A stock's fundamental story and chart story can differ, but when the charts are bearish, it generally pays to recheck your fundamentals.
These are the five stocks I would tell John Paulson to sell now from his portfolio.
Yes, John Paulson is a pretty bright guy and has done well in the markets, but I am not sure he includes technical analysis in his decision-making process. Maybe his does, but when I looked over a list of 10 stocks he had bought in the second quarter, I found a few names I would be looking to sell now.
These names might be attractive again in the fourth quarter of 2016, but right now they all look vulnerable to declines.
In this daily chart of Priceline (PCLN) , we can see a stock that has some big trading swings, but over the past 12 months buy and hold did not make you money. Prices are above the rising 50-day and 200-day moving averages, but volume has slowed during the rally of the past two months. The daily on-balance-volume, or OBV, line has not broken out to a new high for the move up like prices have, and momentum is weakening with a July/August bearish divergence.
In this three-year weekly chart of PCLN, prices are above the 40-week moving average line, but the slope of the line is flat or neutral. The weekly OBV line has been trending sideways for the past three years, and in the lower panel is the 12-week momentum study. Like the daily bearish divergence between higher prices and weaker momentum, we can see the same setup on this weekly chart.
With Priceline looking vulnerable on the daily and weekly charts, we would recommend reducing or eliminating a long exposure to the stock.