Bearish Bets: 3 Stocks With Something in Common You Should Short This Week
Breaking symmetrical triangles to the downside is downright bearish.
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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.
Crocs Needs to Regain Its Footing
The action on this footwear maker is atrocious. Crocs CROX just fell outta bed this past week on heavy volume to the downside. That turns this chart bearish from a mild neutral state. Failing to hold support from April is troublesome and means we could see quite a bit more downside.
The on-balance volume has been declining for months, bearish since February. The RSI (relative strength index) bent lower this week while the MACD (moving average convergence/divergence) just pushed to a sell signal. Money flow is weak and not impressive at all, and buyers are not coming to it.
So, even with the big drop there is more meat left on the bone. Let's target the $65 area for now, and put in a stop at $82 just in case.
Fortinet Is in Need of a Lifeline
Another chart that broke a triangle, Fortinet FTNT actually did it this past last week on higher volume. The response to this past week's earnings seems anti-climactic. With a strong push down on heavy volume there seems nowhere else to go.
While the turnover is large here don't forget more sellers will cut this stock, which is at levels not seen in about a year. Selling begets more selling.
Money flow is now bearish and growing, MACD turned lower for a sell signal, and the RSI is cooked, oversold here. Nothing bullish about it but there is a short play possible.
Let's target the $60 area for an aggressive short, putting in a stop at $82 just in case.
Lilly Continues to Be a Challenging Stock
No question, the last couple of years if you had to ask what was the most popular pharma stock, it had to be Eli Lilly LLY. One blockbuster drug after another and the weight-loss king (it's drug Zepbound) was going to conquer the world. One commentator even said "Lilly will be the next trillion dollar company." Well, that turned out to be bunk as the stock just went into a tailspin following some very poor earnings.
That happened again this past week and Lilly is now poised for even more downside. The stock is flirting with levels not seen since February 2024, a stark reminder that bearish action still exists. We could see the stock make a run at the 200-week moving average at $548 or so, which is a good target.
MACD is on a sell signal, and the on-balance volume has rolled over. Target the $548 area, and let's go with a wide berth on our stop, $705.
A very bearish chart breaking that triangle.
