NEW SPLIT CANDIDATE PLAY
DCLK - Doubleclick, Inc. $196.88 +$12.75 (+27.50)
It's no secret, Doubleclick is due for a split soon. Rumors have
been circulating about this stock, some calling for a 3:1 split.
DCLK did execute a 2:1 split on April 1st at $193. See the
similarity? Even though its earnings report is still weeks away,
the company will likely announce a split very soon to capitalize
on current momentum and power the stock through the $200 barrier.
The company has 400 million shares authorized and only 45 million
outstanding (and only 18.5 mln in float), so a 3:1 is possible.
Momentum traders are on this one already, so look for more runs on
this stock in the following days. We are going to play this one
aggressively, initiating entry at current levels. Traders waiting
for support can look for a retracement back to $190, however, that
level may not come back in time to play this as a candidate.
Conservative traders can place stops just under $190 but they run
the risk of getting stopped out on any unnecessary market
volatility. More aggressive traders can place stops under more
solid support of $180. Current rumors also speculate on a BoD
meeting tomorrow 12/09/99. We have been unable to confirm.
Picked on Dec. 8th @ $196.88
Change since picked: + 0.00
BRCM - Broadcom Corporation $225.00 +$0.50 (+17.25)
What a tease! Broadcom began to turn heads Nov 19th, anticipating
a split annnouncement that would come after the shareholders met to
raise the authorized shares to 400 million on November 22nd. We
courted BRCM as well, picking it as a split candidate on Nov 18th,
then dropping it after the company disappointed the market with no
announcement. Traders turned the cold shoulder, punishing BRCM for
being stuck-up. We think BRCM is slowly coming around, and ready to
come to the dance. Earnings are due January 13th and the stock is
trading in the plus $200 area, nearly $100 higher than this year's
January 26th split announcement. We think BRCM is holding off until
just after the new year to announce, guess they like to announce with
earnings. Traders will soon recognize this. Next week, BRCM will
participate in the TV industry's Western Show in Los Angeles, touting
its new high-performance broadband chip. Our strategy is to accompany
BRCM into earnings, initiating entry points at current levels.
Tuesday's trading volume was light, due to a 2% pullback in the
semiconductor index, as well as an overbought indication on
stochastics. Timing is everything, conservative plays initiated nearer
to support at $215 will have less fear of denial. BRCM traded intraday
to that level Tuesday, bouncing off to close higher. Stops should be
based upon entry, support levels are currently $220 (very very mild)
$215 (stronger) and $200 (and even better).
Picked on Dec. 8th @ $224.50
Change since picked: + 0.00