The leg up in the internet stocks has stalled at this time, and with this kind of momentum, normal profit-taking ensues.
The market is also experiencing more than -100 Dow days again due to the Brazil uncertainty.
But watch for the following:
1) Volume and support levels in the Dow and Nasdaq.
2) Performance of the leaders YHOO, AMZN, EBAY, INKT, AOL to see how much "damage" is done to the sector.
3) How lower tier net stocks are doing (ie. COOL, BFLY, etc.)
4) How the net IPO's are doing.
So far everything is normal as far as a correction in the market and internet stocks are concerned. Remember that we have had an incredible yet obviously unsustainable run, so any further leg up has to take place after some type of correction or consolidation.
The market and net stocks are keeping much of its gains and volume is leveling off. That's good. In addition, shorts are starting to pile in at these levels, which is very dangerous for them considering that net stocks will be announcing quarterly results in less than one month which will include the the leaders (YHOO, AOL, etc) and the e-retailing stocks that had a ROBUST Thanksgiving weekend already.
I like YHOO, AMZN, AOL, EBAY, INKT, CNWK, NSOL, NEON, COOL, BFLY, and HLYW. These baskets of stocks will be outperforming the rest based on earnings and price. |
