The shares recently broke below long-term support
Back in October amid the broad-market sell-off, beer maker Constellation Brands, Inc. (NYSE:STZ) broke below a trendline that had supported its rise since 2012. The stock was swiftly rejected after rallying back to this trendline earlier this month, and the $200 area -- site of the August lows -- has also emerged as resistance. Now down more than 14% in 2018, it's time to make a bearish play on STZ.
Analysts remain in the bullish camp, for now. Of the 15 brokerages covering the stock, 11 rate it a "buy" or "strong buy," while its consensus 12-month price target sits at a frothy $247.68. This indicates downgrades and/or price-target reductions are a real possibility and could push the stock lower.
You also can't count on any short-covering potential from STZ. Short interest fell by 25% in the most recent reporting period, and the 3.55 million shares sold short represents a meager 2.25% of the stock's total available float, and only 1.71 times the average daily trading volume.
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