The Play Of The Day

May 17, 2000
08:50 AM EST.

Good Morning Stock Fans!


The NASDAQ futures are down after it closed at 3720.00 or so yesterday. What the NASDAQ lacked was volume after the FED increased rates .50. The FED went on to say more rate hikes were in store. If the market had even .50 built in the bond market is not showing it this AM as it sets itself up to price in more. The NASDAQ as I said for 2 days now has seen lower volume take it higher as crazy ranges were created in NASDAQ stocks to the upside. I admit being short the past few days was not the right call. However refusing to give way to a market that didn't follow common sense higher on more volume and buyers. I stayed short and watched the NASDAQ rally yesterday ahead of the FED on more volume but go nowhere as KEY NASDAQ stocks traded in tight ranges on more volume. This action was exactly the opposite of how they traded on Monday as they went up extremely fast on low volume. The Market Makers on the NASDAQ have a big advantage in that they can hold stock for days and wait for the prices to come their way. Yesterday following the FED the NASDAQ wasn't able to do to KEY things. Trade higher and trade on more volume. The question I asked myself is if Goldman is a Market Maker in a stock and they are obviously short, are the fund managers at Goldman going buy stock for long term? Offcourse not. It looks very much like now over the next 2 days the NASDAQ should go lower and find and area where long term investors are willing to buy stock again. The number I look at is the 5 day low on the NASDAQ of 3,367.00 They refused to buy the NASDAQ there ahead of the FED last week as the volume showed plainly money awaited on the sidelines. So the question is will they buy stock this time there. Its hard to believe the NASDAQ went of this Monday's low of 3,445.00 to go as high as 3,729.00 yesterday. The move was over 280 points higher. The NASDAQ can lose 300 in a hurry as stocks sell off faster then they go up. The KEY is where will the big volume come in. The NASDAQ based on its ranges and May Option Puts could very well go right to 3221.00 the 200 day low. I will watch the VOLUME closely today and look for short term bounces to go long. However I must still stay with my overall sentiment the NASDAQ looks very much like it is ready to sell off and find a base.

Today's Play of The Day Lycos (NASDAQ:LCOS)

LCOS was bought yesterday by Terra Networks. The traders that ran up LCOS ahead of that news released about 30 mins after yesterday's trading will be quick to book profits on LCOS as they sell it off after a huge run up from under 50.00 to over 70.00. I will look for LCOS to sell off a bit faster then most NASDAQ stocks today because of its steep run up. However LCOS should have more long term buyers that believe in the deal and getting TRRA stock later this year. I like LCOS to have a nice bounce later today ( perhaps the second bounce ) at $64.50-$62.25. The premium that Terra Networks (NASDAQ:TRRA) being over $90.00 a share makes LCOS a steal there. That is a bargain there on the price as LCOS at those level with a $58.00 stop should be a great long term holder.

Buy Area: $64.50-$62.25
Sell Stop: $58.00
2 DAY TARGET: $71.50-$72.25
2 Month TARGET: $81.00-$82.00


BONUS PLAY #1 eBay, Inc.(Nasdaq: EBAY)

eBay, Inc. offers a person-to-person Internet trading community. The Company pioneered online person-to-person trading by developing a Web-based community in which buyers and sellers are brought together in an auction format to trade personal items. The eBay service permits sellers to list items for sale, buyers to bid on items of interest, and all eBay users to browse through listed items in a fully automated, topically arranged service that is available online around the clock. The eBay community includes more than two million registered users, who use eBay as a place to socialize, discuss topics of common interest and ultimately to conduct business in an online trading environment. Through eBay, individuals can buy and sell items in more than 1,000 categories including collectibles, antiques, sports memorabilia, computers, toys, beanie babies, dolls, figures, coins, stamps, books, magazines, music, pottery, glass, photography, electronics, jewelry and gemstones.

Stock Fans, eBay is on my fastest growing list. It sports a 69% growth rate. eBay has been rumored as a take over target. Now that is not the reason for posting this play. eBay's closing price closed above its 10 day moving average on increasing volume and it moved up in overnight accumulation ratings. It is also growing earnings, has 0% debt and 2000 earnings estimates look to grow by 150%. Now as a longer term hold eBay looks pretty solid. If the price rebounds to the $200.00 level by year end then you will be looking at a 49% return on your money. The numbers below are for the short term players, but a 49% return doesn't sound to shabby considering year end is only 6 1/2 months away. Buying some eBay on the morning dip and adding on weakness.

Buy Area:$129.00 to $131.00
TARGET:$144.50 - $150.65
Time Frame: 2 to 6 days
Type of Trade: Swing Trade
Daytrade for 1.50 - 4.00 point scalps. Avg. price range $11.03

BONUS PLAY # 2 CMGI Inc. (Nasdaq: CMGI)

CMGI Inc. develops and operates Internet and fulfillment services companies. The Company's majority-owned Internet subsidiaries include Activerse Inc., Adsmart Corporation, Blaxxun Interactive, Inc., CMGI Solutions, Inc., Engage Technologies, Inc., iCAST Corporation, Magnitude Network, Inc.,, Nascent Technologies, Inc., NaviNet, Inc., NaviSite, Inc., Netwright, LLC and ZineZone Corporation. The Company provides fulfillment services through three wholly owned subsidiaries, SalesLink Corporation, InSolutions Incorporated and On-Demand Solutions, Inc. SalesLink's services are also provided through its subsidiary, Pacific Direct Marketing Corporation.

Stock Fans, CMGI looks to be breaking out of a 4 week base. We all know that CMGI is the leading incubator. We also know that they are sitting on many Companies waiting to take them public. Alta Vista is on hold for now, but with the sale of Lycos almost a sure thing, it will soon be getting a lot of attention. I am looking at a longer term hold here. Now for a little math. CMGI's 52 week high was on 1/3/00. It closed at $163.00. Now if you believe this will bounce before the end of the year, and that the closing price will at least challenge the $100.00 level, then you will be looking at a 55% return on your money. Golf anyone? I will buy 1/2 of my normal position size on the morning dip and add on weakness if available.

Buy Area:$61.00 to $62.50
TARGET:$68.75 to $71.875
Time Frame: 2 to 5 days
Type of Trade: Swing Trade
Daytrade for 1-2 point scalps. Avg. daily price range $5.73
Longer term target (before year end) minimum of $100 for a 50% ROI


The usual NASDAQ suspects are on our screens again today. We will look for bounces inside what looks to be sell off ranges. Look for EMAIL updates to all Premuim members today as the NASDAQ gets more into motion following the first 60 mins of trading today.

Have a great day !

More to come...

Stock Jock!

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