The second thing that I have learned from the Edge this week is the impact of Apple's iPad on HDD sector. Like many, I was quite surprised by the sharp fall in the share price of JCY & Notion. Now, we learned that iPad tablet computer from Apple has caused a sharp dent in the sale of netbooks, which use hard disk drives (HDD). On the other hand, iPad does not use HDD but uses flash memory. The impact was so severe that Seagate & Western Digital have cautioned investors that they faced pricing pressure as HDD manufacturers increased production.

From Chart 1, we can see that JCY broke below its horizontal support at RM1.41 on July 23 & took a sharp dive to a low of RM1.23 yesterday.


Chart 1: JCY's daily chart as at Aug 3, 2010 (Source: Quickcharts)

Notion's selldown continued. It broke the horizontal support of RM2.25 today. Its next strong horizontal support is at RM1.85.


Chart 2: Notion's daily chart as at Aug 3, 2010 (Source: Quickcharts)

Due to this game-changing event, the HDD sector may take some time to sort itself out. It would be prudent not to take an aggressive position in any of the HDD players until the dust has fully settled.