SFE is now down some 92% from its all-time high. Such numbers are comparable to CMGI which is down some 95%, ICGE is down by 97%, and so on. By those standards, SFE actually is not doing so badly, LOL! Does it mean SFE has further downside to match the declines of an ICGE or CMGI? Well, FWIW, plenty of these stocks have hit new lows today - not just SFE, but ICGE (and CMGI re-tested its low).
I suppose that it may seem nasty since SFE has declined today on the 3rd heaviest volume since May 1, and in fact the last 3 heaviest volumes since May 1 happened Thursday, with 3+mln, Friday with 2+ mln, and Monday with 2+mln. And they were all days of heavy declines for the stock. As a matter of fact, of the last 10 occasions where during a trading day more than 1+ mln shares traded, on 9 of those occasions, SFE declined. A sell-off if there ever was one.
I suppose that short term, we should have a rally in the market - and this might even provide an excuse for some relief rally in SFE, short term, even though on previous market rally occasions, SFE has managed to decline (to wit: Friday). However, as one poster observed many points ago:
"when SFE broke support at $30, the next $15 points down came pretty easily. It is safe to say, the next $15 points for the bears are going to be infinitely tougher to obtain."
Well, these declines have been shocking to most in the market, even on a historical basis - this was a powerful decline and not many can claim to not have been surprised. I wouldn't blame anyone for not foreseeing this depth of collapse in many stocks - including SFE. Be that as it may, I think we can adopt that observation to this downscale situation here... so, if I may paraphrase:
>>I think it is safe to assume that the next 7 points will be infinitely tougher for the bears to obtain.<<
In other words, while the downside may seem limited at this point (at least that's the hope - only 7-8 points left to ZERO, LOL!), what has me in a pensive mood, is the UPSIDE POTENTIAL. I think that actually not all tax-loss selling has been done yet - we still got the rest of December (I know that the argument has been made already 2 months ago that most tax-loss selling should have been out of the way, but I didn't buy it entirely then, nor do I buy it now). Perhaps some of the selling will be countered by bargain hunters - perhaps even some who sold 31 days ago (or more) - and maybe that will be enough to prevent a further decline or slow it at least - and who knows, maybe even provide a small lift.
So, I have bought here at 7 3/8, a reasonably hefty number of shares. I intend to sell at least half of these on the next run-up which, should it occur, perhaps as soon as today, I don't expect to be too substantial. And I intend to sell half of those shares purchased at 7 3/8 as a simple defensive measure. For more than the danger of further declines, I fear something else: STAGNATION. I'd rather not sit on too large a position of dead money. So, I'll sell half of these trading shares on the next run-up (should there be one), and then maybe let the rest run for as long as the basic company (not stock), is executing. And that is a question in my mind - is SFE-the-company, executing? The deeper I dig, the more uneasy I grow. We'll see where all this leads.
Morgan |
