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Momentum Stocks on the Rocks – 3 Names to Short

Momentum works both ways in the market and on the way down, former high fliers can make a hard landing.

According to Carter Worth of Oppenheimer Asset Management, the tehcnicals suggest the following names are at risk.

Wynn Resorts
Priceline
Baidu

Looking at the chart patterns, Worth says these stocks all exhibit a trend.

”They’ve all broken trend as measured by 150-day moving average and then traded back to the line,” he says.

"These stocks all had great strength but once they break trend (the 150-day), trade below that level and then throw back to that level, the throw back draws out unhappy investors. That is people who were trapped by the sell-off take advantage of the strength to get their money back.”

He goes on to say, in all these cases the 150-day has gone flat, the stock has cut well below and then throws back right to the line.

”History shows this is an excellent place to go short,” Worth says.




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Trader disclosure: On Oct 17, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Seymour is long AAPL; Seymour is long BAC; Seymour is long INTC; Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Finerman owns AAPL; Finerman owns BAC; Finerman owns GOOG; Finerman owns JPM stock leaps & puts; Finerman owns GDX; Finerman owns MSFT; Finerman owns owns CMI short calls; Finerman’s firm owns AAPL short calls; Finerman’s firm owns MSFT; Finerman’s firm owns JPM; Finerman’s firm owns IBM short calls; Finerman’s firm owns CMI ; Terranova is long IBM; Terranova is long AAPL; Terranova is long EMC; Terranova is long LULU; Terranova is long CAT; Terranova is long AXP; Terranova is long F; Terranova is long TBT; Terranova is long OXY; Terranova is long FCX; Terranova is long MUB; Terranova is long LQD; Terranova is long VRTS

Fort Brian Kelly
Shelter Harbor Capital is long TLT
Shelter Harbor Capital is long NLY
Shelter Harbor Capital is long GLD
Shelter Harbor Capital is long LO
Shelter Harbor Capital is long Soybeans
Shelter Harbor Capital is long Corn
Shelter Harbor Capital is long Sugar
Shelter Harbor Capital is long SGG
Shelter Harbor Capital is short Euro Stoxx futures
Shelter Harbor Capital is short CRM
Shelter Harbor Capital is short IYR
Shelter Harbor Capital is short XRT
Shelter Harbor Capital is short Euro

For Scott Nations
Nations is long SPY

For Carter Worth
No Disclosures

For Todd Gordon
Gordon is long USD/CAD
Gordon owns UUP ETF

For Fred Cannon
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