Internet stocks are looking weak. That's the conclusion of a chart analysis of Internet HOLDRs (ticker: HHH), an exchange-traded fund that tracks a a basket of Internet stocks, on ETF Investor. The full piece is below; but before you read it, bear in mind that HHH does not include Google (ticker: GOOG). Since Google is the Internet stock with the largest market cap, HHH would look signficantly stronger if Google was included. And HHH's weakness may also reflect concerns that Google is attacking the core businesses of firms like Yahoo and eBay. With that caveat, here's the full article:
I was just going through my list of Exchange Traded Funds (ETFs), which
is ranked by their year-to-day returns, writes Nick Perry, who covers
ETFs for Schaeffer's Investment Research. At the bottom of the list is the Internet HOLDRS (HHH) with a loss of a little more than 20-percent.
This compares to a loss of just over one percent for the S&P 500
(SPX). A check of the HHH chart shows an interesting development.
Created with SuperCharts by Omega Research
I have been tracking this chart for some time (we last looked it
earlier this month) as the HHH has been struggling since breaking that
two and a half year uptrend highlighted by the red channel. The green
line is the 10-month moving average which has capped the shares this
month. Major support sits near 50, which was low for this year and was
the closing low for 2004.
This is worth noting because there has been a good deal of buzz
around internet stocks. With more than 70 percent of the analysts
tracked by Zacks rating Yahoo (YHOO) as a "buy" and eBay (NASDAQ:EBAY) gracing
a couple of magazine covers recently, it appears that expectations are
fairly high. While that doesn't dictate that a fall has to happen, it
does raise the odds that a disappointment may be lurking...
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