More than a few stocks fell victim to the earnings monster.
Their weaker-than-expected quarter, tepid forward guidance or some other disappointment buried in the conference call signaled the beast to come and wreak havoc.
Today’s trio are still reeling from their earnings announcement fallout and remain vulnerable. If you’re a believer that weakness begets more weakness then consider these companies ripe for short trades. And, bonus, attractive low-risk setups are now available if you’re looking to join the ranks of the bears.
They all boast technical deterioration. Two of them have been falling for ages — at least by active trader standards — and their latest earnings seem to have kickstarted another down leg.
Behold, three stock breakdowns beckoning to bears.
Breakdowns Beckoning to Bears: Twitter Inc (TWTR)
Twitter Inc (TWTR) is once again knocking on the door of new all-time lows. It seems the blue bird’s brain needs re-wired. Summer is approaching and yet TWTR is hellbent on flying south.
Poor old bird is lacking a quality catalyst to turn its course. Its fundamentals continue to disappoint, and until TWTR can to deliver something for investors to get excited about, its descent will continue.
And no need to drone on about the chart. It’s a piece of junk on all time frames. ‘Nuff said.
TWTR stock is basing at a key support level in the $13.90 region. Wait for a breach, then buy the Sept. $14 puts.
Breakdowns Beckoning to Bears: FireEye Inc (FEYE)
Fireeye Inc (FEYE) and Twitter are birds of a feather. Nevermind that FEYE is in the cyber security space. It too finds itself locked in a downtrend with little hope of escape.
FEYE stock’s latest setback was another weak earnings announcement. It seems anytime the stock finally finds its footing, the cold, hard reality of deteriorating fundamentals strikes and the plunge begins anew.
Like TWTR, FEYE stock has built a base in the days following its earnings announcement. If you’re looking to get in on the bearish action, wait for a break of the $12.40 support, then sally forth with a Sept. $14 put buy.
Breakdowns Beckoning to Bears: Walt Disney Co (DIS)
The mouse house rounds out today’s bear candy. Walt Disney Co (DIS) stock was really making strides this past quarter rallying back nicely from its February lows.
The bulls even succeeded in taking DIS stock back above all its major moving averages. But, alas, the recovery bid was halted by another disappointing earnings announcement last week.
To their credit, Disney bulls did succeed in delivering a reversal candle on Friday right at the 50-day moving average. So perhaps the slide has been halted for now.
If you think DIS stock eventually succumbs to gravity, look for a break of Friday’s low to confirm a new down leg is upon us, then buy the July $100 put.
As of this writing, Tyler Craig did not hold a position in any of the aforementioned securities.
