ARBA: investorlinks.com
<<<However, technical analysis of Ariba's chart suggests its share price may have bottomed out over the past week. The stock appears to be tracing out an upside-down, head-and-shoulders formation. This bullish pattern could take the stock up to $54 over the next few weeks, for a possible appreciation of approximately 135%.
The stochastic indicator is at deeply oversold levels, suggesting the stock could expect significant momentum behind it. On Thursday, Ariba's share price jumped up over the critical 10-day moving average. It also closed above a downtrend line. Both these important events fuel the theory of a continued near-term advance. Friday's dip back below these significant indicators should be viewed as only temporary.
If Ariba's stock reaches $54, it may sell back down to $43 again, as it begins to form the right shoulder of the pattern. Another rally from that point could follow to complete the formation. That rally could take the stock back up to approximately $80 over the next two months, for a possible 86% appreciation.
Ariba provides an e-commerce platform and services that enable efficient online commerce, integration and collaboration between B2B marketplaces, buyers, suppliers and commerce service providers. Says J.P. Morgan Chase & Co. (JPM, Chart, Boards), "IT spending intentions for 2001 show e-business software…as a top priority. Companies under profit pressure will continue to seek productivity gains through targeted IT investment." In the face of a possible economic slowdown, CFO Bob Calderoni believes, "When [companies] go through the prioritization process, I believe they will select the solutions that Ariba has. We still remain very bullish about our prospects in the coming quarters." In its financial guidance, a company official forecast Ariba's fiscal year 2001 earnings to come in at $0.25 to $0.26 a share, on sales of approximately $790 million, a 183% increase in sales over the previous fiscal year.
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