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CORL's Technical Indicators
I have noticed that several people continuously take offense to those that say something negative about CORL. Let me therefore preface my message by stating that there is no difference between the longs that hype the stock and the shorts that trash CORL. Two sides of the same coin, both with the objective of making money (at least, most people want to make money.....some actually don't). Anyway, you should cool the negative rhetoric.
I'm a technical trader. I generally hold no personal opinions on the companies I trade, and don't care about the speculation on Cowpland, the CFO leaving, the legitimacy of CORL's Linux potential or lack thereof, or that the analysts that cover the stock do not like it. I care about one thing: where the stock is headed in the near term. Well, the technicals on CORL don't look good.
CORL is trading below its 10-day exponential moving average (EMA), and the 5-day EMA is about to cross below the 10-day, both of which are clearly negative signs. THE MACD indicator has also issued a bearish signal, as has the Slow Stochastic. Also, Money Flow is extremely negative. From a technical point of view, CORL is in sell mode (visit BIGCHARTS.com for data).
Furthermore, there is sell-side pressure in the marketplace. On Friday (Dec. 17), Linux-related stocks continued to trade up sharply (LNUX +44 3/4) and the tech stocks were screaming up, yet CORL only gained 11/16. And on a press release of another CORL deal in the LINUX business (w/ SIII), this is a pittance. The old trading tenet applies: If a stock is supposed to go up and it doesn't, its going down. Yes, CORL lifted up, but given its recent selloff and the tech sector's stellar performance, the lift was very weak.
BTW, I'm sure that others with access to Level II quotes have probably noticed that many of the professional market makers that are trading CORL have taken large short positions (net basis). They buy enough to prop CORL up and generate interest, then sell tons of it short. Where do you suppose they eventually plan on covering?
Based on these factors, I recommend all longs reverse position and go short. I was previously long when the technicals looked hot, but I am currently short and believe that CORL will get hit hard over the next several days. For those of you in it for the long term, you will improve your bottom line by taking profits off the table and getting back in at a significantly lower price.
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