Ed:
A drop below 23 is beyond anything that I would have expected. The other day I offered a few posts with my thoughts about the mm trying to accumulate stock. I was grabbing at straws, I felt 24 was rock bottom. If anything, the mm appear to have been trying to find buyers. On my intraday charts the slide for the past few weeks has been characterized by the absence of buyers. Two days ago, when the stock recovered a bit prior to the close, it appeared that a reversal might be near. That rebound was not a reversal, it was the mm looking for a bottom themselves, no buyers appeared and the stock fell further. To say this is the bottom is very difficult. The bottom will be reached when buyers appear.
When the stock fell below 28, it appeared to me that the current drop was more than a retracement and might in fact signal an overall market top in which the leveraged stocks plunge first. I think we are beyond a reversal and nextel will require a period of consolidation at a low level of support. I have been very lucky this past week, been very busy at work, otherwise, I would have attempted to trade the stock at these levels. I think you are right, it is best to wait for the dust to settle. The big money is probably waiting to see how the competition is going to effect the bottom line of nextel. When the quarterly results come out, you can bet your bottom dollar, the ARPU number is going to be looked at very closely. A 25% increase in customers is not going to be attractive if there is a 10% decline in the ARPU for 2 million units. My bills have declined by 50% as a result of signing up for one of the incentive programs. July will be interesting.
Ken |
