I agree that I do not think we are seeing a short squeeze. But I would like to be there when it happens! For that matter, the recent price action of this stock may encoureage more shorting of this stock which I think is in our favor.
I do think that many misunderstand TA even though there are some using it like one would use ....what is that board that you place your fingers on and it moves from one letter to the next as a way to communicate with ther etheral spirits. ;) For instance, I am sure with your day to day following of stock prices you have seen evidence of support and resistance levels, such as the resistance level the 52 week high provides. This is what many traders use on stocks which creates a reality of its own. I think what throws some people is the use of the esoteric indicators that have wierd undecipherable names. I can understand this, since I think some of the available indicators have no basis in reality and no worthwhile use.
Still, I repsect your opinion on TA. I also use FA, particularily on the longer term investments. I think FA is very important in this case. Even with short term trades, I do look for recent positive fundamental events on a company I am considering investing in to support my TA of the stock. Matter of fact, I started out as a long term investor that used FA almost exclusvely in my investment decisions. But in this choppy, maturing market, I shortened my investment timespan. I do believe we are in for at least one more bull run of the stock market before it tops out.
PSFT seems to be a good longer term candidate. My concern here is the company (and stock) meeting investors expectations. In the recent past, not only has beating the concensus estimates become a requirement for a positive reaction by the investor, but now the whisper number is becoming the target that a company needs to beat. With PSFT at such a high valuation placed on it by the current investor, one earnings warning maybe all that it takes to topple the stock. This may particularily be the case now that many investors are moving away from the overvalued high PE stocks. So investor "exhuberance" is a two edged sword.
How has PSFT responded to earnings announcements? Does it look like there is predominantly the longer term investor involved with this stock?
Bob Graham |
