U.S. equities are dipping into the red again on Wednesday amid ongoing concern about the rise of trade protectionism sentiment from the Trump Administration, the looming approach of the Federal Reserve’s next policy meeting later this month, and a hotter-than-expected PPI inflation report.
The decline has taken the Dow Jones Industrial Average — which has badly lagged the tech-heavy surge in the Nasdaq Composite — back below the critical 25,000 level in what looks like a violation of uptrend support from the February panic lows.
If a retest of last month’s lows is coming, these five stocks to sell look set to suffer the most:
Stocks to Sell: J C Penney (JCP)
J C Penney Company Inc (NYSE:JCP) shares are falling out their post-November uptrend pattern and look set to drop back below the $3-a-share level. That threatens a decline all the way back to the early November low near $2.50, a near-20% decline from here. The catalyst was an initiation with a sell rating by analysts at Credit Suisse.
The company will next report results on June 1, before the bell. Analysts are looking for a loss of 23-cents-per-share on revenues of $2.62 billion.
Stocks to Sell: Qualcomm (QCOM)
Qualcomm, Inc. (NASDAQ:QCOM) shares have been in the news after the Trump Administration axed a potential acquisition by Broadcom Ltd (NASDAQ:AVGO) citing national security concerns. The result pushed shares down out of a multi-month trading range for a test of the 200-day moving average today. Watch for a breakdown to setup a fall to the lows seen last fall, which would be a 16%+ decline from here.
The company will next report results on May 2, after the close. Analysts are looking for earnings of 55-cents-per-share on revenues of $5.2 billion. When the company last reported on Jan. 31, earnings of 98-cents-per-share beat estimates by 7 cents on a 1.7% rise in revenues.
Stocks to Sell: Boeing (BA)
A rare selloff in Boeing Co (NYSE:BA) shares is the primary motivator for weakness in the Dow Industrials today, with the stock dropping hard below its 50-day moving average for the first time since May 2017 — when the stock was trading for just $180 vs. $332 now. Because of its high price, BA’s weakness carries an outsized influence on the Dow’s price-weighted index.
The company will next report results on May 2, before the bell. Analysts are looking for earnings of $2.66-per-share on revenues of $22.01 billion. When the company last reported on Jan. 31, earnings of $3.04-per-share beat estimates by 16 cents on an 8.9% rise in revenues.
Stocks to Sell: Kroger (KR)
Embattled grocer Kroger Co (NYSE:KR) has seen shares drop back below their 200-day moving average, reversing the gapped move higher seen in late November, after a 22%+ decline from the late January high. Analysts at the Tesley Advisory Group recently lowered their price target on concerns necessary investments in its business (to fend off Amazon.com, Inc. (NASDAQ:AMZN) and others) will weigh on profitability.
The company will next report results on June 7, before the bell. Analysts are looking for earnings of 63-cents-per-share on revenues of $37.4 billion. When the company last reported on March 8, earnings of 63 cents matched estimates on a 12.4% rise in revenues.
Stocks to Sell: General Motors (GM)
General Motors Company (NYSE:GM) shares are languishing below their 200-day moving average, capping a 17%+ decline from its late October high. Shares have been pressured by talk of a trade war and import tariffs, as it will threaten profitability not only by raising metal costs but increasing the expense of bringing cars manufactured in places like Mexico into the United States.
The company will next report results on May 8, before the bell. Analysts are looking for earnings of $1.31-per-share on revenuers of $34.12 billion. When the company last reported on Feb. 6, earnings of $1.65 beat estimates by 22 cents on a 7.7% decline in revenues.
Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
