InvestBaboo

Dell Deal Proves Brocade's Unique Position

CorrectaMundo! What is surprising/shocking is that BRCD hasn't been taken out yet! Whosoever owns Brocade can make a serious play for the enterprise market to grab some of Cisco's juicy share provided they bring along a complimentary product portfolio with them. I can think of several names that could have taken BRCD out but strangely that has not happened yet.

MYL and SEPR

Now talk about being lucky! SEPR (Sepracor) gets acquired for $23/share! Upwards of 30% profit in just a handful of days! You can't beat that! :-)

Expect a Selloff for Brocade

You are kidding me. Brocade's signing of OEM deals over the past several weeks is in the public domain. Why, just this week it signed a deal with NetApp. A deal with Dell is reportedly in the works but rumor has it that Dell wants more than just an OEM deal. An OEM deal with HP has been in the works for a long time but not announced yet (we will have to find out why during the conf call). One of the best sources for checking rumors is TheFlyOnTheWall.


On Aug 17 06:54 PM Bill L. wrote:

> Can you send me a link on this?

Expect a Selloff for Brocade

What you have not taken into account in the short term is the power of leverage made available to Brocade with the multitude of OEM deals. None of these are cross channel (no channel conflict) -- they are all additive. This is the reason (as it is rumored) that Brocade has kept suitors at bay and seeks future as an independent entity where it believes it can deliver far higher value to shareholders.

Expect Brocade to significantly revise upward its future forecast which will cause a runup in the stock and break of the resistance at 9 and change. From thereon it is uncharted waters as the stock will seek new levels without historical baggage. Earnings coming this Thursday.

Expect a Selloff for Brocade

You are comparing apples with oranges.

Brocade is a very different company now. They have acquired Foundry which gave them a whole new range of products. Also, from the Brocade side of the house have come a whole new range of products that have taken market share away from Cisco. Their OEM strategy is new and is getting them major vendor one after another.

If you had applied this logic to Apple which was range bound for a long time then it would have never traded at current levels. Your logic makes no sense.

ETrade: Not for the Faint Hearted

Great article!

Etrade is a stock that could quadruple within the next year. It's time has come.

10 Upcoming Catalysts for ATP Oil and Gas

Very good and compelling answers! The charts however confirm a Sell signal on the daily charts as of today. A reversal generally takes several days to take place so ATPG may have a little ways to go down and could present a better buying opportunity. The charts do reverse and if they do I will let the readers know.

10 Upcoming Catalysts for ATP Oil and Gas

Devon:

This is one of the best researched articles I have read on SeekingAlpha. Furthermore, you have replied to every post where a question was asked without taking offence.

I spotted ATPG when it registered a Buy signal on the chart in early May. I am a chart reader first and do fundamental analysis next. I searched SeekingAlpha and came across your article and loved the story. The charts said YES and your fundamental analysis said YES. Another enticing factor was that this was once a fifty dollar stock (!) and it stands to reason that if someone paid fifty bucks for it once they will remember it and support the stock once it starts showing upwards momentum.

I would really like to double down or triple down on ATPG however a couple of things bother me. Perhaps, you can answer?

#1 Throughout your article and in the posts thereafter you seemed to firmly believe that they would not dilute. It was so strongly against their interests given the CEO and CFO's significant stake in the company. BUT THEY DID IT! Instead of reevaluating your position and checking facts againt you have forgiven them too easily. If the story is this good and if the stock price potential is so high would you not think that they would leave no stone unturned to not dilute? In fact, you firmly believed that they had other ways to get the money they needed. How come they still diluted? Is there something you do not know and the big money knows that caused management to do this?

#2 On June 15, 2009 the ATPG daily charts registerd a Sell signal. Ever since then this equity has headed south. Weekly charts are perhaps a day or two away from registering a sell signal. A Sell on the weekly charts if it happens almost certainly means this stock is headed down to the $5 range. What I am saying here is irrespective of the fundamentals you detail big money is running from the stock fast and furiously.

#3 I fell for a similar stock on SeekingAlpha - a company named LDK Solar which was touted by many authors on SeekingAlpha as $120 stock that was misunderstood and was stuck in the $40 range. Same kind of analysis that you provided accompanies these articles to rationalize why this was a $120-plus stock. This company was one of the largest producers of polysilicon on the planet, had many many delivery agreements, was building a new generation plant that would give them even lower cost and so on and on. Almost every day the company issued press releases touting yet another delivery agreement with yet another brand name company. They did have to acquire a lot of debt to bring their new plant online much like ATPG but the authors were confident the company could easily handle the debt load. For some mysterious reason the stock was going down every day. Instead of going to $120 in 6 months the stock went to single digits! What went wrong? Well, it turns out that the company lied about their new plant and when it would come online. They lied about Polysilicon price points which went south quite drastically. Instead of upbeat quarter they announced massively disappointing earnings and they stock got hammered. And when they went ahead and did a surprising dilution event (much like ATPG) the backers who balked at first found it easy to forgive the company and came up with rationale that justifed the diluation. Much like ATPG! And most importantly -- the Street had no faith in the management and that was one of the reasons why they did not trust anything the managemeng said and eventually the Street was proven right. So if things are this good and the management is telling the Street all the information you seemed to have acquired from them yet the stock is headed south -- is this because the Street distrusts the management?

Your perspective much appreciated.

Is Rambus the Next 27 Bagger?

RMBS has an average volume of 2.4 m shares. Maybe you can manipulate this a day or two but you can't for weeks in a row.

As per the charts RMBS generated a strong buy signal the last week of April. It has been on a run since stopping every now and then consolidating and moving higher. Going purely by the charts this stock looks like a good investment irrespectivf of all the hype published in this article. I would buy it at current price and put a stop loss at 15.5.

US$, Gold and Silver - Charts Say...

Vincent:

Two things with respect to the dollar. First, the charts. A definite downtrend. Second, the fundamentals. With debt to GDP ratio now set to exceed 78% the dollar will come under severe pressure. Remember, there is still 2 trillion dollars in debt to be issued by the treasury. Your point on the safe haven was applicable in March of this year when gates to hell seemed to have opened. Now that the markets are (relatively) stable the safe haven appeal has reduced.

Now on to Gold - the charts have exhibited some heavy stress but not a sell signal yet. I am expecting that Gold will hit its low this Monday or Tuesday before resuming its climb. Gold is a hedge against a falling dollar and also rising inflation. Gold and Silver are essential components of a well diversified portfolio.

Reload on Gold stocks on any pullback

Hi Freedom:

I wish it was easy to explain. I use several charts starting with the Prophet Charts built into my trading platform, ThinkOrSwim. Secondly, I use chart programs from StockCharts.com. A lot of people use different methods to analyze charts but I use my own which I learnt over the last 2 years. For instance, I pay more attention to price-volume action above and below the moving averages than to lagging indicators such as CCI, Stochastics, etc. And then I combine this with my own wisdom and experience from the past to get a handle on what the future may hold. So two people may look essentially at the same chart and come up with two different outlooks. That is when you need to look at the track record of the person and decide whose anaysis you like better.

Is the Powerful Market Rally Running Out of Steam?

Funny.

I saw articles with almost the same headline and same theme 1 month into the rally, 2 months into the rally, 3 months into the rally..

I suspect we will see more of these 4 months into the rally, 5 months into the rally, 6 months into the rally....

Microsoft's Great Week

With BING I tried Phx to Mia. (Phoenix to Miami). Nothing useful turned up. (True, the search worked as the author stated for NYC to Denver). Google returned information by far was useful. What Microsoft is really doing is putting a better interpreter for ecommerce type queries. Not all but most popular ones. How hard is it for Google to do this? I think about 4 weeks with 10 programmers and you will have most of these eCommerce type queries covered. Be careful here and look under the surface.

The Bull Is Back...on So Many Levels

Trader Mark's gripes about the fundamentals aside I have been screaming here on Seeking Alpha and my InstaBlog that the charts have exhibited a strong Buy signal since mid-to-end March of 2009 and that the rally has continued week after week after week. The ONLY TIME I thought the rally may come unhinged was when that moron Michael Mayo downgraded the bank sector. That is when the charts developed some serious strain however the crisis passed and the rally continued on its course. Trader Mark is right that we have handsomely beaten the SDMA (Simple Day Moving Average) for the S&P and Nasdaq and only the Nasdaq is over its 200 EDMA (Exponential Day Moving Average). If S&P breaks and closes above its 200 EDMA then TraderMark is right that more cash may come flowing in from the side as many chart-watcher fund managers will pile their money in not willing to sit on the sidelines any longer.

Now to the fundamentals. Who in hell really knows what the market is seeing a few months out down the road? While TraderMark gripes that P/E is out of whack it is because he (or I or anyone for that matter) can not really figure out the "E" part of P/E going down the road. If you use an optimistic number for the "E" then you are way undervalued and if you use a pessimistic number for the "E" then you are way overvalued. The market appears to be betting on a much larger "E" then what the bears seem to be forecasting. The next quarter earnings period will shed a more clear light on this picture.

However, I hasten to point out something important. It is the action in markets in China and India. I had noticed that the three markets (U.S.A., China and India) were pretty much in lock-step until a few weeks back. In other words, the old adage that when the U.S. sneezes China and India have caught the flu used to be true but no longer. Both China and India markets are making new highs as if they are unhinged from the U.S. markets. Does this mean that the theory that the China stimulus is going to drag us out of this rut has some validity to it? If consumption picks up substantially in China and India and the U.S. consumer is not as bad off as we thing he is then it is possible that the "E" part of our multi nationals will improve more significantly than we have given them credit for.

There is hope when you look at the fundamentals with the colored glasses I wear when I look at them. The only danger I see is if the next Q numbers don't validate to the market that the "E" picture is improving substantially then this rally may run into a wall. If however the "E" picture as envisioned by the street seems to be on track then we are looking at the Dow plowing pas 9000 and S&P past 1000 to new heights. Doom, death and despair that you see in the air aside what the market really cares is if the "E" is solid in the "P/E" and so far there are signs that it is.

The Coming Economic Collapse, Part 1

One more comment to my post above.

#5 The U.S. dollar will continue its downward trend due to natural market forces all of which I think you can find in the plenty of criticisms that Graham has levelled against the U.S. economy. It is for these very reasons the dollar is falling. The dollar's fall will naturally increase the price of commodities because they are all priced in dollars. The prices for oil, crops, just about any commodity will increase significantly. This will incenticize production of more oil, more green energy, more crops, more metals, etc., most of which will happen in the U.S. because:
-- The falling dollar will reduce the cost of U.S. labor.
-- The falling dollar will increase transportation costs so much so that production of goods needs to happen close to where it is being consumed.
-- The cost of imports will rise so much because of the falling dollar and increased transportation costs that more people will consume Made in America goods. Which in turn will increase jobs here.
-- The cost of debt service will fall because of the decline in the value of the dollar which in turn will reduce the burden on our deficits which in turn will allow for the govt to pass on the savings to reduction in taxes and such.