Bearish Bets: 3 Stocks You Should Consider Shorting This Week
Here's why these names could fall further.
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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:
SLM Remains Volatile with Downside Targets
SLM Corp. SLM has a pretty wide range working. The stock is making a move towards the lower end, and the 200-day moving average, too.
Money flow has been bullish but the price action has been awful, with a series of lower highs and lower lows. That is a textbook pattern of a downtrend. However, we may see a bit of support coming about $2 lower, so we will look for a move to the $19 area before covering the short.
Moving Average Convergence Divergence (MACD) is a on a sell signal crossover, while the Relative Strength Index (RSI) is bending lower at a steep angle. That tells us this will soon be oversold — but more downside is coming.
Let's target the $18.75 area, and put in a stop at $23 just in case.
Teradyne Has Seen Better Days
Teradyne TER had a chance to right the ship last month but failed that task. The big gap lower following July earnings was painful, and even worse, the bounce gave the bulls some hope that all the selling was over.
That false reading came to light this week after the company again posted weak earnings and guidance. Once bitten, twice shy they often say.
The technicals are dreadful, and even after the big move down Thursday there is plenty of room for more downside. Money flow is quite bearish, RSI is oversold but that of course is no reason to buy. Volume trends are bearish and picking up steam, while MACD is on a sell signal.
There's nothing bullish about this chart, and the gap lower and trading down is symptomatic of the problem. There's a bearish trade setup here, so target the $95 level, April lows, and put in a stop at $130 just in case.
Bears Looking for the Knockout Punch on TKO Group
We've seen a miserable move down for TKO Group TKO with some very heavy selling and a shift from bullish to bearish. This chart shows the stock has fallen to the 50-day moving average (blue line) but we don't see that stopping this avalanche.
TKO just got leveled last week and is holding onto the ropes, but the bears are ready for punching action.
Money flow is poor and the MACD is on a sell signal. We see the 200-day moving average as a first objective target. RSI has also rolled over to a sell signal, so no reason to buy here of course.
We will look for the $101 level from here ($115), then re-assess and probably ready for the stock to move down to $95. Put a stop in at $121 just in case.
