Tuesday, May 23, 2006

Sun stock price - technical analysis

SUNW has been experiencing a lot of technical trading recently. The share price has broken down through resistance levels of $5.00, $4.50, and is likely to touch $4.20 before rebounding quickly to $5.00. Taking a look at the price over the past year, it appears to be leaping upwards in ever-greater bounds. Here are some factors that are likely to produce the next leap:

  • At a price below $4.50, analysts are more likely to upgrade the stock
  • Very soon, Sun and Ubuntu will announce that Linux runs fast on Sparc chips
  • I get the feeling that Sun, Red Hat and JBoss are planning something good
  • Mike Lehman, CFO, is about to announce head count reductions
  • Revolutionary new Sun storage products will be announced very shortly

So while the guys who bought at $5.00 are being "shaken out" at a price of $4.25 or so, maybe it's time to be contrarian and start to pick up SUNW at what will appear to be a cheap price in a month or two?

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