CMGI "Technical Rap" - By Gizelle (from Raging Bull)
Hi Guys!
Well, overnight selling left little doubt about the overall direction for our favorite stock, CMGI. Instanet had it down another $1 to below $75, along with all the other true internets. A string of I-Net IPOs continue to test the market and (in my opinion) weaken it.
Technically, we are in a "free fall" situation, with a minor support level of $79 breached yesterday without so much as a look back. The key support level of $71-72 is the next downside test of CMGI.
Why is $72 important? Two reasons: #1 - It marks the low reached during the last downward cycle, from which CMGI sprung back to the $120 level before the latest troubles began. #2 - It is the 200 day moving average.
Will we shoot past $70 and head into oblivion, or will the $72 level hold? That's the $100,000 question which only time and the market can answer. We remain oversold, although not as badly as eBay (-30 MACD), but there is no sign of a reversal. If I had to guess how low we could go on CNBC, I would develop a serious case of the "no-shows".
At times like these, sometimes it's best to do nothing until the trend reverses itself. Still too early to jump in, but it's certainly time to have the cash ready to either buy back your covered calls or purchase more CMGI.
We will come back stronger, but there is some pain left to endure. |
