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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank
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To: Cactusjac who wrote (61742)9/17/1999 1:21:00 AM
From: Jenna  Read Replies (1) of 120523
 
RHAT.. you picked a doozy there. I also rode RHAT up and down but it was only on the third try that I rode it down without giving back a big part of the gain. The trouble with RHAT is not a technical answer..or even a fundamental answer. The stock market values the company at more than $7 billion -- nearly 700 times its 1998-99 revenue of $10.8 million. Even with Goldman, Sachs and Co. estimates of revenue at $43 million in 2000, Red Hat is trading at a tremendous premium. Technically of course it triggered a 10 day MA breakout this afternoon.

There is no doubt that RHAT is tremendously overvalued but if you remember when NTOP and PHCM could do nothing wrong and just kept on going up. In "The Industry Standard" they reprinted an article from TheStreet.com which described NTOP as a 'pasttime for daytraders that were bored during the summer slowdown'.. This pasttime was very lucrative as you may remember.

Ultimately I wouldn't give RHAT more than 1-2 good day but that could conceivably translate to another 17 points or more. That's what happened on the leg up that I joined one day late. It was up 22 points than the next day it was up another 22, even after that I had trouble shorting and covered once with a 2 point loss and then again shorted at 132 and the stock closed at 116 but the next morning it gapped up 7 points from that short gain. Only the third time was I finally able to get a good short going.

RHAT is "hot" and how do you put a premium on the value of hot'..
but other players strong also..
RHAT UNFY APLX SCOC CORL ADSP
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