Finding reversal opportunities in beaten down stocks MOH HURN HCPL FL DIN BGS 03-25-2017

As the GOP's revision of the health care bill gets deferred for the second time this week on late Friday, markets breath a sigh of relief and were able to close almost unchanged on Friday. SPY was down by just -0.07%. It's likely the president and GOP leaders will take on a legislation that they expect to pass which could possibly calm the markets a little bit. Markets dodged a sell-off Friday as the bill wasn't put up for vote because the possible outcome of failure seemed clear.

Trade Idea Recap from last week (March 20th and 23rd 2017)

Let's look at some of the ideas we talked about last week in two separate blog posts (tech ideas and bio tech) which we thought were good candidates to trade on either direction.

  • ALRM – Alarm.com Holdings, Inc. : As anticipated last weekend, ALRM did test $33 the following week with price reaching as high as $33.60. The original thesis is still in tact and I've found an entry at low $31 and I'm anticipating a $33 test again along with $35 as my initial price target in a week or so. If price doesn't hold $30 I'll be looking to get out of this position.

  • TLND – Talend S.A. : We said if TLND doesn't break above $31 right out of the gate early last week it will consolidate back to $28. That's exactly what the stock is doing currently. I think $28 would be a good entry with low $27 as risk. I'll be looking for an entry early next week for a long swing position.

  • XBIT – XBiotech Inc. : We thought XBIT would very likely test $20 last week and the stock went as high as $19.90. Friday we noticed a major indecision as the stocks was sold off early but recovered late closing at high $18. We like to see $17 to hold which it did very nicely. If this continues $25 is possible but use caution as this is a very thinly traded stock and there key ongoing issues to take note of.

  • NTNX : Ive' closed this short position from $22.50 at mid $19 but this could likely go lower.

Six ideas to consider for reversal

Here are some of the stocks that I'll be watching for a reversal next week. Using BuySellShortCover's prospecting engine I've created a scenario targeting actionable stocks that are trending downwards but starting to show signs of life for a comeback...

downtrend-reversal-ideas-03-25-2017

Once again, to learn more about how to use and apply proprietary gauges such as Berserker, Elasticity and Flux checkout our howitworks page. Now back to the ideas..

The common theme among these charts is they are trending lower in the short term while still holding longer term support levels. Here is GIF that flips through these charts in 6 seconds to visualize similarities.

basket-stocks-gif-03-25-2017

MOH – Molina Healthcare Inc

After an earnings miss on mid February and downgrades, MOH has been on a downward channel but the stock made a strong price movement on Friday and is currently testing the higher end of the channel which is also a major near term resistance (see chart). Elasticity is currently making a saucer formation. What we want to see next is Elasticity moving back to 0 and break above the channel for a ride back to $50. If that doesn't happen the stock would continue to decline. Additionally, MOH has a 20% short interest as well which isn't very high but something to keep in mind.
MOH-03-25-2017-technical-analysis

HURN – Huron Consulting Group Inc.

HURN is coming off a fresh 52 week low area and it made a $1.50 move on Friday on the back of a recent analyst upgrade if that amounts to anything as I don't find analyst upgrades or downgrades useful but it tends move the price.

$40 seems to be a good support and we want to wait for price to form a solid base here if this stock were to make a comeback and take on a position. HURN has a very low short interest (< 3%).

HURN-03-25-2017

HCLP – Hi-Crush Partners LP

After announcing 25m shares offering on Feb 23rd 2017, price has fallen off the cliff and it's currently in a downward channel. If $15 doesn't break, we could see a retrace back to $13.50 and the channel continuation in the channel is likely. We will be watching HCLP's Elasticity to turn positive/sustain and break outside the channel (over $15) before taking a long position or join the trend on the short side for a short term trade if that's not the case.

HCLP-03-25-2017

BGS – B&G Foods, Inc.

Recently price gapped down on Feb 23rd 2017 due to dismal earnings results and right now the price is struggling to hold $40. We will be watching to see if $40 can hold and consolidate sideways for a few days. If we start to see a nice grind up the stock could re-test $45 within a month.

BGS-03-25-2017



And here are few others from this scenario you can analyze in our platform. We encourage you to research each actionable idea further to understand the catalyst, story, and/or event behind them:

  • FI – Frank's International N.V.
  • DIN – DineEquity, Inc
  • SLCA – U.S. Silica Holdings, Inc.

Alright, That's it for now folks. Happy and Profitable trading for the next week.

If you're interested in learning how to find highly actionable trading ideas everyday like the ones in this blog post, sign up for an account at http://buysellshortcover.com, our new idea generation platform. We're currently in open beta and there is no cost for using the platform during this time.

Feel free to contact us if you have question, comments, or feedback by visiting http://buysellshortcover.com/contact

Image credit - urbanfragment.files.wordpress.com | disclaimer.

Saadey (साँढे)

compsci background, high perf software engineer by profession, fintech fanatic, entrepreneurial, food lover, soylent, traveler, NBA fan, geek, and avid learner.

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