|Thursday December 14, 2000
SAMPLE PLAY OF THE DAY!
Please Note: todays pick has 2 parts (Short then Long)
Summary: EMC Corp. (EMC) (PLAY: SELL SHORT)
($77.88 current price. $4.25 down today)
EMC Corporation and its subsidiaries design, manufacture, market and support a wide range of hardware and software products and provide services for the storage, management, protection and sharing of electronic information. These integrated solutions enable organizations to create an electronic information infrastructure, or what EMC calls an E-Infostructure. EMC is the supplier of these solutions, which are comprised of enterprise storage systems, networks, software and services. Its products are sold to customers utilizing a variety of the world's most popular computing platforms for key applications, including electronic commerce, data warehousing and transaction processing.
COACH'S STRATEGY: (Short & Long) Shares of EMC lost their 200 daily moving average (dma) of $79.45 today as they fell back nearly $5.00 on high volume of over 15.5 million shares. The stock normally trades 12 million shares. The fact that EMC couldn't hold its 200 dma on close today was not good at all. It means that a small anticipated bounce up from today's close of $79.25 should be met with heavy selling as well as short sellers.
Technically the chart isn't much better as EMC's stochastic on its daily chart are beginning to roll over. Furthermore the MACD on its daily chart is in a complete downward motion. As a result of these technical readings, shares of EMC should continue its drop tomorrow as it looks now as if it will come very close to a re-test of its 200 day low of $69.06. At that point it has solid support and should bounce back up. So, we will short the stock just under its 200 dma in the AM, and then look to cover and go long as it should see a solid bounce off the $70.88 area. Itlooks like a great play.
KEY INDICATORS: EMC- SHORT
Sell Short Area: $79.50
Execution Price: $79.50
Limit Stop: $82.25
Average Volume: 12 mill.
Today's Volume: 16 mill.
KEY INDICATORS: EMC- LONG
Buy Area: $70.88
Execution Price: $70.88
Limit Stop: $68.00
NEW PLAY RECOMMENDATIONS: (1st Period): 12/14/2000
SUMMARY: Gannett Company Inc (GCI) Play = Buy Long
(currently $60.06, up $2.06)
GCI publishes newspapers, operates broadcasting stations and is engaged in marketing, commercial printing, a newswire service & data services. For the 39 weeks ended 9/24/00, revenues rose 18% to $4.45B. Net income from continuing ops. rose 7% to $677M. Revenues reflect solid advertising demand, particularly in national and classified. Earnings were partially offset by increased interest expense and amortization of intangibles
There's more to the stock market than technology. I know many people don't realize it, but its true! With technology stocks in a clear downtrend, it pays to start looking around at a few other sectors. Gannett peaked at over $80 at the very end of 1999, but has been a strong downtrend ever since. Today the stock broke out of an "inverted head and shoulders" on the strongest volume since early October. The move was significant because it cleared the "neckline" of the inverted head and shoulders ($58). This had been acting as significant resistance. Now, the inverted head and shoulders would predict a minimum advance to at least $66. The width and strength of this reversal however would suggest that this move may kick off a long bullish move in this particular stock.
The ideal buy here would be on a dip back to $58. Many stocks which break out of inverted head and shoulders will proceed to dip back
to the neckline before advancing further. This offers an ideal entry point and should be bought fairly aggressively.
KEY INDICATORS: GCI:
Buy Area: $59.13
Execution Price: $59.13
Limit Stop: $55.88
Average Daily Volume: 876,600
Today's Volume: 1,568,600
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