3Par Inc (PAR) : A play on storage virtualisation and ‘thin provisioning’

3Par has been on my radar since they were a startup.

It has been years since then and the company has matured with a more rounded team; adding other management expertise from sales, marketing to its otherwise technology oriented founding team.

So, what caught my eyes about 3PAR?

The first thing I look for is competitors. Are they in a new or matured industry? In this case, 3PAR competes directly with the leaders like EMC, IBM, Hitachi, Hewlette-Packard. And this is GREAT!

In the tech world, to be really successful, you don’t get there by being small and niche. In 3PAR’s case, they are in a industry that is established with big players. 3PAR’s advantage is of course to innovate faster than the incumbants. 

I will not touch on the technology in this blog. That will be another post or a link to ‘tech oriented’ blogs.

For now, let’s look at the chart.

1. Tenkan sen cuts Kijun sen. However, we can see immediate resistant from the kumo ahead. Lots of resistant from the thickness of the kumo.

2. From the volume, we can say that part of the price movement is influenced by the buying on 10 March to 12 March. 

3. We should see some pullback to somewhere between 6.74 and 7.00 (identified by the support line and the kumo resistant).

4. Risk. The risk lies in its low volume. At less than 500k, it is very illiquid.

We have seen 3PAR steadily going against the big boys and this is a plus sign. Recent wins includes Ticket.com and also expanded channel sales with PTC in South East Asia.

If we believe that the downturn is going to be an extended one, we can safely assume that cost-efficient alternatives (or complementary products) from 3PAR will be under consideration for the CXOs.

I think opportunities exists for this. We just need to keep an eye on 3PAR and see when the stars aligned for them.

 

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iam802

Trend trading with Ichimoku