All of the positive reasons to buy GTAT are still there.
The DOW dropped 200 today.
Solar stocks corrected after big moves and so did GTAT.
BoB solar companies are showing signs of significant improvement in % and shipments. Profitability is coming. Some companies will continue to gain market share while others shut their door. This process will allow balance sheets to strengthen and get the industry ever closer to the upgrade cycle that will create a huge demand for GTAT technology.
All this being said, is the GTAT rally about solar?? Perhaps to some degree, but I believe this is more about sapphire. A sapphire boom is coming and GTAT is ready.
On September 10th Apple will announce the release of 2 or 3 new phones which will include a sapphire covered camera lens and very likely a biometric sapphire covered home button that will set the precedent and standard for all mobile devices in the future. It will be protected with sapphire(no other logical choice) and GTAT might be the AAPL beneficiary according to Melissa Lee of CNBC. When this gets officially announced, it will set off a flurry of buying and analyst upgrades. GTAT management already stated that sapphire will drive revenue in the 2nd half of 2013. They already know, so for them it's just a formality, but for the stock price, it'll be a short squeeze. Q3 may not be great, but as several have mentioned its more about guidance which should be pretty darn good, and a strong balance sheet has them ready to take on significant demand.
GTAT went through a hellacious market that saw the SP500 drop nearly 80 points from 8/2, and yet GTAT went up 35% during that time. A correction was needed. Perhaps it pulls back a little more. If I was looking to a pickup more shares, it would be at $5.95. That's my downside risk. I expect GTAT to resume it's uptrend and march or pop into $8.40 to $10 within 3 week, but that's the short term; 2h2014 will have GTAT at $25.
It wasn't just the Chinese lot of solar stocks that took a hit today; SPWR -7% and FSLR -5%. It seems like there was a large scale movement of capital out of the sector, and also tech in general. Notice the divergence between DOW, S&P and NASDAQ. With betas taken into account this covers the entire drop in GTAT. I do wonder if this tech weakness will get some follow up next month or if it was just a one-time correction.
As for GTAT I can't really say much, I've been calling it a hold for a while now and wrong b/c it kept going higher. It may finally stabilize for now, and just drift with the macro forces like today. In that case we're probably establishing $5-$7 as a new trading range until more specific news come out.
Just don't get excited and buy on the bounce give it till next week to see where september is headed. I've got the possibilities of 6.04 down to 5.60 if that breaks. It has to pull the averages back together. Check stockta dot c moving averages as buy points. Scale in buys at those. Refer to the pattern of may 21 and the weeks after for how it will bounce on the daily before continuing down to 5's