Shake Shack Among Top-3 Stocks to Short After Jobs Report
A look at the chart shows the odds favor more losses for these three names.
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These three names were bearish before earnings and crashed hard afterward.
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:
Planet Fitness Chart in Need of Heavy Workout
The chart of gym Planet Fitness (PLNT) has been hit hard by the weight of sellers. The stock has been pounded for weeks and this past week the stock was whacked on very heavy volume. The ugliness should continue though as high volume prints like 5/7 point to continuation moves.
The technicals have been bearish for some time. MACD is on a second sell signal, money flow is weak and the RSI is now overbought, as we know not a time to get long. So, a short is in order here, let's target the $35 level first and then down to $30. This is a very bearish chart, put in a stop at $54 just in case.
Some Bad Action for Zoetis
Another ugly chart here with a series of lower highs, lower lows. Zoetis (ZTS) had some support on the $110 line but that fell through like a hot knife through butter this past week. The ugly price action hit with some very high turnover, these sellers are going to be tough to turn around anytime soon.
MACD is on a double sell signal while the RSI is deeply oversold. We may see a small bounce but that would be a signal to short more of this animal prescription company. Money flow is turning bearish now, just nothing positive here but we can consider a short play, targeting the $66 level and then to $60 eventually, but let's use a stop at $95 just in case.
Only Bears Having a Feast at Shake Shack
It appeared the bulls were going to pull it off this week with Shake Shack (SHAK) . After rallying about 22% from late March the stock appeared ready to break out from stiff resistance (shown). But alas, the bears had other thoughts, feasting on the sellers as SHAK was obliterated this week on heavy volume. That was a devastating move for the bulls, and now a new downtrend is likely in place, further we are not likely to see many buyers step up anytime soon.
Money flow has been awful for months, the recent move lower put the MACD on a double sell signal. Big, huge drops out of nowhere are a shock to the system and often leads to much more selling. RSI is oversold as one might expect. While much of the meat is off the bone here we could see a run to the $58 area, some support at that level and then perhaps down to $55. Put in a stop at $78 just in case.
