Bearish Bets: 3 'Legacy' Stocks You Should Short This Week
These companies have been around many decades, but now the 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.
A Long Haul for Winnebago Industries
Are people not taking vacations in campers anymore? Several years ago it was the thing to do, especially in the summertime. You would pack up your gear in the Winnebago WGO and explore the country. Winnebago stock was a strong holding, in fact there was the 'Winnebago Indicator' back in the 1970s that said "as Winnebago goes, so goes the economy." But those days are behind us now and the company is struggling.
The chart shows a stock steep in a downtrending pattern, with lower-highs and- lower-lows. Certainly shorting from the low 50s would have been ideal or anywhere between there and current levels, but with the struggles of the company there seems to be more meat left on this bone for a short play. Money flow, in the second-to-bottom pane, is weak. The Moving Average Convergence Divergence, near the lower-middle of the chart, is on a sell signal and the Relative Strength Index is making lower-highs and bending lower at a steep angle, the price action is going to catch up to it.
So, let's target the $20 area and then a bit below there for a newer objective afterward. Stop at $31 just in case.
FedEx is Still Not Delivering to Its Shareholders
Another worrisome earnings report from FedEx FDX this week puts this massive delivery company behind the 8 ball. The trend has been in place for quite some time, a series of lower-highs and lower-lows defines the downtrend. But a rally from those April lows looked encouraging until this week when a miss in earnings forecast ravaged the stock.
Huge volume to the downside on June 25 defined the move and solidified the downtrend, so a short play is in order. Below, the triangle drawn is trouble for FedEx, let's target the April lows here at $185 for an aggressive move down, a stop at $230, which is above the downtrend line and likely tell us the play is wrong.
Paychex Is Not Paying the Bulls
The downtrend channel that was in place for Paychex PAYX even before earnings hit was a clue that this stock was in trouble. No question the indicators were also bearish, just look at when the MACD turned lower in early June that kicked off a bearish streak of days.
Just recently, the chaikin Money Flow moved to a bearish posture, telling us big money investors are selling this stock. Not good, especially with the huge bar down on big volume on June 25.
So, we can see more downside for Paychex, and probably below those January lows seen on the left side of the chart. Let's target $120 and then perhaps a bit lower if that objective is met. Let's put a stop in at $144 just in case, which is where the 200-day moving average lives.
At the time of publication, Lang had no position in any security mentioned.
