Internet HOLDRs in the danger zone (HHH)

| About: Internet HOLDRs (HHH)
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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 (NYSE: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...