The Play Of The Day

May 23, 2000
08:55 AM EST.


The NASDAQ closed yesterday at 3,362.00 on light volume as it shook off more then a 200 point loss. At its lowest point yesterday the NASDAQ went under the old 200 day low of 3,221.00 and found 3,172.00. It was lead down in the early morning hours by the likes of Cisco Systems hitting a a year low of 50.00 at its lowest point yesterday.

The NASDAQ looked to be shorted heavily yesterday Stock Fans, as it came back off the 3172.00 area. It did indeed test and bust through 3221.00. However it didn't have the quick reaction that a bottom sees as stock usually fall fast and then bounce huge. It looked as if the sellers had dissipated yesterday and the NASDAQ Market Makers used that as a chance to short more stock and take the index higher. The likes of eBAY moving up more then 26.00 points after it had tied its year low at $109.75 seems to just lay more truth to the fact that the NASDAQ had not found bottom and was going higher again to go lower.

Yesterday's big move really didn't have the cliche word in it we hear so much "Conviction!" I look for today's action to begin with an uptrend and then have investors sell quickly into shorted stock. One thing is for certain the entire NASDAQ 100 could be squeezed if it doesn't pull back as NASDAQ stocks appear to be so shorted at this point that any news of any kind in a positive sense could send them flying. However on the same token negative news could take them down much more then even yesterday.

The NASDAQ after a "gap up" low volume open should then have the ranges at about 3372.00 to fall back. It doesn't look as if it will be able to get through Friday's close of 3,390.00 Having that range in tact the NASDAQ then should have sellers getting out today as they book short term profits. The NASDAQ in its current state should drop fast on these profits and may find its way under 3,200.00 again. If it loses 3,200.00 the NASDAQ could easily go under 3,050.00 and test the next level of support at 2,997.00. The move yesterday from 3172 - 3362 was 190 points. If we use the same equation we have used of late, that low volume uptrending stock lose more then they gain then the end result on yesterday's 190.oo point come back could be under 3,100.00 today. The NASDAQ I believe must stay under 3,321.00 over the rest of May and into the June FED meeting to have any chance of escaping another FED rate increase. With this in mind and using the formula that the NASDAQ moves in about a 350 point range every 7 days of trading of late then it would seem almost certain to stay under 3,321.00 and avoid a rate increase in June 2000 the NASDAQ must find a trading range of 3,000 - 3,350.00 area ahead of the FED.

Today's Play of The Day eBAY (NASDAQ:eBAY) (SHORT)

eBAY (NASDAQ:EBAY) I agree with the analysts its a great stock for the longer term. However on 3 mill shares yesterday eBAY fell more then 9.00 and found its current 30 day low of $109.75. It then on perhaps YHOO rumored buy out plans again or something to that extent ran up more then 25.00 ass it blew through 3 key areas of resistance eBAY going to 139.00 plus off 109.75 on only 1.6 million shares bringing it back is a stock that had individual investors buying into shorted stock in such a manner that they sent it through the roof. eBAY belongs at 115.00 to 118.00 tops right now or perhaps even less. The stock should act a lot like COMS did for us a few weeks back as it may not have that many bail on the onset but as the NASDAQ tops out the exits should fill and EBAY should lose 120.00 by tomorrow at the latest.

Sell Short Area: $138.00-$136.50
Buy Stop $144.1250 (FIRM) if it clears this it short squeezed and could explode to 150.00!
1 DAY TARGET: cover half 50% = $122.50
3 DAYTARGET: $118.8750-$115.8750
Time Frame: 1-3 days

The EBAY June 2000 $120.00 OPTION PUTS

BONUS PLAY #1 Reliant Energy (NYSE: REI)
Reliant Energy, based in Houston, Texas, is an international energy services and energy delivery company. The Company has a wholesale energy trading and marketing business that ranks among the top five in the U.S. in combined electricity and natural gas volumes and has a presence in most of the major power regions of the U.S. It also has power generation and wholesale trading and marketing operations in western Europe. The Company has more than 22,000 megawatts of power generation in operation in the U.S. and western Europe and has announced acquisitions and development projects that will add another 10,000 megawatts. Reliant Energy also has marketing and distribution operations serving nearly four million electricity and natural gas customers in the U.S., has significant interests in power distribution operations serving nearly 10 million customers in Latin America and recently launched a telecommunications business in the Houston area.

Stock Fans, Reliant Energy is in breakout mode! Volume is off the charts. The 1 day, 2 day, 1 month, and 6 month volume are all increasing. Reliant Energy sports a PE of 4!! Cash flow is only $8.72 / share. This company has a 5 year PE range of 3-533. Looks like we are at the low end of that. This is the sector to be in. The timing indicators are continuing to move up. I may take 1/2 position, $.25 to .50 above yesterdays close if no dip is seen. Looking to get another energy stock in the portfolio, hopefully on some weakness.

Buy Area:$27.50 to $28.25
TARGET:$31.08 to $32.50
Time Frame: 2 to 4 days
Type of Trade: Swing Trade
Daytrade for .25 - .50 point scalps. Avg. price range $1.02

BONUS PLAY # 2 Newmont Mining Corporation (NYSE:NEM)
Newmont Mining Corporation is engaged in the production of gold, the exploration for gold and the acquisition and development of gold properties worldwide. The Company currently produces gold from mines in Nevada and California, and, outside of the United States, from operations in Peru, Indonesia, Mexico and Uzbekistan. In 1999, the Company also began production of copper concentrates from a copper/gold deposit at a second location in Indonesia.

Stock Fans, we played this stock back in February. Gold stocks have gained attention as a hedge against current market conditions. Nemont's being accumulated and volume over the last couple days and months has been increasing. Stochastics and Macd timing signals say this is a good entry. Looking to take a position today when the market is up and gold is down.

Buy Area:$24.25 to $24.60
Sell Stop:$23.37
TARGET: $26.75 to $27.50
Time Frame: 4-7 days
Type of Trade: Swing Trade
Daytrade for .25-.50 point scalps. Avg. daily price range $1.32

JDSU did hit the high end of our SHORT play yesterday at $85.50 into the close. It looks as if it will not see $87.00 today. I like a top of $86.25 today. It then should hold true to form of late and have atleast a 7 point spread and find its way back down to the $79.25 area where it should fall through later in the day and again test the $78.00 area where it sat for over 2 hours yesterday in a very narrow trading range of $77.8750 - $78.25.

Sell Short Area: $85.50-$86.25
Buy Stop Area: $88.25 (FIRM) over Friday's high
TARGET: $ 77.8750
Time Frame: 1-2 days

JDSU LONG: under $76.6250 yesterday's low. It could come today but should happen by Thursday. Sell Stop on this Play $73.00 under JDSU year low.

QQQ- At NASDAQ 3372.00 SHORT it for a move down to $76.00 today
YHOO - It should fall back quickly and test the 125.00 area. Then should lose it and find $122.00 later.
CMGI- It should test $50.00 again
LCOS- It is topping out at 50 plus
CSCO- It should test Friday's low of $52.8750 as early as tomorrow, maybe today
ORCL- This stock needs a lot more volume to drop it and it should get it to send it back under $62.00 today

More to come....

Have a great day!


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