To: Christine Kellstrom who wrote (2747 ) 5/5/1999 3:57:00 AM From: michael r potter Read Replies (1) | Respond to
-OT- Thank you for the info. on ITG. Did not plan to talk about NITE, but circumstances warrant. Previously said a buy on pullback under $120-$130. Yesterday [MON], NITE touched $160, today [TUE] close was $132. No change in fundamentals, but upon review, NITE touched its 50 day MA in March. It came within 10% of it in April. Right now the 50 day MA is at $90. If it were to come even within 10% of it, that would be $100. Given my very guarded outlook for the immediate future, for reasons previously outlined, IMO it would be better to wait on NITE until this thing shakes out further in the high PEs/no PEs [read internet]. Many times the big brokers are the lead stocks in anticipating general trouble. The major brokers topped weeks ago and have terrible charts, with Merrill Lynch down $6 Tue alone. The former leaders are breaking down and many are now showing very poor chart patterns. YHOO is down already from $244 to $159, AMZN $143 down from $220 two weeks ago. MSFT has broken support and CSCO right on the edge of its 50 day MA. GE acting poor. WCOM breaking down. All the while, gold stocks, papers, chemicals, aluminum, metals, drillers, oil, oil stocks, and interest rates up. What this all means is open to conjecture, but it is not good for certain sectors. Despite possible counter-trend rallies, this trend is not going to turn on a dime. [Rallies are a time to re-adjust if need be IMO]. I probably don't need to tell anyone here given the sophisticated nature of this thread, but if anyone, [including friends] is now on margin in accounts with an over-weighting in the high pe/no PE stocks, do not let them underestimate the danger if you agree. SFE is 3 or 4 points from initial support, and as stated before, that may not hold. If it does not, then next support is around $62. Failing that, the 200 day MA is at $47. There is no way I can predict if it would get that bad at this time, but these are levels to keep in mind. The doubts about initial support [$70-$72] holding are related to the exposure SFE would face from a serious downdraft in the internets which is a distinct possibility-bordering on probability in my book . Margin selling could be a minor factor in exacerbating a [SFE] decline in accounts over-exposed to internets with SFE included in them as presumedly, many would sell stock rather than put up cash to meet a margin call. Mike
