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Stock Analysis: Nokia (NYSE:NOK) Shares

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Nokia Stock PatternGLOBAL – Two days ago the Apple iPad was announced, and the question in every analyst and investor’s mind is whether this will this have some influence on Nokia stocks. The answer is no, and just in the case the iPad’s sales go wrong, then the Finnish manufacturer will be able to take advantage from that, as the iPad and other internet tablets are a new niche for tech companies. Some analysts have also pondered on whether Nokia should release its own iPad-like tablet, but that would take a new analysis.

Nokia yesterday published its fiscal results Q4 profits, which rose 65%, beating estimates, as it recovered 11% of market share in smartphones, defying expectations. Net income from Nokia rose to US$1.33 billion, or 26 cents a share, from 15 cents, a year ago. Nokia dominates 39% of the smartphone segment (a year ago quarter it was at 31%). Nokia has Apple (AAPL) and Google (GOOG) competition on this segment, with the iPhone and Android platforms respectively.

With these results, Nokia shares climbed yesterday 7,82% reaching 13.93 euros, although today there weren’t great moves. Despite doing quite well yesterday, Nokia shares are right now one of the most risky stocks to trade. When there are great news, they soar, but after few weeks, they return to the same level.

Nokia (NOK) is trading around their all-time minimum values. If one believes that Nokia’s future investments will take its shares to a higher level, the price then will zone between US$10.83 to US$16,31, which is a great zone for accumulation, if one wishes to invest in the longer term.

Breaking US$10,83 is a strong reason to sell Nokia shares, and above US$16,31 approximately, one would notice that the market gets confident on Nokia’s recovery, and it would be a buy signal. In the figure below, observe at the green and red lines: as one can see, Nokia shares have been ranging between those two levels for more than one year!

In the short term one can notice a zig-zag pattern (figure below), and the best way to approach Nokia shares is to follow their daily activity and trade based on a 30-minute graphic. Yesterday 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.

Nokia Stock Pattern

If we close today below US$14,08-14,00, it would be a short signal for a short time trade, as visible in the chart below.

Stock analysis to continue on Monday.

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By , Financial Director and Correspondent on Jan 29th, 2010 GMT +2


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