MSFT might sell off for two reasons. First, CPQ fell short, because of WEAK DEMAND: biz.yahoo.com
Weak demand, not just thin margins. I don't care about thin margins - that doesn't impact MSFT, since as long as the volume (demand) is there, it doesn't matter how cheaply hardware sells - MSFT will have its software in with every box. But weak demand, is a different story... that means fewer boxes sold, and fewer MSFT products sold.
Sure, you can hope it's CPQ specific, and maybe Dell or someone else picks up the slack... I think it's true to some degree - one of the fastest growing box makers are the e-machines Korean folks. I bet that takes some business away from CPQ, but even so, I still think that doesn't explain everything. Box sales are down, in addition to the box segment distribution toward cheaper PCs.
The second reason MSFT could sell off is purely technical. It has tried several times to break and hold through 95. After 3 tries, that resistance is firming up. What that means, is that it will now head down, having failed to go up.
Add to that tax season adjustments before April 15, the fact that the market has run up and is short term overbought, and CPQ could give a good reason for a pretty solid correction. People will take money off the table. I don't see how MSFT can go up in this environment.
I sure hope MSFT proves me wrong - but it doesn't look too good at this point. |
