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Technology Stocks : Excite [XCIT], an exciting stock to own in 1999!
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To: TLindt who wrote (710)12/23/1997 2:43:00 PM
From: Andrew Hunter  Read Replies (1) of 3183
 
Well, Excite has been in a trading range between 22 and 26, and as of today it seems to have broken out. It could go to 30 if the current run on internet stocks keeps up. LCOS I would short when it seems like the current run is over. That may be today as lycos is down a quarter point or so, but I'd be careful because YHOO and XCIT and both up pretty strong.

In the long run, I have no thoughts anymore. The search engines are volitile and their futures are uncertain. They are all priced high using typical valuation measures. I look at them as short term trading stocks only. Since they ussually run as a group, I'm not sure that being long XCIT with a LCOS hedge would be effective. It might just serve to cancel out any gains you had with one via the other. I would be wary of taking on any of these stocks with a buy and hold approach as they could fall out of vouge, and they're expensive right now. Nor would I take one on as a long term short, as there is no clear limit on how far they could run.

I think a good strategy is to buy XCIT when they've had a bit of a sell off and are turning upwards (like a couple days ago when it bounced of $22 and went to $23) and sell it when you see weakness in YHOO (down a point or more at the close) as it won't take long for either XCIT or LCOS to follow YHOO. At that point, sell LCOS short if you're sentimentally attached to XCIT; otherwise, short both.

I also think it's unlikely that XCIT will overtake LCOS in price until it can match that magic penny profit, even though we all know it's a vastly superior search engine.
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