It's Time to Play Lucent, Nortel for a Trade
By James J. Cramer
8/24/01 2:46 PM ET
Lucent(LU:NYSE) and Nortel(NT:NYSE) are done going down. I think that the stunning reorganization of Lucent, which has resulted in $9 billion in cash and lots of room to breathe, plus the convertible offering that re-liquefied Nortel, have created important lows for both, lows that I don't believe will be violated.
In fact, I think the next five points for these stocks is up, not down. They seem like ideal trading opportunities in recognition that their franchises are no longer in jeopardy.
I am calling them "trades" because I don't want to invest in these stocks. I just think they have become deeply oversold and the fundamentals are no longer deteriorating. They are steadying at very low levels and probably can trade north from here now that we know they will make it.
If you are selling these stocks now, it is too late. If you are looking to trade something, these stocks are probably right. You could make a good gain here.
These stocks are not for the squeamish. And I suspect that six months from now, my time frame for investments, they might have stopped moving up and will trade at $10-$11 for ages. I am not supposed to be in anything for a trade, so I have to pass on this trade.
But that's a good percentage gain, especially in this market, and I think it can be had. I would go for it, if I could. I think you can make some money as a trade. |
