There’s Still Time to Sell This Troubled Stock

by Sam Collins | September 26, 2012 1:51 am

Cognex Corp. (NASDAQ:CGNX[1]) — This company produces machine vision products that capture and analyze visual information to automate tasks primarily in manufacturing processes.

CGNX was on our list of Stocks to Sell in September[2] when it was trading at $36 with a target of $30. At that time, I wrote: “[Cognex] is estimating that earnings for 2012 will fall to $1.55 from $1.63 last year. Analysts have recently reduced their targets and earnings estimates due to the continuing global economic slowdown.

“Technically the stock bounced from about $30 in July to over $36 where it turned back from its 200-day moving average. Sell CGNX if you own it and sell it short if you are a trader. The downside trading target is $30.”

On Tuesday, Piper Jaffray downgraded the stock with a target of $27. This reinforces that CGNX should remain on our short-sale list and any recovery should be used as a shorting opportunity. Our downside target remains at $30.

Short-selling is a speculative, high-risk technique, so a stop-loss order should be entered to protect against unlimited losses. Check with your broker for any margin requirements.

Trade of the Day – Cognex Corp. (NASDAQ:CGNX)
Click to Enlarge

Trade of the Day Chart Key

  1. CGNX:
  2. Stocks to Sell in September:

Source URL:
Short URL: