4 Tech Stocks to Sell Right Now

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Stocks succumbed to the worst selling pressure we’ve seen since October on Monday, pushing the NYSE Composite Index down and out of a three-week consolidation pattern.

Stocks to SellThe decline was driven by the ongoing slide in crude oil as well as weakness in high-yield corporate bonds. Junk bonds are being pulled down on concerns that weak energy prices will threaten higher default rates among indebted U.S. shale oil producers.

Also weighing on the minds of investors is the upcoming Federal Reserve policy meeting and the risk that policymakers drop the “considerable time” language from their statement — an action that, if it happened, is widely translated to mean that the first interest rate hikes since 2006 are less than six months away. And of course, we can’t dismiss the risk of a government shutdown heading into Thursday’s budget deadline in Washington.

In response, and as I warned about in a recent post, technology stocks led the declines with heavyweights like Amazon.com, Inc. (AMZN) dropping back below its 50-day moving average. But now, the selling pressure is spreading to popular, super-hyped “new tech” stocks, including some recent IPO sweethearts.

Here are four tech stocks that are headed lower in the near term.

Tech Stocks to Sell: Tesla Motors Inc (TSLA)

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Everyone’s favorite purveyor of electric cars is getting hit by the realization that five-year lows in gasoline prices is undercutting a big reason for taking on the range anxiety that goes with electrics.

As a result, shares are collapsing below their 200-day moving average for the first time since 2012 — violating a level of technical support that has held Tesla Motors Inc (TSLA) stock five separate times over the last two years.

In response, I recommended on Dec. 3 to Edge Pro subscribers the Dec $230 puts, which are already carrying a gain of nearly 140%.

Tech Stocks to Sell: Alibaba Group Holding Ltd (BABA)

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The Chinese e-commerce/B2B behemoth that is Alibaba Group Holding Ltd (BABA) is suffering its most serious post-IPO pullback after surging more than 40% from its October low.

Shares are dropping out of a two-month consolidation pattern following disappointing Chinese trade data earlier in the week.

In response, I’ve recommended Edge Pro subscribers look to profit with the Dec $105 puts.

Tech Stocks to Sell: Twitter Inc (TWTR)

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Social media icon Twitter Inc (TWTR), with its cute bird logo, is seeing its share price act more like a ton of bricks as it drops out of a three-month trading range near $40 as doubts grow over the company’s ability to broaden its reach.

TWTR stock was hit hard back in October on concerns over the growth of user metrics.

A return to the May lows look likely as the company continues to tweak its experience and attract more casual users.

While I’m a fan of the instant-on/stream-of-consciousness information dump you can get from Twitter, I’ve recommended Edge Pro subscribers prepare for further short-term weakness by moving into the Dec $40 puts that are already up nearly 103%.

Tech Stocks to Sell: GoPro Inc (GPRO)

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Action cam maker GoPro Inc (GPRO) enjoyed a rip-roaring rally in August and September on reports of a short squeeze against bearish investors doubting the company’s ability to take on fresh competition from the likes of Sony Corp (SNE).

But now, with shares dropping out of a four-month pennant formation, those doubts appear well-founded. There were reports that the company was looking at branching out into a consumer-market drone for launch in late 2015 — a move that wasn’t received well given the intense competition in that market. There also has been a persistent rumor of a Google Inc (GOOG) buyout of the company that continues to ring hollow.

A secondary share offering in late November priced at $75 looks set to offer some resistance here, leading me to recommend the Dec $70 puts to Edge Pro subscribers.

Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters.

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Article printed from InvestorPlace Media, https://investorplace.com/2014/12/4-tech-stocks-sell-right-now-tsla-baba-twtr-gpro/.

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