The Play Of The Day
May 18, 2000
08:55 AM EST.
Good Morning Stock Fans!
NASDAQ OUTLOOK TODAY:
The Futures on the NASDAQ were down more then 25.00 then popped up more then 15.00 as the huge surplus of sideline money mentioned by analysts then conveyed on CNBC seems to be waiting in limbo for a place to go. This action may create more of a pocket for NASDAQ Market Makers seemly doing all they can of late to get stock to drop and wash out momentum investors in order to find that sideline money. What the NASDAQ still lack is conviction in the ranges, caused by an increase in volume. Many investors may be out of this market for a while after March and April's big drops in the Nets and Techs, but not the Fund Mangers they are waiting for lower prices it is almost a certainty. The NASDAQ has had nice bounces back up over the past few days. It may indeed bounce higher today. However the volume still has not returned. The trend seems to be over the past 10 days for ever 1/3 move higher the NASDAQ ends up losing more then that sooner going down. Its clear that the sideline money wants in the question we need to answer is where.
Today I look for the NASDAQ to open a little higher and maybe even test the 3700.00 area. However the late day selling should come back into focus into the close as the NASDAQ has set a trend where over the last 3 times it has lost 2% in one day (yesterday fits the model down 72.00 ) It has gone on to trade 5% lower with less then 1% bounces along the way the next 5 days. This has happened now 3 times already in the last 4 weeks. Yesterday's close of 3644.00 - 5% over the next 5 days = 3461.00. The 5 day low on the NASDAQ is 3445.00 reached this past Monday, May 15, 2000. With that data in mind the NASDAQ looks to bounce 1% early today to lose 2% later and then over then next 4 days lose more then it gains.
SENTIMENT IN POSITIONS OF TRADING:
Daytrading: In a market like this it makes sense to buy into low volume shorted stock looking for about 2-3 points tops on a $50.00. This type of trading seems to work best 35 mins after the open and then sell out 45 mins ahead of the close.
Swing Trading: This type of trading is over the next 5 days for the most part. This type of trading seems to be best for SHORT positions, or CASH waiting for bottoms in the ranges.
Longer Term Investing: This type of trading, or postion is what the market lacks of late. The NASDAQ can't go higher and stay higher until this type of position is entered ahead of momentum money. With the trend exactly the opposite the moves higher are short lived.
Today's "Play of The Day!" is: Daleen (NASDAQ:DALN) (SHORT)
Founded in 1989, Daleen (NASDAQ:DALN) is a leading provider of solutions that bond businesses and customers in the digital economy. Daleen's software solutions provide mission critical support to businesses who offer voice, data, Web and applications hosting services over packet and circuit-switched networks. The company distributes its eBusiness, OSS gateway, service activation and BillPlex products throughout the world via Business Alliance Partners and other leading certified systems integrators including Business Edge, Cap Gemini, Danet, Ernst & Young, Prolan and Unisys. Daleen is an active participant and provides leadership in industry forums such as the Ordering and Billing Forum (OBF), Internet Protocol Data Record (IPDR) working group and the Application Service Provider (ASP) Industry Consortium. In addition to its Boca Raton, FL headquarters, Daleen has regional offices located throughout the United States, and in Toronto and London. For additional information regarding Daleen's products and services, visit the company Web site at www.daleen.com.
DALN is alot like the succesful play we had last week COMS (short) up real significant news yesterday more then 5.00 the Stock in a down market should have momentum invesotrs who went in yesterday be fast to get out today. It is already indcated under 20.00 as it rocketed off 15.50 area yesterday. The volume wasn't that large taking it up less then 1 million. So today as they sell it off it should drop later in the day back to atleast 17.00-16.00 area good for a few points in the range back down.
KEY INDICATORS: DALN -SHORT
Sell Short Area: $20.00-$19.50
Buy Stop: $22.00
Time Frame: 1-3 days
Type of Trade: Short Swing Trade.
DALN - LONG off Bounceunder $15.00
BONUS PLAY #1 Ensco International Incorporated (NYSE: ESV)
Ensco International Incorporated is an international offshore contract drilling company that also provides marine transportation services in the Gulf of Mexico. The Company's complement of offshore drilling rigs includes 36 jackup rigs, six barge rigs and eight platform rigs. The Company's marine transportation fleet consists of 36 vessels. The Company's operations are integral to the exploration, development and production of oil and natural gas.
Stock Fans, Ensco is in breakout mode! Volume is off the charts. The 1 day, 2 day, 1 month, and 6 month volume are all increasing. The oil and Gas Drillers are where it is at. The group leads in new 52 week highs. This may not be an exciting fast moving Naz stock but look at CHK, one of our recent picks. Ensco sales and earnings record is not the prettiest. But 2000 earnings are expected to be up 1000%! Looking to playing the sector where the money and the volume is!
KEY INDICATORS: ESV
Buy Area:$37.75 to $38.50
TARGET:$42.35 to $44.28
Time Frame: 3 to 7 days
Type of Trade: Swing Trade
Daytrade for .35 - .75 point scalps. Avg. price range $1.54
BONUS PLAY # 2 Noble Drilling Corporation (NYSE: NE)
Noble Drilling Corporation is a provider of diversified services for the oil and gas industry. The Company performs contract drilling services with its fleet of 48 offshore drilling units located in key markets worldwide. Over 60% of the fleet is currently deployed in international markets, principally including the North Sea, Africa, Brazil, Venezuela, the Middle East, India and Mexico. The Company also provides labor contract drilling services, engineering and production management services, and turnkey drilling services.
Stock Fans, Noble Drilling is in the hot sector! Volume for the 1 day, 2 day, 1 month, and 6 month volume are all increasing The oil and Gas Drillers are where it is at. The group leads in new 52 week highs. . Sound familiar? See above, no deja-vu! Noble Drilling shows strong growth estimates for growth in 2000 and 2001. This stock is in break out mode! These are the current leaders in this market. Jumping ships to drill for profits!
Key Indicators: NE
Buy Area:$44 1/2 to $44 3/4
TARGET:$49.23 to $51.45
Time Frame: 2 to 5 days
Type of Trade: Swing Trade
Daytrade for .50-1.00 point scalps. Avg. daily price range $1.96
STOCKS ON OUR SCREENS TODAY:
YHOO- It up a lot and still 350 points ahead of NASDAQ. If it loses $131.00 it should sell off fast.
MACR- It may drop down to $82.00 it looks good there.
WEBT - It ran up on Tuesday and added on more then $5.00 the volume was 1/3 that yesterday as it held its own. We look for a pullback to test $30.00 soon.
JDSU- CEO retires as it trades down more then $3.00 in pre market. JDSU looked to be setting up for a gap down all day yesterday as it surged on less volume off $92.00 all day. It has big support at just over $86.00 it could bounce there today. Otherwise the 5 day low on JDSU is $81.43750.
CSCO- If it loses $57.00 it will be at its 5 day low when the NASDAQ was at 3,445.00
LPTHA- This one may lose 2 more then bounce.
SCMR- This one has had nice volume of late a bounce down $4.00 might be good for $2.75 back up
ANCR - Made a nice move yesterday. It could go up 3 more soon
QCOM- under $100.00 it looks like a buy again for a 3 point move.
RNWK - It seems to hold $33.00 very well.
ORCL- If it loses $77.50 then $76.00 could turn into $72.00 very easily.
ARBA- It makes nice moves off low 60's. If NASDAQ sells off it a great one to grab at $62.00.
LCOS- It is all over the place. It looks like it will test 56.00 again today. Perhaps $55.00 is a good spot to hold 10 over the collar.
More to come...
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