Let's not forget that sometimes bad stocks happen to good companies. I'm sure everyone on this thread has seen the stock of a well-managed company trashed for no apparent reason. Face it; when the Street doesn't like a stock, no amount of beating the drum or glowing analysts' reports is going to bring the heavy buyers out of the woodwork.
As far as Conseco is concerned, the Street stopped liking the stock when it failed to recover after the tsunami in October. The stock has since only briefly broken above its 50-day moving average twice, both times on low-to-middling volume. I think Dirks is getting too much credit for the decline in CNC recently. Sure, Monday's drop was influenced by the Barron's article, but I think the stock's (again, not necessarily the company's) troubles run deeper.
As soon as CNC falls decisively below the 200-day MA, I'd consider it prime shorting fodder. Regardless of what Hilbert, Dirks, and the assorted hangers-on say, all it takes is enough doubt and a lack of buyers for CNC to fall $8 - $10. The 200-day MA has provided plenty of support in August, October, and November. The next level is at 40 (tested in July and August). If that support is broken, look out below.
I'll short it if it closes below 42 for two days. And it has absolutely nothing to do with what Ray Dirks does or doesn't say. It's because the stock will drop further, and I like to make money.
RS |
