How to break through 99 1/2: #1. Convert margin positions to cash if able (create fewer shares that can be shorted, and strengthen holding ability during market fluctuations) #2.Realize that there is new support for GNET in view of the Charter IPO (why would anyone sell at this point? excluding market conditions). #3 Buy on dips, add to positions reducing cost basis. #4. Insider buying; a show of confidence if timed well can have more impact than any PR move. I am assuming that short interest in GNET has grown this week based on market sentiment and this recent rec. from option investor.:
NEW PUT Play, 07/27/99
GNET - Go2Net,Inc. $65.00 +2.38 (-5.69)
Because we are online investors, chances are most of us have had the opportunity to use the services of
Go2Net. This company provides us with Web sites, search engines, and software for finance and the
investment community. Their focus is to be able to allow their customers access to vast amounts of
resources by linking together the virtual community. Products such as Siliconinvestor.com, Metacrawler,
stocksite.com, and playsite.com are but a few of the sites this company offers.
GNET has been the unfortunate recipient of the markets attack on the Internet sector. The stock
weakened with a break below the 10 dma on 7/16. Since then it has continued to drop below it's 50dma
and 100 dma, a significant resistance level at $67.00. Like a balloon losing helium against the ceiling, we
think the stock will continue fall to lower levels due to market conditions and overvaluation. The technical
indicators are showing us that this may be a good entry point to enjoy this balloons ride to the floor.
Despite GNET's positive report of .07/share earnings on 7/21, and increased traffic to it's sites, the stock
was unable to maintain any upward momentum. The company's CEO expressed some dismay at Wall
Street's outlook; however, it appears to be a sector issue, and not so much a personal one. AT&T also
announced they are lowering their ISP rates, which is causing the whole Internet sector to be affected
adversely. With all indicators pointing toward a continued correction, we feel this is a good point to play
the downside on GNET. Keeping the resistant levels in mind, pick your entry, and confirm market
direction before jumping in.
Today, the announcement of the Charter IPO, HSAC's definitive signed 5 year contract with RoadRunner, and Broadband PR from GNET have started some momentum which the above put play does not consider. If it follows through, this monmentum may be fueled by shorts covering and sidelined investors entering. Yzfool |
