With its +4.16% close-to-close price gain this past week, SIVB struck the General as being hell bent on establishing a new 52-week high. Unimpressive < ADV trading volume through Thursday, however, kinda took the bloom off the rose.
Then Friday delivered volume activity 50.30% > ADV. That's more like it.
Friday's i-d h of 38.47 has brought SIVB to within 4.16% below the goal. Maybe this coming week will see SIVB enter the $40s.
Jeffries & Co. upgraded SIVB from a HOLD to a BUY, today, a day in which SIVB established its 14th new 52-week high (+ 12/14's i-d h which equalled 12/02's new 52-week high of $43.00) since it broke out of its 16+ week-long cup-with-handle (c-w-h) consolidation on 10/26/04.
For those readers who would be interested in why the General has taken such a seemingly "extreme" and drastic attitude towards some 'practitioners' in the research community, he presents the following chronological "anatomy":
SIVB "peaks out" in its run up @ an i-d h of $39.90 and begins to decline (into what the future will show is a 16+ week-long c-w-h consolidation).
In the course of forming the descending left side of the "cup," SIVB gaps down -0.45 of a point (between Thursday's i-d l of $35.25 and Friday's i-d h of $34.80).
SIVB establishes (what time will show is) the cup's nadir point @ its session's i-d l of $32.38 (= -18.85% below 7/01/04's "peak-out").
A week after "nadiring," SIVB, now on the ascension, closes the gap-down created 6 sessions earlier on 8/06/04, when it ranges between $34.19 to $35.99, in a session in which it closes up 1.49 points (+4.37%) on a volume of 492,000 shares (= 197.45% of its then 3-months ADV of 249,181).
The General posts "Goin' for the gold? (message #!964 ...to which this message 'replies'). SIVB had continued building the rising right side of its "cup" and had closed on that previous Friday's session @ $38.78.
SIVB's i-d h "peaks-out" @ $39.40 and begins declining to form the cup's descending "handle" (on lighter trading volume). In doing so, SIVB has now established its c-w-h's "pivot point" of 0.10 of a point above its "peak-out" price. Pivot point = 39.40 + 0.10 = 39.50.
Passing upward through a c-w-h's pivot point on significantly above ADV volume is a technical "BUY!" breakout signal.
SIVB declines to an i-d l of 37.30 (a -5.57% below its pivot point), touching and bouncing off its 50-EMA. The future will prove this to be the low point of its "handle."
Now rising from its handle's low point towards its c-w-h's "breakout," SIVB closes its session @ $38.54, a -2.43% below its breakout's pivot point. Its session's i-d h of $39.06 is now a mere -1.11% below said pivot point.
With SIVB now within striking distance of breaking out to new 52-week highs, what does Jeffries & Co. do? They issue a DOWNGRADE, of course, from a BUY to a HOLD!
Now while a "Hold" can be interpreted as really a "Sell," the market (fortunately) pays no attention to Jeffries & Co.'s downgrade and continues to push SIVB's price higher (by 75� that session � + 1.95%). Its i-d h of $39.29 brings it to within a mere -0.53% below the $39.50 pivot point (and potential "breakout").
On the morrow of Jeffries & Co.'s downgrade, what does SIVB do? Its i-d h penetrates (by a penny) above the pivot point on a session's volume of 395,000 shares traded (~153.51% of the then 3-months ADV).
SIVB breaks out, establishing a new 52-week high ($40.22).
Continuation of the above ($40.48).
Having gotten as high as $44.27 (on 12/21), an increase of +12.08% above its pivot/breakout point, Jeffries & Co. now decides that it's time to BUY SIVB and issues its upgrade.
Since this is supposed to be the season for goodwill toward all, the General will extend wishes for a Merry Christmas and Happy New Year to the readers here and even expand it to include the research anal-ists @ Jeffries & Co.
Every time in 2004 SIVB has come near $40/sh, which has been at the end of January and the end of June/first of July, it has turned tale and declined.
Since the last retreat from near $40, it has made what looks like a higher low.
I appreciate your projections as to some price targets. I wonder how those projections square with the trailing PE of 45? There may have been a quarter where the earnings fell short in the trailing 12 months, but at 20x earnings I would contend SIVB is fully valued. If the rally in the Nasdaq continues and VC funding keeps going strong, I could see the projections coming to fruition. However, it seems axiomatic, to make some higher trading ranges, SIVB has to get through $40 and then turn that level into support rather than resistance
TAvery49, the General took your query to a 'higher authority', the General's own T/A, the Oracle at Delphi. So you're are 'getting the gouge' from the horse's mouth (so-to-speak)rather than from the opposite end of the equine.
The question you've posed is one based on 'technicals'(as you well know) and you're mixing it with fundamentals (P/E) in the hope that they will seem reasonably non-exclusive and confirmative. The Oracle acknowledges your point about BPOP appearing fully-valued on a P/E basis, but is giving an answer based solely on the technicals.
And that answer is that SIVB's first line of resistance when it exceeds/breaks through $40 will be $46.50.
He also sees the potential for SIVB to return to the $60 realm.