The Play Of The Day
July 20 2000
08:59 AM EST.
Good Morning Stock Fans!
Attention Stock Fans!
I will not be in the LIVE Trading Room Tomorrow (Friday July 21, 2000). However Pro-Trader Sago will be taking over for me. David our Pro Trader who just correctly called the NASDAQ top at 4280.00 on Monday, and the NASDAQ low yesterday at 4060.00. (The low was actually 4047.00, but David calling missing a 240.00 point sell off by 13.00 is still amazing!) Will also be in the LIVE Trading Room helping Sago, Matt and Swany will as always back up the group!
In other words, I shouldn't be to missed!
NASDAQ OUTLOOK TODAY:
Stock Fans, The NASDAQ has truly been one of "Buy the Rumor, Sell the News" as over 66% of the S&P Companies and NASDAQ stocks have now reported numbers that have been almost 70% at expectations or beating expectations. The sell off the past 2 days from a new 200 day high of 4287.00 reached on Monday was met with heavy selling the past 2 days as Tech, and Internet related stocks sold off and shed in some cases all the gains they had added in since July 3rd 2000 the last time the NASDAQ traded under 4000.
The question many are asking today is the sell off over? Well, lets examine a couple of things that stick out to me. First looking at this 2 day drop from 4287.00 to a low of 4047.00 we see a drop of 240.00 points or (5.5%) The drop took the NASDAQ under what I had called its KEY SUPPORT Area of 4077.92 the pervious 200 day high before the NASDAQ had broken 4078.00 on July 5, 2000. This area to me represented an area that brought the NASDAQ's current 30 day low back into play of 3820.00 where the index has a double bottom of support created in its 30 day range.
What sticks out to me is this. The NASDAQ last was lower then yesterday when it traded at 4074.92 back on July 3, 2000. The index at that point also took a breather and dropped back almost exactly the same % it has the past 2 days as it traded down from 4074.92 to 3820.00 a drop of nearly the same as the past 2 days both in points and percentage. (4074.92-3820.00 = 254.00 (5.6%) )
The index then went more then 467.00 points higher and found Monday's high of 4287.00. I agree with many traders the index is probably due to lose 4000.00 in the next 2 weeks or perhaps sooner. However the index currently appears to be due for a bounce as yesterday into the close appeared to be one of Selling on "Fear!" as recently high flying issues such as CMRC, RNWK were hammered losing more then 14% at their day lows.
This type of action as the volume increased on select issues into the close, shows me that the index is perhaps back at a point now where it goes higher to go lower, as momentum traders into the mid morning (11:00 AM EST - 1:00 PM EST) may be used as often the trend to push at least in the short term some oversold issues back up. I look for NASDAQ Market Makers to short many stocks higher as momentum traders continue to get in and get out. This action should push the NASDAQ back up over 4100.00. However my top now would be 80 points over lost support yesterday of 4078.00 therefore I look for the top to be no higher then 4157.00 or so staying under Monday's low of 4161.00. In other words go up and get back yesterday's losses, but not be allowed to get back Monday's as David would have indeed appeared to call the NASDAQ high at least until October, November 2000. Therefore it would appear till atleast the FED Meeting in August 2000 that the NASDAQ should create a trading range of 4157.00 to 3970.00 holding over its July 6, 2000 high of 3961.00 About half of the NASDAQ current range. I then am deducting about 135 off the current 30 day high of 4152.00 as resistance and adding 135 to the NASDAQ current 30 day low of 3820.00 as a result compiling a number of 3955.00 as support as the NASDAQ carves out a trading range.
Today I look for the Index to add on about 80.00 to yesterday's low going up to higher then 4130.00 and then closing over 4078.00. It should be a good day for buying some short term hammered issues for nice bounces as momentum traders come in and push the index higher to go lower!
Today's "Play of The Day!" is: KeyNote Systems: (NASDAQ:KEYN)
This stock reported numbers less then 3 days ago on Monday as it then was crushed on what were good numbers but some analysts feeling that perhaps KEYN had some competion form such competitors as Mercury Interactive and CheckFree Systems. They saw the stock as its revenues only increased 35% as one that didn't come in over its expectations.
However the stock didn't miss, the wires first reported as it was crushed on the highest volume it had seen well over 6 million shares since its IPO debut in September 1999. The Wires reported it was just some pre earnings selling on Friday as it as hammered off a 200 day high of 85.00 to go as low yesterday as 48.50. However what I like about this stock is 6 million on Monday became 2 million on Tuesday and lead to only 680,000 yesterday in volume and in the midst of a NASDAQ drubbing of more then 120 points at its low KEYN actually only lost 1.50 all day in a tight trading range, and even added on into the close as it reclaimed 50.00.
The fact that this issue lost its 50 day Moving Average of 51.50 was not good agreed but the fact that its year low is 41.00 and its year high is north of 130.00 means this stock has had it drop of more then 40% in less then 3 days. It also should mean that the bravest of momentum investors are now gone, and the stock is ready to bounce back as a drop of 40% was way overdone on this stock.
I like it today to make a nice move back and perhaps as early as 3 days get back to 60.00- 62.00 where this one should have held anyway!
KEY INDICATORS: KEYN
Buy Area: 49.50-51.75
Sell Stop: 45.00
1-2 DAY TARGET: 55.00-57.00
3-5 DAY TARGET: 60.00-62.50
BONUS PLAY #1: Exodus Communications (NASDAQ:EXDS)
Exodus Communications, Inc. (NASDAQ"EXDS) is a provider of complex Internet hosting for enterprises with mission-critical Internet operations. The Company offers sophisticated system and network management solutions, along with technology professional services to provide optimal performance for customers' Web sites. Exodus delivers its services from geographically distributed, state-of-the-art Internet Data Centers that are connected through a high-performance dedicated and redundant backbone network. The Company's tailored solutions are designed to integrate with existing enterprise systems architectures and to enable customers to outsource the monitoring, administration and optimization of their equipment, applications and overall Internet operations. Exodus offers an integrated portfolio of solutions that provide customers with a scalable, secure and high-performance platform for the development, deployment and proactive management of mission-critical Internet operations.
EXDS, is a stock that has been just hammered since April of 2000. It was as high as 83.00 on April 5, 2000 then got crushed with most of the NASDAQ as it fell to as low as 26.25 on May 24, 2000 when the NASDAQ hit a year low of 3042.00. The stock since that time with the NASDAQ went back to as high as June 6, 2000 57.00 then it fell back and was never able to break 60.00. However this stock reported numbers yesterday and as it dropped under 49.00 yesterday I saw a big chance and sent an ALERT EMAIL on it under 49.00 and stole it into the close as its numbers would launch it to over 55.00 in after hours trading.
I like this stock to open today at under 57.00 find resistance to start at 57.00 then to fall back test 52.00 and then hold and rocket maybe as high as 65.00 over the next 2 days as if it can break 57.00 it could goto 73.00. its vastly oversold and I don't expect it to follow the NASDAQ entirely as this one could and should be on the minds of many as I bail on the open of my shares and wait for 52.00 to fall into my hands and then hold for 10.00 !
KEY INDICATORS: EXDS
Buy Area: 52.50-53.00
Sell Stop: 49.50
1 -3 DAY TARGET: 56.00-57.00
5-10 DAY TARGET: 61.00-62.00
End of Yr. TARGET: 75.00-82.00
PRO TRADER SAGO'S BONUS PLAY'S:
SAGO PLAY: EMC Corporation (NYSE: EMC)
EMC Corporation and its subsidiaries design, manufacture, market and support a wide range of hardware and software products and provide services for the storage, management, protection and sharing of electronic information. These integrated solutions enable organizations to create an electronic information infrastructure, or what EMC calls an E-Infostructure. EMC is the supplier of these solutions, which are comprised of enterprise storage systems, networks, software and services. Its products are sold to customers utilizing a variety of the world's most popular computing platforms for key applications, including electronic commerce, data warehousing and transaction processing.
HOPKINTON (Reuters) - EMC Corp (NYSE:EMC - news), the No. 1 data-storage company, wowed Wall Street on Wednesday when it reported a 50 percent jump in earnings and predicted revenue would continue to accelerate for the rest of the year
Stock Fans, was one of my picks on the 6-17. We went in with a 1/2 position with the upcoming earnings announcements. This stock has the key to future growth. Growing earnings at a increasing rate will draw more buyers. It has been upgraded and the CEO has confirmed what we have know. EMC is on fire and breaking out to new highs.
Key Indicators: EMC
Buy Area:$83.00 to $84.00
Time Frame: 2 to 5 days
Type of Trade: Swing Trade
Daytrade for $.50 - $ .75 point scalps. Avg. daily price range $3.01
SAGO BONUS PLAY: Flag Telecom Holdings Limited (NasdaqNM: FTHL)
Flag Telecom Holdings Limited is a global carriers' carrier that develops and offers a broad range of telecommunications products and services to licensed international carriers, Internet service providers and other telecommunications companies. The Company's network, the FLAG Telecom network, is comprised of the FLAG Europe-Asia cable system; the FLAG Atlantic-1 cable system; and terrestrial connections between the Company's landing stations in the United Kingdom and Spain to the city centers of London and Madrid, and intra-European connections.
Stock Fans, this is a riskier play than most that I pick. I like the volume and the chart. I also like this play as a longer term hold. The average daily volume is 506,000 shares so this won't light any charts up. Volume the past 3 days has been significantly above its average. But part of our job is to find future runners and this looks to fit that criteria. The weekly and daily chart look solid for a swing. My target below, is set at 8%, but I believe this can hit 20 in a one month or sooner time frame.
Key Indicators: FTHL
Buy Area:$15.75 to $16.1875
Time Frame: 3 to 7 days
Type of Trade: Swing Trade
Daytrade for $.15 - $.25 point scalps. Avg. daily price range $.95
PRO OPTIONS TRADER MATEO'S OPTION PLAY:
MRVC - Nasdaq NM
MRV Communications (MRVC) designs and manufactures networking products that direct and move data around corporate networks. MRV's family of complete and stackable switches allows users to facilitate transitions to newer, faster networks. The company also produces fiber-optic voice, data, and video transmission components, including laser diodes, light emitting diodes, and transmitters. MRV is exiting the LAN switching business and, with its purchase of Taiwan-based Fiber Optic Communications, is expanding its fiber-optics business. Clients include IBM, Intel, and Alcatel.
With JDSU being added to the S & P 500 next Wednesday, July 26th, the entire fiber optics sector should get a lift. MRVC is up 2 in after hours at this point. Wait for morning volatility to pass and choose your entry wisely. 5 - day swing hold here till Tuesday, July 25 market close.
August 80 Calls - RVYHP last ask 10 3/8 - use a 25% stop loss from your entry point. Look for 50% upside return.
SECTORS TO WATCH TODAY: (Fibre Optics & Broad Bands)
JDSU, who has already acquired ETEK, and who will be acquiring SDLI has been added to the S &P 500 replacing Rite Aid. Off this news. Look for the Fibre Optics Sector to be active today. Some names to watch are:
LPTH, HLIT, LDP, MRVC, DIGL.
Broad Band ("Cable Guys!")
This former high flying sector, has some stocks in it that are adding on volume of late and making some nice moves and even threating to get back in some cases to near or over there past year 200 day moving averages. Some names to keep an eye on it this sector are:
RTHM, RBAK, COVD, NPNT, WGAT, IIXL.
"Time To Buy IBM?"
LONG TERM HOLD: IBM (NYSE:IBM)
No need to go into this Dow Components business. "Big Blue" as a real quick overview, is the leading making of main frame systems. However its recent business goes much deeper then that. It has added e-Commerce to its profile, and many other 21 Century applications.
IBM (NYSE:IBM), reported earnings yesterday, and even though the revenue, has been down as IBM warned it would be. The stock did beat the street earnings per share number. The stock in 1998 broke out big and was the Dow's leading gainer. However in the last part of 1999 and all of this year IBM has been stalled and stuck in an extremely tight range for the better part of a year of not more then 5.00 points or so.
However, if this stock can break 110.00 it could make a move back up to 125.00 and then break out where it can really run. I expect institutional buying, and also short covering to fuel this long time "Blue Chip" holding. The stock would seem to be one if it can be bought under 110.00 could be and furthermore should be a real nice find the second half of the year, as IBM appears to have light at the end of its Y2K slowdown tunnel. Big Things might be in store for Big Blue into the second half of 2000!
KEY INDICATORS: IBM
Buy Area: Under 110.00
Sell Stop: 8% under buy
6 MONTH TARGET: 131.00-138.00
Type of Trade: Longer term hold for Target
RUN THE OPTIONS: IBM
The December 2000 120.00 Option Calls
STOCKS ON MY SCREEN TODAY: By The Stock Jock
1.JDSU- Well Its finally added to S &P 500 rocketed 16.00 after close on news. It has resistance now at its 30 day high from July 3rd at 128.25. If it breaks that blue skies till 131.31 its current 60 day high. I am looking for a pull back to 119.00 on this one where I would like to add on. I will sell my 300 shares bought in after hours right off today's open as I see 128.25 as resistance.
2. BOUT- Blew away number, looking for a nice pop on this one.
3.STLW- This one ran yesterday in a down market. I will watch for it to add on more.
4. APNT- Gap at 41.00 I will buy it for a bounce under 42.00 as it could add on 4.00-5.00 fast.
5. JNIC- Nice move yesterday, as many got in this one off my listing it in this section. If it can break 60.00 it could go.
6. GERN- lok for a bounce
7. GENE- It looks good
8. MEDX- It should pull back
9. AOL- earnings today 62.00 resistance.
10. EXFO- 72.00 support
11. DLK- added to NASDAQ 19.00 recent high
12. XLA- Look for 28.00 today
13. OVTI- Look for 41.00 today
14. DISH- look for 44.00 as top
15. QCOM- Came in as expected support 58.00 resistance 64.00
17. CMRC- Look for 60.00 today
18. RNWK- Look for 52.00 today
19. CMGI-Look for 45.00 today
20. DCLK- Look for a bounce
21. TRMB-Great numbers
22. CMTN- Bounce back to 109.00 today could happen.
23. PPRO- Look for 44.00
24. EBAY- Earnings coming
25. ICGE- 42.00 resistence now
26. INSP- Earnings coming could run
27. EXTR- Beat numbers announced a split it is up in pre market may pull back 5.00 where I get in
Have a great day!
More to come.........
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