gytheon, truthful article, thx
"All of this misinformation, partial information and bad behaviour simply underscore the need for investors to rely more on technical analysis and less on earnings releases.
Consider the recent activity in the shares of Nortel before and after last week's big restatement of their 2001-2003 earnings.
The shares did nothing. The news was already in the stock. This came as a big disappointment to many speculators who bought call options in anticipation of a big price advance in response to a positive earnings report.
Last Thursday, the Montreal Exchange website listed the open interest for the January calls. A stunning 40,000-plus contracts are due to expire worthless next Friday unless the stock closes well over $4.
Don't hold your breath.
Our chart this week plots the weekly closes of Nortel above those of rival Cisco Systems Inc. of San Jose, Calif. Note the close price correlation operating between the two plots. I should mention that both stocks reached their initial manic peaks in March 2000. They both rallied through to September 2000 and then collapsed to introduce the great technology bear of 2000 to 2002.
Both stocks bottomed in October 2002 (to the week) and both subsequently rallied through 2003 to peak in January 2004.
Both stocks then declined through mid 2004 and then traced out a sideways basing pattern through year-end. This clearly illustrates that Nortel is a sector play and not an earnings play.
Our chart illustrates the smart money has already decided that Nortel's fortunes will ultimately be decided more on the fortunes of the information technology group and not necessarily on their corporate effort.
Keep an eye on those charts; it's the right thing to do."
BTW, the link is not leading anywhere :(
cheers
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