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.
Edwards Lifesciences Needs a Lifeline
Edwards Lifesciences Corp. (EW) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
The stock of the medical device company is extremely vulnerable to more downside. Edwards really got belted last month on strong volume and breaking that 200-day moving average was a huge negative.
Money flow is bearish -- check out the bottom pane with Chaikin money flow. The cloud is red as well and the chart shows a bearish flag. The Relative Strength Index (RSI) is bending lower at a steep angle as well. There is nothing bullish about this chart. Hence, it sets up as a nice short play here. Target the $68-$70 level, put in a stop at $83 just in case.
Ormat Technologies Loses Steam
Ormat Technologies Inc. (ORA) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
The geothermal and recovered energy power company has been in miserable downtrend for a month, but this is the second sizable move down since early June. Notice back then the stock could not even get above the 200-day moving average and ORA just headed right down. It's in a channel here with lower highs and lower lows. That would be the definition of a downtrend.
Money flow is bearish while the RSI bends lower at a steep angle. There is nothing bullish about this chart. However, we can see about a short play. Target the $60 area, but put in a stop at $81 just in case there is a swirl of buying.
Euronet Worldwide Tumbles
Euronet Worldwide Inc. (EEFT) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
With a sharp move lower late last month and no recovery since then, the stock of the payments processing company is in big trouble. There is nothing bullish here as the money flow is very bearish and the RSI just cannot get above oversold.
Notice the strong move downward and little recovery; this stock is heading much lower. There will be a bounce, which will be another short opportunity. But for now, we see something happening. The cloud is red and with plenty of downside targets we will take a stab at a short play. Target the $70 area for an aggressive move, place a stop at $90 just in case.
