Closed at $28. Average volume. Off the low of the day. Substantially off the high of the day. Other networkers gained.
Bay share price vulnerable to any broad market retreat. Reason? Hit by block selling last week - probably profit-taking and asset re-allocation by a large institution or two in volatile pre-earnings period. Momentum of that down-draught weakening but still there. Its effects exaggerated today by weak buying on weak volume for most of the day. Uncertainties about this quarter results undermine confidence. But the uncertainties not new - structural for this quarter, well-known by close followers of the stock, hence still strong support from majority of analysts. No known news to suggest that consensus earnings will not be met, but people, for no identifiable reason fearing that news might be coming. This sets stage for sharp falls on negative news or sharp rises on neutral or good news. Even with uncertainties, even with slightly below consensus, BAY to have strong 4th quarter.
These levels doubly disappointing after a prolonged period where BAY would rise, not fall, towards the end of the day and after stock moved steadily into the 31-33 trading range.
What to do now - not to be facetious, but one buys, sells or hold. Sell if you think that there will be negative news or if you think everybody else will sell on fear of negative news or simply because they think the stock is falling, giving you a chance to get back in at a lower price, hold because nobody can fine tune short-term stock prices and the absence of a good reason to sell is a good reason to hold, buy because 28 is a good price, much better than the 31-33 BAY was at last week when three major brokerage houses recommended it as a buy, and because 28 is a good price for a stock which will approach and surpass 40 not too long after earnings and certainly in the next 4-6 months. Buy if you are a short-term trader (you could have gotten 29 3/8ths for it today).
Goodnight from Europe!
Victor |
