Bearish Bets: Visa, Celldex and MakeMyTrip All Have This in Common
Let's check three charts that could prove to be good short plays.
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In this edition of TheStreet Pro's Bearish Bets we're charting three stocks that appear bearish from a technical perspective and could be good shorts: Celldex CLDX, MakeMyTrip MMYT and Visa V.
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.
Celldex's Chart Craters
It is tough to make a case for a stock to invest in, when it fails to trend higher with the rest of the market. Celldex is in miserable shape and just cannot seem to get out of its own way. The wide, choppy trading range from the summer is now over, the stock is about to break the August lows any day now.
Momentum has certainly taken a turn for the worse, money flow is poor, while the Moving Average Convergence Divergence indicator in the second pane remains on a sell signal. The relative strength index is oversold, but that of course does not mean buy, rather look for a pull up in price to short more. We still see an opportunity at this late stage, though, with some downside follow-through we see more coming. Let's target the $28 level, put in a stop at $40 just in case.
Can MakeMyTrip Turn Down?
The question is: Will MakeMyTrip take a drive to Bearville? The stock has been in a beautiful uptrend for months, with higher-highs and higher-lows. The technical picture has mostly been strong, save for a few minor dips that were scary-type moves. Certainly a follow-through down from this week would strengthen the argument for more downside, so we'll have to wait on that. But for now, we think a short play is still warranted.
Look at money flow in the bottom pane, which is bearish for the first time since June. The Moving Average Convergence Divergence indicator in the second pane has rolled over again from a higher level and remains challenged. Volume trends have turned bearish, there is nothing pretty about this chart.
Let's target the $75 level, if that 50-day and 20-day moving average fail to hold that level should be easily achievable, it is right near the 200 moving average. Put a stop in at $108 just in case.
Bears Won't Let Go of Visa
Volatility is following Visa everywhere. The stock got hammered last week and the bears followed through with another whack this past week. Indicators are clearly in the bear camp, MACD is awful and on a sell signal, money flow just turned to bearish and indicates big money is rolling out of Visa.
Meanwhile, the price is trying to find support at the 200-day moving average but the weight of selling is very heavy. If that support fails to hold there are plenty of downside targets to the July lows of $252, which we see as a logical bounce area. Let's target that spot of $252 for a timely but aggressive move, set a stop at $280 just in case.
The Portfolio has no position in any security mentioned.
