Mark, To you and anyone else who took offense to my previous remark, I apologize. I meant not to be arrogant or cute with my words, for though I made money on this stock last fall I took an arrow last week when I closed out my position. I am just glad to be on the sidelines during this period of uncertainty.
Having said that I will restate that even though I don't know what tomorrow may bring I am still of the opinion that the price of the stock will follow the pattern it has charted and seriously challenged the support it has at 16+ and if it does breakdown then I believe it will retest its lows at 10-11over the ensuing months.
What evidence do I bring to support this? First of all, the significant amount of overhead supply of stock that is bearing its weight upon the price. Additionally, the 50-day MA is falling and should shortly cross over a 20-day MA that I use in my own analysis. The 200-day MA is presently just under 15/78 and rising, lending support to the stock's price. Should the price break this line its next support, I would think, would be at 14-15 level. As to the several large trades that took place today and yesterday, I think that I would be encouraged had the price responded favorably. But it did not suggesting that it was either swallowed up with no aftertaste by the supply of stock or, more probably, exchanged between MM's off the table so as to not disturb the market.
As to my thinking that should the price break and retest its lows I need only review the price's past history. After the double top of Jul. - Sept. '95 S3 went immediately into a symmetrical triangle which ultimately resulted in its breaking down thru the pattern on very heavy volume, continuing its trek until it hit bottom. Given the present situation of S3 and the industry I don't see any reason to think that it will be immune to this, once again..
Finally, I do believe that for this to occur there must be some outside event to act as a trigger device. No matter what the company says or does we have seen that the stock has not responded. Likewise, too, whatever help received from outside sources, i.e. brokerage houses, print media, etc., has, also, left the stock gasping for attention.
Over the near term, events in the economy, I believe, will dictate the coarse of action for both S3 and the market. Last Thursday could have been a very important day for the market in general with new intraday highs recorded amidst very heavy volume. The market's action yesterday and today contributes to uncertainty. The GDP report comes out Friday and the Fed meets next week. It seems to be a foregone conclusion that there will be a increase in rates at least by March. Against this background S3 trades lower and lower. I very well could be wrong with my assessment but, as I said earlier, I am glad to be on the sidelines while this works itself out.
Nursing my wound,
Keith |
