Bearish Bets: Medical Co., Cell Play, Software Stock All Pointing Down

Let's look at a diverse group of stocks — a medical equipment maker, cellular infrastructure play and software company — and how each are fumbling on the charts.

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:

Steris' Problem Pattern

One of the most common and reliable patterns in the technical universe is the bear flag, which consists of long move lower and a pull up on lower volume. Think of a flag upside down. The theory here is some relief on low turnover, lacking conviction on the buyside and when that is completed the old trend (down) will continue. Medical equipment maker Steris (STE) shows the signs here, the stock looks exhausted to the upside but barely made a dent in the down move shown from early March.

Therefore, we see more down to go, with a weak money flow indicator and declining relative strength. Let's target $200 here, a 10% move down and then probably lower at $175. Put in a stop at $235 just in case.

Crown Castle's Downtrend Is Intact

Unless a stock chart exhibits a change in character it makes logical sense to follow the trend. With Crown Castle (CCI) , that trend is clearly down, with lower-highs and lower-lows. Crown Castle owns, operates and leases over 40,000 cell towers and tens of thousands of miles of fiber.

Relative strength at the top has been thrown back repeatedly as buyers just won't step up. Yet, some have been taken to the woodshed after trying to catch a falling knife. That is not a healthy exercise.

Money flow is weak and the moving average convergence divergence is about to roll over for a sell signal. Recent buys took the stock up to the top of the channel so this is a good, low risk entry level to short this stock. Let's target $70 for an aggressive down, put in a stop at $91 just in case.

Gen Digital: Brace for More Downside

While the move lower in software name Gen Digital (GEN) has been sharp and long, there seems to be more downside left. There is little meat left on the bone with this one but a move to the single digits cannot be ruled out, the trend is strong with a series of lower-highs and lower-lows.

That is our textbook definition of a downtrend. Relative strength just cannot make it above the 50 level, Williams %R indicator on the bottom is flashing a sell opportunity, and moving back to the top of the price channel means a low risk entry point for a short.

Let's target the $9 level first and maybe further, put in a stop at $19 just in case.

At the time of publication, Lang had no position in any security mentioned.