Using recent actions and grades from TheStreet's Quant Ratings and layering on technical analysis of the charts of those stocks, Trifecta Stocks identifies five names each week that look bearish.
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.
Owens Corning
Owens Corning Inc. (OC) recently was downgraded to Sell with a D+ rating by TheStreet's Quant Ratings.
The stock of this producer of building materials has formed a bearish triangle on the lower end of the chart, which often ends poorly. Volume has been light as the stock rallied up over the past few weeks, though with much less conviction than you want to see.
The cloud is red and the Moving Average Convergence Divergence (MACD) is extended at this interim high. A break of this triangle spells trouble for Owens Corning, which could drop easily to the March lows.
Put in a stop at the top of the cloud, or the $48 level.
Tapestry
Tapestry Inc. (TPR) recently was downgraded to Sell with a D+ rating by TheStreet's Quant Ratings.
Another disaster in the retail group is this company behind Coach and Kate Spade. The stock fell sharply in March and tried to recover but barely recouped the losses.
Volume levels have been swelling on the down sessions, the Relative Strength Index (RSI) is capped around the 50 level and the cloud is red.
We could see a test lower to the March lows, just above $10. That would be a nice 30%+ decline from current prices. Put a stop in around $17.50.
This commentary is an excerpt from "5 Bearish Bets" a weekly feature sent to subscribers of Trifecta Stocks. Click here to learn more about this portfolio, trading ideas and market commentary product.
Want to find out the three other stocks we think look good short this week and how to play them? Click here for a trial subscription to Trifecta Stocks and get "Bearish Bets" each week!
-- Bob Lang and Chris Versace are co-portfolio managers of Trifecta Stocks.
