Internet HOLDRS (AMEX: HHH) Takes a Hit Says Market Timer Frank Kollar

May 6, 2008 (FinancialWire) (By Frank Kollar)

Shares of the Internet HOLDRS (AMEX: HHH) ETF sold off Monday, May 5, on news that Microsoft Corp (NASDAQ: MSFT) was withdrawing its bid for Yahoo! Inc (NASDAQ: YHOO).

Not to get into the deal between these two internet powerhouses, but Internet HOLDRS declined, intra-day, to $54.16 a share. This may be about as low as it will go, setting up a potential buy for this actively traded ETF.

$53.35 is the 61.8% retracement for the March 17 to May 2 run-up in share prices, while $53.35 is also the 50% retracement for the entire February 1 to May 2 advance, from the panic lows on January 23 and January 31. This means there are intersecting support levels for Internet HOLDRS just below Monday’s lows.

It is unlikely prices will decline lower than $53.35 without a reversal. Monday’s intra-day lows may have come close enough to be the final lows. If Internet HOLDRS rallies on Tuesday, look for higher highs in coming weeks.

The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy has a position in Internet HOLDRS.

Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.

Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.