STEC, Inc. (NASDAQ:STEC)
Why are you so bullish on STEC? It goes up almost 1 point everyday, where does it stop? I would like to make a large investment in this company but I am afraid because it is on it's 52 week high. What goes up must come down.
Yes you are right. STEC has gone up quite a bit without any significant retracement. In fact, we issued an Uptrend back on 3/11 at $6.10 and the stock has not changed its trend since. While stochastics are overbought, they have been overbought for some time. Our proprietary momentum indicators (NBDV and IBDV) are close to overbought but not entirely which means it could still have some more room to the upside. But a new long position is risky as the longer the Uptrend is in terms of maturity, the greater the risk that a Downtrend is coming as markets and individual stocks move in cycles. Plus STEC is well above its 50-day moving average which also increases the risk profile. I think if you really like the company, your best bet is to wait for a pullback. Earnings in a few weeks will cause some volatility in the name given how much it has run up and thus there may be some very high expectations.
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