5 min read
In our guide about short selling we have already talked about selling assets. The main idea of short selling is to speculate on the asset’s price decline. Many traders prefer to only invest in growing assets, while paying attention to the falling ones might also be of use.
Here are 4 stocks that lately have been showing a bearish trend. While it does not mean that these assets will continue falling, since past performance is not an accurate indicator of future price change, it might be a good idea to analyse them to understand market trends a bit better. What causes the downtrend? Let’s take a closer look.
The first in our list — a stock that shows a steady drop, Rolls-Royce, with a change of -83% in the past year. The problems for Rolls-Royce started even before the global pandemic with engine issues, however the reduced demand over the past year has played a huge role in settling this company as a strong “sell” for many economists.
While the COVID-19 vaccine could turn things around for this collapsed asset, for now many investors agree that Rolls-Royce remains in a strong bullish trend.
Alcoa, a company engaged in the production of aluminium, bauxite and alumina, has announced that it expects “lower quarterly performance” due to higher costs of production. The estimation caused Alcoa’s shares to drop 8% this month and the downward trend might continue. As the duration of the pandemic and the limitations are unknown, the company expects aluminum shipments of 2.7-2.8 million metric tons in 2021, a drop from the 3 million tons shipped in 2020.
Currently Alcoa is traded at $20 per share.
The stock of one of the largest United States electric utility providers based in California is down 3% this month as California suffers from wildfires. More than 290,000 homes and businesses are at risk of losing electricity and many customers have already been shut off, while an official warning of a possible shutoff of this size in January was never issued.
While the stock lost around 22% last year, many investors argue that an increase in electricity demand in 2021, especially in the first quarter of the year, makes the stock a contender for a place in a long-term bullish investor portfolio. However, so far the stock’s losses speak for themselves.
Citrix Systems (CTXS)
Following the announcement of its agreement to buy Wrike Inc. for $2.25 billion by Citrix Systems, the shares of the second one, as expected, decreased by 2.2% and are now traded at $127.38.
The deal is going to provide collaboration software to Citrix Systems’ products, as the demand for it continues growing with more businesses relying on remote work since the beginning of COVID-19.
Which assets do you think will continue their decline? Let us know what you think in the comments below!