victor: Thanks for the clarification. My apologies for misunderstanding. From another posting on this thread by someone else, I was under the assumption that you followed TA rather closely. (Note: further support for the Law of ASSUME.) Inherently, I have always held the same view toward TA that you have expounded. Over the long run, the underlying fundamentals of a company will generally converge with basic laws of supply and demand to determine a given stock's "value." In between, there are a number of external variables that are not necessarily redundant nor predictable that will effect fluctuations in price over and under this value. However, as you point out, based on evidence, before and after the fact, that I have examined, it appears that a degree of "success" has been achieved by some people in correctly predicting trends of major price movements. Thus, I have recently become interested in learning more about TA to test, within my own experience, whether a certain amount of "mathematical analysis" can be beneficial in determining the occurance of a higher percentage of price fluctuations than I would otherwise anticipate. (Again, keeping in mind that such is based on the assumption of a perfect world with no external, interfering variables, a scenario which I cannot remember when last occured.)
I agree that CPQ will push $48 at least once, and possibly twice, before breaking out to $50. I believe this only because the stock has historically teased at least 2 or 3 times in its attempts at breaking through a previous high. Possible momentum from the approaching week's tech earnings (MSFT, IBM, et. al.) will be helpful in testing the initial strike toward $48, but like we saw this week, the market in general, and especially the tech sector, will likely be looking for any possible excuse to retreat by the end of the week and we are likely to see a pullback. CPQ's earnings the following week should be substantially above expectations, but the stock's price has already built a large portion of this impact in. Thus, IMO, a true run at $50 will only come with continued expectations in the market supported by forward statements from the company expecting robust performance in Qtrs. 1 and 2. Frankly, I still see CPQ breaking $100 by 1999's end as I believe 1)its markets will be stronger throughout the year than is currently forecasted; 2) that the company's performance will prove most successful within them and 3) with a quarter or two of continued strong performance, the market will allow this stock a higher multiple as new confidence is gained in the CPQ/DEC integration. |
