My short on MU was called for by my computer, and is thus technical in nature. For what it is worth my computer has reversed itself and is now calling for me to go long tomorrow, so if MU opens weak as Globex predicts I may cover my short. I note that you favor a short of AMAT as well. I sold my long position on my computers recommendation, but did not take a short position. My computer is also calling for an AMAT long tomorrow.
The market is a bit flakey right now as it swings dramatically from one extreme to the other. In this environment my computer models sometimes get whipsawed, reversing direction too late because they trade only once per day. In such times sitting on the sidelines may be the best place to be, and a second choice would be to rely on my instincts.
I have no particular feeling on the fundamentals on MU at this point in time, and the stock could go either way. Obviously DRAM prices will fall as Korean volume ramps up, and that will bring the MU short sellers back into the market. Thus even if the market plays out well for MU a downturn in the stock price would not be a surprise. On the other hand as long as computer and cpu makers remain strong any major weakness in MU would be a surprise unless the price for DRAM falls dramatically. Also remember that at this point in the year most investors are looking for losses, not profits, so they are more likely to sell stocks that are down. This also suggests continued strength in MU.
Sorry if I'm not much help. As I have said I will probably cover my short on weakness and sit out for a couple days. If I had to call it, I'd say the tech market will be up slightly through Wednesday, thus completing head&shoulders patterns on numerous semis, then the market will be down sharply until Christmas. But I take things one day at a time, and right now I am inclined to sit the next couple days out.
Good luck,
Carl |
