Bearish Bets: Gaming Name's a Bad Bet, So Are 2 Former Tech Stars
Horrific moves down tell us more downside to come in these technology names.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
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.
Stop Betting DraftKings Will Go Higher
We see a bearish chart pattern playing out on DraftKings (DKNG) , and that is a head/shoulders. Notice the blue lines in the top of the chart, a reliable bearish pattern that won't likely finish for a couple more weeks. There is some more downside though, if you can believe it. Bulls are not wagering heavily on DraftKings.
Money flow is weak, relative strength is bending lower at a steep angle, which says more selling is in the pipeline. Heavy turnover was the nail in the coffin today, so let's target the easy spot of $31, and the perhaps a run to $28. Put in a stop at $42 just in case.
Hubspot Just Cannot Get Any Momentum to the Upside
A clear downtrend in place for Hubspot (HUBS) and when it hits the downtrend line it is time to short more. That was the cue this week, but with this move down the stock has violated some good support. No question the trend is down, money flow is now bearish and the RSI, or relative strength index, is moving toward oversold. Remember, that does not mean the stock is a buy, in fact it is probably due for more selling.
The Moving Average Convergence Divergence has rolled over for a sell signal here, just bad news on this name as it continues to struggle. Let's target the $400 area as a first stop, maybe down a bit lower but certainly we would like an opportunity to short on a pull up, that might be to $470 or so. Put in a stop at $490 just in case. When this thing goes down, it goes down fast.
Docusign Responds to Bearish Action
After falling so far, so fast the past few days can Docusign (DOCU) recover quickly? It's possible but not likely, the stock has been in mortal pain for days, and even while Docusign rallied for a month from August to September, it only took a few days to wipe out those gains. Brutal for the bulls.
In fact, failing the 50-day moving average for a third time should teach them a lesson here that anything below that support level is dangerous. No matter, we still see a bit more downside to go. MACD has rolled over, money flow is bearish and the RSI is oversold, which only means short the rallies.
Let's start a new short play targeting $55 and then $50, put in a stop at $66, be ready to short more up to $63.
At the time of publication, Lang had no position in any security mentioned.
