A few weeks ago I posted some not-so-optimistic comments on Vonage Holdings Corp. (VG) following what I felt was an excessive runup in the share price that really wasn’t yet supported by the news or underlying results. Some agreed, some didn’t… welcome to investing (or trading, for me).  Not a lot has changed since then in terms of share price, though Vonage seemed to have an easier time making rallies than it did the dips. Today’s 22% plunge from VG, however, has put the stock dangerously close to a breakdown trigger again.

The key here for Vonage shares - for better or worse - is the support line around $1.31. Today’s low (so far) has been $1.37. That’s not exactly teetering in the edge, but it’s close. The downward momentum is accented by higher than average volume… an alarming number of sellers are bailing out of VG on what is, quite frankly, nothing all that terrible.

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From here the course of action is to wait. The stock could rebound tomorrow, rendering these comments meaningless. If Vonage pittles around here though, and stumbles under $1.30, I can see a firestorm of selling unfolding. Like I said above, the underlying fundamentals don’t really support a price of $1.37 yet, and the market seems to be figuring this out.

As for a target, I don’t have one. I do think Vonage is one of those stocks that’s quick to find support and sympathy buying though, so I’d personally be inclined to take a quicker profit following any significant plunge. Keep your powder dry in the meantime though.

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