Setting My Sights on Short Candidates

Who doesn't want to pay 80x forward earnings for some noodles? Well, me for one. I'm just not excited about Noodles & Company (NDLS). Sure the company is new and expanding, but I hesitate on recent IPOs lacking cash, wanting big growth and then providing tepid guidance. Add on a chart that looks like a wet noodle under $40, and there is a ton of risk in buying Noodles right now.

Noodles & Company (NDLS) Source: View Chart » View in New Window »

The stock already has three strikes against it from the technical side. The moving average convergence/divergence has crossed over in a bearish fashion, the commodity channel index has plummeted, now running well below -100, and price is breaking lower out of a tight Bollinger band setup. If it weren't for the support at $40, I would be looking to join the other 6% of the short float on that side of the coin. So for now, this is an avoid on the buy side for me and a closely watch for a short entry....310 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.