Each week we identify names that look bearish and may present interesting investing opportunities on the short side.
Using technical analysis of the charts of those stocks, and, when appropriate, recent actions and grades from TheStreet’s Quant Ratings, we zero in on bearish-looking names.
While we will not be weighing in with fundamental analysis, 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.
Constellation Brands Inc. (STZ) recently was downgraded to Hold with a C+ rating by TheStreet’s Quant Ratings.
The chart of this producer of beer, wine and spirits shows a bearish trend in place, with lower highs and lower lows and a move below short-term support. The 200-day moving average might be the last area of help for STZ until the fall lows come into play. That appears to be a pretty good bet, though, as the Relative Strength Index (RSI) is starting to roll over.
If short, put in a target of $207 but place a stop at $245 just in case.
HNI Corp. (HNI) recently was downgraded to Hold with a C+ rating by TheStreet’s Quant Ratings.
The stock of this maker of workplace furnishings and residential building products shows a monster head-and-shoulders pattern that is bearish, and now HNI is moving in on the neckline. If that breaks then quite a bit more downside could be expected, all the way toward $30.
RSI is steep and pointing downward, while moving average convergence divergence (MACD) is barely giving help to the bulls. We could see a sharp move lower very soon.
If short, put in a stop at $40 and ride it down to the low $30s.
Booking Holdings Inc. (BKNG) recently was downgraded to Hold with a C+ rating by TheStreet’s Quant Ratings.
This high-priced, high-flying online travel company appears rather stuck in a no man’s land. Money flow is weak, and as the stock levitates just under $2,200 there is a suspicion this level is going to break.
The moving averages short term and long are well above the price, but that should not enter into the equation for a short. The price action is bearish, and that means a move toward the March lows is in order.
Put in a stop at $2,325 just in case and target the $1,975 area.
(Real Money contributor Bob Lang is co-portfolio manager of TheStreet’s Action Alerts PLUS. Want to be alerted before AAP buys or sells stocks? Learn more now. )