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.
Abbvie Is Taking Its Medicine
It's frustrating when you own a stock that just does not keep up with the rest of the market. Take Abbvie, which clearly has been in a downtrend. Not even new 52-week highs by the indexes or strength in the pharmaceuticals ETFs could lift this stock.
Now we have the potential for a market correction or worse, and any stock such as Abbvie that is not being bought will continue to be shunned or sold further. That means it's a good spot to short Abbvie, as we see this stock is at the upper end of a range. This $137-$139 area has been trouble, and we could see Abbvie trade down to the lower end of the range at $130. Let's target that area, but put in a tight stop at $145 just in case.
Conagra Grows Stale
The packaged foods giant shows a very steep, defined downtrend channel with lower highs and lower lows. Volume has been swelling on the down sessions, which tells us big institutions are doing the bulk of the selling. While the stock has fallen a large amount since early May there seems to be more downside to come here, and perhaps even a break of the October lows is in order.
Notice the weak money flow and a continued sell signal on the moving average convergence divergence (MACD). The cloud is red, too, and with markets running higher anyone who wants to buy should run away. That means a good short opportunity as the trend remains down. Target the $28 area, put in a stop at $35 in case the stock turns upward.
IBEX Isn't Inspired
The provider of customer acquisition and retention technology looks ready to break down badly. With high-volume selling and the indicators just turning bearish there is plenty of room for downside in IBEX.
Money flow is bearish while the Relative Strength Index (RSI) is in a steep downturn as well. Support seems to be at the $20 area, but each time the stock comes down to that level the support weakens. There is room to reach those October lows, though, and that comes in around $17. Let's target that area, but put in a stop at $22, which would turn this trend upward.