3Com Corporation (NASDAQ:COMS)

Q: Hello,

What do you think is a good price to purchase 3Com at? I was thinking at $3.32. What do you think?

A:We issued a Downtrend on COMS on 6/22/09 at $4.38 and even though it bounced on that 50-day moving average, 3Com continued to decline a few days later.  The stock is trying to find some support around the $4 level where it traded from late April through mid-May.  I would be careful and use tight stops since the next support level isn’t until the 200-day moving average which is at $3.  Plus since we still have the stock in a Downtrend, we would not advise a long position as that it basically bottom timing which is something we try to avoid.  If you do own it, watch that $3.72 bottom on 7/13.  A break below could be potentially bearish.