The Play Of The Day
June 12, 2000
8:55 AM EST.
Good Morning Stock Fans!
The NASDAQ continued its week long low trading volume as it again traded in a very narrow range. And, for the first time in Y2K it went into its final hour of trading with less than 1 billion shares of trading. It did, however, manage to add on enough shares when the session had ended to eclipse 1 billion--ending at 1.2 billion shares as its final reading on Friday, June 9, 2000. The NASDAQ did find a new 30 day high, but it wasn't much of an increase over Thursday's 3890.00 as it traded in a range of only 3,893.00 - 3,825.00 which is 19 points-- to close up 49.28 at 3,874.84.
NASDAQ OUTLOOK: "3,982.00 And OVER = Bullish, UNDER 3,790.00 = Bearish!"
Stock Fans, the NASDAQ traded in a range last week of less than 200 points. The range was Y2ks narrowest range. The NASDAQ seems to currently be in a "wait and see" mode. The Fed is the "wait" part and the "see" portion is this weeks upcoming economic reports that may lend more information to the fact that the economy is indeed slowing. Friday's Price Purchasers Index ( PPI ) was a mixed bag that showed a decrease in the PPI , but an increase in the Core PPI. It wasn't enough data to send the NASDAQ to a KEY NUMBER over (May 1, 2000) 3,982.00 a new 60 day high. The NASDAQ remains--with Friday's close--off of the NASDAQ 60 day high by 108.00 points. The reason that the 3982.00 marker and over is so crucial is that the NASDAQ unable to make a new 60 day high in May 2000 found itself trying to hold 3,000 instead of breaking 4,000 by May 24, 2000. If the NASDAQ can break 3982.00 it should see 4,000 with it being at that level--18 points off of 4,000. If it break that barrier, then the NASDAQ data over the last 90 months shows that the NASDAQ could find a new 200 day low. If the NASDAQ can't trade at least as high as 4,039.00 before it closes under 3729.00 (the latest rally) though impressive will be seen as nothing more than the Bears have already called it--a BEAR MARKET rally. If it ends under 4,039.00 it is still leaves the NASDAQ off its 52 week, and all time closing high of 5,048.00 by at least 20% giving the NASDAQ its technical definition as still one trading in a BEAR MARKET.
Considering all of the above information, the NASDAQ begins this week at a crossroads. The recent historical data says something has to give--over 3982.00 and 4,000 plus is so close the NASDAQ will be able to touch it. It should then have enough momentum to break over its current 90 day Double Top of 4,009.00. 60 days have passed between missing it by less than 20 and then almost finding sub-3,000. If the NASDAQ can't achieve that level,then it could test its last 30 day high of 3729.00 (on May 16, 2000) before that level was broken 2 Friday's ago at 3813.00. Trading begins in less than 2 hours at 9:30 am EST with 2 KEY NUMBERS--if it can close over 3,790.00 then things remain BULLISH. If it can't, then the NASDAQ may have just experienced the biggest BEAR MARKET rally in its history. One thing is for certain--this week we should find out the answer to that question as Wednesday CPI and Friday's housing report should send the NASDAQ out of those narrow trading ranges one way or the other.
MARKET POSITION INDICATOR:
Under NASDAQ 4,009.00 (sub 4,039.00 out of BEAR MARKET) remain BULLISH.
Under Friday's low of 3,825.00 begin to turn BEARISH, and if 3,790.00 is broken, and then the NASDAQ closes under it ...Then BEARISH.
SHORT- Being SHORT as the NASDAQ trades under 4,000 today might not be a bad idea as it has much more room to drop back and test the first of its 3 up trading gaps of 3,581.00 -3,729.00
LONG: Long could be dangerous if the NASDAQ loses Friday's low of 3,825.00 as many investors own stock from last week in an extremely tight range of 3,756 - 3,893.00. If the NASDAQ loses 3,790.00 and then 3,755.00 it could have several investors lighting the exit doors for PROFITS!
CASH: The best option maybe one of RAISING CASH and closing out LONG
positions at today's open where NASDAQ stocks could trade at the highest level of the day. After booking profits in LONG positions and looking for DIPS in the NASDAQ as profit taking occurs could be the shrewdes way of playing the NASDAQ today.
FINAL NASDAQ OUTLOOK:
It would appear the NASDAQ tests 3,729.00.00 before it breaks 4,009.00. The low on the NASDAQ seems to be with a rate hike or not in June 2,000--3550 or so according to all my compiled data. This is the number I like the NASDAQ to test ahead of the FED meeting this month if it can't trade and close over 4,039.00 this week!
Today's Play of The Day is: Ask Jeeves (NASDAQ:ASKJ)
ASKJ exploded late in the day Friday. It could make a further move higher today and see 35.00 if it can hold 24.00 today. This one moves fast, but in a NASDAQ that still hasnt succumbed to profit takers this one may have its share of investors looking at its 52 week high and doing the math!
KEY INDICATORS: ASKJ
Buy Area: $24.1250-$24.75
Sell Stop: $21.75
Time Frame: 2-4 days
SJ - STOCK TO WATCH: Micro Strategy (NASDAQ:MSTR)
MSTR really exploded last week with new rumors of possible upcoming
financing. To date nothing has been announced by MSTR or anyone else for that matter. The stock more then tripled after being CRUSHED off the 200 plus level it had found earlier this year to go as low as under $20.00 last month. I agree MSTR was oversold but a move to more than $80.00 would be out of line. I can, however, see further gains today as investors realize more and more just where MSTR came from off its highs in March and April.
Today MSTR will begin trading over $60.00 plus. It may open over $65.00 as it is indicated. Looking at a 90 day trading chart on this one--April 4, 2000, sticks out as well as the last week of March 2,000. It would seem to indicate that 79.06 is the top for MSTR. It could see $80.00, but it is doubtful before the profit takers come in. Therefore, I will make a play on MSTR today LONG over $62.3750 and SHORT over $78.25!
KEY INDICATORS: MSTR (LONG)
Buy Area: $62.3750-$63.25
Sell Stop: $58.3750
Time Frame: Today!
KEY INDICATORS: MSTR (SHORT)
Sell Short: $79.25-$77.50
Buy Stop: $82.50
Time Frame: 3 days
* If MSTR LOSES $58.00 TODAY before it breaks $70.00, then I will look to SHORT it to $49.00 with $64.00 as a BUY STOP!
BONUS PLAY #1 California Amplifier, Inc. (NasdaqNM: CAMP )
California Amplifier, Inc. designs, manufactures and markets a broad line of amplifiers, downconverters, antennas and integrated products. These products are used in the reception, conversion and amplification of microwave signals used in conjunction with the reception of video, audio and data transmitted from satellites or earth-based transmitters using microwave signals. The Company operates in three business segments:
Satellite Products, Wireless Products, and Antenna Products. California
Amplifier also designs, manufactures and markets two-way voice and data
transceivers used for wireless communications between fixed locations. In addition, the Company markets MultiCipher, a broadband analog scrambling system that decodes all channels transmitted simultaneously, and a broad line of antenna products used in Global Positioning Satellite applications for vehicle and asset tracking, surveying and marine and airborne navigation.
Stock Fans, the Electric Products sector has moved up in weekly ratings
fast. It jumped from the number 20 slot to the number 10 slot. California Amplifier's volume has been increasing as it looks to break out of a 2 month base. Sales and earnings look solid for this company. It has a debt percentage of 1% and a short interest of 0%. Guess the shorters are afraid of this one! Going to CAMP to bank some profits.
Key Indicators: CAMP
Buy Area:$30.50 to $31.00
TARGET:$34.10 to $35.65
Time Frame: 3 to 8 days
Type of Trade: Swing Trade
Daytrade for $.50- $1.00 point scalps. Avg. daily price range $2.53
BONUS PLAY # 2 Patterson Energy, Inc (NasdaqNM: PTEN)
Patterson Energy, Inc. provides domestic land drilling services to major and independent oil and natural gas companies. The Company focuses its operations primarily in Texas and southeast New Mexico. The Company markets its contract drilling services to major oil companies and independent oil and natural gas producers. The Company owns 119 drilling rigs, 114 of which are currently operable. Patterson is also engaged in the development, exploration, acquisition and production of oil and natural gas and, to a lesser extent, provides contract drilling fluid services to other oil and natural gas operators. The Company operates in three business segments, contract drilling, oil and natural gas and drilling fluids.
Stock Fans, Patterson Energy has it all. The hot sector moving up in the ratings is Oil and Gas Drillers. As a matter of fact all of the Oil and Gas sectors have 5 of the top 8 top slots in the Industry Group ratings. Guess that means we won't be seeing $.99 / gal. any time soon. Patterson Energy's volume is increasing, it's closing price closed above it's ten day moving average initiating the buy signal. Play the hot sectors they say and this sector is hot.
Key Indicators: PTEN
Buy Area:$24.00 to $24.40
TARGET:$26.84 to $28.06
Time Frame: 3 to 5 days
Type of Trade: Swing Trade
Daytrade for $.25 - $.50 point scalps. Avg. daily price range $1.75
STOCKS ON OUR SCREENS TODAY:
QCOM- It now says CHINA Telecom will use its 3rd generation CMDA
technology. QCOM could trade at $86.00 - $88.00 today after it tests 78.00 into today's firt 60 mins of trading.
SCON - profit takers till $31.00 then a bounce back to $38.00 maybe
EFCX- Watch this one as it could still make a move.
PLUG- The energy stocks are hot watch this one close
NUVO- This JDSU like IPO may pull back some on profit taking.
WGAT- It closed at nearly $20.00 Friday. I could find $23.00 in next 2 days.
ISPD- It been hot of late again.
IBAS- Watch this one could break out.
FIBR- It has leveled off but under $50.00 its a buy.
ESFT- If it can break $10.50 it could explode to over $20.00 watch it very close.
YHOO - It looks like it will test $130.00 before it sees $150.00
EBAY- It came close to losing 70.00 on Friday if it does then 68.00 is next level of support.
JDSU- It somehow held $111.00 area most of the day Friday but then into the close lost 110.00 but got it back in after hours. JDSU type traders may get tired of a nuetral trading range of 112-110 on JDSU. It loses $109.00 it could lose $100.00 very soon there after. If the NASDAQ can break 4,000 JDSU should break $115.00!
TSAI- This one is interesting and may find $25.00 soon if it can hold $17.00.
ISLD- This one could bounce back today and see 43.00. If it cant hold $35.00 this one is should test $29.50 there its a buy again.
IIXL- Watch this one as it may increase with WGAT.
HSAC- Worth a look.
NPNT- same sector.
RBAK If it loses $114.00 it should test $103.00 next
CRA- It should see $94.50 and then $90.00 before it breaks $115.00 again
VRTL- a $14.50 test before $20.00 again.
CSCO- The number to watch close is 66.3750 if CSCO can break it NASDAQ may see 4,009.00 soon there after!
ORCL- The KEY NUMBER here is $84.18750 if it can break that then $86.00 PLUS is HUGE! It will set up ORCL to take a shot at $90.00 again!
Have a great day!
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