While Tim is away, I’ll take the opportunity to slip back on my bear suit. Shhh, just between you and me. I’m expecting some weakness in the broader markets for the remainder of the summer, before continuing higher later in the year. One area of the market that caught my attention today was housing. Below are a trio of shorts ripe for the taking. Enjoy!
Mohawk is my favorite of the three. In a bear market since the end of 2017, MHK has fought its way back up to resistance at the 2016 low, and has started to fall away after creating a double top over the course of the last month. MHK saw an ATR sell reversal on Monday of this week.
Lowes looks vulnerable as well. In April of this year LOW fought its way back up to its 2018 high, and has been falling ever since. After the steep drop the stock saw in May of this year, LOW has made a 50% retrace of the April/May drop, and is starting to roll over again from an overbought condition.
Leggett & Platt has been in a downtrend for the past couple years, and also looks subject to more weakness ahead. After a sharp rise at the beginning of 2019, it has been falling since the end of February. The stock saw a nice bear market rally over the past six weeks, but saw an ATR sell reversal on Monday of this week. Hit em’.
The Great Bearish Reverend who was once, and shall be once again.