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IT Manager's Journal: IT Investor's Journal: How Novell is Becoming a True Linux Play

Feb 24, 2004, 17:00 (4 Talkback[s])
(Other stories by Melanie Hollands)

"During the next two to three years, I quite like the prospects for appreciation in Novell's stock price, but I'd be inclined to stay on the sidelines for the next few months before thinking about starting a position. While I expect Red Hat to remain the sector leader, its dominant position will be eroded as strong competitors such as Novell/SUSE enter and consolidate in the space. It's still early, and Novell's transition will take time as management reconciles its various challenges and opportunities.

"Consequently, until Novell's transition is further along, I expect NOVL stock to move 'sideways' for the next few months and under perform RHAT's on a relative basis. NOVL looks like it might find support at around the $10.50 area, but if that breaks on volume, then it looks to go lower. It might be worth a shot going long with that $10.50 price area as a stop. But I'd rather hold off on being long NOVL for a few months, and if the stock broke $9 on volume then I'd remain on the sidelines..."

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