Lexmark International (NYSE:LXK) — This manufacturer of printers, imagers and content management solutions missed its Q1 earnings estimate by a wide margin, but Q2 came in ahead of forecasts. Nevertheless, Goldman Sachs and Raymond James cut their ratings on the stock due to a sluggish world economy and its direct impact on the printing market. Additionally, Lexmark��s ��subscale positioning�� was noted by a Credit Suisse analyst who looks for ��declining revenues and negative margin leverage.��
The stock has been in a downtrend since October 2010, with each rally held in check by its 200-day moving average (red dash line) and its bearish resistance line. On Thursday, LXK broke a support line at about $28.25, and if it closes below the June low of $26.80, should sell off again with a target of $20 to $22.
However, a gap at $30.23 could be closed, so we should wait for either the break of $26.80 or a rally to $30.23 before entering short-sell positions.
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