JMatz: This is what I think is happening. DELL is a bellweather stock, one of the four horseman of the NASDAQ. If it's share price plunges, the assumption is that the NASDAQ will get slashed and almost every tech stock will be hurt, at least momentarily. CPQ and the boxmakers are particularly vulnerable because they are in the same sector. This is not the time for the market to be working out the nuances of the news. Most people are not that sophisticated. If DELL is having trouble the immediate assumption is that other companies will be having the same trouble. However, the institutions will have their buyng targets for CPQ.
Also, a lot of people are still waiting for the second and third leg down of the current correction. The first leg was over quickly, perhaps too quickly. CPQ bounced from $40, but many beleve that it needs to go to $38 or even $35. To survive $40, again, the market has to grasp very quickly (a) that in YK2 the computer market addressed by CPQ is sound and (b) that CPQ is holding its market share and its margins and might even be gaining on DELL in some categories.
The price acton will depend, in the first instance, on how much of CPQ institutions are willing to buy at or above $40 tomorrow and the next few days. |
