The Play Of The Day
10-25-99 08:50 EST
Good Morning Stock Fans!
Today's Play of The Day is: Covad Communications (NASDAQ:COVD)
This "Cable Guy!" (in the area of high speed access to the Internet DSL) has been trending higher of late. With buying volume up about 20% ahead of normal it is easily seen here that there have been more buyers then sellers for over a week now as the stock has found a nice trading range over the last week and increased its share price.
It just recently has been given a contract by Fujitsu Networks Services to install its network equipment at more than 40 new hub sites. The hubs will handle high speed access services, witch connect home and business users to the Internet, and to corporate local area networks.
With this new contract it would seem that (NASDAQ:COVD) would only do a bit of retracing off its current share price and then go higher from there. It has had many rumors surrounding it of late that shows it might be in the market for (NASDAQ:NPNT) (watch that stock as well today. ) (NASDAQ:COVD) with the volume the way it has been in such a hot area of business "Cable Guy!" it is always on the radar screen of the big boys like an AT&T and an AOL as a possible take over target.
Buy Area: $43.93750-$44.50
Sell Stop: $39.75
BONUS PLAY: Ramp Networks (NASDAQ:RAMP)
The shares in Ramp Networks (NASDAQ) were more then cut in half Friday after one of the fastest-growing providers of Internet-access products to small businesses said its third-quarter loss widened.
At one point (NASDAQ:RAMP) dropped as low as $9.8750, an all-time low since its initial public offering at $11.00 a share in June. (NASDAQ:RAMP) in trading of 6.1 million shares traded almost twice the three-month daily average.
Ramp Networks said Thursday its third-quarter loss widened to $3.6 million, or 17 cents a share, from a loss of $3.1 million, or 78 cents, in the year-ago period.
Ramp Networks (NASDAQ:RAMP) offers a very unique product for $350.00 to $1,500.00, a customer gets a VCR-sized box crammed with electronics and modems that can serve as many as 25 users. (NASDAQ:RAMP) WebRamp's proprietary software lets the PCs on an office's network connect to the Internet for data, voice and fax traffic.
Taking everything above into account from Thursday and Friday (NASDAQ:RAMP) looks to me like it was way oversold on Friday. Sure its losses widened. However I would like to point in the following reasons that (NASDAQ:RAMP) should trade to the upside from here.
1.) This stock is in a very unique and fast growing sector. In order to offer what it does it must first be aware of growth right now and earnings will come. The adage "build it and they will come" (NASDAQ:RAMP) is doing a great job of building it.
2.) Come next quarter the earnings estimates will be lessened for (NASDAQ:RAMP) this in turn will give it a great chance to be next quarter estimates.
3.) It is in an extremely hot are that drove it stock as high as $30.00 plus in late June 99.
4.) Much less risk here then reward with the sellers now out when the stock dropped to where many said it couldn't under $10.00. It bounced hard under 10.00 and found it way back up and over that number very fast.
5.) Net stocks are supposed to loose money.
6.) (NASDAQ:RAMP) found its way higher in NASDAQ market that was selling off near the close. Very positive going into today.
7.) (NASDAQ:RAMP) trades higher in pre market today.
Taking all that in to account (NASDAQ:RAMP) seems like a perfect buy today. Whether the plan is to hold it for the next 90 days or to look to make a point or two over the next 3 days
Buy Area: $10.25-$10.543750
Sell Stop: $9.75
TARGET: $11.50-$12.50 (perhaps today)
STOCK TO WATCH: (NASDAQ:DALN)
On Friday this stock "gaped up " on no news that I could find. I include it today as it look to have a perfect are to buy it at about $20.00 a share. The fact that it went up Friday on no news and on less volume may be a sign for higher share prices to come. In order for that to happen however the stock on less volume again should fall back today to about $20.00 and make its move from there higher.
Have a great day!
More to come...