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Email Version, Section 1, Thursday, 09/07/2000
The SplitTrader.com Newsletter Thursday 09/07/2000 1 of 1
Copyright 2000, All rights reserved.
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In This Newsletter:
===================
Market Commentary - Tech Rebounds, DOW Sinks
Definition of the Day
Thursday's Split Announcements - MLNM
Sector Watch - Breakdown by sector of market performance.
Friday's Expirations
Friday's Play-of-the-Day - FORR
Stock Plays - New - Updates - Drops
==================================================================
Market Commentary
=================
Tech Rebounds, DOW Sinks
Sale prices encouraged investors to purchase 'bargain priced'
Nasdaq issues today. Traders who may have missed out on the
August rally scooped up technology stocks at a discount following
two days of markdowns on semiconductors, biotechs and fiber
optics. But lingering questions about the economy and its effect
upon corporate earnings seem likely to continue.
Today's sector rotation to technology and away from Financials,
Chemicals and Energy stocks was inspired by technical factors,
then pushed along by positive news from semis and biotechs.
We now have a classic tug of war between bulls and bears in
regard to the fundamentals of our economy and the earnings
potential of individual sectors. Last spring, the tech crash was
caused by valuation alone, with no concern about future earnings.
But now, analysts are divided about the prospect of future
earnings growth. That translates to a limit on price
appreciation. Semiconductors remain the stalwart industry of the
tech sector and with the mixed reports about chip demand, I doubt
that anything near Nasdaq 5000 can be achieved this fall,
especially considering that other sector valuations remain
relatively cheap and the big money, institutional, is chasing
more than just technology.
In other words, until earnings are reported in October, our
likely path will be sideways.
Thursday's Data:
The NASDAQ Composite posted an 85-point rebound to close at 4098
on moderately heavy volume of 1.6 billion shares. Advancers were
well ahead of declining issues at 23 to 17. The Advance-decline
line on the NASDAQ returned to a positive indication, as it was
during most of August.
Over in the blue chip arena, the Dow Industrials average gave
back 51 points to close at 11260. Volume at the NYSE exchange
was moderate at 978 billion shares traded. Advancers beat
declining issues 15 to 13.
In the broad market, the S&P 500 index gained 10 points to close
back over the 1500 barrier, at 1502.
With economic news on the light side Thursday, Treasury issues
traded in a choppy range, with the ten-year note losing 7/32 to
close at 99 30/32 and yielding 5.755 percent. Trading was
influenced by new corporate debt coming to the market, which
pushed prices lower and oil prices continued to surge, also
putting pressure on the market. Crude oil gained 49 cents to
close at $35.39 per barrel.
Stock and Sector News:
A rebounding semiconductor index was a relief to tech investors.
Broadcom (BRCM), which is being sued by Intel (INTC), mounted a
12.68 point comeback after company reps made positive comments at
the Salomon Smith Barney conference. Also helping the chip
sector were upgrades to beleaguered Micron Technology (MU), which
gained 3.50 points to close at 73.50. Also in the news was
National Semiconductor, (NSM) which reported earnings that beat
estimates by 11 cents per share. NSM posted a 2.81 point gain to
close at $47.31.
Although today's news was positive for the chip sector, the index
is showing much weakness following the recent disparaging remarks
about the industry. Technically, the MACD is crossing under the
signal line and the SOX index is midway to support at 1000.
Chart of the Semiconductor Index:
Other sectors showing strength today included the Biotech Index
(BTK), which gained 5.77% in today's tech rally. The starting
gun was sounded for the industry when Millennium Pharmaceuticals
(MLNM) declared a 2 for 1 stock split. MLNM gained 2.68 points
to close at $141.75.
Another standout was the Fiber Optics group, which surged
strongly. Curiously though, the rebound was not uniform.
Sycamore Networks (SCMR) was punished by 8.62 points on rumors
that Williams Communications (WCG) is displeased with Sycamore
products.
In weak sectors, Oil Service stocks (OSX) slid 1.6% lower after
Bank of America Securities downgraded industry leader
Schlumberger (SLB) on valuation concerns. This came despite oil
prices which increased to over $35 per barrel, so the setback may
be temporary. SLB lost 2.62 points to close at $83.88.
Chemicals were hard hit (and the Dow Industrials for that matter)
after Du Pont (DD) announced that the company would miss earnings
estimates for fiscal year 2000 due to energy and raw materials
expenses that had risen higher than projected. Other chemical
companies such as Dow Chemical (DOW) -1.88 traded lower on the
news.
And finally, Internet stocks will have to look elsewhere for
leadership. Yahoo, one of the only Internet stocks to hold a
basing pattern through the summer, is slowly sinking. CEO Tim
Koogle painted a less than rosy picture by giving the kickoff
speech at the Robbie Stephens Internet conference, which runs
through Friday. He basically said that advertising revenues are
in a period of consolidation - otherwise interpreted as: revenues
are falling. YHOO fell 5.06 points to close at $107 while the
CBOE Internet Index (INX) fell 1.56%.
Friday's Trading:
Earnings to be reported for Friday are practically non-existent,
so turning to economic reports, we find - not much more. The
only report expected is Consumer Credit for July, estimated at
$10 billion. It's not a widely followed report, but with the
lack of other news events, expect much commentary to follow
regarding the torrid pace of consumer spending and decreasing
consumer savings.
To the charts we go. The NASDAQ Composite had an inside day
while holding support at the 4000 level. Forming a nice base of
support is the 200-dma, which is now at 4005 and rising. Our
trend remains intact, although shaken, so the bias will remain to
the upside. Due to recent weakness in the index, the RSI has
slid back to a more normal level, offering upside potential. The
MACD trend indicator is still positive, but if the index closes
below 4000, multiple sell signals will trigger.
Chart of the NASDAQ Composite:
The INDU decided to take the day off, but no sell signals here.
The trend remains strongly higher, while supporting sectors to
the INDU remain fundamentally strong. The RSI indicator is still
hovering near an overbought condition, but the MACD trend
indicator remains positive so this uptrend looks solid.
Chart of the Dow Jones Industrial:
Looking forward, expect more of the same. More sector rotation,
more range bound trading. The key for the NASDAQ will be further
interpretation of the semiconductor issues. If investors can
shrug off their worries, the NASDAQ may be able to test 4300
again. If not, the sector will drag down all of the tech issues.
For the broad market, the next couple of weeks will be subject to
economic concerns and next week is heavy with reports such as
Retail Sales, PPI, CPI and Industrial Sales. Beyond that,
attention will turn to earnings in October.
Good Luck!
Steve Pekarek
Editor
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great job they did in Atlanta. But more importantly I would like
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Definition of the Day
=====================
Personal Consumption Expenditures (PCE)
The Personal Consumption Expenditure report is actually a part of
the Personal Income Report. This section includes data pertaining
to durables, non-durables, and services.
For the complete definition, please go to:
http://www.splittrader.com/glossary/viewglossary.asp?glossaryid=454
===================
Split Announcements
===================
Thursday, September 07, 2000, Before the Bell
Not Just Once a Millennium - MLNM Announces Another 2-for-1 Split
Before the opening bell today, Millennium Pharmaceuticals, Inc.
(Nasdaq: MLNM) announced approval of a 2-for-1 stock split by the
Company's Board of Directors. The stock split will be issued in
the form of a 100% stock dividend payable to eligible shareholders
on October 18, 2000.
For the complete announcement, please go to:
http://www.splittrader.com/announcements/090700_1.asp
============
Sector Watch
============
As of Market Close - Thursday, 09/07/2000
Key Benchmarks
Broad Market Last Support/Resistance Alert
****************************************************************
DOW Industrials 11,259 11,050 11,450 **
SPX S&P 500 1,502 1,485 1,535
COMPX NASD Composite 4,098 4,000 4,300
OEX S&P 100 818 814 836
RUT Russell 2000 542 520 575
NDX NASD 100 3,953 3,700 4,150 **
MSH High Tech 1,088 1,060 1,130 **
BTK Biotech 743 690 790
XCI Hardware 1,587 1,540 1,660
GSO.X Software 478 450 495
SOX Semiconductor 1,094 1,040 1,180
NWX Networking 1,337 1,320 1,400 **
INX Internet 574 550 605
BIX Banking 621 575 640 **
XBD Brokerage 693 660 710 **
IUX Insurance 714 695 730 **
RLX Retail 824 780 840
DRG Drug 377 365 410
HCX Healthcare 784 760 815 **
XAL Airline 156 152 168
OIX Oil & Gas 317 284 320
Eight alarms were triggered over the past two sessions. Four were at
resistance levels (DOW, BIX, XBD, IUX) and four at support (NDX, MSH,
NWX, HCX). Yesterday's pullback gives traders the opportunity to
establish new support/resistance levels. Raising support (DOW, XCI,
SOX, BIX, IUX, XAL, OIX) Raising resistance (DOW, BIX, XBD, IUX)
Lowering support (NDX, MSH, NWX, HCX) Lowering resistance (SPX, OEX,
NDX, MSH, BTK, XCI, GSO, SOX, INX, HCX).
This section of the investment advisory website highlights
SplitTrader.com's stated Sector Watch across broad market indices
and industry sectors. SplitTrader.com is the only website that
states and regularly updates its Sector Watch across industry
sectors. Investors who reference this section first before
planning their trades will gain a decided advantage. The time
horizon of our stated Sector Watch is generally 2-3 weeks and is
based upon a number of fundamental, technical and sentiment
indicators.
An important feature to our stated Sector Watch is the key
benchmark levels. These levels represent important near-term
support and resistance points. By viewing the sliding bar for
each index, investors can quickly view the relative strength of
our position and better anticipate when we are likely to change
our Sector Watch. These benchmarks are determined using technical
and sentiment indicators. It's important to realize that our
Sector Watch may be contrary to the overall trend when compared
to longer-term moving averages. This is because our stated Sector
Watch is designed to help investors take positions before others
see major trend reversals. For each sector, we highlight the index
symbol, key benchmarks, last level, stated Sector Watch and the
date we changed our position (since).
For industry sectors signaling BULLISH, investors may want to
consider long/call positions. For sectors signaling BEARISH,
investors may want to explore short/put positions. For sectors
flashing Neutral, investors may want to develop hedge positions.
As investors allocate capital, we encourage BULLISH traders to
pursue industry sectors that are trending higher and trading above
moving averages and BEARISH traders to pursue sectors trading
below declining moving averages. Investors can view these moving
averages over a six-month chart by double clicking on the industry
indexes links within the matrix.
====================================
Friday's Expirations by Payable Date
====================================
Pericom Semiconductor (PSEM) splits 2:1
Siebel Systems, Inc. (SEBL) splits 2:1
Electronic Arts Inc. (ERTS) spltis 2:1
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=====================
SplitTrader.com Plays
=====================
The PLAY LEGEND:
SplitTrader.com Play Recommendations.
Play-of-the-Day is our number one play recommendation for the
following trading day.
Updates are just that - updates on continuing plays.
New plays are brand new for the newsletter.
Drops are closing plays that we feel have lost the advantage.
You will see:
Stock Symbol, Company Name, Closing Price, (change for the week)
Picked at date and Change since picked
Terms:
BoD = Board of Directors meeting
ADV = Average Daily Volume
dma = daily moving average
On the SplitTrader.com website we have very detailed profiles
for the stocks we play. Please take the time to visit the site
and look up a stock's profile if you are interested in more
information.
================================================================
========================
Friday's Play-of-the-Day
========================
Thursday, September 7, 2000
=============================
FORR - Forrester Research $58.56 +1.56 (-0.44)
Thursday's Update:
How valuable is intelligence? This is an interesting
question. To that end, our Play of the Day, Forrester
Research, is a think tank of sorts that helps its clients
determine business strategies by trying to identify future
trends. The company's press release today is a perfect
example of the type of market intelligence it offers its
clients. Forrester stated that the Internet will enable
consumers to make better and more well-informed decisions
about the course of their healthcare, which will be a
departure from today's system that is dominated by a somewhat
paternalistic bureaucracy. Companies pay a lot of money for
such information because it pays to be ahead of the curve.
Nevertheless, FORR suffered some pretty decent selling once it
dropped from a base established by the 50-DMA, which now
stands at $63.50. However, the stochastic oscillator did not
reach an oversold during the recent pullback, but it did drop
to a level that has seen bounce rallies in the past. We have
a bit of concern about the MACD, which has not started to make
a turn back up with any conviction. Forrester has already
split once this year (2 for 1 when it was trading at $55.50,
which is obviously very close to today's closing print). With
plenty of authorized shares available and a penchant for
splitting when the stock is in the $50's, we feel that FORR is
a viable split candidate. Another positive factor is that
stock has built a base this week at $55.00, having traded down
to that level twice. However, if this support fails, we will
exit this position with a stop at $54.94. We will also exit
this position if there is a split announcement.
Picked on Sep 7th @ $58.56
Change since picked 0.00
NEW SPLIT RUN PLAYS 09/07/00
============================
NONE
NEW SPLIT CANDIDATE PLAYS 09/07/00
==================================
DIGX - Digex, Incorporated $72.88 +4.12 (-11.63)
DIGX is a provider of managed Web hosting services to businesses
operating mission-critical, multi-functional Web sites. In
addition, Digex offers Web hosting services to the rapidly growing
number of application service providers, enabling them to more
efficiently deliver their application services to their customers
over the Internet. The Company also offers related value-added
services, such as firewall management, stress testing and
consulting services, including capacity and migration planning and
database optimization. If you look at the technicals, you will see
the stock has been "rolling" between support at $65.00 and
resistance at $90.00 for about 3 months now. As we pick up this
play, the stock appears to have just bounced again off support at
about the $65 level and looks ready to move higher. Newsworthy
items affecting the stock include a decision by WorldCom (WCOM) to
buy Intermedia (ICIX), which owns a 54% stake in DIGX. The move
has been well received by investors who took the stock higher both
Wednesday and Thursday. We see support for DIGX at the 100-dma at
$68.93, with resistance at the 50-dma at $75.97 and then the 20-
dma at $78.25. When considering entry points, look for increased
volume above the average of 1 million shares and for resistance to
be conquered. A brief bounce off support, if immediately followed
by strong buying, could also be an entry point. Look for positive
momentum in the NASDAQ and the AMEX Internet Index (IIX) for
leadership and direction. We will place a protective stop at
$68.44 just below support. Look for any changes to this at our IN
PLAY section.
Picked on September 7th @ $72.88
Change since picked 0.00
===
FORR - Forrester Research $58.56 +1.56 (-0.44)
How valuable is intelligence? This is an interesting question. To
that end, our Play of the Day, Forrester Research, is a think tank
of sorts that helps its clients determine business strategies by
trying to identify future trends. The company's press release
today is a perfect example of the type of information intelligence
it offers its clients. Forrester stated that the Internet will
enable consumers to make better and more well informed decisions
about the course of their healthcare, which will be a departure
from today's system that is dominated by a somewhat paternalistic
bureaucracy. Companies pay a lot of money for such market
information because it pays to be ahead of the curve.
Nevertheless, FORR suffered some pretty decent selling once it
dropped from a base established by the 50-DMA, which now stands at
$63.50. However, the SI did not reach an oversold during the
recent pullback, but it did drop to a level that has seen bounce
rallies in the past. We have a bit of concern about the MACD,
which has not started to make a turn back up with any conviction.
Forrester has already split once this year. The stock split 2 for
1 when it was trading at $55.50, which is obviously very close to
today's closing print. With plenty of authorized shares available
and a penchant for splitting when the stock is in the $50's, we
feel that FORR is a viable split candidate. What's more, the
stock has made a bit of a base this week at $55.00, having traded
down to that level twice. However, if this support fails, we will
exit this position with a stop at $54.94. We will also exit this
position if there is a split announcement.
Picked on September 7th @ $58.56
Change since picked +0.00
SPLIT RUN PLAY UPDATES 09/07/00
===============================
NONE
SPLIT CANDIDATE PLAY UPDATES 09/07/00
=====================================
EFNT - Efficient Networks $55.00 +2.56 (-2.00)
Efficient Networks has been testing support. On Wednesday, the
stock hit an intra-day low of $52 thanks to a sell-off in the
broadband sector. EFNT rebounded on Thursday, regaining most of
its losses from the prior session. The stock appears to be holding
at the 10-dma of $52, though we are somewhat concerned about the
descending volume trend and the negative sector momentum.
Hopefully, EFNT can build on its close above the 5-dma of$54.50.
The Company is expected to announce earnings on 10/17, and we are
hoping for a split announcement with the release or following
their next BoD meeting. The company has enough shares to split,
but the recent share price may be a bit on the low side. For now,
EFNT has light support at the 5-dma with stronger support at the
10-dma. There is resistance at $58 and then $60. We would like to
see a bounce off of $54 or a move above $58 on volume of at least
600,000 shares by midday to start new plays. Our stops remain
unchanged at $51.38, as the stock is relatively unchanged.
Picked on Sep 5th @ $55.25
Change since picked -0.25
===
IBM - International Business Machines $133.38 +1.93 (-0.26)
I think I can, I think I can Like the little train that could,
IBM continues to chug along each day, drawing closer to achieving
a new high. On Thursday IBM traded 4.5 million shares,
unfortunately that was not enough coal in the engine to power it
through resistance, for average trading volume is 6.1 million
shares. Stocks making and keeping new levels do so on greater than
average volume. Maybe that will change. On Thursday the company
announced its rolling out a new line of notebook computers
targeted at consumers. The new contraption includes options for
accessing the Internet and other networks wirelessly. One of the
options is a PC card that will enable computers with Bluetooth
technology. A technical look at the stock indicates that support
will first be measured at the 5-dma at $132.37, followed by the
10-dma at $131.00 and finally the 20-dma at $126.37. Resistance
will now be $135.00 and $137.69. Look for big volume when
considering news plays and watch for the resistance levels to be
broken and maintained. Leadership from the Dow Jones Industrial
Average (INDU) the AMEX Computer Technology Index (XAL) should
also be considered. We will keep our stop at $125.00.
Picked on August 29th @ $132.88
Change since picked +0.50
===
LLTC - Linear Technology Corporation $70.75 +3.69 (-2.19)
Known for its expertise in analog engineering, Linear now provides
businesses with the ability to remotely access support tools
through an online medium. Interestingly, businesses last year
spent $19.4 billion on outside technical training. 20% to 30% of
this expense was likely diverted to teaching workers how to
operate high-tech equipment outside the classroom. This type of
remote training could assist companies like LLTC with an
additional revenue stream. Regaining lost ground from yesterday's
sell-off, shares rose sharply higher on the day to close up $3.69.
Wednesday's weakness in the NASDAQ Composite was followed by
strength today, which likely played a significant role in today's
advance. If strength can continue, we'll expect the most recent
high of $74.13 to present an initial challenge, followed just
higher by the all time high of $74.75. Good volume of 3 million
shares will confirm a break through resistance and present a
potential buying point. Initial support should come at the
consolidation range of $70 bolstered by the 10-dma of $69.79.
Further declines are likely to find an additional support at the
20-dma of $66.90. This level could present the base ahead of our
stop at $65. Let sharp bounces off support trigger entries, when
corroborated by good daily volume. The SOX index could give clues
to strength or weakness in the stock.
Picked on August 31st @ $71.94
Change since picked -1.19
===
PCG - PG&E Corporation $30.06 +0.12 (+1.17)
On Thursday shares of PCG hit a new 52-week high on big volume.
The stock, which for most of August was trapped in a trading range
between $28 - $29, broke out of this range over the past two days.
What's more, it looks poised to move even higher. Trading volume
on Thursday soared to over a million shares versus the average of
767 thousand. More importantly, though, the MACD has turned
positive on a rising Relative Strength Index (RSI). We now see
support for the stock at $30.00 followed by the 5-dma at $29.50
and then the 20-dma at $28.82. Resistance could be encountered at
$30.50 and then $31.00. Look for possible entry points if the
stock punctures resistance on good volume. Look for support in the
INDU to accompany any new plays. We will keep our stop at $27.00.
Picked on August 3rd @ $28.83
Change since picked +1.23
===
THC - Tenet Healthcare Corporation $31.44 -0.50 (+0.44)
The slumber continues; however, it does look like this giant
hospital chain company is at least drifted higher. The stock is
approaching its high of $32.69 and does sport a relatively
attractive P/E of 32.62, especially when you consider that some
analysts believe that the company can experience growth of 17 to
20 percent next year. It is also entirely possible that ailing
technology stocks helped THC during the early part of this week.
Cash pulling out of technology stocks sometimes gets put back to
work in other stocks, especially if they are perceived to be
"safer". Unfortunately, this pattern reverses and the NASDAQ
recovery today cut THC's early gains in half. THC just barely
undercut yesterday's low, which is slightly bearish. Most of the
technical indicators, including the MACD and the RSI are decidedly
neutral. OBV is decent and has been rising, which is a good
indicator for the company's longer-term prospects. We have
decided to maintain our stop at $28.00. Please check our In Play
section for our trailing stop suggestion.
Picked on July 30th @ $31.19
Change since picked +0.25
===
VRTS - Veritas Software $123.13 +4.63 (+1.38)
With over 60 of the world's leading servers and operating systems
integrating its software, VRTS has become a de-facto standard for
application storage management. This acceptance in the enterprise
data storage market has kept growth strong, as witnessed by the
company's 2400% increase in revenues over the last 5 years!
Currently, shares have remained in their tight consolidation
formation near the $120 level. Falling below this intra-day level
earlier in the day, the stock quickly regained its position above
this level and closed up 3.9% on the day. With the uptrend still
intact, along with good upside volume (5.0 million shares traded),
we still believe that VRTS is poised to run to its next resistance
level of $127.56 (recent gap). Secondary opposition should follow
at the double top mark of $140. Look for sharp advances through
these points, when followed by good volume to trigger potential
buy points. Support will now be at the $120 mark (previous
resistance) and may present a good intra-day buy point should the
stock bounce sharply from it. Just lower, the $115 level could
offer the final support foothold ahead of our stop at $114.
Continue to watch the NASDAQ for hints of weakness or strength and
to confirm entries/exits.
Picked on September 3rd @ $121.75
Change since picked +1.38
=====
DROPS
=====
SPLIT RUN PLAY DROPS 09/07/00
=============================
NONE
SPLIT CANDIDATE PLAY DROPS 09/07/00
===================================
BEAS - BEA Systems $66.56 +3.25 (-4.19)
It was April all over again yesterday, at least for a day or two.
Many of the high P/E Internet infrastructure software companies
suffered from some decent selling pressure. It was not terribly
surprising because many of these stocks were exhibiting signs of a
short-term overbought condition. We warned that BEAS was
overbought according to the RSI and that the stock probably would
not rally unless the overall market was very strong. We do not
mind taking a healthy profit, and we will definitely be interested
in BEAS again when it starts heading back in the right direction.
Picked on August 27th @ $59.63
Profit/Loss +4.37 (7%) (Stopped out on Wednesday at $64.00)
Best Profit +11.75 (20%)
===
CPTH - Critical Path Incorporated $72.19 +3.94 (-2.69)
Last week is a good example of how a stock can sometimes react
once it hits a wall of resistance. Of course, hindsight is always
crystal clear, but you can see a double test near $80 was followed
by weak volume that lead to a decline. After breaking through good
support at $73.38 (previous high), CPTH slowly drifted lower to
our stop of $65.44, which was hit early in today's trading.
Although the run was short lived, it still provided an opportunity
to lock in profits at resistance near $80. The stock will likely
remain a good play for future runs, so we'll keep you updated on
further plays as they develop.
Picked on August 28th @ $73.00
Profit/Loss = -7.56 (-10%) (Stopped out Wednesday at $65.44)
Best Profit = +6.38 (+9%)
===
GMST - Gemstar-TV Guide International $79.44 -3.19 (-7.75)
The lengthy rally for this television technology and media company
came to a screeching halt this week. We were stopped out
yesterday at $85.00 during the NASDAQ decline. Despite having to
forfeit some profits, there was a lesson to be learned - declines
tend to be stronger, faster and more dramatic than rallies. Panic
seems to be stronger emotion than greed. This is one reason why
we like to use stop-losses, it takes the emotion out of a trade.
GMST may have some more downside because the stock failed to
recover any of its losses despite a good NASDAQ rally today. It
may be a while before we pick up this stock as a play again.
Picked on August 15th @ $65.06
Profit/Loss +19.94 (31%) (Stopped out on Wednesday at $85.00)
Best Profit +26.57 (41%)
===
GSPN - GlobeSpan, Incorporated $112.19 -0.81 (-12.44)
In late Wednesday trading, we were stopped out of GlobeSpan at
$117.00. The stock traded as low as $115.00 before it bounced and
began a recovery. Unfortunately, we exit GSPN with a loss. Still,
we will continue to watch this stock for trading opportunities in
the future.
Picked on September 3rd @ $124.62
Profit/Loss -7.62 (-6%) (Stopped out Wednesday at $117.00)
Best Profit +5.63 (+5%)
===
HELX - Helix Technology Corp. $39.19 +0.19 (-0.81)
Helix Technology did not last long. On Thursday, the company's
shares continued to slide despite a strong semiconductor rally.
The stock dipped below the 5-dma, hitting our stops at $38, so we
are dropping this play tonight.
Picked on Sep 5th @ $41.63
Profit/Loss = -3.63 (-9%) (Stopped out on Thursday at $38)
Best Profit = +0.31 (+1%)
===
IDTI - Integrated Device Technology $92.97 +6.34 (+0.41)
Round two of the semiconductor stock correction knocked IDTI below
our stop yesterday, so we are no longer in this play. The selling
is most likely a case of profit taking. If that's the case, we do
not have a problem with taking our profits. A lot of the general
selling was due to two key downgrades. Micron Technologies (MU)
and Intel (INTC) both dropped when a couple of analysts became
less optimistic about their prospects. Perhaps a consolidation
will give us the conviction to try IDTI again because the stock
could be ready to announce a split.
Picked on August 13th @ $65.44
Profit/Loss +18.56 (28%) (Stopped out on Wednesday at $84.00)
Best Profit +29.81 (46%)
===
ITWO - i2 Technologies Incorporated $169.81 +9.81 (-9.44)
The price resistance levels of $180 and $190 looked to have marked
the top for shares of ITWO, which took a hefty fall yesterday on a
130-point decline for the NASDAQ. Wednesday's 15-point decline not
only took out our stop of $174, but also handily broke strong
support at $170 (previous high). Combine this decline with ITWO's
good volume (7.4 million shares) and it looks as though the stock
may be ready to shift directions. The good news for us is that we
managed to pocket a solid gain of $7.50, or 5%, in the last 7
trading days.
Picked on August 27th @ $166.50
Profit/Loss = +7.50 (+5%) (Stopped out Wednesday at $174)
Best Profit = +21.50 (+13%)
===
LWIN - Leap Wireless International $71.50 -1.00 (-7.19)
On Wednesday shares of LWIN tumbled at the open as the NASDAQ
headed south for the second consecutive day. By lunchtime our
stop, which we had placed at $74.00, was triggered. We exit this
play with a small profit. We will watch LWIN for further trading
opportunities as it draws closer to its earning date on September
20th.
Picked on August 20th @ $73.44
Profit/Loss +. 56 (+0%) (Stopped out Wednesday at $74.00)
Best Profit +8.44 (+11%)
===
NTAP - Network Appliance, Inc. $115.75 +14.12 (+0.25)
On Wednesday selling on NASDAQ pressured most tech issues,
triggering our stop on NTAP at $111.00. We are now out of this
play with a decent profit. Once again, we find a stop-loss to be
an effective tool for securing profits and limiting losses. We
will continue to watch NTAP for future trading opportunities and
will advise you accordingly.
Picked on August 24th @ $101.69
Profit/Loss +9.31 (+9%) (Stopped out Wednesday at $111.00)
Best Profit +18.19 (+18%)
===
RIMM - Research in Motion $79.25 -1.06 (-1.75)
On Thursday shares of RIMM triggered our $78.00 stop-loss, giving
us a small profit. Despite today's decent recovery in the NASDAQ,
the stock failed to respond as we would have hoped. We will watch
RIMM for better opportunities in the future.
Picked on August 31st @ $75.56
Profit/Loss +3.32 (+4%) (Stopped out Thursday at $78.88)
Best Profit +12.13 (+16%)
===
TIBX - Tibco Software, Inc. $102.06 +0.00 (-6.00)
During Wednesday morning session trading, we were stopped out of
Tibco Software at $104.00. By consistently applying stop-losses,
we were able to capture a profit on this play. We will watch TIBX
for future trading opportunities.
Picked on August 27th @ $96.25
Profit/Loss +7.75 (+8%) (Stopped out Wednesday at $104.00)
Best Profit +15.13 (+16%)
===========
SHORT PLAYS
===========
NEW SHORT PLAYS 09/07/00
========================
AEOS - American Eagle Outfitters $30.50 +0.50 (-1.25)
Specialty retailer American Eagle Outfitters sells men's and
women's casual lifestyle apparel, footwear, and accessories. AEOS
operates 526 stores in malls spanning 46 states. On August 30, the
Company announced that its four-week sales had increased 29% over
last year. However, same-store sales had increased by only 9%.
Shares of AEOS popped up following the news, hitting an intra-day
high of $33.13 on Friday. Since then, the stock has been hovering
around the $30 mark as the retail sector searches for direction.
Conflicting reports about the depth of the recent economic
slowdown are dragging the group down while the notion of a kinder
Fed is trying to bring the group back to life. We feel that the
retailers will continue to move lower as more evidence of a
slowdown comes out. If the news goes our way, AEOS may be looking
at its July lows. From a technical standpoint, support is the 10-
dma at $29, with potential support at $27 or possibly the 20-dma
at $25. Resistance is the 9/5 high of $31.75 and then $33.13, the
9/4 high. We plan to set stops at $33.13 to limit risk.
Picked on Sep 7th @ $30.50
Change since picked +0.00
===
RSAS - RSA Security Incorporated $52.31 -1.69 (-6.81)
RSA Security Incorporated is in a highly volatile sector of the
market, Internet security. This group has been hit particularly
hard as of late and further weakness in the NASDAQ Composite could
only create a more hazardous environment. With this in mind, we
think stock looks to be on course for more selling. Shares of the
electronic security solutions company have preceded the recent
sell-off in the tech market by about 2 full months. This could be
telling us that shares of RSAS are much weaker than several other
technology stocks. Wednesday marked the first session that the
stock was able to break through a major low at $54.88 and kept
selling lower today. This suggests to us that the stock may be on
route to immediate resistance at $50. Heading to further lows, the
$45 mark is sure to offer a tougher resistance point, as bolstered
by a recent low of $46. Another interesting aspect is that RSAS's
trading volume is also increasing, indicating that momentum is
supporting the downtrend. Given the current situation, consider
opening a position if we see RSAS break through the $50 mark.
Consider setting a protective stop at $55.00, which will allow
enough room for some intraday volatility, but protecting us if
RSAS decides to break out of its downward decline.
Picked on September 7th @ $52.31
Change since picked 0.00
SHORT PLAY UPDATES 09/07/00
===========================
NONE
SHORT PLAY DROPS 09/07/00
=========================
NONE
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************************************************************
==========
DISCLAIMER
==========
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in making an informed decision regarding how to trade stock
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editors and staff of SplitTrader.com may own, buy or sell
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