Stocks are rolling over badly on Wednesday, reversing early session strength, as investors are spooked by headlines President Trump may increase the import tariffs on Chinese goods further as well as a hawkish statement from the Federal Reserve. Policymakers upgraded their assessment of the economy to “strong”, which raised fears of an accelerated rate hike pace.
From a gain of roughly 80 points, the Dow Jones Industrial Average is down 120 points as I write this. Narrowing breadth has been a problem for weeks, with the recent push to new highs by the Nasdaq Composite coming solely on the back of the mega-cap technology stocks.
A number of stocks are rolling over strongly now. Here are eight stocks to sell right now:
Stocks to Sell: MGM Resorts (MGM)
MGM Resorts (NYSE:MGM) shares are plummeting out of a multi-week trading range above their 50-day moving average, returning to lows seen in early July. The stock is falling in sympathy with losses for Caesars Entertainment (NASDAQ:CZR) after management issued a cautious outlook on its conference call. More downside looks likely now, with a break of support at $28 likely giving way to a fall back to early 2017 lows.
The company will next report results on Aug. 2, before the bell. Analysts are looking for earnings of 26-cents-per-share on revenues of $2.9 billion. When the company last reported on April 26, earnings of 29-cents-per-share missed estimates by a penny on a 3.8% rise in revenues.
Stocks to Sell: American States Water (AWR)
American States Water (NYSE:AWR) shares are falling out of a multi-month uptrend pattern, closing in on their 50-day moving average, which was tested multiple times over the spring. Adding to the downside pressure, and impetus to sell, is a recent downgrade by Atwater Thornton analysts on valuation concerns.
The company will next report results on Aug. 6, after the close. Analysts are looking for earnings of 48-cents-per-share on revenues of $116 million. When the company last reported on May 7, earnings of 29-cents-per-share missed estimates by 6 cents on a 4.1% decline in revenues.
Stocks to Sell: Concho Resources (CXO)
Concho Resources (NYSE:CXO) shares have broken down below their 200-day moving average, succumbing to downside pressure following a “death cross” of the 50-day moving average below the 200-day moving average back in late June. The downside acceleration comes despite an upgrade from Goldman analysts back on July 18.
The company will next report results on Aug. 1, after the close. Analysts are looking for earnings of 92-cents-per-share on revenues of $906.8 million. When the company last reported on May 1, earnings of $1-per-share beat estimates by 23 cents on a 54.7% rise in revenues.
Stocks to Sell: Wynn Resorts (WYNN)
Like MGM, Wynn Resorts (NASDAQ:WYNN) shares are being punished by the negative impact of negative guidance by competitor CZR. Shares have dropped out of a multi-week consolidation range that capped a 20% decline from the double-top high near $200. If support near $155 doesn’t hold, shares could fall a long way back to early 2017 levels near $85, which would be worth a decline of roughly 50% from here.
The company will next report results on Aug. 1, after the close. Analysts are looking for earnings of $2.03-per-share on revenues of $1.7 billion. When the company last reported on April 24, earnings of $2.30 beat estimates by 28 cents on a 20.5% rise in revenues.
Stocks to Sell: PepsiCo (PEP)
PepsiCo (NASDAQ:PEP) shares are testing their 20-day moving average, threatening to break the post-May uptrend that saw shares gain some 20% from their lows. The company reported solid results in early July, helped by the ongoing success of the sparkling water/no-calorie category. But lots of overhead resistance is in play now going back to May 2017. Profit taking should result in a 50% retracement, returning shares to the $106 level.
The company will next report results on Oct. 4, before the bell. Analysts are looking for earnings of $1.58-per-share on revenues of $16.4 billion. When the company last reported on July 10, earnings of $1.61-per-share beat estimates by 8 cents on a 2.4% rise in revenues.
Stocks to Sell: Oshkosh (OSK)
Oshkosh (NYSE:OSK) shares are reversing sharply lower, breaking out of a three-month uptrend pattern and setting up a test of the late June low near $67.50. If that doesn’t hold, watch for a return to the lows seen in late 2016 and early 2017 near $65, which would be worth a loss of more than 8% from current levels as the tailwinds from a surge of military truck orders fades and profits are taken off the table.
The company will next report results on Oct. 30, before the bell. When the company last reported on July 31, earnings of $2.20-per-share beat estimates by 17 cents on a 6.8% rise in revenues.
Stocks to Sell: Dominion Energy (D)
Dominion Energy (NYSE:D) shares are lurching lower following earnings on Wednesday, breaking below their 20-day moving average and ending a very tight three-month uptrend pattern. This represents a failed breakout attempt above its 200-day moving average, which maintains the downtrend that has been in place all year.
The company reported results this morning before the bell. Earnings of 86-cents-per-share beat estimates by 7 cents on a 9.8% rise in revenues. Previously, the company reported results on April 27 when earnings of 86-cents-per-share beat estimates by 7 cents on a 9.8% rise in revenues.
Stocks to Sell: HanesBrands (HBI)
HanesBrands (NYSE:HBI) shares are being slammed. Currently down nearly 19%, shares are returning to levels last seen in early June, after HBI reported disappointing quarterly results. Investors were spooked by word Target (NYSE:TGT) will not renew their contract for an exclusive line of C9 by Champion activewear apparel when the contract expires at the end of January 2020.
The company reported results this morning, with earnings of 45-cents-per-share missing estimates by a penny on a 4.2% rise in revenues. When the company last reported on May 1, earnings of 26-cents-per-share beat by 2 cents on a 6.6% rise 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.
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Source: Investor Place