The Internet & Casino Stock Report
June 22, 1999
Market Overview:
Expectations of less than stellar earnings by the cyclicals funneled money
away from value stocks and into the big momentum plays. The large Internet
stocks continue to lead the Nasdaq higher; Go2Net (GNET) +21%, Priceline
(PCLN) +13%, Ameritrade (AMTD) +23%, Yahoo (YHOO) +10%
For the remainder of the week the buying should continue but a one or two day
retracement is now in order as net stocks are beginning to approach the
short-term overbought condition. Pullbacks should be viewed as buying
opportunites.
Casino Issues:
After reaching an intraday high of 2 25/32 GIC Global (GGNC) collapsed,
trading as low as 1 1/4 before rebounding to close at 1 29/32. We exited our
long position at break-even 2 5/32. Competitor Starnet Communications (SNMM)
saw strong buying gaining 17% to close at 14 15/16 on volume of 980,000
shares. Total Entertainment (TTLN) was unchanged at 0.687
Stocks to Watch:
Semiconductors: Taking the advice of a survivalist trader we removed
ourselves from the path of a moving freight train. Our short sale in Triquint
Semiconductor (TQNT) was covered at a 5 point loss (-9%). The strength of
this market is enough to make a short seller quiver.
Two major IPO's are scheduled for this week. The first is online trading firm
Waterhouse Securities (TWE). The stock is expected to price between $20-$24,
with 32 million shares offered. In anticipation of the IPO, as well as
brokerage earnings, discount brokers Ameritrade (AMTD), E*Trade (EGRP),
Southwest Securities (SWS), Siebert (SIEB), and JB Oxford (JBOH) made
substantial gains on Monday's close. These stocks should be observed for
follow-through on Tuesday. The second IPO worth mentioning is online travel
agency Tradescape.com (RSVN). As mentioned in previous reports we are looking
at 1-800-Travel (IFLY) as a possible sympathy play. Now trading at $4 3/8,
IFLY is poised for a short-covering rally and rebound from its recent lows.
DSL Providers and Switching Equipment: Flasnet (FLAS), High Speed Access Corp
(HSAC), Covad Communications (COVD), Copper Mountain Network (CMTN), Redback
Networks (RBAK), Brocad Communication Systems (BRCD). Group now gaining
momentum.
traderjohn.com
The information provided above is believed to be accurate. Earnings and
revenues may be estimated for the purposes of evaluation and comparison. This
letter is a general circulation publication. We do not give investment
advice, nor do we at any time manage or direct the funds of any person or
company other than our own. Positions contained in this report are the
publisher's personal trades, and are not intended as trading advice for
readers. This report is issued solely for informational purposes and content
is not to be construed as being an offer to sell or a solicitation to buy any
security. We do strongly recommend that readers contact their personal
investment advisor or broker for advice pertaining to any investment
questions they might have. The publisher is not a registered investment
advisor, but rather a news editor and a stock trader for his own account.
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