3 Stocks You Should Consider Shorting This Week
These names have been hit hard by high-volume selling and are primed for more downside.
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Let's check three stocks that appear technically bearish and 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.
Zscaler Remains a Top Bearish Pick
Certainly the recent selling in Zscaler (ZS) was a sign of things to come, but who knew the stock would act so poorly after earnings. The downtrend line was in place, a series of lower highs and lower lows. So when the stock fell sharply on heavy volume this past week it was no surprise.
The moving average convergence divergence (MACD) was already on a sell signal and money flow had weakened. A gap from June has now been filed, too.
What is worse here, there is not much support for the stock until those interim June lows are tagged. That is a ways down, and we'll target that area first, all the way to about $198 or so, and beyond that the April lows at $170.
It may take some time to get to these targets but the downtrend is clearly in place. Put in a stop at $285 just in case.
Deere Wrecks a Budding Uptrend With an Ugly Earnings Report
Nothing will ruin a nice day like poor earnings.
Deere (DE) was pushing the envelope recently, making a nice series of higher highs, higher lows after reaching an interim bottom in early October. The stock rallied, however, on lower turnover, and that is a sign of weakness. You want to see stocks rally on stronger turnover, showing the commitment of big money to accumulate the stock day after day. That hasn't been the case lately for Deere.
Money flow is weak and the relative strength index (RSI) just broke an uptrend line. MACD is turning for a bearish signal, and the price action and volume are downright ugly, so let's target the $430 low in April as a first stop, and if the bearish trend remains strong we could see a move to $405 as well. Put in a stop at $492 just in case.
Ambarella Broke a Nice Bullish Channel
Here is another name that showed nice improvement, a bullish chart pattern and strong volume trends. But it was a mixed earnings report that caused the stock of Ambarella (AMBA) to implode, and while the move was large on 11/26 it is likely to move even lower than current levels.
The 200-day moving average is not far away and seems a logical first target. Money flow is poor and the MACD is on a sell signal confirmed (actually a double sell signal). The stock had massive volume selling this past week.
A likely target is down to the mid-$60's before a rally might appear, but that would be another short opportunity. Put in a stop at $82 just in case. A really nasty looking candle and follow-through to the downside would lock in this trend.
