Are You In The Chinese Internets?
The
market has seen a fantastic month for October. We have seen a
few pullback attempts, but nothing has really come to fruition…at least
not yet.
There are only eight more trading days in the month, and the
only real correction (or should I say “destruction”) we saw came from
some of the recent Internet leaders. I am referring to J2
Global
(
JCOM |
Quote |
Chart |
News |
PowerRating) and the Chinese Internet names.
JCOM did not please investors with its earnings release. This
10+ point route in the stock is the first time that the stock has been below
its 50-day moving average since May.
Netease.com
(
NTES |
Quote |
Chart |
News |
PowerRating) led the reversal for the China-Internet stocks. Many of these names
were overdue for a pullback and are now seeing it occur. We will continue to
follow this group for signs of support and see if names like NTES,
(
SINA |
Quote |
Chart |
News |
PowerRating)
and
(
SOHU |
Quote |
Chart |
News |
PowerRating) can regain their footing.
After the bell, Amazon.com
(
AMZN |
Quote |
Chart |
News |
PowerRating) released decent earnings, but was trading lower as of this writing.
The Internet group (HHH) has been very strong since Yahoo!
released stellar earnings numbers for the quarter-ending 9/30/03.
(
YHOO |
Quote |
Chart |
News |
PowerRating)
is still holding a bullish gap higher left after this report on 10/9.
There is no doubt that if
the market decided to correct or consolidate from here, it would not necessarily
be a bad thing. Corrections and consolidations usually lead to higher prices.
We have seeing very supportive volume and price action for a Bull market in
recent weeks. As we look to the week ahead, it will be important to see how
leading stocks act around areas of support if they do decline. As we look to
strong names that rally, it will be important to see them make the moves on
above-average trade and indicate a consistent buying interest in the stocks.
Best of Trading!
timt@tradingmarkets.com