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IT Manager's Journal: SCOX: High Valuations are a PIPE Dream

Mar 19, 2004, 15:15 (8 Talkback[s])
(Other stories by Melanie Hollands)

"On Feb. 16, I wrote in this column that SCOX stock '...broke a key level of support around $13.5-ish, establishing a downtrend and putting in place a five-month top.' At the time, I wrote that 'SCOX is looking to test the next important area of chart support--at around $8.5 to $9--so I would hold off starting a long position for now.'

"Since then, the stock has fallen 36% from the high $13s to close Wednesday, March 17, at $8.74. $10 was pretty significant support for the stock, and while it has obviously violated that level, the volume seems to be decelerating. SCOX is getting pretty close to that low-end of the area of support of around $8.5 to $9. I might be concerned if I was short at this level and would start reeling in some of a short position around here. Short-term, at some point I expect SCOX to bounce a bit and it could potentially run back up into resistance at $10. That said, I don't like the stock on the long side for a longer-term position and see $5 as downside, although I'd like to see some more volume on the downward move..."

Complete Story

Related Story:
IT Manager's Journal: IT Investor's Journal: An Analysis of SCO Group(Feb 17, 2004)