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

To: Dnorman who wrote (17759)	9/12/1998 11:41:00 PM
From: drsvelte	Respond to of 70770

TECD It looks like it broke thru previous two tops (July & August) on good volume -- about 3X 50D MA. Under accumulation.

To: Dnorman who wrote (17759)	9/13/1998 9:29:00 AM
From: j g cordes	Read Replies (1) \| Respond to of 70770

Dennis, playing with TA at this turn in the market should be augmented with some fundamental opinions which I've added below from Fool. My own opinion is that its been trading in a horizontal channel between35 and 50 since Sept 1997. The depth of the channel is 15 points which I would use to calc its break out target to 65 when it occurs. Looking at its business cycle, its peaked in October two years in a row, which may coincide with component delivery. That cycle may extend a little as its been noted the pipeline has been worked through/to stabilized (a problem also associated with CPQ and others..), but one must also bear in mind the shorter just in time delivery model everyone is striving for (DELL leading the way). I would, if trading, sell if it gets to 51 and re-enter on the fall back to mid channel support, 38-41. If you're not trading it, the question is moot. "Bucking the otherwise choppy trading today, shares of Tech Data (Nasdaq:TECD - news) connected for a $1 5/16 gain to $40 3/4 on the strength of strong second quarter results announced after the close yesterday. This leading international distributor of microcomputer hardware and software products to value-added resellers (VARs), corporate resellers, and retailers said sales rocketed 43% to $2.2 billion in the July period. Excluding a one-time gain on the sale of its Macrotron unit to Ingram Micro (NYSE:IM - news) , net income rose 29% to $27.7 million, or $0.55 per share. That bested last year's $0.47 per share and beat the consensus earnings estimate of $0.52 per share. Tech Data benefited from strong results across all segments, with sales at its networking unit up 54%, revenues at its peripherals division up 51%, and software and systems sales up 38% and 24% respectively. While domestic revenues vaulted 19% higher, the stellar growth has come from the international business, which accounted for 26% of total sales versus 11% a year ago. These numbers, however, include full quarter results of Macrotron, which was sold to meet antitrust issues in Germany raised by Tech Data's acquisition of Computer 2000 AG, whose results won't be included in Tech Data's numbers until the third quarter. Like other leading distributors Ingram and CHS Electronics (NYSE:HS - news) , Tech Data hopes to be one of the big winners in the consolidation game playing out in Europe. The distribution business is a low-margin affair that depends on economies of scale, access to financing, and asset management. Tech Data continues to show continued operating efficiencies, with sales, general and administrative (SG&A) expenses dipping to 4.28% in the quarter from 4.34% last year. However, with the computer industry suffering through weak average selling prices and lingering effects of the inventory problems that peaked earlier this year, gross margins for the period were just 6.5% versus 6.7% a year ago. The good news here, though, is that inventory turns improved as inventories declined sequentially from $970 million to $811 million. Ingram recently reported a similar sequential dip from $2,279 million to $1,966 million. That's more incremental data suggesting that the inventory glut may be over. Tech Data now trades at 19 times the $2.28 EPS estimate for the fiscal year ending in January and less than 16 times the $2.76 projected for the following year. Although the shares have suffered through the weakness and volatility seen by the PC industry this year, the company remains interesting as a play on the manufacturing changes taking place in that market as a result of Dell's (Nasdaq:DELL - news) phenomenal success with the build-to-order model. Last September, Tech Data began handling final systems assembly for IBM (NYSE:IBM - news) , and it has recently started similar programs for Compaq (NYSE:CPQ - news) and Hewlett-Packard (NYSE:HWP - news) . To manage the new business, the firm opened a new integration and assembly plant in June. These added responsibilities for manufacturing promise to boost profit margins. When operating margins are thin to begin with, a little margin juice can produce delicious earnings growth. "