The Play Of The Day
June 15, 2000
08:44 AM EST.
Attention All Live Trading Room Members & Plus Members:
I will be away from 11:15 AM EST till 2:00 PM EST. today. During this
time period there won't be any Alert Emails.
Yesterday, the NASDAQ came off a "tame" Consumer Price Index (CPI) report and for the fourth time in 10 days tried to break 3,900.00. However, the top came at 3,883.00 as investors decided to "sell the news." Then in the afternoon, the NASDAQ went negative and by 3:00 PM EST it had dropped back to 3821.00. However, in the final hour the Techs and Nets sold off into the close as the NASDAQ closed at its low of the day 3,797.00 ( -54.00).
Meanwhile, yesterday over on the NYSE many "old economy" stocks did better. For example, the likes of Johnson and Johnson (NYSE:JJ), Alcoa (NYSE:AA) and 3M (NYSE:MMM) all saw advances on the day.
NASDAQ OUTLOOK TODAY:
The NASDAQ could now be stuck in a "Catch 22" scenario as the economy is slowing, but with the slowing does that also mean the NASDAQ slows as well? It very well could mean that. The upcoming earnings in some of the Big Name NASDAQ stocks such as INTC, YHOO, MSFT, and CSCO all warned last time that they reported earnings of upcoming "seasonal slowing." Now, with interest rates on the rise it would appear that it may have an even bigger effect on the remainder of the year 2,000 numbers. This fear could in turn cause investors who didn't sell back in early April to lock in the 30% 40% in some cases more increases they have enjoyed in less than 15 trading days. That may start a sell off of short term over bought Tech and Net stocks that could set up the NASDAQ to test 3,400.00 by June 22, 2000.
In retrospect, the NASDAQ was indeed "oversold" on May 24, 2000 when it found a new 200 day low of 3,042.00. However, it would now also appear that the NASDAQ was "overbought" at the 3,893.00 area based on the fact that it tried for nearly 10 days to break 3,900.00 and was
unsuccessful. The top at 3893.00 and the bottom at 3042.00 may truly be
just that until after the FEDs meeting upcoming.
If it is too low at 3,042.00 and too high at 3,893.00 then just where
does the NASDAQ trade before the extremely important FED meeting on June 29, 2000?
It would appear that the NASDAQ now should drop under 3,790.00 then lose Tuesday's low of 3,695.00 and drop to 3,670--where based on its latest trading 200 day moving average. At this level, it could bounce but most likely it drops back and looks to hold support over the next 3-5 days at 3,600.00.
Today, I like the NASDAQ to go as low as 3,625.00 and then bounce back
to 3,755.00 or so. Then, it should bounce back, and nicely, off its lows but still 40.00 plus points under yesterday's close and low of 3,797.00 as more profits should be booked on the NASDAQ.
One thing about the Market in generalIt often seems to over correct
sell offs and then also to overcorrect rallies. However, historically it also tends to find a trading range somewhere in the middle as
it awaits more news. It would appear that its setting up to do just that as the news it awaits is the FED on June 29, 2000!
Today's "Play of The Day!" UPS Corp (NYSE:UPS)
No need to explain UPS to you all. They are the biggest shipping company in the world. Commomly referred to as "UPS!" If they go on strike then the business world comes to a screeching halt as more people use UPS than any other shipping company.
What I really like about UPS is how strong its been off of 55.00. It
doesn't trade all that much volume daily--at just over 800,000 shares on average, but this one really has nice ranges. Over its entire short-lived history of less than 52 weeks, it has shown that everytime it gets to that magical 55.00 level "It can't DRIVE 55.00! It bounces big and can go as high as 69.50. Its nearing that point again. It looks like such a solid play off of that level. I may not get it today. However, this one is worth the wait as its almost a 100% & its chart suggests to pop nicely off $55.00
KEY INDICATORS: UPS (LONG)
Buy Area: $57.50-$59.6250
Sell Stop: $55.00
5 DAY TARGET: $64.00
15 DAY TARGET: $69.50
Type of Trade: Swing Trade
KEY SHORT PLAY TODAY: Elentec Seminconductor: (NASDAQ:ELNT)
ELNT has been a great performer of late. It has been perhaps as good a
stock on the NASDAQ as there is. However, at current levels this one is trading at more than 2 times its 200 day moving average, and 1.50 times its 50 day moving average. Those commonly used technincal indicators suggest that ELNT is way ahead of itself at current levels. It, therefore, sets up to be a great short as it should continue to drop lower. Then, at $47.00 this one may bounce. It very well could go all the way to $42.00 as it has a gap to fill at $41.00.
Stock Fans, in "Short" no pun intended, this one is a great short on the charts. It also is a perfect stock to begin to follow closely cause this ones a real big time keeper as it has outperformed in the last 52 weeks the likes of JDSU, RMBS, and even PMCS. Its a real gem in the sector and in a field that is only going get more attention and more profitable. Ill short it here but this one I want LONG and STRONG in my long term portfolio sometime before August I hope!
KEY INDICATORS: ELNT (SHORT)
Sell Short: $57.43750-58.1250
Cover for a LOSS: $62.25
Time Frame: 3-7 days
Type of Trade: Swing Trade
(* Long on ELNT for a bounce @ $47.00. It does, however, have a gap to fill at $41.00. It has been very strong off of 47.00 of late as it exploded off it last time to go higher than even current levels suggest.)
BONUS PLAY #1 American Express Company (NYSE: AXP)
American Express Company, founded in 1850, provides travel-related
services, financial advisory services and international banking services throughout the world. American Express Travel Related Services Company, Inc., including its subsidiaries, provides a variety of products and services, including global network services, the American Express Card, the Optima Card, and other consumer and corporate lending products. American Express Financial Corporation provides a variety of financial products and services. American Express Bank Ltd. offers financial service products, and the Travelers Cheque Group issues travelers checks. In 1999, the Company further defined and focused its enterprise-wide Internet strategy on four key objectives: becoming a payment provider for online transactions, delivering online customer service, becoming a preferred destination site for existing and new customers, and using interactive capabilities to improve the Company's economic performance.
Stock Fans, American Express is breaking out off of lots of good news and strong institutional buying. Looking for a pullback later in the day to pick up some shares.
KEY INDICATORS: AXP
Buy Area:$55.75 to $56.50
TARGET:$61.325 to $64.975
Time Frame: 3 to 10 days
Type of Trade: Swing Trade
BONUS PLAY # 2 Halliburton Company (NYSE: HAL)
Halliburton Company provides a variety of services, equipment, maintenance and engineering and construction to energy, industrial and governmental customers. The Company offers its products and services through three business segments: the Energy Services Group, which provides discrete services and products and integrated solutions to customers in the exploration, development and production of oil and gas; the Engineering and Construction Group, which provides services to energy and industrial customers and government entities worldwide; and the Dresser Equipment Group, which designs, manufactures and markets highly engineered products and systems, primarily for the energy industry.
Stock Fans, looking at the oil sector for plays. It is clearly the leader breaking out to new highs. Volume has been solid and the timing
indicators look great. Looking to add on the dip!
KEY INDICATORS: HAL
Buy Area:$46.75 to $47.50
TARGET:$50.25 to $52.875
Time Frame: 3 to 7 days
Type of Trade: Swing Trade
Intel Corp .(NASDAQ:INTC) - Option Play
INTC looks to be breaking down a bit at these levels and in need of some consolidation. 124.50 has provided support recently and if that level is broken it should sell down to 118. Any time you can capture more than 5 points in a stock within a few days - options are a great way to play. So our call on INTC is to buy the JULY 120 PUTS SYMBOL = INQSD last ask 5. Use a stop loss of 130 on INTC for stopping out of your puts so as to protect capital. Downside target is 118 INTC. Play smart and take your profits when they present themselves.
STOCKS ON OUR SCREENS TODAY:
MSTR- It may have support at $36.00 today.
JNPR- It splits on Friday. It should drop back to $194.00 ahead of its split and fill in the gap it has in its trading graph
SPLN- SHORT this one to $13.25 it has a double bottom there and a gap to fill in. It looks good at 13.25 for a bounce back up. (daily volume is low on this one)
ARBA- This one should pull back to $62.00 area over next few days
QCOM- It has a 50.00 price target says Hambrech and Quist today. It may have support as it has a gap to fill at $54.00
YHOO- It looks like it loses $134.00 in next 2 days
JDSU- It now looks like it drops to $105.00 next 3 days.
EXDS- It splits Monday it should drop down to $82.00
EBAY: It looks like it may test $59-$58. It looks good at $60.00 and sell stop of $57.00 there it looks like a buy again.
RNWK: It should give some back and find $42.00
SDLI- What a stock, but it is looking drop more on profit taking taking play. It
should test $225.00 soon then a gap at $199.00
DCLK: It came on late and held up ok. It still looks like $45.00 can be attained.
ORCL- $75.00-$73.00 area upcoming
CSCO- It looks as if it going test $60.00 before it breaks $66.00 again
Have a Great Day!
More to come....
and BigPlayStocks.com TEAM OF PRO TRADERS!