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Technology Stocks : AUTOHOME, Inc

ATHM 22.74

+0.2%

Jan 5 3:59 PM EST

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To: wogger who wrote (9644)	5/20/1999 7:45:00 PM
From: E. Davies	Read Replies (1) of 29970

... so how come @Home tanks on this turn of events today? My reply below was written to someone else as a PM, but I find it appropriate to repeat: Why have we dipped? Because the market for "great expectations" stocks stinks thats why. We are buying this stock based on the concept it will be huge somewhere around 2005. Suddenly a lot of little things are making people realize that 2005 is a long time away. The market has been essentially going straight up since October. Even a solid bull market regularly has 10-20% corrections that last for 2-3 months. The market has been held up not just by low interest rates but by falling rates. Earnings in 2005 are worth a lot less now with higher rates (more accurately with the fear they may go higher). Summer is also historically a lousy time for stocks, people have sunshine on their minds 8-) Take a look at a 1 year chart with an open mind. We are just now starting to reach down to touch the 50dma. The first solid support level (which we bounced off of in April is 110-115. The 200dma is way down at 100. Even great stocks like DELL and CSCO retreat to their 200dma now and then. My original goal was ATHM at 200 by end of year. Even though we spiked to that in April (shoulda sold!) its not that unlikely that my target will be right. That would still be 4x for the year. Considering that ATHM is only growing at 3x/year it wouldnt be too bad. Sure we would love ATHM to go straight up to 500, but why should it? Lastly dont forget that splits are purely a physological game played by traders. If the market is in the mood to run some stocks they will run stocks whose name shows up on the radar screen. A split is as good an excuse as any. So is a deal with Microsoft. Remember how that went? Thats what happens when the market isnt in the mood. Guess what the short-termers who bought hoping MSFT news would give the stock a pop do? They sell as soon as they see that the pop didnt happen. Still I think the split will help create the bottom So what am I doing? Not enough. I'm not selling thats for sure, but I'm not buying either. So I make little daytrades where I sell part of my position and buy it back a few points lower. I expect a margin call after today, so I'll sell something else to hang on to my XCIT. If you have any free cash put in a GTC order to buy at 115 and forget its even there. Eric

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