These recently downgraded names are displaying both quantitative and technical deterioration.
By BOB LANG
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.
Live Nation Puts on a Poor Show
The concert and ticketing giant is a serial offender, often making a big move up only to be downgraded. That happened this week with Live Nation, which came off a touch of its 200-day moving average last month and has just fallen apart.
Money flow is bearish while we see a moving average convergence divergence (MACD) crossover, too. The Relative Strength Index (RSI) is bending lower at a steep slope, telling us there is more downside to come.
The bleeding may come to an end soon, as Live Nation has some support at the November lows, call it $66. However, an aggressive trader might continue to ride it through, targeting the mid $50s if patient. We’ll consider that as a trade here, but put in a stop at $74 just in case.
Constellation Brands Goes Flat
The producer of beer, wine and spirits has had a miserable month, making lower highs and lower lows on pretty strong turnover. Money flow just went bearish and the RSI is bending lower at a steep angle. That is also bearish.
Constellation Brands’ price action is horrendous, far worse than the rest of the market. There is little support between current levels and the January low, so a good target would be down to about $205. Put in a stop at $230 just in case.
This chart is extremely bearish and we would not be surprised to see the January low taken out.
Mattel Isn’t Swell
The big toymaker’s chart is awful, with price action reflecting the bearish sentiment. Volume trends are extremely bearish while we just turned negative on the money flow. That tells us big institutions are selling the name.
There is some support around the December lows; that comes in around $16. The cloud is red as well, which tells us the trend has shifted bearish. If short, target the $15 area, put in a stop at $19.50.
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