The Play Of The Day
09-16-99 08:45 EST.
Good Morning Stock Fans!
Today's Play of the Day is: Level 3 Communications (NASDAQ:LVLT)
(NASDAQ:LVLT) was over $65.00 a share less than 8 trading days ago on September 3, 1999. Yesterday's news stated (NASDAQ:LVLT) sold $750 million of 10-year convertible subordinated notes to help expand its 10 billion dollar fiber-optic network. (NASDAQ:LVLT) went as low as $52.25 ahead of yesterday's news. Once the news was released (NASDAQ:LVLT) woul see positive volume yesterday of over 6 million shares. This huge volume was over 4 times its 30 day average of 1.57 million shares. This large increase in volume took shares of (NASDAQ:LVLT) as high as $55.18750 before it closed at $54.81250 up $0.93750 on the session
Looking at the trading chart of (NASDAQ:LVLT) I see that it reached bottom yesterday at $52.25 and looks to go no lower than that in the near future. In looking at the upside potential in the shares of (NASDAQ:LVLT) it looks as if yesterday's news coupled with its volume that shares of (NASDAQ:LVLT) are headed back up to at least $60.00 a share where they were ahead of yesterday's such positive news that should go a long way in
securing an increase in (NASDAQ:LVLT) share value in the coming months as NASDAQ:LVLT) continues to put together their 10 billion dollar fiber-optic network.
There is even more information that points towards (NASDAQ:LVLT) to move higher from here. Yesterday, September 15, 1999, (NASDAQ:LVLT) had what I can only call unusually very high volume on its trading of October 22, 1999 $70.00 Call Options. It seems that a group of investors seem to feel that (NASDAQ:LVLT) currently trading at $54.81250 future stock price will be as, high as $70.00 a share by the week of October 18, 1999. This group of investors is so sure that (NASDAQ:LVLT) will move up to $70.00 on its stock price in the next 15- 24 trading days that they placed a very large bet (NASDAQ:LVLT) in the form of October 22, 1999 $70.00 Call Options to the tune of 913.
When I see volume so large on Option Calls so far out of the money it is 9 times out of 10 a dead give away that the move is coming.Otherwise, these types of bets would not be placed in the form of time sensitive options.
If (NASDAQ:LVLT) moves up to $70.00 a share in the next 15-24 trading days (a $15.87 move up from where it closed yesterday at $54.81250) those 913 October 22, 1999 Call Options bought at $1.25 could be worth as much as a staggering $5.8750 each per contract for an increase on each contract of over 350%!
Stock Fans! When I see an opportunity this good I can't ignore it. The way I am going to play (NASDAQ:LVLT) October 22, 1999 $70.00 Call Options today is to take $2,000 of completely RISK CAPITAL and buy 15 contracts of (NASDAQ:LVLT) October 22, 1999 $70.00 Call Options to take advantage of what 913 option contracts bought over $15.00 out of the money.
KEY INDICATORS FOR: (NASDAQ:LVLT) Stock
Buy Area: $53.93750- $54.6250
Sell Stop: $52.1250
TARGET: $59.50 to 65.00 + (3 days to 3 weeks)
"RUN THE OPTIONS!"
The October 1999 $70.00 Option Calls
(Symbol:QHN-JN) Last Ask: $1.25
BONUS PLAY IIXC Communications (NASDAQ:IIXC)
Yesterday September 15, 1999 shares of e-Net Inc. Inc. (NASDAQ:ETEL.O) rocketed 140 percent o after high-speed communications supplier IXC Communications Inc. (NASDAQ:IIXC.O) agreed to develop and market e-Net's (NASDAQ:ETEL) technology for placing telephone calls via the Internet.
What amazed me about yesterday's news of the agreement between (NASDAQ:ETEL) and (NASDAQ:IIXL) failed to benefit the shares of (NASDAQ:IIXC) as it traded down $0.68750 to close at $32.25.
In looking at shares of (NASDAQ:IICX) over the past 30 days it is easy to see that (NASDAQ:IICX) ahead of yesterdays new of its agreement with (NASDAQ:ETEL) had sold all the way down from a high of $39.3750 where it was only 30 days ago. It would seem to me that since the agreement that (NASDAQ:ETEL) and (NASDAQ:IICX) made yesterday has a provision in it the includes in strong possibility of (NASDAQ:IIXC) taking a 19% stake in (NASDAQ:ETEL) that (NASDAQ:IICX) looks to benefit with this new technology even more then (NASDAQ:ETEL) does.
Buy Area: $32.25- $33.00
Sell Stop: $31.75
TARGET: $35.25- $37.00 (3 days to 3 weeks)
STOCKS TO WATCH: (NASDAQ:BAMB) & (NASDAQ:IMGX)
There have been good runs posted on IPO's of late that are coming out of their quiet periods. On August 19, 1999, shares of IPO (NASDAQ:BAMB) went public along with shares of IPO (NASDAQ:IMGX). There 30 day quiet periods will end on this coming Monday, September 20, 1999, ( The 19th is a Sunday) as the end approached investors will often buy up the shares IPO's ahead of Broker upgrades and good news that should be coming very soon.
More to come....
Have a great day!