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.
Cirrus Logic
Cirrus Logic Inc. (CRUS) recently was downgraded to Hold with a C rating by TheStreet's Quant Ratings.
The maker of integrated circuits appears to be running out of steam at the 100-day moving average. With volume trends slowing down as money flow turns bearish, Cirrus maybe headed for lower prices.
The Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) are pointing down, a bearish divergence with the price chart. A cross under the 200-day moving average would be quite bearish.
If short, put in a stop at $76 but ride it down to the low $50s.
Madison Square Garden
Madison Square Garden Sports Corp. (MSGS) recently was downgraded to Sell with a D+ rating by TheStreet's Quant Ratings.
The chart of the sports and entertainment giant finds itself in a no man's land here, with no trend. Higher lows and lower highs define the condition, but with huge bearish money flows this stock may be headed back to the March lows soon.
RSI has stalled here and there is a gap lower to fill around the $154 area. A break of the May lows would have this name in trouble.
If short, put in a stop at $187 or so (the 200-day moving average) but ride it all the way down to the low $140s for a nice gain. Very bearish chart setup.
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.
