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Michael Levin
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I have been in the market since 1981. I have set international records in option trading contests, as well as lost a few fortunes of my own while trading. I have written many articles for trading magazines both on and offline and have been featured in a Large Metro Daily. It really means crap... More
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  • Classic Chart Pattern Setup for Tivo 1 comment
    Feb 1, 2011 11:08 PM | about stocks: TIVO

    I don't want to ramble on about all of the positives that I see for Tivo here.  Not the new contracts with major players, not the Huge court case decision that could be just moments away and lastly not the potential for a Google or Apple or other media savvy company from around the world to make a sweet offer into Tivo's ears...

    I am just looking at the charts and the classic "Cup & Handle" setup that has formed over the past 3 months in Tivo

    You can see the nice pop on a court win, in March 2010, then the en banc review collapse in May that lasted til early July.

    Since then Tivo had a nice rising trend from July through early November and the subsequent decline and test of support through December, set up the rally in January to complete the "Cup" formation.

    You can see the sideways action the past month has formed the "handle" of the cup.  Some call this a flag or pennant formation.  Whatever you call it, it sure looks like a level that could be a springboard to the highs of the rising top trendline.

    IF it breaks out, on volume and the shorts feel sufficiently scared that Tivo could really run, then the $13 area could really be reached.

    If Tivo wins this recent case against Dish/Echostar, the award could be in excess as $2 Billion or more which is almost twice Tivos current market cap of $1.14 Billion at todays $9.77 close.

    In that case, how high is high?  Who else will pay up and how will Tivo integrate into the Apple/Google/Netflix/Satellite/Cable world of 2011?

    Mario Gabelli's Gameco Investors rated TIVO one of their focus 5 stocks earlier in 2010 and said: “We believe TIVO’s intellectual property to pause / rewind / play live TV makes them a likely takeover target to a variety of potential acquirers, including technology companies Cisco, Microsoft or Apple and distributors such as DISH or DTV.  TIVO trades at a significant discount to our 2011 PMV of $22 based on DISH and other operators entering contracts of $1.50+ per sub per month creating high margin recurring revenue.  We expect DISH’s en banc review to be rejected".

    Whether that happens or not, there is certainly room for movement in Tivo; which way, only time will tell...

    Disclosure: I am long TIVO.

    Additional disclosure: Long Feb $11 Call options

    Stocks: TIVO
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  • Michael Levin
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    Author’s reply » I submitted this last night as a paid article, but was told to post this as an instablog, so here it is (They don't do articles just on technicals)
    2 Feb 2011, 12:33 PM Reply Like
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