Hi Robert,
I think you are absolutely right; that AOL will indeed test the middle 100-teens again. And I for one do not think that it will hold there.
The chart pattern, as well as the institutional psychology (note IBD article 5/6/99, William Miller, Legg Mason Value Trust Fund, "I've been selling for months because it is significantly overvalued"), has now turned pretty ugly. Also note that Miller says of AOL that it is a great company.
The bulls on this stock at market caps around 150 to 200 billions simply are not able to distinguish between the quality of a company and whether or not it is a good investment. Those who were around in the 70s (there, darn it, I've again marked myself as one of those old fogies who just don't understand the new paradigm) may remember what were called the nifty fifty, also called the "one-decision" stocks. Some of you MIGHT even remember what happened to their prices.
In any event, if the levels reached by the quick dip a couple of weeks ago are breached, I continue to believe that, in the context of a stiff correction in the market, that AOL will return to the trading range in which it spent most of Jan and Feb, that is mid-60s to mid-80s. AOL super-bulls please note this is sans splits. Vendit please note: Again I repeat my prediction of several weeks ago; AOL will again trade in the 60s (on current stock price) before reaching new highs over 171 or so.
BP. |
