Stock to Sell #6 – Sony (SNE)
Sony (SNE) is recognized worldwide as a quality electronics equipment manufacturer. However, the consumer electronics industry is saturated with products, and weak consumer spending and a lack of revolutionary products is driving sales and profits lower. On Oct. 31, the company reported worse-than-expected quarterly results, causing S&P to lower earnings estimates and cut its price target.
The stock responded by crushing support at its 200-day moving average at $19. It opened a breakaway gap on very high volume and its MACD flashed a major sell signal.
SNE could have a reaction rally back to $18-plus, but shareholders should use any rally as a selling opportunity. Selling at the current price is also warranted. No support is obvious, but it appears that the stock could fall to the low teens.