The Play Of The Day
June 1, 2000
09:07 AM EST.
THE MAY 2000 THAT WAS: "10 DAYS = Another LOW in MAY!"
The NASDAQ high in May 2000 happened on May 1, 2000. It was 3982.38 On May 25, 2000 the low hit at 3,042.66. That is a range of nearly 1,000 points from one end of the spectrum to the next (940.00 points to be exact) The final reading in May 2,000 came in at 3400.00. However, yesterday's high of 3501.00 came within 11 points of retracing half of that spread(470.00 of the 940.00). Also noteworthy is the fact that it took the NASDAQ 19 of the 22 total trading days in May 2000 to find its low (on May 25, 2000), but it took the NASDAQ only 2 days to retrace about half of those lost gains--finding 3501.00, yesterdays high (on May 31,2000). That lightning fast move by the NASDAQ further illustrates that the NASDAQ is currently shortedand could find an even lower low.
One final point on May of 2000. Every 10 days of trading from May 2000 the NASDAQ found a new 10 day low as it decreased and hit the lowest reading of the month on May 25th at 3,042.00. With May 25, 2000, falling last Thursday it would seem that by Friday, June 9th, 2000 that if the NASDAQ holds its current pattern, it should find a new 200 day low and go below the low of last Thursday, May 25, 2000 when it was at 3,042.00. What is really interesting in this analysis is that on Friday, June 9, 2000, the NASDAQ and the entire Us Stock Market for that matter is due to get the May 2000 Purchasers Price Index (PPI) and the Core are due to be released. This HISTORICAL data is my 2nd favorite indicator
the favorite of course is volume.
TODAY'S BREAKING NEWS:
Jobless Claims up 1,000
The NASDAQ added on only 42.00 points after its huge run up on Tuesday May 30, 2000 of 250.00 plus points as the volume remained fairly low into yesterdays (May 31, 2000) high on the NASDAQ of 3,501.00. Then, the index pulled off of 3501.00 and sold off abruptly into the close to reverse Tuesday's action to instead close only one point off its low at 3,401.00. CSC, ORCL and MSFT all saw almost half of Tuesday's gains
quashed in the final 35 minutes of trading as the NASDAQ fell from 3,485.00 to it's close of 3401.00.
NASDAQ OUTLOOK TODAY:
The NASDAQ, as I stated last week, did indeed have big resistance at what used to be the double top of 3,390.00. However, this area was surpassed on Tuesday, May 30, 2000 by about 70.00 points and following yesterday's (May 31, 200) high of 3,501.00 it was surpassed by almost 100 points. I point this out because the NASDAQ then gave away nearly that entire amount into yesterday's close of 3401.00as it closed about 10 points off 3,390.00. The move up from 3,390.00 to yesterday's high of 3,501.00 was on lower volume as the NASDAQ blew right through 3,390.00. That 100 points as I review the facts was primarily used to set up more KEY NASDAQ Tech stocks to find new lows--200 day lows on the NASDAQ that should take place on or slightly before June 9, 2000 (provided that the NASDAQ keeps its current trend of finding a new low every 10 trading days after its previous low) That in mind, it would seem that 3,390.00 was broken only on paper for less than 24 hours as NASDAQ Market Makers (MM's) it would almost seem shorted many of the KEY NASDAQ stocks in order to create momentum buying to allow them to unload stock that they had held for less, for more in May 2000-940.00 point drops.
What I look for today, after considering the aforementioned data,is a range of less than 60 from top to bottom today. Meaning the NASDAQ may add on 60 at the most to its current 3,401.00 getting to a high of not more than 3,461.00 (Tuesday's high) and not going under another KEY AREA today of 3,362.00. I like a total move today on the NASDAQ of 60 on the upside and 75 on the down side setting up a close today under 3,390.00 and what I still hold as key support (3,390.00 NEEDS TO BE BROKEN ON MORE VOLUME! ON Monday it wasn't!) and above 3,362.00. With a close of about 3370.00 or so today the NASDAQ then would be in a position to "Gap Down" on tomorrow's hot ticke, the Labor Report, as it has a gap to fill from 3,286.00-3,205.00 in its current range. What this could very well mean is by Friday's open on June 2, 2000 the NASDAQ could very well be right about where it was at its lows on Friday of last week at 3,150.00 erasing the 30 min move up on Friday-- the massive 250 point explosion Tuesday and yesterday's final 42.00 point surge before the NASDAQ sold off 100 points or so off its high yesterday to close where we ended yesterday at 3401.00.
Today's Play of The Day is: Intel Corp. (NASDAQ:INTC)
Stock Fans, I called this one about 15 trading days ago as INTC announced a split it then ran up big to get from a May 17 , 2000 low of $105.00 or so to go to an insane high of more than $130.00. When INTC hit its May 2,000 low at the 105.00 area the NASDAQ was trading at 3,367.00. On yesterday's (May 31, 2000) close of 3,401.00 INTC was still almost without doubt shorted and trading at 124.00. What this means is INTC is (as is the NASDAQ) is only 34 points off 3367.00 currently on yesterdays 3401.00 close, which is some 19.00 points higher than what it should be to be in correlation with the NASDAQ. This means that INTC is more than 19 higher or 200 points ahead of the NASDAQ drop. INTC has to pull back to set up for a new 200 day low finding 105.00 at least or less. INTC looks to again be a great play right here as we keep in mind the splits of EBAY, and CMRC both of which were run up huge ahead of those splits that now are
trading more then 30% off those highs. INTC might be a top NASDAQ tech stock, but it trades in the same market, and therefore as the split occurs or before INTC has to pull back as investors sell INTC gains into a shorted INTC stock. All the exits light my fire as HISTORY again should repeat itself with INTC.
KEY INDICATORS: INTC SHORT
Sell Short: $126.50-$127.75
Buy Stop: $132.00 (or NASDAQ 3,550.00)
1-3 DAY TARGET: $117.6250-$116.00
8 DAY TARGET: $110.00
RUN THE OPTIONS! INTC
The June 2,000 $120.00 PUTS 5 of these
The June 2,000 $110.00 PUTS 5 of these.
JDSU RANGE PLAY TODAY: Predicted Areas:
JDSU should get as high as $93.00-$92.50 today and then should by the
close test the $86.00 area--losing it perhaps momentary and then closing at about $85.50 to $86.25
KEY INDICATORS: JDSU (SHORT)
Sell Short: $92.93750-$92.25
Buy Stop: $94.93750
1 DAY TARGET: $85.1250-$86.25
DAYTRADE JDSU JUNE 2,000 OPTION PUTS:
The June $85.00 PUTS bought with JDSU trading over $92.00 should add on
about 100% or more today if JDSU by close tests $86.00 and a little under that.
SAGO'S BONUS PLAYS TODAY: HE'S BEEN RED HOT! Thanks SAGO for ATML--to name just one of the winners! It is up in pre market over $40.00!
BONUS PLAY #1 SanDisk Corporation (NasdaqNM: SNDK)
SanDisk Corporation designs, manufactures, and markets flash memory
storage products that are used in a wide variety of electronic systems.
The Company has designed its flash memory storage solutions to address the storage requirements of emerging applications in the consumer electronics and industrial/communications markets. The Company's products are used in a number of rapidly growing consumer electronics applications, such as digital cameras, personal digital assistants, portable digital music players, digital video recorders and smart phones, as well as in industrial and communications applications, such as communications routers and switches and wireless communications base stations.
Stock Fans, SanDisk Corporation is making all of the right moves. From camcorders to cell phone deals this is one to own. SanDisk is 65% off of its high. It has a Relative Strength rating of 91. Earnings have increased significantly in the last 4 quarters. Earnings for the year 2000 are estimated to increase by 98%. Stochastics are climbing, the news and demand is there. I am looking to take a 1/2 position today and will add on strength or weakness.
KEY INDICATORS: SNDK
Buy Area:$57.25 to $58.00
TARGET:$63.80 to $66.70
Time Frame: 3 to 7 days
Type of Trade: Swing Trade
Daytrade for $.75- $2.00 point scalps. avg. daily price range $6.27
BONUS PLAY # 2 Adaptive Broadband Corporation (NasdaqNM: ADAP)
Adaptive Broadband Corporation provides products for wireless ultra-high speed Internet access, transport fixed wireless broadband product, AB-Access and worldwide Internet backbones. The Company's product is able to send large amounts of voice, video and data traffic over the airwaves using microwave technology.
Stock Fans we know that you should focus on what you do best. That is what Adaptive Broadband is doing. They are focusing on the wireless broadband internet sector. Boy, do I need that! "Adaptive's AB-Access product is the last link that connects customers to the Internet wirelessly, much like phone lines are the last mile connection to homes and businesses. Data are transmitted at 25 megabits per second, a speed the company said is expected to rise fourfold in 2000." Now, here is a company that looks to be profitable by 2001. We know where the future lies. Most of us would prefer to trade and watch the Stockjock at the pool. This company will help us do that! The timing indicators look good for a run.
Buy Area:$25.75 to $26.25
TARGET:$28.75 to $30.19
Time Frame: 3 to 6 days
Type of Trade: Swing Trade
Daytrade for $.50 - $1.00 point scalps. avg. daily price range $2.79
MATEO'S NASDAQ 100 TRACKING STOCK: PLAY (NASDAQ:QQQ)
QQQ Nasdaq Trust 100
If you can get yourself on the right side of a 100 point Nasdaq move, you can make a tidy profit trading the QQQ calls or puts. With a 200 point move you can double your money. QQQ options are great to trade because of the high open interest, great daily volume, many buyers and sellers (easy to get fills between the spread), and the best reason IMO is that you are trading an index which is much easier to read than individual stocks. A great way to play the QQQ is by means of a swing trade. A 2-3 day hold works great giving many chances for entry and exit. Chose your entry point and exit point before entering the trade and stick to your plan. DO NOT GET GREEDY! You will lose. Take your profits when you hit your target. Example: I opened QQQ puts yesterday at Nasdaq 3475. I bought at the money puts which at the time were the 84's. My target is 3,300. If it hits that today or tomorrow, I will close the position and wait for another entry. Should my target of 3300 be hit, my return will be 75%. I paid 4 for the put and should be at 7 or better if the Naz hits my target level. You can also day trade QQQ calls very easily even just scalping them for 1/2 of a point. Remember that demand for a certain call or put and market conditions will change the price of an option. Play smart and take your profits when they are offered. With the Nasdaq there is always another play!
STOCKS ON OUR SCREENS TODAY:
NUFO- Watch this one close it exploded yesterday into close can it see$70.00 today it could!
RIMM- CNBC anaylst had good things to say with a $70.00 plus 6 month target on it.
AOL- It was unchanged yesterday look for a move $1.00 down today.
CSCO- worked out well for us CSCO on its way to $50.00 again.
YHOO- 14.2 mill moved it $4.50 yesterday hi to lo. On May 25, 2000 9.2 million shares moved it $11.00 its not shorted on that tight of range. YHOO may hold up well today, but $105.00 is the low and maybe $99.00 coming soon on it.
EBAY- It has been dropping nice after a shorted pre 2 for 1 run up. EBAY before 68.00 it finds $55.00 it would seem.
ORCL - This one could lose $3.00 into close.
EXDS- It should gain $3.25 today to lose $8.00 later off that and close under $67.00
ARBA- I will short more of it if it clears $55.00 looking for $48.00 on this one before $58.00 comes
QCOM- Well it has a gap to fill at $57.00- $58.00. It may open at $68.00 then find $70.00 maybe but when it ends today $62.3750 should be tested at $63.1250 I buy QCOM today.
Have a great day!
More to come....
SJand BPS.com TEAM OF 5 PRO TRADERS!