4 Technically Vulnerable Stocks to Sell Now

How do the charts stack up against Credit Suisse's list of contrarian stock ideas for investors to sell?

Author:: Bruce Kamich
Publish date:: Mar 30, 2016 2:51 PM EDT

Bloomberg News

There is a particular four-letter word that you will rarely hear from a sell-side firm: S-E-L-L.

Indeed, it's easy enough to find investment advice about how and when to buy stocks -- but much more of a challenge to find advice about when to sell.

With that in mind, I took a look at the stock charts of Credit Suisse's 12 contrarian stock ideas and found four names that are near their highs and look technically vulnerable.

In this longer-term chart, above, Dollar Tree shows a possible top formation as rally failures in the $80-to-$85 area have capped the upside. Prices are currently above the flat/neutral 40-week moving average line. The on-balance-volume line is neutral or non-supportive, and the MACD oscillator is close to a liquidate-longs sell signal.

This chart, above, of Big Lots shows prices not far off their 2015 zenith. While prices are above the 40-week moving average, the slope of the average line is pointed down. The OBV line is also pointed down telling us that sellers of Big Lots are more aggressive. The MACD oscillator signaled a cover-shorts buy but not an outright buy with the indicator below the zero line.

The Super Bowl is over, and I guess maybe the peak consumption period for Buffalo Wild Wings . The price peak also seems to be in our rear-view mirror. Prices broke below their 40-week moving average line last year and rallied to the underside of the line this year. The OBV line has been weakening since last summer, and together with a bearish MACD oscillator, it points to further declines for Buffalo Wild Wings.

Expeditors International of Washington has been pretty volatile in the past three years. Prices have crisscrossed the 40-week moving average line several times in recent history. The OBV line shows only limited improvement, and the MACD oscillator is below the zero line and bearish. Prices are still within striking distance of the record highs, so this sell recommendation appears to be well-timed.

Dollar Tree

In this longer-term chart, above, Dollar Tree
shows a possible top formation as rally failures in the $80-to-$85 area have capped the upside. Prices are currently above the flat/neutral 40-week moving average line. The on-balance-volume line is neutral or non-supportive, and the MACD oscillator is close to a liquidate-longs sell signal.