But, here’s a little musings.

Will Oracle join in the bidding for 3PAR?

1. Founders of 3PAR, Jeff Price and Ashok Singhai, both hail from SUN (now Oracle)

2. Is Oracle’s storage technology stack covering the entire industry’s needs?

3. 3PAR, with their thin provisioning, will it provides an added advantage for Oracle over competitors like HPQ, DELL, and even make it more challenging against EMC and IBM?

Having said that, there’s also a few executives in 3PAR that comes from HPQ.

It is hard for an outsider like me to figure out what goes on in the discussions or agreement.

But, it will be interesting if Oracle decides to join the bidding game. I assume they have the money to do so.

And even if they fail to win the bid, it could possibly make a hole in HPQ or DELL.

Dell Inc. said Monday it plans to purchase data-storage company 3PAR Inc. for about $1.15 billion in cash, as the personal-computer maker seeks to boost its offerings for corporate technology departments.

Dell will pay $18 a share for 3PAR, an 86.5% premium to the Fremont, Calif.-based company’s Friday closing price of $9.65.

Read more: http://online.wsj.com/article/SB10001424052748703382304575432411652741480.html?mod=googlenews_wsj#ixzz0wm6THxl6

Firstly, congrats to 3PAR. Storage is a tough market. Hopefully, with DELL as its backing, it can go further and go up against the likes of EMC.

The storage industry has continue to consolidate including the recent Oracle acquisition of SUN.

Without strong backing, it will take  a long time for 3PAR to build up the channels and replace the incumbent.

On the trading front, it has been a miss for me. I have wanted to buy some shares of 3PAR with this market correction.

Guess, DELL knows that this is a good time to buy (seeing that 3PAR’s shares is not going to move ahead much).

I think this is a good move on DELL’s part. Hopefully, the management can work together and provide alternatives to the industry.

What happens after the gap resistance?

1. 3PAR move up very quickly when it break through the gap resistance; it could be a short squeeze or just speculators trying to front run as 3PAR’s management is on the road with its various presentation at conferences.

2. Nonetheless, as ‘Zoltan’ has suggested, 3PAR hit the huge kumo resistance and is now forming a flag

What’s next? From the Ichimoku chart,

1. The first support is around 10.0 to 10.1, where the previous gap is. That is also where the Kijun sen is.

2. We can also see that the Tekan sen is just starting to cross the Kijun sen. But with such a huge kumo resistance ahead, I am not about to call for a strong bull call on this. Unless, there are deals going on (eg. M&A). Without such catalyst, it is better for 3PAR to form a base at this level before breaking out of the resistance ahead.

3. I will try wait for confirmation that the support level holds before making an entry on 3PAR.

This is a nice level to watch as we can see the following from the chart:

1. Tenkan sen has started to turn up and the price level is above it; suggest that the short term uptrend may have started

2. Kijun sen is starting to flatten; suggesting that the current trading range of around $9 to $9.69 is stabilizing

3. On this chart, I have also added the RSI and the Force Index. Both are starting to show signs that it is going up. The Force Index in particular seems to have edge up across the bullish line.

4. We can also see the thick kumo resistance in the leading kumo which suggests heavy resistance (<< see pink colour kumo or cloud ot the right)

Storage market continues to be a tough market.

On the Ichimoku chart, even before 3PAR announced its earnings, the counter has been going down since around Jan 6.

With its price below the kumo even before earnings, it is already entrenched heavily in the bear market. Coupled with a gap down opening, I believe 3PAR is heading towards a target price of $9.