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.
Bath & Body Works Gets Worked Over
Bath & Body Works Inc. (BBWI) recently was downgraded to Sell with a D rating by TheStreet's Quant Ratings.
Since late 2021 the specialty retailer of home fragrance and body care products has been steadily declining, a symptom of changing consumer tastes and margin compression. Those are fundamental reasons; the chart shows this to be the technical case as well, with a series of lower highs and lower lows. The stock of Bath & Body Works fell sharply below support last month and tried to rally, but to no avail.
Money flow is bearish and the Relative Strength Index (RSI) is bending lower at a steep slope, telling us there is likely more downside here.
Put in a stop at $42 and ride this one down into the mid-$20s.
Myriad Genetics Isn't Passing the Test
Myriad Genetics Inc. (MYGN) recently was downgraded to Sell with a D+ rating by TheStreet's Quant Ratings.
The developer of genetic tests has been punished lately. The big sell days were in late May and buyers have been absent since. That means little interest here, and with that comes lower prices ahead. Money flow has been weak and just went bearish, while the cloud is red.
There is a defined trend channel in place, and even a modest rally would be a time to sell more stock short. Moving average convergence divergence (MACD) has rolled over as well.
If short here put in a stop at $21 and ride Myriad down to $11.
Hanesbrands Isn't Wearing Well
Hanesbrands Inc. (HBI) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
The maker of underwear and other apparel has been drilled from the start of the year. Hanesbrands has a pattern of lower highs and lower lows with very poor money flow and repeated sell signals on the moving average convergence divergence (MACD). There is simply no buying here; every single rally attempt has been met with sellers.
The cloud is red, volume trends are bearish and the sellers started to pick up the pace in May. That means more downside.
Look to take this stock down to the $7 area, put in a stop at $13.50 just in case.
(Real Money contributor Bob Lang is co-portfolio manager of TheStreet's Action Alerts PLUS. Want to be alerted before AAP buys or sells stocks? Learn more now. )