Stocks to Sell in April
After a sharp sell-off in mid-March, the Dow has risen more than 800 points since its March 16 correction low. But volatility has been high and volume low, indicating a possible lack of commitment on the part of major institutions.
Despite the numerous uncertainties that remain, from the financial crises in Europe to unrest in North Africa and the Middle East, most stocks have rallied from their lows. However, some have failed to keep pace, and these represent stocks to sell. Additionally, many of the stocks on our list have been subject to heavy selling by “insiders,” including corporate officers, which is another bad sign.
Bottom line: In a bull market, investors cannot afford to have their portfolio growth restrained by non-performers and should weed them out. Here are six stocks to sell in April:
Stock to Sell #1 – BP PLC (BP)
International oil and gas company BP PLC (NYSE: BP) has “a high risk profile,” according to Standard & Poor’s. Following the disastrous Gulf spill, the stock has managed to recover from its low under $27 and rally to above its 200-day moving average. But it came into contact with its long-term bear market resistance line in late February, and again in late March, and quickly turned away from it each time, confirming the downtrend.
Those who have held BP throughout the crisis now have the opportunity to sell and reinvest their money into a higher-growth asset. TD Ameritrade’s “ResearchTeam” (S&P, Ford Equity, TheStreet, MarketEdge and Jaywalk) recently downgraded BP from “hold” to “reduce.” The technical target for a short sale is $40.
Stock to Sell #2 – Celanese Corp. (CE)
Celanese Corporation (NYSE: CE), a producer of industrial chemicals, acetyl products and engineered polymers, has risen from a low of under $26 in July to over $44 in February. But slower-than-expected global economic activity and unplanned shortages limited its growth. The Research Team downgraded CE from a “hold” to “reduce” on March 30.
Technically, the stock is running into resistance at huge tops made in 2007 and 2009, and it is unlikely that it has enough momentum to overcome the sellers at those levels. Insiders have been selling on balance for three months. The stochastic is overbought and our proprietary Collins-Bollinger Reversal (CBR) indicator recently flashed a double sell signal. The technical target for short sellers is $38.
Stock to Sell #3 – Intel Corp. (INTC)
Despite its position as the world’s largest semiconductor chip maker, Intel Corporation (NASDAQ: INTC) has been in a bear market since December 2001, due to its inability to outperform smaller, more specialized manufacturers. S&P points out that Intel’s limited share in the fast-growing mobile markets will limit sales and sees “acquisitions hindering profitability improvement this year.” Insiders have been large sellers for 12 months.
Note that the stock turned away from its red-dotted bearish resistance line in February, and from its 200-day moving average in March. Long-term holders of the stock are advised to seek higher growth technology stocks, and short sellers may take positions with a target of $18.
Stock to Sell #4 – JetBlue Airways Corp. (JBLU)
JetBlue Airways Corporation (NASDAQ: JBLU) provides passenger air transportation services in the United States, operating 600 daily flights to 60 destinations in 20 states and Puerto Rico, and 11 other countries. Rising fuel costs and slowing growth due to increased competition are the reasons cited by S&P for their “two-star sell” fundamental rating. And insiders have been selling heavily for the past three months.
Technically, JBLU is in a long-term basing pattern that began in 2008. Its recent rally to its 200-day moving average looks like a great opportunity to sell the stock. The short seller’s target is $5.50.
See KeyStock to Sell #5 – Jones Apparel Group (JNY)
Jones Apparel Group Inc. (NYSE: JNY), a designer and marketer of branded apparel, footwear, etc., could be hurt by weaker-than-expected consumer spending and competition from department stores. The Research Team reduced JNY to “downgrade” from “hold” on March 14.
Technically, JNY is in a pronounced bear market and rallies are opportunities to sell this stock. Short sellers could take positions now targeting new lows at $11 or less.
Stock to Sell #6 – QLogic Corp. (QLGC)
QLogic Corporation (NASDAQ: QLGC), a designer and supplier of network products to handle large volumes of data, has trended sideways since 2001. S&P has a limited target of $20 for the stock due to high risks associated with valuation versus its peers and concerns about weak consumer spending, a possible rise in the U.S. dollar, and a significant loss of market share. Insiders have been heavy sellers for 12 months.
The stock has been trading around its 50- and 200-day moving averages since July 2010, and most likely will continue the sideways trend indefinitely. Sell now for better opportunities in the technology sector.
