To: bobby beara who wrote (14545 ) 5/20/1999 8:31:00 PM From: pater tenebrarum Read Replies (1) | Respond to
Bobby, i just looked at NTBK, which clearly has broken out of the triangle to the downside.it may well be a warning of what's to come for the rest of the group. also several of the leading netstocks i watch have recently proven unable to overcome their 10 & 20 DMA's (which have had bearish crossovers) on a closing basis for more than a day if at all. the only thing about today's declines that was not entirely negative was the relatively low volume. i have given some thought to the triangle and it's implications. since it is so huge, the resolution will be huge as well; if one assumes a resolution to the upside, the netstocks would go unbelievably high. they have already gone higher than anyone believed possible,so is it really reasonable to expect that they will do so again, only on a much larger scale? a good proxy to look at when considering the fate of netstocks in general is CMGI. it has two prior consolidating symmetrical triangles that have resolved to the upside with a vengeance. from one peak to the next, the stock has advanced by about 50% (152-226-330), from apex to peak about 100%. if it were to repeat that feat, a likely target would be 450-500, at which point it would be a good candidate for a 5 for 1 split (g). note btw that the triangles i speak of are the ones *after* the initial 2-week run in january during which the stock tripled from 50 to 150. the one-year range of CMGI (so far) is 16 5/8 to 330, which simply boggles the mind. while an upside resolution of the current triangle would yield even more incredible figures, a downside resolution, however violent, would bring the stock merely back to some point where it has been before, not too long ago. if initial support at prior peaks(226/150) fails, it would certainly find strong support at 50, which used to provide strong resistance from july to november 98 and served as the launching pad for the january advance after it was first broken in december. why, anyone who was savvy enough to buy CMGI at it's 52-week low would still be a respectable 200% ahead! i fully expect the flood of net IPO's to do the whole sector in eventually, and while i am not saying that the end is necessarily here already, it's a possibility that's definitely worthy of consideration. i have also noticed that some of the lesser lights(e.g.SEEK,MKTW) have descending triangles, which i take as a warning as well.
