These recently downgraded names are displaying both quantitative and technical deterioration.
Stocks quotes in this article:
Each week Trifecta Stocks identifies 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 five 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.
The provider of health insurance exchange services fell hard last week on big volume; the trend was already pointing downward, so this was no surprise. Money flow is barely in the green but has been making lower highs.
The cloud is red and the Relative Strength Index (RSI) is oversold; no reason to be a buyer on that. Moving Average Convergence Divergence (MACD) is rolling over here, too.
The stock is at resistance from the gap down last week. Nothing positive on this chart; look for a move down to $22 or so, put in a stop at $35.
The downtrend is a powerful sign, and this provider of financial products and services shows that big channel here. Money flow is bearish and has been during this price flush.
XP stock may be trying to recover, but a fools’ rally is one the bulls will lose. The cloud is red and RSI is stagnant here at the 45 level.
A break of $32 and this stock is headed to the mid-$20s. Target that area but put a stop in at $36 just in case.
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 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.
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