Lenovo Dropping PC Prices - Could Cause Dell More Pain

Includes: DELL, LNVGY
by: Philip Davis

Lenovo (OTCPK:LNVGY) was dropped from the Hang Seng today as they struggled to justify the massive purchase of IBM's already struggling PC division.

They are going to start dropping prices, and this could be the bad news we’ve been waiting for to push Dell Inc. (NASDAQ:DELL) down a little further so we can make a short term buy again.

I’m in the Jan ’08 $27.50s at $1.60, and I’m going to sell the Oct $22.50s against it for .60 with a .90 stop. Were I not in it already, I would just wait for a sell-off to buy some November calls. As it is, I’m just looking to make .20 or .30 on a dip.

DELL 1-yr Daily Chart