Bearish Bets: 3 Tough Luck Names That Are Poised to Head Lower
Under the hood these names look sickly.
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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.
F5 Really Is Up Against the Ropes
No question the action this past week on F5 Networks (FFIV) has been bearish. Hitting an all-time high the previous week was nice, but the stock has faltered here on heavy turnover, and even more, it confirmed the downside move later in the week. There is a date with the 200-day moving average, which stands near $296.
The chain of events for FFIV pulled the rug out from under the bulls, and now we see more downside coming. Moving average convergence divergence (MACD) is not helpful to the bull case, it is now confirmed on a sell signal, while volume trends have turned bearish. The relative strength index (RSI) is weak and nearly oversold. There could be a bounce, but it is likely to be short-lived.
Let's target the $265 level from here, a nice 12% gain but let's be patient. Put in a stop at $325 just in case.
Marsh& McLennan Downtrend Continues to Frustrate the Bulls
There's nothing worse than a huge gap down on big volume to ruin your day, especially when the stock market is higher. Such is life for Marsh & McLennan (MMC), the big insurance firm that has been circling the drain for months.
Lower highs and lower lows is a textbook definition of a downtrend, and that is simply the case here. Money flow has been bullish but we pay more attention to the chart action, which has been uber bearish.
RSI is down for the count, MACD is on a sell signal and a gap lower is certainly no guarantee that a bottom has been made. So, we see more downside to go until further notice.
Let's target the $175 area here, and put in a stop at $210 just in case.
Hewlett Packard Enterprise Fails to Hold the Uptrend Line
Just a tough day when a stock breaks the strong uptrend line and gaps lower. Hewlett Packard Enterprise (HPE) is pushing down on heavy volume, so we don't have a confirmation just yet, but that could be coming any day now.
Money flow is bearish and the MACD has again crossed over for another bearish signal. There's nothing positive on this chart.
Volume trends are bearish too, and the RSI has flipped to bearish, and with technology stocks being quite strong HPE is a huge disappointment not being able to keep up. Therefore, we see a good bearish chance here, at least to the 200-day moving average and maybe a bit lower.
Let's target the $19 level, and put in a stop at $26 just in case.
