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.
Snap Goes Limp
Snap Inc. (SNAP) recently was downgraded to Sell with a D+ rating by TheStreet’s Quant Ratings.
When this company warned about its second-quarter recently, it was amazing to think it would have so much poor visibility a month after reporting first-quarter numbers. But there it was — Snap cut its guidance, blaming everyone but itself for it. Regardless, the stock had been weak for many weeks, and money flow was signaling an exodus of big money managers.
The relative strength is poor and the cloud is red; there is little supporting this stock as it could be single digits very soon. Target the $8 level, and put in an aggressive stop at $19.
Genesco Is Out of Step
Genesco Inc. (GCO) recently was downgraded to Hold with a C+ rating by TheStreet’s Quant Ratings.
The footwear and apparel retailer is in a good spot for a short play. The recent drop and bear flag bounce looks ideal to at least get back down to the $50 area. Some of the indicators are starting to improve, but it’s the price action that tells the story — it is bearish.
The Relative Strength Index (RSI) is making lower highs and lower lows. The cloud is red, and the onus is now on the bulls, but that won’t matter much. The weight of selling is going to be hard to overcome.
Target the $45 area, put in a stop at $62.
Pinterest Loses Interest
Pinterest Inc. (PINS) recently was downgraded to Sell with a D+ rating by TheStreet’s Quant Ratings.
Much like Snap, this visual content platform provider has been under severe selling pressure for months. Not even a recent market rally could get this limp Internet media darling to move to higher levels. Volume trends are still bearish, and the stock appears to be rolling over here.
Money flow is good, but at this level is of no consequence. Moving average convergence divergence (MACD) has broken down here, with strong volume prints on the downside. Look for more down here, likely into the single digits.
Put in a stop at $24.50 and target the $8.50 area.
(Real Money contributor Bob Lang is co-portfolio manager of TheStreet’s Action Alerts PLUS. Want to be alerted before AAP buys or sells stocks? Learn more now. )