The Play Of The Day

July 12, 2000
08:33 AM EST.

Good Morning Stock Fans!

NASDAQ RECAP: July 11, 2000
Ahead of Yahoo's! Earnings:
Open: 3970.42
High: 4029.30
Close: 3956.42 -23.87 (-0.60%)
Most Common Range: 3981-3992

NASDAQ OUTLOOK TODAY: "The NASDAQ Could Bring Yahoo! To a New 60 Day High!"

Yesterday, without question the normal trading day was hugely overshadowed by the extra session. The Bulls got what they so badly needed yesterday. A Major Blue Chip NASDAQ Stock to report blow out numbers!

Yahoo (NASDAQ:YHOO) dipped for a time yesterday under 100.00 as it traded more than 50.00 points off its June 2000 high and more than 60% off its year high of 260.00. Mary Meeker was up early yesterday, fearing YHOO would fall short in ad revenue. The stock reacted by opening under this trader’s sell stop of 107.00 yesterday as it opened sub- 105.00 yesterday on her bearish comments.

The action on Yahoo hurt other major Internet related NASDAQ stocks such as AOL, DCLK, CMGI, EXDS, RNWK, EBAY, AMZN, PCLN and INSP. They all hit year lows as YHOO struggled to hold 100.00 most of the day. Then about 60 mins ahead of the close yesterday investors may have begun to sense YHOO had been hammered enough, and the stock made its way off 100.3750 –its afternoon low-- to close at 105.50.

Stock Fans! I was hopeful that YHOO would at least hit the higher end of its numbers estimated at 10 cents a share. YHOO held true to its name and as the numbers hit YHOO exploded and cleared 107.00 in seconds. For good reason, it rocketed as it had reported blow out numbers 12 cents a share! The number was well over the highest Whisper Number! The revenue was a 110% increase and YHOO revenue (including ad revenue) was just fine at 270 mill 10 million more then the highest of estimates!

The Bulls indeed got what they wanted! YHOO didn't disappoint and the NASDAQ Futures EXPLODED in after hours going up 70.00 at one point. The likes of AOL, DCLK, CMGI, EXDS, RNWK, EBAY AMZN,PCLN and INSP all added on more than 2.00 a piece as YHOO rolled to go as high as 122.50 in after hours before having its last trade come into the latest of after hours at 121.00 even!

Talk about a tale of 2 markets. The after hours session last night had its biggest volume in over 3 months as YHOO had done it yet again, and under the biggest of pressures.

"YHOO vs Slowing Economy!"

The FED has done its job. YHOO has done its job. Now the question is will the NASDAQ break to a new 60 and 90 day high thus breaking 4074.00?

It would seem to have all the fuel it would need to do that today. With the CPI and PPI both upcoming in less than 5 trading days from now. It would certainly appear to me that the NASDAQ better use its latest good news regarding YHOO and rocket over 4074.00 and not allow YHOO numbers to be an excuse to sell stock into strength on worries of more rate hikes in August off bad CPI and PPI reports.

The NASDAQ should open today based on the NASDAQ Futures (way over 70.00) at about 4023.00 going over yesterday's Key Area of resistance. The NASDAQ then is going to need to break 4040.00 and make 4050.00 very soon thereafter. Any kind of pause and YHOO numbers will be forgotten and used as an excuse. The NASDAQ has to get a new 60 and 90 day high today and, I think must take place within the first 30 mins of trading. It has to break 4074.00 and be up over 115.00 points before the clock strikes 10:00 am on the East Coast. If it can run over 4074.00 then 4100.00 would follow 4200.00. The NASDAQ would then break out of its rather narrow trading range of nearly 60 days old from 3800.00-4000.00 (on average) and would make the bulls run again. The likes of YHOO and all the other aforementioned Internet Stocks as well as Techs on the NASDAQ should all add on today in YHOO’s wake.

The major thing is for the rally to sustain and surpass 4074.00 and then take out 4077.92 and make that new 90 day high. The NASDAQ could very well--based on the amount of volume that moved YHOO and others up in after hours-- be a shorted market. However, they will have to cover on the open. The key is once again to not sell off into strength. This trader will be looking very closely at the follow through. In a rally especially in the AM hours right off the open. It can't continue to be a rally if sellers come in and book profits. There should be no need to book profits in a sustained rally. Nothing could be better today for the Bulls and the Longs then to bust this NASDAQ up and over 4100.00 and break it out!

The KEY Numbers today are:

4029.00 Yesterday's high.
4054.00 The current 5 and 10 day high.
4074.00 The Current 60 day high.
4077.92 ( 4/10/00 High) Next Level of Resistance over 4074.00
4182.00 (4/07/00 High) The Break out Point.
4381.00 ( BREAK OUT) to 4500.00


Today's "Play of The Day!" is: People Soft (NASDAQ:PSFT)

Stock Fans, PeopleSoft Inc. Chief Executive Craig Conway said late into yesterday’s regular trading session that PSFT will beat analysts' per- share earnings estimate by 50 percent on increased sales of software licenses. Conway said he tried to persuade analysts to raise their estimates for 2001 to 60 cents to 65 cents from a range of 40 cents to 44 cents, at an analyst meeting in May. Analysts didn't change their forecasts because of the company's problems last year. In light of that fact Conway took it upon himself to issue yesterday's press release and let those doubting analysts know again he wasn't kidding PSFT will indeed beat the Street!

PSFT traded as high as 22.6250 yesterday. As high as 22.00 in the regular session and then added on nearly 900,000 shares in the extra session to send the stock up another .6250 more.

Today, I expect PSFT to see massive volume and should break 22.50 perhaps very soon after the close. The break out point is 22.68750 If it breaks that I will get into shares of PSFT as it could rocket to 27.00 soon thereafter on huge buying interest that could be spurred on by the likes of daytraders and CNBC.

If it can't break 22.68750 off the open then I will wait and go in under 21.00 as profit taking should allow it to bounce just under 21.00 today. I will then load up on PSFT as the volume that this stock could see today could send it up 6 to 26.00 as soon as today or tomorrow!

KEY INDICATORS: (PSFT If it BREAKS 22.68750 off the open)
Buy Area: 22.75 limit buy placed
Sell Stop: 21.6250
1 DAY TARGET: 25.50-26.00
Type of Trade: daytrade

KEY INDICATORS: PSFT ( If it can't break 22.68750 after the open)
Buy Area: 20.8750-20.6250
Sell Stop: 20.25
1 DAY TARGET 22.50
1-2 DAY TARGET: 24.25-26.00

I am going buy 5 PSFT July 2000 25.00 Calls off the open today. I will add 10 more to it if PSFT breaks 22.75

BONUS PLAY #1 Electro Optical Engineer (NASDAQ:EXFO)

Stock Fans, I am calling EXFO as a bonus play today based on the fact that EXFO went to 76.00 yesterday in after hours. I like the play today off 70.50 for a move back up 5.50 where I sell half and then will look for a big break out on EXFO for the other half. I like 70.50 today as I think EXFO will not break 73.00 after the open then drop back and wash some momentum traders away and regather to make that run to 76.00 and maybe more! I'll take 5.50 any day of the week including Wednesday's!

Buy Area: 70.50 buy half ( 50%) limit buy placed on open Limit buy 71.00 for other half (50%) placed on open.
Sell Stop: FIRM: 68.00
1 DAY TARGET sell half 50%) 75.8750
2-5 DAY TARGET: 78.00 - 80.00 sell rest
Time Frame:
Type of Trade:

If YHOO can't break 128.00 today and see 131.00 then it still sits in a profit taking range of 125.00 - 110.00 Low 99.8750 yesterday. With YHOO going up so much in after hours on 2 million shares. Some of it no doubt was due to the numbers. The rest could have well been short covering. Therefore I am going buy 5 YHOO July 2000 110.00 PUTS right off the open today and bail on them with my losses in hand at YHOO 133.00. If YHOO can't break 128.00 then I will buy 2 more. YHOO went from 103.00 on average - 121.00 last night. I would expect many including me with my 400 shares under my sell stop on Monday of 108.00 based on yesterday's open will bail if YHOO loses 120.00. If YHOO loses 120.00 I will add on 3 more and have 10 total. YHOO should easily test 105.00 sometime before July 21, 2000. In other words many may sells the YHOO news leaving investors to decide whether or not they will pay in excess of 131.00 for YHOO

I will buy YHOO back under 109.00 in the next 4 days if by some chance gets there.

I will SHORT YHOO at 126.00 today and cover at 133.00 and look for 115.00 as a 2 day TARGET. FIRM SELL STOP 133.00!


Sago's fabulous Florida vacation is over. He told me last night he has missed trading and also has missed all his friends in the LIVE Trading Room! He heads home to the North! Hopefully the NASDAQ heads the same way he is NORTH!

Sago to return Thursday, AM


The other 9 Key Net Stocks Should Roll off - YHOO!
1. AOL- Look for 57.00 it breaks that I pile on.
2. DCLK- 32.00 is huge for run back to 36.00
3. EBAY- 48.6250 is huge for 52.00 move.
4. CMGI- 41.00 is huge for 45.00 move
5. EXDS- It better make 45.00
6. CMRC- It way oversold I watch for a break out. and 50's
7. RNWK- 45.00 is where I buy for 50 move 54.00 is a dream.
8. AMZN- 39.00- 40.00 might be too much to ask
9. INSP- major resistence now at 50.00 it breaks it 62.00 could follow.

11. GNSL- a retrace under 25.00 gets me in at 5.00 off highs. I will go in and look for 30 again.
12.LEXG- 42.3750 I buy and look for 46.00.
13.JDSU- 100.50 big resistence now. It breaks it I go in for 104.00 move under 96.00 I short JDSU to 94.00 and go long JDSU at 93.25.
14.SDLI- Too rich for my blood-- short however, if it loses 320.00 back to 314.50 for a quick 5.50
15. XOMA- Watch for more
16.DURA- Watch.
17.PILT- over 17.25 I buy for 20 move.
18.DLK -watch close could break out.
19.BBSW- It clears 36.00 its gone!
20. BVSN- I buy it over 40.00 today and look for 44.50.
21.00 over 45.00 I buy it and look for 48.00
22. AFCI over 48.50 I buy and look for 52.00 -55.00
23. GBLX I watch close for a move over 30.00 and a break out.
24 RMBS under 87.50 I buy and look for 92.50.
25. 64.00 and over I buy in for 70 break out under 60 I short it back to 56.00


Have a great day!

More to come.........

Stock Jock!

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