NEW YORK ( TheStreet) -- If you're a current OCZ (OCZ - Get Report) investor, Tuesday's earnings release must have felt like your computer froze solid as you tried to save a document you spent all day working on.
The small miss and especially the guidance surely do not warrant the selloff on Wednesday. Look for bargains in the share price, but don't chase it.
OCZ has lost about 16% of its marketcap from Tuesday's close. The loss in share value is the result of earnings per share missing an expected loss of 12 cents to a dismal 17 cents per share. Revenue came in light as well at $113.6 million vs. the mean estimate of $115.7 million.What truly captured Wall Street's attention is operating expenses. OCZ already was trading below the widely followed 200- and 90-day moving averages, adding fuel to the liquidation based on chart technicals. The chart to watch for OCZ is the weekly chart. In the weekly chart, you can find support just above $4 and again at $5.15. Both these levels offer support and resistance. More importantly, both offer a history of reactions with price retracements that suggest OCZ will once again trade above $5.15 soon. The 200-day MA doesn't come into play on the weekly chart due to the relatively young age of the stock. Revenue is a bright spot for OCZ. OCZ is computing at high speed with revenue hurtling over $110 million quarterly. That is an extension of 16% over last year. Management inculpated higher unit costs that squeezed margins. Based on sales it appears reasonable, and likely a short-lived obstacle.