RACK got hammered overnight

[dochesgriff]

What do you think about RACK this morning? Could we catch a quick 10% gain on the open? The thing got hammered over night, and I wonder how it will respond. Will Cramer wear a sticky note on his head or tell people to back up the truck?

[dochesgriff]

I'm in at 21.50

[metalheadrr3]

I generally like quick plays like this but my money is all tied up. I usually just wait for drug companies to drop 80% though ... that's much easier. But I don't think 10 - 15% over the next few days is out of reach.

[optimus25]

Tempting....

[clavocat]

i paper traded it w. my bros scottrader elite and lost a little, from here possible but it was bad news. i got burned on gap plays, cat and sndk

[BuyOnDips]

"The company on Tuesday said higher-than-anticipated DDR (double data rate) memory pricing, lower-than-expected sales of RapidScale products and more aggressive pricing on some of its contracts due to increased competition hurt earnings and gross margins.

But Thomas Weisel Partners analyst Gaurav Kapoor in a client note said the stated reasons for the miss do not add up with what he has observed throughout the quarter, and wonders what the company is not sharing.

Kapoor believes the miss could be due to shipment delays that resulted in unfavorable price renegotiations for Rackable, along with year-end accounting issues.

While the analyst expects the company's management to have near-term credibility issues with investors, he kept an "Overweight" rating on shares, citing longer-term growth opportunities."

http://biz.yahoo.com/ap/070117/rackable_systems_ahead_of_the_bell.html?.v=1

I wonder what other companies will be hit with the higher costs of memory. I wanted to buy 1 gig of memory last year and the prices were around $75.00. Now they are around $100.00.

The stock got hammered last year and bounced back fairly quickly. It might be worth buying a few shares with some mad money. I'll wait a few days to see how the trading goes before I decide whether or not to buy some shares for a swing trade.

[bahroor]

yeah, when this thing got slaughtered last summer, it took a few more days of selling before stabilizing and then recovering.
Patience.

[aiki14]

BUY BUY BUY. I am in at 20.10. The hit it took is too big for the news. It retraces to 22 maybe by mid day tomorrow. Do your own DD and don't blame me if it tanks. set your stops at 19.75.

[optimus25]

BUY BUY BUY. I am in at 20.10. The hit it took is too big for the news. It retraces to 22 maybe by mid day tomorrow. Do your own DD and don't blame me if it tanks. set your stops at 19.75.

I like the stock at current prices and looking for a 50% retracement on that gap. It could bounce 1-3 dollars in the very near term.

[discrat]

Picked up a a little bit of this today. 375 shares@ 18.98........
Had been sipping on tea watching this for the last day.
Felt like it would be down for at least two days. Might have been a day early. But we will see.

Looks like its holding steady at support around the $19 level
Down nearly 45% from two days ago.
So Shorts should be covering by end of bell today or tomorrow. IMHO

[Jack24]

I hope you guys do well - I really do.

I think you're crazy to buy RACK right now.

Tighten those stops.

[bahroor]

Down nearly 45% from two days ago.
So Shorts should be covering by end of bell today or tomorrow. IMHO
Shorts????

[discrat]

I hope you guys do well - I really do.

I think you're crazy to buy RACK right now.

Tighten those stops.


Watch and Learn my friend. Watch and Learn !! ;)
Around these Levels the risk seems to be mitigated as RSI reads very Oversold.
Alot of traders have sold short into this. So what must goes way way down must come up a little !! At least the probabilities say this.

But of course anything is in possible so your right, stops are and should be tight.

Crazy ?? Yeah I can plead a little guilty !! It makes life a little more
interesting :mrgreen:

[Jack24]

Watch and Learn my friend. Watch and Learn !! ;)
Around these Levels the risk seems to be mitigated as RSI reads very Oversold.
Alot of traders have sold short into this. So what must goes way way down must come up a little !! At least the probabilities say this.

But of course anything is in possible so your right, stops are and should be tight.

Crazy ?? Yeah I can plead a little guilty !! It makes life a little more
interesting :mrgreen:


If you're going to use RSI as an indicator to buy, at least wait for consolidation and a decent base before pulling the trigger.

You have no idea where the bottom is until you get that.

RSI is also a horrible indicator in a down trending market or sector.

[discrat]

If you're going to use RSI as an indicator to buy, at least wait for consolidation and a decent base before pulling the trigger.

You have no idea where the bottom is until you get that.

RSI is also a horrible indicator in a down trending market or sector.


Iam more or less looking for a short term technical bounce. If you will , a dead cat bounce to make a quick slam play.

Not looking for consolidation or constructive basing, whatsoever !!! This strategy is a totally different one and has nothing to do with identifying a bottom. That would be more of a longer term swing play.

From my experience with these plays there is many more times than not a short term technical bounce where Shorts cover and take profits in a short tern timeframe. This happens within the first three days or so after a stock has plummetted 30%
or more overnight.

Once again this has nothing to do with finding a advantageous entry point based on identifying a consolidated bottom,or waiting for a decent base to be built.

Thanks

[Jack24]

More or less looking for a short term technical bounce. If you will , a dead cat bounce to make a quick slam play.

Not looking for consolidation or or basing per se !!! This strategy is a totally different one and has nothing to do with identifying a bottom. That would be more of a longer term swing play.

From my experience with these plays there is many more times than not a short term technical bounce where Shorts cover and take profits. This happens within the first three days or so after a stock has plummetted 20%
or more overnight.

Once again this has nothing to do with finding a advantageous entry point based on identifying a consolidated bottom,or waiting for a decent base to be built.

Take no offense, because I mean none, but it sounds like you hope to get a lucky bounce.

I've been there, and I've taken those chances. I've lost some and won some.

But that's more like a gamble than a trade. I do hope you make big $$$, though.

[discrat]

Take no offense, because I mean none, but it sounds like you hope to get a lucky bounce.

I've been there, and I've taken those chances. I've lost some and won some.

But that's more like a gamble than a trade. I do hope you make big $$$, though.



No offense taken :)
Gambling or being lucky ?? In all due respect, I guess I see it differently. When a stock plummets 45%, I look at it as putting probabilities in my favor just based on technical theory. And technical theory alone.
If this strategy is just 55% in my favor then in the Long run I will come out ahead with good money management.


BTW....In last 7 years of trading I have used this strategy extensively and on a monetarily basis have come out way way ahead on P/L.

[BuyOnDips]

It took 11 trading days for it to hit bottom after the last time the stock bombed. I'd probably wait to hear the conference call on Feb 1st. Analysts don't seem to trust management. Maybe the stock deserved to fall as much as it did.

[dochesgriff]

I am thinking about doubling down at this point, but will wait to see the morning action. I was a bad tape today all around so no hope of the bounce this session.

[SpongeBob]

It is a good opportunity but not the best deal yet. I will wait a little bit longer.

[aiki14]

I got sold out as it dropped through my stops, and I'll buy back in on a retracement of 50 cents or so. Sorry about the call at 20.10. That was expensive.

[dochesgriff]

I just doubled up at 18.90. It is risky with tech getting thrown away, but I just need a couple points up and I can at least get my money back.

[discrat]

I got another 225 sh @ 18.97
For total of 600 sh. @ $18.98

Risk at these levels are mitigated and adding to that an Upgrade today has made it that much easier to profit if you got in below $20. Of course IMHO

[discrat]

Surprising downward Movement for this Stock the last hour or so. The Shorts are just relentless with this stock and do not want to throw in the towell. We closed down near the low of the day. This could portend to be bad at least short term for any longs. We might see a little more pain. $17.50ish or so, but on low Volume.
I entered this trade with the notion of putting the probabilities in my favor. And geting a quick technical bounce as far as Shorts covering late yesterday or today. To no avail, though !!!!!
The Shorts are tough as nails with this baby.

But the company actually has decent fundis with positive Earnings. And I have a strong suspicion that we hit over $20 sometime next week.
The institutions arent gonna just sit back with a company that has these credentials and let it sit there nearly 70% off its 52 week high. Its not gonna happen. Not with a company with this amount of profitability.

IMO this is one of the best swing trade opportunities (5 to 2 weeks)
for substantial profitablity I have seen in my 7 years of trading. Although I did not see it as such yesterday when my trade strategy at that time was a quick slam play ;)
Trading is much about flexibility and adapting to change and sometimes reevalualting your initial asumptions. And acting accordingly.


Just be patient with this and I think Longs as of yesterday will be rewarded.

[optimus25]

Looks good to me. Though downside risk is there, I think upside probability looks great.

[InvestingMoron]

Looks like a reversal.....

[aiki14]

got in @ 18.70, and more @ 18.90. Stops are set, loss from last week erased.

[discrat]

Nice Movement today. Alot of Short Covering going on. I would be surprised after today if we see the teens again. At least for awhile.
I got my sell order in around $22.00

[metalheadrr3]

Got in at 18.60 today. Quite happy ... I am looking to see $23

[discrat]

Still up some today. But taking somewhat of a little breather from yesterdays surge upward.
I dont see this stock going much lower than $20 . Might touch its yesterday's close of $19.84. But if you can still get in at these level prices it looks to be a high probablity for a very profitable trade.

Institutions in the next week or so will be trying to slide in with periodic chunks of major Buying. And the Shorts will conitnue to get their stops knocked out, just adding to the upward frenzy !!!

[bahroor]

here's the understatement of the year...
Rackable 4Q Profit Falls Sharply
Net income for the quarter was $563,000, or 2 cents per share, down from $7.3 million, or 32 cents per share, for the fourth quarter 2005. Excluding certain expenses, earnings were 19 cents per share.
source (http://biz.yahoo.com/ap/070201/earns_rackable_systems.html?.v=1)