These recently downgraded names are displaying both quantitative and technical deterioration.
By BOB LANG
Stocks quotes in this article: IPAR, SITE
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 several 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.
Inter Parfums Isn’t Up to Par
Inter Parfums Inc. (IPAR) recently was downgraded to Hold with a C+ rating by TheStreet’s Quant Ratings.
The fragrance maker has been in a sharp downtrend for months. The peak here was the start of the year, as it was for many stocks. The cloud remains red, as this stock is in a severe move lower.
The recent pull-up is simply a bear flag, with a steep downtrend in the Relative Strength Index (RSI). Money flow is weak and smacks of distribution.
We could see a bounce back into the mid $70s, but that would be about it. A break below recent lows targets the high $50s here; but put in a stop at $75 and target $55.
SiteOne Landscape Supply Isn’t Attractive
SiteOne Landscape Supply Inc. (SITE) recently was downgraded to Hold with a C+ rating by TheStreet’s Quant Ratings.
This landscape supply wholesaler has a miserable-looking chart, with lower highs and lower lows, which is indicative of stocks in this group. Money flow is poor and just bounced positive for a moment, so this is a good time to set in with a bearish play.
RSI is still well under 50; this move to the 20-day moving average is on lower turnover, a good spot to get short.
Target the $110 area here, put in a stop at $145.
(Real Money contributor Bob Lang is co-portfolio manager of TheStreet’s Action Alerts PLUS. Want to be alerted before AAP buys or sells stocks? Learn more now. )
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