Shares of Corning (GLW) are trading within easy striking distance of major support near 2014 lows. The stock has been very weak of late and while somewhat stabilizing, is still working on its sixth straight decline. This most recent phase of the stock's late July breakdown will likely re-test the January low before it runs its course.
Corning was trading just below its 52-week highs mid-year, but had completely run out of fuel. The stock was very vulnerable when it was hit with a powerful selling wave on July 29 following a weak second quarter report. GLW fell over 9% on the news as volume swelled to its heaviest level of the year. This massive breakdown took out the April, May and June lows in one sudden move. The steady bull move that had been in play since 2013's fourth-quarter lows was over.
The stock found support near its 200-day moving average two weeks later and was able to mount a rebound, but the heavy supply left behind in late July limited the upside. The second leg of the post earnings breakdown began in mid-September and once the 200-day moving average gave way without a fight, GLW began to collapse.
I expect the 2014 lows near $16.50 to be re-tested soon. With GLW now off over 25% from its 2014 highs, and reaching its deepest oversold reading since late 2012, I believe a low risk entry opportunity is developing. As we near Corning's quaterly earnings report, due on Oct. 28, it is possible all the negative news is factored in and the stock will have bottomed near a major support zone. I am not in the stock at this time but will likely have a small long position heading into earnings.
At the time of publication, Morrow had no positions in GLW.