RE: >Why is Compaq down
As a former DEC shareholder who thinks that long run DEC/CPQ will do very well, I thought about taking a stake in CPQ. My short run decision is to wait for a better buying opportunity. I see short-term support around 23-24, but I am not sure that it will hold there.
Technicals: Chart still looks heavy, with a potential third downleg if it closes below 23. Bumps up against resistance at 28, the area of a downtrending 200-day MA.
Fundamentals: Company announced that inventory transition will take another quarter. May be a reason to buy a week and a half from now, or next month, but not right now. DEC's upside surprise is not significant relative to combined companies. Besides, the upside surprise was versus lowered expectations, after DEC warning last quarter.
Just my opinion, of course. Could change my mind any time, and I may be more inclined to go long toward the end of the month, taking advantage of short-term seasonality.
Charlie. |
