Bearish Bets: 3 Stocks With Bad Charts to Short This Week
These shares, which are looking vulnerable, are 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.
DigitalOcean Looks 'Lost at Sea'
The stock of DigitalOcean DOCN has been wandering aimlessly for months. The trend, though, is sharply lower, and with the Nasdaq and small caps on the move, this stock is demonstrating horrible relative strength. A recent rally barely took the stock up to a resistance line and it appears DOCN will be right back down in the next phase.
Money flow is horrible as the stock is well below the 50- and 100-day moving averages. So, we think a short play is still in order, at the very minimum to those April lows at $28, but then even lower to the $22 mark. Let's target those two areas, put in a stop at $34 just in case.
Enphase Is in the Middle of a Vicious Decline
There may not be too much meat left on the bone for a short play in Enphase, ENPH but there is at least some opportunity to move down to the lower end of this channel. The stock has been spiraling out of control for months, a series of lower highs and lower lows and with horrendous technical conditions.
One might view the positive money flow and Moving Average Convergence Divergence as bullish, but recall the same condition existed in April just before the stock made another massive turn down. We'll trust the trend, it is at the upper end of the range and begging to be shorted. Let's do that, target the low $30s for a nice gainer, put in a stop at $49.
Atlassian Is Again 'Taking One for the TEAM'
There is no mistaking this Atlassian TEAM is a troublemaker for the bulls. Each time the stock tries to rally, the sellers come out and smack it down with some heavy volume selling. Money flow is poor and the MACD is about the cross under for a sell signal.
The downtrend channel is in tact, lower-highs and lower-lows; the stock is breaking lower from the top end of this range. With other technology stocks doing well, this name has poor performance, and hence probably has lower prices ahead.
Let's consider a short play with a target to $175 and probably down to $150 eventually. Very bearish, put in a stop at $235 just in case. Below the 200-day moving average is not good here.
