Each week, we identify names that look bearish and could present interesting short-term investment opportunities.
Using technical analysis of those stocks’ charts, and where appropriate, recent actions and scores from TheStreet’s Quantum Ratings, we’ll single out three names.
While we won’t be focusing on fundamental analysis, we hope this section will provide investors interested in stocks on the way down a good starting point to do name exercise. .
Nike Just Don’t Do It
Nike Inc. (NKE) was recently downgraded to Organization with a C+ rating by TheStreet’s Number of ratings.
This major shoe and clothing maker blew up its tires last week, reporting terrible sales and instructions. The chart already showed a significant downside move ahead of this report, so that move last week came as no surprise.
The money flow is very weak while the red cloud and the Relative Strength Index (RSI) are falling. As for the moving average convergence divergence (MACD), it is on a double sell signal with higher and lower lows on the chart. Shares are down a ton, but more is likely here. Briefly here, especially after the stock rebounded. Target $70 area, stop at $100.
Shredded international paper
International Paper Co. (IP) was recently downgraded to Organization with a C+ rating by TheStreet’s Number of ratings.
Last month, the packaging maker struggled with massive sales and very weak price action. The money flow is poor while we see the creation of the current bearish flag. That is a huge negative, with sellers taking control while buyers seem unable to participate.
The Relative Strength Index is poor and the MACD is still showing sell signal; The cloud is also red and opening. If short-term, target as low as $20, but place a positive stop at $40.
Recognition technology slides
Cognizant Technology Solutions Corp. (CTSH) was recently downgraded to Organization with a C+ rating by TheStreet’s Number of ratings.
Technology and consulting service providers have been in a disastrous downtrend for months, and there’s no reason to believe that’s going to end anytime soon. With lower highs and lower lows on the chart, there is simply no support for or buy this name.
Money flow shows strong multi-week distribution, red cloud and Relative Strength Index is dropping at a steep angle. This tells us that RS momentum is strong and declining. If short term, target $40 high now, stop at $64 just in case.
Receive email notifications every time I write an article about Real Money. Click “+ Follow” next to my take to this post.
