KLA-Tencor Breaks Down

KLA-Tencor (NASDAQ: KLAC) has been looking mightily shaky over the past few weeks and it looks like the stock is in serious trouble. The chart will show that the company is in a 5-year bearish pattern and that today’s selloff (the stock is currently trading down 4.55% to $28.11) puts the stock on the brink of breaking sharply lower.

KLA-Tencor can easily break to the $20-23 level if it does not immediately find buyers here at the $28 level. The company has beaten earrings the past three quarters, but perhaps stock traders are betting that the upcoming report (the company is schedule to report earnings on April 9th) will be less than stellar.

I would be buying cheap put spreads here; the April $27/25 for a net debit of $0.50-0.55 will get you done.