The Play Of The Day
May 16, 2000
08:49 AM EST.
Good Morning Stock Fans!
Breaking News: CPI unchanged:
NASDAQ OUTLOOK TODAY: "All Eyes Now on THE FED!"
The NASDAQ on the first day of May went as high as 3,982.00. It closed yesterday at 3607.00. The NASDAQ'S 30 day low, and its 200 day low still sits at 3,227.00. If we ask the question is it closer to its high or it low? Well, as the market has done so many times the answer is neither! 3,982.00 - 3,607.00 = 375.00 3,607.00- 375.00 = 3,232.00. The NASDAQ is about = to its high and to its low. What is even more interesting is today's CPI report showed no change? So it was benign in nature. However no change from April 14, 2000, big increase of an expected .05 and a .07 increase was shocker. It caused the NASDAQ to drop from 3,615.00 to as low as 3,227.00 the low that day and the 200 day low on the NASDAQ. The CPI having no change today doesn't that mean that things are like they were on April 14, 2000? If that is the case then the NASDAQ would have to retrace as it did on April 14, 2000, the day of the April CPI.
What really struck me as strange. Is the NASDAQ since April 14, 2000, has gone nowhere. 3615.00 the high on April 14, 2000, and the close and high yesterday of 3,607.00 are so close it doesn't even make sense to debate they are not exactly the same?
SJ's Prediction :
After a tense day yesterday on the NASDAQ a range of 162.00 high to low on the lowest volume of the year! - and a rocket close-! I went back to the drawing board so to speak and looked over ton of data. What I found was the NASDAQ has traded in much wider ranges on much less volume 2 previous times in April , and May 2,000. Both days that I looked at in comparison showed that the NASDAQ was heavily shorted and the wide ranges on low volume set up large pockets of higher prices not supported by volume in other words BUYERS! The low volume and tight ranges set up a change in direction as both days I looked at the NASDAQ went on the next 2 days to see deep sell offs!
Yesterday's action was insane for a realist like myself who on BIG VOLUME is as bullish as there is when the buyers line up send those prices flying. However yesterday couldn't be farther from the truth. The range on the NASDAQ and its stock was to put it plainly CRAZY! To see a JDSU bottom out yesterday on 3 mill shares then see it a stock on the NASDAQ that normally takes 22 mill shares to move it 7.00 moved yesterday all higher 9 plus on 9 million shares! Let's put it this way. JDSU doesn't move 48 points on 48 million!
What I look for with the NASDAQ in a shorted state can only be one thing. The FED! It would seem now and CNBC's Mark Hans as well as the "Briefcase Indicator" are already saying .25 increase, and then the FED says it will not back down and will keep increasing rates to ward off inflation.
The way I see it the NASDAQ has 2 problems rallying off its current close of 3607.00 to much higher then 75.00 more points today tops! Momentum money as well as Shorted stock can't be in front of long term money and send stocks higher. Number 2 The NASDAQ Market Makers who unloaded shares into yesterday's close for more yesterday would have to get those shares back for less. The only way that happens is for the NASDAQ shorted bubble to burst sending the NASDAQ faked moves higher yesterday back to earth washing out the momentum investors and setting up for the big volume bottom we look for. In short the NASDAQ looks very much like if it does go higher today ahead of the FED then the volume will not be anything like the volume it will get sending it lower. A .25 basis increase seems to be what would set up a test of the lows as the market will realize very quickly that more rate hikes are to come.
Today's Play of The Day THE FED!
SJ's Predicted FED Rate Increase:25 Strong Stance on future. Market pulls back tests 3,221.00
PLUS MEMBERS Look for EMAIL ALERTS as The NASDAQ changes on the FED later today!
SAGO'S RANGE PLAY'S AHEAD OF FED!
Today's "Play of The Day!" is: Flextronics International Limited (Nasdaq: FLEX)
Flextronics International Limited provides complete global manufacturing solutions by offering innovative engineering, advanced electronics manufacturing and logistical services. The Company's services are offered to original equipment manufacturers in the telecommunications, networking, computer, consumer electronics, and medical device industries. Flextronics' products and services are utilized in the manufacturing of modems, business telecommunication products, computer peripheral devices and pilot electronic organizers. Flextronics' services include product design, printed circuit board fabrication and assembly, materials procurement, inventory management, final assembly and test, packaging and distribution. The components, subassemblies and finished products manufactured incorporate advanced interconnect, miniaturization and packaging technologies such as surface mount, multi-chip modules, chip-on-board, ball grid array, and miniaturized gold plated PCB technologies.
Stock Fans, Flextronics is a stock we have played before. Flextronics was upgraded to strong buy on 5/8. Now we know that the broker took a position and then issued the upgrade. I like the stock for these reasons. One and foremost it is oversold. Stochastics and MACD look to be northbound (that's good). Volume over the last couple days has increased. Earnings, growth and sales show solid green increases. This stock has held very well considering the sell off. Short interest has decreased by 74%. Regardless of the Fed and CPI, I am looking and playing oversold stocks with the timing, volume and growth indicators in line!
Key Indicators: FLEX
Buy Area:$57.00 to $58.00
TARGET:$63.80 to $66.70
Time Frame: 2 to 4 days
Type of Trade: Swing Trade
Daytrade for 1.00 - 1.75 point scalps. Avg. price range $4.11
BONUS PLAY # 1 Emulex Corporation (Nasdaq: EMLX)
Emulex Corporation is a designer, developer, and supplier of a broad line of fibre channel host adapters, hubs, ASICs and software products that enhance access to, and storage of, electronic data and applications. The Company's products, which are based on internally developed ASIC technology and are deployable across a variety of heterogeneous network configurations and operating systems, support increasing volumes of stored data. The Company is also a supplier of some traditional networking products that include printer servers and network access products. Emulex sells its products worldwide to OEMs and end users, as well as through other distribution channels including value-added resellers, systems integrators, industrial distributors and resellers.
Monday May 15, 9:12 am Eastern Time
Emulex Teams With Microsoft and EMC At NetWorld + Interop 2000 - Business Wire - 9:12 am
COSTA MESA--Calif.--(BUSINESS WIRE)--May 15, 2000--Emulex Corporation (NASDAQ:EMLX - news), an industry leader in fibre channel products and technology, today announced that it teamed with Microsoft Corp. (NASDAQ:MSFT - news) and EMC Corporation (NYSE:EMC - news) to demonstrate a Storage Area Network (SAN) at the NetWorld + Interop 2000 conference held May 9-11, 2000 in Las Vegas, Nevada.
Stock Fans, Emulex falls into the oversold category as well. 75% off of its highs. It sports a growth rate of 107%. Earnings and sales the last 4 quarters have been off the charts. Volume over the last few sessions has been increasing. We have a nice base established over the last 4 weeks. The closing price crossed the 10 day moving average signaling the "Buy". Looking to buy winners Stock Fans at K-mart prices!
Key Indicators: EMLX
Buy Area:$54.00 to $54.75
TARGET:$60.23 to $62.96
Time Frame: 2 to 4 days
Type of Trade: Swing Trade
Daytrade for 1.50-2.00 point scalps. Avg. daily price range $6.19
STOCKS ON OUR SCREENS:
JDSU- it is 100 plus points ahead of NASDAQ. It loos to me like the range is 66% down to 33% up meaning the next 30 mill shares traded on JDSU should set up a 2.06 increase from 90.06 to a 12.54 point drop off 90.06. JDSU seems to be a great short here. I have said this before but it has to give back the rediculous move it made on low volume yesterday faster then it took it!
YHOO- 3982.00 YHOO 136.00 Here 389 points off 3892 YHOO 133.00 It still says to me YHOO is going get rocked much lower then 120.6250 yesterday's low!
EBAY- High costs to keep it brand name up is today's news. The chart says EBAY before it sees 133.00 sees under 100.00.
LCOS- Wrong on this one TRRA looks like it will buy it I will lick my wounds on the short i lost on Thanks Faver you dolt!
QCOM - Way ahead of NASDAQ like most stock are. I look for it to drop fast as the momentum money bails out.
Have a great day!
More to come...
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