As noted earlier, Motorola Inc. (NYSE:MOT) lowered fourth quarter estimates and saw a handful of downgrades. A check of the pre-open action shows the stock is indicated down roughly 10 percent, putting the shares near the lows from last July. In technical terms, a major bottom like the one in July is known as chart support. It represents an area where previous buyers have been willing to step in and buy the stock. A pullback to such support can be viewed as a bullish development, if the stock holds there. However, I am not sure I would be willing to jump on the bullish train without considering a couple of other points.

The first are the downgrades that Melly Alazraki mentioned. As a contrarian I am looking for situations where the Street is getting caught off guard. According to Zacks, 18 of 24 analysts (75 percent) had ranked MOT with a "buy" rating ahead of the warning. There have been a handful of downgrades this morning but there is still a relatively large number of "buys" hanging over the stock. I say "hanging over" because those could turn into downgrades if the company doesn't step up to reassure the Street.

The second point was a recent article in BusinessWeek that touted Motorola's quality-improvement process called Six Sigma. While this is a purely anecdotal read on my part, the upbeat sentiment in the article underpins the optimism seen on the stock. Given the warning last night and the downgrades this morning, it seems that a "resetting" of expectations may be underway.

For another Bloggiong Stocks take, see Eric Buscemi's earlier post.