5 Stocks to Sell for August

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If you’re looking for stocks to sell, now’s the time to do it.

5 Overvalued Stocks to sellAugust is a sleepy month for stocks, typified by low trading volume and modest-at-best gains for the broad equity market. It’s almost like the calm before the storm where everyone is looking for stocks to sell. After all, September is the worst month for stocks, averaging a loss of 1% since 1928, and a loss of nearly 5% in every down September since then.

The S&P 500 has had a heck of a year. Its year-to-date gain of 7% is already better than most market strategists were projecting for all of 2014. Of course, markets do not go up in a straight line, and there’s every to think we’ll hit at least one bout of extended selling before the end of the year.

Whether we get a full-blown correction or not, it’s typical to see stocks suffer some broad-based selling at the end of August/start of September. And there certainly is no shortage of marquee names in the S&P 500 flashing signs of technical weakness right now. It’s as if they’re just waiting for the downdraft to begin. That alone makes them stocks to sell.

From breaking through support levels to a lack of upside momentum to poor seasonality, dozens of S&P 500 stocks are hobbled by weak technicals. After screening the broader market, we chose a handful of names we consider sells on a technical basis alone.

If you want to get ahead of the market’s imminent cooling off period, these are the five stocks to sell for August:

Stocks to Sell – Avon Products (AVP)

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Avon Products (AVP) is having a terrible year — off nearly 25% so far in 2014 — and August looks like it will deliver more of the same, based on current technical weakness and seasonality.

AVP has absolutely no momentum. And after breaking through its 50-day moving average in July, there’s no support level in sight. The stock is nearly 50% below its 52-week high, 10% below its 50-day moving average and 17% below its 200-day MA.

True, AVP’s relative strength indicator suggests that it is oversold. But then, stocks can keep falling and stay oversold for a long time before finding a bottom. It is a process, after all.

Finally, this time of year has never been all that kind to AVP. On average, it loses 3.7% in August, according to data from Thomson Reuters Stock Reports.

Stocks to Sell – Boeing (BA)

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Boeing (BA), a component of the Dow Jones Industrial Average, is struggling this year just as it heads into a seasonally weak period.

BA stock is off more than 10% for the year-to-date, and has a way to go before it finds support. BA stock is now 15% below its 52-week high. It’s also 6% below its 50-day MA, and 7% below its 200-day.

Adding to the downward momentum is an RSI of 38, which reveals BA stock is suffering from weak demand — not that it’s oversold.

August is also a good time to sell BA stock, or at least avoid it, based on seasonality. On average, it loses 0.6% during the month.

Stocks to Sell – ConAgra (CAG)

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ConAgra (CAG) is down 9% for the year-to-date and looks to stay that way — or get worse. Try as it might, it keeps bumping up against resistance at its 50-day moving average.

That has CAG stock trading 18% below its 52-week high, 1.4% below its 50-day and 2.4% below its 200-day. Sure, it’s within striking distance of those levels, but they’ve offered nothing but resistance time and time again in July.

ConAgra’s RSI of 50 shows no momentum either way. It’s solidly in the middle of the thresholds for being overbought or oversold. So no help there.

August isn’t too tough on CAG stock, but there’s little hope for gains, either. It retreats by an average of 0.3% during the month.

Stocks to Sell – Walmart (WMT)

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The fundamentals (weak U.S. sales) aren’t helping Walmart (WMT) this year, and now the technicals are conspiring against it too. WMT stock found support at its 200-day three times in July. On the fourth try, the floor gave way, taking WMT down straight through its 50-day too.

WMT stock is off more than 4% for the year-to-date and should widen that gap over the course of the month. The stock is now 7% below its 52-week high, 1% below its 50-day, and 2% below its 200-day.

An RSI of 25 puts WMT into oversold territory, but that only tells us the bottoming process should be underway. It doesn’t tell us when it’s finished.

Lastly, WMT stock, another Dow component, tends to weigh on the blue-chip average in August, producing an average loss of 2%.

Stocks to Sell – Harley-Davidson (HOG)

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The good news is that after putting up a loss of 8% for the year-to-date, Harley-Davidson (HOG) looks like it just might be starting the process of bottoming out.

The bad news is there’s little reason to expect it to finish that process in August.

After breaking through its 200-day moving average in July, HOG stock sits 7% below that level. It’s also 15% below its 52-week high, and 8% shy of its 50-day MA.

An RSI of 30 has HOG stock on the threshold of being oversold, but it’s not there yet. Besides, HOG has plenty of room to fall further. (It notched a year-to-date low of $61 in February, and still trades a good 20% above its 52-week low.)

Another reason to fear a bad month for HOG is seasonality. On average, HOG generates a loss of 1.3% for the month, according to data from Thomson Reuters Stock Reports.

As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2014/07/stocks-to-sell-avp-ba-cag-hog-wmt/.

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