Over the past 20 years, larger-than-life hedge fund investor David Einhorn has established his credentials as someone who can unearth both longs and shorts. Unfortunately, the charts say that the fourth quarter may not look too good for some of Einhorn's more recent investments.
Digging into his recent 13F filing corresponding to June 30, of the stocks Einhorn initiated positions in in the second quarter, here are the technical prospects for five of them in the weeks ahead.
In this daily chart of Calpine ( CPN) , above, we see a stock that has been struggling to launch a sustained uptrend. Support (buying interest) has developed around $12 while rallies to the $16-to-$17 area have encountered resistance (selling interest). Prices have shown more weakness since early June. Prices are below the declining 50-day and 200-day moving averages. The on-balance-volume, or OBV, line has been declining since early June, signaling more aggressive selling. Lower price lows in June and August had equal momentum lows, giving us a bullish divergence.
A weak close below $12 is likely to generate further losses, but it will take a strong close $16 to give us an upside breakout.