Anand because of our excitement with RMBS we are overlooking the general market, it is weak, the Dow is even weaker than I expected and once more in danger of breaking down that diamond formation (by now the sell signal should be up to about 10300 or so). The turnips were right about the market going down from Wednesday on, and I think that the rest of their short term scenario (weakness at least into Friday this week) will be borne out. Thus, RMBS under $80 is not far fetched. If the market get hits very hard, maybe even under $70, but I do not think that $68 will be breached. Once this weakness is out of the way, I can easily see RMBS breaching $100 and not meeting any serious resistance up to about $115 or so. If the summer rally is as powerful as I think it can be, new highs in RMBS (above $118) are quite possible. Right now, I have a tentative high for the year at $150 or so for RMBS.
In the meanwhile, toward the close yesterday, I got SNDK at my GTC of $62-5/8. Don't disregard this one, if the flash market is indeed going to grow much faster than the DRAM sector, SNDK has RMBS like qualities (they are already making some $50 MM/year in royalties), and is also at the fulcrum of a rapidly developing set of consumer applications. If we get a solid summer rally, I believe that SNDK might be a better bet than RMBS at these prices. SSTI might be a good play as well, but I believe that entry next week in the the low $70' may still be possible, so I am waiting with it.
Once we get over next week, I believe that the better plays will be to buy and hold until early October or so.
Zeev |
