The Play Of The Day
08:29 AM EST.
Good Morning Stock Fans!
Yesterday, the NASDAQ was unable to hold the 3900.00 level. It sold off on possibilities the FED may not raise on 6/28/00 but instead may raise again before year end. Investors saw that sentiment as one to sell out big profits that had been attained from 5/24/00 into as recently as yesterday. The index added more volume then it had one day prior as it closed near its low of the day down 50.00 plus at 3858.00 just one 6 points higher then Monday's low of 3852.00.
NASDAQ OUTLOOK TODAY: "It's All On The FED"
I will await the FED today as many investors should that have not invested in this market of late, remain on the sidelines until the FED's decision comes in on interest rates at a scheduled time of 2:00 pm est.
Until then I will play the play I have laid out and SAGO has laid out as normal. I look for the index to open higher today but traded under 3900.00. I like a trading range of about 3881.00 - 3836.00 ( 45.00 points.).
SJ'S FED PREDICTION:
Examining all the data since 5/24/00 and 3042.00 a 200 day and year low on the NASDAQ. I have come to the conclusion that the FED should stand pat today as predicted as the market has built in that decision. However I don't see the FED being in a position to be done raising rates. I see August 2000 the next FED Meeting as one that will take a wait and see attitude. I see the NASDAQ's reaction on this news one of mixed proportions.
The NASDAQ should (not right away) but over the next 5 trading days test its current 30 day low of 3695.00 off this news. it would seem that one reason the NASDAQ fell from 3890.00 to 3695.00 about 15 days ago was to set up today's "wait and see" attitude. With a hot of economic data between now and then, and many tech stocks earnings. The NASDAQ should eventually retrace to 3550.00.
I don't see it as a bearish situation instead. I see it as a move to make the index more healthy in the longer term. The NASDAQ went to 3042.00 that low on 5/24/00 many contend was a shaken out bottom. However going back to 4073.00 so fast off those lows seemed to contradict the overall state of the intended cause of increased rates.
This intend cause is to supposed to be one of "slowing" dropping consumer confidence in the same motion. It really doesn't matter where the NASDAQ trades on between FED meetings as it has shown in the past that FED meeting's descions on interest rates set up resistance. The FED increased .25 on 3/22/00. That day the index traded over 4300.00. It lost this level 10 days later, and hasn't traded that high since. I see the latest move by the FED one of not raising but one of wait and see, as one that is intended to hold the NASDAQ under 4073.00 but also hold it over 3400.00. It would then seem to be an easier market to gauge.
Sure I love the big moves the NASDAQ has made of late going up over 1,000 then dropping over 200.00 in less then 30 trading days. As a daily momentum trader those moves make my job easier. However since I have no affect on what the FED does in my prediction. The question then is does the FED like the big moves. That question could be answered later today with a wait and see attitude for now. As much as I want the FED to end its rate increases. I just don't see how it can go on hold for August as well.
Therefore I look for a test of the NASDAQ's current 30 day low in less then 5 days at 3695.00 (- 150.00 ) on profit taking. I also then see a drop to under 3652.00 the NASDAQ drop off low in April from 4300.00. The NASDAQ has not been able to go about 300 points higher then 4073.00 and find 4300.00 since 3/22/00. I can see the NASDAQ on this basis should hold 300 plus over the 200 day low of 3042.00. I like 3553.000 as a good retracement. Its a healthy one as well as the NASDAQ then can on no more increases after August find 4,000 plus and 4300.00 again into the middle of September 2,000.
If it does fall today on FED's descion. I will look to buy in LONG off bounces 8-2 SHORTING the drops. Meaning for every 10 plays I call 8 will be longs looking for bounces up off short term ( on the min charts) oversold ranges.
I plan to have sell stops tightly secured by 1:45 EST today. As the FED descion i don't think is so much today on what is now ( today!). Instead its one of what's the FED concludes it will do in the future. The NASDAQ as well as the entire US stock market should inperpit the future as August 2000 the next time the FED meets to discuss rates.
Today's Play of The Day is: (NASDAQ:MMXI)
Today's PLAY, is one I have put some thought into and reminds me of a similar call I made nearly 1 year ago today. The play I am speaking of was MFNX ( s stock I play often) purchase of now bought out by MFNX stock formerly traded as ABOV. Shares of MFNX dropped nearly 20% the day it announced buying ABOV, ( about a year ago today) as investors of MFNX saw the purchase as one that would affect the stock in the short term.
However, like MMXI purchase of Jupiter yesterday, then MFNX was seen as purchasing ABOV to increase its overall company in the longer term. It on this fact in less then 3 days not only added back its lost value it added on 5 more points as the purchase was seen as a quality one in the future. Fen times investors sell first and ask questions later. Later can also be more often then not a misses opportunity at some nice solid gains.
So with this in mind. I see MMXI purchase of Jupiter yesterday as one that could be seen as more positive very shortly then negative. It then makes perfect sense to me to buy into MMXI a stock that normally trades, ( 30 day average 98,100) under 100,000 to one that traded over 1.6 million yesterday on the news.
However the biggest reason why I decided to chose MMXI today as the PLAY. It has a double bottom support lasting nearly 30 days at 23.3750. 5/24/00 and yesterday's low. Sure the stock doesn't trade in the NASDAQ but it does follow the overall market movements. On 5/24/00 the NASDAQ traded at 3042.00 a 200 day and year low. MMXI found this same exact bottom yesterday. It would seem that even on massive selling of more then 15 times normal volume MMXI is destined to hold 23.3750.
Therefore, I will look for MMXI to bounce back about 1.00 on the open then retest 23.25 and under 24.25 I will look to buy shares of MMXI as it might just be a stock ready to go over 26.00 now seen as major resistance as many investors have sold out setting it up as perhaps a stock bigger investors want for longer term gains taking into account that sooner or later MMXI purchase of Jupiter was seen as one to increase MMXI future share volume. It therefore could overtake 35.00 again in less then 60 days from now. Its worth a play today for all of the reasons I have listed.
KEY INDICATORS: MMXI
Buy Area: 23.1250-23.6250
Sell Stop: 21.75
1 DAY TARGET: 24.00-25.3750 ( sell 50% here. hold the rest with 21.00 sell stop for 10 or 60 days.
10 DAY TARGET: 26.00-32.00
60 DAY TARGET: 38.00-40.00
BONUS PLAY # 1 Advanced Fibre Communications (NASDAQ:AFCI)
Advanced Fibre Communications (NASDAQ:AFCI) designs and manufactures worldwide broadband access solutions for the last mile. AFC's OmniMAX(TM) is a global product family consisting of industry-leading multi-service access platforms with integrated optics and intelligent CPE. AFC's OmniMAX(TM) products can quickly and cost-effectively upgrade legacy networks, ubiquitously delivering narrowband, wideband and broadband services to all subscribers regardless of their geographic location from a carrier's central office.
Yesterday shares of (NASDAQ:AFCI) were hit hard as worries of HLIT missing its numbers fell onto stock in the extrmely HOT sector of Fibre optics stock affecting the likes of JDSU, SDLI, and LPTHA. It however had the biggest affect on shares of AFCI as traded massive volume of more then 4x normal, had a range of 10.00 and dropped more then 8.00 ( 8.25) in value yesterday.
It is worth it to me to try and buy this stock as it appears to be "oversold" at least in the short term at current levels under 44.00. The stock may bounce back and open over 44.00 today on lower volume then fall back and re test yesterday's low. If it does this it has presented to me a buy signal and should then hold over yesterday's low of 42.25. I will wait for a move back to just over support of yesterday and go in at that level. If the FED is kind this stock could really take off as some investors bailed on AFCI yesterday on nothing more then fear as it had big volume and seemingly fell apart losing 10 day support right in front of many share holders eyes.
KEY INDICATORS: AFCI
Buy Area: 42.25-43.18750
Sell Stop: 38.8750
1 DAYTARGET: 46.3750- 47.56250 ( sell 50% sell stop = 44.00
*FED TARGET: If the FED is done raising rates. It could rocket back to 50.00 today!
Volume will be the KEY on this stock today. 2 million shares and hold 42.25 it looks to be a good investment for predicted targets.
BONUS PLAY #2: (NASDAQ:DVNT)
This is a lower priced stock. I am adding as a bonus play today, because it has been trading in a nice uptrend. It looks like as if it could make a move higher and take out 20.00 in the next 3-5 days if the stock can hold over 12.31 as it did yesterday. I like it to bounce just above this area today, and if it holds make a move to 15.00. It worth watching from there and holding half of the shares as it could bust free and clear 20.00 as its chart indicates added momentum above 15.00.
KEY INDICATORS: DVNT
Buy Area: 12.3750-12.6250
Sell Stop: 10.8750
2 DAY TARGET: 14.25-15.00 ( sell 50% trial stop= 13.25
5 DAY TARGET: 17.00- 20.00 ( if it holds 14.50)
Type of Trade: Swing Trade
BONUS PLAY #3: Qualcom: (NASDAQ:QCOM)
QCOM has had it problems overseas to say the very least. First, it was China and its CMDA technology. Now its problems with chip set sales in Asia. The stock appears to still have several longer term holders who still believe it or not have fairly good gains from QCOM's huge run up about 8 months ago. It would seem many investors have held QCOM looking for a move back up as they purchased it on margin.
With this in mind QCOM should have more sellers whether its voluntary or mandatory under its double bottom support of 59.8750-60.00. This area has held extremely well thus far as 60.00 was the low on 5/30/00, and 59.98 was the low on 6/15/00. The stock has somehow gone as high as 84.00 in between these 2 time frames. The fact that it has bounced over 24.00 off its 2 double bottom lows of the last 30 days shows it does continue to have interest when its beaten down to 60.00
Therefore, I will play QCOM try and play QCOM the following way today:
I will not SHORT this stock as it seems to be one that has better gains even with bad news in the mix off support areas. It is a stock that also has a tremendous amount of interest and one that has many brokers going back and forth on it. If it can have bad news and bounce off 60.00 2 times in the last 30 days and then go as high as 84.00 its worth waiting on the stock to drop back to 2 key areas and play it long off those areas with tight sell stops.
Taking all this into account I will remember one added factor. QCOM has a gap up to fill from way back in late 1999 at under 55.00 a share. I therefore will look to play QCOM more aggressively long after it loses 60.00 (if it does) at under 55.00.
Below are the ways this stock sets up for me today:
KEY INDICATORS: QCOM ( If it opens today over 60.00)
Buy Area: (limit buy placed at) 60.3750
Sell Stop: 58.50
Time Frame: today
KEY INDICATORS: (QCOM opens under 60.00)
Buy Area: (limit buy) 55.50
Sell Stop: 52.50
1 DAY TARGET: 60.00-61.00 (I will sell half = 50% shares trial with stop.)
3 DAY TARGET: 66.00-67.00
6 Month Target: 78.00-84.00
(*QCOM SHORT- Yes since QCOM could lose 5.00 plus off 60.00 today and go under 55.00. QCOM if it opens under 60.00 is still a good candidate to SHORT for a move down to 55.25. It however could be a dangerous short as QCOM can bounce back very fast, and should trade fast today. )
Again the best way I see to play QCOM is off its 2 levels of support 54.50 and 60.00. In-between those 2 areas things could get very dicey if it trades there for a SHORT player.)
One final indicator to consider today: "VOLUME!"
QCOM could trade 30 plus million shares today and be a very popular daytrading even ahead of the FED. I will only use limit orders in trading QCOM today. The other not on volume to make is it will take massive volume I believe for QCOM to sell under 60.00 if it opens above it and also high volume to drop it to under 55.00.
RUN THE OPTIONS: QCOM
The July 55.00 Puts on QCOM might be a good investment to daytrade if QCOM loses 60.00 today or opens under 60.00 and above 57.00.
PRO TRADER SAGO'S BONUS PLAY'S:
BONUS PLAY #4 Network Appliance, Inc (NasdaqNM: NTAP)
Network Appliance, Inc. and its subsidiaries are engaged in the design, manufacturing, marketing and support of high performance network-attached data storage and access devices, which provide fast, simple, reliable and cost-effective file service for data-intensive network environments. The Company pioneered the concept of the network appliance, an extension of the industry trend toward specialized devices that perform a specific function in the network, similar to the development of the router for network communications. Network Appliance filers and NetCache appliances are based on the Company's patented data access solutions, including Data ONTAP software and standards-compliant hardware.
Stock Fans, we played this stock for a nice return on 6-16. Network Appliance is one of those stocks that can blast off at any time. The daily fluctuations can shake even the firmest of investor. Network Appliance weekly chart looks for a nice pop. The Nasdaq chart looks to be forming a cup and handle formation. In my opinion it is time to buy. Whether the market breaks out here today or tomorrow Network Appliance is a stock to own. It has all of its indicators lined up. It has a Relative strength rating of 97 and a EPS rate of 99. No debt and a growth rate of 77% Earnings and sales have been spectacular. The closing price crossed above the 10 day moving average. Stochastics are in the oversold range. This is a strong leader and I expect that they will be the first to benefit with some positive economic numbers.
KEY INDICATORS: NTAP
Buy Area:$85.00 to $86.00
TARGET:$94.60 to $98.90
Time Frame: 3 to 10 days
Type of Trade: Swing Trade
Daytrade for $.75 - $ 1.50 point scalps. Avg. daily price range $6.08
BONUS PLAY #5 Andrew Corporation (Nasdaq: ANDW)
Andrew Corporation is a supplier of communications products and systems to worldwide commercial, industrial, and governmental customers. Its principal products include coaxial cables, microwave antennas for point-to-point communication systems, special purpose antennas for commercial and government end use, antennas and complete earth stations for satellite communication systems, cellular antenna products, cellular telephone accessories, electronic radar systems, communication reconnaissance systems, and related ancillary items and services. These products are frequently sold as integrated systems rather than as separate components. Approximately one half of Andrew's products are sold directly to end users. Most of the remainder is sold to radio equipment companies.
Stock Fans, we are dipping into the well again. Andrew Corporation gave us some nice profits back when we first played this in May. It has since retraced form it's high by 14%. This is a timing play. The numbers are strong and I am looking for a short term pop!
KEY INDICATORS: ANDW
Buy Area:$35.25 to $35.75
TARGET:$37.54 to $39.325
Time Frame: 2 to 4 days
Type of Trade: Swing Trade
Daytrade for .35 - .75 point scalps. Avg. price range $1.95
STOCKS ON OUR SCREENS TODAY:
1. YHOO- It should trade in a range of 125.00-122.50 ahead of the FED.
2. EBAY- 50.00 is so solid worth adding more when it is 1.00 over solid support of 50.00
3. NSIL- Volume not all that high but it did double the volume and trade 5.00 higher yesterday I will watch
4. BIOI- It added on 2.00 plus yesterday. it could go higher today.
5. GNET- It should bounce back 2.00-3.00
6.BBBY- This one is strong a good buy if it retraces 1.50. it then should continue in uptrend
7. MACR- 88.00 a good buy area. With a tight sell stop of 85.00. Shockwave.com remains a very solid and high profile IPO coming later this year.
8. SCNT- Nice move up I will watch for a move 3.00 higher today
9. MFNX- 35.00 support its worth a buy here.
10.TIBX- It reached a 90 day high asit almost broke 100.00 and closed up over 5.00 at 98.93750. It should retrace back down to 95.6250 and then add on about 4.00 more points going to 103.43750 under next level of resistence 104.50
11. JDSU- It hit my target 3 day yesterday as it droped more then 6.00 back to 117.8750 as a low losing its 5 day support. I look for JDSU to trade under 123.25 today and test its next are of support at 114.50.
12. PAIR- It held my sell stop I still like it.
13. EFCX- it holds well.
14. PLUG- It has 50.00 as solid support.
15. WEBT- I continue to watch for a move over 42.00 then its a buy for a 50.00 move. Numbers should be good.
16. EMLX- If it holds 67.00 it a buy otherwise it mayu test 63.50 today. 62.00 sell stop going in at 63.50.
17. NEWP- Well it looked to top out yesterday. I like it to lose 90.00 ahead of the FED. I would take profits on this long ahead of the FED today and not wait to maybe lose big profits and on a surprise. I think investors will as well.
18. CSCO- If it loses 60.50 today then the NASDAQ should fall under 3800.00
19. MSFT- I like a 75.00 test soon.
20. INTC- It should test 125.00 soon
21. RMBS-popular among daytrader. 102.8750 a buy are to look for 107.00 move up.
Have a great day!
More to come.........
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