Bearish Bets: Tough to Find Upside With These Disasters
Stocks have fallen off a cliff and some good downside action can be argued for this trio.
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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.
Better Home May Be Brought Down to Earth
As they say, "what goes up must come down." Such is the case for Better Home and Finance Holding (BETR), a stock that has ripped higher since the start of August.
For a company that is making no money this chart is truly spectacular. From August to September, the stock moved up furiously from about 13 to 95, unimpeded. But now it appears the profit takers are taking their stand and moving along.
There will be more buyers, but at this point we think the momentum has turned downward and a good short move is a high probability trade. Volume to the downside this week with that massive reversal, overbought conditions on the stock but look at the quick turn in money flow, very bearish. We could see a move down to 30 before too long, a really nice profit to the downside, let's put in a stop at $82 just in case. Volatile name.
Carmax Chart Has Veered of the Road
When a downtrend is in place and then suddenly an earnings announcement arrives, there is little help for a stock that is weak.
Carmax (KMX) reported earnings this week and, while not horrible, there is little in the report for buyers to find interest. The sloping downtrend line tells us how poor the stock is performing, especially against a market that is making new highs.
The indicators have been weak for months, the MACD is just rolling over to a sell signal for the third time. Money flow just went south as well, the volume this week is massive and clearly bearish, RSI shows an oversold condition but that is not enough to buy the stock. Even as Carmax has fallen hard more downside is there, let's target the $37 level and then $33 beyond that, put in a stop at $59 just in case.
Hinge Chart Has Become 'Unhinged'
With just a little history in the chart, Hinge Health (HNGE) was on the rise lately but recent trends have turned bearish. This week the stock fell hard on heavy volume and then followed through to the downside. While we may see a rally attempt it will likely be feeble, and an aggressive short play would be ideal.
MACD is on a sell signal, money flow — while still bullish is heading lower and the RSI is bending lower at a steep angle, with lower highs and lower lows. We see a bit of support at the $42 area, let's target that spot for a nice gain on a short play, also a stop at $58 just in case.
