RtS, 2 answers.
1. I am not shorting AMAT or anything, as well as not buying anything. My interest/ comments are purely based on what I am seeing (I may be blind ggg.) I am building a new home, due to close in 5 weeks. As much as I get tempted to trade, I know I'll get tempted to position trade and I really can't risk my funds.
2. Check these 2 charts of AMAT from 95 to present.
stockcharts.com[l,a]mhcanimy[d19950101,20010901][pc20!d20,2][vc60][iUe12,26,9!Lc20!La12,26,9!Lo14]
stockcharts.com[l,a]mhclnimy[d19950101,20010901][pc20!d20,2][vc60][iUe12,26,9!Lc20!La12,26,9!Lo14]
Same except for linear vs. log chart.
The first can be used to explain the rally from December lows. Purely a dead cat bounce off a dramatic selloff.
The log chart gives a better frame of reference, IMO. The previous two troughs were not as dramatic dropoffs, so my views may not hold. My view is the stock pushes the upper Bollinger Band, then pulls back to the moving average, bases for awhile, then drops lower to get close to the lower Bollinger Band. I believe in the last downturn, we saw AMAT at 25, that was pre-split levels. (Deja vu or whatever, my target would be 25. From 42, we could rally as high as 46 (likely 43.5-44), we will head lower IMO. The 41 print today broke a bottom. There is a chance that 40 holds (1st target, then 35, then 30. 25-30 would be good starting entry points. The risk-reward, depending on time frame, may not be strong enough to short here. The 20 dma is 44, which will act like resistance, so that might be a better entry for short, with a stop at 47 and target of 35. 3:1 risk/reward ratio. (Longer term).
Regards,
Ketan
As far as my comment about it being the best to short, it's based on the contrarian view (of it looks the best.)
I am very bearish on BRCM and MXIM here. better shorts IMO.
The SOX and SMH and AMAT broke down today (bottoms). Whether real news or spooks cause a drop from here, I don't know, but rumors of INTC capex spending in 2002 being 30% lower than 2001. If so, that's a huge negative, that is not priced into the equip stocks. |
