SEAGATE IS A STRONG BUY

By Jack Haddad

Ceo steve luco's 2 million turnaround plan is already bearing fruit. Higher volume sales and cost controls has helped the disk drive maker earn leastwise 7% gross boundary line for the quarter, better than earlier estimates, as stated by the comany's management. Money increased $200 million to when it comes to $1. 5 billion. Product development and merchandising and administrative costs are required to be $380 million, underneath the in the first place projected $395 million.

As a consequence, the organisation expects unit shipments in the quarter of 39 million, with a total market of 110 million to 112 million units. Stx's unit demand for 2. 5-inch and 3. 5-inch ata drives was better than planned; the organisation similarly said it gained considerable percentage in those areas. That said, the organisation now expects to post revenue for its 3rd fiscal quarter ended april 3 of 2. 1 billion-- which ios in front of its former forecast of 1. 6 billion to 2 billion.

Then again, the organisation said the market for enterprise class merchandise fell when it comes to 20% sequentially. Nevertheless, skeptics will have to realize that all major enterprise companies (emc, ntap, etc) have all been hit by the economy. They all have declared bad numbers, layoffs, etc,. The solitary thing they did the last quarter was to burn off inventory. Clients aren’t canceling orders, they’re plainly deferring their orders. Otherwise, there’s a big pentup demand for storage that will soon explode; when it does, stx are going to be rewarded importantly. The scenario occurring right now, is a pentup demand for ability, not speed. Accordingly, clients aren’t clamoring for ssd's, they want ability (hard drives).

Apart from bettered basics, the technological view is similarly bullish for stx. Shorterm, average-term, and longterm opinions all indicate a "buy". The 5. 80 is a solid assist level for stx. The shares have closed above the pivatol point of 6. 85-- a truly healthful sign. Whether or not we may breach through the resistance of 7. 80 on heavy volume, more capital will flow into the stock.

Other bullish indicators are the next:

A. 20, 50, and 100 moving day intermediate against price.

B. 20-50 oscillator band, 20-100 oscillator band, 50-100 oscillator band

C. 20, 50, and 100 macd oscillator

Grounded on the above mentioned technological and quantitative indicators, I commend the next scheme for new entries.

Assuming the shares open at 6. 88 on monday, the can strike 6 at 1. 10/contract look attractive. Whether or not you write these calls versus the underlying shares, you are going to be granted. 43/contract. That is 430 dollars per 1000 underlying shares. The can strike 7 are similarly supplying. 50/contract. But only write those calls whether or not you feel the overall market will proceed to hold its rally. Otherwise, the strike 6 might just be a more suitable hedge.

Disclosure: the author owns stx in his portfolio.

Article Source: http://interpret.zar.vg

About The Author
Dr. Jack Haddad, MD, MBA has been professionally trading the stock market since 1997 and had an annualized return of 39.4%. Dr. Haddad has recently launched MD Capital Management, an Investment Fund with Charles Schwab. The fund utilizes option hedging techniques to generate returns while minimizing risks. For more info, visit Jack's online group: MD Capital Management.