The Play Of The Day
August 4, 2000
08:45 AM EST.
Good Morning Stock Fans!
Last: 3759 + 101.42
NASDAQ OUTLOOK TODAY:
Stock Fans! WOW, is about all that can be said as the NASDAQ futures were down 92.00 yesterday at 8:00 AM EST it looked as if the NASDAQ was going lose 3500.00. Who would have thought that down 92.00 on the futures would translate to up 101.42 on the NASDAQ? Well, I am sure about NOBODY! So what happened that could change the NASDAQ so much form pre market to close? It would seem to me that the NASDAQ dropped back on extremely low volume. Some of the stocks I follow daily such as MRVC dropped 4.25 on only 55,000 shares on the open. That stock would go on to trade over 2 million and have a 10 point plus range.
The fact that Market Makers got stock back so cheap set up what looked to be big buying on the bottom. However in accordance to the volume, and the range it appeared that the NASDAQ may have been shorted. Again Market makers getting stock for much less and then selling it for more is exactly what they what to do each day. "Boy Did They Ever!" get that wish yesterday. The NASDAQ range was over 200 points as holding 3500.00 a low of 3521.00 would end the day of having a shot to see 3800.00 once again as the 3600's came and went towards the end of the day.
All I can do is look back to May 24, 2000 when the NASDAQ dropped back to 3042.00 a 200 day low and a drop off May 1, 2000 high of 3982.00 (-940.00) in less then 30 days of trading. On July 17, 2000 the NASDAQ hit a 120 day high of 4289.00 as of yesterday's low that figure had been cut to 3521.00 low a drop of (- 768.00) The ranges then from May 24, 2000 to July 17, 2000 was 1247.00 points. Falling back to 3521.00 as of yesterday's low brought the NASDAQ back down 768.00 points in less then 2 weeks. The total drop from 3982.00-3042.00 was 940.00 points. So actually the drop off May 1, 2000 to May 24, 2000 was 172.00 points more. The bottom on May 24, 2000 saw a different action on the NASDAQ then what was seen yesterday. Big volume sold off the NASDAQ as it fell off 3289.00 to 3042.00 in a matter of only 90 mins. This day stocks took massive volume on the bottom to set them up to move back through their ranges. Yesterday this was not the case, as again watching MRVC although not a big cap NASDAQ stock 2.4 million shares in all is a darn good indicator to use as a barometer. MRVC as I said earlier dropped fast on way less then 100k shares to sub 50.00 then it took only 225,000 shares for it to find 51.50 and then the big volume came in and it traded back and forth until about 3:30 PM EST when a blast through 3700.00 and 3729.00 what could be viewed as resistance saw MRVC add on from 52.8750 - 57.50 on less then 600k shares. It would certainly appear that the NASDAQ was indeed shorted. The action should have been big volume on the drop to 3521.00 and then big volume on the bottom then a steady move back up through the ranges and a close probably of around 55.00 not 57.50 - 58.00. Shorting the buyers as perhaps a non friendly Employment Report could be upcoming tomorrow.
Stock Fans, as the Employment Numbers are released today, it would appear that the Govnerment jobs for the census 2000 were over 200,000 and with that the news is not so good as the headline number looks good however the "inside" number would seem to suggest that the FOMC on August 22, 2000 still may increase by . 025% making it its last rate hike. The fact that wages increased 6 cents in July also lends to the fact that labor is increasing to much to keep up with supply. I am still predicting. 25% increase on August 22, 2000.
Today, the NASDAQ may sell the news, as more economic data is to be released and the "inside" number laying truth to the fact that jobs didn't drop off at all in July. The reaction on the futures is positive up 48.00, but that I don't think send the index through 3800.00 today. I look for 3802.00 to act as resistance and the NASDAQ to shed about half its gains by ends day. Again the news just hit so I will review it in more depth. It would certainly seem the NASDAQ is near a top off this news already and the news should be sold before today ends. If the NASDAQ loses 3667.00 it could drop rather fast today.
(PLUS members look for an overview and update of my outlook on the NASDAQ as it unfolds and the Employment Report is affecting the NASDAQ as it trades today.)
(The Stock Jock's NASDAQ Outlooks are presented daily, and are his own believes based off of concrete information that he gathers. They are only
an oppoin and are not met to direct the entire market. SJ and his staff of pro traders only uses the index as an indicator. They play each stock separately off news and other indicators. In other words the let their trades be lead by each stock not vice versa.)
NASDAQ KEY INDICATORS TODAY:
RESISTANCE: 3766.00 ( double top in downward range
from May 2000, and double top from July as well.
This area being broken could lead to 3890.00 in a hurry!)
SUPPORT: 3521.00 (yesterday's NASDAQ low and
current 60 day low. This area could serve as
support on any economic indicator)
Today's Play of The Day is: Commerce One (SHORT)
CMRC I called off 40.00 2 days ago. Yesterday it went as low as 41.250. The high was nearly 1 point higher then 2 days ago as well as it eclipsed 46.00 for the first time in 4 days. CMRC 5 day high now acts as resistance and is just over 48.00. As CMRC trades in pre market today it is 46.50. I love CMRC in the long term and it is defiantly oversold. However I see it as a stock that could still miss 50.00 and drop back and test 42.00 -41.00 or so. If this stock breaks 50.00 I go long and ride the wave. It is a call I make just on the range, as I believe that CMRC may fall back after it misses 50.00 today. Again if it breaks 50.00 I go long!
KEY INDICATORS: CMRC (SHORT)
Sell Short Area: 48.43750-49.50
BUY STOP: 50.50 (FIRM)
1 DAY TARGET: 42.50-42.25
Time Frame: TODAY ONLY!
CMRC BREAKS 50.00 GO LONG!
Look for 55.00 -57.00 in a break out!
BONUS PLAY #1 CORV (LONG off 85.00)
CORV a recent hot IPO in the FIBRE OPTIC's space was one I watched all day yesterday. It opened yesterday down 4 at 88.00 it then fell all the way back to 83.00 on volume of less then 225,000. The stock then came on and made 88.00 again on about 900,000 shares. Once it had 88.00 it fell back to 85.8750. The stock then took off on volume of over 500,000 and ran all the way to 95.00 just under its high reached one day before 96.25. It couldn't hold 95.00 as it had 1.4 mill traded in all on it hitting 95.00 then it fell back as the NASDAQ rose. IPO's can't be shorted? It then dropped back to 85.8750 and managed on over 2.4 million shares to close at 91.00. About where its day ended one day before.
What does all that mean?
Well, it means CORV should drop back to 86.00 today and then be a screaming buy and may then take out the last 2 days high and make a push to perhaps 97.50 98.00 If it loses 85.00 it could drop back to 83.50 where I go long again. At NASDAQ 3521.00 or NASDAQ 3800.00 CORV would appear to only have a 5.00 point range. I go in CORV at 86.25 today unless it breaks 98.00 then I go long and ride it to 100.00 plus!
Buy Area: 86.50-85.8750
Sell Stop: 82.50
1 -3 DAY TARGET: 97.50-98.00
SJ SHORT PLAY: "Big Mover" Juniper Networks (NASDAQ:JNPR)
JNPR hit a low yesterday of 118.00 the volume that took it there was less then 500,000 shares. After 10 million plus would trade yesterday JNPR couldn't break 140.00 it went to 133.00 in mid day then fell back and came on and by NASDAQ 3667.00 about 100 off where the NASDAQ would go it reached 140.00 then was unable to break out and run. 148.00 today would seem to be top on it and a fall back to 133.00 looks to be inline. Again JNPR is a great stock and over 148.00 this thing could bust to 165.00 in a hurry. However as long as a BUY STOP is in place, and I won't trade this one without it! The all that can be lost is the risk of trading as with a sell stop. JNPR 118-140 in one day is a big move. 140 -133 appeared to be short selling induced. I will look for 147.00 as my sell short number and hold for 135.00-134.00.
KEY INDICATORS: JNPR (SHORT)
Sell Short Area: 146.8750-148.00
BUY STOP (FIRM): 150.50
1 DAY TARGET: 136.50-134.25
Time Frame: TODAY ONLY!
(GO LONG JNPR if it breaks 152.00 then 165.00 could be near!)
ATTENTION STOCK FANS!
Sago's Play's today as well as Mateo's option Play today both show different points of view that may or may not contradict mine. The great thing about BPS.com as we celebrate one year of premium service today! THANKS FANS! Is that we have great traders and in a market that has Bulls and bears we differ in oppoion. I point out a common cliche "There are 2 sides to every story!"
PRO TRADER SAGO'S BONUS PLAY'S:
BONUS PLAY #1 3Com Corp (NasdaqNM: COMS)
3Com Corp. is a broad-based supplier of local area network (LAN) and wide area network (WAN) systems. 3Com's networking solutions are marketed to large enterprises (including corporations, educational institutions, and government sectors), small businesses, consumers, and telecommunications and Internet service providers. 3Com offers a broad range of products, which are grouped into two general categories: Network Systems Products and Personal Connectivity Products. Among the Company's networking products are switches, hubs, remote access systems, routers, network management software, network interface cards, modems and handheld connected organizers. In March 2000, 3Com completed the spin-off of Palm, Inc. into a new publicly traded company. Following the transaction 3Com owned approximately 532 million shares, or approximately 95% of Palm.
3Com Offers Affordable, Radically Simple Solutions for Integrating High-Performance Enterprise Networking
New 3Com®SuperStack®II Stackable Switches Dramatically Lower the Cost of High-speed Ethernet Workgroup Enterprise Networks
SANTA CLARA, Calif.--(BUSINESS WIRE)--Aug. 1, 2000-- 3Com Corporation (Nasdaq: COMS - news) today announced new
Stock Fans, 3Com breakout! With the lighter load it is carrying with out PALM, 3Com is able to focus on its future. It has a PE of 10 and cash flow per share of $1.92. Institutions like the $17.00 price and so do I.
Key Indicators: COMS
Buy Area:$16.50 to $17.00
TARGET:$18.36 to $19.125
Time Frame: 2 to 4 days
Type of Trade: Swing Trade
Daytrade for $.15 - $ .25 point scalps. Avg. daily price range $1.02
BONUS PLAY # 2 Emulex Corporation (NasdaqNM: EMLX)
Emulex Corporation is a designer, developer, and supplier of a broad line of fibre channel host adapters, hubs, ASICs and software products that enhance access to, and storage of, electronic data and applications. The Company's products, which are based on internally developed ASIC technology and are deployable across a variety of heterogeneous network configurations and operating systems, support increasing volumes of stored data. The Company is also a supplier of some traditional networking products that include printer servers and network access products. Emulex sells its products worldwide to OEMs and end users, as well as through other distribution channels including value-added resellers, systems integrators, industrial distributors and resellers.
Emulex Reports Record Fourth Quarter Results
Acceleration in Fibre Channel Orders Generates Operating Income Expansion of More Than 350%
Stock Fans wow an old friend leaving the station without us! Now that is some serious growth. Emulex consistently reports growing sales and revenues. This stock ran after-hours so here is my strategy. I am going to wait to buy on the gap sellers dip at around 10:00. I will place my stop at 5% to 8% below my purchase. I really believe that this will play for the next couple days. Emulex is 78% off of its 52 week high and my short term target is its short term resistance of $70 -$73.
Key Indicators: EMLX
Buy Area:$58.00 to $63.25
Stop: 8% from entry
TARGET: Low $70's short term
Time Frame: 2 to 7 days
Type of Trade: Swing Trade
Daytrade for $.75 - $1.00 point scalps. Avg. daily price range $4.29
PRO OPTIONS TRADER MATEO's OPTION PLAY TODAY!
QQQ Nasdaq 100 TRUST
Ok - we are familiar with this one. We are also familiar that if you can catch a big move in the Nasdaq, you can bank a nice profit on the QQQ option play. Here is how I see the Nasdaq setting up: (keep in mind I am writing this play at 5:40 a.m. EST - I have no idea what the employment numbers will come in at).
At this point I am market neutral and am simply playing the ranges both long and short. AMD was a great short play from 67 to 58 and AMCC turned out to be a huge winner today from our buy area of 121 to a 141 HIGH! My outlook for the Nasdaq says that it sees 3180 before September. We basically have two possibilities today. 1) Market friendly numbers out of the non-farm payroll number. OK - I believe the Nasdaq could easily see 3862 on that scenario. 3905 would be my highest target. If Nasdaq does see either one of those numbers, I believe that will be the high before the FED meeting August 22nd. I will short the QQQ at that level and keep it for a 5 day hold. Monday will be an even bigger movement day in the markets than today. So target entry for QQQ short would be approximately 94.
2) Market unfriendly numbers. Hard to say how many sellers there would be, but it would seem likely we gap down to 3612 and sell off even more from there. The bargain hunters and shorters did their work yesterday. If we get this scenario, I believe there will be even more selling come Monday with small bounces of bargain hunters and short covering thru out next week. Remember, PPI and CPI are just around the corner and will be providing Mr. Greenspan with his final economic figures to decide interest rate hike or no. I say that the market corrects itself to avoid the hike and that the FED stays pat at this August 22nd meeting and actually is done hiking for the year at this point. Supposing that yesterday's high was the high before the FED, then the intermediate bounce point would be 3281 with a bounce up to 3380 and then down to a final bottom of 3180. If this second scenario begins to take place today, well - pick your entry accordingly on this QQQ put play.
As always, I will adjust my scenario as the market plays itself out. The market is always right and I will follow it's action and change my play accordingly. But unless we bust 3905 to the upside, I will keep this QQQ put play for a 5 day hold.
August QQQ 94 PUTS QVQ TP - entry at 3.5 on good payroll numbers
August QQQ 88 PUTS QVQ TJ - pick appropriate entry point
STOCKS ON OUR SCREENS TODAY:
1. CLRN- it should hold 36.00 today go long there.
2. AFCI- it finally bottomed 35.00 support now.
3. JDSU- 122.8750 may be top today if it breaks it load up for 130 move!
4. MRVC- 62.00 is now resistance with 52.8750 as support. I will continue to play the ranges.
5. CMTN- 62.00 appeared to be bottom. Will watch for 72.00 bust out.
6. SSTI- It had a big range 60.00 resis now.
7. EFNT- It should hold 52.50 and may break 62.00 today been hit hard off 100 plus July highs
8. PWAV- 35.00 might be seen soon
9. MACR- 88.00 5 day high. 72.75 5 day low.
10. EXDS- It could get hot on block buyers
11. JDEC- good numbers
12. TIBX- will watch for a sell off back to 92.50
13. ONXX- 15.25 support.
14. FNSR- looks good
15. FIBR- bottomed
16. VIGN - big volume and a big 2 day run will wathc for 50.00 today
17. JPTR- metioned on CNBC i will watch.
18. BBSW- strong buy ratings could make a move.
19. FDRY- 84.68 resistence. Support 79.00 even
20. AKAM- came on late could run
21. MFNX- 35.00 if it holds could see 39.00 soon
22. ATML- been hammered should come back
23. SPWX- what a call off 74.00 held 72.00 ran to 90 plus. I go back in at 82.00 and sell stop 77.50. I like this one to bounce back to 89.00 after it drops off today. It will be interesting to see if it can make 100.00 its own!
24. NUFO- I will short this thing under over 110.00 for 95.00 re trace.
25. GBLX- Huge VOLUME we shall see.
Have a great day!
More to come.........
and BigPlayStocks.com TEAM OF PRO TRADERS!