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Strategies & Market Trends : Momentum Daytrading - Tricks of the Trade
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To: Richard Estes who wrote (1910)4/16/1999 1:01:00 PM
From: William W. Dwyer, Jr.  Read Replies (1) of 2120
 
The current momentary value of a momentum stock such as NTBK versus the intrinsic value of a "real" stock is quite different. Tai Jin is correct about this one. To prove my point, I dare you to buy NTBK at any price available today and hold it for more than two weeks. Only a fool would do that.

Investors buy on price and value consideration. Momentum traders do not. They buy for pure speculation and greed. In this case, you don't want to be around when the music stops and everyone realizes there's no value here. Lots of traders going to get hurt then.

NTBK is a trap. Look what's happened to all the other stocks in its group. Going through the basement. NTBK is only still up because of those traders who haven't realized that there was no real reason for them to have announced a split. The split announcement is why it's up, and there was no real basis for the split, no good reason other than for some people to capitalize on the greed and ignorance of pure momentum traders.

For everyone making a few bucks on NTBK this week, there are plenty of others losing on it. Some have lost fortunes. This stock is not trading on anything related to value. It's trading solely on greed and unrealistic expectations. Anyone trading stocks like this and not losing big have just not been trading long enough.

Let me know what it's trading at in a couple or three weeks.
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