These recently downgraded names are displaying both quantitative and technical deterioration.
Stocks quotes in this article:
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 media company shows a decent uptrend from September, with higher highs and higher lows. However, that trend may be ending here soon, with moving average convergence divergence (MACD) on a sell signal confirmed and price about ready to break into the cloud. That’s a bearish situation.
Take a look at the circled volume — this trend is bearish while money flow is now bearish, too. We could see a move here down to $16; put in a stop at $24.
Time to hit the alarm for this property monitoring software provider. The stock has been pounded mercilessly on heavy turnover, which tells us big institutional money is letting go of Alarm.com shares and in a big way.
Money flow is awful and shows the big distribution for this stock. Also, the Relative Strength Index (RSI) cannot seem to climb back above 50; there is a bearish divergence here with the price action.
The downtrend channel is constructive here, and with a series of lower highs and lower lows we should see that pattern continue. Target the $40 area, and put in a stop at $70.
The provider of music streaming services has been an awful tech name since breaking down hard right after Halloween. It’s a waterfall slide here, with lower highs and lower lows on the way down to a 60% loss.
Money flow is bearish and the RSI is bending lower; the cloud is red, too. MACD is still on a sell signal. There is no relief here. The best answer is to short on the rallies, such as we had last week.
Target the $105 area, but put in a stop at $160 (aggressive, but this is a big mover).
Get an email alert each time I write an article for Real Money. Click the ” Follow” next to my byline to this article.
Real Money’s message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site’s moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation.
If you have questions, please contact us here.
Thank you, your email to has been sent successfully.
We’re sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.
Please Join or Log In to Email Our Authors.
Email Real Money’s Wall Street Pros for further analysis and insight
Already a Subscriber? Login