Back in the glory days of the old open outcry market, the Xerox (XRX) - Get Report crowd was a fairly tough crowd. Actually, it was a little intimidating to a young floor broker proudly breaking in his new badge number. The stock traded in the room that was known to the New York Stock Exchange community as "the garage".

I can clearly remember being in awe of having a job where I could trade, and even impact a prestigious name like Xerox. I really feel it has been quite some time since anyone has considered Xerox to be "iconic". I don't think anyone trades the name with that sense of awe anymore. The stock has traded below $10 several times over the last two decades.

It is probably only someone whom the name had made an early impression on that could have purchased the shares in what was clearly an impulse-type purchase, when Carl Icahn made his comments in mid-December. Having established a position without going through my usual disciplines, the stock did not react, so the kid hung on. Enter the Fujifilm talks. OK, what now? Let's go the chart.

I will admit to you that impulse purchases in this industry are extremely unwise -- if you admit that the Mets have a chance this year. OK, supposedly no deal is imminent, but Xerox and Fujifilm had talks. Poof. Looks like I recovered a gift fumble on the one-yard line. I am not going to act like I was smart. I am, though, going to take advantage of the situation.

The chart displays some oddities. For one, the stock suffered a death cross just prior to the New Year, yet the stock rallied with the rest of the broader market. Despite horrific looking money flow, the name has obeyed the Pitchfork model that begins with the November lows. That's a positive.

The negative? The name had exhibited resistance at a 50% retracement from top to bottom, October through the present. Yesterday's news event put the last sale above the central trend line that should have acted as rising resistance itself. That line could act as support. If it does, perhaps that might mean more news to follow.

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My take? I did not initiate this long for a good reason. This is found money. I will give it a chance to grow, here. That said, the stock crosses $31.50 to the down side, I take my football and go home, even if the other kids still want to play.

(This is an excerpt from Stephen "Sarge" Guilfoyle's Morning Recon, which now appears exclusively on Real Money, our premium site for active traders. Click here for a free 14-day trial and receive Morning Recon every day, along with exclusive columns from Jim Cramer, James "RevShark" DePorre, technical analyst Bruce Kamich and more.)

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At the time of publication, Stephen Guilfoyle was long XRX, although positions may change at any time.