Don't be surprised if DELL doesn't pull back some tomorrow and through mid week, maybe even as low as 60-64. I have no idea how the market will react to the CPQ news, other than the inevitable knee jerk reaction that the PC industry is in melt down. If the market perceives this to be a problem confined to CPQ, then DELL recovery will be swift IMO. However, don't forget that INTC attributed its shortfall to a general slowdown in OEM demand. Now maybe they were just being kind to CPQ in letting them break their own bad news, or maybe the PC market growth is in fact slowing below IDC/Dataquest forecasts, only time will tell. If that turns out to be the case, DELL recovery will take longer.
In the euphoria following DELL's earning report, particularly with the anticipation of the stock split, there's no question (as the bears on this thread have been correctly saying) that at a share price of $140, DELL has gotten a bit ahead of itself again, as it always seems to do at such times. In the longer term, 1-2 months, DELL will inevitably be back up at the 140-150 level, barring another cataclysmic event like last October, and even then DELL's recovery only took 3 months.
So for longer term holders (me included), last week's INTC/CPQ warnings are of little concern. For people who bought in at the 135-138 level, there could be some short term pain, and for February option holders (me included in a small way), maybe only break even or a possible loss.
David T. |
