Bearish Bets: 3 Nasdaq Stocks to Short, Including a Semiconductor Blowup
Let's check three stocks that appear technically bearish and look ready to short.
While we will not weigh in with fundamental analysis on these issues, we will pop the hood for a look at the charts.
Let's dig in:
Logitech Is 'Logically' Falling after Failing to Rise
We define "no trend" as lower highs and higher lows. That will often have resolution at the apex of a created triangle, in most cases to push out in the direction of the previous trend. For Logitech (LOGI) , the next move should be substantially lower.
Why should I be so negative? After all, the stock has not broken the pattern of "no trend" yet. Volume trends are bearish, and heavy selling on the red days along with poor relative strength signal this stock is ready to make a break.
Let's put on a short play here and target some unfilled gaps from April. A "logical" level would be $76, potentially a nice 15% gain. Put in a stop at $92 just in case.
ASML Has No Friends Among the Bulls
Stocks fell hard this past Tuesday and the culprit was ASML Holding (ASML) . The company announced earnings a day early due to a mishap, but the damage was done by ASML regardless of when it happened. This very poor report and guidance took down the entire semiconductor group, which is not an easy feat. The heavy volume in ASML that day indicates big money is leaving — in a hurry.
When a disaster like this happens for a stock we wait to see follow-through, then we know there is likely more selling to go. Notice the technicals: money flow is bearish, the MACD (moving average convergence divergence) just turned for a sell signal and the RSI (relative strength index) is oversold (not a reason to buy). There is simply too much weight on this stock to turn bullish, so if it's not going up — it's probably going down.
Let's set a target of $640, but it could take some time. Place a stop at $770 just in case, but we feel pretty confident more downside is coming.
Align Tech's Chart Is Way Out of Alignment
This dental company is a wild beast. Just look at the crazy movements in the price chart. Align Technology (ALGN) shows a sharp downtrend, though from April a series of lower highs, lower lows. That is our textbook definition of a downtrend. Money flow is bearish as is RSI.
As we see the stock coming in to test the August lows, the pressure is mounting on ALGN to hold that around the $200 level. If not, there are plenty of lower targets to achieve. I think this one breaks and moves lower, so we can target $200 first and on a break look for the $175 level. Put in a stop at $230 just in case.
