Virtualization software maker VMware (VMW) beat Wall Street estimates for the third quarter.

After the close on Wednesday, the company said it earned $95 million, or 24 cents a share (excluding one-time items), a number that easily beat consensus estimates of 20 cents per share for the quarter.  The company also beat on its top-line revenue number, with sales of $490 million.  The Street was only expecting sales of $472 million.

VMW shares have been a virtual winner in 2009.  The stock is up over 116% year to date, and on the way, we’ve seen several sharp spikes higher in the shares.  The latest price surge now has pushed the Relative Strength Index, RSI, number to 68.82.

An RSI figure this high is certainly indicative of an overbought equity.  Traditionally, when a stock breaches the RSI 70 mark, it’s a signal that a turnaround is imminent.  I think that if we see a spike higher in VMW shares that also takes the RSI past 70, it could be time for shareholders to take their virtual gains and turn them into real gains.

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