When is time to reenter the trading shares.
My trading shares are gone and I would like to get some opinions on when to buy my shares back.
Sdli went from 150 to 460 in a matter of two month. It went as high as $316 by itself, helped by merger rumor of course. The last $100 may not count since it is artificial due to addition of JDSU to S&P. The average of 150 and 450 is $300, which is the first support level, right at the 50 day moving average ($290). Stock has super strong support at around 200, and the chance is slim if it will get there. If it does, I will only own SDLI in my short term portfolio. Contrary to popular sentiment, the merger should go through, although certain division like PIRI (passive components) may have to be divested (not certain this is true). SDLI and JDSU are not big competitors and there are few reasons why DOJ will allow JDSU and ETEK (who competes with JDSU in many areas) to merge but stop this merge. Although NT has some concerns, CSCO and LU has not expressed concerns. GLW should be concerned but its opinion may not carry weight. Therefore I am firm believer of successful merger. Maybe somebody has a better sense of how many percent of their business is overlapping. JDSU has not made much money for its share holders this year, but had rewarded the company it has acquired. It sure made ETEK share holders happy and I think it will make SDLI holders too. At $300 per share, it values JDSU at $79 per share (which is highly unlikely since 200 MOA is at about 94), which I am willing to start buy again. I will be a lot more attractive at $255 per share when a 15% discount is taking into consideration too. At $233 I will use margin to buy, since it is the halfway point of 150 and 315. Hence, average from $300 down seems to be fine things to do. Having said that, we do not know if the stock will go to 300 a share. ETEK share only went to pre-merge price once during the heat of April correction. Any more comments to help me? Thank you in advance.
BL |
