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Technology Stocks : VerticalNet, Inc. [VERT] -- Ignore unavailable to you. Want to Upgrade?

To: Perry Ganz who wrote (422)	11/7/1999 6:09:00 PM
From: Jeff Bond	Read Replies (4) \| Respond to of 1094

I like this stock a lot, but I'm not sure now would be a good time to enter into a position. I'm looking at a few charts and indicators, in reaching this decision. 1. MACD is topping and looks ready to roll over; that would tend to bring the price back down. 2. Williams %R is near 100, an indication the stock is WAY overbought; that may lead to more sellers than buyers. 3. RSI is well above 50, and it looks to be working its way to a climax; this may lead to weakness in price. 4. I do NOT see any cup and handle recently formed, what I do see is an excellent example of a 2-month BASING period through August and September, leading to a breakout on volume as the price passed $42 in early October. 5. The stock price appears to have realized it's potential on this run, and appears ready to base, or more likely correct. The price will most likely range between $65 to $70 for a week or so, then I suspect make a downward move as it corrects (this is NORMAL, there is nothing wrong with a correction). I see stops at $57, $52, $55, then possibly $33 again, JUST MY OPINION, please take it for just that, thanks :o) A couple general rules I've found to be true in looking at the charts. First, giving credit where credit is due, I learned a lot in books by Pring, Martin and Darvis, Nicholas, I'd highly recommend reading both authors. Also, Todd Wiener who posts here on SI is brilliant in my mind, also Steve Wesseler is a master chart reader I've learned tons from. Anyways, here are a few thoughts: 1. Basing usually lasts 2-3 months, and is punctuated by a breakout on volume at least 50% above the 50-day average volume. 2. Basings that occur in the upper half of the prior range are stronger bases that usually lead to stronger & longer runs. Basing in the botom half of the prior range are suspect. 3. Basing or cup & handle formations are typified by tight trading ranges through the period, and it is very important that the handle moves the price down and NOT up in a cup & handle formation, and that in both cases the basing period is characterized by decreasing volume (indicates a drying up of sellers). 4. Breakouts are the BEST time to buy a high-flyer like VERT, if you are looking to maximize your return while minimizing your risk. You can get it cheaper, but you never know if it will continue to get cheaper ... To buy on the breakout, simply set a limit order $1/8 above the prior high. In this case the price to buy would be $74 5/8 ($74 1/2 prior high + $1/8) if it occurs on volume 50% greater than the prior 50 days average volume. Anything else is suspect, and needs to be addressed according to the level of risk you are willing to assume. My plan is to watch the price closely for the next 2-3 weeks. If it bases between $65 to $70, shows no weakness, and volume begins to dry up, I will make a quick buy if it moves up through $74 5/8 on volume. I don't expect this to happen, but if it does GREAT!!! If on the other hand, it falters, I will watch closely for the climax selling at the bottom, then try and time an early entry (forgetting what I said earlier about the breakout being the best time to buy, since I don't mind absorbing additional risk). Frankly, I'd like nothing more than one more chance to get this stock for around $33, probably wishful thinking, but you never know. General thought: 1. The market cannot take this stock much higher, moves from here are going to have to come as a result of positive fundamental performance. That little slight problem of earnings of -$2.22 DOES NOT help VERT in this respect. 2. B2B is going to be HUGE, this is maybe the BEST stock to own, if you're looking for a strictly B2B play. I am, that's why I'm here, best to all!!! Regards, JB