Bearish Bets: 3 Stocks to Short This Week
Burlington Stores Sure Needs Some Help
When a stock chart shows you a well-defined pattern, you simply need to roll with it. Those who try a contrarian stance when the pattern like a downtrend has already been established might feel like a fish swimming against the tide. Burlington Stores ($BURL) has been in a deep downtrend for weeks and with earnings hitting this past Wednesday the stock got smashed, but there looks to be more downside to come.
MACD is firmly on a sell signal, money flow is bearish and the RSI is oversold, as we know not a signal to buy or sell, simply a condition. With the heavy down move here all that is needed is some followthrough, and we may get it coming up. Let’s target the $265 area first but ultimately $242 is in play. Put in a stop at $325 just in case.
Health Equity Has a Terrible Look to it
The chart of Health Equity ($HQY) just looks awful. That nice uptrend was wrecked this week following poor earnings response, and now a test of the 200-day moving average may soon fail. This sort of move on big volume is troublesome and threatens the bull case, especially if there is followthrough. Money flow is weakening here, the MACD is on a strong sell signal and the RSI plummeted to oversold.
The shock of a big move like this does not go away quickly and often leads to more in the direction of a new trend. Expect more selling, let’s target the $82 level and perhaps into the mid $70s, put in a stop at $98 just in case.
Spam Was Not Good Enough to Carry Hormel to a Win
Hormel ($HRL) was a severely hurt this week after a big miss on earnings. The company, which produces SPAM, got absolutely crunched this week on very heavy volume, but we knew something was “up” with that very bearish downtrend channel that preceded the move lower. Nothing worse than moving lower out of a downtrend channel, and on big volume as well. We see some support at the May lows, call it $19 or so.
Money flow is bearish and the MACD is on a double sell signal, not good for the bull case. RSI has crumbled as well, just nothing positive on this chart but a downside target is doable. Let’s reach for the $19 area, put in a stop at $24 just in case. Very bearish chart here.
