Hi Duane, why do you say the chart is interesting?
At the moment, I'm having a tough time figuring out its personality. That always happens to me in a major gap situation - it destroys my 'composite sketch' of a stock, and it is only after an extended period of time that it reshapes itself into something I feel I have even the slightest handle on.
Here is what is going through my mind. We had a nice but relatively plodding uptrend over the last 12-15 months (I say 'relatively plodding' because I think of how some (most?) of the other players in the overall sector have fared during the same period). Then bang! the Christmas pre-announcement throws everything into question. What on Earth is a semiconductor company doing pre-announcing a missed quarter when the sector is in a big-time growth cycle and the picture couldn't be rosier? Huge volume in bringing the stock back down to some 41-ish support - investors (institutional included and perhaps especially) were evidently pissed at management. I admit to knowing no details with respect to the announcement (Bad Boy!), I'm just making inferences based on the chart - but my guess would be that management now has a credibility problem. And once this type of damage is done, it takes a good amount of time to get it back.
On a technical basis, the events of late December also served to definitively break a weekly uptrend. And although the stock did find the expected support at 41-ish, it clearly is flailing about. Someone (you?) mentioned that the 10-point jump the other day could easily have been due to rumors re AMAT. If this is true then imo we are not really seeing internal strength in the stock - we are seeing it act solely on the ebbs and flows of the overall environment.
Given these circumstances, it is hard for me to picture anything except erraticism in the stock for the near future. One good thing I would note is that, rumors having been dispelled, the stock did NOT move back down to where it had been. This is about the only point of encouragement I can drum up. Yesterday you saw an instant run to 51 on good opening volume, but then it mostly died out.
I don't know when they are scheduled to release the quarter, but if their numbers come in better than the reduced expectations, maybe it would pop, I suppose. But if it does, imo it will be short-lived; in fact I can make the case to myself that if they end up beating the reduced expectations by a decent margin, it might only serve to erode management credibility even further.
Net net, I'm glad to have had the sheer luck to have bought a few hundred the first week in January - and it WAS luck, as opposed to any deep analysis. I had been 'playing' the stock for the better part of the year and had been out of it for a while, so I was feeling kinda sentimental. Right now I'm thinking to bail my last 400 until things settle down.
What's your take? It could easily be that a lot of what I've said/inferred above is way off the mark, based on details that someone who pays closer attention to the stock knows. If you'd care to share some insights, I'd be pleased to hear them.
Mike H |
