SanDisk (SNDK) Boost, Were there Indicators?

[tzoom84]

For those that haven't seen in the tech news, SanDisk announced a possible acqusition by Samsung. Naturally, overnight the stock bumped up 10%+ and is now higher (20%+).

While I understand that SanDisk isn't a quality company (pretty bad history), I was curious about this announcement. I wanted to see if there was any way of predicting such a boost. The technical indicators (MA, MACD, Stochastics) were all bad, and theres been minimal volume trading lately.

Were there any indicators that this big announcement was to be made? Or, in similar situations within other market areas, are these usually readable? Or just plain ol' speculation and fluctuation?

[tombrown1]

Good question. I couldn't find a single thing to predict that technically. Looks like a technical surprise.

[Gunnski]

Take a look at one of my favorite set ups.

6 month daily chart. Use a standard Bollinger Band & RSI(2). Yes, (2).

You are looking for a RSI(2) showing a deeply oversold condition. Check.

Price at or near lower B.B. & the middle Moving average to be level or starting to curl upward. No down trending moving average (middle line within the Bollinger Bands). Check.

The trigger is RSI(2) taking off straight up. from a severely oversold position & lined up with price at or near lower B.B.

In this case, the B.B.'s were just begining to expand (called "fish lips"). Another positive.

This was taking place the day before the breakout. I checked both a Scottrade chart & Stockcharts.com.

Sharpchart.com (free charting)


Scottrade Chart:


Year to date stock is -75.57%. Moving average 50 is in a down trend. Very negative for me. Yes, it gapped up. But, it stopped right at some important resistance. Will be fun to watch what happens next. Increasing huge short interst with just a few days to cover, according to NASDAQ. Short squeeze? Maybe.

If you look at a weekly chart the stock has been consolidating. Very similar to the July 2007 move, consolidate, then up.But, then you see what happened after that run up. Escalator up, elevator down.

Intersting comments pasted below from Clearstation.com.

From Clearstation:
Title: heard these rumors before (Short Recommendation)

heard these rumors before, with other companies being the suitor, and nothing happens, except price erosion

Title: buy signal (Long Recommendation)

at 17, in play,undervalued bottoming stock, 5 in cash per share and Samsung already pays 500mil in royalties to sndk. deal makes sense if not now, later.