Bearish Bets: 3 Big-Name Stocks You Should Short This Week
These shares are up against the wall and their struggles are likely not over.
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Let's check three stocks that appear technically bearish and look ready to short.
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.
Home Depot Weakens As Retail is Under Assault
They say "nothing good happens under the 200-day moving average." That is certainly the case for big retailer Home Depot HD, which departed from that support zone earlier this month and continues to drift lower. This stock has been hammered mercilessly over the past few weeks and is now very extended to the downside.
The RSI (relative strength index) is at rare reading under 30 and that puts the odds very strong this will rebound. But in a weak market with a bearish chart those rallies are good spots to sell or short — in fact they are more than ideal.
Money flow is now bearish again while MACD (moving average convergence/divergence) just went oversold after being on a sell signal for more than a month. Stochastics are down hard too, so there is nothing that says screaming buy.
So, let's put in a short here and add more too it if the stock moves higher. We'll target $300, and put in a stop at $375 just in case.
The Challenge for Procter & Gamble Is Right Here
An ominous double top has formed for Procter & Gamble PG on the chart at the $180 level, and now it shows a breakdown to the 200-day moving average. The heavy volume this past week along with the poor price action has this stock up against the wall. Money flow is now bearish and the MACD is on a fresh new sell signal.
There's nothing good with this stock, though there is an uptrend line currently where the stock is located that could serve as support. We think this won't hold and the stock will be lower to test the February lows very soon. Let's target that spot first, call it $162, and then look for more downside at $155 or so.
United's Chart Is Not Flying the Friendly Skies
The descent of the United Airlines UAL chart over the last two months has been steep. The big turnaround bar printed in January (arrow) shows where this stock made a top; buyers just would not support adding shares at this price. United landed right on the 200-day moving average, which it had not visited since last fall (August).
But the indicators show a continuation of this bearish story, the momentum (bottom) is in the tank, money flow remains bearish, while the MACD has been on a sell signal for quite some time.
There is good support way down at the $45 level. That would be a steep decline from the January high but not out of the question. Let's first target $60, a much easier level to achieve from current prices even if the stock rallies a bit. Put a stop in at $84 just in case.
