Talking about stocks to sell when the Dow Jones Industrial Average is surging more than 300 points to cross the 21,000 level for the first time feels a bit like sacrilege.
Never mind that the bulls keep changing the narrative, with the buying apparently being driven by a lack of specifics from President Trump’s speech to Congress last night.
Or that the last time the Dow had a 300-point rally was on Nov. 7, when FBI Director Comey cleared Hillary Clinton for the second time over her email server and thus lifted her electoral victory hopes.
All that seems to matter these days is that stocks, no matter the reason, want to move higher. Yet headwinds continue to build. We are massively overdue for a normal 10% pullback, breadth remains narrow, sentiment is off-the-charts extreme and the Federal Reserve is growing increasingly hawkish, putting a March rate hike on the table.
With this in mind, here are five stocks to sell or consider for possible short-side plays:
Stocks to Sell in March: JCPenney (JCP)
J C Penney Company Inc (NYSE:JCP) shares are dropping below their January low, threatening to fall below the $6 — a critical support level that has been in play since late 2014 and was tested in January 2016.
The company has been hit with selling pressure despite reporting earnings of 64 cents per share last quarter, three cents ahead of estimates, on a 0.9% drop in revenue. Forward guidance was in line with estimates and management announced that upward of 14% of stores would be closed. Investors are losing patience with the company’s ongoing turnaround effort.
The company will next report results on May 26 before the bell. Analysts are looking for a loss of 19 cents per share on revenues of $2.79 billion.
Stocks to Sell in March: Target (TGT)
Target Corporation (NYSE:TGT) shares have plunged to levels not seen since late 2014, reversing the gap move enjoyed three years ago on optimism over the holiday shopping season.
Weaker-than-expected earnings of $1.45 per share, six cents below estimates, brought out the sellers, as did very weak forward guidance and management’s comments about changes to customer behavior increasing the threat from online rivals.
Telsey Advisory Group recently downgraded TGT stock on frustration with management’s inability to revive its business model and differentiate itself from competitors. The company will next report results on May 30.
Stocks to Sell in March: BlackBerry (BBRY)
BlackBerry Ltd (NASDAQ:BBRY) shares are moving down to test support for its six-month consolidation range, risking a move down to levels not seen since last summer.
The stock has been in the doldrums since 2012 — losing more than 96% of its value into the late-2013 low of $5.44 — amid a catastrophic loss of smartphone market share and loss of relevance as a handset maker. Management has since focused on reorienting the company as a secure mobile communications software company with limited success.
The company will next report results on March 31 before the bell. Analysts are looking for a breakeven quarter on $289 million in sales.
Stocks to Sell in March: Nvidia (NVDA)
Graphics processor maker Nvidia Corporation (NASDAQ:NVDA), a recent momentum favorite, has been languishing below its 50-day moving average after a better-than-expected quarterly earnings report attracted attention to a possible slowdown in computer GPU sales growth rate. 2016 sales were impressive thanks to a well-received launch of new GTX 1000 cards (in fact, I am writing this on a computer with a GTX 1060 3GB card).
But a drop in OEM volume and tougher year-over-year comparisons will drag the growth rate lower, distracting from the recent focus on the company’s exposure to exciting new areas like autonomous transportation and machine deep learning.
Nvidia will next report results on May 11 after the close. Analysts are looking for earnings of 66 cents per share on revenues of $1.91 billion.
Stocks to Sell in March: Pandora (P)
Online streaming innovator, Pandora Media Inc (NYSE:P), which has since lost its shine as competitors have zoomed ahead, has suffered a long three-year decline from peaking in early 2014 at $40.44 per share.
The stock has managed a rally since bottoming early last year largely on M&A hopes, which are now fading again. Shares are back below their 200-day moving average losing a three-month consolidation range.
The company will next report results on May 11 after the close. Analysts are looking for a loss of 34 cents per share on revenues of $318.5 million.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
