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.
L3Harris Goes on Defense
Defense names have been rather strong of late, but this one fell hard after a spectacular early October run. Money flow came crashing down and is now bearish and moving average convergence divergence (MACD) is on a sell signal while the Relative Strength Index (RSI) is steep and bending lower.
The recent pull-up in stocks barely budged L3Harris, and the lower support levels of that yellow trend may not hold this time around. Target the $210 area, then down to $200, but put in a stop at $229.
Chico's Is Out of Fashion
The women's apparel retailer has shown heavy volatility lately. Now it's on the way down, and the target is likely the low $4s again. That isn't much of a dollar return, but 20% down would be nice.
Moving average convergence divergence is on a sell signal. Recent volume trends are bearish and money flow is sharply lower. Put in a stop at $7.20, and if this drops down below $6 add more short.
James Hardie Isn't Hearty
The maker of fiber cement siding and backer board products has been in a miserable downtrend for months, with lower highs and lower lows all the way down to the teens. Even the most recent market rally barely helped push this stock upward, and it is still in this bearish trend channel.
James Hardie stock is in the middle now and starting to roll over once again. Money flow is weak and the RSI is pointing lower at a steep angle, which tells us there is more down to go. Target the $13 area, put in a stop at $21.50 just in case.