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 pharmacy chain has fallen sharply since a stormy rise in January. In that month, RAD jumped about 100% in a matter of weeks, perhaps driven by Reddit-esque players looking to squeeze the stock. That worked for a while, but recent trends are bad and the stock is back below its January level.
Money flow is weak and the cloud is red, with the Relative Strength Index (RSI) descending at a steep angle. With markets at the highest level, we frown on stocks that are at or near lows.
Rite Aid goes to single digits, but stopped at $19.
The clothing company has gone into hiding, making a series of lower highs and lower lows. Money flow is terrible, and take a look at the moving average convergence divergence (MACD) — a doubly bearish sell signal.
The 200 day moving average is looming large here at the USD 76 level, down a good 12%.
Ride the trend here and target that 200 day moving average, but stop at $90.
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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