Jeff & Ron-
Today's volume is significant because it accompanies a confirmation of the downtrend being broken. I know I've said this before, but SMTC has broken its downtrend, which included 3 failed rallies. The downtrend line has been the resistance line that has quelled any rally attempts. But last week's failed breakout above the 200-day MA was followed by a slide in the stock which remained above the previous downtrend line, confirming the trendline as support. Today's high volume accompanied a nice bounce off of the former resistance trendline, indicating that the downtrend line is now support. The 200-day MA is still rising, so it is the next line of resistance. But I'd have to believe that SMTC looks very strong technically now. It was a good day to buy.
Options: I think the best way to use them is to write/sell covered calls, in order to hedge a long position against a possible temporary decline. I'm not using them right now, because I am spending my money buying more shares of great companies at great prices (This past week, I've bought more CCSC, NOV, NCES, BTIM and ZIGO). The week before, I bought more SMTC and AMAT.
If Tomcat were smart, she will be gone by the time SMTC's rally commences (in about 2-3 weeks, around earnings time).
Grrrr....Year of the Tiger.
Todd |
