The Play Of The Day
March 24, 2000
08:22 AM EST.
Good Morning Stock Fans!
NASDAQ OUTLOOK THE NEXT TWO TRADING DAYS: I believe that the NASDAQ opens today up and gaps its way very close to the 5,000 area. It looks as if the NASDAQ then before we have time to settle into our chairs and warm up our mouse's the NASDAQ is over 5,000 on much less volume as yesterdays strong up close on NASDAQ follows through, and the momentum created yesterday takes us over 5,000. I then like the NASDAQ to retrace back as it has often done of
late and fall back under 5,000 and then go into RED (negative) for the day. It is then that I see many investors seeing the NASDAQ index RED and sell off as the NASDAQ drops. Therefore I like the NASDAQ to fall back as Allen Greenspan's latest rate hike earlier this week appears to be laughed at thus far. If the market does as it has almost always done in the past it should correct itself and avoid worries of a .50 rate increase the next time the FED meets. I like a retrace today back to just under 4800 as the NASDAQ should on Monday take us back to 4540 30 day support. Again Stock Fans! I could be wrong on my prediction. If I am I feel it will not be because of lack of research as the market seems to be telling me it has topped at least for now...
Today's Play of The Day is: Oracle (NASDAQ:ORCL)
Stocks Fans, I am not going waste time today and explain to you what ORCL's business is as I am sure you all are plenty familiar with its business model as a NASDAQ big cap. Instead I am going use this space that I normally use for the explanation of what a company does to explain to you all using as many indicators as I can that I believe ORCL has either topped out already or tops out today.
Lets look at why I think that this is true. First ORCL has come from a low of $76.00 reached just 3 days ago on 3/21/2000 to as high as yesterday's high $88.00 on less volume. That is a move of $12.00 points in less then 3 days. Looking even closer at ORCL's trading volume over the last 3 days we see another indicator that says it has already topped or is very close to topping. If we look at the volume on ORCL on 3/21/2000 we see 25,888,801. Looking at the next day 3/22/2000 we see volume on ORCL of 26,150,100. Finally looking at yesterday's volume we see 24,839,400. Each day the last 3 days since its big move from $76.00 -$88.00. We see less volume. More often then not a good rule of thumb to use is a stock up on less volume is BEARISH. It says that the price is going up on less volume this is not the path a stock takes to keep those highs as more volume is what takes a stock higher as more people buy it. In this case the volume has decreased and further more taking into account ORCL 30 day average volume yesterday's 24,839,400 is under ORCL's 30 day average volume of 25, 401,900. Yes, that's right ORCL achieved an all time high yesterday on volume of less then its 30 day average volume. In fact ORCL could have very well been shorted since $77.00 3 days ago as it has risen on less volume each day to an all-time high this plainly shows that ORCL is due to for a drop in any market soon.
Again let's check those stock options as we know that it can tell us a great deal of what is happening with bigger investors out of the CNBC spotlight behind the scenes of ORCL's trading and indicate by showing us what could be coming shortly. Looking at the ORCL stock options on the put side (down) we see much more volume almost 3 to 1 on the ORCL April in the money option puts as we do on the in the money April option calls. What this information tells us most often is technicians or what we refer to in slang as market makers may be short on the stock as they load up on option puts for a drop upcoming.
Finally adding in the fact that ORCL yesterday on 4.1 million shares went form an open of $83.1250 to its day high of $88.00 an extremely wide margin on way way less volume. This information most often says that ORCL had plenty of investors and technicians selling ORCL short yesterday. Then taking the rest of ORCL 's volume yesterday of almost 25 mill. The fact that ORCL on more then 20.7 million shares couldn't break $88.00 says that ORCL could very well be being gathered up for a drop back to under yesterday's low of $82.56250.
Again Stock Fans, I may be dead wrong on shorting the NASDAQ today and shorting ORCL. If I am then it will not be because a lack of information supporting my prediction that the NASDAQ market and ORCL go lower today. Wrong or right the information provided here within this play will be excellent material to look at after today's trading ends. If I am right then we will all have known before today's bell why, and acting accordingly to our benefit. If I am wrong we can all go back and look at this play and see what didn't take place today that caused me to be wrong. Either way we will defiantly all learn something to relate back to this play to use in the future to help us make the right prediction next time the opportunity presents itself. However one last point in closing. History one of myfavorite indicators as it often repeats itself says I am probably right on ORCL today as I feel it see 80.00 again before it sees $91.3750.
KEY INDICATORS: ORCL
Sell Short Area: $88.00-$87.6250
Cover for Loss: $91.3750
TARGET today: $81.8750
2 DAY TARGET: $76.00-$77.43750
Type of Trade: Swing Trade
KEY TO PLAY: I will be looking for volume today of
35 mill plus. An increase in volume over ORCL current
30 day average volume of 41%
"RUN THE OPTIONS!"
The Stock Option Calls I like best on today's ORCL short
play are the ORCL April 18, 2000 $80.00 Option Puts.
(Symbol: ORY- PP) Target: ORCL $80.00
BONUS PLAY #1: Macromedia, Inc (NASDAQNM: MACR)
Macromedia, Inc. develops and distributes original technologies and innovative software tools, servers and services to a range of customers including developers, consumers and large corporate accounts. The Company's software products and technologies are focused on maximizing opportunities in three key areas: Web Publishing, Web Learning, and Shockwave.com. Macromedia's family of Web Publishing products works together as a complete solution to streamline Web workflow from concept to design, development to production. Macromedia's Attain Enterprise Learning System is an integrated enterprise-wide solution for managing the online learning process from planning, producing, administering, and delivering curricula, to tracking, storing, and reporting learner progress from any browser, anywhere in the world. Macromedia's new consumer business, shockwave.com, intends to release various products and services that form the basis of this business over the coming months.
Stock Fans, revisiting some old reliable friends. Most of these we have played like a fiddle. MACR is showing signs of heavy accumulation. The timing indicators look great for an entry. Earnings and sales have grown significantly each quarter last year. Looking to ride the Macromedia wave!
KEY INDICATORS: MACR
Buy: $87.50 to $88.25
TARGET: $97.07 to $101.48
Time Frame: 2 to 4 days
Type of Trade: Swing Play
BONUS PLAY #2: Geoworks Corporation (NASDAQNM: GWRX)
Geoworks Corporation is a provider of mobile e-commerce and information services, software and professional technical services. In addition, the Company offers complete project management and software engineering for complex projects. It offers information services, including advertising-sponsored content, to the growing universe of mobile devices. The Company has previously developed and marketed operating system and application software for the wireless device market, and many of its current service offerings are based on the technology it has developed
Stock Fans, dipping back in the same well on this one as well. We rode this one to the $50's before it backed off. With QCOM heating up, I am expecting this to ride along as well. The timing indicators look great.
KEY INDICATORS: GWRX
Buy: $37.50 to $38.25
TARGET: $42.08 to $44.00
Time Frame: 3 to 10 days
Type of Trade: Swing Play
STOCKS ON OUR SCREENS TODAY:
QQQ- NASDAQ index tracking stock you can short it on the up tick. I will do just that today on open
CSCO - We like a retrace back to $72.00 as a 100% increase in shares on its split has added more shorts to its float.
AOL- It again may lose 70's today and maybe even 69 but 68 is solid to hold as that is it break out range the last time in late Oct 1999 it went to 80's
ULTR- This stock is coming back nice. A market pullback shouldn't effect it much today.
RAMP- It looks like we sell this one on open
IFCI- looking for a gap up just short of $31.00 today then selling
XYBR- closed at high of the day current trading range $18.6250 -$22.00
NT- Looks solid to hold $133.00
GE-This one seems like it has run enough a pull back to $154.00 is in order
RNWK- Short play to
MTLK- Looks like it opens higher today finds $54.50 and sells off.
GO- We like a move back to $26.00-$27.00 in a matter of days on DIS power.
IPIX- It cam on late and held $40.00 we like 42 on open today then we sell
DLCK- Retrace back to $88.00 2 days
ISSI- A nice find off news of upgrade to Strong Buy and increased double price on news target of $40.00. It should hold $29.00 today
Have a great day!
More to come....
and BigPlayStocks.com Team of Pro Traders!