PLUS The TELL-TALE SIGNS that They Were Headed for Trouble!
The stock market is a difficult game to play. Like a casino, the odds are stacked against you and the Market often wins. Even the most successful investors don’t always beat the market.
At Chaikin Analytics, we combine our proprietary stock rating with other indicators to help put the odds in your favor.
Let’s take a look at 3 examples of stocks that are destroying portfolios right now and how they could have been avoided altogether!
#1. Is the Goose Cooked?
(GOOS) Canada Goose specializes in extreme weather outerwear.
Our stock rating, which combines 20 of the most important factors to consider when researching a stock, turned VERY BEARISH on GOOS back in December of 2018.
Individuals who held this stock in their portfolios, most likely would have looked to reduce positions if they had Chaikin Analytics, due to that change in rating.
Back in December of 2018, GOOS was trading at $69.48.
Today, as of June 7th, 2019 at 10:06 AM, it is trading at $33.41.
In the top left corner, you will see the current rating on GOOS is VERY BEARISH. Very Bearish stocks are likely to underperform the market over the next 3-6 months.
That was the first of many RED FLAGS for this chart. If you look at the very bottom of the chart, the ribbon across the bottom shows the weekly rating summary.
In December 2018, you can see that the weekly rating ribbon turned, and persistently stayed RED. This was yet another warning sign of a “sick” stock.
On the chart, we also highlighted TWO RED DOWN ARROWS, which serve as calls to attention that something may be going awry. These are Momentum Breakdown signals.
Investors who use Chaikin Analytics to research and monitor positions would have known to avoid this stock long before the 51% drop.
#2. Like a GPS for Stocks . . .
(GPS) Gap is an American worldwide clothing and accessories retailer.
Our stock rating for GAP Inc. has been BEARISH or VERY BEARISH for most of the past year, but has stayed consistently RED since March 4th, 2019.
Our stock rating is like a real live GPS for stocks. It helps guide you to what direction the stock may be heading. Stocks that are RED or BEARISH tend to underperform the market, while stocks that are GREEN or BULLISH tend to outperform the market.
Back on March 1st 2019, GAP closed at $29.51. As of writing this post, it is trading at $17.76.
Down over 39% sounds like following GPS ran you right off the road. And sadly, you can’t take it back to the store and get a refund!
Let’s look at a Chaikin Analytics chart and look for any RED FLAGS.
In the top left corner, once again, you will see the current rating for GAP is VERY BEARISH. This is not a good start.
Next, look at all of the RED DOWN ARROWS, they clearly indicate that an accident may be coming to a head. In this case, these are Overbought Sell signals. Relative Strength has been in the RED all year long as well—never a good sign.
Last, look at the weekly rating ribbon at the bottom of the chart. GPS has had a RED RIBBON for most of the year. This is a clear sign that this stock should have been avoided from the very start like parachute pants at the Gap!
#3. Are the Wheels Falling Off for Tesla?
(TSLA) Tesla is an American automotive and energy company that specializes in electric car manufacturing and, through its SolarCity subsidiary, solar panel manufacturing.
With SpaceX and the Boring Company, maybe TSLA is headed in too many directions.
I can’t remember a time when our stock rating for TSLA has been BULLISH. This is probably due to the weakness in the underlying financials including Long Term Debt to Equity, Price to Sales, Return on Equity, and Price to Book. These are 4 of the 20 factors our rating considers.
NO SURPRISE HERE, our current rating for TSLA is VERY BEARISH.
On January 11th 2019, TSLA closed at $347.26.
On January 14, 2019, the rating ribbon for TSLA turned RED and has remained that way since.
Today, it is trading at $208.22. That is down 40%.
Here is why you would have avoided TSLA using Chaikin Analytics.
In the top left corner, we see a VERY BEARISH rating for TSLA. The weekly rating ribbon was all red since January 14th, when the stock closed at $334.40. Shortly thereafter, TSLA’s relative strength versus the S&P has broken down and TSLA has been on a steep decline. Let’s just say that Tesla may have high performance cars, but this is not reflected in the stock price performance.
Having a solid defensive strategy is just as important as playing offense. Sometimes, it’s the difference between you and the pros.
Chaikin Analytics combines proprietary indicators with easy-to-read displays to help you minimize risk and maximize profits.