Each week we identify names that look bearish and could offer interesting investment opportunities on the short side.
Using technical analysis of these stocks’ charts and, where applicable, recent actions and grades from TheStreets Quant Ratings, we target three names.
While we won’t delve into fundamental analysis, we hope this article provides investors interested in downtrend stocks with a good starting point to do further homework on the names.
Estee Lauder is not pretty
Estee Lauder Companies Inc. (EL) was recently downgraded to ‘. Hold with a C+ rating from TheStreet’s Quant Ratings.
On this list, the cosmetics giant is a repeat offender. With a defined channel of lower highs and lower lows, the stock is moving much lower. We could see a run to support around $213.
Cash flow is bearish, moving average convergence divergence (MACD) is at a double sell signal and volume trends are accelerating and bearish. Nothing inspires us to be bullish, but there is some downside here. Stop at the 200-day moving average or $244 which should be a strong resistance. Aim for the $210 area for a nice winner.
Centerspace (CSR) was recently downgraded to Sell with a D+ rating from TheStreet’s Quant Ratings.
The Shared Apartment Owner is a new name, but it’s the same old chart. The downtrend is strong with very high fluctuations. There is little to like about Centerspace, with bearish cash flows and a MACD sell signal to boot.
The RSI shows an oversold reading, but this is not a buying reason. We could see movement back to the top of the channel, but then it’s right back down. We could see a move into $40 for CSR very soon, but placed a stop at $64 while targeting that $40 level.
Denbury is losing energy
Denbury Inc. (DEN) was recently downgraded to Hold with a C+ rating from TheStreet’s Quant RatingS
The independent energy company has been bearish for several months, with a defined channel of lower highs and lower lows. We could see a modest recovery, then another touch of the lower channel.
Volume trends are up and down right now and the Relative Strength Index (RSI) doesn’t seem to be picking up either. The cash flow is also declining. What remains to be done? Short this stock; aim for the $70 area and place a stop at $82 just in case.
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Source : realmoney.thestreet.com