Garmin a gnome or a giant?

Almost too good to be true if you've been waiting for a bargain price in Garmin (GRMN). At $96.54, or the afterhours price of $96.40, the stock is trading below its 10-day SMA and EMA and its 50-day moving averages. That kind of dip is extremely rare to find in today's frothy market, and not without reason. The major run-up left a lot of traders with hefty paper profits, and when Garmin got the stiff arm (Nokia's planned buyout of Navteq), it appeared at first that Garmin's access to online mapping was shot.

Not so, though. Nokia/Navteq is still contracted to sell maps to Garmin, though there's no way to know what happens with the pricing. The deal is long term, so it's not like Garmin's great GPS products will go without maps all of a sudden. The Co has alternatives, though, none were as good as owning a Navteq. Still, I see the Co rebounding from this major drop over the past three sessions. The all-time high of 122 on Friday is no more.

This 21% fall is mighty. It is also losing steam. Volume on Monday, the gap-down session, was 22 million shares. It was 19 mil on Tuesday and 9 mil today. Is the selloff done? Perhaps. The Co seems to be in no rush to soothe shareholders. I wouldn't be surprised if there was no word from Garmin until earnings come out at the end of this month.

So, is GRMN a buy? Depends on what you think of management and the Co's execution.

Pupule says: Buy small if at all. The floor is near, and shrinking volume says a lot. When this stock turns back up, it'll be swift.