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.
Penumbra Looks Unhealthy
The medical device maker has fallen hard on very strong turnover the last several months. This stock’s downtrend channel is well-defined here, with lower highs and lower lows.
Moving average convergence divergence (MACD) is about to roll over and money flow is surely bearish. The cloud is red, too, as the Relative Strength Index (RSI) cannot seem to get a lift above 50. All in all, this stock is still a short.
Let’s target the $95 area as aggressive, but put in a stop at $140 just in case.
Ruth’s Is Tough to Chew On
The steakhouse operator is one of those names that performed well when the economy reopened but has faltered since and has some bearish qualities on the chart. The stock has fallen hard since peaking in early March, with lower highs and lower lows and an arc bending downward.
Once Ruth’s fell below the 200-day moving average in May it’s been hard times. Lower highs and lower lows dictate the price action; also, MACD is on a sell signal while money flow remains negative.
This one is headed to about $9, but put in a stop at $20 just in case.
Cutera Isn’t Pretty
The maker of laser and energy-based aesthetics systems has shown little bullishness since peaking in April. The stock remains under pressure and looks really to make a run into the $20s.
MACD is on a sell signal while money flow is poor and the cloud is red. The channel is well-defined with lower highs and lower lows.
There is little reason to be long this stock. However, a short lower looks good, but put in a stop at $45 just in case.