Bearish Bets: 3 Stocks You Should Consider Shorting This Week
Stocks that are breaking down while the indexes are making new highs tend to have a continuation move.
Let’s dig in:
The NY Times Is the Official Bearish Chart of Record
Once considered the darling of the print newspaper industry, shares of the New York Times Co. ($NYT) has fallen on some hard times the last few months. That surge earlier in the year was impressive, better than 80% on good volume from October to April, but the bullish momentum stalled and sellers started to emerge.
Notice the downtrend channel drawn of lower highs, lower lows. That is our textbook definition of a downtrend. MACD (moving average convergence divergence) is on a double sell signal while money flow has been weak.
Even with the big slump this past Wednesday some long-term targets are now in view. Let’s zero in on the $54 area, which might take a while, but be patient. That February low might come into play, but let’s put in a stop at $72 just in case.
Papa John’s Is Just Not That Tasty Any Longer
The big pizza chain known as Papa John’s ($PZZA) is in a world of hurt. The stock plunged hard this past week on very heavy volume. This stock is a mess and does not look to recover anytime soon.
Money flow is bearish while the MACD tried to turn up recently but was tossed back. Heavy volume selling like PZZA has means more sellers are coming out of the woodwork, and fast.
Let’s target the $18-20 area for an extreme move, and if PZZA does rally to the $31 level consider even more shorting. We’ll stop out of this trade at $35 or so.
This is a bearish setup and probably good for a nice profit to the downside.
Limbach Holdings Follows the Path of Least Resistance
So much for making a quick recovery! Limbach ($LMB), is nothing but bearish, and fooled some traders recently into thinking the stock was about to break out to the upside. It did in fact move above the downtrend channel but did NOT confirm, so the move was false.
Money flow is bearish and has been for months, RSI (relative strength index) just cannot get above 50. MACD is on a double sell signal; this stock is being punished.
With markets making new highs and Limbach new lows, let’s target some lower levels, down to $45 and then likely $38 or so. Put in a stop at $60 but that won’t likely be a problem.
If LMB rallies up to low $50s then short more. We’ve got a very bearish chart here.
