United Online (UNTD) topping out?

bgold

Established member
532 5
UNTD experienced a "perfect" 99% correction with approx 1.7 bottom down from a Mar00 at $181. From March onwards it continued its spectacular rise topping above $43. In past 4 sessions, the stock dropped tru the 21day MA which was solid support since March and bounced of its 55d MA and support of hammer (25Aug) and 1 Aug High. Nevertheless a 6mos sequence of new higher highs and high lows was broken. Various momentum indicators are pointing to weakness and it should be no surprise that insiders are selling (after exercising options with strikes as low as $2-4.-).

Has the trend changed? Next priuce targets at $30 or $23 the resp 100MA and 233MA?

I would be inetested to hear the views of seasoned traders? Please do share your perspectives?
Thanks
 

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bgold

Established member
532 5
UNTD continues its slide!

Having tested 55MA for 3 days, it seems to be on course to support range 30.25-29.67, the 100MA and bottom of bullish engulfing pattern of 8/9 August. There may also be support slightly higher atr 30.77, the late July Highs.
Momentum indicators are accelarating lower.
Insiders, investors and traders are running for the doors!
Question remains how much of current trading are new Shorts.

Your comments much appreciated?

J
 

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bgold

Established member
532 5
Another opportunity to join the slide?

Yesterday UNTD hit some more rocks, down $5 to close at $30.12. This morning (pre-open) it is rebounding to 31.90 thusfar on back of strong market. What's next? I suspect consolidation which might hold below R1 at 32.50 (50% rebound of yestyerdays' loss) and than another leg down.
Meanwhile, UNTD mngt keeps exercising their stock options. Who will win the "getting-out" race, insiders or traders?
 

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bgold

Established member
532 5
Since previous post UNTD dipped below $25! And, itsCEO didn't like that. See article.

Ridgeland, MS, OCT 20, 2003 (EventX/Knobias.com via COMTEX) --United Online, Inc (UNTD) shares are moving higher in premarket trading after the company was included in the latest edition of Barron's. Relating to the company's recent share price, the article said that "the steep slide seems overdone." According to the article, UNTD's shares have been hurt by a series of news items regarding more aggressive price moves by rival Internet service providers. UNTD CEO commented+ in the article; "We've lost $700M in market cap on three ridiculous announcements. I've told my staff not to confuse the stock with the business. All we can do is continue to do what we're doing. It's grossly irrational. We've taken an unbelievable hit for absolutely no good reason. "

I don't want to sound like an arch bear but doesn't it sound familiar? At $25 UNTD was still trading at July03 levels (eg 3 months ago!). Did UNTD go thru a complete overhaul in past 3 months or was it completely underrated after a run from $1.70 to $25? Well, I don't know but I don't like unsubstantiated claims from insiders who happen to be selling themselves. Since the barron's article, momentum is back in the stock and todays' high was around $29.5. The falling window at $29.71 has (almost)been filled!
Considering the nature of this rally, I would not be surprised if this resistance will hold.
Sell ATM $29.10, Stop = close > $29.71; ST target = $25 (last week's gap & bull engulf 24June); LT target < $20 hammer dd 21May

Good luck
 

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bgold

Established member
532 5
Stopped out on close at 30.51 for a loss of 1.41. Unlucky? I underestimated the phenomenal momentum that can build in this stock. Another mistake was that 29.4 is 25% correction of recent decline. I think UNTD will not rally beyond 34.1 (50%) for bears to get back in control.
NB TA indicators such as Momentum, ROC, RSI, Money flow still point to further weakness.
Recommendation: Go short at first signs of relative weakness!
 
 
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