Stock to Sell #6 – VMware (VMW)
VMware (NYSE:VMW), a provider of virtualization and cloud-infrastructure solutions, has, like other cloud-based equities, not performed up to expectations. Analysts continue to favor the group, but operating earnings for 2013 are expected to be only slightly above 2012’s $2.85, with consensus estimates at $3.22 per share.
In late January, the stock suffered a major collapse as it gapped through long-term support at $82 — falling to a low of $72. Its recent recovery rally ran into trouble at just above $82 after a failed attempt to close the enormous gap at $97 to $80.
Sell VMW short at $78 or higher with a target of $65. Stop-loss orders should be entered at $86. This is a highly volatile stock, and selling it short is not appropriate for everyone.