Each week Trifecta Stocks identifies names that look bearish and may present interesting investing opportunities on the short side.
Using technical analysis of the charts of those stocks, and, when appropriate, recent actions and grades from TheStreet's Quant Ratings, we zero in on five names.
While we will not be weighing in with fundamental analysis, we hope this piece will give investors interested in stocks on the way down a good starting point to do further homework on the names.
The maker of implantable lenses for the eye is now testing the July lows and it looks as if this time around there will be a severe failure. With a moving average convergence divergence (MACD) sell signal and poor relative strength Staar is headed for a test of the 200-day moving average. If that doesn't hold (and we suspect it won't) there is plenty of downside to be had.
Support lies around the $105 area, so look to short down to there and perhaps for a move to $90 or so. Put in a stop at $140.
Ollie's Bargain Outlet
The discount retailer's stock price is now a bargain, or is it? The stock has been punished the last two months on very strong volume selling. That's a bad sign and clearly not a buy signal.
Money flow is negative, and notice the Relative Strength Index (RSI) -- very bearish. The cloud is also red, and we could see this downtrend channel continuing lower into the $50s. Put in a stop at $73 just in case.
This commentary is an excerpt from "5 Bearish Bets" a weekly feature sent to subscribers of Trifecta Stocks. Click here to learn more about this portfolio, trading ideas and market commentary product.
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-- Bob Lang and Chris Versace are co-portfolio managers of Trifecta Stocks.