Palm (PALM)'s violation of near-term support this morning at 12.40 triggered minor downside follow-through to 12.35 prior to a sharp rally to 12.93. The lack of downside extension beneath 12.40 followed by the sharp rally indicates to me that the stock has completed a significant near-term pullback off of the January 19 high at 14.17.

If my work proves correct, and PALM is not overwhelmed by a total market implosion, then this morning’s low should contain additional weakness. But what if I am wrong and PALM breaks 12.35? Where could it go? The next downside target zone for PALM within its bullish pattern off of the December 18 low at 9.60 is 12.00 to 11.85.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.