Lynn, ****OT TYC****
From Briefing.com, 12/11:
09:28 ET ******
Tyco International (TYC) 28 1/4: This is worse than puppy love. When
Wall Street falls in love with a stock, it just can't say no, it's over. Following
yesterday's 22.1% drop in the price of this diversified medical supplies,
electronic security and electrical components company, Wall Street is out in
force backing the stock again. Yesterday's price plummet was caused by the
SEC launching a "non-public, informal inquiry" into the Tyco's acquisition
accounting practices, Wall Street has been backing the stock since the
questions about TYC's aggressive accounting practices were first raised in
early October. Back then, the stock was trading at around 51 1/2 (adjusted
for a subsequent 2-for-1 stock split) when the accounting questions were
raised by money manager David Tice of the Prudent Bear fund and publisher
of Behind the Numbers. Since then, Wall Street has circled the wagons and
backed the stock with Merrill Lynch even naming the issue its "Focus One"
stock of the week shortly after the questions emerged to show support for the
stock. However, this is one issue in which Wall Street's influence has had little
impact in preventing the stock from sinking. Shares of Tyco have been cut
almost in half in the two months that have followed the accounting allegations.
But like a dog with a bone, Wall Street can't let go with various firms
reiterating their "buy" ratings on the stock this morning and even Lehman
Brothers touting their $80 price target. But the chart tells the story that despite
what Wall Street says, investors like mice leaping from a sinking ship, will sell
the stock first and ask questions later. So far, not many investors are
convinced that an inquiry into Tyco's aggressive accounting practices should
be taken lightly, especially when Wall Street shows so much unconditional
love for this issue. - RN
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I don't know if anyone else watches Clearstation's presentation of MACD, HIST, and Stochastic numbers and uses them as guidelines for entry, but TYC does not look good yet... even with one day of price upturn on high volume, it looks very weak. Following CS guidelines one would wait at least until the MACD HIST turned upward for several days before plunging in. Right now the STOCHs are saying that it is overbought even at this low price level.
Doug |
