Bearish Bets: 3 Challenged Stocks You Should Think About Shorting This Week
These names are displaying bearish tendencies based on their technical patterns.
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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.
Hilton Grand's Chart Remains Bearish and Challenged
When a downtrend persists for as long as Hilton Grand Vacations HGV there is no use fighting the trend. Sure, there will be a time the stock finds a bottom, with value players coming out and taking a stab at a low price, but until that day comes every rally becomes a trap.
We saw that recently with this stock; notice how the stock popped to the resistance line in mid-July only to fail miserably this past week on heavy turnover. That move is going to make buyers think twice as sellers hit this name repeatedly. Yes, we see more downside here as the Moving Average Convergence Divergence (MACD) has crossed over and the Relative Strength Index (RSI) continues to sink lower.
Let's set a downside target to $30, and put in a stop at $39 just in case.
Haemonetics Gets Drilled, But More Downside Is Coming
There is nothing worse for the bull case than a heavy selling day with high turnover. When the trend is in place there is no relief until the stock builds a base, and that is not the case yet for Haemonetics HAE.
The stock was drilled this week on heavy volume, and the February lows are coming into view. Turnover was brisk, the highest volume since May when the $82 level stopped the decline. This time around that did not happen as the floodgates opened.
So, we see a good downside target in the low $70s range. Money flow has been bearish for a couple months. RSI is oversold but that is no reason to be bullish.
Let's set a target to $70, and put in a stop at $87 just in case.
McKesson Falls Into No Man's Land — But It Is Still Bearish
A big drop this week on heavy turnover for big healthcare services provider McKesson MCK has this chart in big trouble. Volume was the highest it has been on the downside for months, and the indicators have turned bearish (if they weren't already).
Meanwhile, money flow remains negative, MACD has turned for a bearish signal and the cloud is turning red. All bearish signs.
Where could this stock drop to? We see the February lows as a good first target, down to the $470 level. Below there we have some support at $440, also another good target that might take some time to achieve.
Let's put in a stop at $570 just in case.
