First up is $14 billion IT services firm
(CTXS - Get Report). The price performance in CTXS has been impressive -- shares of the firm have rallied more than 24% since the start of 2012, but that doesn't tell the whole story.
One quick look at Citrix's chart says it all: This stock is stuck in a downtrend right now. Despite rallying hard for the first few months of the new year, Citrix has been bouncing lower within a trend channel for the majority of 2012, erasing those gains along the way.
>>3 Tech Stocks Hedge Funds Are Buying
The width of the channel is particularly problematic for Citrix shareholders. Because it's a wide channel, Citrix has a particularly long way to fall before it catches support again. For shareholders, that's produced some hair-raising declines this year, even if the subsequent bounces to resistance have provided a false sense of security. The implications of a downtrending channel are pretty simple: Until CTXS breaks outside of the channel, its high probability outcome is to stay stuck trending lower.
While CTXS' channel is somewhat shallow, that's cold comfort for investors who have watched their positions slide by double digits since the start of the summer. The fact that Citrix hasn't participated in the broad market rally is another warning sign.
I'd recommend staying away from this name for the time being.
Check Out Our Best Services for Investors
Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts