SNDK trading idea.. Going long on semi conductors.

Sandisk is my favorite long play for this technological era. Flash and SSD will the the most important form of storage in the foreseeable future. The barriers to entry is really high. Sandisk has managed to cut operating cost by using 24nm production.

I believe the stock will trade around this area for the next 2 months before the next leg up.

For a mid term portfolio, I think Sandisk is a good play. I will hold it till $65.

If you like the Android, the iOS, the Windows phone, you’ve got to like Sandisk.

US Economy is back in full steam. TECH, Industrials, Materials, AUTO are my favorites! F, SNDK, MU

It is clearly evident that the recession is finally over. Consumers are coming back. I am expecting huge growth in the TABLET and SMARTPHONE space, hence I would be a buyer of semiconductors such as Broadcom, SNDK, MU, ARM Processor, Qualcomm.

I like the Auto industry as well as USA is once again the innovator for cars. Japan is lagging behind the electric car arms race.

For Auto, F and GM are good picks. Abit of Toyota wont hurt too.

Lastly, Hedgefunds are interested in Energy as they see an energy shortage in the future. If only ENRON was still alive.

John Paulson and Alan Greenspan are in my school today. Should be interesting.

 

Very futuristic design. Well done USA for the good cars.

Market consolidating here, ready for the next rally.

I am still bullish now. It is a good sign that the market chose to consolidate here and not drop.

12800 is my 2011 Mid year target for the DOW.

This is the technical chart, the market needs to break through this resistance and we will have a very strong support at 11400.

Continue to load up undervalued counters… Financials – C, BAC

It is interesting that stocks that I hate always go up haha. I am going to trade on hatred soon.

Examples include Blackdeath RIMM. It has risen from the dead. This is because there was a sudden jump in blackberry internet usage which triggered the rally.

Good luck Blackberry, but I still see death for this dated mobile phone company. I would rather carry a galaxy than a torch, but that’s just me.

The best trade is still SNDK. I am raising my target to $60.

CRM short will be here soon. But you can take advantage of going long first as a hatred play. CRM might hit $160 or $180 or $200… it’s a crazy OVERVALUED to the max stock.

Netflix remains a short candidate, but I would let it rebound first. It is indeed overshorted, some shorts have found other short plays and are taking profit causing the short covering rebound.

the iPHONE and BLACKBERRY killer

Samsung is going to release new Android phones, and this may kill the blackberry for good and perhaps steal market share from APPLE iPHONE.

Android is a huge success. I think blackberry will no longer be the dominant player in the smartphone business. More and more people are adopting the Android platform.

Wait for RIMM to hit unrealistic high price due to their PLAYBOOK HYPE ($65s) then short RIMM.

Buy GOOG target $1000

Buy SNDK target $60 (more and more people will be using smartphones)

Buy MU target $14 for the same reasons.

These are all tech plays.

Sandisk is on a roll. DCF shows $50

Sandisk is going to break its resistance at $51 very soon and the stock could actually see $60s…

The DCF is so sensitive. A small tweak can change the price from $37 all the way to $70.

I still have to find out their change in working capital.

Sandisk was my most successful BIG SHORT where I shorted it at $50 and wanted to cover it at $25 but it could not happen. Nevertheless, I have already covered the short at $35s.

Now Sandisk might be heading for a long run!

This is a risky tech play. But the returns are not too bad if you had gotten in early.

The Market is in denial and euphoria. Continue to short $FCX and $LVS.

Looking at the market psychology chart again, Refresh your memory here, http://tradedragonschool.blogspot.com/2010/09/market-psychology-cycle.html. it seems that the market is in both denial and euphoria mode again.

By denial, I mean that the market will go up in the mid term, and by euphoria, I mean that the market will go down in the short term.

Today’s price action is surely breath taking. 2.17, there was a FLASH PUMP! The DOW suddenly jumped 70 points. That was during my economics lecture. I was dumbfounded… WT$? The market has been behaving rather erratically lately. Stocks jumped as soon as the FED said that they may provide more relief to the economy. Well, that is a good and bad news. The latter being that the economy is doing good.

So, finally, the Bulls gave up, and the shorters started shorting the hell out of this market.

It looks like we may see more bearishness ahead. Housing sales figures will freshen the tone, and perhaps the unemployment figures may also help to keep this rally sustainable. Otherwise, the market will crumble one more time.

Trading ideas====

http://tradedragonschool.blogspot.com/2010/09/bearish-hanging-man.html THE BEARISH HANGING MAN – FCX has that.

This candlestick signals more downside for FCX. This confirmed that the previous rally that FCX had was due to GOLDMAN’s PUMP. The Dump begins shortly.

LVS short confirmed.

Support is seen at $30.4.

Take profits on your SNDK shorts. It’s time to run before Apple release some surprise devices that will use NAND.

SANDISK was indeed a HYPE stock. Buy when the price is ultra low ---- $25

It was a pity that we did not continue shorting SANDISK stock, but it was fortunate that we did not buy it too.

SANDISK stock was hyped, see the previous SANDISK POSTS: http://tradedragon.blogspot.com/search/label/SanDisk%20SNDK

The entire CHIP market is doomed again as the price of chips keeps dropping. This is one disadvantage of technology stocks. Their margins are always getting smaller. However, there are some like INTEL that actually go higher, due to synergies. However, in the long run, tech chips prices will drop. Only demand will allow CHIP companies to profit.

In such an environment, investors have to be careful in buying technology stocks as ANALYSTS love to give them extremely bullish and overpriced + high PE ratios, aka pumping them. It is true that most technology stocks have high growth due to the transition to this techno era. Hence, this high PE is actually acceptable too. But be careful in choosing the type of tech plays here. Analysts are usually only concerned with high sales figures and the constant growth, however, in most cases, technology is cyclical, the bullish run may end really soon. 2009 was the start of the technology cycle, and it usually last about 2 to 3 years. Currently, the market is showing a correction in the technology cycle, however the rally hasn’t stop here. TECH will continue to grow in this 3 years cycle, and there are many opportunities to be made out there.

SANDISK is a buy again at $25, this is pricing a low 8X PE given the volatility that SNDK will experience due to its cyclical nature.

Better tech stocks are INTC, IBM which has fewer competitions. SNDK has too many competitors including MICRON, SAMSUNG, HYNIX, and many more.

NOT A SHORT recommendation. Waiting to buy at ultra low prices.

SANDISK SHORT Play over.

I am done shorting SANDISK. It was a good trade, surpassing my target of $45.

SNDK shows very strong uptrend, the stock keeps trying to go higher, but shorters kept coming back to short it. However, given the uber low market levels now, I believe a bottom is here or has already been made. I am done shorting SANDISK as the CHIP recovery is for real. More people will be using smart phones, and many more will be converting from their old phones to smart ones as more people reach the $10k per annum threshold.

This is not a buy recommendation though. I am not buying sandisk here. This is its fair value.

Disclosure: No more positions.

$SNDK, HYPE STOCK?

Unbeatable Competition and HYPE.

Look at Micron $MU and SNDK seems to be an extreme hype. Micron is more to the DRAM market which faces extreme volatility. However, SanDisk is also in a volatile NAND market. Price margins may go lower especially when Toshiba finish up their new FAB. And Samsung is not going to keep quiet either.

IPAD is NOT JUST SANDISK.

SNDK managed to run up due to strength from IPAD sales. Look at how they are correlated. AAPL and SNDK moves up together. However, the correlation was broken on Friday.

Investors are buying SNDK as if IPAD sales means SNDK will do super well. If people buy IPAD or IPHONE, then another product will not be bought. Think about iPhone. If someone buys iPhone, means he is giving up the chance to buy Blackberry or other smartphones which also uses NAN flash supplied by SanDisk.

Lastly, IPAD does not always use Sandisk. People have dismantled their IPAD online. Look at all those dismantled IPAD, try to find us a SANDISK product… WHERE IS IT???? Theres toshiba…. I don’t see OEM which SANDISK usually do…

Here’s the link: http://www.macrumors.com/2010/04/02/fcc-ipad-images-reveal-broadcom-chip-apple-a4-toshiba-flash-memory/

OEM could mean MICRON too……

So this is just a hype, BARRON article contributed to the GAP on monday. BARRON said that theres a SANDISK In all ipad….. So investors thought the many millions of IPAD sold had SANDISK in it.

TREND

The stock has climbed from $15, and the trend has not reversed yet. It is not going to reversed to this time. I am only looking at a very short term short at this point. SNDK is weak now that there is no buying fury at $50.

WEAKNESS

It is reasonable to take advantage of this weakness and short this stock as we anticipate many profit takers here.

GAP FILLING

The gap at $45 would most probably be filled. Sandisk has a good history of filling gaps. Look at the markings on the charts.

SENTIMENT

STRONG SELL. SNDK is full of HYPE. SHORT TERM SHORT, reason for short term, those investors are crazy, they will buy this no matter what.

MARGINS will go down in the near future. This stock is unsustainable at $50.

Recent Analyst recommendations:

Goldman Sachs HOLD @ $40
Many others TP @ $40 area. So I think that’s a good target, however, I will close half of my short at $45 and let the others run.

Disclosure: I shorted this stock at $49.92.

Tech enjoying its rally. $SNDK jumps. $MU should follow suit.

The 2 DRAM makers have proven that the DRAM Market will soar in 2010.

DRAM is a volatile market as you have seen. I longed $MU and $SNDK when they were at $9.5 and $28 respectively. Today both of them are more than 20% up in just 1 month.

SNDK did so well, though I had more weightage in MU.

It is time to take profits in SNDK very soon since it has made a whopping 40% gain. It has definitely surpassed my target of $39.8.

Investors who bought in today are hoping that SNDK jumps to $52 which is the line I have drawn.

I am going to be conservative on SNDK. It is fairly valued. I prefer MU in the long run.