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5 Toxic Tech Stocks to Sell or Avoid

Salesforce.com

Last up on our tour of toxic technology stocks is Salesforce.com (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 S&P 500 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 on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

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At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.
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SYM TRADE IT LAST %CHG
CRM $73.00 -1.20%
NOK $7.00 6.30%
QCOM $64.63 2.30%
ORCL $39.70 -0.23%
AAPL $122.14 -0.69%

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