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SanDisk Analyst Anticipates Strong Second Half

SanDisk Corp. (SNDK) shares are higher by $1.44, or 4.92%, to $30.71 on good volume of 9.1 million shares. The stock is continuing to the upside, breaking out over $30 in what now is not simply a countertrend move, but a clear reversal of the downward trend that has been in place since the fall of 2007. Heavy call option activity signals an extension of the rally into at least Friday. Schaeffer’s has the total call option volume at nearly four times the daily average, with particular interest in May calls with a $30 strike price – 10,104 contracts have traded compared to open interest of 15,041 contracts. What’s helped is that there is a clear fundamental backing to the move. Citi Investment Research analyst Craig Ellis notes today that the flash memory supplier is moving into a seasonal “sweet spot” that may force him to raise earnings per share estimates. According to the Associated Press, the analyst points out among other things, that the company’s personal computer market offers an upside to earnings this year because of a slew of solid state disk products, and confirms that major memory chip makers shutting down production should help clamp down on the output during the second quarter, resulting in higher prices. Ellis says that “NAND’s comparative seasonal strength should augur well for SanDisk shares if fundamental and estimate trends emerge in the second and third quarters as we think possible.” Guess it’s a good time to be in SanDisk.

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Related Articles

• June 3, 2008 -- SanDisk on Its Way to Reclaim $30
• May 21, 2008 -- SanDisk Sell-Off Doesn’t Defeat Second Half Turnaround
• May 5, 2008 -- SanDisk Shares Forward-Looking, Shorts Still Skeptical
• April 18, 2008 -- SanDisk CEO Affirms Market Optimism of NAND Turnaround
• April 4, 2008 -- SanDisk Rally All About Potential NAND Pricing Bottom

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