Bearish Bets: Earnings Were Not Kind to These 3 Names
Bad news hit these three names and there is more downside to come.
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Here are three stocks that are worth shorting next week after harsh earnings reactions.
Let’s dig in:
Yeti Holdings Tests Support But It Won’t Likely Hold
An ugly day for Yeti Holdings (YETI) as the stock gets drilled following weak earnings. The drop to the 200-day moving average was substantial and on very heavy volume, the biggest turnover in months. Of course, one day does not a trend make but with this heavy fall it seems there is going to be more downside to go, the 200-day moving average is likely to fail. We can see good support lower in the upper 30s.
The Chaikin money flow has been poor for several weeks, the MACD just pointed lower after the stock cratered. RSI is nearly oversold but that does not mean buy, if there is a rally it is likely to be sold. Let’s target the $37 area, put in a stop at $50 just in case.
New IPO Cerebras Systems Gets Hammered Post Earnings
So much for a nice rally from the lows for Cerebras (CBRS), which really got belted this week after a swing and miss on earnings. The stock was just crushed this week on heavy turnover, and while the indicators are starting to turn up the price action tells us something different. We always defer to the price action before anything else.
RSI peaked and is coming in, a followthrough day to the downside would cinch lower prices ahead. Let’s put in a short and target the lows from earlier this summer, that would be the $160 area, which would be a large fall but the price action here is just awful. Put in a stop at $245 just in case, this may take awhile but the downside objective is sound.
Shoppers at Tapestry Are Not Buying
Just an ugly week for Tapestry (TPR), which showed early in the week some trouble as the stock fell hard from all-time highs and then got pasted on August 13 with very heavy turnover. Notice the heavy volume not just on the big down day but also the prior session — perhaps someone “knew” what the earnings on that day were going to look like. Perhaps, but the technicals and chart have already turned bearish so we believe there is more meat left on the bone.
MACD on a sell signal, the RSI sped all the way down to near oversold, which is not a buy signal at all. In fact, some followthrough to the downside cinches more down, where we see stock moving to better support at the $105 to $107 area. Put in a stop at $143 just in case.
