Each week we identify names that look bearish and may present interesting investing opportunities on the short side.
Using technical analysis of the charts of those stocks, and, when appropriate, recent actions and grades from TheStreet’s Quant Ratings, we zero in on three names.
While we will not be weighing in with fundamental analysis, we hope this piece will give investors interested in stocks on the way down a good starting point to do further homework on the names.
Estee Lauder Isn’t Pretty
Estee Lauder Companies Inc. (EL) recently was downgraded to Hold with a C+ rating by TheStreet’s Quant Ratings.
The cosmetics giant is a repeat offender on this list. With a defined channel of lower highs and lower lows the stock is heading much lower. We could see a run to support at $213 or so.
Money flow is bearish, moving average convergence divergence (MACD) is on a double sell signal and volume trends are picking up and bearish. Nothing at all inspires us to be bullish, but there is some downside potential here. Put in a stop at the 200-day moving average, or $244, which should be heavy resistance. Target the $210 area for a nice gainer.
Centerspace (CSR) recently was downgraded to Sell with a D+ rating by TheStreet’s Quant Ratings.
The owner of apartment communities is a new name, but it’s the same ol’ chart. The downtrend is strong on very high turnover. There is little to like about Centerspace, with bearish money flows and a MACD sell signal to boot.
The RSI shows an oversold reading, but that is no reason to buy. We could see a move back up to the higher end of the channel, but then it’s right back down again. We could see a move into the $40s for CSR very soon, but put in a stop at $64 while targeting those $40s.
Denbury Loses Energy
Denbury Inc. (DEN) recently was downgraded to Hold with a C+ rating by TheStreet’s Quant Ratings.
The independent energy company has been bearish for several months now, with a defined channel of lower highs and lower lows. We could see a modest rally, then another touch of the lower channel.
Volume trends are high and bearish right now, and the Relative Strength Index (RSI) cannot seem to get going, either. Money flow also is bearish. What is there left to do? Short this stock; target the $70 area, put in a stop at $82 just in case.