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 bearish-looking 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.
APOG's chart shows us a very wide trading range, with the stock is at the lower end of that range. Moving Average Convergence Divergence (MACD), though, has rolled over, and odds seem to favor this stock rolling over, too.
Money flow is negative. The 200-day moving average was recently tested and while Apogee bounced, it is hardly impressive. Notice the increase in volume here as the stock travels south, a sign of institutional distribution (selling). There's more solid support at the $41 area, so perhaps a potentially nice 10% down leg.
Target the $41 area, and put in a stop at $50.
The CBTX stock chart shows a clear bearish sign, an "M" pattern. MACD is rolling over and money flow is poor. We see better support down at $27 or so.
Since the end of March this stock has just been straight down on higher volume. Big money is selling, so bulls get out of the way!
A move down to $27 or a bit lower looks to be in the cards, but let's put in a stop at $31 just to be safe.
Apple Hospitality REIT
This is a different apple, the hospitality REIT. This stock has been torpedoed lately, with heavy turnover on the down days and the Relative Strength Index (RSI) shows a steep slope downward. That tells us more downside is to come and the trajectory is much faster.
MACD has rolled over while money flow is weakening, too. The 200-day moving average is in sight, and that would be a move to $15 or so, which would be a nice 15% move downward. But let's put in a stop at $20 just in case.