3 Bearish Stocks You Should Consider Shorting This Week
These names have broken important technical levels, opening the door for more downside.
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Welcome to another edition of TheStreet Pro’s 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.
Manpower Breaks a Downtrend Channel
With poor earnings guidance this past week ManpowerGroup (MAN) has fallen back sharply and looks ready to test some lower support. The recent downtrend channel was broken even lower on stronger volume, telling us big money investors are distributing (selling) the stock. That is often a precursor for more downside, and the indicators tell us this as well.
MACD (moving average convergence divergence) is on a firm sell signal while money flow has weakened considerably. Support may be at the $40-42 level but that is not likely to hold, and a more pronounced move is likely.
Look to target the $36 level for now, and put in a stop at $48 just in case. This chart is very bearish with a confirmation (next day) down.
Strong Support Fails to Hold for DigitalOcean
It was a rough week for DigitalOcean Holdings (DOCN). It was hammered with the rest of technology and the stock fell through good support like a hot knife through butter. That $102-105 level had held like a champ on numerous occasions, but this time around the buyers were nowhere to be found.
The MACD is firmly on a sell signal, money flow is bearish, while the RSI (Relative Strength Index) is nearly oversold. As always, not a reason to buy. Volume trends are bearish.
While the move this week was extreme we see more downside coming, with the shares likely to hit the $70 level eventually. That would be an aggressive move but the chart is already bearish. Put in a stop at $110 just in case.
TTM Technologies Is a Glutton for Punishment
There’s been awful action recently in the TTM Technologies (TTMI) chart, with lower highs and lower lows now in view. The heavy volume circled here is our clue of distribution. Nothing worse for the bulls than a stock in severe distribution, and that is TTM. Breaking good support at the $100 level seems to be the last straw. MACD is firmly on a sell signal.
Money flow is still positive but likely to turn down within days. We see good support at the January lows, call it $68-70 or so. Let’s go for that aggressive target, and put in a stop at $120 just in case. A pretty bearish chart here with all indicators pointing lower.
