Internet Stock Issues Sell Signal — Short Now

by Sam Collins | January 17, 2013 1:39 am

Internet Stock Issues Sell Signal — Short Now

VeriSign (NASDAQ:VRSN[1]) — This company is a leading provider of Internet domain name registration. Analysts are concerned about greater government oversight and unexpected weakness in its core business. Fourth-quarter and full year 2012 earnings are scheduled to be announced after the market closes on Jan. 24.

The stock has fallen sharply from its October high at over $50 — crashing through its major bullish support line and 200-day moving average on a breakaway gap. A subsequent rally failed to close the gap, and it opened a continuation gap in late November. That gap was closed in a recent rally to just over its 50-day moving average at about $40.

The MACD has declined rapidly from its early January high, and on Tuesday, issued a sell signal. If VRSN breaks below its 50-day moving average at $38.87, look for a test of the closing low at $34.15 from Nov. 30. The downside target for VRSN is in the low $30s.

This stock should be sold by investors and traders alike. As with all short sales, check with your broker for any margin requirements and the ability to borrow the stock. A stop-loss order should always be entered after the execution of a short sale in order to protect against the possibility of an unlimited loss.

01 17 13 vrsn 300x206 Internet Stock Issues Sell Signal    Short Now
Click to Enlarge

chart key 300x84 Internet Stock Issues Sell Signal    Short Now

Endnotes:
  1. VRSN: http://studio-5.financialcontent.com/investplace/quote?Symbol=VRSN

Source URL: http://investorplace.com/2013/01/trade-of-the-day-verisign-nasdaq-vrsn/
Short URL: http://invstplc.com/1fAhvyg