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Technology Stocks : America On-Line (AOL)
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To: robert duke who wrote (14897)5/5/1999 1:46:00 PM
From: Steeny  Read Replies (1) of 41369
 
I can only tell you where the supports and resistances are. I don't know where the bottom is. What happens during the day is unimportant compared to the closing level as long as volume is high. Volume very heavy today making this a real move.

On the upside, a close above 127 preserves the 50 day ma and signals a move up to 140. Around 144, many shorts begin to cover and signals a move to 152.

Downside:

A close below 125 breaks 50 day ma and signals a move to 117 which is a well supported trend line. My personal view is that 117 IS WHERE IT STOPS.

In the UNLIKELY event that doesn't hold,
A solid close below 117 breaks trend line and and signals a move to 100- the 100 day ma. Not a strong support level. There is heavy support around 90 where a lot of big money got long on the way up.

This selling is based mainly on interest rate fears which goes hand in hand with rotation from high pe to low pe. The other factor is the perception that AOL does not have a strong broadband strategy. This is unfounded. AOL is sure to announce an alliance with some broadband cable company or there will be a breakthrough in the case with Congress to open cable lines.

The high pe to low pe is what is worrisome. AOL's pe has a long way to come in line with other high growth businesses. There is no way to value internet companies because growth is so high, but so young.
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