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.
Sohu.com Is So-So at Best
This Chinese name is a shell of its past self. The provider of online video and game products is down for the count, with a defined channel of lower highs and lower lows.
Towards the upper end of the channel is an excellent spot to set a low-risk entry point for a short play. Put in a stop at $17, target the $9 areas.
Forrester Research Keeps Struggling
The provider of independent research and advisory services is a repeat offender as its stock has been on this list a couple times before. Notice the multiple moves down to the $34 area, which seems to be good support. However, the more times you bounce on support, the weaker it becomes, and that is likely the case here.
Indicators are weak, and the Relative Strength Index (RSI) and moving average convergence divergence (MACD) show rollover potential. The cloud is red and starting to expand while volume trends are bearish. Look for a move into the mid $20s, put in a stop at $38.
Palomar Holdings Fades
The stock of the specialty property insurer has seen better days. The recent collapse has been on pretty heavy turnover, with the indicators rolling over.
Money flow is quite negative now and MACD is on a sell signal. The RSI is bending lower at a steep angle, telling us there is little chance that the selling will abate. The cloud is red and the chart shows a break of good resistance. There is plenty more downside here; target the $38 level, put in a stop at $60.