Bearish Bets: 3 Well-Known Nasdaq Stocks You Should Consider Shorting This Week
These names are displaying bearish tendencies based on their technical patterns.
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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.
Mobileye Fails to Hold at Support
A simply dreadful move down recently from Mobileye MBLY, a spinoff last year from Intel INTC. The recent downtrend channel of lower highs, lower lows is a textbook bearish downtrend. There is no disputing the fact and with a massive drop lower this week a new support level is being sought, which may not be found for quite some time.
The technical indicators are dreadful. Money flow is bearish, the Moving Average Convergence Divergence (MACD) is on a sell signal while Relative Strength Index (RSI) is oversold. Remember, that does not mean buy, though we could have a brief pull up, which could then be a great shorting chance.
For now, we see downside to the low teens, perhaps down to $10 area, and maybe more meat on the bone after. Put in a stop at $21 just in case.
Tesla Chart Is in a World of Hurt
Everyone's favorite chart to hate and love, Tesla TSLA, is starting to break down badly, and if the recent support at $215 does not hold there is plenty more downside to be had.
Notice the weakness in moneyflow (bottom pane) after earnings hit this month. That is a telling sign that big money is exiting the name quickly, a bearish development.
The price action has been awful since peaking in early July. Call it a short squeeze or whatever, but the buyers have disappeared since then and selling has become intense. MACD has rolled over and there are downside targets with the 200-day and 100-day moving averages close by.
So let's be aggressive but patient here on this short play. Set a target to $185 — that is quite a ways down. Put in a stop at $260, so we're probably going to sit with this one for awhile. We could see a move to $165 eventually. It's very bearish if it breaks the level above.
Western Digital Fails to Hold the Line
The downtrend channel is clearly in place for Western Digital WDC. That's the bad news for the bulls, but even worse news is reaching down for an even lower low, this is an extremely bearish chart that is quite challenging. Money flow is bearish and the MACD is on a sell signal, too.
Take a look at the volume bars. They're all bearish as they are accelerating when the price is going down. RSI is weak and oversold, but this may still be a time for a good short play.
Let's take an aggressive stance here and target the $50 area, a good spot for support. That would be a 13% drop, a nice profit objective. Put in a stop at $67 just in case.
