A reader mentioned STEC not 48 hours ago in one of the comments sections; asked my take on the chart. At the time I believe my exact quote was eh. :) Nothing exciting either way...

STEC (STEC) fell off a cliff yesterday and continues down another 3% today after a downgrade it appears. I hope said reader did not buy this stock Wednesday.

  • Thursday wasn't pretty for memory chipmaker Stec(STEC), which tumbled nearly 17% by the closing bell.
  • Earlier, an analyst for Wedbush Morgan cut Stec's price target to $39 from $45 citing increasing competition in the enterprise solid-state drive market intensifying above our previous expectations, though she kept her Outperform rating intact.
  • According to Dow Jones, the analyst wrote that downward pressure could continue on the stock even though Stec may beat bottom-line third quarter estimates and though a jump in its fourth-quarter estimates may be on the horizon.

I mention this stock because it is still up... (wait for it) 640% for the year, and unlike say... AIG ... actually is making money. But it shows you when a high momentum stock reverses, it can get ugly very fast.

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From a technical point of view its uptrend is of course completely busted and now we sit and watch to see if that yawning gap at $28 gets filled. I don't normally buy charts like this but this is still a unique business and I wouldn't mind the valuation down there. I doubt it would turn on a V there since momo guys will have abandoned it, but I am a growth at reasonable valuation guy so it fits my profile (albeit I'd hate the chart) As I type the stock is at $30.50 (low of day $30.00); $2.50 to go to fill that gap.

p.s. looking way back, there is also a gap just over $10 ;) hopefully that one won't fill until 2013 or so when STEC's technological lead is obliterated.

STEC, Inc. designs, develops, manufactures, and markets custom memory solutions based on flash memory and dynamic random access memory (DRAM) technologies.

[July 16, 2009: STEC - Keeps on Tickin', Never Quittin']

No position