Runnin out of minutes big time

I wish I had more time this morning - but I don't - so this will be as quick as possible. One of The9.com's (NCTY) biggest competitors is getting nailed today. The name of the company is Netease and the symbol is (NTES). Here is the chart and the snapshot:




That folks - is what we call a GAP DOWN on major volume. Also getting killed this moring is Toll brothers (down 11%) - but I don't have time to post the chart and it is unrelated sector. Anyways - MotleyFool is out with a red alert on this one - buy NTES now - this is a great bargain, etc, etc. Maybe it, maybe it isn't - I haven't done the due diligence on NTES - but I will tell you this. In the NTES conference call yesterday they explicitly mentioned that their numbers and guidance was weaker due to increasing competition.

They also explicitly called this competition "World of Warcraft." That is the game that NCTY runs and I am making somewhat of a jump here and expecting better earnings for NCTY. The models that I have seen should put revenues around $30 M with EPS in the $0.35-0.45 range. I think that will be enough to move this one on Friday after earnings release is on Thursday night.

The good news for those like me who are optimistic is that NCTY is continuing to sell off in sympathy with the rest of the sector - down a little more than 1% today. I am going to continue to watch it and maybe. just maybe I can get in at high 16s or low 17s sometime on Wednesday or Thursday. I will be watching it - here is the chart:


That is the long and short of it. Well see what happens - hopefully broad market is weakening a bit here too - but it is unclear.

Regards,

BG