Bearish Bets: 3 Stocks to Short as Market Faces More Downside
These stocks are showing some bearish qualities and look like they have more downside to come.
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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.
What a Mess for the Copa Holdings Chart!
It does not take much to wreck a nice uptrend, in fact it could take a day just to inflict massive damage to the chart. Seems that is what happened to Copa Holdings (CPA) this week. A massive selloff on heavy volume is going to trigger more selling and likely much lower down to the support level drawn.
Money flow is poor, the MACD is now on a double sell signal while RSI just slipped to near oversold. No reason to buy there.
How about a short play? Yes! We can see the $101 are being good support for a muted bounced, let's target that here, putting in stop at $122 just in case.
Jacobs Solutions Cracks Lower on Big Volume
Just a miserable few weeks for Jacobs Solutions (J) , with heavy selling while price action tested some lower levels. We could see the pressure building a few weeks back with heavy volume but weak price action, eventually something was going to break and this week it was price. A sharp move down to the 100-day MA was not anticipated but these moves hardly ever tip their hands.
RSI is now oversold but no reason to buy, and the MACD is firmly on a sell signal, no reason to buy there either. With one big down day we should expect to see more over the coming days, let's target the rebound bottom in May at $118 or so, a solid 13% lower than current levels. Put in a stop at $148 just in case.
Canadian Solar is Not a Hot Chart
You might be surprised to know that Canadian Solar (CSIQ) is a Chinese company! No matter, when a stock chart is bearish it does not make a difference, bears will swipe at any company. Canadian Solar had a nice run in October but that appears to be finished, and now the bears are taking over here. A big drop in the MACD has this indicator on a sell signal, and money flow is still rather shaky.
There is an uptrend line that connects higher lows from the August low, and that may hold for a bit but with the strong volume trends down I don't believe this stock is going to bounce much from there, but if so another short opportunity. We see much lower levels here, target the 200-day MA around $12 or so, let's use a stop at $27 just in case.
