Bearish Bets: 3 Stocks You Should Short This Week
Welcome to another edition of TheStreet Pro’s Bearish Bets, our weekly feature where we identify three stocks that look bearish from a technical perspective and may present interesting investing opportunities on the short side.
While we will not be weighing in with fundamental analysis on these issues, 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 contained herein.
Macy’s Has a Nervous Breakdown
What goes up eventually comes down, unless you’re making new highs on a regular basis.
There is nothing bullish here for Macy’s ($M), which had shown some positive qualities over the summer. The pattern of higher highs, higher lows was encouraging, but the bears took a swipe lately and broke the stock well below support.
Money flow is bearish, MACD (moving average convergence divergence) is on a double sell signal and volume is getting cranked up to the downside. RSI (Relative Strength Index) is poor, and support for the stock is much lower than current levels, let’s call it $18, perhaps, before some buyers step in.
A short currently would yield a nice 10% return to the downside. Let’s target that spot ($18), and put in a stop at $23 just in case.
Navan Just Got Hammered and Looks for Lower Levels
The signs were strong for a coming breakdown for Navan ($NAVN) this past week and it happened after earnings. The shocking move down on heavy volume was previewed by a failure of the stock to hold the 50-day moving average (blue). This clued us into a changing of the trend.
The stock looks quite bearish here. Money flow is now bearish while the MACD rolled over for a confirmed sell signal earlier in the month. The steep drop and gap lower was below the 100-day moving average; more sellers are likely to exit the name here and take there lumps.
The stock at $20 or so leaves it in a no man’s land. Better support to buy is way down at the $12 area, a nice profit move to the downside. Let’s put in a stop at $24 just in case.
Axogen Is About to Break an Important Channel
We’ll take some risk here and suggest a short on Axogen ($AXGN), which has not broken the downtrend channel but the odds certainly favor it.
The channel shows higher highs, higher lows but this recent fall on heavy volume is suspect, meaning there is likely more downside to follow. Money flow has come down drastically, the MACD is on a sell signal and the RSI is not quite oversold yet.
There is good support at the March lows, way down at the $27-28 level. That would be a nice profit objective, but put in a stop at $46 just in case. We can see even more down if that $28 level is tagged, perhaps down to $18.
