Fair value is a difficult concept. You have to figure in balance sheets, earnings, future prospects etc. Given that the market goes to extremes, I would say that when bad news comes out, it gets pretty well priced in. Maybe not on the first announcement, as it oftencatches the market off-guard, but in a sector trouncing like the hard drives, its usually no surprised and priced in.
Thus, with the days action in my view, it looks likea typical case of buying on the bad....smells like we are near a bottom.
QNTM up 9/16 at 13/16
wdc up 9/16
hard drives strong!
When stocks rally on bad news, they should usually be bot.
I wouldnt be short this sector any more....the tide is turning.
When I see the first news reelase that everything is great again, I will be within a day or so of selling.
Regards,
Steve@yamner.com |
