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 three 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.
Alcoa Loses Its Mettle
Alcoa Corp. (AA) recently was downgraded to Hold with a C+ rating by TheStreet’s Quant Ratings.
The producer of alumina and aluminum products delivered poor earnings last week, but because the markets were priced to rally the stock got a lift. Nonetheless, the chart is still showing weakness, with lower highs and lower lows. The downtrend line is in place too, as buyers are getting exhausted. That is the time to swoop in on a put play.
The Relative Strength Index (RSI) is bending lower and the cloud is red. If taking on a short position, target the $33 area, put in a stop at $47 just in case.
Intercontinental Exchange Goes Cold
Intercontinental Exchange Inc. (ICE) recently was downgraded to Hold with a C+ rating by TheStreet’s Quant Ratings.
This operator of regulated exchanges and clearing houses has taken a turn for the worse. With lower highs and lower lows there is a very negative chart pattern here. While there seems to be some support around the $90 area, that may fall through this time around.
Money flow is miserable and bearish, and the 50-day moving average remains under pressure. The recent rally in this stock barely made a dent — that is telling. The cloud is red and the RSI is about to roll over. Take a shot with ICE; if short, target the $75 area (aggressive), put in a stop at $100.
Stag Industrial Sags
Stag Industrial Inc. (STAG) recently was downgraded to Hold with a C rating by TheStreet’s Quant Ratings.
The real estate investment trust that focuses on single-tenant industrial properties has fallen hard since the late spring. With lower highs and lower lows on the chart Stag is in trouble. We do see a close above the 50-day moving average, which could be considered at least a positive, but the weight of evidence supports another drop in price.
Ideal entry points for a short include a move up to resistance, which is what we see happening here with Stag. The cloud is red and the trend is down. Target the $25 area, put in a stop (tight) around $31.
Get an email alert each time I write an article for Real Money. Click the “+Follow” next to my byline to this article.
