Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Dell Is Likely Headed Lower

By

Dell is rapidly losing business to Apple and other tablet companies with more cutting-edge products.

PrintPRINT
MINYANVILLE ORIGINAL Dell (DELL) is expected to report earnings after the bell today. The computer company is expecting $0.45 earnings per share on $14.68 billion on revenues. Just like Best Buy (BBY) and Barnes & Noble (BKS), I think it has a declining business model. I can't remember the last time I heard someone say, "Hey check out my new Dell computer."

Dell is rapidly losing business to Apple (AAPL) and other tablet companies with more cutting-edge products. I continue to believe the company is in a tough fundamental position, and is sandwiched between low-cost players Lenovo (LNVGY), Acer, and Apple which are encroaching more in its core PC business as Macs and mobile devices gain share.

It is possible that the stock rallies due to its current pricing trading above the 50 day moving average at $12.15. I think it is headed lower and any weak guidance or revenue miss will cause the stock to move lower even faster.

If First Solar (FSLR) can rally on earnings, then it is possible that any stock can. I am looking to buy the Dell September 12-13 strangle for $0.95. The front month volatility is 112 and the August 12-13 strangle is $0.70. I would rather buy the September strangle for its cheaper volatility and for an additional $0.25; I can get an extra three weeks of movement.

After the last four quarters' earnings the stock has sold off all four times: -17.2% -5.8%, -3.2%, -10.1 averaging a 9.5% movement. The implied volatility is 9.1% and I think it will move this much. As the chart shows, it is possible that it double bottomed since the 2010 lows of $11.30, however the long term chart looks weak and I think it will move lower.


Click to enlarge
No positions in stocks mentioned.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE