Bearish Bets: 3 Tech Stocks You Should Short This Week
These Nasdaq-listed shares are showing bearish tendencies and charting a path downward.
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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.
Photronics Really Could Not Be in a Worse Place
That drop this past week on Photronics PLAB with heavier turnover was the death knell for this stock. A very modest but promising uptrend was in place following those April lows but now the pattern is destroyed. Further, the volume print on that huge bar this week was quite bearish and leads us to believe more sellers lurk on this name.
Money flow just turned bearish, and on balance volume is quite poor, too. MACD (moving average convergence/divergence) has just turned down as well, so nothing positive about this chart. Hence, we'll look to enter a short play here.
Let's target the $10 level, and put in a stop at $22 just in case.
High-Flying Synopsis Takes a Hit From the Trump Administration
Synopsis SNPS was doing such a nice job recovering from the those April lows. With a solid uptrend in place and coming earnings, it certainly appeared the stock was ready to take out those January highs and move to higher ground.
Well, that was not meant to be as Synopsis was hit hard by sellers following a report the Trump administration had told chip design firms to curb shipments to China. That decision blew a hole in the chart and has now turned it bearish.
Notice the heavy volume bar printed on Wednesday, which is a clear negative. MACD is turned lower for a sell signal. On balance volume (bottom pane) has also turned lower, and Thursday's follow-through tells us there is more downside to go.
Therefore, we'll target the April interim low levels at $400 but looking for more downside at $360 after that. Just in case we'll set a stop at $480.
Ansys Fails to Impress
Much like Synopsis, Ansys ANSS fell sharply following word from the U.S. government to stop chip design shipments to China. That sent the bulls to the sidelines as they sold this stock in droves.
Ansys pushed down to the 200-day moving average and fell below it the following day; hence a confirmation of the downtrend. We see a bit of support around $300 but that might not hold for long.
Looking at the technicals, the MACD has confirmed a sell signal while on balance volume has turned lower. The RSI (relative strength index) in the top pane is no longer overbought and turning down, while other indicators like volume and money flow are heading towards bearish signals.
Let's target the $300 level, and put in a stop at $340 just in case.
