Mixed Reactions to UTSI's Announcement

Judging by today's price action of UTStarcom, one day after its announcement that it's considering strategic options to increase shareholders' value, the market reaction is mixed at best. Near-term the share price could go down because:

1. Technically speaking the price pattern is negative for short-term;
2. Smart money knew about the announcement. They may start to take profit.
   
3. The announcement may be interpreted as a desperate move to pop up share price;
   
4. The management succession plan is in doubt again;
5. The Street probably prefers to see a depressed share price for now (and accumulate more shares).
   
6. Lehman Brother's still has a price target of $5;
7. Bear Stern upgraded (sic) the stock. (Last time the guy downgraded at $8. He is now upgrading at $10).

However the long-term trend is still up until more data suggest otherwise. The expectation for Q3 is low as PHS sales will be sharply down sequentially.

While UTSI disappointed, 3Com, which is another take-over target, and Yum Brands came to the rescue, on a day which saw Dow Jones Industrial Average making another record high. Yum Brands reported solid earning and guided 2007 earnings higher, thanks to its KFC restraunts in China. Talk about a breakout long over-due [the consolidation lasted for almost 20 months!].