E-
Actually, it's a very positive sign. NOV is not closing below its 100-day MA. And each day, the stock trades lower, yet it still closes at the highest point of trading. The volume has been increasing steadily as the stock has moved down. We are forming a strong support level here. Judging by the chart, I'd say that Q4 was very good. Some institutions seem to think so, because they keep buying all stock below $13.
Here's a guess:
If NOV announces tomorrow morning, and the results are very good, perhaps .20 (vs. analysts' .17), we'll see 1 million shares traded and NOV jump above $15. Within the next week, NOV will top $16.
That's pure conjecture, but remember that the PEO segment is probably adding a lot of earnings. And the chart's pattern suggests that any good fundamental news will release a burst of unrestrained buying. The buildup of volume has a cap at $13 now, but if there is a fundamental reason for the stock to move higher, it should do so on significant volume. Besides, NOV traded down to slightly below its 100-day MA just before Q3 earnings were released. The stock moved much higher after the release.
For comparison, Q4 1996, NovaCare reported:
EPS: .13
Income: $8.4 million
Revenues: $203 million
Even if NOV reports only .17, that's still a 30% improvement.
The last press release that NovaCare issued was on 4/30, announcing Q3 results, which were 45% higher than the previous year. 45% higher than Q4 1996 would yield .19 this time. That would also be a 19% sequential growth from Q3. That'll get the stock flying. But I'll be happy if they meet estimates. I guess we'll see.
Todd |
