Note, this is a repost — the original (with comments) is the next post (Financial Sector: Beware LEH, CIT ») but or some reason typepad isn’t being very cooperative today. (you can see it by clicking Short Selling)

Every day, we run a series of screens, large and midcap, buys & sells, breakouts and breakdowns.

Today, our Large Cap Sell Screen identified Lehman Brothers (LEH) as a Sell. It has a current master score of 33 (out of 100) and has an abysmal technical score of 17. It went to a sell signal back in March around $52, and two weeks later, traded as low as $20.25. It recovered somewhat, flipping to neutral around $44. 

Its now back on a sell signal, with a $20 price target. (See chart below)

The MidCap Sell Screen found a smaller financial: CIT Group (CIT). It also went on a Sell signal. Same set up as Lehman Brothers: First sell signal was in March about $16, fell to $6.45 a few weeks later, back to a neutral a month later.  Now, CIT is back on a Sell/Short rating, with a possible target about 30% lower.

Lehman Brothers (LEH) Six month daily
Leh

CIT Group (CIT) Six month daily
Cit

NOTE: Traders who short stocks should always work with stop losses. The
financial sector, with outside investors, have been very volatile, with
squeezes occurring regularly.

Regular FusionIQ posts can be found here.

Category: Credit, Derivatives, Short Selling

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