Stitch,
Mind you, I'm not totally convinced myself, but it would appear that, indeed, component makers are leading the HDD makers. Looking at the charts, SEG may be the only HDD maker that may have signaled the downturn early. With the advantage of hindsight, we see that APM reached its peak in Feb. RDRT started its decline in Mar, and HTCH in Apr. Admittedly, Apr & May were bad months for both component makers & manufacturers, but while WDC & QNTM continued to make new highs afterwards, the component makers never did. The peak for INVX & KMAG was May (SEG too). But, WDC & QNTM didn't begin their decline until around October.
Now, I'm not trying to prove causality, only that component makers may lead the prices of manufacturers. I also realize that when manufacturers got clobbered, component makers also tanked. Still, the charts seem to point that weakness in component makers existed before the manufacturers encountered theirs, and (I hope this isn't wishful thinking) any strength in the component makers may signal an uptrend in manufacturers. |
