CHECK THE RFMD CHART (CHANNEL IS BECOMING DEFINED AND WE SHOULD BOUNCE SHORTLY)
This question is more for Rick (as I am not a TA GUY) but I do know that stocks sometimes form a nice defined channel in an uptrend and if you chart RFMD this channel appears to be forming. Just take a ruler and draw a line on the highs and lows and the lines drawn on both the highs and lows form almost a PERFECT CHANNEL in my opinion (what the PUKES have probably been using to manipulate the price). THIS IS A GOOD THING and why RFMD keeps selling off but to higher lows and keeps slowly rallying and taking out the old highs......nice pattern but FRUSTRATINGand how the PUKES MANIPULATE THIS STOCK !!! Would be nice to break to the upside like other stocks have done (MU, TQNT for example).....however, the break-out to the upside (hopefully) will occur later this year.
News on Friday (Samsung) allowed them to chase out MANY WEAK HANDS (sure people wanted to participate in the rally and any short term traders BAILED and there was selling pressure almost all day in an up market..never fun to watch if you are long).
However, the fundamentals based on the two conference presentations appear INTACT and Gross Margins (our biggest issue) should start to expand in the 3rd quarter through the end of the year (nice tailwind to have for once). If we did get a big APPLE WIN that would be a HUGE TAILWIND as well. Plus, smartphone sales should increase as the year goes on (little soft patch now which happens) and are expected to still DOUBLE (yes, 100% INCREASE) over the next few years........so we have that TAILWIND !!
Rick, is right on this one...trading opportunity for now passed us by and it is time to establish a position and "enjoy the ride" for once. If they do what they say they will do Revenues will easily surpass $1.2 billion this fiscal year and should hit $1.2-$1.35 billion (highest in many years).....with margin improvements we should do about 40-45 cents this fiscal year and projections should have us close to 55-65 cents next FY year....$7 should be in the bag
You know I might be wrong and I might be right......if the market was as easy as just following Fidelity technicals EVERYONE would be a BILLIONAIRE.....if there was 100% chance they were right lets face it YOU and ME would mortgage the house and use every available penny to short this stock.
So lets face it......YOU aren't that sure we GO DOWN and if I was 100% certain we go up I would mortgage everything. I feel the risk/reward is to the upside with a 75-80 percent chance of winning so I am giving it a shot based on what the company is saying. Margins increasing by 400 basis points with sales revenue over $300 million a quarter has to move this stock up......if they MISS it will go down but I also feel margins could increase 500-600 basis points "if" they hit their $350 a quarter target in the coming year or so......do the math......you are a GENIUS.....IF that happens you have a stock well above $7 in my opinion using any "metrics" you want to use.
So you go with FIDELITY......I will stash the stock away and see what happens. Barclays has this as a TOP PICK and for good reason I feel as well as some other people and if RFMD does TANK then so will the majority of the TECH SECTOR as the only way they don't win is if CELL PHONE SALES TANK and that will take down more then RFMD because they have everything in place to WIN if the call phone sales increase over the next year.....so just SHORT THE TECH SECTOR if you feel RFMD is going to LOSE.....
We can re-visit this after earnings.....my feeling is they beat SLIGHTLY but GUIDE MUCH HIGHER then the street is expecting for the September quarter due to the APPLE ramp ups.....that is "my bet" and I feel it is a 75-80 percent chance of winning so I am rolling the dice again.