NEW YORK (TheStreet) -- It's been 14 years since the Internet bubble popped in the first quarter of 2000. Some say the markets make the same mistakes over and over again. It appears 2014 is starting to resemble the patterns of 2000.
In my first post of 2014, Stocks Begin 2014 With Inflating Bubbles I predicted the major equity averages would decline to their 200-day simple moving averages at some point in 2014. Five out of six Internet stocks I profile here traded at or below their 200-day SMAs after setting new all time highs in the first quarter.
We crunched the numbers to help you decide if and when to invest. Here are the six profiles, and today's "Crunching the Numbers" tables follow.
Amazon.com (AMZN) ($317.76) is down 22.1% since setting its all-time intraday high at $408.06 on Jan. 22. The stock first tested its 200-day SMA at $340.20 on March 27 and traded as low as $313.13. The weekly chart is negative with its five-week MMA at $346.71. An annual value level is $259.67 with an annual pivot at $334.95, which has an 85% chance of being retested at some point in 2014.
Facebook (FB) ($56.95) is down 21.5% since setting its all-time intraday high at $72.59 on March 11. The stock is still above its 200-day SMA at $49.53 which is the downside risk as I do not show a value level at this time. As a recent IPO we do not have enough price history to have quarterly, semiannual and annual levels in our proprietary analytics. The weekly chart is negative with its five-week MMA at $61.57 which is the first upside given an oversold condition on its daily chart.
Netflix (NFLX) ($338.00) is down 26.2% since setting its all-time intraday high at $458.00 on March 6. Bulls on the stock had an opportunity to buy the stock at its 200-day SMA at $333.85 on Monday as the stock slipped to as low as $331.11 staying above our quarterly and semiannual value levels at $328.81 and $328.21. The weekly chart is negative with the five-week MMA at $380.17.
Netease (NTES) ($64.70) is down 23.3% since setting its all-time intraday high at $84.35 on Jan. 9. The stock set its 2014 intraday low at $62.92 on March 20 then rebounded to a failed test of its 200-day SMA at $69.73 on March 31 through April 2. The weekly chart is negative but oversold with the five-week MMA at $67.73. Weekly and semiannual value levels are $63.09 and $62.28 with quarterly and semiannual risky levels at $66.63 and $68.95. Above is a monthly risky level at $78.51.
Pandora (P) ($26.99) is down 33.3% since setting its all-time intraday high at $40.44 on March 5. The stock closed Monday just below its 200-day SMA at $27.13 trading as low as $25.83 but opened above the 200-day this morning as the daily chart is oversold. The weekly chart is negative with its five-week MMA at $31.62. As a recent IPO we do not have enough price history to have quarterly, semiannual and annual levels in our proprietary analytics. Our quarterly pivot at $28.89 should be a magnet.
Yelp (YELP) ($66.00) is down 35.1% since setting its all-time intraday high at $101.75 on March 5. The stock closed Monday just below its 200-day SMA at $66.13 trading as low as $63.70 but opened above the 200-day this morning as the daily chart is oversold. The weekly chart is negative with its five-week MMA at $77.61. As a recent IPO we do not have enough price history to have quarterly, semiannual and annual levels in our proprietary analytics.
Crunching the Numbers with Richard Suttmeier: Moving Averages & Stochastics
This table provides the technical status for the stocks profiled in today's report.
There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.
The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with readings from Oversold, Rising, Overbought, Declining or Flat.
Interpretations: (stocks below a moving average listed in Red are below that moving average)
Five-Week Modified Moving Average (MMA) is one of two indicators that define whether or not a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.
A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.
A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.
A stock with a neutral technical rating has a profile that is not positive or negative.
The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance and as a "reversion to the mean" over a rolling three to five year horizon. (even Apple declined to its 200-week SMA in June 2013)
The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three to five day horizon and vice versa.
The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.
The 200-Day Simple Moving Average is another technical support or resistance and I consider this level as a shorter-term "reversion to the mean" over a rolling six to 12 month horizon. (even Apple tested or crossed its 200-day SMA in nine of the last 10 years)
Crunching the Numbers with Richard Suttmeier: Earnings & Where to Buy & Where to Sell
This table presents the levels at which to buy on weakness and where to sell on strength.
EPS Date is the day the company reports their quarterly results.
EPS Estimate is the earnings per share estimate from Wall Street analysts.
Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.
Investors who wish to buy a stock should use a good-until-canceled GTC limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.
At the time of publication the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff