The Play Of The Day
May 22, 2000
8:45 AM EST.
NASDAQ OUTLOOK TODAY: "NASDAQ 1 Step UP - 2 Steps Back!"
The NASDAQ closed near its low of the day on Friday down 148.00 at 3,390.00. It now has achieved a double bottom as 5/11/00 low was 3,389.00 (close enough to be a double bottom). If the NASDAQ loses 3,390.00 it doesn't have far to fall to bring back into play 4/17/00 lows, and the NASDAQ 200 day low of 3,221.00. The Key Numbers along the way back down if the NASDAQ does indeed test those 4/19/00 levels are 3367.00 the low 10 days ago and 4/24/00 low of 3,345.00. The NASDAQ also has key areas scripted at 3321.00, and 3265.00 before it hits 3221.00 again.
The futures are up this morning as the NASDAQ will have to do it on its own with the out the help of any economic data or earnings to spur it on. It would seem now that a test of the 200 day low on the NASDAQ is almost a certainty as stocks such as
CSCO and QCOM have already gone lower then they were on 4/17/00. I am still looking for big volume to come signaling a bottom. The NASDAQ as it sets up on a 1 year chart now seems to want to test the 2812.00 to 2997.00 area before it heads back over 3600.00 again.
Today, the NASDAQ may go higher on the onset, and then might even keep those gains that may be achieved today open much lower volume as Market Makers of NASDAQ stock force the index higher creating ranges to take in lower. It would seem that the NASDAQ may lack any long term holders buying in today knowing full well that the NASDAQ has begun positive 4 out of the last 5 sessions only to fall part and go lower into the close. The KEYS that I will watch today will be CSCO and QCOM to see if they may wash out and have buyers find them as beaten down stocks. However it would seem for that to happen the rest of the NASDAQ may need to test the 200 day low of 3221.00 before any sizeable gains such as over the 3,445.00 level (the NASDAQ previous 5 day low ahead of Friday's low) can be achieved.
Today's Play of The Day is: Ariba, Inc. (NASDAQ:ARBA)
Ariba, Inc. (NASDAQ:ARBA) is the leading business-to-business (B2B) eCommerce platform provider. Through the Ariba B2B Commerce platform -- an open, end-to-end infrastructure of interoperable software solutions and hosted Web-based commerce services -- the company enables efficient online trade, integration and collaboration between B2B marketplaces, buyers, suppliers and commerce service providers. The global reach and best-of-breed functionality of the Ariba B2B Commerce platform creates Internet-driven economies of scale and process efficiencies for leading companies around the world, including more than 20 of the Fortune 100. Ariba can be contacted in the U.S. at 650-930-6200 or at www.ariba.com.
As with almost all of the Techs and Nets (NASDAQ:ARBA) got hit hard Friday as it pulled back more then 5.00 as it went under the $60.00 area for the first time since the NASDAQ hit 3445.00 back on 4/24/00. ARBA should get a nice bounce back up today as it may even see 64.00 - 65.00 area as it over the last 10 days bounced off the 62.00 area several times going almost as high as 70.00 each time. The 30 day low on ARBA is $55.8750 its low on 4/24/00. ARBA still closed that day at 62.00 after finding that sub 60.00 low. It would seem that ARBA is going to go lower then 55.8750 the low on 4/24/00. However it would seem by looking at the NASDAQ latest trend that it would go higher first on lower volume so it can sell off and test its current 30 day low.
Today, we will look to play ARBA off the open for what look to be a nice move of about 4.00-5.00 points to the upside on lower volume as we attempt to play ARBA for some fast gains ahead of what we still see as a big sell off coming on the NASDAQ taking ARBA lower then 50.00 when its over. However as a range play and for now we will play ARBA and look for some fast gains. We will set our sell stop at 55.6250. If it breaks that area we will SHORT ARBA as it should then find sub 50.00 once it penetrates the 55.00 area.
KEY INDICATORS: ARBA
Buy Area: $57.25-$59.3750
Sell Stop: $55.6250 (FIRM!)
Time Frame: Today
Type of Trade: Swing Trade
SJ'S FAV STOCK TO TRADE: JDS Uniphase (NASDAQ:JDSU)
JDSU is my favorite stock to play on the NASDAQ because it has such a wide range for a stock trading under 100.00 a share currently. It showed this last week as it had a range of 14.00 points from its low to its high. Once again paid off more me as I called it short last week of the 86.00 and 94.00 as well as 95.50 area. I made the call because JDSU last Monday went from an open of 85.50 to a low of 81.43750 to a close and high of 90.06 on ridiculously low volume. It didn't stop there as it went on to by mid day last Wednesday ahead of the FED decision to go to 96.00. Once again this was on really low volume. JDSU then on Thursday came back to life as it began to drop on its CEO retiring, as well as the NASDAQ adjusting for more rate hikes upcoming in June 2000. JDSU would turn out to be a golden short as it was not able to break its double top of 96.00 and closed the week at its low of $82.00
JDSU looks as if it is going open today at 84.00 a 2.00 point gap higher then Friday's close and low of 82.00. JDSU has had an average trading volume over the last week of 14.1 million shares. However more importantly to a trader like me is it has had a range almost all those days of exactly 6.00 points from its high to low. The fact that JDSU looks to open today at 84.00 means it then could go up about 1.25 - 1.50 and still be able to test its current 15 day low of 79.25. With the likes of CSCO and QCOM already much lower then they were on 4/17/00 JDSU has a long way to go to find that low of 73.1250 on 4/17/00 and 74.31250 on 4/24/00. JDSU should go higher today on the onset as it has in the past and follow a trend as it sucks in momentum traders and then stops fast at about $85.50 or so and fall back $6.00 from there and tests the $79.50-$79.25 area today.
KEY INDICATORS: JDSU (SHORT)
Sell Short: $85.43750-$84.75
Buy Stop: $86.8750-$86.8750
Time Frame: Today
Type of Trade: daytrade
JDSU LONG TODAY:
JDSU look to be a great long play today if it can hold 80.00-79.25. If it can then at 81.00 I will look to go in JDSU and look for a move back up to 83.75 area before I prepare to short JDSU again.
5-10 day outlook JDSU:
Low of $75.25 a high of $85.8750
BONUS PLAY #1 Southern Company (NYSE: SO)
The Southern Company produces electricity and supplies energy to a 120,000-square-mile United States service territory spanning most of Georgia and Alabama, southeastern Mississippi and the panhandle region of Florida. The Company operates through Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric, each of which generates, purchases, distributes and sells electricity. Through its international subsidiaries and affiliates, the Company also provides electricity in Argentina, the Bahamas, Brazil, Chile, China, England, Germany, the Philippines, Trinidad and Tobago, and parts of the United States outside its traditional service territory. Southern Company also owns Southern Energy Inc., which develops, builds, owns and operates power production and delivery facilities, conducts energy marketing and trading activities, and provides energy services to utilities and industrial companies in the United States and international markets
Stock Fans, the Southern Company is in the Hot sector du jour. It sports a low PE of 13. This company is a cash cow with a positive cash flow of $4.20/ share. Institutions and Insiders both are buying up shares. With oil prices increasing and the air-conditioning season about to start, many think this is the next breakout sector. Looking to add the Southern Company on the morning or afternoon dip.
Key Indicators: SO
Buy Area:$25.00 to $25.75
TARGET:$28.33 to $29.74
Time Frame: 3 to 7 days
Type of Trade: Swing Trade
Daytrade for .25 - .50 point scalps. Avg. price range $1.10
BONUS PLAY # 2 Intuit Inc (Nasdaq: INTU)
Intuit Inc. provides a range of small business accounting, tax preparation and consumer finance desktop software and financial supplies for individuals and small businesses. Intuit offers products and services through four principal business divisions. The Small Business Division includes accounting software, financial supplies, employer services (such as online payroll), technical support, consulting services and other related services. The Tax Division includes personal, professional and small business tax preparation software, web-based tax preparation, services and electronic tax return filing. The Consumer Finance Division includes personal, finance software, websites and marketspaces and related services. The International Division includes small business, tax and consumer, finance products and services in selected foreign markets, with the primary focus on small business customers.
Stock Fans, Intuit closed up Friday on double average volume. This companies cash flow is $1.18/ share, has a PE of 62 and sports a 22% growth rate. Intuit has a 2% debt and is off 67% from its 52 week high. It reports earnings on 5/26/00 and from everything I have read it looks to have blow out numbers!
Key Indicators: INTU
Buy Area:$28.1875 to $29.00
TARGET:$31.90 to $33.35
Time Frame: 2 to 4 days
Type of Trade: Swing Trade
Daytrade for .50-1.00 point scalps. Avg. daily price range $2.82
STOCKS ON OUR SCREENS TODAY:
YHOO- It may bounce back today but if it can't clear $125.00 I will short it again for a 107.00 test upcoming
INTC- It wasn't to popular a move when I called it last week but did it ever pay big divedends. INTC should test $110.00 soon.
QCOM - It might be a buy if it can hold $90.00 and then find $94.00 before it falls back
EBAY- It could test $112.8750 before it finds $122.00. At $122.00 EBAY is a good buy for 7 points back to $132.00
CMRC- It was up Friday it may drop big todasy to under $40.00
WEBT - It should hold $30.00
LCOS- TRRA fell under the $45.00 collor LCOS may get rocked!
CSCO- Under 50.00 it a must own. VOLUME is so key on this one.
COST- Numbers coming really hit hard may be worth a few points this week aheado of numbers
More to come....
Have a great day!
and BigPlayStocks.com TEAM of 5 PRO TRADERS!