It's been a very interesting year for Nokia (NOK). Just a few months ago, shares were falling like a rock, only to rebound hard on a few glimmers of life since August. But don't think for a second that this stock's problems are behind it.
Nokia is forming another textbook head and shoulders top pattern, one that's got a larger initial downside target than the one in Netflix (though not nearly as deep of a secondary downside target). Nokia's neckline is currently at $3.50. If we see a push through that support level, I'd recommend avoiding long exposure to this stock.
Lest you think that the head and is too well known to be worth trading, the research suggests otherwise. A recent academic study conducted by the Federal Reserve Board of New York found that the results of 10,000 computer-simulated head-and-shoulders trades resulted in "profits [that] would have been both statistically and economically significant." That's good reason to keep a very close eye on NOK and NFLX this week.To see this week's trades in action, check out this week's Must-See Charts portfolio on Stockpickr.-- Written by Jonas Elmerraji in Baltimore.
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