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Pull the Plug on Emerson Electric

Sell EMR short on a break below $45


Emerson Electric Co. (NYSE:EMR) — This scientific and technical instruments designer and manufacturer issued fiscal Q2 results that widely missed targets, causing analysts to lower their projections for 2012 and 2013. Weak economic conditions in China and Europe were blamed for the miss.

A bearish rounding top has formed with support at $45. In early June, the stock recovered from that support, but then reversed down from a double-top at about $47. Note the heavy accumulation of sellers and the sell signal from the stochastic.

Sell EMR short on a break below $45. Support exists in the low $40s, but this stock could fall to the mid-$30s. Stop-loss orders should be entered at $50.

As with all short sales, be sure to check with your broker for the ability to borrow the stock. Short-selling is a speculative technique that involves higher-than-normal risk.

Trade of the Day – Emerson Electric Co. (NYSE:EMR)
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