Alcatel-Lucent (ALU-N)

Came together in the mid-2000s. It will give NOK-N a third of the market. You want to own NOK-N going forward to realize all these synergies. He would sell the others. He would sell this one in case the deal does not go through. Sell this and buy NOK-N because it will do better regardless of how the deal goes because the market really does not like the deal.

It has been a dog for a long time. He thinks they will do okay, but there is no major catalyst. If you have an opportunity, perhaps sell it.

Fibre buildout is going to be very positive for anyone in the telecom ecosystem. There should be some upside here, but it has been a bit of a dog.

Chart shows a nice little run up. It will eventually run into some resistance at around $5.20. All indications are that it will continue. Relative Strength (RSI) looks reasonable. The MACD came off a little at the end of the year. He would look for this to Hold right around where it is now at about $4.50. If it doesn’t hold there, you’re probably looking at $4.25.

You have seen a cyclical rally in a whole lot of stocks in Europe. Not the kind of company he likes. Top line visibility is hard to get a handle on.

The challenge with this is that fundamentally there was an overdose of fibre in the 2000 timeframe. There is going to start to be need for more fibre, so the fibre play would obviously be Corning (GLW-N). In terms of equipment and multiplexes that are required to extend the current life of the existing fibre, those companies are starting to do well. This is more a psychological trade as investors are starting to think that growth is starting to come back and the US is recovering and therefore this is a trade where people are going. If you have owned this, it may be time to start taking profits.

Chart shows a falling wedge, which can be bullish. Also, the sector is favourable.