I would not buy&hold SUNW at these levels. A few short term trades could probably be made, but I would not consider a mid or long term hold. The analyst who downgraded the stock did so for excellent reasons. The reason why is simple. SUNW is not a great company and no longer growing. Money is being blindly placed back into large cap tech companies without consideration of their true fundamentals. Eventually, the conference call will come and the truth will come out. I suspect that it will slip back into the trading range of low 6s-high 5s to mid-3s. SUNW could easily be a 3 dollar stock in a matter of months. The call comes on January 23rd. The trend is your friend. Since 2002, the trend for this stock has been one wave from the 5s-6s back to the 3s and then back again. I would trust that trend.
The answers you just received demonstrate why it is not a high probablity play. There are good stories to be told on either side of the trade, even from a technical perspective. You have a rising trend, but price is currently at short term resistance. Fundamentally, you have a strong market wind and economy at your back, but concerns about the company. A very mixed picture, and not worthy of your dollars.
If you memorize the curved shape of the recent climb from the july lows, that chart formation will make you money 90% of the time.
I was going to invest in SUNW but then i saw on their headlines, Cray Inc. won a 250 Mil. contract with the government. Their stock jumped from 10 to 13.45 and less than a week later was back at 10. I saw this as a great opportunity and pour money into the company, and now it back to 13. I forgot all about sunw after that.
sunw with me here is sell for the month and year Might take a step uptrend this week to 7 but I would not count too much on it see attached for next week's Channel (ignore the date on x-axis) <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1327502>
do you still want to be long in sunw? You can define an entire trading strategy with SUNW. Short in the 5s, buy in the 3s. It hasnt changed since late 2002. You could do a few trades a year and make over 100% with this stock. Imagine a hedge fund that followed this simple safe strategy. Throw it all at SUNW. Short in the 5-6s, buy in the 3s. How can anyone mess this trade up?
From a story standpoint I think Sunw is going to surprise because its solaris product line is going to blow the competition away especially with the chips that AMD will be putting out in 6 months time. I also think that they have done a lot and have more to do to slim down and be a more effective organization and that will show up in earnings in the next 2 quarters. From a trading standpoint given my view of market conditions I think that the chance this trade is going to work is very low and there will be a better entry point in a few months. I will be looking to slowly accumulate both Sunw and AMD on any significant market sell off.