Shibumi,
The technical indicators today are far deteriorated than they were in December. It is true that not much has changed since December regarding the competition, the press and the competitors. The stock price has, however, run up over 60% split adjusted since its low back then. Management's profit outlook then and now does not justify the price increase, and they have effective said as much.
If the stock hadn't dropped after Wednesday's earnings report, the short term technical picture would not yet have signalled that a price correction was at hand. The price, however, did drop precipitously on high volume over the past two days, doing serious damage to the stock's technical picture. Thus my assessment of the picture is that of a short term but significant pull back. If. however, the price bounces off 91 and holds during the next trading week, the technical picture will have changed. If as I believe, we get a daily closing price under 91, the next strong support according to my work, is 82-83. I do not anticipate that the price will fall lower than 82. If it did, some apocalyptic event will have triggered such a move and you would probably see much lower prices in the market as a whole.
I hope this clarifies my position.
Franco |
