The Play Of The Day
March 29, 2000
09:03 AM EST.
TODAY'S NASDAQ MARKET OUTLOOK:
Stock Fans, We continue to use caution and were SHORT into the NASDAQ close yesterday. What we don't like about this maket is it sits at the top of the ecnomic cycle, and lacks interest in its VOLUME as in concern to BUYERS. What we also fear is that this Monday, a day that has seen heavy volume on the NASDAQ most of the year was the NASDAQ lowest volume day of the year. What this tells us is looking at stock more in a simplified form we consult the very model of capitalism and defintion of a market upon it. The definition states that a market has varried interest in realtion to what a product worth is. It must have buyers of this product that see its future as increasing in the form of gains. It also must have sellers upon it that see the value of the same procut as less or doesn't benefit. When sellers see no reason to sell (as the NASDAQ is showing us) and buyers feel prices are high at the top of an enconmoc cycle, (as the NASDAQ is currently) the market as its defintion plainly states must drop its valule in oder to find a surplus of buyers. If this doesn't happen the market could staggnate, and if it continues to happen for longer then just short term it could cause an extreme selloff as the holders of stock no longer see value in the market (meaning that further gains look to be a small posabiltiy in the near furure) and refuse to hold any longer and seem to follow a pattern of follow the leader as everyone sells at just about the same time.
In essence what we are saying is that like a stock running on momentum. If the NASDAQ runs up then has no buyers, and lacks sellers the volume can drop so much that like a momentum stock does as it has news , or something that spurrs on buyers in huge masses to trade millions of share (much more then ussual) that same stock could trade less then 60,000 shares, (extremely low volume) just a few days later. We must have buyers looking for gains, and sellers seeing further of much less probable. With out this we have a stale mate and nobody make money and the economic cyle ceases to exist.
With that in mind as in realtion to the NASDAQ market since it is near impossible for the market to cease exsistence history as always stated in the past that the market value must drop. Therefore we will not look to buy into this market long until to things take place.
1.)We see MORE VOLUME pushing up stocks to make them have higher market caps, and LESS VOLUME having them lose value on their market caps. Until that happens we will not buy in Long for any amount of time longer then a small bounce.
2.) Until we see stock prices drop atleast 5-10% off all time highs an area that with some amount of time passing may push stock higher. We do know that from Monday , and yesterday's market action that the market is telling us we must fall back to go higher.
Today's Play of The Day is: Geo Works (NASDAQ:GWRX)
This stock has bounced off the $36.00 area quite a few times over the last 2 months. It has gotten stuck on the wat up at about 55.00 as the top, and the bottom as stated is most often 36.00. It could lose 36.00 , but it looks very good to hold 32.00 in most any market. We will look to by more of (NASDAQ:GWRX) (averaging down) in to a drop as our risk looks to be minimal in any mareket as this stock even in a NASDAQ correction has held the $32.00 area. if it loses $32.00 a place it bounced hard off off as recently as March 21, 2000 we will not play GWRX until it breaks $32.00 again as it could go down abruptly if it loses that level.
KEY INDICATORS: GWRX
Buy Area: $36.75-$35.1250
Sell Stop: $31.6250
Time Frame: 2 -3 days
Type of Trade: Swing Trade
Bonus Play #1 (SHORT)Williams Communications Group, Inc. (NYSE: WCG)
Williams Communications Group, Inc. owns or leases, operates and is extending a nationwide fiber optic network focused on providing voice, data, Internet and video services to communications service providers. The Company also sells, installs and maintains communications equipment and network services that address the comprehensive voice and data needs of organizations of all sizes. Its three business units are the network unit, the communications equipment solutions unit, and the strategic investments unit. The Company also enters into strategic alliances with communications companies to secure long-term, high-capacity commitments for traffic on the Williams network and to enhance its service offerings.
Stock Fans, CNBC let the cat out of the bag on Williams. Williams has all of those cool commercials saying how they can push a camel through a needle. Well they will need some magic soon, because they have 395 million shares coming out of lockup today. That will only take 369 trading days to absorb those new shares. Economics 101..Supply vs. Demand. Lots of supply= red light specials! Now here is the kicker. According to my research Williams sales increased 4th quarter by 3% and losses were $.16 vs. $.20. The fact is that this stock has increased in price from its IPO price of $27.00 to yesterdays close of $46.38. Or an increase of approximately 72% in share price. So needless to say Williams closing price crossed below its 10 day moving average indicating a sell (or short).
KEY INDICATORS: WCG
Sell short: $46.00 to $47.50
TARGET: $45.075 to $40.375
Time Frame: 2 to 5 days
Type of Trade: Short Play
BONUS (Short) PLAY #2: Priceline.com, Inc. (NASDAQNM: PCLN)
Priceline.com Inc. has developed a type of e-commerce where customers enter prices they're willing to pay for products or services and then the Company contacts participating sellers to determine whether they can fulfill the offer. Priceline.com pioneered this type of electronic commerce, known as demand collection system. Using this concept, the Company collects consumer demand, in the form of individual customer offers guaranteed by a credit card, for a particular product or service at a price set by the customer. Priceline.com then either communicates that demand directly to participating sellers, or accesses participating sellers private databases to determine whether it can fulfill the customer's offer on the basis of the pricing information and rules established by the sellers.
Stock Fans, Priceline has had a tremendous run. Earnings are not due to May 5th. This is a chart and a trend play. Priceline failed to breakout from its current run. Its closing price closed below its 10 day moving average. Stock fans, its time to name our own price! Cover Priceline in the $70!
KEY INDICATORS: PCLN
Sell short: $86.25 to $87.25
TARGET: $81.94 to $72.75
Time Frame: 2 to 5 days
Type of Trade: Short Play
Bonus Play #3 LONG- ACTV, Inc (NASDAQ:IATV)
ACTV, Inc. (IATV) has developed patented and proprietary technologies, which the company calls Individualized Television and HyperTV. ACTV uses patented and proprietary software technologies to create unique programming for digital television and for television/Internet convergence applications. The company is launching regionally-based, individualized cable television networks with programming provided through its strategic alliance with FOX Sports Net. With HyperTV, viewers can switch back and forth between various picture options such as instant replay, isolated views, and statistical information. We are hearing rumors of good news for the firm. Shares are up more than 45 percent in the past five weeks and various technical parameters suggest further upside going forward. Brokers recommend the stock with two "strong buys" and four "buys". Analysts expect earnings growth of about 30 percent this quarter. Over the past 52 weeks, IATV shares have traded in the range $7 9/16 to $51 3/4.
KEY INIDCATORS: IATV
Buy Area: $36.75 - 37.75
Sell Stop: $34.94
Time Frame: today
Type of Trade: daytrade
STOCKS ON OUR SCREENS TODAY:
SMSI- Camon near end of close keep an eye on it today.
ONVI- it looks like a buy under $30.00
ESHR- Closed at day high worth watching today.
VNTR- Really hammered it may bounce today.
ATHM- It shouldn,t break $42.00 we will look to short it there.
ORCL- It has to trade more shares to atrract buyers volume is sad. We really think further downside is coming.
CSCO- Again low volume. With no buyers stock is to high has to drop
QCOM- It cam on yesterday. We don't see it breaking $160.00
LPTHA- It should continue to fall
SCII- Antoher short we have done well on so far.
INTC- We don't see it breaking $140.00 today
MSFT- resistence is $108.00 and then $111.00 both areas are hard for MSFT to break anytime ahead of settlement.
VRTL- It may bounce down another $1.00 or so.
YHOO- If it loses 195.00 it could see $165 soon
EXDS- It has support at $138.00-$137.00 area
Have a great Day!
SJ and hes Team of Traders
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