Top-3 Stocks to Short Now: Shopify Among Bearish Bets
These three names had shocking drops and the bottom does not seem to be in as of yet.
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Let's check out 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:.
Unity Looking Bearish Even Before This Week's Tumble
Unity Software (U) is now just a shadow of its former self. There's nothing bullish about this chart and frankly, everything is bearish. Notice that the setup for this week's failure happened over the last few weeks.
I drew in a bear flag, which is one of the most powerful bearish signals in the technical universe. Money flow as you can see here is poor and has been for weeks. The RSI is weak and bending down at a steep angle, which means more downside is likely.
Volume prints this week have been heavy, this indicator clearly on a bearish signal. The stock remains on the decline and while there could be a modest rally we don't believe it will be anything less than a short covering variety. Let's target those April lows, call it $16 for a nice profit, put in a stop at $26 just in case.
Odd Weakness in this Big Commercial Real Estate Holding
It is not often we would find Jones Lang LaSalle (JLL) on the bearish list, but here it is.
A sharp move lower on heavy volume has the bulls showing some concern here. Thursday's smackdown was on heavy volume and broke some good support. Money flow is now bearish and the MACD just rolled over for a sell signal, not good for the bull side.
There is some support at the $265 to $270 level and that might be where some bulls pick at the stock, but that would be about 10% lower than current levels. Better to go with the trend, which is now bearish than try to catch a falling knife. Let's target the $265 area and possibly lower, let's set a stop at $320 just in case.
Shopify Has a Lower Gap to Fill
Tech stocks have been showing some weakness of late, especially the higher valued names like Shopify (SHOP) . This company reported strong earnings recently, saying their holiday period was they best on record but the sellers continue to hammer the stock mercilessly. No doubt the high valuation is a problem, big money investors prefer to find cheaper names other than SHOP.
Money flow is weak, volume trends are bearish and the stock reversed for a major bearish price trend change.
The stock tagged the 200-day moving average this week and was rejected, now there is a chance of much lower prices to fill the gap from last April. The price objective would be about $83 to $85, a nice 27% move down from current levels. It might take some time to get there, let's also put in a stop at the blue downtrend line, call it $130.
