This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Toxic Tech Stocks to Sell or Avoid

Nokia

From one cellular phone stock to another: Nokia (NOK). Nokia has seen better days lately. Shares of the $10 billion firm have dropped like a rock in 2012, sliding 44.4% year-to-date as the firm's share of the phone market got eaten up along with its profitability. And now, a bearish setup in shares indicates that this stock's relief rally may be coming to an end.

>>8 Big Tech Stocks Leading the Market

That's because Nokia is currently forming a descending triangle pattern, a setup that's formed by horizontal support to the downside and downtrending resistance to the upside. Essentially, as NOK bounces in between those two technical levels, it's getting squeezed closer and closer to a breakdown below that support level at $2.40. When it does, traders have their signal to short this stock.

I think it's valuable to think about what this pattern means in real-terms. After all, NOK's drop has nothing to do with triangles or any other geometric shape. Instead, it's all about what's going on with buyers and sellers. Support at $2.40 is a price where Nokia has historically been able to catch a bid it's a price below which there's a glut of demand for shares. But the downtrending resistance level in shares indicates that sellers have control of NOK at higher levels. For that reason, a break below support means that those increasingly eager sellers have absorbed the buyers at $2.40.

When buyers are on the defensive, it's not a good time to be a shareholder.

4 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,905.85 -79.76 -0.47%
S&P 500 1,964.56 -8.27 -0.42%
NASDAQ 4,401.9040 -17.13 -0.39%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs