We highlight names that appear bearish each week and may offer intriguing short-term investment possibilities.
We focus on three names using technical analysis of the charts for those stocks plus, when necessary, recent actions and grades from TheStreet’s Quant Ratings.
Despite the fact that we won’t be offering any fundamental analysis, we believe that this article will serve as a useful starting point for investors interested in equities that are headed lower.
Quick Thoughts on Incyte
TheStreet’s Quant Ratings just lowered Incyte Corp. (INCY) to Hold with a C+ rating.
This biopharmaceutical business has been a wild mover this year, swinging widely between $65 on the low side and nearly $85 on the high side over the last six months.
Money flow has changed from bullish to bearish, and the moving average convergence divergence (MACD) indicator is still giving a sell signal. A double top is in place. With the June lows not far away and the Relative Strength Index (RSI) sliding downward at a strong angle, we might see a move toward $67 or so relatively fast. Aim for that region, but include a stop at $76 just in case.
The Grand Canyon plunges into the depths.
TheStreet’s Quant Ratings has lowered Grand Canyon Education Inc. (LOPE) to Hold with a C+ rating.
The chart displays a broad and slightly inclined downward channel, indicating that this institution of higher learning has been in the news for some time. Grand Canyon Education is currently close to the channel’s bottom and made the transition there rather swiftly after a spike in selling in early August. As buyers are still lacking, this stock is expecting a little bit more decline.
A rollover is expected when weak indicators (MACD, RSI) are present. This is a great opportunity to sell down to the mid-$70s; aim for the lows from February around $74 but place a stop at $91 just in case.
Medifast Quickly Loses Weight
TheStreet’s Quant Ratings just lowered Medifast Inc. (MED) to Hold with a C+ rating.
The manufacturer of weight-loss goods exhibits a massive move down on a large volume, as well as follow-through following some brief covering. With a red cloud, a negative RSI, and a sell signal on the MACD, Medifast appears to be broken in this instance.
With a break of that recent low in early August, things might turn ugly. We believe it will occur. Target a sharp decline to around $115 and stop at the most recent high of $145. Once that low from August is broken, this may be a hefty reward.