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.
The popular discount retail chain is not looking great for those looking to swing trade the stock by buying shares. Popular financial site TheStreet recently downgraded Dollar Tree’s quant 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%.
Learn more about Dollar Tree: Website | Investor Deck | DLTR Chart
Exelixis Inc. 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 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%.
Learn more about Exelixis: Website | Investor Deck | EXEL Chart
3. Standard Motor Products (NYSE: SMP)
Standard Motor Products 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 a 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%.
Learn more about Standard Motor Products: Website | Investor Deck | SMP Chart
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Disclaimer: Wealthy VC does not hold a long or short position in any of the stocks mentioned in this article.
