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VSEA, ARRS, and VMED - Bearish Technical Alert

|Includes: ARRS, Virgin Media Inc. (VMED), VSEA

Avoid shares of Varian Semiconductor, Arris Group, and Virgin Media for the time being.

Despite the market's recent bullish tide, a handful of stocks have managed to form alarmingly bearish chart patterns. In fact, Varian Semiconductor Equipment Associates Inc. (NASDAQ:VSEA), Arris Group Inc. (NASDAQ:ARRS), and Virgin Media, Inc. (NASDAQ:VMED) have all triggered one of our two primary chart-based sell signals. Here's a closer technical review.

Though it doesn't show up on our weekly chart, Varian Semiconductor Equipment Associates Inc. (VSEA) made a significant bearish outside bar today, ending what has been a long string of gains.

Those gains also pushed the stock into a stochastically overbought position, which is one of the proprietary system's key conditions.

A revisit to the $24/$25 range for VSEA is very possible now that a breakdown effort has been initiated.

This system accurately spotted the previous major breakdown.

Like Varian, Arris Group Inc. (ARRS) shares posted a bearish outside day today as well, after stalling at the $13.20/$13.60 most of the week. Given the degree to which it was overbought, Arris now poses more downside risk than upside opportunity.

Our near-term target price range for said breakdown is $10.50 to $11.15.

Note that today's bearish outside reversal bar was made despite the fact that the company turned a profit in Q2 (18 cents per share), let alone a higher net profit (versus 6 cents last year). Strong selling on good news is a major red flag; most of earnings-based runup came in front of the news.

Virgin Media, Inc. (VMED) actually peaked on Monday, but the downside follow-through over the course of the week has cemented this sell signal in place. The stock was overbought, plain and simple.

The $8.34 area has been support as well as resistance before, so that may be a good starting target price for a pullback.

Virgin Media isn't expected to turn a profit this year or next year.