The Play Of The Day
April 19, 2000
08:22 AM EST
Good Morning Stock Fans!
NASDAQ MARKET OUTLOOK: "NASDAQ 3,800.00 Yesterday... Why Not The Panic for Longs that 3,200.00 was for SHORTS less then 2 Days Ago?"
Yesterday the Tech heavy NASDAQ rocked higher as it shot out of the gate on Monday's record momentum as it soared another 200 plus blowing away yesterday's record before the ink in the record book had dried! The NASDAQ after falling from 4446.89 less then 10 days ago on April 10, 2000, to by Friday drop to under 3,400.00 and then on Monday open just over 3200 at 3227.00 has now adding on yesterday's gains of 254.54 and Monday's 209.00 plus the $Compx has no risen over 450.00 points in less then 2 days after losing 1,219.00 points in less then 6 trading days.
What sticks out to me on the NASDAQ is quite simple we go back to that supply vs demand issue. The NASDAQ truly was oversold at 3227.00 it was even over sold at 3300, and even perhaps 3400 and lets add on 100 more and say 3,500.00. However the Key number I looks at is Friday's bounce off 3375.00 low on heavy selling, and its rise back to 3510.00. It did indeed break 3500.00 Yes, a Key number that many look at. However the NASDAQ this past Friday went all the way back from 3510.00 to under 3321.00 as the index had even more selling. The move from 3510 to 3265.00 was 189.00 points. As the NASDAQ hit its high yesterday at 3794.00 it was about 200 points off 4,000. If you add in Monday's low of 3227.00 to that range you get 227.00 points. Take yesterday's high of 3794.00 and add 227 points to it you indeed get a move over 4,000.00. Why do I do this? Well, to create a trading range. It seems the NASDAQ is over bought here at 3793.00 as badly as it was oversold at 3227.00.
So the question to ask is just where does the NASDAQ have more buyers then sellers? Is it over 3,500.00? To best answer this let's now add in the time factor on the NASDAQ. Have Key Index Stocks on the NASDAQ for the most part posted earnings over the last 6 months that would indicate good growth? Yes, they have. So then looking at the low of 3,227.00 on April 17, 2000, and looking at the low the NASDAQ just about 6 months ago as it sat at 2,997.00. We can deduct that the Index based on inflation all the key indicating reports, and the interest rate increases add in is indeed worth 230.00 points more 6 months later. Right? So then how can the NASDAQ after adding on 230.00 solid points in 6 month add on 2 times that in 2 days? The answer is quite simple it can't!
If we then agree the NASDAQ has more buyers then seller under 3,500.00 to perhaps 3,321.00 say the middle an where a double bottom, and also a close in April exists of that key number I have been talking about for 3 days now. 3321.00. It is this number one that we are 472.00 points off of that has to be tested in the next 5 days or so to evaluate the NASDAQ real value. The range from 3,500 to 3321.00 is half this range and 3,500.00 to 3793.00 yesterdays close is the other half. Therefore we can really only deduct that the NASDAQ is currently way over bought and like it exploded off of 3227.00 on Monday it should fall quite hard off of yesterday's close at 3793.00. The ranges set up well the volume indicates over the past few days the same as the NASDAQ gained about 50.00 more points on 1/3 less the volume it had just 1 day earlier. With the Index sitting here it is way ahead of itself, as the Market technicians looked to have shorted it again. See the key to remember is in order to take an index range lower with 2 sides in a range being present then you must take it higher. To short the index rising on less volume 3,500.00 to 3793.00 a total of 293 points was done to set up the NASDAQ to test 3,321.00. About the same amount down if you add in Friday's bounce back to 3,510.00 as the number.
So in light of all this information the NASDAQ is defiantly in major Short sell territory, except for stocks such as APPL, or QCOM reporting good numbers those stock should hold up somewhat better. With a lack of buyers since 3,500.00 as volume would indicate the NASDAQ can slide in a hurry as Market technicians add to the supply of stock dropping its value. The slide once again could be fast and swift. What amazes me most is many of the chats and message boards are calling for 5,000 again. We must all remember that the NASDAQ was trying to hold 3,200.00 less the 2 days ago. Now its about to break 3,800.00. Well, snit that interesting that once again you all should see 3,800.00 being long is just as bad as 3,200.00 being short was less then 2 days ago!
Today's "Play of The Day!" is: (NASDAQ:APPL)
If any CEO has the right name in the Tech stock it certainly is Steve Jobs the CEO of APPL. He has done one heck of a JOB! He took over APPL as the stock had been crushed worse then the likes of AMZN off its high and rebuilt it as in less then 3 year a stock that was trading at 20.00 less then the likes of BKS at the time. Now is trading at a multiple adding in splits that is 4 times the likes of BKS. Wow The reason I use BKS is a broker I had in the past got me onto BKS in light of BNBN IPO. I had to sell APPL to get it. What a mistake as time has told that tail very well.
APPL will report it's number today on close and it looks to be yet another blow out Quarter. The only question is what will APPL board of Director give Jobs this time. He already has a Jet worth 40 mill plus from last Quater explosion on growth. Well, perhaps Jobs will get something along with all his shareholders that believed in him to the likes of He will get double his stock in APPL announcing a split as the stock true was over 140.00 ahead of July's sell off but only went as low as 115.00 in the turmoil. It added on yesterday and found 125.00 plus and looks to pull back test 121.00 and then about 2 hours into numbers APPL should run and run nicely. APPL 's teacher is truly Jobs. His pupils as I will be one of them by days end hope that brining the teacher an AAPL today does indeed get us a split! APPL announces that split it could be right back to 140.00 by the first day we trade after Easter 2,000!
KEY INDICATORS: APPL
Buy Area: $121.00-$123.00
Sell Stop: $114.00
Long Term Buy APPL: Hold for 5 year 5 times investment atleast!
10 DAY TARGET: $135.00 and a split to $140.00 plus
Type of Trade: (10 day target Swing trade) Long Term buy - 5 year hold
Watch MACR and ADBE to run in sympathy off APPL!
RUN THE OPTIONS! AAPL
We like the APPL May 130.00's the best. Although they are out of the money we except a big Quarter for AAPL today.
Bonus Play: #2 Charles Schwab (NYSE:SCH)
SCH reported solid numbers this past week as it came in way over estimates as its numbers reflected the huge volume the NASDAQ saw in its trading from The end of October through March 1999 the end of SCH reporting Quarter. With that all in the bank SCH added on more then $7.50 in its range going all the way over $45.00. It has a nice gap that it filled in its 5 day trading graph off its 5 day low. It closed that yesterday but was unable to hold it as it needed to close at its high to do so. With that area filled and the market indicated lower SCH should open under $46.00 then sell off to about $43.00 maybe lose $43.00 then bounce and on NITE blow out numbers make a move over the next 3 -5 trading days to a number it had broken rather soundly ahead of April's NASDAQ sell off $50.00!
Buy Area: $41.93750-42.25
Sell Stop: $39.93750
Time Frame: 4 days
Type of Trade: Swing Trade
STOCK TO PLAY IN THIS SECTOR
NITE, EGRP, AMTD, SWS, SIEB, JBOH, NDB, TWRS, MER
Bonus Play #2: Atmel Corporation (NasdaqNM:ATML)
Atmel Corporation (NASDAQ:ATML) is a global semiconductor company that designs, develops, manufactures and sells a wide range of highly integrated semiconductor integrated circuit products. The Company has been instrumental in developing and commercializing nonvolatile memory, or memory that continues to store information after power is turned off. Atmel offers complex system-on-a-chip solutions for a broad array of markets by combining its leading edge complementary metal oxide semiconductor, or CMOS, bipolar CMOS, or BiCMOS, and silicon geranium, or SiGe, process technologies with system level building blocks such as microcontrollers, digital signal processors, or DSPs, and analog and nonvolatile memory. The Company manufactures more than 90% of its products in its own wafer fabrication facilities, or fabs.
Earnings expected on this hot chip stock today after the close. That gives us one more day to 'play the hype'. Watch for this one to dip a bit on open, that is where we will enter. Upside resistance is found at 58.50. If it can break that level on good vol, then it could make a new high over 62. ATML will need to do 10 million shares again to reach that level. Watch for volume to build and for ATML to track equal to the Naz. Options have been very hot and volatile. If you chose to play the options, stay close to the money and use sell stops just as you would a stock.
KEY INDICATORS: AMTL
Buy Area: $52.50 - $53.25
Sell Stop: $49.00
Time Frame: 1-2 Days
Type of Trade: Swing Trade
RUN THE OPTIONS: AMTL
The April $55.00 Call, Last Ask $2.6250
Suggested entry 2. Target by end of day $5.00
STOCKS ON OUR SCREENS TODAY:
NITE- Blew away Numbers. It is way undervalued. It should be over $50.00 right now!
INTC- Was way ahead of number, but said it sees a tight product supply for the reamining fo the year. The stock lost 6 in after ours after seeing $131.00 but not breaking it $115.00 is now in line
AOL- $0.09 cents was the number they earned $0.11
IBM- Warns of continued slowing in Y2K
JDSU- It should now make that move back to mid 80's and perhaps lower
YHOO- It misses 131.00 It should now as range indicates test that $111.00 number
TER- Nice numbers all the brokers come out and upgrade it. The Q meeting was solid it should run after an up open
DCLK- $50.8750 looks to be test area.
ORCL- It should test $75.00 and looks to lose it. Then comes $70.00 and lower.
CSCO- It could re test $58.00 soon
DELL- 50.00 was a big number $45.00 is good support $47.3750 may come soon
NTRX- It got ahead of itself yesterday down it should go today back to $9.00
Have a great day!
More to come.....
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