Western Digital (WDC) Message Board

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Technology Stocks : Western Digital (WDC)

WDC 163.33

+3.5%

Nov 28 9:30 AM EST

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To: hcirteg who wrote (8368)	1/3/1998 10:33:00 AM
From: Jonathan Bird	Read Replies (3) of 11057

HC, I think perhaps I didn't make my point clear. I'm NOT saying the charts don't look good. I'm NOT saying we will not go higher short term. I'm NOT saying anyone who is long right now is a sucker. What I am saying is that we have not seen the REAL bottom yet, or the end to the woes of the sector. I am remembering what brought us this low in the first place. That is oversupply, and as a result, falling prices and margins. I haven't seen the slightest shred of evidence that things are stabilizing, nevermind getting better. What I am seeing on this thread, and the reason I posted, is people thinking that the sunny days are here again. Well there not. If I was simply seeing traders taking advantage of the January Effect then I wouldn't have posted at all. WDC is fairly valued at the 21-24 range where I expect it to hit in the next 4-6 weeks. I guess this is where we disagree mainly. Here my basic premise. Go over to bigcharts.com and look at the stock price relative to the rolling EPS over the past 5 yrs. Now match the current forward EPS estimate to the price on the chart. It hits around 10 dollars per share and less. On a historical basis, WDC is clearly overvalued. The chart clearly shows the next stop is the low 20's (without news). I don't disagree. But what if there is news(bad)? And whats the next stop after that? I think im looking farther down the road then you are. Now, if I were you (and the rest of you shorts), the last couple of days action would worry me. I covered my APM short on Dec 31 in full anticipation of this rally. So this actually has me pretty excited at the thought of being able to short again at a price with more potential so I can ride it down some more. So no worries. :) And im glad to see APM friends getting a break. I just hope they don't get greedy and miss their chance to bail out before it REALLY gets ugly. Jon Bird

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