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Strategies & Market Trends : TATRADER GIZZARD STUDY--Stocks 12.00 or Less..... -- Ignore unavailable to you. Want to Upgrade?

To: SnowShredder who wrote (16423)	5/4/2000 2:50:00 AM
From: MrBuzz	Respond to of 59879

Hello Where'd He Go... After doing a bit of earnings to price correlation with the charts, you'll find that fair value for NSOL is roughy $108. Go here and take a look at a price/earnings chart: whats-the-buzz.com - solid lines are earning 1,2 yr earning trends and in this case they all correlate - dotted lines are 1, 2 yr price trends What you can see is this: 1) NSOL at its peak was trading year 2003 earnings 2) NSOL was trading on price trend alone (no sense of value) 3) NSOL is shifting to trade on fundamental trends (i.e. earnings) 4) Bottom of last months bar correlates with 2002 earnings. So by looking at the following, you can see NSOL is trading two to three years ahead of earnings. The thing one needs to sense is if the market agrees that NSOL should trade that far ahead of itself. In this case, you now know why I prefer to be short on the stock. It is currently struggling to maintain the 1 year price trend. 2 year price trend resides in $120 area. The $108 area is a more riskier range and could take a while to get to this month (if ever). We saw this last month, and I feel that was pretty close to the bottom for the year. The conservative trader would bail this month's bar in the $120 area. If it gets sub that, then no big deal - you managed your risk vs reward scenario differently. The aggressive trader would tough it out for $108's and realize the length of time and risk involved. This chart, although simple, shows very clearly the relationships between price and earnings trends. Its important to study both because in times, the two get out of line and one is dominant over the other. With Internet stocks, psychology is more dominant than clear fundamentals. Overtime, the fundamentals will kick in. Market makers are now going to swing these stocks up and down to wash out both longs and shorts this year with the help of "interest rates". In some ways, investors get hurt in this process, especially this year as prices will move sideways wildly. The daytraders will have to realize that swing trading over a period of time will produce the best profits if the trades are planned in advance. In other words, know the boundaries of your trades before pressing the buy/short button! Currently, for NSOL, if it trades sideways for the rest of the year, it will maintain earnings trends and tilt the 1 year price trend inline with earnings. You can see the pattern developing - a slow up and down descending triangle into the end of the year. Maintaining the 1 year price trend would have to demand both strong earnings and revenue increases - hard to believe for such a stock whose business has saw its greatest increase from URL domain products over the past 3 years. Also consider competition from other URL domain registrys of which NSOL no longer fully dominates. Food for thought, MrBuzz whats-the-buzz.com