AMAT sold all @ 12, near today's close.
I am taking a large loss, doing this, as I bought a lot in June at around 20. I'm doing this because:
1. In June, I thought the recession was definitely ending, and the semi-equip upcycle was in it's early stages (as evidenced by the increasing bookings). Today, I am a lot less sure of those conclusions.
2. So, I'm going back to ST and MT trading, rather than taking a LT position.
3. 12 looks like a very-ST high for the stock. I'll buy back at 11 and down. Basically, I'm going back to trading the ranges.
4. before we make any sustained upmove, we need to have a bottoming pattern, lastly months, and we haven't even begun that. I don't know where the bottom of that horizontal channel is, but the top is unlikely to be over 20. So, for the next several months, I'd be willing to short AMAT at prices around 20. Below that, I'll just try to make money on the volatility, as I think (now) there is no money to be made in BuyAndHold in AMAT.
5. If consumer spending collapses, and if we get a double-dip recession, then AMAT is unlikely to bottom until we see a P/S of 1-2. Annualizing last quarter's sales gives:
12/((1.46B sales X 4)/1.70B shares) = 3.50
Someone check my numbers please, as I make mistakes.
So, the downside here is that we could easily see 6, the 1998 low. The upside, for the rest of 2002, and probably 1H03 as well, is 20, IMO. |
