Bearish Bets: 3 Nasdaq Stocks You Should Consider Shorting This Week
These stocks 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.
DraftKings Sellers Send a Warning to the Bulls
There have been signs with DraftKings DKNG that show the stock is suffering from chronic fatigue. The strong move up from the lows in October 2023 was a bit rocky, however, the stock did make an 80% move up with some strong volume trends.
In addition, indicators were strong as well, but since peaking in late March the stock has been struggling. This week saw DKNG getting blasted on heavy turnover, but the recent downward action was pointing towards that end.
Now the stock looks tempting for a short, yes even after this recent drop of 23% from the recent highs. The stock is now flirting with the 200-day moving average, and a drop below will be ominous.
Money flow has been weak for a month and now the Moving Average Convergence Divergence (MACD) is on a sell signal. This one may rise later in the year, but for now it is downtown.
Let's target the $29 area, put in a stop at $40 just in case.
Sarepta Therapeutics Looks to Take a Step Down
The chart of Sarepta Therapeutics SRPT had been working its way higher from the lows in October 2023. Like with many growth and speculative names the money was flowing, and the stock reached levels not seen in well over a year.
Some sideways movement was constructive, though, until this past week when the stock was simply hammered on heavy turnover. While the stock rebounded late in the week, it seems more likely downside action is the next course for Sarepta.
The technial condition looks poor for Sarepta, and breaking the box and below key support of the 200-day moving average looks quite bad. Money flow is poor and the MACD is now on a sell signal.
All signs point to lower prices, at the very least to fill the gap from January. So, let's target the $102 area, and then below that $90.
Workday Follows Through to the Downside
When a stock gaps lower and follows through to the downside there is simply no buying to support the stock. When we look at the chart of Workday WDAY there is really nothing supporting the stock at this point until the October lows, call it $205.
The stock was crushed reently following earnings, which were just not good enough for buyers to step in. Indicators have been horrendous, MACD is on a sell signal and take a look at money flow, very bearish.
While the stock may bounce around a bit, make no mistake the trend is down. Lower highs, lower lows is our textbook definition of a downtrend. So, while it may take awhile, let's target the $204 area and put in a stop at $225 just in case. This chart is really bearish.
