JNIC...imo, there's a coupla ways to look at this one, Paul: fundamentally, it's fairly sound with no debt, lots of cash, and is (I believe) beginning a new product cycle in a sector that is still growing even during this "recession." Additionally, JNIC has been gaining market share and is growing more quickly than its competitors (according to news releases I've read).
Technically, it broke April's low of 6 but has stabilized at about 5.50 on increasing volume, a potential large double-bottom. Shorter-term, we've already seen the earnings warning and downgrades successfully absorbed just these past few days. A rising price in a down market leads me to believe the bias is to the upside. Personally, I'm playing this one fairly aggressively and am hoping that a high-volume close ABOVE 7 will draw in additional buyers. Until I have a few more days of data my best guess is 8-10 within a few weeks. At that, I'd probably take partial profits but would hold as much as half for further gains.
Last year I posted JNIC was very overbought when it hit 85 or so and sold all my shares...it went on to about 110 before crashing so I missed the absolute top. If the general market keeps falling, it may retest intraday lows of 5.20 but, with over $4/share in cash, I doubt it will go much lower. I believe it's an excellent opportunity right now. Any additional buys I make will probably have about a 4-5% protective sell stop and any open positions will probably have a trailing stop of no more than 10% to protect any profits. No sense fighting the tape or letting a winner turn into a loser.
Ooops, forgot to answer your question! I don't know if any run to 7 will be immediately followed by a retracement to 6. I personally hope not!
All the above is my opinion only--MK-- |
