I just read through your thread, and I would like to congratulate you on starting it at a time which, so far, looks like it may have been within 20% of the closing high for AMAT, and only five weeks early. I don't know why you edited the opening message to tone down the bearishness. If it turns out that we have already seen the final top for this cycle, then your timing will turn out to be a darn good record in a sector as volatile as this one!
After looking through many of the charts linked in this thread, I'd like to make the following observations (some of which have been made before, but I think they're timely right now):
The following chart shows that the peak in AMAT's stock price preceded the peak in SEMI bookings by one to seven months on the last two peaks. With AMAT currently down 20% from its closing high and having set up a pattern of lower highs and lower lows in the past two months, perhaps the market is now forecasting a slowdown in future bookings. It will be interesting (to put it mildly), to see if the stock market's predictive powers hold true this time.
geocities.com
bigcharts.com
The following chart suggests that now is a very risky time to be invested in the sector. As has already been pointed out, next month's data will be a subject of very keen interest.
geocities.com
(Gottfried, I wonder if you have done a chart plotting the above against AMAT's stock price. Also, on all of the long term charts, I think it would help to identify trends if the stock prices were plotted on a logarithmic scale.)
It has been commented that it is difficult to find a leading indicator for the stock price. I don't know of one, and the only strategy I have been able to come up with for consistently making money in the sector, without getting killed in the downturns, is to invest in one or more of the industry leaders, and then to sell half every time the stock doubles, and double up on the position every time it falls by half. I wish I would have followed my own advice on this; I would have made a lot more money. I haven't checked to see if this would have been any better than buy-and-hold, however. |
