Last up on our tour of toxic technology stocks is
(CRM - Get Report)
. Salesforce is another name that's provided some pretty impressive gains for investors for most of 2012, but looks a whole lot less attractive in the short-term. While that doesn't mean that you should unload your CRM holdings right away, it may be worth considering for a short trade if the pattern breaks down.
CRM is currently forming a double top, a pattern that's formed by two swing highs that come in at approximately the same level. For Salesforce, that resistance level is right at $160, a price that's been a challenge for the firm for the entire year. Put simply, after a 51% rally in shares this year, sellers are more eager to sell and take gains at $160 than buyers are to keep buying. That sets the stage for a top in the stock.
The sell signal (or the short signal, if you're so inclined) comes on a breakdown below $150 -- that's the support level that separates the two tops in CRM. If you decide to take a short trade here, I'd recommend keeping a tight protective stop; with the broad market finding an important support level of its own, the correlations in the
could help awaken buyers in the next few weeks.
Salesforce also shows up on a list of
8 Big Technology Stocks Leading the Market
To see this week's trades in action, check out the
Technical Setups for the Week portfolio
-- Written by Jonas Elmerraji in Baltimore.
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