Tony,
As for BAY, it is developing a support at 34. From a strictly technical perspective, I think BAY will finish this week (5/17) between 35 and 36. The recent run up to 36-7/8 put it 4 points above its 10 day moving average. The consolidation over the last 2 days places it now at 3/4 of a point above the 10-day. The pattern looks very similar to the one from 4/18 through 4/30 when it ran from 28 to 33-5/8 then back to 31 to build a base for 5 days before making another run.
Of course, technical analysis is useless when there is a lot of news. However, except for a couple opinions (one upgrade/one downgrade), BAY has been pretty quiet.
As for the long term, I am less bullish on BAY than most (even though I own the stock). If it hits 40 within the next 3 months, I'll be happy. Switched and Fast ethernet (although adequate for most users) is not as glitzy as ATM. If BAY wants ATM, it will have to buy it (just like Cisco did). And, let's face it, with P/E's above 30 for these stocks, investors are betting on long term profitability. Those who don't know any better think ATM is the only answer and want to put lots of money there (just look at CSCC for example, or just think about why CSCO barely took a hit when they announced they would pay over $4 billion for STRM).
At any rate, BAY has done well over the last month and I expect it will continue to have short term RS peaking at $39 to $41 by the end of June assuming no surprises from the likes of AT&T or Hewlett Packard.
-- Jeff |
