Einhorn Loves These 5 Stocks -- but What Do the Charts Say?

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.
 
Calpine
 
 
 
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.
 

 
Rite Aid
 
 
In this daily chart of Rite Aid  ( RAD) , above, we have mixed technical signals with prices currently between the declining 50-day and the 200-day averages. The OBV line has been on the defensive the past 12 months and points to traders being more aggressive sellers than buyers. Einhorn's purchases of RAD appears to have been made on price weakness, taking whatever came to him without pushing up prices. Momentum is not diverging from the price action. The recent rally to around $7.75 is interesting in that it stopped at the underside of the 200-day moving average line. The OBV line has been on a downslope for the past year and shows little pickup in July and August.

 
Amaya 
 
 
In this daily chart of Amaya  ( AYA) , above, we can see a stock that has taken months to crawl back from $10 to $17. The OBV line has moved up strongly since late March, perhaps much more strongly than the price action has warranted. Amaya just crossed back below the 50-day average line and remains below the declining 200-day average line. Momentum is not giving us any strong clues whether prices will weaken or strengthen.

 
 
 

 
Amerisource Bergen
 
 
In this chart of Amerisource Bergen  ( AMG) , above, we still see an ongoing bear trend -- lower lows and lower highs. The OBV line on this chart shows a downtrend until May and then only a weak upside response. The MACD oscillator is in downtrend a could soon generate a new outright sell signal.
 

 
Perrigo
 
 
This chart of Perrigo  ( PRGO)  shows a stock that has been under pressure for a long time. Currently prices are below the short term 50-day average line and the longer 200-day moving average line. The OBV line appears to be tracking prices lower and lower. Prices have moved sideways the past four to five weeks, but momentum readings are not offering up an new clues. With the major then down we would expect the bears to remain in charge.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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