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Analysis: Nokia Production Delay Cover-up, Impact on Stocks

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ESPOO, Finland – Last week I commented that there could be a Nokia stock evolution in the upcoming weeks, and that it should close the gap it had on the opening prices from the results above estimates it got. The same company was sued for hiding from investors its 2008 production delays that caused phone prices and operating margins to decline.

This is negative for Nokia shares, negative for Nokia as a company, because it happened in 2008 and we are in 2010, so the manufacturer cannot do anything to fix the issue. In terms of quotes, yesterday and owing to this news, its stocks fell almost 4% during the day, closing that technical gap, and finished with a loss of 2.55%.

As I said on my previous analysis:

Yesterday (the day the results were released) we could have broken some resistances, but personally I am not confident it would reach higher levels, but breaking US$14,63 would be a nice entry point for a short time trade based on technical analysis.

This week, the maximum Nokia achieved was US$14.43, so the buy signal wasn’t activated, and we remain short for its stocks. Nokia is just below the 200 day-moving average, a bit over 250 day-moving average and above an important support at US$13.35, just above the 50 day-moving average. Closing on Monday below this value would get us a stronger sell signal, but in the long term we remain “walking on side-ways”. Personally I think Nokia will recover just a bit before we continue our down trend. If we close below US$13,35 we can easily reach US$12.50.

No positive news, only negative ones, I would not be a stockholder on this one owing to its volatility, and because it remains on sideways, no supports or resistances were broken. We will surely get back to this stock analysis when we see new developments.

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By , Financial Director and Correspondent on Feb 7th, 2010 GMT +2

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