Jacob, But not now, not last year, not for the next 12 months, and that's as far as anyone can reasonably predict.
Selling AMAT at a P/S of 6, and buying it back when it hits a P/S of 2 (yes, it will be available at that price again, just as it has over and over in the past) is foolproof.
On a fundamental analysis basis I agree with you. AMAT has never had this high a PE that I can recall. However, on a TA DW chart sense if we break the double top of $57 with $58 statistically the Probability for profitability is 80.3% with an average gain of 38.7% over 11.5 months. This would give AMAT a price of $79.059 from the $57 range.
With the high values that Ralph Acampora (sp), Prudential Analyst, projecting a DOW top of 11,500, it being a the highest S & P year, 24% median return of the Presidential Cycle, the high values of the internet stock, I find it very difficult of fight the market trend (tape). However, I will concede that the Market and sectors, at 58%, on the bell shaped is moving to the high higher percentiles and will correct sometime.
I agree with Tito, that AMAT will have a plateau probably after the earnings for a short time prior to moving up to $100 by August.
I just find it difficulty to figure out what the market, sector and AMAT will do except when they are at the extremes: overbought (70+%) range or oversold (below the 30%) range. This is why I buy in during the oversold periods wait for the momentum to take over and sell when the sector is in the oversold area. AMAT is in that oversold range now but I believe that based on what Gottfried's Orders, shipment and BTS # are telling us that we will go higher.
Then, again I could be wrong. The BTB # will be out this week along with other equipment #.
Just my $.02.
PS Even Big Bucks, I believe, is calling for AMAT to reach $60 if INTC, and some other tech stocks move up and $70 if AMAT has a good EPS report.
Paul
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