SILC

[danman3459]

Out at 24.01    That's luck for ya.

[phabrux]

I am Long and I don't mind so much seeing SILC  heading to cover its first gap
at (19,43 - 18,84) because:

1) the strong ascending support line would give SILC a chance to rebound from there after closing the gap and for the second time escaping nord at the top of a flag formation.


2) finishing the right shoulder by closing the gap and rebounding from there.
(I just spotted the shape of this reverse Head and shoulder formation --good for Long!--, the right shoulder is now forming(not draw on the chart)).

But I would sell if the ascending support line is cross.

[bjc]

Breathing a sigh of relief today on SILC.  Hopefully this is the last we've seen of the teens, though I wouldn't be surprised at all if we got yanked down there again.

It seems as if common sense might be taking over here, but who knows, we'll see.  With SILC trading at a trailing PE in the upper 20s and a forward PE south of 20, IMO SILC has the opportunity to rise to the upper 20s, maybe even extending into the lower 30s on a big rally. 

[phabrux]

My reading by priority is:

1) for Long's SILC is back inside the flag after its false breakout and wait to rebound at the ascending trendline level.

2) for Long's SILC build the right shoulder from a inverse Head and Shoulder pattern
giving a target of

   24,27  +  7,27  =  31,54$

from the inverse H&S neck line level(24,27).


3) for Long's SILC is finishing the job of closing the gap  (18,84 - 19,46 )
from the 28 Jun 2007


4) for Short's SILC is back in a descending channel, going down.

[Garoh]

SILC is a good investment opportunity now at these levels ....

We really need David's readings and oppinion  after the Ernings released
..

[Stocky2000]

I expect just a summer correction like last year 1-2 months...long term bullish....but it s good david puts a stop in now he has to protect his 15% gain of the 3sof portfolio.....in case of correction i expect all stocks to retrace 10-30% (who knows). ...if he is not protecting his porfolio it will probably go down to -/+ =0% this year. Then this long term talking, writing doesn t help much.
The problem is when new members arrive they just have to buy the stocks higher in the portfolio as they were not here when 3sof entered like silc was at 12 dollar...but they buy at 21 like some did and the risk increases. Mid term holding would be better as new members get chances to get in in other stocks much earlier...so a new member is a bit lost when he enters to high then....or he waits 2-3 months for the next pick..can he do this ?....and the name of the page is still "3 stocks on fire". In 2005 in the beginning we took more risks here and took gains earlier....i think the portfolio is to fat.....i would start again with 100 000.-. The head gets fresh again. I did the same took the gains to the bank...and restarted...felt good.

But i have to say i thank david i was learning a lot here in the last 2 years...about trading...so thats very positve. The whole story 3sof is still great.

a good trading day for all

ket

it s a pity profits melting..

[Terliso]

Distribution still stronger than accumulation. Other than that, SILC still trading down the channel and below 50sma.

SILC is  back  inside the channel & below 50sma.... not so good to hold on to.....

[danman3459]

Tomorrow will be a good day for SILC.   

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_S/threadview?m=tm&bn=16580&tid=7599&mid=7599&tof=2&frt=2

[bjc]

Nice day today, hopefully we have another good one tomorrow on higher volume to confirm some kind of a turnaround.

SILC is simply too cheap.  Look at earnings and revenue trends.  It deserves a higher pe ratio than 23.6, simple as that.  Forward PE, based on ETrade's estimates, is 18.

I'm down about 10% I believe, maybe a bit less.  I'm not too concerned.  I'll sell my shares for $25 plus.  Once we get a shift in trend, we should overextend to $30.  That's where I'll sell.

[David Randolph]

I spent part of the weekend looking for stocks to buy, and even though I found some interesting stuff, I didn't get any better than some of the old Main's holdings, especially SILC. I heard the latest conference call, and even though revenue growth and EPS were great, the stock came off because management made the usual "there will be quarterly fluctuations" and "there's no visibility, that's why we don't provide any guidance" comments.

They made the same comments in Q1 (that was part of the reason my hands were weak) and still delivered a record Q2.

As I heard the 2nd quarter conference call and gave some more thought about the business and the stock, I believe I fully understood the nature of the business and see it growing a lot over the long term.

Just a few highlights from the conference call:

- The company had 47 design wins and that is about the same as "costumers";
- It is talking to 100 more companies to become their costumers. SILC had two design wins in Q2, but only announced one - this is because they only announce the ones that are very significant from a revenue impact point of view;
- They're looking for acquisitions;
- They've been talking with IBM, DELL and HP, but couldn't sign any deal because they were too small, not just in terms of revenues, but also in terms of working capital. Management believes now is the time to approach these giants again, and a contract with any one of them would provide at least $10 M more in annual revenues;
- The WAN optimization market will surely keep growing over the long term, but SILC may have quarterly fluctuations and even see sales down sequentially, if all costumers order less by-pass or non by-pass equipment;
- The company's inventory rose $1 M from Q1, that's because they expected more orders that didn't materialize in Q2. The question now is: will these orders happen in Q3 or not? Anyway, the inventory increase in Q2 may help expanding profit margins in Q3.

Overall I want to get back to SILC as a long term investor, but I think that because of fear of an earnings miss in Q3, the stock will probably touch the 200 days SMA, eventually.

I want to buy SILC at the 200 days SMA (blue in the chart below) and I'll adjust the trading plan accordingly everyday. For today the trading plan is:

Buy SILC, 6.66% of capital as always, if the stock prints $15.66. 

[David Randolph]

SILC's 200 days SMA today stands at $15.72. The trading plan is to buy SILC if it reaches this value today, which is highly unlikely.

I guess the SMA will move up to catch up with price, instead of the price coming down to touch the 200 days SMA. We'll see.

[berloga]

I guess our plan to buy SILC at below $16 can now be safely abolished. Good thing my wife was stubborn and kept SILC in our account... I was a bit hasty and sold at $20 in my IRA...

SILC is 15% up today and closing in on $25...

[David Randolph]

I guess our plan to buy SILC at below $16 can now be safely abolished. Good thing my wife was stubborn and kept SILC in our account... I was a bit hasty and sold at $20 in my IRA...

SILC is 15% up today and closing in on $25...

 

Painful, but well deserved in my case.

Two lessons for the future:

1) If you want to buy, buy, forget waiting for a pullback;

2) Hold for as long as you trust the fundamentals, forget the chart.

[berloga]

Good judgement, David. Applaud!

I agree, patience pays off, given it has a fundamental justification. Investors are in a constant
pursuit of worthy stocks, hence the ones undiscovered will sooner or later be.

[BigSully1]

I wouldn't even think about selling SILC here. IBD is on to it. was highlighted on "Today's Daily Stock Analysis" at investors.com and is mentioned on today's front page at "The Big Picture"- and "leaders up in volume" - thinly traded network adapter that has barged out of a long price pattern this week.

Not on the IBD 100 list yet, but might soon appear there. .

By the way, IBD  says market is still in confirmed rally since Aug 29, even though yesterday counted as a distribution day for the major indexes.