Bearish Bets: 3 Stocks to Put on Your Short List 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.
Becton, Dickinson Breaks Below the Channel
That was a massive down day this past week with Becton Dickinson BDX failing to hold within a downtrend channel. At this point the stock is very well oversold, however, with such heavy turnover and bearish price action there is more likely further downside to go before a low is established.
Hence, we can probably look to the $155 area as a good target before buyers come in, but that is clearly a guess. We want to ride out a trend as long as possible and just because a stock is oversold does not mean it cannot stay oversold for a longer time.
Notice the indicators are all bearish. The RSI (relative strength index) is oversold while the MACD (moving average convergence/divergence) has just turned down for a sell signal. Money flow is bearish as well and as mentioned, the downtrend channel, which was pretty wide, was violated.
So, a short play targeting the $155 area for starters, and place a stop at $193 just in case.
Lilly Remains in a Downtrend
Strong volume moves to the downside when the rest of the stock market is moving higher is not a bullish sign. That is the case here with Eli Lilly LLY, a major pharma company that has been on the radar for some time now.
Lilly's diabetes drug has been the talk of Main Street and Wall Street, and that was a strong driver of earnings this past week (posted), but just not enough to beat elevated expectations.
The stock is towards the lower end of the downward trend channel and has some gaps to fill on the downside, namely $730 or so. But that won't come easy as the recent flurry of bullish action continues to exert itself. Yet, these moves down do take time to complete, so a short play here with some patience should work.
We'll use a loose stop, the 200-day moving average at $842 for now, but target $730 and if that objective is met we'll look to $680. This was very bearish action this past week after a strong move up.
Pilgrim's Pride Falters as Tariff Issues Are a Concern
Pilgrim's Pride PPC posted a nice earnings surge over last year but missed the consensus estimate and was punished for the miss. When stocks falter as the rest of the market performs well that is a cause for concern.
The company faces challenges with tariffs, like many other firms as well. The drop this past week after a very sharp uptrend is a reversal the bulls cannot stomach for too much longer.
MACD has no rolled over to a sell signal and the RSI dropped like a bad habit, but it is not even oversold yet. That is where we can come in with a short play, looking to make a run toward the $42 area before hitting some support. That would be a nice 10% gain for a PPC short, and where we could re-assess for a further move down. Put in a stop at $51 just in case.
