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S&P 500 : Will it turn now?

Mar 27, ’09 11:27 AM

Yesterday’s continuation of S&P 500 rally has seen it reach a very important milestone.

On the chart, it has pierce through 828, but not with strong volume.

The missing volume is a critical factor as this is a level that has been tested 3 times this year before it finally break down.

Just as it is difficult to break down, I believe it will be also face difficulties breaking through convincingly.

More importantly, we can see that S&P has now ‘slammed’ into the wall of kumo.

I guess, the market is looking for catalyst next week. Perhaps the G20 meeting next week is a good catalyst to help it break through.

Nothing much has change since Geithner’s announcement of the ‘bad bank’ rescue plans. The economy is still not doing well.

We can’t expect S&P 500 to continue soaring and making new high, can we?

Comments (2)

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

Mar 26, ’09 5:36 PM

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.

Comments Off

Mercadolibre (MELI)

Mar 26, ’09 3:13 PM

MELI is an online platform in Latin America. It operates 2 business; e-commerce operations and online trading platforms.

The only reason it interests me is because it provide an opportunity to play ‘tech stocks’ in Latin America; a possible growth area and maybe M&A down the road.

MELI charts shows a surge in price yesterday breaking out of its previous trading range.

From the chart, we can see that the previous trading range is identified by the box. The price surge and break the next resistant level at 18.78.

At this moment, I do not know what causes the price surge. I expects that there will be a little pullback.

Or, if it continues to goes up, we should see a resistant at 21.50.

Possible trades:

- A vertical spread for the short term.

- Or hold the stock long term. (and bet that it will either become number one in the market place or they get acquird for a premium)

However, the risks exists for this stock. It has very low volume. At less than 2million, it does not take a lot for price to be push up before it gets dumped.