Bearish Bets: 3 Stocks You Should Consider Shorting This Week
Let's look at three names — including a once-shining tech stock — and why they're in technical downtrends.
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Here we'll look at the technicals of a name that was once a bright spot in the tech sector, a hotel stock that's not so "choice" right now, and a healthcare records play, and see why all could make for good shorts.
Universal Display Dims
Once one of our names in Pro portfolio, Universal Display (OLED) has been a train wreck. Lower-highs and lower-lows is our textbook definition of a downtrend, and there is no dispute this stock is trending lower. A recent surge in February was met with heavy selling, and again in April the same bullish pop yielded a lower-high and now a lower-low. The stock is ugly, no two ways about it.
The moving average convergence divergence is rolling over for a sell signal, relative strength quickly went down to an oversold condition. We see more downside here, probably into the $70 area. Let's target the $78 area first and then down to the low $70 area. Very poor stock performance as the market is rising up.
(Not a Good) Choice Hotels
When a stock is rising it is like taking the escalator, when it is going down it is like taking the window. Choice Hotels (CHH) this week saw a massive reversal down that took out many gains from the last six weeks.
This stock is volatile and any word of bad news is sniffed out by investors and traders quickly. That is what happened this past week, probably just the first move down which is likely to be followed by more selling.
The indicators are bearish and the moving average convergence divergence is crossing over for a bearish signal. Money flow is turning bearish. Meanwhile, the Relative Strength Index fell all the way to oversold. Now, we could see a bounce here following an extreme move but no doubt the sellers will look at that move as an opportunity to sell. The trend is a trend. We'll target the $90 level first, eventually the December lows at $77, put in a stop at $98.
WayStar Can't Get Out of its Own Way
Just an ugly and bearish trend on Waystar (WAY) , a long series of lower-highs and lower-lows. That is our textbook definition of a downtrend, and believe me when I say that Waystar is in the bear's clutches. Money flow is bearish. The moving average convergence divergence is rolling over here as well. RSI is also weak and is approaching oversold. That does not mean buy, of course, but a place to look for another short play.
The big volume and price break has been excruciating for the bulls, but we don't argue with the trend. The recent February lows were tagged this week, and we see more downside here. Let's target the $15 level, then perhaps down to $12. There is just no relief for the bulls here, but let's put in a stop at $27 just in case.
Related: How U.S. Investors Can Profit After Crazy Day for Japanese Yen
At the time of publication, Lang had no position in any security mentioned.
