Pentair (PNR) broke down from a bearish head and shoulder pattern, July 31, 2014, on a poor earnings report. The company missed both sales and earning's estimate and guided lower. Since then, the stock has attempted to rally back to the fifty day moving average and head and shoulder neckline two times, but both attempts were in low volume.
Accelerating margins over the last four quarters are about the only thing good going for the coming, but revenue misses have led to decelerating earnings growth. Ruining the potential of accelerating margins. The company has missed analysts estimates for two straight quarters and estimates have been coming down significantly ever since. Three year sales growth is expected to decelerate from 35% to 1% and earnings growth is expected to stay steady at around 16%, but decelerate over at least another quarter to 9% from 83% three quarters ago.
The stock can be shorted as it breaks below the recent range between $66.00 and $66.25 with a tight stop just above recent highs around $67.30.
Full Disclosure: Hold Position