Bearish Bets: 3 Stocks That Are Screaming 'Short Me' This Week
A close look at the charts reveals several names that are poised for further losses, giving investors a lucrative opportunity.
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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.
Goldman Sachs Is Not Ready for a Higher Level
There is no question Goldman Sachs GS is a premiere investment bank. A Dow Industrial component, the stock has ridden the wave this year of strong stock market performance (relative), but the recent highs seem to represent a topping pattern, and a breakdown on volume tells us big institutions are distributing the stock.
That's not always a bad thing, in fact with this recent pullback there could soon be a nice setup for a buying opportunity. But first things first, we see some downside targets as an objective before seeing that reversal back up.
Money flow has been poor, Moving Average Convergence Divergence (MACD) is on a sell signal as well. The channel we drew in on the top of the chart is narrow and concentrated with big moves; that is how it goes with Goldman.
We see support at the 100-day moving average here ($470) but if that fails the 200-day moving average is next up at $420 or so. Let's target that price, and put in a stop at $490 just in case.
Micron Tumbles Further and Just Before Their Earnings Date
There is nothing worse that getting your stock nearly chopped in half while the rest of the stock market moves ahead. That is pretty much the case with commodity-producer of DRAM, flash and data storage chip company Micron Technology MU.
The stock has been knee-capped since peaking in mid-June, a calamitous fall on some heavy turnover, which signals to us big institutional selling that has not let up at all.
Without a doubt Micron will make a big move when the company reports their quarterly earnings on September 25, but the chart tells us the response will not likely be bullish. MACD is on a sell signal, the trend in price is of lower highs, lower lows — a textbook bearish pattern — while the cloud is red and the Relative Strength Index (RSI) is bending lower at a steep angle. That is not healthy.
We can see MU making a run to the high $60s before too long, so let's target that area. Add a buy stop just in case at $100.
Rubrik Confuses the Bull Case Once Again
There is nothing more frustrating than seeing a nice rise in a stock only to constantly be knocked backwards at resistance. That is the case with Rubrik (RBRK), as the stock has had multiple runs toward the $38-40 level but has been rejected; count it, four occasions. This most recent time in August appears to have frustrated the bulls again, and with support down near the $28 level we'll see if that holds. The technicals seem to show that won't happen this time around.
MACD (moving average convergence divergence) is on a sell signal, the RSI is bearish as well and the cloud just went red. Those are all bearish qualities, and tell us some distribution (selling) is underway. Recent volume trends are bearish (arrow), so a break below $28 would be significant.
Let's target the $19 area, which would be a very large move but again if support breaks the dam will give way. Put in a stop at $40 just in case.
