These recently downgraded names are displaying both quantitative and technical deterioration.
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Each week Trifecta Stocks identifies 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 five 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.
Intuitive Surgical (ISRG) recently was downgraded to Hold with a C+ rating by TheStreet’s Quant Ratings.
Medical device stocks had been hot for a while this year, but there’s been a recent moderate correction to Intuitive. Examining things here the volume trends have been strong and bearish and money flow just turned negative. Further, the Relative Strength Index (RSI) shows a steep slope downward and the bearish channel is lengthening. Hence, the trend is still intact.
Moving Average Convergence Divergence (MACD) is on a sell signal.
The 200-day moving average looks like a good target here around $290 or so; put in a stop at $350.
Biogen (BIIB) recently was downgraded to Hold with a C+ rating by TheStreet’s Quant Ratings.
Big biotech name Biogen has been hurting for months. A big surge in June was all she wrote — the stock has made a steady decline on pretty high turnover. This downtrend does not seem over, though the late May lows might be enough for a pause.
Money flow is very poor, while RSI is flat on its back. This is certainly not a buy for anyone here, but a short still looks attractive. Be patient, but set this to a target of the $225 area and put in a stop at $300.
This commentary is an excerpt from “5 Bearish Bets” a weekly feature sent to subscribers of Trifecta Stocks. Click here to learn more about this portfolio, trading ideas and market commentary product.
Want to find out the other stocks we think look good short this week and how to play them? Click here for a trial subscription to Trifecta Stocks and get “Bearish Bets” each week!
— Bob Lang and Chris Versace are co-portfolio managers of Trifecta Stocks.
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