Don’t Toy With Technically Sloppy Nokia

NOK stock has to recover from a substantially weak day

   

Global mobile communications company Nokia (NYSE:NOK) hasn’t had the best start to the year, currently wobbling around an 8% loss year-to-date. Of course, the company’s fall from grace over the past decade or so has been well-documented as competitors like Apple (NASDAQ:AAPL) and Samsung (OTC:SSNLF) have pulled the proverbial rug underneath Nokia’s feet.

Through this long-term lens, the stock’s lower high in November 2007 (vs. its all-time high in June 2000) in hindsight solidified the doomsday scenario ahead for Nokia as it continued to tumble right into July 2012. From this point of view, the stock remains firmly in grizzly town with much work needed before turning the long-term chart back up.

NOKlongterm 1024x576 Don't Toy With Technically Sloppy Nokia

Zoom in a little bit closer, however, and a first hopeful sign is to be spotted on the stock’s chart looking back to 2010. Namely, the stock’s downtrend from the April 2010 highs finally managed to break in November 2012, which ultimately led the stock to rally into January 2013.

NOKmultiyear 1024x522 Don't Toy With Technically Sloppy Nokia

Despite Nokia’s breakout past a first significant downtrend in November 2012, the stock is still trading fairly sloppily. This leads me to draw levels of interest on the chart rather than take a stand right here, right now, with a directional trade. Nonetheless, NOK has displayed some relatively tight patterns over the past nine months or so, as noted on the chart below with the simple blue trendlines.

Yet, the stock’s 4.5%-plus drop yesterday raises a small, red flag.

NOKcloseup 1024x590 Don't Toy With Technically Sloppy Nokia

In the event Nokia can overcome yesterday’s weakness and throw itself back above Monday’s closing price near $3.85, I could get interested in the long side of the stock for a move back to near the January highs of $4.70. Other than that, from a longer-term point of view, the stock has much more to prove before I will become interested in trading it with any consistency.

Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free weekly newsletter here.


Article printed from InvestorPlace Media, http://investorplace.com/2013/05/dont-toy-with-technically-sloppy-nokia/.

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