Click chart to enlargeCREE broke out from its multi-month consolidation, which bodes well for the LED sector, as well as for the broader market. This is not a guarantee that the market will begin a new leg up from here, but it is yet another sign that the bulls are coming on very strong in the tug-of-war for control of the market. Even though CREE is not near 52 week highs and is not posting the largest percentage gains of the stocks in the LED space, it still is the leader of the sector. What the leader does, the rest of the stocks in a sector will do.
Now that we're quickly closing in on LED earnings, (RBCN on Aug 5 & CREE on Aug 10), we're hoping to be blessed with some upside that allows us to exit all or part of our positions before the earnings are released. Lightening up on shares that rally ahead of earnings is a win-win situation. You make your profit and avoid the risk of an earnings miss. Only in rare occasions will you miss significant further upside. Over the course of an investing career, it is better to miss these rare upside moves than to repeatedly participate in 50% gaps to the downside.
9 comments:
What about AIXG?
AIXG
All the LEDs seem to be on a terror lately. RBCN sure does hate $34..it's like watching a decent movie and the ending you're hoping for is getting dragged out. I've noticed that there are numerous days where RBCN will go straight up intra day. I hate to use the word manipulation (learned from the LDK board), but is that what that possibly is?
34 was just resistance where people learned to sell. Now that it's been broken, it is now support. Hopefully people will learn to buy at 34 now, so we can stay in the 34/40 box.
The thing about resistance is that as annoying as it may be to watch your stock not be able to break through it, the more times it gets rejected at it, the more powerful the eventual break is. RBCN could continue to rally strongly for another day or two... fingers crossed.
Doesn't it appear fishy that resistance was broken by a single person? Literally went straight up. Makes me wonder if not so popular stocks like rbcn are often coached along by the players that want them to follow certain trends. For example, I want RBCN to finally break resistance so I'm going to drop $3.3 million to make it do so, and now it will progress into it's next stages. Not complaining, just wondering if its possible. Fingers are crossed with you Snot
vx6000, everything in the financial industry is a manipulation. So much so, that we've learned to never trust anyone wearing a suit. The SEC is run by former GS top brass who still maintain close ties to their GS friends. When you reach that level of "finance", you literally are above the law. Nothing is legit on Wall Street. The best we can do is ride their coat tails, whether the underlying moves in the stocks we own are caused by legitimate dealings or not.
Wow VECO had an amazing quarter and strong outlook. It could get to +$6 EPS next year. It's the best value in the LED space. I would not be surprised to see a 15-20% pop this week.
Do the VECO math at a 15 P/E: $75 pps at $5 eps; $90 pps at $6 eps.
PE at 20 then pps $100 - $120; not out of the realm of possibility.
It's not to late to enter or re-enter under $50.
Yes, VECO did exceptionally well. Shows the importance of being in the right sector. Hopefully it will pull all of the LED stocks higher tomorrow. You know the drill... up in the morning, down in the middle of the session, then up at the end of the day.
Bottom line, if VECO is selling the tools, then their strength should be an indicator of how many LEDs are going to be produced and eventually sold. Couple strong earnings reports with a strong broader market (even if only temporary) and we may still have quite a bit of upside for the LED issues over the next several weeks.
VECO is very interesting and perplexing: 1) it technically breaks down dropping below $30 briefly 2) it exhibits all of the characteristics of a great stock: explosive, exponential Rev and eps growth widely beating expectations 3)it's clear it has not passed the top of the cycle, possible in the 3rd inning of a 9 inning game.
The LED assets are still dangerous animlas but still have some room to run before it's time to reverse direction.
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