FTSE 100: Stocks stabilise after hefty sell-off, ARM Holdings plc remains technically vulnerable to fresh 'leg down'

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Category: ARM Holdings plc

Published on Tuesday, 26 June 2012 11:42

Written by Will Peters

"In sum, a partial short may be initiated here, with the downside target 450p" - Investors Intelligence.

The FTSE 100 (INDEXFTSE:UKX) is 0.25 in the blue at 12:20 in London. The index is at 5,465.13.

Stocks stabilised in Europe by mid-day trade on Tuesday, with investors attempting to build positions after yesterday’s hefty selloff across regional indices.  German GfK consumer confidence bucked the trend in recent poor economic data from the country, painting a better picture than anticipated.  However, caution has been adopted ahead of the EU summit later this week," says Ishaq Siddiqi, Market Strategist at ETX Capital.



Looking at individual stocks, ARM Holdings plc (LON:ARM) is on the radar.

According to an analysis at Investors Intelligence the tech firm is vulnerable to another leg down.

A note to clients from Investors Intelligence says:

"Since mid-May, the stock has been drifting upwards weakly. Prices could not even rally to the former support at 530p, which, by now, has converted into resistance (see right). The makes the huge former trading range at 530-650p an area of resistance now. Moreover, the recent breakout at 510p was countered swiftly, indicating ready selling.

"In sum, a partial short may be initiated here, with the downside target 450p. Add if the 480p support goes. Initial stop at 525p."

The Eurozone crisis remains the key concern for investors.

"Worryingly, Cyprus has requested aid from Europe’s bailout fund, saying it needs to contain the crisis infecting its banking system which has been hurt considerably by the crisis in neighbour Greece.
 
Although Cyrpus asking for aid isn’t a huge surprise [and the request of EUR10b is small] given how the country is so inextricably linked to Greece - the news fuels contagion fears," says Siddiqi.