These recently downgraded names are displaying both quantitative and technical deterioration.
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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 bearish-looking 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.
This mega-cap name has seen better days. Facebook’s parent has shown all kinds of distribution on the chart, starting with poor money flow and a bearish moving average convergence divergence (MACD) crossover.
Relative strength is extremely poor and the cloud is red and widening, indicative of more downside to come. The 20-day moving average has been good resistance on the way down, too, and that will be a challenge to exceed until the stock can flatten out. That doesn’t seem likely here.
There is some meat left on this bone even after a pretty sharp move downward. Target the $160 area, but put in a stop at $203 just to be safe.
The producer of interactive games is playing a difficult game here, with lower highs and flattening out around the $155 area. Money flow just turned bearish and MACD crossed over for a bear signal.
The Relative Strength Index (RSI) is in a steep drop with a very strong slope, which tells us the price action is quite poor.
The best the bulls can hope for is a bounce at the trend line, but that may be breached soon enough and a test of $140 or so may be coming.
Retailers have been taking it on the chin this quarter, and the specialty stores are really showing poor relative strength. Apparel and home fashion retailer Ross Stores is among these names, and frankly with a series of lower highs and lower lows this stock is in for some trouble.
MACD is now on a sell signal while money flow just turned bearish. The recent selling has been on strong turnover; the volume trends are bearish.
We could see the $70s before long, and that would not surprise us. Aim for that level, but put in a stop at $96.
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