Time to buy.
Caveat: this is probably not a LT position. I've set limit orders to sell at 18.5. I'd use that sell price, or maybe 21, if I wanted to exit a LT position. In the low 20s, we run into the 200DMA, and the January peak, and that should be strong resistance, which won't be taken out until there is a major change in sentiment about the sector. I don't see much downside (or much upside) in this stock, or telcos in general, for a while (many months, possibly a couple of years). WCOM has been in a bottoming formation, bouncing over and over in the 13.5-15 area, for the last 8 months. If you want out, patience should get you a price better than today's. Another caveat: if you recall, I thought 40 would be support last year.
Since January, I've decided the stock markets are going to be in an extended period of volatility with no net upward movement. I've used the January and April rallies to exit most of my LT positions, and have very profitably been trading the ranges on a variety of stocks. My portfolio is up 25% so far this year. If I had stayed with LTB&H (as I was from when I began investing, through January 2000), I'd have had a big loss for 2001. I buy the dips on stocks that I think don't have much downside, and short the rallies on stocks that I think are still very overvalued. WCOM fits the former catagory. Ask yourself, what else could happen, that hasn't already happened? A horrible present, and a horrible future, is already in the stock, right? It feels weird to be stating the bullish case. |
