Bearish Bets: 3 Tech Names to Short as Market Turns
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.
Qualcomm Misses the Mark, Points to Lower Levels
There has been horrific price action in semiconductor stocks and Qualcomm ($QCOM) is no exception.
The big chip company missed guidance this week and fell on its face. We saw it coming, with the chart in awful condition and pointing toward more downside. The top trendline of lower highs and lower lows is in place, that is a textbook definition of a downtrend. Money flow is not bad but will get worse in days, probably negative in a couple of sessions.
MACD is on a double sell signal, volume trends extremely bearish and the RSI is not quite oversold yet, so we have a short opportunity here. Let’s target the $140 area first and then to $122 and put in a stop at $168 just in case. This chart is very bearish.
Cisco Is Typical of the Trouble in Tech
Without leadership from technology, the stock market going nowhere, or even much lower than current levels. Take a look at Cisco Systems ($CSCO), which pretty much looks like most tech stocks right now. A severe downtrend, heavy volume to the downside, poor internals and support levels far lower than current prices.
The Cisco chart is bearish. A trend channel of lower highs and lower lows and heavy volume skewed to the sell side has put a ton of pressure on the stocks. Support is much lower, we’ll call the first target $82. RSI is not yet oversold, so there could be much more downside to come, and then perhaps the lows from earlier this year in the mid-70s. Put in a stop at $105 just in case, if this fall through the channel it is bad news for the bulls.
Dave Needs to Dial Up Some Buyers
Dave ($DAVE) has pushed lower once again, but the downtrend channel remains in place. The lower highs, lower lows is again the textbook pattern of a downtrend. MACD is starting to roll over and money flows just went bearish. There is some good support going back to April, but that would be a significant decline. In this market environment, that could happen fast.
Let’s target that $195 area first, then down to $170 or so for a nice score on a short. Nothing seems to be getting in the way of lower prices. Put in a stop though at $320 just in case, but no doubt this stock is in trouble and more down seems to be in order.
