The stock is forming a handle now. The prior "breakout" at about 55 was a little deep in the base to be productive from a long-term perspective and not likely itself to result in a running to new highs without first further consolidating.
The high yesterday was about $66.45, making the pivot point in the handle about $66.60. If it breaks that on volume of at least 50% higher than normal, it will likely presage a breakout above the 52-week high of 73, and continued movement of at least 15-20% from there. If it breaks $66.60 on light volume, the stock will likely retrace, but the new intraday high would become the new pivot point.
Technically, some congestion exists at about 80 due to the high reached just last March. That may make any breakout a little less powerful and more inclined to fail. If you try to play the breakout, I would set a stop loss about 5% below the pivot to protect against any breakout failure. Better to lose 5% and get whipsawed then get stuck holding a stock that might breakdown substantially in the short term.
In the meantime, while it "handles" I expect SYMC to consolidate in the low 60s or even high 50s on light volume. How long the consolidation lasts depends on all sorts of factors, one of which is the strength of the overall market. I wouldn't expect SYMC to run far unless other security stocks also rallied. In the meantime, I'm just enjoying the fundamentals. SYMC has been a great story since JT came aboard, and his execution has been among the best in the entire tech world over the past year or so.
From a long-term perspective, if you go back 12-18 months on this board, you'll see some thread discussion regarding the long-term potential for SYMC's AV products in the wireless and handheld arena. Interesting speculation that, if it comes to fruition, would provide a significant, sustained increase in shareholder value. That discussion focuses on the consumer hand-held market (including phones). Now that SYMC is penetrating substantial corporate accounts, there exists the potential for bulk wireless AV service, a pure-margin, incredibly scaleable business with nearly no incremental cost per subscriber. Given the recent economic weakness, as well as NETA's continued bungling, the world of legitimate competitors to SYMC is looking smaller. And, of course, you can't compete unless you have a full library of all known past viruses (talk about IP and barriers to entry!), as well as a 24/7 team of programmers identifying and neutralizing new viruses.
All JMHO, of course.
RK |
