ARUN

[BigSully1]

David, yesterday's strength was due to an analyst upgrade.

Aruba Shares Climb After Upgrade
Thursday April 10, 5:03 pm ET 
Aruba Shares Jump to Regain Recent Losses After Upgrade


NEW YORK (AP) -- Noting that its shares had lost roughly 12 percent of their value since the start of the month, an analyst upgraded Aruba Networks Inc. Thursday and said the company's business is not deteriorating in any meaningful way despite a rival's recent profit warning.
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Brean Murray, Carret analyst Joanna Makris raised her rating on Aruba to "Buy" from "Hold." Shares of the Sunnyvale, Calif.-based company rose 54 cents, or 11.5 percent, to $5.23, near their late-March levels.

Earlier this month, data-services provider Riverbed Technology Inc. lowered its first-quarter profit forecast, citing weak sales. Since the warning, the analyst said, there has been a "wave of negative sentiment plaguing enterprise networking stocks."

"While we agree that deal closure rates have slowed, we argue that a considerable portion of Riverbed's miss is partially attributable to the company's market share stagnating amidst increasing competition," Makris wrote in a note to investors.

The analyst said that although three weeks remain in Aruba's fiscal third quarter, which ends this month, "our most recent checks do not point to any meaningful erosion of business and in fact, point to evidence of an uptick in the federal and education verticals."

She also thinks there is a potential for stronger international sales to partially offset some weakness in retail this quarter.

[David Randolph]

David, yesterday's strength was due to an analyst upgrade.

Indeed, thanks for the information BigSully1. I have the complete research text here.

I won't think much about it, just follow the plan:

Trading Plan:

Take profits at $3.75. Buy to cover if the stock is set to close above $5.42.

Not all trades will be winners, but I expect to win on balance.

[David Randolph]

Despite that analyst's upgrade and buy recommendation, ARUN failed to close above the 45 days SMA resistance, so I expect disappointment for the failure to drive it lower to my buy to cover area of $3.75.

I've read the analyst's reasons and basically she just says things aren't as bad as people think and at least two "verticals" worth 10% of revenues are doing well. I think her arguments are weak and as I compare ARUN with others in the same industry, it still looks very overvalued to me, still not reflecting the deterioration in fundamentals.

Anyway, the trading plan is the trading plan and I'll just keep following it.

Trading Plan:

Take profits at $3.75. Buy to cover if the stock is set to close above $5.30.

[David Randolph]

The 45 days SMA continues to limit any upside for ARUN, even as the company puts out rosy press releases:

• Aruba Networks to Deliver Secure Wireless Networking to More Than 120 K-12 Schools in Oregon's Lane Education Service District Region
Marketwire (Mon 8:00am)

I guess bulls will feel disappointed by their failure to move the stock beyond key resistance levels and they'll just throw down the towel below $4.

Anyway, the trading plan is getting tight and ARUN needs to fall right away for me to profit handsomely.

Trading Plan:

Take profits at $3.75. Buy to cover if the stock is set to close above $5.20.

[David Randolph]

Trading Plan:

Take profits at $3.75. Buy to cover if the stock is set to close above $5.20.

[David Randolph]

Trading Plan:

Take profits at $3.75. Buy to cover if the stock is set to close above $5.20.

[David Randolph]

ARUN is starting to get a bit scary here, taking too long to dive. Moreover, the 50 days SMA just turned positive, even though the price remains below that average.

I fear that with the market up so much this morning ARUN just makes a big white marubozu on momentum and short covering alone.

I opt to bail out with a small gain, there are better long and short prospects out there. I came late to this bears party.

The Trading Plan is:

Buy to cover ARUN around the open.

[David Randolph]

I see two things in the general market:

1 - The SPY is at a crucial resistance level, as you can see in the following chart:



2 - There have been surprisingly good news on the US economy over the last couple of days and yet the market went down.

This divergence between the news and the price action worries me.

Anyway, I don't have a strong conviction on the direction of the general market, I don't have a clue.

But I don't feel like having 100% long exposure here in the TM Portfolio, which is a short term trading portfolio. So I'm taking profits in EXM today and went looking for something to sell short. I went through the entire Watch List and ARUN continues to be the best stock to sell short in my opinion. It is still very overvalued and losing fundamental momentum. Also the right part of the chart is much lower than the left part (for a beginner this seems bullish, but it isn't).

If you decide to follow this recommendation but your broker doesn't allow selling ARUN short (because it isn't a very liquid stock - yet it still traded 800,000 shares yesterday, and it is a $500 M market cap), try RVBD instead. The fundamental story is basically the same and that stock is right at the 50 days SMA resistance now.

If I'm going to sell something short, I look for weakness instead of strength. If these stocks went down while the general market was going up, imagine what they will do if the general market trends down? Fall like a rock, probably.

The Trading Plan is:

Sell ARUN short around today's open. Take profits at $4.65. Take a loss if the stock is set to close above $6.50 (alternatively sell RVBD short - I prefer ARUN because it is smaller in terms of market cap, it should fall faster). 

[soxguy]

Based on the latest after market activity,it might not be wise to be short. We shall see.

[David Randolph]

Based on the latest after market activity,it might not be wise to be short. We shall see.

Yes, probably taking profits in EXM to sell ARUN short wasn't a good move

But ARUN is so overvalued it should go down even if the general market goes up from here. Well, there's a reason why I have stops in this portfolio, to protect it from my idealistic or fundamental views which often don't prove correct.

ARUN is facing resistance now, I won't think more and will just follow the pre-set trading plan:

Buy to cover with a profit at $4.65. Buy to cover with a loss if ARUN is set to close above $6.5.

[David Randolph]

Nice trap yesterday (from the bears perspective). Some people, caring about fundamentals, bought the stock on the false bullish breakout. Fortunately (at least as it is now) I have this rule of not considering intraday technical signals.

Trading plan:

Buy to cover with a profit at $4.65. Buy to cover with a loss if ARUN is set to close above $6.5.