It's the most wonderful time of the year... The holiday season has been extremely kind to day traders, investors, momentum players and even shorts (e.g. Linux play CORL has tumbled 67% from level traded just two weeks ago). Tech has led the way, with the Nasdaq posting more than one-third of its 81% year-to-date gain over the past month. Investor favorite Yahoo! (YHOO) has tacked on 200 points or 90% and has carried some of the other premier Internet names along for the ride. The rage this holiday season has been theme investing. From the business-to-business e-commerce space, Commerce One (CMRC +86%), Sciquest.com (SQST +182%), PurchasePro,com (PPRO +84%) and Chemdex (CMDX +80%), have led the way. Alternative operating system/information appliance plays Be Inc (BEOS +100%), Geoworks (GWRX +232%), and Red Hat (RHAT +61%) have also made sizeable gains over the past month. The hottest of these groups, and probably the one that has received the least attention, has been customer loyalty/Internet direct marketing, which is made up of names such as NetCentives (NCNT 345%), MyPoints.com (MYPT +358%), WebStakes.com (IWIN +275%) and CyberGold (CGLD +251%)... With no significant earnings reports or initial public offerings due for a couple weeks, interest in these groups likely to continue into the new year. Traders should also be on the look out for new gimmicks that may pop up, such as the free ISP theme that launched Juno Online (JWEB) as much as 430% higher this week and caused an intraday double in Internet America (GEEK) on Tuesday. The first place that momentum players typically look for secondary plays is the under-$10 space, favoring recent IPOs. With their small floats and thin daily volume, these stocks put up the least resistance when traders are looking for a ticker to run. Moreover, to this crowd, a move from $4 to $8 just doesn't seem as outrageous as a jump from $35 to $70, though, both are doubles. - DS
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