Podcast: Diving into Disk Drives

Pete, May 15, 2008 @ 4:47PM ET | Link | RSS | Read via Email | Start a Discussion

Yesterday’s podcast provided more examples of the thinking process behind finding trade setups by comparing price action to investor sentiment.

Today we will focus on another use for our daily stock scan list: finding specific industries that might be “in play”. As a bonus, we also included a company that is experiencing ‘news/price divergence’ that might be worth watching.

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While going through Trading Ideas for Thursday, I noticed there was big representation in the computer storage devices industry. We spoke about Western Digital (WDC) in yesterday’s podcast and today, it seems like other fellow industry companies are following its lead. After the market, Bloomberg reported some interesting investor sentiment:

U.S. Investors Say It’s Time to Buy Stocks; Favor Asia, Energy
The annual Bloomberg/Los Angeles Times poll of investors found that 44 percent of those with household incomes of $100,000 or more viewed it as a good time to buy stocks, versus 15 percent who said it isn’t. The benchmark Standard & Poor’s 500 index has declined 10 percent from its record high in October. “Any time prices come down, that’s typically been the time to buy,” said Phyllis Hamm, 59, a survey participant who works at a nonprofit group in Raleigh, North Carolina. The poll results signal some Americans may be ready to shift part of the $3.5 trillion parked in money market funds into equities.

To show appreciation for our clients, Trading Ideas for tomorrow is exclusive to Portfolio Strategy subscribers.

Amex Disk Drive Index($DDX.X)

The Amex Disk Drive Index ($DDX.X) is the closest index to represent the computer storage sevices industry.

Daily bar chart with 50- and 200-day moving averages

Daily bar chart with Swing Line applied

Daily bar chart with InVivo.RMI.Stops and InVivo.RMI.Histogram applied

SanDisk Corporation (SNDK)

SanDisk shares rise as analyst sees strong season
Shares of memory chip maker SanDisk Corp. rose Tuesday after Citi Investment Research analyst Craig A. Ellis said the company is moving into a seasonal “sweet spot” and that its fundamentals appear to be improving.
Market Report — Short Stories (SNDK)
Needham upgraded SNDK to Buy from Hold with a $38 tgt. Firm believes NAND prices will remain stable in the next few months as the market reaches near-term supply/demand balance, and better pricing will drive upside to ests.

CHARTS

Daily bar chart with 50- and 200-day moving averages

Daily bar chart with Swing Line applied

Daily bar chart with InVivo.RMI.Stops and InVivo.RMI.Histogram applied

Brocade Communications Systems (BRCD)

On the Watch: Brocade posts 2Q profit
Shares of Brocade Communications Systems Inc., a data networking technologies company, may trade actively Thursday, after fiscal second-quarter profit jumped partly because of a tax benefit.

CHARTS

Daily bar chart with 50- and 200-day moving averages

Daily bar chart with Swing Line applied

Daily bar chart with InVivo.RMI.Stops and InVivo.RMI.Histogram applied

EMC Corporation (EMC)

Record Number of Attendees Expected at EMC World 2008
In just under one week, more than 9,000 EMC customers, partners, technologists, journalists and analysts from around the world will gather in Las Vegas for the annual EMC World user conference. EMC World (May 18-22, 2008) is a comprehensive educational forum that provides attendees with unparalleled access to experts from EMC and over 100 partners, discussing and demonstrating the technologies and strategies that help customers get the maximum value from their information and their information infrastructures.
EMC 1Q profit dips 14 percent, revenue up 17 percent
EMC Corp.’s first-quarter profit dipped 14 percent on acquisition-related charges, but the data storage vendor managed to post a double-digit revenue gain amid a slow U.S. economy.

CHARTS

Daily bar chart with 50- and 200-day moving averages

Daily bar chart with Swing Line applied

Daily bar chart with InVivo.RMI.Stops and InVivo.RMI.Histogram applied

Seagate Technology (STX)

Seagate Gets NSA Seal Of Approval
Shares of Seagate Technologies (STX) jumped 9.3%, or $1.87, to $21.92, on Wednesday afternoon after the company announced that its self-encrypting hard-drive, the Momentus 5400 FDE.2, was given the prestigious designation by the NSA of being worthy of use in U.S. government computers.

CHARTS

Daily bar chart with 50- and 200-day moving averages

Daily bar chart with Swing Line applied

Final thoughts are ‘if’ there is a rotation out of strong sectors like Energy and Basic Materials will more money be moved into the Technology sector and would the Disk Drive industry benefit from this potential scenario?

Bonus: J.C. Penney Company (JCP)

J.C. Penney announced a 50% drop in quarterly profit today. The main thing to watch is the divergence between the price action being positive while having negative earnings news. With the news traders moving JCP in today’s trading session, the question is what will the price action look like down the road after the smoke clears?

It’s worth watching because of how much it relates to the health of the consumer and the economy.

JC Penney Profit Sinks 50%, But Shares Rise
Retailer J.C. Penney reported a 50 percent drop in quarterly profit Thursday as weak demand forced it to cut prices to clear unsold merchandise, but the results were better than Wall Street expected.

CHARTS

Daily bar chart with 50- and 200-day moving averages

Daily bar chart with Swing Line applied

Daily bar chart with InVivo.RMI.Stops and InVivo.RMI.Histogram applied

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Podcast: Diving into Disk Drives

Amex Disk Drive Index($DDX.X)

SanDisk Corporation (SNDK)

Brocade Communications Systems (BRCD)

EMC Corporation (EMC)

Seagate Technology (STX)

Bonus: J.C. Penney Company (JCP)

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Podcast: Diving into Disk Drives

Amex Disk Drive Index($DDX.X)

SanDisk Corporation (SNDK)

Brocade Communications Systems (BRCD)

EMC Corporation (EMC)

Seagate Technology (STX)

Bonus: J.C. Penney Company (JCP)

More Articles from Our Blog

Recent Comments and Discussion

Join the Discussion

For Investors

For Traders

Read Blog By Category

In My Library

Programming For

My Bookmarks

Blog Archives