Bearish Bets: 3 Nasdaq Stocks You Should Consider Shorting This Week
These names are displaying technical deterioration and present opportunities for short plays.
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Welcome to another edition of Bearish Bets, our weekly feature where we identify three stocks that look bearish from a technical perspective and may present interesting investing opportunities on the short side.
While we will not be weighing in with fundamental analysis on these issues, 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 contained herein.
Don't Gamble With Penn Entertainment as a Long
After a big drop in February, Penn Entertainment Inc. PENN has really been punished. It has made a triangle pattern in the lower end of the chart, which when it gets resolved should move in the direction of the prior trend. That would be down, and with the indicators also reflecting such a move there is still a good short opportunity. A break of that triangle spells trouble and probably means a move below the February lows for the casino operator.
After some sideways movement there was a good 25% move down. Money flow is weak and the Relative Strength Index (RSI) is just not able to break higher. Let's target the $15 area, but put in a stop at $20.50 just in case.
InMode Isn't Aesthetically Pleasing
In a rare occurrence in this market, InMode Ltd. INMD has broken well below the October lows from 2023. It is rare because most stocks have been able to hold above that level for most of this year, but not InMode. The stock of the maker of minimally invasive aesthetic medical products has been in a miserable downtrend, with very strong volume to the downside. Money flow is bearish while moving average convergence divergence (MACD) is turning down for a sell signal. RSI is pointing lower at a steep angle, too, telling us more pressure is coming to the stock.
With InMode at a rather low price we could look toward a high-percentage move down. Target the $14 level but place a stop at $23 just in case -- the top of the cloud where buyers seem to be located.
Bulls Should Run Away From Sunrun
A series of lower highs but weaker higher lows is the chart characteristic of Sunrun Inc. RUN. A good clue as to the future direction of the producer of residential solar energy systems might be when the triangle is broken to the downside, which might happen any day now. Money flow is bearish, the cloud is red and the RSI is bending lower. Though the series of higher lows might cancel out any sell indicators, the volume on those up sessions is rather meek. This means the conviction from big institutions is not bullish.
Let's set up a short play here on Sunrun. It's a cheap stock but there is plenty of meat left on this bone. Target the October lows, which seem a lock at this point if the triangle breaks lower. That would be the $8.50 area, but put in a stop at $14.30 (the 200- day moving average) just in case.
