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 producer of silicon carbide and gallium nitride materials and power devices had a monster move up in November but has come crashing down to earth. With heavy turnover in mid-November the ground was set for lower prices when the stock could not make a new high.
Actually, lower highs and lower lows are now the problem, and the recent pull-up in price makes this a great short entry point. Money flow is weak and the Relative Strength Index (RSI) points downward -- not a good spot here for the bulls.
Target the downside, a move to around $75, but put in a stop at $104.
This provider of identity management platforms is one of those high-growth companies that got annihilated in the winter. Okta came tumbling down and now has a defined trend channel.
Sell the rips on this name; it's at the top end of the channel now. Target the $150s or so, but if the channel is broken (two consecutive closes) the short would need to be covered.
Put a stop in at $210 or so just in case, but ride this one lower.
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.
Want to find out the other stocks we think look good short this week and how to play them? Click here for a trial subscription to Trifecta Stocks and get "Bearish Bets" each week!
-- Bob Lang and Chris Versace are co-portfolio managers of Trifecta Stocks.