Weekly Trifecta Shares identifies names that look bearish and that can offer interesting investment opportunities on the short side.
Using technical analysis of those stocks’ charts, and, where appropriate, TheStreet’s recent actions and numbers Number of reviews, we focus on five names.
While we won’t get into fundamental analysis, we hope this piece will give investors interested in stocks on their way down a good starting point to do further homework on the names.
The maker of implantable lens for the eye seems to be starting a flight of stairs down. With increasing volume and a very poor flow of money, Staar is starting to take some hits as far as we are concerned.
While the Relative Strength Index (RSI) is oversold and the price action is bouncing, it is not impressive. Indeed, we could now see a drop off the 100-day moving average (gold) every day, leading to a sharp drop to the 200-day moving average. The moving average convergence divergence (MACD) is on a sell signal.
Look ahead for lower prices; set a target at $104 and use a stop at $145.
The operator of a digital consumer finance platform in China peaked in mid-June and is now showing a series of lower highs and lower highs. That’s a bearish quality, and with money flowing lower, there’s a lot of downside potential here.
The RSI is heading down at a steep angle, which is also bearish. The 200-day moving average may offer some support, but it is unlikely to feature a large number of sellers. MACD has a sell signal.
If it is short, target the $18 level, but use a stop around the $33 level.
This commentary is an excerpt from “5 Bearish Bets”, a weekly feature sent to Trifecta Stocks subscribers. Click here to learn more about this portfolio, trading ideas and market commentary product.
Want to know what other stocks we think are looking good this week and how to play them? click here for a trial subscription to Trifecta Stocks and receive “Bearish Bets” every week!
— Bob Lang and Chris Versace are co-portfolio managers of Trifecta Stocks.
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