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Post# of 704019
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Zeev Hed

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Zeev Hed

Re: mlsoft post# 55717

Saturday, 12/14/2002 9:54:41 AM

Saturday, December 14, 2002 9:54:41 AM

Post# of 704019
mlsoft, anecdotally, when i get a week in which i have my head handed to me by three stocks (SKX, ERTS and COO), more often than not, it is the end of a down move rather than the start of such a move, but that is of course, just "anecdotally".

As for the market, it is a little weaker than I expected, but on the other hand it is doing, so far exactly what I expected, killing the calls (bringing QQQ to max pain) a week before expiry (#msg-616638 and #msg-616871), maybe next week they'll get busy with killing the puts. At last that was the "plan".

As for COO, right now I am just going to swing play it. I believe that the gap fro 9/5 to 22 will be filled and we may even retest the late July lows. Before Friday, I managed to reduce the cost of my COO stock acquired in late August just under $23 to $7.38, I really wanted to get that to nil, but yesterdays, raised that cost back to $12.76, c'est la vie. In the next three months, I'll try to use the expected down channel to at least repair yesterday's damage.

There is really nothing wrong that I can find with COO, yes, the tax rate was lower this quarter, but they have spent more on R&D and SG&A to launch new products. Nevertheless, I think that the market is not going to like, short term, the fact that the top line is growing faster than the bottom line and while $30/share is a fair price for a company earning $2/share and growing at more than 20%/year, the technical damage will probably require retesting of the lows just above $19 over the next quarter or wo. Thus for now, I am reducing the OB on COO to $20 and also removing it from the core. Technically, the stock must close above $31.50 to become "viable" again. Here at $25 (my last reentry) it is not particularly cheap, nor particularly expensive, just fair value.


Zeev

AZH

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