re: "is your objective to trade, or to hold until TXN recovers"
I chose the option I did, because I haven't decided between those two choices. Since they are the longest-term available, I can hold them till 2003. TXN at 30 meets my Value criteria, and I think that is a good entry price for a long-term holding. If the SOX collapses (again), I'll hold the LEAPs I have, and buy more whenever support looks to be reforming. Maybe buy more LEAPs, in increments, at 25 and 20 and 15 (not a prediction, just a scenario).
On the other hand, if we get a quick pop up, I'll probably sell. The top of the trading range isn't clear to me now. Since the February low, we've had two failed rallies, and both of them went above what I thought was resistance at 36. If we get a month-long rally in the techs, TXN could go all the way to 50.
The bottom of the trading range seems clear, with support at 30.5. Below that, we quickly retest the February lows. Right below that, there is an area of congestion around 25. Lots of the techs, after the October 1998 bottom, made a steep upmove, and then stalled in early 1999, forming a horizontal range for a while, before resuming the uptrend. That area of congestion seems to be a support level, for a lot of the techs. For TXN, that level is at about 25.
So, I don't see a lot of downside risk in this stock, at prices from 31 on down. But I could easily be wrong. In a bear market, support levels hold and hold and hold, and then fail. At the moment, I think we are just at the beginning of a recession. My attitude toward the turn in the economy, and the fundamentals of semi companies, is "show me". There is a hint (just a hint) that chip inventories for PCs are getting cleared. But other chip inventories are still growing. CSCO may have inventory in the channel equal to 9 months of demand. And demand is still weakening. It's way too early to call the bottom, given the fundamentals. |
