One man's
good news is another's bad: ELX, QLGC
By Duru
January 7,
2005
I have been
watching ELX for quite some time. I had recently become impressed with the
strong rebound form the August and October lows. So when the company raised
guidance recently, I figured that would be the "coup de grace" that
would send shorts scrambling for cover and the stock soaring to renewed glory.
Instead, sellers took advantage of the short pop to dump holdings. So then I
looked at QLGC, a close competitor, figuring maybe the news had better tidings
for them. Instead, I was a bit surprised to find that QLGC had sold off HARD.
So hard in fact that the stock now looks like a short. The message in the
madness could be yet again that the good tech story and rally is coming unglued
here and now. Check out the charts below.
(Click here
for disclaimer that applies to this market analysis)
ELX
QLGC
For QLGC, also
take note that the "on-balance volume" stalled out at the same time
the stock was apparently making a top. More convincing evidence that this stock
has become a short candidate…or at least a stock you do not want to buy.
The madness
continues, so be careful out there!