Short at 62? Gutsy move I'd have to say.
Technically, the stock broke lower trading band (about 65), and MACD crossed lower this Friday, which is bad (SELL signal). The fact that it's still away from low Bollinger band (56), along with RSI at 42, indicates that it has room to go lower short term. Another interesting point to note, is that it's "closing" a gap (1/27/99: 56 to 59). As you all know, there's some theory out there that claims gaps should always be closed.
Other than crystal ball gazing, there are other things IMO that affected NEON. Recent drops of high flying software companies like PSFT, CPWR, ORCL, then NETA painted a dismal picture of the industry. This has to play a role in any short sellers' decision making. They might see NEON as the next good candidate. It seems that it does not matter if the earnings will be met or beaten. The buzz word today seems to be revenue growth. (There's no warnings from NETA, nor CPWR. In fact, analysts follow CPWR agreed that CPWR will meet or beat estimate but their worries are on top line). Also, the drop of IBM certainly not helping.
However, there's a good chance (VERY good I incline to say) that NEON might just hit 56 and bounce. If it closes below 55 for a few days next week, I'd say watch out (for longs).
Just my 2c and I have no position, yet. |
