The Play Of The Day
May 8, 2000
08:17 AM. EST.
Good Morning Stock Fans!
BREAKING NEWS OVER WEEKEND AFFECTING NASDAQ'S OPEN TODAY:
Baron's Article: CSCO -"Wanna By A Bridge?"-
The Barron's Article over the weekend slammed CSCO saying it is overvalued at current levels, and doesn't belong to the likes of Big Cap Stocks. This article is the basis for a 96 point NASDAQ gains on Friday turning into a NASDAQ -64.00 on the Futures this morning.
NASDAQ MARKET SUMMERY- May 5, 2000
The NASDAQ once again rallied on even lower volume then it had had just one day before as it was lead by CSCO adding on more then $4.00 ( up on its 15th purchase of a tech company ) to go up and over the 3,800.00 area again closing just off its high of 3,818.00 at 3816.00 on the lowest volume of 2,000 up 96.00
NASDAQ MARKET OUTLOOK TODAY:
The NASDAQ as I begin this piece today does indeed look to open lower today as the futures drop even more down 70.00. The NASDAQ on this Friday, May 5, 2000, on the heals of an extremely strong Labor Market Report, opened lower but then as I watched in amazement with many of the LIVE trading Room members rallied and really never looked back after that. However the volume being so low it looked very much as if the index was shorted higher as it went up throughout the day. Today the Barons Article on CSCO the hot Labor Report and the low volume has set up what I have said all last week. The NASDAQ is shorted to go higher. The lack of volume as it rises indicates that a bubble is being created to set up momentum to break through that key area of 3,600.00.
The most important day of trading on the NASDAQ last week was indeed Wednesday, May 3, 2000. That day the index sold of for the second straight day and dropped back to lose 3600.00 setting up a major increase in volume. Just as the index was about to fall apart and sell off on increased volume it was shorted higher into a close that saw the NASDAQ gain 114.00 points in less then 30 mins. This move as I stated last week was not in proportion to the volume that took it up 114.00 off a 3592.00 stop area. It will indeed set up to test that area today with 3650.00 being the key area as it sells off today.
PLUS MEMBERS - Look for an ALERT EMAIL later today as the NASDAQ unfolds
Today's Play of The Day is: Vertel (NASDAQ:VRTL) (SHORT)
This stock ran up last Friday May 5, 2000, on a "unconfirmed rumor" The company said later in the day on Friday that it didn't see of any real reason for the run up in its stock of more then $4.00 to go as high as $19.50 form an open of $17.00. In a NASDAQ sell off this AM VRTL should be hit worst then most and could easily fall back to as low as $15.8750 today. The volume on this one should increase as the morning wears on and this one sell off.
LONG OFF BOTTOM: Under $15.1250 or @ 14.75 VRTL would be a nice stock to hold for a bounce that could happen quickly back to $17.00
KEY INDICATORS: VRTL (SHORT)
Sell Short: $18.3750-$18.1250
Buy Stop: $20.00
Time Frame: today
Type of Trade: daytrade
SAGO'S RANGE PLAYS TODAY:
BONUS PLAY #1 Biogen, Inc (NasdaqNM: BGEN)
Biogen, Inc. is a biopharmaceutical company that develops, manufactures and markets drugs for human healthcare. The Company sells Avonex (Interferon beta-1a) for the treatment of relapsing forms of multiple sclerosis, and sells and licenses a number of products, including alpha interferon, hepatitis B vaccines and hepatitis B diagnostic products. Avonex has been shown in a pivotal clinical trial to slow the accumulation of disability and to reduce the frequency of exacerbations in patients with relapsing forms of multiple sclerosis. The Company focuses its research and development efforts on areas where it has scientific strengths, such as multiple sclerosis, inflammatory diseases, cardiovascular diseases, developmental biology, kidney disorders and gene therapy. Products under development include Amevive, for the treatment of certain autoimmune diseases and Antova, a treatment for a variety of autoimmune diseases and a therapy for preventing organ and cellular transplant rejection.
Stock Fans, looking to snag the bottom. All of the signals are in place. Biogen made the fastest growing Naz list over the weekend. It sports a 112% growth rate. It has the lowest accumulation rating which reflects the down sloping chart. Biogen has formed a nice base in the $50-$59 range over the last month. Biogen has a 5% debt rate and has grown earnings over the last 4 quarters with the most recent first, +41%, +63%, +63%, 70%. Sales have grown nicely as well. Biogen's volume has increased over the last few sessions indicating that others have the same idea. Biogen's closing price crossed above its 10 day moving average initiating the buy signal. Looking to add on any morning weakness.
Key Indicators: BGEN
Buy Area:$57.25 to 58.25
TARGET:$64.125 to $66.9875
Time Frame: 2 to 7 days
Type of Trade: Swing Trade
Daytrade for 1-2 point scalps. Avg. price range $4.03
BONUS (Short) PLAY #2: RCN Corporation (NasdaqNM: RCNC)
RCN Corporation is a facilities-based provider of bundled local and long distance phone, cable television and high-speed Internet services to the densest residential markets in the country. The Company is currently delivering broadband services over its Megaband Network or designing and building its network on both the East and West coasts, as well as in Chicago. The Company provides a wide range of local and long distance telephone, video programming and data services, both individually and in bundled service options.
Stock Fans, RCN Corporation is a fast growing company that has the backing of Paul Allen. Volume has increased over the last several sessions and the daily chart shows a "Hammer Bullish" formation. The financials are not pretty on this company as most of the cable / ISP builders are, but I am not looking to marry this baby. Looking to scalp for a few points over the next 2 days.
KEY INDICATORS: RCNC
Buy Area:$24.75 to $25.25
TARGET:$26.50 to $27.50
Time Frame: 1 to 2 days
Type of Trade: Day / Swing Trade
Avg. price range $3.76
SJ'S BEST BET FOR BIG YARDAGE TODAY: Aether Systems (NASDAQ:AETH)
AETH rallied the last 2 days as it went up huge more then 20.00 points over the last 2 trading days. This stock should drop extremley fast as investors try and lock in profits. I like this one to go perhaps all the way back to $110.00 where it has a TRIPLE BOTTOM. It should lose the $160.00 area fast and then sell off form there. Look for $150.00 to maybe even be tested today. As the NASDAQ re traces back to 3,221.00 I like AETH to see $110.00 again.
KEY INDICATORS: AETH (SHORT)
Sell Short: $165.00-$164.00
Buy Stop: $177.00
TARGET: $151.00 today $111.00 by May 19, 2000
LONG AETH : If it loses $150.00 I will look for a 7 point bounce back up up then short it again for $110.00 target
STOCK ON OUR SCREENS TODAY:
CSCO- The Barrons Article should send this one down to the 62.00 area if it loses that then look for CSCO to lead the NASDAQ sub 3,600.00 today
QQQ- 3rd most active option puts on Friday had QQQ in them. Look for more downside.
CRDS- Watch this one to move in sympathy of ANCR today.
BRCD- It may also add on on wake of ANCR buyout.
TIBX- The "Play of The Day!" was a great winner on Friday due for more today go long at $71.00 on this one for a bounce back to $77.00
EMC- It missed $140.00 on Friday look for it to continue to pull back
YHOO- It was up on ridiculously low volume Friday look for $122.00 to be tested today. It loses $122.00 then $119.00 then $113.00 is next
GE- 2 for 1 split today takes effect. With 100% more shares it should pull back in a Shorted DOW today
DIS - It may buck the trend with Millionaire back on the air
JDSU -$88.00 is so key it loses $88.00 $86.00 is coming soon
VRIO _ bought today it may get to $64.00 then I look for it to lose $60.00 and then go long on it today.
ANCR- Q logic has bought it its trading up to $34.00 a share.
ORCL- It should lose $73.00 today.
ADCT- It should drop back 7-10 today.
UPS- It has a huge amount of stock coming out of lock up it should lose 5-7 on that.
PWAV- It could go all the way back to $178.00 today off its close of $195.00
Have a great day!
More to come.....
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