Corning Incorporated (GLW) - Get Report began Wednesday's session with a downside gap and has remained weak since. With 90 minutes into the session the stock was off over 5.5% on heavy volume making it one of the five weakest members of the S&P 500 Index. This damaging post-earnings blow is a sharp reversal from the very positive pre-earnings action. Investors should keep a close eye on how shares handle a very solid support zone near $30 as the dust begins to settle.
GLW began a fresh rally leg in late-June when the $30 area was cleared. During the prior six weeks the stock traced out a narrow consolidation pattern after gaining over 30% from the November lows. This healthy sideways action provided the footing for a new uptrend that would eventually lift the stock another 7% higher before closing Tuesday at new 52-week highs. The ugly breakdown Wednesday is a sharp reversal that may take further downside before a new base can be built.
In the near term, GLW investors can view the $30 area as solid support until proven otherwise. This key zone includes the stock's May and initial June highs as well as the 50-day moving average. If GLW can regain its footing here, the damage from today's flush will remain limited and a low-risk entry opportunity will develop for this A-®rated stock.
More of What's Trending on TheStreet:
- AMD's Crash Could Tally 70%, One Analyst Thinks
- Advanced Micro Devices Could Explode Another 17% Within Hours: Chart
- GM May Slash Six Car Models to Combat Slumping Sales, Avoid Plant Layoffs
- Tesla Is Having a Party for Model 3 Buyers That Could Also Ignite Its Stock
This article is commentary by an independent contributor. At the time of publication, the author had a long position in GLW.