Earlier, I took a look at downgrades for EMC and VMware. Well, the downgrade parade didn't stop with these 2 companies. Morgan Keegan issued a downgrade for Palm (PALM: sentiment, chart, options) this morning, cutting the firm to "market perform" from "outperform." The brokerage stated that PALM has a slight, but ever-increasing risk of needing additional capital to bring its turnaround to fruition. Morgan Keegan stated that PALM's cash balance will erode from $248 million in the most-recent quarter to $75 million during the next year, leaving "little room for error relative to our [Morgan Keegan's] expectations."

PALM has reacted to Morgan Keegan's move by dropping 15%. The stock is left searching for support in the 3 region. Today's plunge has pushed the equity below the 3.5 level, where it has spent a majority of the past 9 trading sessions. That said, the shares may be able to benefit from upgrades. According to Zacks, 11 of the 16 analysts tracking PALM rate it a "hold" or worse. In fact, 4 of the aforementioned bearish bunch rate PALM a "strong sell." Upgrades from this group of extremists could push the stock higher. Of course, it will take quite a push higher to help PALM topple overhead resistance from its 10- and 20-unit daily and weekly trendlines.