Bearish Bets: 3 Stocks You Should Short 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.
GitLab Chart Leaves Something to Be Desired
After posting decent earnings but only so-so guidance GitLab GTLB was smashed down after making some positive strides over the last six weeks. Sadly for the bulls that trend is over and now the sellers have taken control, with heavy volume prints this past week as the shares suffered a major loss of support.
Money flow is weak but so is the on balance volume, which tells us the big institutional money is bailing on the stock. GitLab is beaten down but looks to have even more downside to go.
So let's target the April lows for an easy target, about $38, but look for more downside at the low $30's support area. Put in a stop at $43 just in case.
Chewy's Chart Is Not Barking Out to Me
What goes up often comes back down, even for a short period of time. That is what we see in Chewy's CHWY chart.
The stock blasted higher for about a six week period from April to June and with one day (post earnings) completely obliterated the uptrend. That is the inherent risk in names like this, especially in retail when you have no edge other than just riding the trend. Sometimes that works but if you're not willing to at least take some profits along the way you leave yourself exposed to potential losses.
On the chart, the money flow is starting to go away, with the on balance volume tripped up and now pointed downward, in just one session. Moving average convergence/divergence (MACD) is now on a sell signal and the releative strength index (RSI) is not yet oversold.
We could move sharply lower with some follow-through, so let's target the 200-day moving average at $34 for now, and put in a stop at $45 just in case.
Bulls Have Lost Their Appetite for United Natural Foods
Just a really horrible couple of weeks for United Natural UNFI, with very heavy volume and price action that broke through some heavy support levels. MACD has been on a sell signal for about a month, while money flow is bearish.
Check out the on balance volume, which tells us big money managers have been exiting the stock in size. RSI looks to be oversold but it has been for days. This stock is due for a bounce but that will be a time to short more.
For now, we'll stay on the trend and put on a short play here and target the mid-teens. Put in a stop at $27 just in case.
