Merolla, I think you made a wise choice here.
Long Recommendation
ENE's idea to create a trading market for bandwidth, its compacts with Bell Canada and Compaq Computer, and its dynamite control of gas and electricity trading make this the premier performer in trading. Now it has created a market to trade paper.
See the coverage of ENE in Forbes and in today's issue of Fortune. I'm looking for an entry price here as stock has been consolidating for nine weeks. Needs a solid breakout here to be really exciting, but fundamentally sound with a modest downside risk. If you enter at today's price use an 8% stop loss. Note the price is down today on essentially good news, and is being priced like a tech stock, and traded like one, i.e., it goes down if techs go down, but not as much.
Note that Williams Companies (WMB) is eyeing jumping into the bandwidth trading arena...this will lend credence to Enron's idea which is to trade available bandwidth like any other commodity, and they are the leader in this field, having done a total of one deal to date (no one else has done any). The original (12 months) response to ENE's bandwidth trading idea was negative or lukewarm, but ENE has persisted, and it is beginning to look like it will succeed here, just as it did in electricity. As premier traders, they would be hard to beat regardless of the commodity being traded.
If ENE gets some more trades under its belt before others decide to jump in and actually do some trades, ENE will have an enviable head start. What's more, if they think in terms of "storewidth" and offer to trade bandwidth and storage capacity, they could build a lock on a huge market.
On the technical side, note that ENE has put in a quadruple bottom in and uptrend, always a good sign. MACD and STOCH are acting favorably and volume has been steady to high at about 5 million shares a week. If we get a new high here change my recommendation from buy to strong buy.
Rak up a winner
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