Bearish Bets: Pressure Mounts on These 3 Names
Three stocks that have changed direction and now see lower prices ahead.
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It is typically a bad sign when the markets are making highs but a stock gets slammed to the downside. These three stocks are having trouble moving up, and now some downside targets are in sight.
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:
Pepsi Goes Flat
The downtrend in Pepsi (PEP) has been difficult to stomach for the bulls. A series of lower highs, lower lows and a well-defined channel down has this stock in the eye of the storm. The recent pop on volume from about 135 to 147 was destroyed this week, and while the 134 area seems to be holding there is plenty more selling to be done here.
Money flow is weak and has remained bearish, MACD is about to turn for a sell signal while the RSI just cannot get over 50. This translates into more downside, some targets down to $120 are seen on the weekly chart (not shown), let’s look to that area but put in a stop at $144 just in case.
One Ugly Break for Ions
This biotech Ions Pharmaceuticals (IONS) was in a beautiful uptrend with good volume, positive internals and technicals along with bullish volume. However, all good things come to an end and eventually the sellers do take control, especially after a massive drop like IONS did this week. Failing to hold the March lows is painful for the bulls.
Money flow is very bearish, MACD is rolling over and the RSI is almost oversold, but not quite yet. The price action is extremely bearish and the volume hitting on the sell side is enormous. Let’s target the gap down at $42, which may take awhile but would be a nice profit objective. Place a stop at $78 just in case.
Cable One Crashes Through Major Support
When a stock follows a downtrend channel to lower lows, that is a bad sign and one that says the bears are in complete control. This happened with Cable One (CABO) this week, a terrible move down on big volume that sets up this name for more downside action. RSI is weak and just turned lower while the MACD is crossing down for a sell signal. The money flow is awful, with big money sellers lurking around every corner. Just nothing bullish here and any rally is prime for a short play.
I believe more downside happens now though, and any rally should be shorted aggressively. Let’s target the $30 area first, and then possibly down to the $25. Let’s use a stop at $45 just in case, but Cable One is a very bearish chart.
