Each week we identify 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 three 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.
Children’s Place (PLCE) recently was downgraded to Sell with a D+ rating by TheStreet’s Quant Ratings.
This retailer’s chart is atrocious. With heavy money flow to the downside and little support until the November lows, Children’s Place is in trouble.
Moving Average Convergence (MACD) is still on a sell signal while money flow just turned bearish, and the slope of the Relative Strength Index (RSI) is steep and remains bearish. There is more downside to capture here as the stock just recently broke an uptrend line. So, target those November lows at $32 or so, put in a stop at $42.
This is a truly bearish chart.
Griffon Is a Dog
Griffon Corp. (GFF) recently was downgraded to Hold with a C+ rating by TheStreet’s Quant Ratings.
Griffon, a home and building products company, has taken a dive recently. Money flow is weak and the MACD remains on a sell signal.
The recent bear flag was created on low turnover — what we like to see in order to put a short position on. This is an ideal spot, or low-risk entry point.
With the cloud now red, there is little hope for this stock to make a run higher, so we would put in a target at $28 for a short. Stop yourself out at $35.
Hardly the Top
Primo Water (PRMW) recently was downgraded to Hold with a C+ rating by TheStreet’s Quant Ratings.
Primo Water has a well-defined downtrend, with lower highs and lower lows. Support coming in at the gap around $13 bucks or so, MACD is on a sell signal and money flow is just turning bearish.
The cloud is red as well, but there could be a bit of support around the 200-day moving average, where it bounced off earlier this week. All in all, this looks like a move to the $12 area is imminent.
Put in a stop at $15.40 just in case.