Foundry Networks - FDRY - cls: 14.07 chg: -0.60 stop: 14.89 *new*
Although we still haven't found a reason for FDRY's drop (other than expected profit taking), it continues to underperform competitors Plantronics (PLT), PTEK Holdings (PTEK), and Tekelec (TKLC), and underperform significantly. FDRY's 4.09 percent drop also proved much deeper than the COMPX's more modest 1.64 percent decline. We knew this was an aggressive playing going in because we're shorting a strong stock merely because it's moved too far too fast. Thankfully, our timing appears to be working out. Remember, this is a very aggressive play and only risk capital should be used.
Wednesday, we thought FDRY's midweek rise provided a new entry to aggressive traders, but suggested that traders preferring to enter on momentum might wait until a move under $14 or 13.79, Wednesday's low. This week's action verified the horizontal resistance at 14.90 and the resistance provided by the 10-dma, too. We're lowering our stop accordingly, to 14.89. Stochastics, RSI, and MACD verify that this play might have a lot more room to drop.
Annotated Chart for FDRY:
Picked on June 8th at $14.28
Change since picked: -0.21
Earnings Date 07/23/03 (unconfirmed)
Average Daily Volume: 3.5 Million
Link to Current Quote FDRY