The Play Of The Day

July 18, 2000
08:45 AM EST.

Good Morning Stock Fans!

Breaking Economic News:
June Consumer Price Index (CPI):
CPI: .06%
CPI Core: .02%

Stock Fans, the CPI came in a bit higher than expected . The BEARS have what they want--a reason to sell! However, the NASDAQ may have just been waiting to come on in and step up to the plate to BUY BUY BUY! Many don't know about FOMC meeting and many will just buy key names that are lower in the last few days. The CPI has forced the NASDAQ futures down about 25.00 points today. The CPI , I don't think was the type of reading that was strong of a reading to move the NASDAQ. It may set up some profit taking. However, I am looking for 4182.00 to hold today and then leave the NASDAQ in the hands of INTC. INTC will report today after the bell. The fact that it found its way to a new high in the past 5 days says loud and clear that earnings are now ahead of the FED’s August meeting and will drive this market. YHOO reported blow out numbers, ARBA, and MOT all came inline. In April YHOO hit, but cautioned. MOT missed and warned, and ARBA was not close to its number. With all 3 of them doing fine and the PPI on Friday in decent shape as well as a small increase in the CPI reading I feel that earnings are now the fuel to the NASDAQ. If INTC can follow today after the close and come in just fine--as NVLS and GNET really impressed yesterday-- then it would seem that the NASDAQ will continue the rally higher.

With daytraders and a renewed interest in this market again I believe that the FED will probably increase interest rates again in August. The fact is however that its about 1 month away. Earnings are KEY until then and as long as INTC today and MSFT and AOL on Thursday come in to the upside, then the NASDAQ after today's profit taking early in the session seems to be forced higher by momentum investors. In short, its going to take more than a .01% CPI increase to send this market under 4100.00 and as long as it holds that marker, its got a nice range to go higher. Under 4078.00 the NASDAQ is in big trouble to lose 4000.00 and lose confidence.

I look for the NASDAQ to open down at about 4250.00 or so today, then drop maybe to 4188.00 as INTC moves up in anticipation of earnings. I look for the NASDAQ to make a move back over 4265.00 and close about where it did yesterday. I don't see it adding on today. It does need good news for that. INTC may be just what the BULLS ordered! The last hour today may tell us an awful lot as INTC could make a nice move into the close. One thing is for sure--INTC will have the NASDAQ floor after the bell as it will send this market higher Wednesday if it can beat the Street or it could cause it to really sell off. INTC will be the main attraction now!


Today's Play of The Day is: Red Hat (NASDAQ:RHAT)

Yesterday, RHAT the premiere "LINUX Play!" ran up into the close on CNBC featuring it as the afternoon broker call. It looked great as it went as high as 28.6250 breaking previous strong resistance with a double top in its range at 26.00. The fact that the stock broke through this previous 5 day resistance is very important. However, what sticks out even more is that the stock had gathered in a very tight range ahead of its move yesterday over a period of 4 to 5 days. After studying RHAT's chart for quite sometime, it looks as if the accumulation was enough to possibly send this one to its 30 day high of 36.00. The volume yesterday into the close also looked to include some short covering.

I like RHAT today to make 26.00 and hold 26.1250 and then make a move higher to possibly 32.00 where short covering could send this one up in a hurry, as well as panic buyers. The CPI will have some bearing today. However, this stock is still extremely oversold in its current 200 day range and even its current 15 day range. If it can break 35.00 its off to the races. It could get close today after I think it shakes out by maybe even losing 26.00 by 62 cents or so, then making a big move up.

Buy Area: 26.50-27.1250
Buy More on Weakness at: 25.8750
Sell Stop: 25.00
1 DAY TARGET: 28.43750-29.3750
2-4 DAY TARGET: 32.00-34.50 ( Sell half)
BREAK OUT: 35.00 plus could see 44.00 in a hurry!
Type of Trade: daytrade/ swing trade

Watch these LINUX Play's today off RHAT:

BONUS PLAY #1 Genomic Solutions: (NASDAQ:GNSL)

On Friday GNSL sold off and went under 20.00 to 19.25 on lower than usual volume. When I saw this I immediately figured that GNSL would drop more than 3.50 on lower than its normal 5 day volume. It told me that many investors could be holding the stock for a run, perhaps on news, back up to its current all time high and 30 day high of 31.00 plus. The fact the GNSL only traded 750,000 shares under its 30 day average by about 1/3 or so was very inviting to me as a stock going down on less volume many times does indeed show investors are holding for news.

Yesterday, GNSL on about the same volume as Friday, added on more than 3.50 at one point and came within about one of its break out area of 26.00 as it rocketed about 25 minutes after yesterday's open to just under 25.00 by a few ticks. It mangaged to still add on 10.74% yesterday, as it closed up 2.00 at 22.00. The move perhaps was partly on a renewed BIO- Tech Sector. However, it also could very well have been in anticipation of today's non-stream lined news that Genomic Solutions GNSL, Is unveiling a Genomic Research Tool. That news could be just what those investors were holding for yesterday and Friday.

I like GNSL to make a run today as it gets renewed interest back up to 26.00 and maybe break out and head back towards 30.00. The cost of this stock is still relatively cheap in relation to what it does. It seems like it is going be a Bio Tech stock that could go to 40 -50 as it continues to release the type of news it has today.

Buy Area: 21.50-21.8750
Sell Stop: 20.25
1-2 DAY TARGET: 23.43750-24.68750
3-5 DAY TARGET: 25.50-26.00 sell half
5 DAY TARGET: 32.00
Type of Trade: daytrade/swing trade



BONUS PLAY #1 Three-Five Systems, Inc (NasdaqNM: TFS)

Three-Five Systems, Inc. designs and manufactures display modules for use in the end products of original equipment manufacturers. The Company currently specializes in custom liquid crystal display (LCD) components and technology. The Company collaborates closely with its customers in providing its design and manufacturing services. Its LCD modules are used in mobile handsets and other wireless communication devices as well as in office automation equipment, industrial controls, medical equipment, and instrumentation. In addition to its traditional LCD module business, the Company is pursuing the commercialization of its liquid crystal on silicon microdisplays following substantial research and development over the past two years. The Company markets its services in North America, Europe, and Asia through a direct technical sales force.{F5292744-59AB-47CB-BB4E-34A4A721FC7B}

Stock Fans, as the CEO in the article above said, the selloff is overdone. Here is a chance to buy a profitable company on sale. Three-Five Systems has a PE of 48, a RS of 92 and an EPS rate of 85. Earnings ending 6/30/00 were up 200% over the same period last year. They just received new orders.

TEMPE, Ariz., July 17 /PRNewswire/ -- Three-Five Systems, Inc. (NYSE: TFS - news) today announced that the company's China facility has received two new design wins and has received a first production order for an additional program to be manufactured in the Beijing facility. Each of these programs come from new and separate customers for Three-Five. The custom liquid crystal display modules will be designed by Three-Five Systems for use in a PDA, a wireless handset and an MP3 player.

Looking to buy on the dip for the swing.

Buy Area:$37.50 to $38.00
Time Frame: 2 to 5 days
Type of Trade: Swing Trade
Daytrade for $.50 - $ .75 point scalps. Avg. daily price range $4.72

BONUS PLAY # 2 Chiron Corporation (NasdaqNM: CHIR)

Chiron Corporation is a biotechnology company that participates in three global healthcare businesses: biopharmaceuticals, vaccines and blood testing. The Company is developing products for preventing and treating cancer, infectious diseases and cardiovascular disease. The Company's products include Proleukin, a recombinant form of interleukin-2, which the Company markets as a treatment for metastatic renal cell carcinoma and metastatic melanoma. The Company manufactures recombinant human platelet-derived growth factor, the active ingredient in Regranex Gel, which is marketed by Ortho-McNeil Pharmaceutical, Inc., a Johnson & Johnson company, as a treatment for diabetic foot ulcers. Chiron also manufactures Betaseron for Berlex Laboratories, Inc. and its parent company, Schering AG, which is marketed by Berlex and Schering AG as a treatment for multiple sclerosis. In addition, the Company sells a line of traditional pediatric and adult vaccines.

Stock Fans, looking at one of the profitable Biomeds for a swing. Chiron's growth rate is 43% and sports a PE of 80. Earnings and sales are on the increase. Taking advantage of the stochastic turn and the cross of the 10 day moving average

Buy Area:$52.75 to $53.50
Time Frame: 2 to 6 days
Type of Trade: Swing Trade
Daytrade for $.25 - $.75 point scalps. Avg. daily price range $5.05


1. ICGE- 45.00 would be huge to send it closer to break out point 52.00. If it can hold 41.3750 today it should be fine. If it loses 40.00, then its in trouble. This one may shake lower to get investors to sell losing 42.00 but I doubt 41.00
2. ATHM- All that volume. It held up all day they aren't selling it!
3. XLA- 32.00 is its break out point. S= 27.00 now.
4. LDP- Wow this thing could go to 25 before it sees 13.00 again
5. ADIC- Came on into close. I will watch for more.
6. MYPT- It really made a move in the last 10 minutes to 21.00 then sold off. If it can hit 21.00 again today it could run up to 24.00.
7.EXCA- This stock is a long term keeper. The big moves happen on the open on this one 51.00 support. There I buy more.
8. CRA- it looked good yesterday. I like 110 as next move up.
9. GNET- Blew away numbers by 50% wow! It could add on more
10. PPRO- This one may bounce back and make a move to 49.00 today.
11. LWIN- I like this 110.00 plus in March Wireless play. It held well yesterday 72.00 plus could send it to 84.00 in a hurry on a break out. Volume of 800k today would be oh so great!
12. NVLS- Great numbers. 70.00 could come today!
13. JDSU - retrace to 111.8750 then move back to 115.00
14.PWAV- Could bounce back to 43.00 today.
15. CNET- 43.00 plus could send it up 3 more.
16. SDLI- This one should sell off 15 today.
17.BWAY- This one I will continue to watch.
18. BLSW- I like the chart a lot looks good to hold 34.00 today.
19. CMRC- Looking for a bounce after a drop today. I like 68.00 a lot after a 60.50 test.
20. CMGI- If it can hold 47.00 it could see 52.00 real soon.
21. KIDE- massive short covering yesterday. I doubt momentum traders give up and force more to cover.
22. IIXL- Big volume again watch close for 20.00 bust out.
23. COVD - sold off on major volume. If it can get 22 back it could run up in a hurry.

Have a great day!

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

Stock Jock!

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