Moved to Sell: BioTelemetry (BEAT), Datawatch (DWCH) and Materialise (MTLS)
The market is still a little touchy and tech stocks have been the latest group to feel some pain. This isn’t too surprising given how immune they’ve been for most of 2018. Still, it marks a shifting in the sands, and that’s making the market’s foundation a little unstable.
At this point it seems prudent to trim three underperforming positions that haven’t been working well for us—especially since all three are at, or just below, the pivotal points I’ve been monitoring for several weeks.
BioTelemetry (BEAT) is a story that should be resonating with investors, but just can’t seem to stick. It might be that the stock needs some time to digest the LifeWatch acquisition. Or maybe the competitive threat from iRhythm (IRTC) is holding back new money, or that those interested in this space are more interested in iRhythm. In any event, shares of BioTelemetry have been kicking around in the $30-to-$36 area for the last three months and can’t seem to mount a convincing rally. We have a modest gain in the stock now, and while it pains me to cut it loose, I’d rather lock in the gain we have right near a solid support level than risk seeing it evaporate should shares break lower (which would probably trigger a high-volume decline). In other words, BioTelemetry is moved to sell, and will go back on my watch list. SELL.
Datawatch (DWCH) just dipped below $8.50 this week, and while the breach wasn’t exactly violent it still signifies a nine-month low, which in my mind increases the probability of the downtrend extending even further. I like the stock and the improving fundamentals, but the bottom line is that the timing doesn’t appear right. Datawatch will go back on the watch list. SELL.
Materialise (MTLS) also doesn’t appear to be working right now. I thought the trend was getting more constructive after shares broke above their 50-day line in early March, then walked up to their 200-day line last week. Unfortunately, that’s as far as they got. Yesterday they traded down to their 50-day line, and today shares are on their way back toward their February low. As with Datawatch and BioTelemetry, Materialise will go back on the watch list for inclusion if and when shares start to perk up. SELL.
Aside from a few exceptions, most of our other stocks are holding up above their 50-day lines. We are seeing declines in the 3% to 6% range for many of them this week, but at this stage these little dips aren’t overly concerning. Of course, I’ll be watching closely to make sure these fissures don’t develop into gaping holes. And if the probability of that goes up we’ll likely take partial profits in one or two stocks to make sure we lock in some gains.
For now, ratings on our remaining positions are unchanged.