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.
Zebra Technologies Slides
The provider of data capture technology has fallen on hard times of late and the downtrend is clearly defined. Lower highs, lower lows and swelling volume to the downside mean this stock is still correcting.
Money flow is poor and the Relative Strength Index (RSI) is challenged. Note that just a year ago Zebra was a top-performing name, but now it's in the junk pile. Or, the short pile if you will.
If short, ride this one down to the $250 area, put in a stop at $335.
ONE Group Hospitality Isn't Cooking
The operator of restaurants and lounges has been in a massive downtrend for weeks. The stock is in the house of pain and continues to slide into the single digits.
The cloud is red and the Relative Strength Index (RSI) just cannot get above 50 -- that's a problem. The recent failure on heavy turnover tells us there is little in the way of seeing this stock fall further.
Short this stock around $7 and target the $3 to $4 area. There's plenty of meat left on the bone.
Encompass Health Looks Sickly
The chart of the provider of post-acute healthcare services is a mess. Since peaking in April this stock has been in a steady decline on higher turnover. That means big institutions are selling it hard.
Money flow confirms this with big negative readings. The recent bear flag is an ideal spot to get short Encompass Health. The Relative Strength Index (RSI) is poor and the cloud is red, with plenty of resistance overhead.
If short, target the low $40s, but put a stop in at $65 just in case.