After all the good news on opticals that have been out for the
last year , especially now ( AMCC exploding during an alleged
recession etc ), what is the investment rationale for these
hedge funds to continue shorting what appears clearly now to be
an up market?
TA, I believe we will see short covering and going long on the market. Hedge funds are in it for the money and if they see a turning point (AMCC, JNPR), they won't want to hope the market comes down. Might as well go with the flow.
Short interest on high PE stocks went up even in December as the bet was that economic slowdown will eat into the PEs of AMCC, JNPR, JDSU, CIEN, PMCS, VTSS etc. Logical trade. However, if they extend the news yesterday to the companies that have not reported, there will be a rush to cover and go long certain tech sectors. Intel's news for the semiconductor stocks (although Intel itself is not doing well) has an incredible effect. If Intel accounts for 15% of the equipment makers revenue, the increase in their capital spending is significant or at the very least may also represent an inflection point for this sector. NVLS was positive, which certainly helps.
Of course we are going to get all kinds of rumors to try to push the stocks down. You can bet on that.
It seems too late for this to work,IMHO.
I am hoping for another opportunity to buy more tech stocks. |
