The Play Of The Day
09-30-99 7:54 EST.
Good Morning Stock Fans!
Today's Play of The Day is: Southwest Securities Grp. (NYSE:SWS)
Late in the day many of the beaten down online brokers ran on increased volume in Internet related stocks as well as over all increased volume in the entire market for September 1999. President Clinton pledging a fight to block taxes on electronic commerce didn't hurt the online brokers surge either.
Today I like shares Southwest Securities Grp. (NYSE:SWS) because it's is less known play in the online broker sector. that has been beaten down off its high perhaps worse then any other online broker play of late. It does however have great potential for a couple of different reasons.
1.) Mydiscountbroker.com, is the on-line brokerage subsidiary of Southwest Securities Group, Inc. (NYSE: SWS). It was ranked 8th in the Fall 1999 Gomez Advisors Survey. Mydiscountbroker (www.mydiscountbroker.com) improved it's standing from number 11 in the Summer 1999 Gomez survey.
2.) (NYSE:SWS) also has quite a large stake in shares of Knight Trimark (NASDAQ:NITE) a stock that has enjoyed perhaps the best move to the upside 1999 in the on line broker sector as the leading NASDAQ Internet stock market maker. Shares of (NASDAQ:NITE) since it was pretty much discovered as an online broker Internet play on January 12, 1999, when it was trading at only $33.00 a share have gone up over 400% including a 3 for 1 stock spilt along the way. Keep in mind that with the recent resurgence of (NASDAQ:NITE) shares of (NYSE:SWS) look to benefit in (NYSE:SWS) upcoming earnings.
2.) It also seems that (NASDAQ:NITE) has been running up of late on continued reports of rumors that Wall Street "Power House" broker Merrill Lynch (NYSE:MER) who less then 5 months ago announced it jump into the online broker sector might just be interested in buying (NASDAQ:NITE). This continued rumor continuing to push shares of (NASDAQ:NITE) higher will only benefit shares of (NYSE:SWS)
3.) Finally Stock Fans! to put it quite simply (NYSE:SWS) has been crushed since May 1999 (less then 5 months ago) when it was trading at almost $100.00 a share. Since that time (NYSE:SWS) has seen its stock slowly decrease to go as low as $23.68750 yesterday. It has lost almost 50% of that move on decreasing volume when it sold down off its high in May down to roughly $69.00 to $63.00 a share. The trading chart on (NYSE:SWS) plainly showed until yesterday that for over 3 months now this stock has been pretty much forgotten about. The fact that it traded more 4 times it 30 day average volume 582,000 shares on its way to gaining up more then $3.50 s a share to close at $27.6250 yesterday tells me it is no longer forgotten.
Today as the market is indicating I am looking for shares of (NYSE:SWS) to open up slightly and then with only a small pullback look to go higher from there as this stock should now find it way back up to over $35.00 a share over the next few trading days. It has an extremely low float (amount of outstanding publicly traded shares) Taking that into account (NYSE:SWS) can move up and for that matter down very fast as supply and demand can changer this ones price in a hurry. The Key on this one being a winner is going to come down to VOLUME to the buy side.
Buy Area: $26.3650- $28.25
Sell Stop: $23.6250
TARGET: $35.00 - $38.00 ( 3 to 5 trading days)
Remember VOLUME is key on this one. I will be looking for increased volume over yesterday's 500,000 plus shares to take it higher.
I will also be watching the entire online broker sector today. Some of the symbols for these include NDB, SCH, EGRP, AMTD, SIEB, JOBOH.
BONUS PLAY: America Online (NYSE:AOL) Stock and Option Calls.
Stock Fans! It is the last day of September 1999. With that in mind S&P Fund Mangers that have been on the outside looking in since last week when (NYSE:AOL) began a big run bouncing off of $80.50 a share to go as high as $113.50 yesterday before it closed yesterday at $109.25 still up over $28.75 a share since that low it bounced off last week.
In short I am going to go with (NYSE:AOL) Stock and Call Options today on the basis that all those S&P fund manager as well as AOL wanna be investors are going to see today's decrease on shares of (NYSE:AOL) as an excellent buying opportunity. I really believe that all things a side these fund mangers are going to jump at the chance to owning (NYSE:AOL) as we finally end today what has been anything but a stellar September 1999.
With what (NYSE:AOL) historically has done into the month of October over the last 3 years how can they not buy into shares of (NYSE:AOL) as it looks to benefit more then any other company on what should be 2.5 times bigger a holiday e-Commerce Christmas 1999 then last years already huge 1998 was that took shares of AOL up over 30% in October 1998.
Buy Area: $102.93750 - $104.93750
Sell Stop : $98.3750
TARGET: $ 125.00 (end of October 1999 )
I am consulting my AOL history book on this play. If it repeats itself like it has the last 3 years 125.00 is a low Target in October 1999.
RUN THE OPTIONS
(NYSE:AOL) November 1999 $120.00 Call Options
Have a great day!
More to come.....