The Play Of The Day
09-28-99 4:07 AM EST.
Good Morning Stock Fans!
Today's Play of The Day is: PACKETEER (NASDAQ:PKTR)
Stock Fans! Those of you that have been with me since September 1999 remember my call on (NASDAQ:PKTR) as I made it my Play of The Day on Wednesday, September 8, 1999. It didn't disappoint that day as it went from a morning opening low of $44.43750 to as high as $59.00 with volume of over 750,000.
Packeteer (NASDAQ:PKTR) is a leading provider of application-adaptive bandwidth management solutions that enhance mission-critical application performance over enterprise wide area networks of the Internet? (NASDAQ:PKTR) solutions enable businesses and service providers to manage proactively bandwidth contention at congested access links, protect important application traffic and increase network efficiency. (NASDAQ:PKTR) deliver comprehensive application-adaptive bandwidth management by discovering and classifying network traffic, analyzing application and network performance, controlling traffic flows and monitoring and reporting on performance.
In short, Packeteer (NASDAQ:PKTR) offers a unique product that allows network administrators to manage network bandwidth. The company's boxes ensure that mission critical applications such as ERP software and sales force automation software get priority over non-critical functions such as web surfing. Since bandwidth is such a precious commodity for many offices, management products are fast becoming a necessity.
Last but not least the RED HOT IPO (NASDAQ:ATON) is a what I call a "Web Plumber (Infrastructure builder of the Internet) That is to say it is layer of the groundwork that is, and will provide the inner workings of the web. (NASDAQ:PKTR) can also be referred to as a "Web Plumber!" as well. With shares of (NASDAQ:ATON) trading over $100.00 easy currently. The fact that shares of (NASDAQ:PKTR) are trading under $40.00 again makes (NASDAQ:PKTR) a perfect play today at current levels.
I really like shares of (NASDAQ:PKTR) today for the following reasons.
Once shares of (NASDAQ:PKTR) hit $59.00 a share its all -time high on Wednesday, September 8, 1999 (NASDAQ:PKTR) sold down on much LESS VOLUME a very bullish sign to go as low as $33.00 only 12 trading days later, and reach the same low it achieved on August 31, 1999 of $33.00 even before it began its run to $59.00. With shares of (NASDAQ:PKTR) trading in a range of $34.50 to $36.00 for the most part yesterday. I see very little RISK and much more REWARD in shares of (NASDAQ:PKTR) today as it has excellent support at $33.00 even.
(NASDAQ:PKTR) traded in a very tight range yesterday on more volume 360,000 shares. Its average 30 day volume is 214,000 shares. What is even more interesting to point out is that shares of (NASDAQ:PKTR) have not traded volume of over (NASDAQ:PKTR) current 30 day average volume since it was trading on September 13, 1999, at a high of $50.00 a share? The trading behavior of (NASDAQ:PKTR) surly suggests that many current share holders are holding through it current retracement for even bigger gains coming. As they hold their shares the DEMAND Vs SUPPLY issue of (NASDAQ:PKTR) in turn will take shares of (NASDAQ:PKTR) higher.
(NASDAQ:PKTR) only has a float (amount of publicly traded shares) of 4 million. Sound familiar? Yes, (NASDAQ:ATON) has the same float as (NASDAQ:PKTR) does. A small float usually means a stock should have a much wider gap between the bid and ask. (NASDAQ:PKTR) held true to that theory of trading until yesterday when it traded over 350,000 shares but did it in a very narrow range. In contrast (NASDAQ:PKTR) has traded less then half that many shares and had bigger trading ranges. So then what does yesterday's increased volume in a tighter range represent. Two key things really. First (NASDAQ:PKTR) has interest. Number 2 (NASDAQ:PKTR) could indeed as it trading pattern suggested yesterday be in accumulation of a big run coming as unique "Web Plumbers!" like (NASDAQ:PKTR) are RED HOT!
What do Alteon Web Systems (NASDAQ:ATON) and (NASDAQ:PKTR) have in common? It would seem that the power house of routers and top rated "Web Plumber" (infrastructure builder of the Internet) CISCO Systems (NASDAQ:CSCO) wants to take over both the UNIQUE spaces of expertise that (NASDAQ:ATON) and (NASDAQ:PKTR) provide. (NASDAQ:PKTR) is a probable buyout target for (NASDAQ:CSCO) and keep in mind the price if (NASDAQ:CSCO) wants to add (NASDAQ:PKTR) to its team will not be cheap!
(NASDAQ:PKTR) represents a perfect buying opportunity today as it trades its REWARD from 35.00 to 50 perhaps soon. Represents much more REWARD then the RISK factor of (NASDAQ:PKTR) dropping to $33.00 and losing support a price that (NASDAQ:PKTR) is less then $3.00 away from.
If you are looking for competitors of (NASDAQ:PKTR) look no further then Check Point Software (NASDAQ:CHKP) all it has done is go from 35.00 in April 99 its all-time high reached as recently as September 16, 1999, at over $96.00 a share! (NASDAQ:PKTR) could easily be worth that much or more sooner then later!
In looking at (NASDAQ:PKTR) trading graph. The formation that (NASDAQ:PKTR) has created by finishing higher today on more volume suggests that (NASDAQ:PKTR) could come out of the shoot fast and up. It looks very much like the trading graph of (NASDAQ:CNCX) did on August 26, 1999. (NASDAQ:CNCX) the next day August 27.1999 gained as much as $5.8750 a share.
Stock Fans! With so much potential and for all the reasons I have researched for you above (NASDAQ:PKTR) looks to be a perfect stock to get in today and hold for $50.00. If (NASDAQ:PKTR) gets any backing by the media or brokers with such a low float (NASDAQ:PKTR) shares will explode. For just that reason bigger players maybe stocking up on shares of (NASDAQ:PKTR) in anticipation of its upcoming run. In closing just to put shares of (NASDAQ:PKTR) in prospective with the identical 4 million float that (NASDAQ:ATON) has (NASDAQ:PKTR) can move just as fast. All it needs is volume.
KEY INDICATORS (NASDAQ:PKTR)
Buy Area: $34.3750- $36.50
Sell Stop $32.6250
TARGET: $48.00 - $50.00 (1 day to 10 trading days)
One of Today's Internet IPO's Foundry Networks (NASDAQ:FDRY)
begins trading later today on the NASDAQ Exchange.
Lead Underwriter: Duetche Banc, Alex Brown
Offering 5 million shares priced at: $22.00 to $24.00
About Foundry Networks:
Foundry Networks (NASDAQ:FDRY) designs, develops, manufactures and markets a comprehensive suite of high performance networking products for enterprises and Internet service providers. Our Gigabit Ethernet Layer 2, Layer 3 and Layer 4-7 switches enable our customers to build and maintain efficient, high performance networks. Layer 2 switches provide dedicated bandwidth, while Layer 3 switches route network traffic. Layer 4-7 switches, a new generation of networking devices, provide the intelligence to control information delivery.
Stock Fans! yet another "Web Plumber!" (Infrastructure builder of the Internet) NASDAQ Internet IPO Foundry Networks (NASDAQ:FDRY) looks very HOT today and in high demand as it should get a very warm welcome from Wall Street today, as well as investors. I am looking for (NASDAQ:FDRY) to open from $51.50 to $67.00 a share.
I really like this company especially after the run up of (NASDAQ:ATON) a "Web Plumber!" as well. However (NASDAQ:FDRY) taking a closer look directly competes with power house "Web Plumber!" (NASDAQ:CSCO). I took the following excerpt right out of (NASDAQ:FDRY) Business Plan.
"The market in which we (NASDAQ:FDRY) operate is highly competitive. Crisco (NASDAQ:CSCO) maintains a dominant position in this market and several of its products compete directly with our products. Its substantial resources and market dominance have enabled it to reduce prices on its products within a short period of time following the introduction of these products, which reduces the margins and profitability of its competitors. Purchasers of networking solutions may choose Crisco's (NASDAQ:CSCO) products because of its longer operating history, broad product line and strong reputation in the networking market. In addition, Crisco (NASDAQ:CSCO) may have developed or could in the future develop new technologies that directly compete with our products or render our products obsolete.
That last word "OBSOLETE" scares me on the overall future of (NASDAQ:FDRY). However, today it should run as investors of (NASDAQ:FDRY) will ook to buy now and ask questions later especially on the run up of (NASDAQ:ATON) along with other Web related successful IPO's from last Friday. If there is any mention of (NASDAQ:CSCO) being a direct competitor in the media especially CNBC today. (NASDAQ:FDRY) reception into the NASDAQ Market might be less then what the experts are calling for.
I like shares of (NASDAQ:FDRY) at about 10% or so off it opening price. I will look to use that percentage to gauge a good area to buy into (NASDAQ:FDRY). (Special Note: Internet IPO are especially dangerous with no history of support and resistance to calculate trading ranges to limit risks. USE CAUTION & tight sell stops to limit a mistake. )
Buy Area: 10%- 15% first public trade (example: opens at $55.00 -10% = $49.50)
Sell Stop: 14% less where you buy
TARGET: 30% more then opening trade (example: opens at $55.00 + 30% = $71.50)
TWO STOCKS TO WATCH: Sympathy PLAYS off of (NASDAQ:ATON) huge moves!
F5 Networks (NASDAQ:FFIV ) and, Extreme Networks (NASDAQ:EXTR)
Both of these stock are off of their highs and both gained some nice ground yesterday as the RED HOT IPO (NASDAQ:ATON) rocketed into stratosphere! These two companies (NASDAQ:FFIV) and (NASDAQ:EXTR) are worth watching as investors may look for sympathy play off of (NASDAQ:ATON) recent unbelievable gains!
I like (NASDAQ:EXTR) as it closed at it high of the day $60.50 on bigger then normal volume to gain $4.00 a share. I especially like the trading range on shares of (NASDAQ:EXTR) as it was trading as high as $73.00 a share as recently as September 9, 1999.
KEY INDICATORS: (NASDAQ:EXTR)
Buy Area: $57.43750- $60.50
Sell Stop: $56.3750
TARGET: $70.00 plus 5- 7 trading days
RUN THE OPTIONS
To take advantage of this play you can also buy into the October 1999 $65.00 Option Calls (Symbol:EUT-JM) Last price: $2.81250 per contract
KEEP AN EYE ON SHARES OF Level 3 (NASDAQ:LVLT) is has assembled a perfect trading graph much like (NASDAQ:PKTR) has of late. It tested it current 30 day support level of $52.50 as the NASDAQ sold off last week. It now looks to go back up in its 30 day trading range and head for over $60.00 a share over the next 10 trading days or so. This is a perfect Swing Trade with little downside risk.
KEY INDICATORS: (NASDAQ:LVLT)
Buy Area: $53.6250 - $54.43750
Sell Stop: $52.00
TARGET: $58.00- $61.81250 (3-10 trading days)
NASDAQ Internet Companies with IPO Ownership Interest to Watch: Both Perfumania (NASDAQ:PRFM) and (NASDAQ:HYPR) have IPO's coming to the NASDAQ market that they have spun off their current businesses.
Perfumania (NASDAQ:PRFM) already a stock I have featured as a perfect play on Christmas 1999 e-Commerce boom that should be coming in next 60 days is trading at about $4.25 a share. It has had 2 straight quarters of record earnings and has been as high as $13.93750 earlier this year.
The fact that it now as the Internets top selling Perfume fender is being spun off of (NASDAQ:PRFM) in one of this weeks expected Internet IPO's Perfumania.com (AMEX:PF). With shares of (NASDAQ:PRFM) in a current surge in price to the upside. Low priced (NASDAQ:PRFM) volume has been picking up of late. Perhaps with the (AMEX:PF) IPO shares of (NASDAQ:PRFM) can trade at over $5.00 a share a place where (NASDAQ:PRFM) would be in line for even more gains to the upside.
(NASDAQ:HYPR) formally (AMEX:PQT) has spun off it popular division of PC Quote. (NASDAQ:PQCT) get ready to go public. Watch shares of (NASDAQ:HYPR) to possible move up in anticipation of the revenue created for (NASDAQ:HYPR) off of PC Quotes (NASDAQ:PQCT) gains.
Other Internet related IPO that I will be looking to play in my LIVE TRADING ROOM today are:
Airgate PCS (NASDAQ:PCSA)
Callico Commerce (NASDAQ:CALICO)
Free Shop.com (NASDAQ:FSHP)
Join me in my LIVE TRADING ROOM as I will be looking for the best buying area on the preceding Internet IPO's
TOP PERFORMING WEB PLUMBER FUND!
If you are looking for another great way to take advantage of Web Plumbing type companies for the LONG TERM. Consider moving some of your 401K or longer term investment funds over to ORBITEX INFO TECH FUND A shares (Symbol:OITAX) it is only up 70% year to date as it has more then doubled its October 10.1998 price of $16.00 a share.
More to come...
Have a great day!