The Night Watch: Hathaway Looking Good in After-Hours and Qualcomm Continues to Run - TheStreet

The Night Watch: Hathaway Looking Good in After-Hours and Qualcomm Continues to Run

Thirteen days until spring training starts and there's already a few home runs out there.
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Just before midday, California electronics maker Hathaway (HATH) announced that its subsidiary, Computer Optical Products, received a $1.98 million order for motors and encoders. These technological bits and pieces in the order are due in the next 12 months and are vital parts in fiberoptic telecommunication systems.

As a result of the almost $2 million contract, shares in the $13.8 million market capped company hit a 52-week high during the day session, en route to a gain of 1 5/8, or 108.3%, to 3 7/32. Volume was robust, cracking 1 million shares traded. Usual volume is nonexistent.

No, seriously. The company didn't trade a single share in six of the 20 trading days in 2000. That's a strikeout percentage of 30%, which would even give

Jose Canseco

, baseball's current king of whiffing, reason to pause. When it does trade, five-digit volumes are uncommon.

Tonight, the company extended this heavy interest in after-hours trading on Island ECN. Earlier gains dissipated as volume grew heavy and it finished off 1/8 to 3 1/16 on 260,000 shares.

What's with this?

More itsy-bitsy-eeny-weeny companies traded on giant volumes in after-hours trading. Just look at

Conolog

(CNLG)

, which has a market cap of $8.73 million, less than what

Kevin Brown

made last year after testing free agency.

The company, another electronics manufacturer, was last off 11/64 to 1 1/4 on Island, trading on 260,000 shares. It was just behind Hathaway, trading at the No. 4 slot on Island's most actives list. During the day session, it rose 23/32, or 109.5%, to 1 27/32 on 945,000 shares.

The interest was all due to Conolog's release of second-quarter revenue, expected to be $1.6 million vs. last year's $589,000. That's second-quarter earnings of 4 cents a share vs. last year's 12-cent loss.

In a different vein was

Sicor

(SCRI)

, which rose 2 1/8 to 9 3/8 on 240,000 on Island. The pharmaceutical maker announced that the

Food and Drug Administration

gave its

Gensia Sicor Pharmaceuticals

unit approval to use injections to treat leukemia and cancer.

For you serious science fans out there, the FDA granted new application approval to Sicor's Daunorubicin Hydrochloride injection, which is used to induce remission of acute myelogenous leukemia in adults and acute lymphocytic leukemia in children and adults.

Not all market movers had tiny market caps. Look at

Qualcomm

(QCOM) - Get Report

, which traded up 2 49/64 to 129 3/4 on 400,000 shares on Island. The wireless giant has a cap north of $80 billion.

Tonight, the company continued to rise on the news that it was in talks to break into the potentially lucrative Chinese wireless market via a deal with China's second-largest telephone company,

China United Telecommunications

. As the news spread, so did investor goodwill. Qualcomm rose 16 3/8, or 14.8%, to 127 during the day.

Another major market capper on the move was

JDS Uniphase

(JDSU)

, which is also involved in fiberoptic telecommunications and has a market cap exceeding $55 billion. It rose 3 9/64 to 207 on 46,000 shares on Island. The move tops a day session gain of 8 1/16, or 4.1%, to 203 15/16.

Tonight's leap into the stratosphere was a quick trip for the company. At 5:30, it was already up 1 9/16 to 205 27/64 on 40,666 shares. Two hours and 7006 shares later, the company had doubled that gain. That's a pretty big move on a small number of shares.

Which begs the question: What's up with after-hours volume, man?

It's very important to note that tonight's volume on Island was relatively thin, as it has been during earnings season. When volume is thinner, the gaps between bids can be much larger than during a day session and stocks can be highly volatile. Therefore, moves can be the result of irregular bids that don't come in the usual teeny increments found during the day session.

That's why volume traded is usually included after the point moves in

The Night Watch

. The bigger the move on the smaller the volume, the more likely the quote should be taken with a grain of salt. Post-close quotes should not be discounted, but they aren't the gospel either. It is very important to realize than thin volumes increase volatility.

Just look at tonight's move in JDS Uniphase. Now that's a really good example.

It's like that

Whodini

hit, "Freaks Come out at Night."

Freaky things happen post-close. Small-caps trade on seven-digit volumes while major names can barely make a trade. Warrants like

Big Buck Brewery & Steakhouse Warrants

(BBUCW)

rest on Island's most active chart, while tech stalwarts like

CMGI

(CMGI)

,

Yahoo!

(YHOO)

and

Cisco

(CSCO) - Get Report

can't get arrested.

There's a new breed out here and new rules apply. That's why

TheStreet.com

has this story and a special section called

Investing Basics: Night Owl, which will help late night lurkers see the light when it gets dark out.

Island ECN, owned by Datek Online, offers trading, mainly in Nasdaq-listed stocks, from 8 a.m. to 8 p.m. EST.

.

MarketXT, formerly Eclipse Trading, offers after-hours trading to retail clients of Morgan Stanley Dean Witter's (MWD) Morgan Stanley Dean Witter Online, Mellon Bank's (MEL) Dreyfus Brokerage Services and clients of Salomon Smith Barney. Clients can trade 200 of the most actively traded New York Stock Exchange and Nasdaq Stock Market issues, 4:30 p.m. to 8 p.m. EST Monday through Thursday.

Confused?

TheStreet.com

explains how the rules change when the sun goes down in Investing Basics: Night Owl, a section devoted to after-hours trading.