NTAP TA:
stockcharts.com[h,a]dahlnymy[dd][pb50!b200!f][vc60]
We are now at a critical support area, at 15-16. This is the 200DSMA, where we found support in the February dip. If 9/01 was the bottom, and if we are now in a LT uptrend that began then, then the stock should be expected to find support at that moving average. If we don't bounce here, then the channel the stock is in, may be horizontal (15-25?, 10-20?), rather than rising. That is, this may be a stock where improving fundamentals puts a floor under the stock (a floor well above the 9/01 lows), but too-high valuations put a ceiling on it, so we go sideways for a prolonged period (I'm thinking years). So, if we don't bounce here, I will be more aggressive in selling, when my LEAPs get into LT cap gains territory, in June.
In spite of being down from 27 in January, to 16 now, this stock has outperformed just about every other tech, since the 9/01 panic-selling bottom. Still more than a double off its lows. A lot of that is just that this stock is extremely volatile. But, look at EMC: a single-digit stock now, collapsing below its 9/01 low. The only way EMC gets back to its old highs, this decade, is using the AT&T method: a reverse 1-for-5 stock De-split. I predict this becomes a widespread trend in telecom and telecom-equip stocks. There are some companies that just are never coming back, and management is slowly realizing this, and adjusting to reality.
Anyway, if I didn't already have all I want at much lower prices, I'd start buying NTAP here. And, if we bounce here, while the Nas keeps going down, I'd start buying more aggressively. I can't argue with anyone who says the valuations are still too high. My response is, I'm not going to argue with the market, and the market doesn't want to fully deflate the Bubble (except maybe in the telecom and telecom-equip sectors). If you wait for valuations to get to where they usually get in a recession (S&P500 at a trailing PE of 10), you'll wait forever. Those valuations only happen when inflation is significant, and when the Fed has been raising rates repeatedly. As long as inflion is 0-1.5%, and the Fed is leaving their Funds rate at 1.75%, current valuations are sustainable. For now. |
