) stock has had a rough year, down over 50% YTD, as margins have
been hurt due to investments in items such as solid state drives
and other technology, as well as by competition from
). This is reflected in the two-year-high short interest of 18
million shares, or 16.25%, of the float.
Rackspace is hoping that OpenStack momentum will improve while the
investments pay off. This may be a bounce candidate into next year;
however, I would suggest incorporating a strong technical
discipline on the long side.
As illustrated in the weekly chart below, Rackspace shares failed
and turned down from their 50-week moving average (purple arrows
and line). Shares are now approaching a major support band (green
lines), near $33 to $20. Volume remains heavy, thus it is key that
shares hold above this area, otherwise, the next stop would be in
the mid $20s.
RAX Weekly Chart
Click to enlarge
What Mobile Sensors Mean to Tech's Future: A
Q&A With Rob Scoble of Rackspace