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The following is a list of stocks that are approaching an inflection point, based on moving average trends. For this article, we define an inflection point as the convergence between the 50-day and 200-day moving averages.

When these two moving averages cross, it often represents a shift in investor sentiment. If the 50-day MA moves above the 200-day MA (bullish), it's called a "Golden Cross" signal. If, on the other hand, the 50-day MA crosses below the 200-day MA (bearish), it's called the "Death Cross".

To compile this list, we started with a universe of stocks signaling the "Death Cross", and then narrowed it down to stocks that are being sold by institutional investors over the last three months.

Admittedly, most of these stocks have seen relatively small amounts of selling, but it's important to point out that the smart money isn't buying into the recent weakness. Are they being overly pessimistic?

Moving average data sourced from Finviz, institutional data sourced from Reuters.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.


The list has been sorted by change in institutional ownership over the last three months.

1. Shanda Games Limited (NASDAQ:GAME): Multimedia & Graphics Software Industry. Market cap of $1.78B. SMA50 at $6.21 vs. SMA200 at $6.22 (current price at $6.13). Institutional investors currently own 56,529,279 shares vs. 56,674,968 shares held three months ago (-0.26% change). Short float at 1.01%, which implies a short ratio of 0.86 days. The stock has lost -43.21% over the last year.

2. Sonus Networks, Inc. (NASDAQ:SONS): Communication Equipment Industry. Market cap of $771.35M. SMA50 at $2.75 vs. SMA200 at $2.87 (current price at $2.85). Institutional investors currently own 134,641,245 shares vs. 134,772,348 shares held three months ago (-0.1% change). Short float at 2.83%, which implies a short ratio of 2.42 days. The stock has gained 20.26% over the last year.

3. Mobile Telesystems OJSC (NYSE:MBT): Wireless Communications Industry. Market cap of $19.84B. SMA50 at $21.21 vs. SMA200 at $21.28 (current price at $20.48). Institutional investors currently own 321,798,315 shares vs. 322,085,922 shares held three months ago (-0.09% change). Short float at 0.22%, which implies a short ratio of 0.8 days. The stock has gained 0.34% over the last year.

4. Royal Bank of Canada (NYSE:RY): Money Center Banks Industry. Market cap of $74.52B. SMA50 at $52.93 vs. SMA200 at $53. (current price at $52.01). Institutional investors currently own 742,857,865 shares vs. 743,484,580 shares held three months ago (-0.08% change). Short float at 0.78%, which implies a short ratio of 16.5 days. The stock has gained 1.04% over the last year.

5. PPL Corporation (NYSE:PPL): Electric Utilities Industry. Market cap of $12.97B. SMA50 at $25.87 vs. SMA200 at $25.88 (current price at $26.55). Institutional investors currently own 346,273,356 shares vs. 346,439,404 shares held three months ago (-0.05% change). Short float at 1.27%, which implies a short ratio of 1.6 days. The stock has lost -11.98% over the last year.

6. Diana Shipping Inc. (NYSE:DSX): Shipping Industry. Market cap of $1.01B. SMA50 at $13.04 vs. SMA200 at $13.2 (current price at $12.43). Institutional investors currently own 28,414,833 shares vs. 28,427,592 shares held three months ago (-0.04% change). Short float at 1.48%, which implies a short ratio of 1.04 days. The stock has lost -22.35% over the last year.

7. Novell Inc. (NASDAQ:NOVL): Security Software & Services Industry. Market cap of $2.09B. SMA50 at $5.89 vs. SMA200 at $5.91 (current price at $5.92). Institutional investors currently own 277,808,242 shares vs. 277,928,162 shares held three months ago (-0.04% change). Short float at 0.44%, which implies a short ratio of 0.18 days. The stock has gained 28.79% over the last year.

8. MEMC Electronic Materials Inc. (WFR): Semiconductor Industry. Market cap of $2.59B. SMA50 at $11.94 vs. SMA200 at $11.98 (current price at $11.35). Institutional investors currently own 214,361,969 shares vs. 214,441,840 shares held three months ago (-0.04% change). Short float at 4.4%, which implies a short ratio of 1.78 days. The stock has lost -21.35% over the last year.

9. Avon Products Inc. (NYSE:AVP): Personal Products Industry. Market cap of $12.73B. SMA50 at $29.3 vs. SMA200 at $29.78 (current price at $29.95). Institutional investors currently own 365,328,661 shares vs. 365,454,065 shares held three months ago (-0.03% change). Short float at 1.82%, which implies a short ratio of 1.68 days. The stock has lost -4.51% over the last year.

10. Blyth, Inc. (NYSE:BTH):
Personal Products Industry. Market cap of $306.81M. SMA50 at $40.37 vs. SMA200 at $41.85 (current price at $37.05). Institutional investors currently own 5,177,116 shares vs. 5,178,637 shares held three months ago (-0.03% change). Short float at 4.05%, which implies a short ratio of 6.49 days. The stock has gained 12.56% over the last year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 10 Stocks Dragged Down by Bearish Momentum and Institutional Selling