Another log on the cell phone fire

National Semiconductor (NSM) makes a lot of sense on the short side as their business is very tied to cell phones and their gross margins seem to have peaked in the last couple of quarters. Order guidance was better than expected when they reported but the cell phone market has clearly deteriorated over the last several weeks. They're not going to hit the 440-460 mil guidance they have out there and margins will likely disappoint. The stock could decline 10-20% by the time they've reported this quarter's results.

I still really don't like Texas Instruments (TXN) as I expect several quarters of underperformance. They're a lagging indicator and they're not seeing the pronounced weakness that's coming… yet.

I also don't like Nokia (NOK) and I'm an ass for trying to trade around the position. Expect them to miss margins and probably have to reset the bar when they report.

Too cute in Nokia

I'm watching the stock bleed lower and wondering why I had to try to trade sell siders defending a stock I don't think is correct to defend.

I already regret saying to take it off short-term.

Sony Ericsson plays a weak handset

Ericsson on the tape this morning blowing up in mid-high priced handsets. Specifically, it appears the K850, their first phone with HSPDA (real 3G) and a 5 megapixel camera, is sucking wind.

This confirms some speculation that Ericsson was the weakness at Texas Instruments. I am still aware of weakness in the higher end of the Nokia supply chain so I wouldn't count the possibility of a Nokia margin miss out.

Nokia is down a couple pre-opening, trading below where I suggested shorting it. I think Nokia is struggling also but I think it's the best house in a bad neighborhood.

It's likely that the sell side will defend the stock down here. I'd take the Nokia short off for the time being and let them do it.