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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (37691)	7/18/2002 12:57:51 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69854

10:16 ET SanDisk (SNDK) 15.47 +0.47: A look at the one-year chart on SanDisk illustrates one primary point. Namely, the shares have been all over the map during the past twelve months. Much of the volatility can be attributed to the 'choppy' conditions on the broader markets. Yet an additional factor is that SanDisk operates in the flash memory market which is largely viewed -- and correctly so -- as a cyclical business. Put another way, SanDisk's business isn't expected to grow in a straight line as you might expect say from a restaurant. Rather, its business 'cycles' through peaks and troughs that, as a rule, span several years. What is flash memory? It's a storage chip that, unlike standard memory, doesn't require constant power to store data. Common applications include digital cameras, portable CD players and cellular phones -- the product cycles for these and other products contribute to the length and depth of SanDisk's business cycle. This morning, shares of SanDisk are bidding higher after it reported better-than-expected second quarter results. Specifically, the company posted second quarter earnings of $0.13 per share, on a 38% increase in revenues to $127.7 million. Management cited surprisingly strong growth in global retail and OEM sales, and also spoke of relatively stable pricing in the flash market throughout the quarter. Yet management also touched on the real key, from an investment standpoint, by characterizing the quarter as 'the company's first operationally profitable quarter in six quarters.' Admittedly, this is something of a back-handed highlight, but it's especially notable for a cyclical business. So the question at this point becomes whether the flash memory market is headed for the next upturn in its business cycle. Time will tell, but it's worth noting that Advanced Micro Devices (AMD) also pointed to sequential growth in its flash business last night. Other companies worth watching for additional signs of a flash memory recovery include SSTI, FLSH and LEXR. -- Mike Ashbaugh, Briefing.com