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.
Walgreens Boots Alliance
Walgreens Boots Alliance Inc. (WBA) recently was downgraded to Hold with a C rating by TheStreet’s Quant Ratings.
The pharmacy giant has been struggling lately, but shows a series of higher lows and lower highs. That means the stock is trendless.
Recent volume trends have turned up bearish, though, and the Relative Strength Index (RSI) is poor. Also, moving average convergence divergence (MACD) is now on a sell signal.
A break of the lower trend line is negative here for this stock, so we’ll look to target the low $40s here; put in a stop at $50.
Rocky Brands Inc. (RCKY) recently was downgraded to Hold with a C+ rating by TheStreet’s Quant Ratings.
This boots and apparel retailer has fallen hard lately, with a break lower on big volume. That’s a red flag, but then Rocky Brands fell harder than Rocky Balboa vs. Apollo Creed! Money flow is poor and the MACD sell signal remains.
Though the stock is oversold here that is no reason to buy it, no way, no how.
Put in a small short here, target the low $30s, and if the stock rallies up add more to the short. Put in a stop at $45 just in case.
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.