The Play Of The Day
07-02-99, 08:32 PM EST
Good Morning Stock Fans!
Thank You very much for sending all of those Birthday Wishes! I really appreciate it.
OK, Lets get right to it,
Today's Play of The Day is: Metro Media Networks INC (NASDAQ:MFNX)
Stock Fans! Here is yet another stock that has been hammered lower of late, or has it been? Looking closer at (NASDAQ:MFNX) I go back to 06-23-99 and I see news with this company. The news was that (NASDAQ:MFNX) was to acquire AboveNet (NASDAQ:ABOV) in a stock swap for 1.37 billion. Upon that news (NASDAQ:MFNX) would open 06-23-99 at $37.43750 over $5.00 dollars lower then where it had closed on 06-22-99 of $42.50 per share.
What did this mean? Well, it seems to me it meant that investors saw (NASDAQ:MFNX) to be valued as lower after the deal it had made to acquire (NASDAQ:ABOV). However didn't Metromedia buy AbovNet to improve its company? Of course it did, but in the short term the shares of (NASDAQ:MFNX) were viewed to be lower on (NASDAQ:MFNX) having to give its own stock shares to get AbovNet. Sure in the future they would be valued much higher with its acquiring of AbovNet, but not NOW!
So in turn (NASDAQ:MFNX) would over the next 5 trading days into the last day of June '99 (NASDAQ:MFNX) sell all the way down to as low as $31.06. That is over $11.00 in just 5 days!
I guess you could make a case that (NASDAQ:MFNX) acquiring of AbovNet (NASDAQ:ABOV) in the short term would devalue the share price of (NASDAQ:MFNX) in the short term, but not that much. It did recover on big volume on June 30, 1999 and closed at $36.00 even
With the "gap down" open between 06-22-99 ($42.50 close) - 06-23-99. ($37.43750 open) there are uncharted waters in (NASDAQ:MFNX) trading chart. It looks ready to now "fill in" that open gap in it's trading range. I look to popular opinion of investors not only holding the stock currently but those that want to buy it to determine what the price really should be not the Market Makers (they make market to set prices on stocks as to what they should trade at). It already has recovered from that "panic sell off" on 06-30-99 that took it as low as $31.06 before it would rocket up and close at even $36.00.
Stock Fans! With all this in mind the news is now old and investors are starting to see that in the overall picture (NASDAQ:MFNX) is indeed not of LESS value but, in fact, the exact opposite MORE value.
As I examine all of this information I can come to only one conclusion. (NASDAQ:MFNX) has seen its low (volume over the last 3 days has verified that as each day it has sold down more on less volume- this is a very bullish sign) and now looks to go higher and get back to $42.50 a share. Then as the purchase of (NASDAQ:ABOV) becomes seen as positive, look to establish the $47.00 price that is was valued at as recently as 06-10-99.
Stock Fans! I will look to buy shares of (NASDAQ:MFNX:) between $33.3750 and $34.75. I will be looking for a target price of $47.00 dollars a share (back where this stock should be right now) over the next 10-14 days. VOLUME will tell me how long it takes.
Attention: "Swing Traders"
(NASDAQ:MFNX:) makes a real nice trade over the next 10-14 days. Just remember to use sell stops and as the stock hopefully gets closer to my target. Look to take profits as you sell some of your shares into what should be a real nice uptrend in the stocks share value.
(NASDAQ:MFNX) Trading Keys
Buy Area: $33.3750- $34.75
Sell Stop: $31.93750
Target : $ 47.00 next 10 -14 days
Tandem Stocks! Metromedia and AbovNet
Since (NASDAQ:MFNX), today's Play of The Day, will in the future own AbovNet (NASDAQ:ABOV) I will look to (NASDAQ:ABOV) to trade higher here as well. It looks to have support at $35.00 a share even. I will wait to buy shares of (NASDAQ:ABOV) as its chart suggests at $35.00 even as it should pull back to that number and then chart higher and take (NASDAQ:MFNX) with it.
Buy Area: $35.00
Sell stop: $ 34.25
Target : $ 41.1250 plus (10-14 days)
BIRTHDAY BOY Brings BONUS PLAYS:
Stock Fans! It was so nice of you to give me all those Birthday Email wishes and cards that I felt like I better prove to myself as it is indeed better to give then receive and come with 3 bonus plays for you to choose from as America looks to celebrate a Birthday of its own. OK, Here they are. I have always found that when CNBC tries to move this market or analysts try to move this market with upgrades and downgrades. It usually works in their favor in the short term but then in a few days, it all seems to go for not.
Looking back to 06-22-99, I remember that Barnes and Noble.com and DLJ Direct (both IPO's that debuted in late May 1999) had completed their "Quiet Periods" (30 days following a stocks (IPO) public offering a company going public can not be upgraded by any analyst). Both Merrill Lynch and Goldman Sachs come out with buy ratings and some lofty 12 month targets on Barnes and Noble.com (NASDAQ:BNBN) and DLJ Direct (NASDAQ:DIR).
CNBC's Maria Bartaroma gave some real solid TV time as she profiled the upgrades of the two stock by Merrill Lynch and Goldman Sachs. With this news both (NASDAQ:BNBN) and (NASDAQ:DIR) "popped" on the open 06-22-99 only to sell off soon there after.
They both now seem ready to react to those upgrades and 12 month price targets. With that in mind, I will look to buy shares today as both look to have sold down on less volume to areas of support, and now look to go higher from here.
Barnes and Noble.com (NASDAQ:BNBN)
Buy Area: $17.00 (Huge Support)
Sell Stop: $16.8750
Target : $ 24.3750 ( 21 days)
DLJ DIRECT (NASDAQ:DIR)
Buy Area: $ 27.25 - $26.50
Sell Stop: $ 25.3750
Target : $ 31.1250 (3 days)
SKY HIGH? NO NEWS?
Sky Mall (NASDAQ:SKYM) exploded yesterday and erased it range as it traded over times its normal 30 days trading average and shot up over $2.00 points from an open of $9.18750 to a close of $11.69 up (+22.67%) With still no news so far today. If it says that way as the NASDAQ opens today. I will look to BUY shares of (NASDAQ:SKYM) in VOLUME as there defiantly seems to be something up. I use the old saying in this market "Buy on rumor Sell on news". Since the price jump seems to have no rumor to it, as well as news, I will look to own it when one of the two shows itself in the share price of (NASDAQ:SKYM). The Key Indicator will be the VOLUME. With a float (outstanding shares available for trade) of only 8,984,000 this stock on a volume out break of buying could see big numbers as its year high and low is $1.87 to $48.00.
RIGHT OFF MARIA'S DESK: 07-02-99 - 07:59 EST
CNBC's Maria Bartaroma reports today that Merrill Lynch prominent analyst Mary Cohen has upgraded share of both Cablevision (AMEX:CVC) and Comcast (NASDAQ:CMCA) Cohen goes on to say that she feels they both have superior management and very strong growth as well as earnings. I look for both to open perhaps higher on the news then fall back. Upon both falling back. I will look to buy shares of each into weakness today as they both look to be going higher in the coming days.
Special Note: Today's VOLUME in the Stock Market looks to be LOW as CNBC's is already reporting this morning. With the 3 day weekend in the US Stock Market (Closed on Monday, July 5 in inobservance of Independence Day.) upcoming.
With that in mind I will be looking to BUY and hold today. I am quite sure that 3 days off will be more then many traders can handle. They will be so eager to trade on Tuesday, July 5, 1999, that there eyes will be as big as saucers. I plan to be in the market ahead of them as there excitement will drive the market higher right off the open on Tuesday, July 5, 1999!
OK READY BREAK!
See you in my LIVE TRADING ROOM today.
More to come.....