Top 3 Stocks to Short Based on Negative Technical Outlook
Rather than sitting on the sidelines or making risky long bets, many experienced investors are shorting stocks as a means to keep the gain train rolling.
With stock market sentiment growing increasingly bearish, investors are left with few options to continue generating profits in this bear market.
Today, we’ll be reviewing three stocks that were recently downgraded and currently have a negative technical outlook. Investors experienced in the art of short selling should look closely at these stocks and consider the possibility of opening a new short position in one or more of the names below.
1. Dollar Tree (NASDAQ: DLTR)
The popular discount retail chain, Dollar Tree (NASDAQ: DLTR), is not looking great for those looking to swing trade the stock by buying shares. Popular financial site TheStreet recently downgraded Dollar Tree’s quantitative rating to C+. Trading volume is also well down from last month, leading to a strong chance of further downside in the near future. The firm believes the stock could fall as low as $120, a 15% downside from current levels.
Shares of Dollar Tree closed the day at $139.33 per share, down 1.79% on the day. YTD, DLTR stock is down 1.3%.
2. Exelixis (NASDAQ: EXEL)
Exelixis (NASDAQ: EXEL) is another firm that should see its stock see further downward pressure in the short term. Heavy trading volume has led to a 13.8% decline in the past month alone, and there’s not much in the way of positive catalysts in the coming months. Such is the way for many biotech companies, caught in a downward trend by heavy trading volume and a lack of news. Shares could fall more than 10% from here based on several indicators, but be prepared with a well-placed stop loss in the high teens.
Shares of Exelixis closed Thursday at $16.57 per share, up 0.42% on the day. YTD, EXEL stock is down 13.61%.
3. Standard Motor Products (SMP)
Standard Motor Products (NYSE: SMP) is another recipient of a downgrade to C+ from TheStreet’s quant ratings. Based on several indicators, the stock is down the most on our list and might fall the furthest from current levels. Trading volume is low, and the RSI is on a steepening slope down. The downside from here is much greater than the upside until we see that slope start to flatten out. Bet against the automotive parts supplier with a short to medium-term exit plan.
Shares of Standard Motor Products closed today’s trading session at $33.13 per share, down 0.93% on the day. YTD, SMP stock is down 36.76%.
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Disclaimer: Wealthy VC does not hold a position in any of the stocks, ETFs or cryptocurrencies mentioned in this article.
