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.
Arrow Financial Misses the Mark
Arrow Financial Corp. (AROW) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
This regional bank holding company has seen better days. The stock is down 30% since the end of 2022 and appears to have even more downside to come.
Check the money flow. It is bearish since late February while the Relative Strength Index (RSI) is flat on its back (top pane). Volume trends are elevated and are steeply bearish, and the stock remains well under all the moving averages. When a stock creates lower highs and lower lows it is abundantly clear the trend is down. Target the $18 area, which is long-term support, but put in a stop at $27 just in case.
Don't Bank on FVCBankcorp
FVCBankcorp Inc. (FVCB) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
Here is another regional bank that had a catastrophic fall in the spring. But as we see from the chart, this decline started well before the Silicon Valley Bank problems in March.
With lower highs and lower lows FVCBankcorp has been in a strong downtrend. Money flow is weak and moving average convergence divergence (MACD) is on a sell signal, but the RSI tells the story. With markets up strong in 2023 this stock has been pounded and there is probably more downside to go. There is not much meat left on the bone, but there is room for FVCB to go down further into single digits. Target $6 on this short, put in a stop at $13 just in case.
Kenon Holdings Sputters
Kenon Holdings Ltd. (KEN) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
The owner and operator of power generation plants is a new name but the chart looks the same as the others. Moving straight down since early April, the stock saw a monster rise in volume early in the month but the price action could not continue.
This is a volatile name and moves around, but a break of recent support tells us more downside is coming for Kenon. MACD just went on a sell signal and the RSI is about to break the 50 line. We see more downside to the March lows; call it $24.70 or lower, a nice 10% move down. Put in a stop at $31.
