Bearish Bets: 3 Beaten-Down Stocks to Short This Week
These 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.
Deckers Gets Its Clock Cleaned Again
When it rains it pours, as the maker of Ugg boots and Hokas just got pasted this past week following a weak earnings report. Just look at the chart and you can see the stock has been a hot mess for months. Falling about 55% since peaking in early February, Deckers Outdoor DECK has been on the avoid list for weeks.
A series of lower highs, lower lows is the textbook downtrend characteristic. This stock has not seen the light of day for weeks and while it did rally marginally in May, the stock suffered badly this past week.
Notice the heavy volume on Friday May, with a sudden turn on the MACD (moving average convergence/divergence) indicator while the RSI (relative strength index) turned lower.
There is some support here at the April lows but the news was bad enough to send it down further. Let's target $80, and put in a stop at $112 just in case.
Unfortunately, Now Ross Stores Is on Sale
The big off-price retailer really took it on the chin this past week. Ross Stores ROST just got hammered, with no mercy for the bulls as heavy volume hit this stock in a big way. The price action was downright ugly too, with some support below at the $123 area.
Like Deckers, this retailer warned about their upcoming quarter and attributed the blame towards trade policy and weakening consumer spending. Just very bad here, so let's target that $123 area, and even look for more downside around the $105 if that prior objective is met.
Workday's Chart Needs a Work Around
The big software and cloud company Workday WDAY is in need of dire repair after the sellers clipped the bulls' wings. One could argue this is just a modest pullback to the midpoint of a range; that could be right. However, the heavy turnover, negative price action and turn down on the MACD tell us there is more downside ahead. This chart is extremely poor, with RSI turning down and very heavy volume Friday.
We see some support at the gap in April and even more support at the $207 level, but those won't likely hold. So with the stock at $238 let's target the $205 level, and put in a stop at $265 just in case.
