Each week we identify names that look bearish and may present interesting investment opportunities on the short side.
Using technical analysis of those stocks’ charts and, where applicable, recent stocks and TheStreet’s Quant Ratings, we zeroed in on three names.
While we’re not going to weigh in on the fundamental analysis, we hope this article gives investors interested in stocks that are going down a good starting point for further research on the names.
the sysco kid
Sysco Corp. (SYY) has a rating of Hold with a C+ rating from TheStreet’s Quant Ratings.
SYY shows us a chart of a stock ready to break down. The recent move to the apex of this triangle was quite bearish, with a lot of volume on that big day of candlesticks.
That was a low session, and it’s being followed by another. We see that the flow of money is bullish, and that is probably the best and only positive indicator.
The Relative Strength Index (RSI) is doubling down while the Moving Average Convergence Divergence (MACD) is ready to turn into a sell signal.
We could see a run to the lows of $70 and possibly $69 as the cloud is red as well. Put a stop at $81 just in case.
A bear flag flies here
Calix Corp. (CALX) has a rating of Hold with a C+ rating from TheStreet’s Quant Ratings.
Calix has formed a bear flag here, and with a lot of volume on the recent move down, there is tremendous pressure on the stock.
Watch the bearish money flow and MACD sell signal in progress. That’s telling, and the gap that’s been open since July begs to be filled. That comes to $45, a nice 14% move down from current levels.
Let’s target that area, put a stop at $56.50, just above the 200-day moving average in case the buyers return. I highly doubt that will happen.
It is difficult to have a downtrend again in the tube
Colgate-Palmolive is rated is rated Hold with a C+ rating from TheStreet’s Quant Ratings.
Colgate shows us a steep downtrend channel, with lower highs and lower lows. Additionally, the stock recently tumbled through the 50-day and 100-day moving average, and the 200-day moving average due to heavy turnover.
That strong sell-off is not being reconsidered and prices continue to fall. The recent pull-up looks like a bear flag is forming and is an excellent place for a low-risk entry point on a short play.
Aim for the $70.90 area; put a stop at $77 just in case.
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