Bearish Bets: 3 Stocks You Should Really Consider Shorting This Week
These names are displaying bearish tendencies based on their technical patterns.
You've reached your free article limit
You've read 0 of 1 free Pro articles.
Welcome to another edition of Bearish Bets, our weekly feature where we identify three stocks that look bearish from a technical perspective and may present interesting investing opportunities on the short side.
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.
Netflix Reversal Is Painful to the Bulls
We still see a bullish uptrend in place for Netflix NFLX yet the stock is really trading poorly. Recent earnings results were good but not good enough to push the stock higher, and the bulls are dropping this stock like a bad habit. Notice the heavy volume and the price reversal, this is not making the bullish case stronger.
Moving Average Convergence Divergnce (MACD) is on a sell signal while money flow (bottom) just turned negative. We see more downside here as the gap from May needs to be filled. That would be a good target of around $580, about 8% lower. Put a stop in at $650 just in case.
CrowdStrike Gets Hammered and Looks Like More Selling Is on the Way
Without question Friday, July 19, was a truly regrettable day for CrowdStrike CRWD. Apparently an update went awry and the stock is getting punished, no mercy on the name. With a monster volume day to the downside and trading at levels last seen in April, would the sellers dry up Friday? Not a chance, in fact the bounce off the 200-day moving average is going to attract some buyers, though it may be a trap.
The technicals have just started to roll over but as you see, the MACD was already in that position prior to this selloff. The intensity and the price drop has materially affected the stock price and relative strength, which is now oversold. Remember, that is a condition that does not mean buy.
If short here, prepare for some volatility and be willing to hold for a nice reward. We see downside to the January lows down at $240, a huge gain if you're patient. Put a stop in at $335 just in case.
Autoliv Gets Whacked and Zooms in on New Lows
This stock has been obliterated, with heavy volume selling. It's more than just about July 19 trade, though, Autoliv ALV has been challenged for months. Notice the bear flag pattern drawn out, tempting the bulls to buy, then slamming the door in their face with a massive drop lower. Brutal.
But, is there more downside? You bet! We'll target the $80 level here, putting in a stop at $113. Notice the MACD rollover and the weak money flow. Buyers will now shy away from this name.
