In the premierinvestor.net evening wrap on April 9th "The labor software tree may begin oozing SAP" and in past comments have followed the stock. Today, bearish traders from PI and OptionInvestor.com have been e-mailing me looking for some updates on what to be doing. They are getting the break they've waited patiently for and now's as good a time as any to finally be taking some profits. Here's why.
SAP Aktiengesell Chart - Daily Interval
Shares of SAP have fallen nicely today and the stock now sits right at the lower-end of regression. It took some time for the MARKET to come to its senses, at least I think so, as other like names like Oracle (ORCL), PeopleSoft (PSFT) and Kronos (KRON) have really been under selling pressure due to concerns of slower than expected sales in the "workforce management" software space.
SAP Aktiengesell Chart - $1 box
With shares of SAP falling nicely today, the stock also sits right on the bullish support trend. In past commentary I've mentioned how stock can have a funny "habit" of finding buyers at these trends. Since I'm seeing some correlation from the bar chart and the regression's lower trading band and the bullish support trend from the point and figure chart, I'm looking to lock in at least 1/2 positions if not full positions. When I first profiled this stock as bearish, we didn't have a bearish vertical count to work with.
Instead, we were using the bearish action in other stocks like ORCL, PSFT and KRON to be looking short.
Kronos (KRON) bears like the action they're seeing in SAP today and would like to see the stock break below bullish support trend.
Just as SAP "held tough" for several sessions above the $32 level, KRON has been doing the same above $38.
Kronos Software Chart - Daily Interval
Shares of KRON have been giving bearish traders some of the same type of "fits" that SAP was giving bears. Just as bears had to take some heat in SAP to the upper end of its regression channel, same thing in play with KRON. I'm looking for bulls that were supporting KRON above the $42.87 level to sell some positions (assuming they didn't sell the recent lows of $36) and put pressure on the stock.
Yesterday, shares of Oracle (NASDAQ:ORCL) got hammered to the downside amid analyst's concerns that IT spending on software product remained weak an that current quarter earnings estimates might be too high. I think those comments undoubtedly has SAP trading lower today and looking for the same thing to eventually catch up with KRON.