Tesla Among Top-3 Stocks to Short as Downtrend Continues

Let’s check out three stocks that appear technically bearish and ready to short.

Claim 30% Off TipRanks

While we will not weigh in with fundamental analysis on these issues, we will pop the hood for a look at the charts.

Let’s dig in:

1. Pulte Bulls Need to Find a New Home

With elevated inflation, a weakening economy and very high home prices, this does not seem to be the right time for homebuilders. Pulte (PHM) is choking on higher rates and low demand, and it cannot seem to get out of its own way, tripping over itself while other market sectors seem to be doing better. 

 

The chart of Pulte is atrocious. The bears have clearly been winning in this name and other homebuilders. The trend is down with a series of lower highs and lower lows.  The double-top formation shows an M pattern, which is bearish. Plus, it shows MACD on a sell signal and RSI deeply oversold. Nothing bullish here, but we could have more downside to the June lows of last year. Let’s target $95, an aggressive move, and put in a stop at $125.

2. Tesla Batteries Running on Empty

Horrific price action on Tesla (TSLA), with a downtrend channel in place. Lower highs, lower lows, which is our textbook definition of a downtrend, and the MACD is on a confirmed sell signal and money flow just went bearish. This MAG 7 name is well on its way to meeting lower support levels.

We see a good short opportunity here as the 200-day MA resumes its place of heavy resistance. The $280 level is a logical spot for a target, let’s short here and wait for it, putting in a stop at $405 just in case.

3. Ulta Beauty’s Chart Is Not Really Beautiful

It’s been a tough month for Ulta Beauty (ULTA) after posting good earnings but warning about future quarters. The stock was bludgeoned and buyers just went away from the name. A follow-through after that earnings miss was the death knell for the stock, which continues to look bad.

Money flow is weak, MACD is on a crossover sell signal and relative strength is already in bearish territory. There’s nothing here to save this stock, so a downside target could be the gap around $420 or so, a sizable move down but let’s set a protective stop at $580 just in case.

Now is an excellent time to join TheStreet Pro. Click here.

This article is being shared as premium content from TheStreet Pro. It was written by Bob Lang.