EMC Corporation (NYSE:EMC) lost some of its intraday gains yesterday but managed to end the session with a gain of 3% even after lowering its guidance and reporting a weaker than expected quarterly result. The volume surged to 35 million against the daily average of 18.5 million. The stock has rallied in the last few sessions but the momentum of the rise raises questions about the internal strength of the bulls.
Just 3 months back in January, EMC Corporation (NYSE:EMC) expected full year earnings of $1.98 per share on revenue of $26.1 billion. Now that projection is amended to earnings of $1.91 per share on revenue of $25.7 billion. The quarterly net income came at $0.13 per share or $252 million, against the $0.19 per share or $392 million reported in the same quarter last year. The earnings of the company slipped from $0.35 to $0.31 on an adjusted basis, much lower than the expected $0.36 per share. The street was expecting revenue of $5.74 billion but the company reported revenue of $5.6 billion, a gain of 2%. On a constant currency basis, the revenue saw an increase of 6%.
Technically, the stock is going nowhere from a long term vantage point. The series of higher highs and higher lows has kept the major trend up but the decade long supply area around $30-$31 doesn’t look to be conquered very soon. In the last 12 months, the price has been mostly stuck in the range of $25.00-$30.50 with very violent drops and bounces in this calendar year. The short term trend suggests another possible drop to $24-$25 levels and investors may keep that in mind before trying to take an entry. The volume pattern provides no clear signal but the decrease of volume in the last 1 year must be noted.
