These recently downgraded names are displaying both quantitative and technical deterioration.
Stocks quotes in this article:
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.
D.R Horton Is Hurtin’
Housing stocks have been a disaster since the start of 2022. No surprise, though, as higher interest rates have forced borrowers to the sidelines, waiting for the moment when interest rates settle down. That could be awhile. In the meantime, homebuilders such as D.R. Horton are stuck trying to build the right amount of inventory.
Profits are strong, but frankly the charts tell a story that is bearish down the road. This stock shows a steep downtrend channel of lower highs and lower lows. The cloud is red and the money flow is sharply bearish. No relief here.
Take a short and target the mid $50s, put in a stop at $77.
Starbucks Has the Jitters
Not even the return of the old CEO can help Starbucks get it together. The stock has been swirling in a downtrend for months, with lower highs and lower lows. Money flow is poor and moving average convergence divergence (MACD) just crossed for a bearish signal.
The Relative Strength Index (RSI) is negative and shows a steep downslope. That tells us more downside is likely.
Target the mid-$60s, but put in a stop at $86, which is pretty aggressive. This stock should move to the target eventually.
Boston Beer Goes Flat
The brewer behind the Samuel Adams brand shows a miserable downtrend with high volume, poor price action and a bearish MACD. The RSI is in a steep downtrend and the recent touch of the 20-day moving average and the downtrend line was reversed sharply. That tells us price is rejected on every dip, with lower highs and lower lows.
It’s hard to believe this stock was $550 just five months ago, but there seems more down to go. Target the $300 area, put in a stock at $395.
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