Stock to Sell #2 – AVX Corp. (AVX)
Information technology company AVX Corp. (NYSE:AVX) is in a bear market. Earnings are expected to fall for the third consecutive year.
The stock broke down in May from a right triangle and fell 25% before attempting to consolidate. That was followed by a death cross where the 50-day moving average (blue line) drops through the 200-day moving average (red line) — a very negative chart signal.
From May to late July, AVX continued to fall, confined by the limits of a bear channel. But a new high-volume breakdown occurred in late June, confirming that even lower prices were likely. However, note the small arch up in the stochastic, which could result in a rally to $10 where it should be sold.