SanDisk: A Swing Trade Candidate This Week

It’s late, and I’m somewhat tired.  I hope everyone enjoyed their Easter, I know that I did.  Because of my busy day with my family, the only chart I put together tonight was SanDisk (SNDK), which is a viable candidate for a swing trade come its earnings report Thursday.  I will be producing PeaBody Energy (BTU) and Intel (INTC) tomorrow when I have more time.  For now, let’s begin the SNDK breakdown.

SNDK  9-Month, Daily

First off, SNDK’s chart is setting up for a large price move with any remotely good earnings report on Thursday (Disclaimer: I will be legging into SNDK throughout the week).  SNDK’s financial structure is hanging in there, but is very similar to the financial trends it showed during the Tech Crash of ‘00-’02.  Although the company’s cash to debt level is high for its industry, the company has a good amount of cash reserves on the sidelines.

The only thing that makes me a little nervous about SNDK is the company’s growth trends.  Over the past three years, SNDK has put out poor growth rates that haven’t promoted the company’s good and innovative technology.  Sales lagged largely in 2008, and I have a feeling a lot of this had to do with the retail collapse that spawned from the destruction of the financial sector.  The company’s turnover rate has been stellar, however, and this gives me hope for a better quarter than Q4, hopefully beating analyst expectations for Q1:

SNDK Financial Strength (Courtesy of Reuters)

SNDK Financial Trends/Key Ratios (Courtesy of Reuters)

All in all, SNDK should be placed on your watch list for this week.  I will be taking any opportunity to get long this company on a market dip this week prior to Thursday.

Speaking of watch list, I am keeping my watch list from last week.  It is riddled with Basic Materials and Energy sector names, and I will probably end up daytrading a couple of BM names this week.  If you need a refresher of what was on the watch list, hit up this link (NOTE: MRO has been replaced with SRS.  All other tickers apply):

I will be back later today during market hours with my INTC analysis (BTU will be saved for post market hours).  Until later, my fellow traders.

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