this week in p has shown the beginnings of very large blocks of selling in the latter part of the week, since
the major run after ces.
today, 100k, and 90k basically without regard to price moves are driving the stock down as much as .20 or .30 in one fell swoop.
it is what i have been looking for as the only sign that some of the institutions will begin to cash in their gains
from the previous year.
currently leaning toward a feb. retrace rather than march, and i believe after interim earnings either provides
another short squeeze up, or a plummet down, the stock will come down to around the 30-32 level once more.
today's action shows a struggle to stay above the 35.00 price target, and yesterdays action showed a move
toward the 37 target at which i would short the stock.
please note, i am not suggesting that p as a company is dead, or anything other than the top front runner in
music streaming. as well their first mover advantage has to date given them a strong foothold with which to
figure out how to monetize their user base.
however, valuations can only be maintained for certain periods of time where clarity begins to come to light
for sustainable earnings. apple is a shining example of how the market values a stock, as well as amazon.
a continuation of base growth shows promise for future earnings, while a flattening or decreasing of users
often leaves the market turning on a stock.
if p is able to continue growing users in autos that are not already users, then their growth can potentially
continue albeit at a slower pace.
as such, i believe over the next few months targets will remain the same while the stock price will adjust
toward the previous mark i still maintain at 21.60-24.21
current recommendation now stands at short above 36.00, preferably 36.50 if i can get it.
may wait till after interim earnings, pending market conditions.
side is short side for this year.
suggestion is to look for clarity on interim earnings report in order to:
1. not to gamble on earnings when what i believe could be a final short squeeze can occur.
(not that it will, but either way, its a gamble.)
2. determine short entry position, which could be as low as 33, or as high as 38 or 39.
3. allow current overall market movement to present downside opportunity.
quite simply, the upside vs. downside here in relation to price targets is quite wide to the downside.
to assume that price targets will be raised again and again regardless of growth or earnings
is not a reliable bet here in my view.
as well, from the technical perspective, the stock will at some point be due for a serious correction.
timing is certainly demonstrated over and over to be difficult to determine, while the overall technicals almost always prove out at some point.
as such, a 40% fibanacci retrace at this level presents a stock price of 21.50 or so.
at a higher level, say 50 should it reach that high, it would still be 30.00.
i am willing to take that bet should the stock continue higher, however i would rather wait until the
next technical reversal presents itself.
the pullback from a high of 32 to 26 was approx. 20%, and i certainly made the mistake of jumping
in a bit soon, as the market overall, and p as well had more yet to run, however anyone who had shorted on the highs was presented a 20% return as opposed to a 10% return currently had they bought at those highs.
again the situation in my view presents a 20% return on the downside to 30, vs a 15% return if the stock were to move to 40.
seeing blocks of 100k sells go through leads me to believe the profit taking in blocks has begun, and that the stock will not rise above the 36.50 level +- .40 cents or so, before retracing.