The Play Of The Day
August 23, 2000
08:37 AM EST.
Good Morning Stock Fans!
NASDAQ RECAP: August 22, 2000
Volume: 1.35 billion
Last: 3958.21 + 5.06
NASDAQ OUTLOOK TODAY:
Stock Fans, the NASDAQ got what it was looking for yesterday. The FED left rates alone. However it would seem that ahead of that news many of the NASDAQ's favorite most south after stocks were shorted heavily as the index made its way from an open to a pre FED announcement high of nearly 4000.00 at 3996.87. Then as the FED news hit the NASDAQ quickie blasted off to 4011.00 and then as fast as it had found that magical 4000.00 land before any of us could taste 4000.00 it was gone as the index dropped back to 3992.00 in a matter of seconds. It would come close to 4000.00 again but only as high as 3996.00 as it was unable to penetrate 4000.00
The action as I briefly touched on looked very much like it was shorting. Today with the NASDAQ futures down over 30.00 points currently that suspected shorting appears to have continued over into today. What is interesting to point out is that the NASDAQ traded in a range yesterday of 4011.00 - 3957.00 after the FED's decision.
The reason I point this out is that range is 54.00 points one that would seem to set up well for shorting. It also is one that could easily be doubled today as the index I can see falling back another 54.00 points to 3805.00. I see the index holding 3805.00 today at worst levels.
Looking at a 60 mins week long chart of the NASDAQ it is easy to see 3750 is the low support line and drawing a line up that chart to resistance would have placed a line almost exactly at 4011.00. I think the NASDAQ will hold 3800.00 and may go as low as 3811.00 100 points off that high yesterday. I see buyers coming in at that levels as the index if it can hold 3800.00 still would appear to be in an up trend. The biggest plus about yesterday is the volume was low. With this in mind I look for the NASDAQ volume to stay low as long as it holds 3800.00 under that and the NASDAQ almost surely sets up to test 3750.00. There is really no reason that the index fall 200 points today as the news was no raise yesterday. The downside on the news was the FED still is on alert for the next meeting. However will it increase in the midst of an election? Not likely. The index may simply fix itself between now and then. So on that fact the index may be bearish in the longer term outlook. It would appear that until big volume comes in 3800.00 holds.
NASDAQ KEY INDICATORS TODAY:
4011.00 ( big resistance )
3750.00 ( huge support)
TRADING RANGE = 251.00
NASDAQ PREDICTED LOW TODAY:
NASDAQ PREDICTED HIGH:
PREDICTED RANGE TODAY: 155.00
PREDICTED VOLUME: 1.2 billion
Today's "Play of The Day!" is: Macromedia (NASDAQ:MACR)
MACR, is a stock I am sure all of us know by now. It lost its 30 day low yesterday as a slowing in July PC sales was determined to effect it. It should have had some effect no doubt with the business that MACR is in, but nearly 25% effect from a previous day high of 79.00? It would seem to be really overdone as big time investors, and FM's unloaded huge shares of MACR they crushed it on massive volume of over 10 million.
However, lets look at just how that scenario unfolded leading MACR down over 14.00 at its worst levels yesterday:
First, the number one indicator is VOLUME no question here. The other factor off that indicator is just where did those big blocks of 100k plus shares or more sell off. Well, that bit of information would seem to be what tells a lot more then just the headline story. Over 80% of MACR block sells yesterday came in a range of 77.00 -68.75. What is so interesting is how MACR actually found 62.25 into the close yesterday. It fell from 79.00 its open and high back to 68.00 even then held on and it wasn't until later in the day after 11:00 AM est that it would fall to 65.31. This is where I think it was shorted on more blocks but not buys selling short. Then MACR would go from 65.31 back to 68.50 but not make 68.75. Then it would hold 68.00-67.25 most of the afternoon till about 10 mins ahead of the close it lost 66.00 then lost 65.31 and then it was FAST SELLING ON FEAR! "Get me out at any price" was probably the cry as investors bailed MACR! However after touching 62.25 it would have blocks come back in and traded as high as 65.50 in after hours and closed the regular session at 63.50 a bounce of 1.25.
The fact of the matter is sure MACR has support now at 58.00 and looks to open at 64.00 or so today. I don't think this stock falls under 62.25 today as when it loses 63.00 to many long term investors, and FM's should come in a gobble it up. However if it does the KEY is add on weakness to it and hold till 57.8750 as solid massive support comes at 58.00. MACR should enjoy a bounce based on previous recent history over the next 2-3 days a bounce of nearly 20% off bottom. If its 63.00 today then 78.75. If its 58.00 then 72.50. Anyway you slice it MACR is a stock that is almost a must buy at these levels.
KEY INDICATORS: MACR
Buy Area: 64.50-65.00
Add on weakness: 63.50
Sell Stop: 57.8750
1-2 DAY TARGET: 68.25-69.00
1-5 DAY TARGET: 72.50-77.8750
RUN THE OPTIONS: MACR
The MACR Sept 70 Calls look like a steal here.
Also selling the MACR Sept 55 puts off the bottom is low risk and could pay big dividends as 58 looks to be MACR worst case drop.
BONUS PLAY #1 Powerwave (NASDAQ:PWAV) (SHORT)
PWAV, has been a stock I have played often over the last 3 months or so. It looks like a great short play here as it has run into a "gap down" area after it missed revenue figures and was down graded on 7/17/00 by more then a few brokers on the Street. It's "gap down" dropped shares of PWAV on 7/18/00 from a previous day close of north of 52.00 to a fall to open under 44.00 about where it has had trouble breaking through over the last 3 days currently. PWAV looks like a perfect short here as 45.00 even looks to be to much for it.
KEY INDICATORS: PWAV (SHORT
Sell Short Area: under 45.00
Buy Stop: 45.50
1-2 DAY TARGET: 37.75-36.1250
Type of Trade:
Summery of Position:
PWAV- Short under 45.00-42.00
PWAV- Long over 45.00
PWAV Long under 36.00
SJ's "Christmas In August! PLAY!" (Hold till Jan 2001) Yahoo! (NASDAQ:YHOO)
YHOO, was as high as 250.00 in early 2000. Since then it has had what can only be called an extremely volatile year! Its trading range in less then 9 months has been 250.06 - 99.8750. Stock Fans, that's basically a market cap volatility of over 55 billion! WOW indeed. With such huge a swing from top to bottom 150.00 plus points just where should this thing be trading?
Well, one way to gauge that is to look at last August 6, 2000. YHOO went as low as 90 or so and then by years end believe it or not it saw 460.00 then split 2 for 1. In other words its been here before. It is a leader in its space and one would think with unemployment at a 20 year low, and productivity at a 20 year high that YHOO Christmas is going be one that is going be of record proportions. YHOO actually has less competitors this Christmas then last Christmas.
Stock Fans, Over the last 3 years dating back to 1998 YHOO has hit its year low in August. Its going be hard to do that this year as it went to under 100.00 ahead of its earnings on 7/11/00 only to go as high as 142.06 just 10 days later! WOW
Looking at YHOO current graph there is no question it is oversold at current levels. The question is just where does it have solid support. Well, it would appear it has solid support at 115.00 even. However it may not drop that low based on yesterday's drop to 126.31, and a close of 127.50. It would seem to me the best way to invest in YHOO for the long term (till Jan 2001) would be to buy it under 122.00 and over 118.00. I think it tests 120.00 at worst case and holds 118.00. I don't see it falling to under 118.00 as it would sure seem like YHOO gets plenty of buyers under 116.00 that would be bottom fishing it.
If successful in catching YHOO on its re trace today, and perhaps over the next 2 days it could and based on 3 years of history should be a play that when all is said and done come Jan 2001 that could easily be a DOUBLER!
KEY INDICATORS: YHOO:
Buy Area: 122.00-119.00
Add more: 121.50 limit buy to add YHOO on weakness
Sell Stop: 114.50
5 month TARGET: 229.00 ( its that good!)
*YES, YHOO is a short play over 128.00 - till 122.00)
Buy Quality stocks that have been 50% higher or more over the last 52 weeks on FEAR and HOLD through that FEAR!
RUN THE OPTIONS: YHOO:
The YHOO Jan 2001 195.00 Option Leaps!
Pricey but 2 of them might pay big dividends
PRO TRADER SAGO'S BONUS PLAY'S:
BONUS PLAY #1 Commerce One, Inc (NasdaqNM: CMRC)
Commerce One, Inc. is a provider of global e-commerce solutions for business. Its solutions are designed to create a network of interoperable marketplaces, trading communities and commerce portals called the Global Trading Web. The Company has developed the Commerce One Solution to automate the procurement cycle between multiple buyers and suppliers. The Commerce One Solution is comprised of enterprise e-procurement applications consisting of BuySite Enterprise Edition and BuySite Portal Edition, and the MarketSite Portal Solution. Within the MarketSite Portal Solution, business services such as auction services and enhanced content services are offered, with others to be added in the future. In July 2000, the Company formed Commerce One Ventures to accelerate global participation in e-business through strategic investments.
Stock Fans Commerce One got a nice mention form an analyst yesterday pointing out the future of this oversold sector. Commerce One has grown sales in the last 4 quarters by 1000% or better over the prior years quarter. They are yet to be profitable and have 0% debt. Commerce One has a nice cup and handle formation on the daily chart and the closing price yesterday closed above its 10 day moving average. Looking to buy on the morning dip. Note: I HAVE A SMALL POSITION OF CMRC CURRENTLY.
Key Indicators: CMRC
Buy Area:$50.25 to $51.00
Time Frame: 2 to 5 days
Type of Trade: Swing Trade
Daytrade for $.50 - $ .75 point scalps. Avg. daily price range $3.32
BONUS PLAY # 2 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 Network Appliance has been a profitable long and now looking to make it a profitable short. The charts say this one is plain tired so I am looking to short on the morning jump.
Key Indicators: NTAP
Sell Short Area:$93.00 to $94.00
Time Frame: 1 to 2 days
Type of Trade: Swing Trade
Daytrade for $.50 - $1.00 point scalps. Avg. daily price range $6.71
PRO OPTIONS TRADER MATEO'S OPTION PLAY:
Intel Corporation (NasdaqNM:INTC) PUT PLAY
Intel Corporation, a semiconductor chip maker, supplies the computing and communications industries with chips, boards, systems and software that are integral in computers, servers and networking and communications products. The Company's major products include microprocessors, chipsets, flash memory products, networking and communications products, embedded processors and microcontrollers, and digital imaging and other PC-peripheral products. Intel's component-level products consist of integrated circuits used to process information. Intel sells its products to original equipment manufacturers, PC and computing appliance users, industrial and communications equipment manufacturers, and businesses, schools and state and local governments. Intel also provides data center services to businesses needing e-Commerce services.
This was one we called in the room yesterday right before the close and many of us jumped in to the play. INTC will trade with the Nasdaq here and it looks as if both are headed for a retrace. As I write this play futures are -38 (it's 6:30 a.m. EST). If you enter the play today, watch for the gap down open then buyers to grab up the dip. Buyers are going to have to overcome the sellers / shorters at this point. I expect INTC to see 68 today on a sharp Nasdaq decline to perhaps 3830. Play smart!
INTC Sept 70 PUTS INQ UN last ask 2 1/16
STOCKS ON OUR SCREENS TODAY:
1. DSLN- under 6.25 its a buy again.
2. NTSL- it cam on yesterday it may addon
3. VRTL - watch this crushed stock close for an 11 bust out
4. STOR- hammered yesterday 109 appears to be support.
5. EVOK- It should hold 9.8750 today.
6. EFNT- It may retrace now back to 47.8750
7. CLRN- It has support at 44.00
8. NTRO- It exploded yesterday under 72.00 its a short back to 62.50
9. ZIGO- earnings on the bell it may run into a split.
10. KEI- It should retrace a massive gap back down to 55.00 atleast
11. JDSU- It has support at 117.50 that should hold
12. LPTH- It should hold 39.00 in this market
13. TIBX- It has support at 75.00 that is very solid. It should test 78.00 today
14. AKAM- Its been hit hard look for a bounce after it trades 40 mins.
15. EMLX- This one should fall to 74.75 today SHORT under 87.00 BUY STOP= 89.50
16. NTAP- It should test 88.00 soon.
17. GMGC- watch this one close.
18. CEGE- way up on low volume. it should drop to 24.00 then a buy
19. JNIC- this stock should fall more then 6.00 today.
20. WJCI- may add to yesterday's late move.
21. EMRG- It could have short covering
22. OVTI - It slowly comes back
23. CLRS- big gap they may sell this one down to 43.00 today fast.
Have a great day!
More to come.........
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