Each week Trifecta Stocks identifies names that look bearish and may present interesting investing opportunities on the short side.
Using technical analysis of the charts of those stocks, and, when appropriate, recent actions and grades from TheStreet’s Quant Ratings, we zero in on five names.
While we will not be weighing in with fundamental analysis, 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.
Boston Omaha Corp. (BOMN) recently was downgraded to Hold with a C rating by TheStreet’s Quant Ratings.
The outdoor advertising and surety insurer has some big turnover lately as the stock faltered badly. Money flow is bearish while the cloud is red, and relative strength is bending lower as well.
Moving average convergence divergence (MACD) has crossed for a sell signal, so all the indicators are lining up bearish. We could see a drop to the May lows here, around the $24.50 level, a nice 20% gain.
Put in a stop at the 200-day moving average (around $34) just in case.
Digital Turbine Inc. (APPS) recently was downgraded to Hold with a C+ rating by TheStreet’s Quant Ratings.
The provider of media and mobile communication products was explosive this summer but it has been falling hard on big turnover. That’s a bad sign, a sign of institutional distribution.
Money flow is negative and MACD is on a sell signal. The cloud just turned red and is pointing lower; the indicators are extremely bearish here.
Look for a test of the August lows around the $47 level, but put in a stop at $71, giving it some room to work.
This commentary is an excerpt from “5 Bearish Bets” a weekly feature sent to subscribers of Trifecta Stocks. Click here to learn more about this portfolio, trading ideas and market commentary product.
Want to find out the other stocks we think look good short this week and how to play them? Click here for a trial subscription to Trifecta Stocks and get “Bearish Bets” each week!
— Bob Lang and Chris Versace are co-portfolio managers of Trifecta Stocks.