The Play Of The Day
May 25, 2000
09:10 AM EST.
SJ Running Late Today: Sorry!
NASDAQ OUTLOOK TODAY: "Stock Jock's FINAL ANSWER NASDAQ BOTTOM 2,808.00 AHEAD OF FED!"
The Labor Market remain tight. I like for yesterday's low of 3,042.00 to now not be low enough. The reason for this is simple. The NASDAQ looked to today's economic information to show that the economy had slowed down. The revised GDP didn't reflect that nor did the labor report. The fact is with no slowing in the economy the FED isn't done. Yesterday's rally was impressive in it did have more volume but to many NASDAQ stocks didn't hit bottom. Capitulation was not found either as stocks didn't run into fear and drop massively fast then rise faster. Yes, at 3042.00 the market did turn but it didn't have a bottom where it turned fast. It took seemingly forever for the rally to unfold as it did more and more investors played follow the leader.
For the likes of JDSU and YHOO as well as INTC to not even go as low as they did on 3,221.00 on 4/17/00 with the NASDAQ some 179.00 points lower then 3,221.00 at its lowest point yesterday of 3,042.00 it says plenty that a bottom wasn't found. The NASDAQ now has an area of resistance set up at 3390.00. This are is one that will take plenty of volume to break. The way I look at it the NASDAQ rally yesterday told us very little as it didn't have the conviction the massive volume like 100 million on CSCO and JDSU 40 million and YHOO 14 million. It still remains undefined and unwashed out. The NASDAQ index is made up of several stocks and for some to find 4/17/00 bottoms and more and other not to come close tells me that more positioning was needed to set the NASDAQ up for its final fall. I like a rally where a real rally should be following the FED. Once the NASDAQ goes under 3,000 and then 2,900.00 It will be at a point where many have given up on it. ( a great place to buy in as the majority is almost always is the minority in making money!) This is where I believe the FED and the NASDAQ Market Makers and Fund Managers want it to be. Then seemingly when nothing is left of it that's where Greenspan plays hero doesn't raise on June 16, 2000 and the NASDAQ and the DOW for that matter have the NEWS they need and the OK that the market is OK to buy again. After a drop of some 2,000 points in 120 days. The rally isn't going be 234.00 points. I think I am pretty safe to say that massive volume will precede a bottom like we had on 4/17/00. It also stands to history that a bottom will be made on a gap down as NASDAQ Market Makers and Fund Managers have a leg up on the rest of us "little guy" individual investors.
THE NUMBERS TO 2,808.00
The NASDAQ went up 284 last week to then drop exactly 284.00 more points to find 3,162.00 the low before yesterday's new inter day low of 3,042.00. Using this formula that has proven right time and time again we then look at the rally range yesterday. (3,042.00 - 3,276.00 = 234.00) 3,042.00- 234.00 = 2,808.00. The NASDAQ as well as its leader CSCO dropping to $50.00 and setting up a triple bottom of $50.00 has already told us we lose 3,000 atleast. CSCO was $55.50 at 3,221.00 on 4/17/00. CSCO $55.50 -$50.00 = $5.50 0r about 10% to 49.95 close enough. Therefore the NASDAQ at 3221.00 - 10% = 2,898.00 atleast. I like 2,808.00 because the NASDAQ has a "gap up" to fill at 2,812.00. This bottom will be one that would fill in the chart and set up a bottom and leave the market in a positron to rally.
THE NASDAQ RANGES TODAY:
3276.00 is a BIG NUMBER now! It is almost as big as 3,390.00. I will cover half my shorts at 3,310.00 and then I will call myself wrong on my prediction if the NASDAQ breaks 3,390.00 before it sees sub 3,000.00. I look for the NASDAQ to have profit takers today. MSFT has all lots of impact on this market as well as GDP and tight labor market. The end is near but not here yet under 2900.00 we will have it, and bad news from it creates more sellers. I don't think the NASDAQ will even break 3276.00 and hold it long.. The truth is this was a move up to set up a move down.
Today's "Play of The Day!" NO MAIN PLAY!
Look for ALERT EMAIL to ALL MEMBERS TODAY!
BONUS PLAY #1 QUALCOMM, Inc (Nasdaq: QCOM)
QUALCOMM, Inc. is a provider of digital wireless communications products, technologies and services based on its Code Division Multiple Access (CDMA) technology. The Company designs, develops, manufactures and markets CDMA subscriber products and designs, develops and markets CDMA chipsets and system software. The Company also licenses and receives royalty payments on its CDMA technology from major domestic and international telecommunications equipment suppliers. In addition, QUALCOMM designs, manufactures and distributes products and provides services for its OmniTRACS system. The Company also has contracts with Globalstar L.P., a low-Earth-orbit satellite system utilizing CDMA technology, to design, develop and manufacture subscriber products and ground communications systems and to provide contract development services. In December 1999, the Company announced plans to sell its phone business to Japan's Kyocera Corporation
Stock Fans, not much of an introduction needed. This has been on our play list quite often. I am looking to take some quick profits on the China news and especially the oversold condition of Qualcomm. Qualcomm has a growth rate of 95% and has a PE of 83. The 5 year PE range is 17-218. The timing indicators say this is the sweet spot for a two day pop. I will sell Friday morning as a gap play.History tells me that I will be able to buy it back next week cheaper! Qualcomm is gapping pre-market and I will look for a pullback to enter this position. Stop in the Live Trading Room for help with timing your entry.
Key Indicators: QCOM
Buy Area:$79.50 to $81.00
TARGET:$85.05 to $89.10
Time Frame: 2 days selling into the morning gap
BONUS PLAY # 2 China.com Corporation (NasdaqNM: CHINA)
China.com Corporation is a leading pan-Asian Internet company built on an integrated operating and investment business model. The Company provides a full range of Internet services that build e-business strategies and solutions, distribute content via its portal network, and sell services through online advertising. China.com also invests in synergistic Internet companies throughout the Asia-Pacific region that add value and depth to its services and portal channels. Through China.com's investment program, the Company has invested in more than 40 Internet companies around the world. The Company has over 1,300 employees in 24 offices across 10 Asian markets, including Australia, Hong Kong, Japan, Korea, Malaysia, Singapore and Taiwan. Major corporate shareholders include America Online Inc., Mitsui & Co. Ltd., Xhinua News Agency, New World Infrastructure Limited and 24/7 Media Inc.
Stock Fans so how do we place a value on the China deal? Lots of pros and cons, but here are the facts. The CHINA CEO said on CNBC that they have 1/2 billion dollars in the bank looking to capitalize on improved trade relations. Sales for CHINA have increase the last four quarters, with the most recent first, 999%, 999%, 471% and 174%. They have no debt. China.com is 65% off of its 52 week high. There are many ways to play the China deal, but I am sticking with an old friend!
Key Indicators: CHINA
Buy Area:$29.50 to $30.50
TARGET:$32.50 to $33.50
Time Frame: 1 to 2 days
Time Frame: 4 to 10 days
Daytrade for $.75 - $1.50 point scalps. Avg. daily price range $3.41
STOCKS ON OUR SCREENS TODAY:
Look for these in your Emails and to be posted on the site as the day unfolds.
Have great day!
More to come...
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