Each week we identify 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 three 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.
PVH Goes Out of Fashion
PVH Corp. (PVH) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
Retail has been hit hard recently and even the finer names have been struggling. PVH is one of those, with the stock of the apparel maker behind Tommy Hilfiger and Calvin Klein moving sharply lower and through support.
The Relative Strength Index (RSI) is sloping downward at a steep angle, which tells us more selling is likely soon. Money flow is poor and moving average convergence divergence (MACD) is on a sell signal.
We could see PVH wind up in the $40s before too long, but put a stop in at $75 just in case.
Martin Marietta Falls Like a Stone
Martin Marietta Materials Inc. (MLM) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
The supplier of aggregates and building materials fell sharply last week on pretty strong turnover. That means the selling was done by big institutions, a clear distribution. MACD is on a sell signal crossover, while short-term moving averages are bending lower.
The cloud is red, which points toward lower prices to come.
We could see this stock make a run at $300 or so, but put in an aggressive stop at $350 just in case the bulls bring the stock higher. Turnover has been very strong lately, bearish.
MicroStrategy Is Punished Bit by Bit
MicroStrategy Corp. (MSTR) recently was downgraded to Sell with a D+ rating by TheStreet's Quant Ratings.
Live by the sword, die by the sword. The provider of enterprise analytics software is now a Bitcoin proxy play, and the stock has been punished hard as the cryptocurrency has fallen on hard times. MicroStrategy's chart tells the story, with lower highs and lower lows and a waterfall decline that is epic.
MACD is on a sell signal while money flow has been in full retreat for weeks. The RSI is extraordinarily bearish here, and there is just little support for the stock.
At this point put in an aggressive target of $150 and short more at $200, but put in a stop at $300 just in case. This is aggressive, but the trend is down.
(Real Money contributor Bob Lang is co-portfolio manager of TheStreet's Action Alerts PLUS. Want to be alerted before AAP buys or sells stocks? Learn more now. )
