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

“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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