The Option Investor Newsletter Sunday 7-18-99 1 of 7 Copyright 1999, All rights reserved. Redistribution in any form strictly prohibited. MARKET STATS FOR LAST WEEK AND PRIOR WEEKS ******************************************************************* WE 7-16 WE 7-9 WE 7-2 WE 6-25 DOW 11209.84 + 16.14 11193.70 + 54.46 11139.24 +586.68 -303.00 Nasdaq 2864.48 + 71.41 2793.07 + 52.05 2741.02 +188.37 - 10.79 S&P-100 733.79 + 10.91 722.88 + 6.66 716.28 + 44.99 - 12.18 S&P-500 1418.78 + 15.50 1403.28 + 12.06 1391.22 + 75.91 - 27.53 RUT 465.26 + 7.28 457.98 + 1.47 456.51 + 13.40 - 1.94 TRAN 3401.87 - 25.45 3427.32 - 88.67 3515.99 +199.88 - 80.23 VIX 18.13 19.09 18.85 22.61 Put/Call .46 .46 .47 .53 ******************************************************************* Impending boom or impending bust? It depends on who you talk to but the actions of the Dow for the last two weeks are becoming increasingly disturbing. That loud noise you heard Friday afternoon was the Dow hitting the upper limit of our recent trading range, 11200, and stalling again. The Dow closed at 11,201 at exactly 4:PM but inched up another 8 points as late trades were settled. This was the second record close this week but don't start celebrating just yet. The total points gained this week were only +16. That's right, only +16 points for the week. Remember this was the week that saw very benign PPI, CPI, Retail Sales, Jobless claims, etc, etc. The market should be blowing out to the upside according to conventional wisdom. Instead the chart below shows the dead stop and the extremely narrow trading range. The Dow this week was held up by the Nasdaq which hit three new record highs. The earnings this week were very good with many companies beating the street by big numbers. Next week will be very important to the future of any rally. As you can see by this Dow chart, not only has the Dow stalled but the advance/decline line is now definitely trending lower. Again, this is very disturbing in light of the strong earnings season in progress. The Nasdaq looks really strong but if you look behind the numbers on Friday you will see that of the top four Nasdaq stocks only one was positive. Microsoft was up +5.06 on news of a win in the trial against Bristol Technology AND news that they may create a tracking stock for their Internet businesses. This was an exception and likely a one day event. The other three pillars of the Nasdaq traded down even with MSFT soaring. INTC -.56, DELL -.69, CSCO -.56. This is not a good sign! The most troubling factor to market technicians is the very low volatility. The VIX hit a twelve-month low of 17.7 intraday on Friday. The last time the VIX was this low was the day before the start of the July/August crash last year. If you doubt the relationship between the VIX and the DOW simply examine the two year VIX/DOW charts below. There is an exact inverse relationship between the two. Remember the old saying, "when the VIX is high it is time to buy, when the VIX is low it is time to go." This is a very critical week. With millions of traders sitting with their finger on the sell trigger, watching for signs of a repeat of the last two years drops, every market event will be crucial. The only two events that should impact the market are the Housing Starts on Wednesday and the Greenspan testimony on Thursday. Housing starts could show an increase or decrease in the growth of the economy. This number is watched by the Fed. Clearly the biggest event will be the Greenspan testimony to the house banking committee on Thursday. There is a strong feeling by some analysts that Greenspan will "bless" the recent CPI/PPI numbers and claim inflation to be non-existent and therefore kill any worries of another rate hike this year. The other side of the coin would be the camp that expects him to continue to be cautious and warn again that the Fed stands ready to continue raising rates to "preempt" any inflation problems. (and keep the stock market in check) The Dow on Friday was held up not only by the Nasdaq but also by the July options expirations. With the major move up from 10,500 in June there were many call sellers forced to cover their positions last week. In spite of the heavy options covering we still were only able to add +23 points and traded in negative territory over half the day. Last Sunday I talked about the S&P, DOW and Nasdaq setting new highs two Fridays in a row and could we dare ask for three. We got the three, a triple triple, but you could not have seen it from the internals. The declines beat advances and were picking up speed at days end. Declining market breadth could be the first signs of the crack in the bulls armor. Secondly, the OEX (S&P-100) and the SPX (S&P-500) were both up on the big Microsoft gain. Microsoft is the biggest company in either index and will impact both strongly. MSFT is 9% of the OEX. Take away the MSFT gains on Friday and the OEX, SPX, NASDAQ and DOW outcomes could have been substantially different. The only thing we need now is an international crisis to detract from market stability. OOPS! China attacking Taiwan maybe. All eyes are trying to avoid contact as the two Chinas trade verbal volleys but there is an all too real possibility that this could escalate into a real battle. You never know where the next market bomb could appear. Last week Argentina, next week China or maybe an inside stealth attack by Greenspan. Keep your eyes open and your ear to the news. This week is packed with earnings from big names. Monday we will see IBM, MSFT, QCOM, BAC, C, DCLK, EGRP, LXK, S, TLAB, just to name a few. Tuesday is known as super Tuesday because of all the financial stocks that report. There will be no shortage of earnings news and the market should move up in reaction. Failure to move up would be another sign of things to come. Don't get me wrong, I would love to see the market breakout of the current range and run for 12,000. The internals are just not pointing in that direction. Please remember however that the longer we stay at this level the stronger the base and more likely a breakout to the upside. This week will be critical. I would be cautious this week and look for direction before making a significant play. If the market explodes out of the gate on Mon/Tue and runs up significantly I would look at any major intraday reversal as a strong warning. Most major market changes come on the heals of a major move in the opposite direction. I would be a buyer of DJX or OEX puts if you see a major spike up intraday and then a pull back. We have heard a rumor that Intel is going to enter the ISP business soon in a big way. Rumor has it that they are buying 120,000 servers from Dell which are being shipped in quantity to different parts of the country. Dell announced on Friday that they are going to start offering their Dell.net ISP service and would not be buying an ISP. Could Dell have seen the writing on the Intel wall and are trying to beat them to the punch? Rumor also has it that Intel is going to partner with a broadband company to jumpstart their ISP business. On Friday Cisco and Intel announced that Intel would start making high speed DSL modems compatible with Cisco's DSL equipment. Is this another way to get them into the prime ISP position for DSL accounts? Also in June Intel announced that it will colaborate with Hughes Electronics on a wide range of set top boxes that deliver Internet access to a television. On Wednesday Intel announced that it was restructuring several of its business groups to focus more on Internet opportunities. Intel recently invested in World Online International, an ISP which operates in 12 countries and has 815,000 subscribers. Anybody see a pattern developing here? Maybe we should look at any current pullback on Intel as a buying opportunity. Just a rumor but the more we dig the more we uncover..... If you did not see it on Thursday, we started an "Insider Trading" section. This section will feature actual plays made by OIN researchers and staff and their reasoning behind the play. We received many positive comments about wanting to see more real life. You asked for it, you got it. We are still looking for some additional researchers who are willing to commute by email. If you are a successful options trader then please email us if you are interested. (kimo@OptionInvestor.com) Good Luck, Sell too soon. Jim Brown Editor Trivia question: As a single female which one of these would have been your best investment in 1978? Bill Gates 1978 Another milestone was achieved on Friday other than records by the various indexes. Microsoft became the first company to exceed $500 bln in market cap. Bill Gates also became the first individual to exceed $100 bln in net worth. Larger than the Fidelity Magellan fund which just hit $100 bln this week. PS: If you are only reading the email version and not viewing these sections on the website you are missing out. The imbedded charts and links are provide a much more visual image on the website than is possible in an email format. *********** JIM'S PLAYS *********** What an ugly week. The gap down at the open on Tuesday killed all hope of July options having a chance of retaining any value going forward. Yahoo - I did not play Yahoo this week but it did drop another -$14 before performing a perfect technical bounce from the oversold position. (sounds like watching a gymnastic event) The holders who watched their stock decline from $189 kept saying to themselves, "if I had only sold at $$$$". When it rebounded they got their second chance and as you can see by the chart, many took it. I am still short YHOO Aug-170 calls @ 19.38 and they are currently $5.50. I expect them to expire worthless for a full profit of $19.38. MSFT - I was long Microsoft July-80 calls from last week and after the pounding on on Tuesday morning and the drift down all day, I was happy to sell on the bump at the Tuesday close and exit the July position. I was short MSFT July-90 puts @ $3.50 and I closed the position @ .13 on Wednesday for a net profit of $3.38. QCOM - Qualcom also gave me a scare on Tuesday morning. The drop from $147 to $140 was a wake up call on the July-140 puts I was short. Fortunately the rebound was almost instant so I did not make the decision to close the position. The calls were another matter. I did the "if only they get back to where they were" thing and sold them Tuesday afternoon for $22.75. Sure wish I had them back!! The high was close to $34 on Friday. The July-140 puts were closed for $.13 on Thursday for a profit of $6.75 each. I still had stock @ $149 from last week and I sold it at the open on Friday for $154.25 because I was concerned the market could pull back at any moment. After watching the stock continue to rise I was of course suffering from sellers remorse again. After the stock bounced off $153 and started back up I checked on the July-155 puts. They were still bid @ $2.25. I put in a market order to sell 50 contracts and the market maker quickly woke up. I got 30 at 1.63 and 20 at 1.50. Still about $8000 in premiums. As soon as I saw QCOM cross $155 I sold 25 more for $1.38. I bought them all back later in the afternoon for $.13 to close the positions. $11,340 in, -975 out = $10,365 profit on options expiring less than five hours away. MU - Micron suffered the same bounce down on Tuesday morning but quickly recovered. The July-45 calls I had at $4.50 quickly reached my price target and I sold at $7.00. Yes, I could have held them to the high of $14 on Wednesday if my crystal ball had been working. You know my plan, take a profit when available. Look at the chart. Did you know MU would tank on Wednesday afternoon? It was a good play for a 65% return. I can't complain. SFE - Safegard Scientific tanked right on the open Monday and I got clobbered for a huge loss. I sold for $10.50 and my cost was $14.63. OUCH!! The chart was strong as of Friday but somebody wanted out quick and I was in the middle. ITVU had a real nice chart going into the close on Friday and I was real happy about the play on Monday. The gap down with the market on Tuesday convinced many traders with profit from the last two weeks that maybe they should take the money off the table. I was fortunate to get out even and only had to pay comissions. HSAC - High Speed Access skidded for $12 drop at the open on Monday and never recovered. I got stopped out at $42.00 and actually made some money but $42 is a long way from the $49 close the day before. This was strictly a momentum play and the music stopped. The big loser for the week was still MCOM. I was long the July $40 calls from the week before for $12.50. The midday drop on the previous Friday had caught me away from the computer without any stop losses. Bad move! I finally sold them for $1.63 for a $10.88 loss. OEX - When the market did not come screaming out of the gate on Monday morning I quickly sold the OEX calls and closed the position for a small loss. Cost = $14.50 sold $14.38. VOD - Vodaphone gave us a nice bottom on Wednesday and I opened a new position in the August-210 calls for 9.25. The dip in the Dow just before the close on Thursday scared me out again. The European stocks react to the Dow and if the Dow closes down they are sure to follow and then the next U.S. trading day the U.S. price will over react as well. You do not want to own European stocks if the Dow closes negative. It looked like the Dow was going balistic in the wron direction and I bailed. Shortly there after it recovered just as fast. VOD tacked on another +$4.50 on Friday to add insult to injury. I made a small profit but missed a large one. Play recap: Closed QCOM Puts JUL-140 AAW-SH @ $.13 cost = $ 6.88 profit $6.75 Closed MSFT Puts JUL-90 MSQ-SR @ $.13 cost = $ 3.50 profit $3.38 Closed QCOM Puts JUL-155 AAW-SK @ $.13 avgcost$ 1.50 profit $1.38 Sold MSFT Calls JUL-80 MSQ-GP @ $14.00 cost $12.13 + 1.87 Sold ITVU Calls JUL-45 QYU-GI @ $ 7.00 cost $ 7.00 + .00 Sold MCOM Calls JUL-40 MQM-GH @ $ 1.63 cost $12.00 -10.37 Sold SFE Calls JUL-60 SFE-GL @ $10.50 cost $14.63 - 4.13 Sold MU Calls JUL-45 MU-GI @ $ 7.00 cost $ 4.50 + 3.50 Sold OEX Calls JUL-710 OEZ-GB @ $14.38 cost $14.50 - .12 Sold VOD Calls JUL-210 VOD-HB @ $10.50 cost $ 9.25 + 1.25 Sold QCOM Calls Jul-130 AAW-GF @ $22.75 cost $21.00 + 1.75 Sold HSAC stock @ $ 42.00 cost $ 36.50 profit $5.50 Sold QCOM stock @ $154.25 cost $149.00 profit $5.25 Current position: Short YHOO Calls AUG-170 YHV-HN @ $19.38 (current 5.50) This was a rough week. I had some good plays but the bad plays were really bad. MCOM and SFE really hammered me. The saving grace was the PUTS which were all profitable. When you are trading options in the week they expire your options (pun) are limited. You either win big or lose big and any unforseen market event, like the Argentina thing, can kill you. Except for the naked YHOO calls I am totally in cash and waiting for market direction. I expect a big move this week and I want to be able to react to it either way. Good Luck Jim ************* COMING EVENTS ************* Monday: None Scheduled Tuesday: International Trade May Forecast: -$19 Previous: -$18.94 BTM Schroders 7/17 Forecast: -- Previous: 0.3% LJR Redbook 7/17 Forecast: -- Previous: 0.1% API Oil Stocks 7/16 Forecast: -- Previous: -2.59M Wednesday: Housing Starts June Forecast: 1.675M Previous: 1.676M Housing Permits June Forecast: 1.605M Previous: 1.586M Thursday: Greenspan testimony before House Banking Committee Jobless Claims 7/17 Forecast: 314k Previous: 310K Money Supply (M2) 7/12 Forecast: --- Previous: -$17.7B Friday: None Scheduled MARKET SENTIMENT **************** Sunday, July 18, 1999 Great Expectations! Below is an updated list of equities (that should be reporting their earnings this next week) and our Pinnacle Index for those particular stocks. We have now also included their expected earnings, the infamous whisper number (if available), and their estimated earnings release date. What we look for are liquid stocks/options that garner a lot of interest from the investment community. Most of the issues are high tech, and are thus more aggressive. We then filter out many of the equities, only to show stocks with excessive optimism or pessimism. From a contrarian standpoint (a high number is a good indication of extreme optimism, and a low number is a good indication of extreme pessimism) you should buy when its low, and sell when its high. During the last two letters, we pointed out several different companies with extreme pessimism or optimism. During the last letter, we spoke about the excessive pessimism going into Gillette's earnings. The Pinnacle Index for Gillette was extremely low across the board, and as you can see by how it reacted Friday (+2.50), the negative sentiment was already built into the stock. Stock Symbol Pinnacle Earnings Whisper Expected Index Est. Number: Date*: Amazon AMZN 5.5 -.49 -.45 7/21 America Online AOL 2.7 +.11 +.13 7/22 American Power APCC 2.0 +.23 7/22 Excite@Home ATHM 0.9 -.49 -.45 7/21 Atmel ATML 8.7 +.13 +.14 7/21 BellSouth BLS 0.4 +.46 +.47 7/21 Boston Scientifix BSX 3.9 +.26 7/20 Cadence Design CDN 2.8 +.21 7/20 Checkpoint Software CHKP 11.6 +.50 +.53 7/20 Citrix Systems CTXS 4.8 +.31 +.32 7/19 Computer Associates CA 6.3 +.39 +.41 7/20 Doubleclick DCLK 3.5 -.13 7/19 E-Trade EGRP 2.2 -.10 -.09 7/19 EMC EMC 3.9 +.24 7/21 Go2Net GNET 3.1 +.05 +.07 7/21 Gateway Computer GTW 4.2 +.55 +.57 7/22 Healthsouth HRC 6.9 +.27 7/19 Hutchinson Tech. HTCH 2.4 -.14 7/20 IBM IBM 4.6 +.88 +.92 7/19 Informix IFMX 5.1 +.07 +.09 7/19 Ely Lilly LLY 4.5 +.51 7/21 Lucent Technology LU 2.8 +.23 +.25 7/20 Lexmark LXK 17.3 +.49 +.51 7/19 LSI Logic LSI 26.1 +.18 +.21 7/21 Microsoft MSFT 9.8 +.36 +.38 7/19 Network Associates NETA 2.1 -1.05 -1.00 7/21 Network Solutions NSOL 3.2 +.16 +.17 7/22 Knight/Trimark NITE 2.8 +.35 +.38 7/21 RealNetworks RNWK 2.5 -.01 -.01 7/20 Sprint PCS PCS 1.8 -1.28 7/21 Qualcomm QCOM 6.9 +.58 +.60 7/20 Schering Plough SGP 6.9 +.36 7/20 Sun Microsystems SUNW 12.9 +.46 +.47 7/22 Teradyne TER 9.9 +.38 7/20 Tellabs TLAB 16.9 +.30 +.33 7/19 Texas Instruments TXN 23.9 +.78 +.82 7/20 If you take a look at the above, the most optimist equities include: LSI Logic, Texas Instruments, Lexmark, Tellabs, Checkpoint Software, Sun Microsystems, Microsoft, and Atmel. Not only do these above mentioned companies have a high Pinnacle Index, but they also have a whisper number significantly higher than the regular earnings. Based upon sentiment readings and expectations, these companies would most likely sell off after the release of their earnings, due to the build up of optimism in the stock. If you look at Texas Instruments, the Pinnacle Index is 23.9, and the whisper number is already 4 cents higher than the (published) expected earnings. TI already has so much optimism built in, that a sell off after earnings would be likely. For TXN to go higher, they had better reinvent the wheel (or a chip that will put INTC and everybody else out of business) because everybody already expects their quarter to be a blowout. This would be a perfect example of buy on rumor, sell on news. The same can be said about the eight stocks mentioned above. Low expectation stocks for this week include Bellsouth, E-Trade, AtHome, and Spring PCS. The options traders are pessimistic on these equities (which is bullish),however, three of these companies have whisper numbers above their expected earnings. This is a little bit contradictory, however, it is still bullish in general for these above mentioned equities. Ideal (low expectation) stocks would be like Gillette last week. Gillette's Pinnacle Index was hovering around 1, and the whisper numbers was 1 penny lower than the expected earnings. This was a perfect candidate for a rally based on low expectations. Rambus (RMBS) was also an ideal candidate, as it rallied over $20 in two days. Bullish Signs: Interest Rates: The 30-yr Treasury is beginning to retrace back under the key 6% level. Investor Intelligence: As a contrarian indicator, the percent of Bullish investors decreased by over 3% and the percent of Bearish investors increased by 2%. Russell 2000: Trending above both moving average, and also above key 450 benchmark. Mixed Signs: Market Posture: Several indexes are showing signs of a potential rollover, including the Dow, OEX, networking, software, and semiconductors. Advance/Decline Line: After checking up last week, the A/D line is beginning to roll over and could prove Bearish if decliners out pace advancers in the week ahead. BEARISH Signs: Peak Open Interest: The contraian put-call ratio clocking in at .95 suggesting bullish sentiment picking up steam. OTM Call Analysis As we move through the August expiration cycle, Pinnacle is tracking the level of call buying (OTM) between 710-780 among option speculators. As we have been documenting, excessive out-of-the-money (OTM) call may serve as overhead resistance. July Expiration Cycle OEX OTM Call Analysis (Open Interest July 680-750) Date Open Interest Change % Friday, June 19 35,225 - Friday, June 25 63,342 +79.8% Friday, July 02 87,833 +149.3% Friday, July 09 99,855 +283.5% August Expiration Cycle OEX OTM Call Analysis (Open Interest August 710-780) Date Open Interest Change % Friday, July 16 32,285 - Market Sentiment at a Glance Friday Indicator (7/16) Pinnacle Index (OEX): Overhead Resistance (720-750) 3.6 Underlying Support (685-710) 1.7 Put/Call Ratios: CBOE Total P/C Ratio .6 CBOE Equity P/C Ratio .5 OEX P/C Ratio 1.3 Peak Open Interest (OEX): Puts 600 Calls 730 P/C Ratio .95 Market Volatility Index (VIX): CBOE VIX 18.13 Investors Intelligence: Bullish 55.20% * Bearish 26.70% * The Power of Sentiment Analysis It has often been said that the crowd is right during the market trends but wrong at both ends. Measuring and evaluating the sentiment of the crowd, therefore, can give savvy option traders a decided edge. Pinnacle Index OEX Friday Benchmark (7/09) Overhead Resistance (720-750) 3.6 OEX Close 733.79 Underlying Support (685-710) 1.7 Average ratings: Resistance levels 2.0 / Support Levels .5 What the Pinnacle Index is telling us: Overhead sentiment resistance is building at the OEX 725/750 level while the underlying support is holding at the OEX 685/710 level. Put/Call Ratio Friday Strike/Contracts (7/16) CBOE Total P/C Ratio .60 CBOE Equity P/C Ratio .45 OEX P/C Ratio 1.26 OEX Peak Open Interest Friday Strike/Contracts (7/16) Puts 600 / 12,196 Calls 730 / 12,844 Put/Call Ratio .95 VIX Volatility Index Major Date Turning Point VIX October 97 Bottom 54.60 July 20, 1998 Top 16.88 October 8, 1998 Bottom 60.63 January 11, 1998 Top 26.38 March 4, 1999 Bottom 28.15 May 14, 1999 Top 25.01 July 16, 1999 18.13 * Investors Intelligence Major Percent Percent Date Turning Point Bullish Bearish October 97 Bottom 22.0 48.3 July 20, 1998 Top 52.0 24.0 October 8, 1998 Bottom 38.5 42.7 January 11, 1999 Top 58.3 30.0 March 4, 1999 Bottom 49.1 32.5 July 14, 1999 55.2 26.7 * DISCLAIMER *********** This newsletter is a publication dedicated to the education of options traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock or option but an information resource to aid the investor in making an informed decision regarding trading in options. It is possible at this or some subsequent date, the editor and staff of The Option Investor Newsletter may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. The newsletter staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control.
The Option Investor Newsletter 7-18-99 Sunday 2 of 7 ************** MARKET POSTURE ************** As of Market Close - Friday, July 16, 1999 Key Benchmarks Broad Market Bearish/Bullish Last Posture/Since ********************************************************** DOW Industrials 10,500 11,000 11,210 BULLISH 7.01 SPX S&P 500 1,315 1,355 1,419 BULLISH 7.01 OEX S&P 100 660 690 734 BULLISH 6.29 RUT Russell 2000 390 450 465 BULLISH 6.29 NDX NASD 100 2,110 2,220 2,459 BULLISH 6.29 MSH High Tech 1,010 1,080 1,244 BULLISH 6.19 XCI Hardware 900 950 1,081 BULLISH 6.17 CWX Software 675 700 840 BULLSIH 6.17 SOX Semiconductor 410 425 530 BULLISH 6.10 NWX Networking 525 545 624 BULLISH 6.25 INX Internet 500 510 520 BULLISH 7.01 BIX Banking 680 720 707 Neutral 6.29 XBD Brokerage 410 425 429 BULLISH 7.01 IUX Insurance 645 660 659 Neutral 6.29 RLX Retail 900 910 954 BULLISH 6.29 DRG Drug 370 400 375 Neutral 7.01 HCX Healthcare 750 800 776 Neutral 7.01 XAL Airline 180 190 165 BEARISH 5.21 OIX Oil & Gas 285 310 311 Neutral 5.13 Posture Alert The market continues on course with more all time highs being added this last week. The 30-yr bond continues to hold below 6%, and corporate earnings continue to come in positive. The leaders for Friday include Software (+2.25%), Insurance (+1.67%), and Hardware (+1.31%). No changes to the posture board. A detailed description of our Market Posture and its applications can be found at: /members/marketposture ************** SEMINAR UPDATE ************** On behalf of OptionInvestor and George Fontanills of OPTIONETICS we are declaring the OIN summer seminar series as SOLD-OUT. For all you folks that have already attended the Boston and Los Angeles events thank you for your support and for the lucky people who signed up for the Dallas and San Francisco seminars ..."enjoy". Don't forget you can still take the "OptionInvestor Home Study Course" .. featuring George Fontanills and his OPTIONETICS methodology demonstrating high profit low risk and low stress option trading. The home study package comes in either audio or video format and allows a future attendance at a OIN/Optionetics seminar for FREE. So you get the best of both worlds. Study in the comfort of your own home and then attend a seminar in the Fall for FREE. If you sign up now you can also reserve a place for a companion in the seminar for FREE. As you now know space is limited and you should sign up today to avoid being disappointed for the live seminar." email dana@OptionInvestor.com for details. *************** INSIDER TRADING *************** The stock market is that creation of man that humbles him the most. - Anonymous Second to that is writing about one's trades in front of his public. Actually, this month has been very good for me. Yet, it is one of those few times of the year that our mantra "sell too soon" can bring about a bad case of seller's remorse. Nevertheless, I'd rather get out of a trade with a profit and whine about missing the rest than have the trade go against me with no profit or worse - a loss. While I did not have the luxury to go into the same depth that Buzz did on Thursday, I still hope you can garner some enjoyment from my own recent plays. To bring you up to speed, I'm going to list all my trades for the month of July. During earnings season, I would prefer to trade a lot more, but work here at OIN has been fast and furious. Actually, let me jump back to June 28th, 1999. After doing the research on the play for UNPH over the weekend, I had made a mental note to watch it over the next week. Monday the 28th, UNPH had gapped up a couple of points (to the low 150s...I don't remember really $152 or $153) and held it all day. I chose to jump in with some July 145 calls about 1:00pm because I believed that UNPH really was due for a split and it had just come off its 10 dma. I would have felt better if I had played it off its 30 dma or even its 50 dma but it was earnings season and everything looked bullish. Anyway, I spent $13.50 for the options. The next day, UNPH took off. Because I had been expecting to hold this play for a couple of weeks, it was one of the few times that I did not already have a GTC sell already in. To have UNPH flirting with +8 all near the end of the day was too much for me. The greed factor immediately kicked in as the option price had already surpassed my planned exit of $17. I tried all afternoon to sell for $19.50 but settled on $18.50 with 15 minutes to the close. I got taken out and a last minute buying spree had my option close at $19.50. So for $5 an option in one day did I complain? No, but watching UNPH go up to over $173 in the next two days from the $160 level I sold at was tough. Even worse, when UNPH merged with JDS Fitel the company later announced a stock split like we expected and the stock price went to $177+. That's okay, I'll take $5 on an option any day. Next on my horizon was VOD. VOD makes some pretty good moves and Thursday July 1st, it made a very clear bounce off its 50 dma at $195. It tends to channel so I knew it could run for a good three or four days if the market let it. The next day, Friday, July 2nd, VOD had gapped up and then sold off midday only to come back strong near the end of the day. This was a Friday ahead of a holiday weekend! So with VOD nearing $202 and climbing I spent $9.13 on some July 200 calls. I was feeling pretty confident about these since VOD really had no resistance until about $212-$215. The next trading day was Tuesday, July 6th. VOD gapped up and made a long slow climb all day but started gaining momentum near the end of the day to close at just under $206. Late in the afternoon, I entered a GTC sell for $15 (getting a little carried away in my excitement) and eagerly waited for tomorrow. Sure enough, VOD gapped up again to $209 and proceeded to bump up against $211 all day. This time I had no qualms about getting out and changed my sell to take me out at $12.25. Of course the next day VOD immediately ran up to over $213 before selling off the rest of the day. That same day, the Dow (DJIA) had run up to its current 52 week high over 11,230 and then fell all the way back down to under 11,150 by 3:20 pm. I thought this really didn't bode well for the next day and gambled on some OEX puts and bought some ATM July 720s for $10.25. The next morning, the market opened and headed down as expected but since I was trading OEX options I was cautious and watched the market bounce off of 11,100 3 or 4 times within the first hour of trading. I could have gotten out for a 10% profit more than once but the market rallied and when the Dow turned positive I bailed and sold my puts for a small loss $9.38. Yes, if I had a little more faith I could have turned a larger profit when the market turned South in the middle of the day but it almost immediately rebounded and we've been stuck in a trading range ever since. So now it is the 7th of July (same day I sold my OEX puts above). The market held and started to rally at the close. I had been watching several stocks and chose MSFT, SNE, and VISX. MSFT had just had a bad day on Monday the 6th, but made a clear bounce off its 10 dma and had been in rally mode all day. With earnings two weeks away I felt it was a safe bet to buy some calls. With MSFT at $92 I placed my order. MSFT is one of the few stocks with enough liquidity that I feel really comfortable placing a market order to buy something. I got filled at $3.50 for July 90s right about 3:54 pm. SNE had also just bounced above its 10 dma (at $110) but it had done so intraday on the 7th. This was more of a momentum play. The Japan market was doing well, electronics were doing well, and SNE had been showing a lot of strength. Volume on this stock is lower than I'm normally comfortable with most of the clues looked good. With SNE at $111 I bought some July 110s at $3. Now I had about 2 minutes left and but I was still in "buying" mode and was looking for something else before the market closed. I had been watching VISX for a while and had been following the news, reading the play. I knew that earnings were soon and the expectations for VISX were going to be high. This was always a fast mover tended to be volatile. VISX had just had a very strong day on the 6th, but today had corrected and bounced off an intraday bottom. I thought, "Great! there is another entry point." VISX was at $88 and the bid was at about $2.25 by $2.38 for some July $95 calls. I placed my order for $2.25 right at the closed and got filled at 4:02 pm. So what happened next? Well, the next day, VISX ran straight up all day long and by the close was at about +$5 near $93. My options I had bought for $2.25 were now $3.38. That is a great return for one day. However, earnings were still a week away on the 14th. The greed factor raised its ugly head and I held. The next day, VISX gapped up at the open near $94.50, ran to $95 and promptly headed South. My options peaked just under $4 and quickly fell away. For the next three trading days VISX could not break $92 and my options started to bleed to death. Next thing I knew it was the 14th and I had to decide - hold over earnings or not. Through all the temptation and glory I saw VISX delivering in my head one thought rang in my ears. "Never hold over earnings". I had deliberated so long it was now 2 minutes to close and frantically placed my market order to get out. I was filled at $1.50 while VISX closed at $92 The next day VISX ran to $96. Oh well, it was a gamble either way but I elected to presever what was left of my capital. SNE was a different story. My options that I had bought for $3, were doing fine. SNE was steadily climbing. I knew that SNE tended to gap one way or the other at the open so I had a GTC sell order for $6 immediately following my confirmation order to buy them. Sure enough, three days later SNE gapped open a couple of points to $117.50 and my sell order at $6 was filled at $7.25. I was overjoyed. The play had behaved better than expected. However, to make my joy complete I have watched SNE continue to run from $117.25 to $125.56. Again, I can't and won't complain, but that just hurts. My last trade was MSFT. MSFT has a huge following so I won't go into too much detail. With the Nasdaq hitting new highs, tech stocks were in vogue, the software giant was clear for takeoff. The only problem was the constant stall at $95. Fortunately, I had bought $90 calls, but the problem was I had bought July. I saw no reason to pay for August if I was going to be out of them before earnings on Monday, July 19th. Surely, MSFT would have enjoyed most of its earnings run by then. By Wednesday I was getting frustrated and when I saw MSFT run right up to $95 and stop I felt enough was enough and sold my options for $4.63. A great return - but I knew MSFT had more juice in it than that. Sure enough, everyone knows what happened on Friday. My options had actually hit $10 before the close on Friday. Of course as an options trader with no intention of excercising those calls, why would I hold Julys through the afternoon of expiration Friday? I would not. So I chalk another one up to the big one that got away. In reality I don't see it that way so the MSFT play didn't hurt as much as the SNE one did. Of course, with plays like that I plan on living in pain for the rest of my life. Sell too soon, Kimo ****************** OPTION CLUB UPDATE ****************** Another Great Week for the Local Trading Clubs in Your Area We had our third meeting on Sunday our topics were how options are priced and a continuation of written trading plans. One of our members, Jim, gave a great presentation on his trading plan he uses for day trading and a presentation on option pricing. We had a great story from Bev, about the consequences of failing to follow through with her plan, I think we have all been there, and a discussion of how to improve that scenario. Our next meeting will be on strategies, and how to put them into a trading plan, and also on the pricing of LEAPS. We have a very enthusiastic group with a desire to learn and share. We had 16 in attendance on a very beautiful Seattle Sunday afternoon and 28 on our last cloudy Seattle afternoon. Please have any inquiries include their e-mail address, it's much easier to just pop them into the group address book if they just type it out in their email. Thanks. Leslie Jouflas Seattle Club ********** Of course I would like to tell you some interesting stories, etc. But we've only met once so far as it took us awhile to come together. However it was one of the more important meetings I can remember as far as the relationships that have sprung up from it and the new sources of information I have gotten. Attendees come from Trenton, Millville and Cherry Hill, New Jersey as well as one attendee from Philadelphia, PA. I will be better off giving you some stories as we go along. Jim email@example.com ********** We have over 30 people coming from every direction in New England. Gary Winter will speak, from Tucker Anthony in downtown Boston. He's traded options for over 20 years and will start with the basics for the novices in the group. Then he'll build up from there and take all levels of questions at the end. The Chicago Board of Options is going to send someone out to talk to us in the next month or two, and several other people have accepted our invitation to speak as well, notably Jerry Kopf from Benjamin and Jerold, and Leeway from the Option Investor Message Boards. We're very flattered that they all have agreed to come visit us! We look forward to coordinating our September meeting with the Option Industry Council's workshops on Sept. 15 and 16, on Basics and then Advanced Level Options. We currently have close to 50 members, most of them quite active. Many of us email each other every day and exchange humorous stories and trading ideas. It's so much fun and much better than operating alone! Thanks for giving us our start! Kim Lemaire Contact Support New England ********** We have had 3 meetings in Chapel Hill, NC. 9-13 people in attendance with experience ranging from pure novice to one day trader who also writes programming for Omega Research. Good group, lively conversation and interaction. We now have 16 on the roster and growing! firstname.lastname@example.org North Carolina ********** Interested? Please send an email of interest to: Visit@OptionInvestor.com or Organize@OptionInvestor.com *************************************** LAST WEEKS CHANGE FOR THIS WEEKS PICKS: *************************************** Index Last Week Dow 11209.84 16.14 Nasdaq 2864.48 71.41 $OEX 733.79 10.91 $SPX 1418.78 15.50 $RUT 465.26 10.51 $TRAN 3401.87 -25.45 $VIX 18.13 -0.96 Calls Week SNE 125.56 11.19 Japanese economy is recovering TXN 154.19 10.94 Announced 2:1 split last week QCOM 158.25 9.51 Dropped, Earnings are Monday VRIO 82.38 7.62 Investor excitement is evident HWP 114.00 7.31 Possible split announcement?? VOD 214.25 7.12 Annual shareholder meeting July 21 LU 78.44 6.50 Earnings coming on July 22nd SEPR 92.94 5.69 Let the earnings run begin AMAT 78.56 4.44 New, strong sector momentum CMVT 81.38 4.25 New, buy ratings and price targets EL 56.00 4.19 New, only 7 days to earnings HD 69.63 3.81 New, popular analysts pushing HD NOK 98.13 3.70 Earnings Thursday before the bell SUNW 76.13 3.19 Releasing earnings on Thursday UIS 45.88 3.13 New, surprisingly strong earnings NXLK 95.94 2.94 2:1 stock split coming in August GTW 70.50 2.88 Breakout play in a hot sector GE 118.88 1.75 New, all-time high set Friday EXDS 138.00 1.63 Big swings are great for options DELL 43.25 0.44 Still a leader in computers BBY 75.69 -0.30 Sitting right on the 10-dma TMCS 34.00 -0.87 Dropped, flattening out SLR 71.06 -0.88 Consolidating, use stops CSCO 66.00 -1.07 Not to late to get aboard IBM 136.25 -1.13 Dropped, Earnings are Monday DCLK 100.13 -2.81 Dropped, Earnings are Monday BRCM 139.81 -3.94 Dropped, Underperforming RNWK 86.63 -5.75 Dropped, Earnings are Tuesday AOL 119.89 -8.37 Dropped, Big disappointment Puts NDB 48.44 -5.75 New, online brokers looking weak U 40.19 -4.81 New, old and new problems surfacing DE 35.69 -2.50 New, commodity prices hurting sales WPI 34.06 -1.88 Showing all the signs of weakness FDX 47.44 -1.06 Oil prices at 18-month high JCP 46.50 1.07 Can management turn things around? ************* PICK SUMMARY ************* SL = Suggested stop loss. Sell if bid breaks this price. OI = Open Interest - the number of open contracts outstanding. TP/P= True premium or Time premium RRR = Risk/Reward/Ratio ITM = In the money ATM = At the money OTM = Out of the money MTD = Move to double - amount stock must move to double option price in one week. ONE WEEK MOVE ONLY ! Numbers within ( ) are the amount of change for the week. Numbers within ( ) may be designated with PxW, like P3W, prior 3 weeks The options with a "*" by the strike price are our choices from the group. If the stock moves as expected we feel they have the best chance to substantially increase or double in price with the best risk/reward ratio compared to the other options for the same stock. You must determine if they fit your risk profile for time and price. Analysts ratings: 1-2-3-4-5 Analysts who follow each stock rate it and these rating are accumulated and displayed as follows; Position 1 = number of analysts recommending "strong buy" Position 2 = number of analysts recommending "moderate buy" Position 3 = number of analysts recommending "hold" or "neutral" Position 4 = number of analysts recommending "moderate sell" Position 5 = number of analysts recommending "strong sell" Example rating 5-3-1-0-0 would be 5 "strong buys", 3 "moderate buys", 1 "hold" recommendation. ***************************** STOCKS ADDED TO THE PICK LIST ***************************** CALLS: GE - General Electric Co. CMVT - Comverse Tech Inc. EL - Estee Lauder Companies Inc. HD - Home Depot Inc. AMAT - Applied Materials UIS - Unisys Corp. PUTS: Please confirm downward motion before playing. With the market in rally mode any beat up stock starts looking like a value play. DE - Deere & Co. NDB - National Discount Broker Group Inc. U - US Airways Group Inc. *************************** PICKS WE DROPPED THIS WEEK *************************** Remember that historically, when we drop a pick it will go up 10 to 15% the very next week. It is part of Murphy's Law. Just because we drop a stock as a pick does not mean we are advocating a "sell" on any position you have. We are simply dropping our recommendation as a new play. Existing plays can and do continue on and are usually profitable. *************************** CALLS: TMCS $34.00 (-.88) TMCS is another Internet stock that has just flat ran out of gas. As the NASDAQ makes new highs, Internets are losing ground. We are a little cautious for this sector and can't feel confident in recommending TMCS for the time being. If we see confirmation of a new move up in the Internet sector we will look to add TMCS at that time. We just aren't seeing the earnings runs we thought we would out of the sector. DCLK $100.13 (-2.81) Our play of DCLK is ending due to the fact they have earnings during the first part of the week. Overall we were disappointed by the performance of both DCLK and the Internet sector this week. DCLK did provide lots of volatility and opportunities to profit but compared to the NASDAQ it under-performed. We talked about the resistance from the moving averages at $101 and DCLK just couldn't get enough strength to push above that price. If this was the best they could do in an earnings run, I wouldn't expect much after the report unless they really blow away the estimate or announce a split. The company is scheduled to report earnings on Monday, July 19th. AOL $120.00 (-8.25) AOL has been a big disappointment to all of us involved with the play. We added it to catch another one of their famous earning runs which have proved so profitable in the past. It has given us a glimpse of of strength and momentum over the past two weeks but then retreats again. It is our feeling that Thursday's news of selling by institutions like Fidelity is on going and will probably keep the stock down over the near-term. In our most recent update we mentioned the critical $120 support which it violated most of the day Friday and that gave us the final evidence we need to drop it as a call play. If you have an open position, remember that we don't encourage holding over earnings which are on Wednesday. RNWK $86.23 (-6.15) RNWK has been a real disappointment. It will announce its earnings on Tuesday, July 20th. The stock was cheated out of its earnings run by weakness in the Internet sector. Following new product announcements and a deal with Microsoft, RNWK had made huge gains the week ending July 2nd, and smaller gains the following week. Going into last week it was gaining strength as it headed into what should have been a good earnings run. Unfortunately, the Disney-Infoseek deal caused a reassessment of valuations in the Internet sector, and many Internet related stocks that had made recent gains saw profit taking. RNWK could still see a pop tomorrow. If it doesn't, and if earnings beat estimates, it could climb after it announces earnings. This is NOT a recommendation to hold over earnings, but a suggestion to watch a stock that could have potential on the other side of earnings. We are dropping RNWK. IBM $136.38 (-1.00) We are dropping IBM, since it reports earnings tomorrow, and we never recommend holding over earnings. Although it lost $1.00 last week, this successful play is up over $21.00 since we picked it up, and it might rise further on Monday. A recent article says Abby Joseph Cohen feels that IBM is one of the stocks that will drive the DJIA higher. She says mainline tech companies are reasonably priced and that, of the Internet stocks, it is the Internet "infrastructure-building companies" like IBM that will do well. This sentiment was echoed in a CNET article on Friday. It says that Merrill Lynch (MER) believes that revenue growth at Big Blue "could approach last quarter's 15% vs. a 12% estimate." Solomon Smith Barney and other analysts also had positive things to say about IBM, particularly concerning IBM's emphasis on e-business and its new Technology Group. The just-before-earnings media coverage may give the stock a boost on Monday. It announces after the closing bell and could be a play for options day-traders. ****************************** SEE DISCLAIMER IN SECTION ONE ******************************
The Option Investor Newsletter 7-18-99 Sunday Part 3 of 7 *********************** DROPPED CALLS CONTINUED *********************** BRCM $138.50 (-5.25) BRCM has given up most of the gains it saw last week, and we are dropping it due to poor performance. This stock often trades with the Internets, and the Internets as a group did not perform well last week. There are those of us, however, who believe that BRCM may still make a good showing early this week before its earnings report after the close on July 21st. Take a look at the reception of 2 broadband IPOs in a similar business. Efficient Networks (EFNT) was offered Thursday at $15 and closed Friday at $58.69. Paradyne Networks (PDYN--originally spun off from AT&T and then Lucent) was offered Friday at $17 and closed at $56.26. Some of the short-term trading capital that flowed into these IPOs may move back into stocks like BRCM as investors take profits and look for a short earnings play on BRCM. Other investors may look for a sympathy move from BRCM. Unfortunately, BRCM did not live up to our expectations last week, and we must drop it. QCOM $158.25 (+9.50) It's been a great run. But since earnings are due after the close on Monday, we are dropping the play on principle of never holding over earnings. Generally, when expectations are high (as they are with QCOM) the price falls after the announcement. Also, QCOM will likely announce a 2:1 split when they announce what promises to be better than expected earnings. The outcome should be excellent, but we have to stick to the rules. PUTS: none today *********************** STOCK SPLIT CANDIDATES *********************** EXDS - Exodus Communications NOK - Nokia HD - Home Depot Inc. SUNW - SunMicro VOD - Vodaphone Airtouch (4:1 possible) HWP - Hewlett-Packard STOCKS WITH UPCOMING SPLITS **************************** We don't list all splits available, only those we feel may have play possibilities. The number of splits has slowed down considerably but we are sure to get another flood with the earnings announcements. Symbol - Stock Splits/Date CC - Circuit City 2:1 07-15-99 ex-date 07-16 IPG - Interpublic Grp 2:1 07-15-99 ex-date 07-16 LUV - Southwest Air 3:2 07-19-99 ex-date 07-20 DISH - EchoStar 2:1 07-19-99 ex-date 07-20 TIF - Tiffany CO. 2:1 07-21-99 ex-date 07-22 LCOS - Lycos 2:1 07-26-99 ex-date 07-27 AIG - American Intl 5:4 07-30-99 ex-date 08-02 CREE - Cree Research 2:1 07-30-99 ex-date 08-02 QLGC - QLogic Corp 2:1 07-30-99 ex-date 08-02 JDSU - JDSUniphase 2:1 08-03-99 ex-date 08-04 TD - Toronto Dominion2:1 08-03-99 ex-date 08-04 JMED - Jones Pharma 3:2 08-06-99 ex-date 08-09 LVCI - Laser Vision 2:1 08-09-99 ex-date 08-10 ENE - Enron 2:1 08-13-99 ex-date 08-16 XETA - Xeta Corp 2:1 08-13-99 ex-date 08-16 ADVS - Advent Software 3:2 08-16-99 ex-date 08-17 TXN - Texas Instrument2:1 08-16-99 ex-date 08-17 NXLK - Nextlink Comm 2:1 08-27-99 ex-date 08-30 For a complete list of all the coming splits check out the "split calendar" on the side of the online edition newsletter page. ******************************* SPECIAL SHORT TERM SPLIT PLAYS ******************************* We always recommend selling the day of the actual split or earlier. Profit taking will drive down the price on an average of 7 of 10 splitters immediately after the split. They may come back in a week or two but why risk it ! ******************************* None today ******************************************************* THE PLAYS OF THE DAY -CALLS- ONLY PLAY IN RISING MARKET ******************************************************* With all the great plays each week we can never decide on just one so take your pick. ******************************************************* GE - General Electric $118.88 (+1.75) Bringing good things to life See details in sector list Chart = http://quote.yahoo.com/q?s=ge&d=3m ****** SUNW - Sun Microsystems $76.13 (+3.19)(+2.88)(+5.19)(+0.81)(+4.38) Textbook earnings run See details in sector list Chart = http://quote.yahoo.com/q?s=sunw&d=3m ****** Put play of the day: NDB - National Discount Brokers $48.44 (-5.75) Online brokers in a downtrend See details in sector list Chart = http://quote.yahoo.com/q?s=ndb&d=3m ********* Hardware ********* DELL - Dell Computer $43.25 (+0.44)(+5.68)(+0.19) The one, the only, the amazing. . . Dell! Dell is the direct sales model leader and pioneer of the on-line retail business. They sell PC's notebooks, servers and work stations built to order direct from their factories worldwide. Eager buyers pony-up 18 million e-$$$ daily for their products. Total annual sales for the trailing 12 months were $18.2 bln., excluding their recent foray into direct selling of other manufacturers' software and support products from their gigabuys.com web site. For 1999, Dell expects total revenues of $26 bln. For perspective, that greater than Microsoft's anticipated 1999 revenue. Despite their recent fall from grace, they are growing at an annual rate of 41% with margins that are the envy of the industry. Return on equity is a whopping 79%. Like a phoenix on the desert, Dell has kept on performing no matter how many feathers the analysts try to pluck from it. Investors were concerned that that the sub-$1000 category was going to eat Dell alive. Not so. As early as June 9, International Data Corporation announced that they expected worldwide PC shipments to grow by over 21% this year instead of the previously forecast 16.5%. Then analysts squealed about the falling ASP's, or average selling prices. That Dell's least expensive model is $899 compared to competitors in the $300-$500 range doesn't hold water since over 90% of Dell's customers are businesses. A comment from Michael Dell stating "the company earned 55 percent of the PC industry's total profit in the first quarter and that its profit share may increase in the second quarter" points to the direction of the future. Not many noticed that either. Technically, the chart still looks pretty good. Dell reached as high as $44.63 last week, but couldn't hold it. In fact in Friday's trading it fell further and closed only $0.13 up from its low of the day. Volume was only %65 of normal. However, we are still waiting for a more of a pullback before entering a position. Based on Thursday and Friday's trading, there appears to be some short-term support in the $42 to $43 range. But exercise caution here, as NASDAQ has set records for the last 3 days and is due for some cooling off. DELL will move with it. Again, this is a time for DISCIPLINE AND PATIENCE. Like CSCO, Dell's earnings are not until late in August (8/18, company confirmed), so you won't be missing an earnings run. Plan your entry in accordance with your own risk tolerance. Dell held their shareholders meeting On Friday, wherein Michael Dell predicted that 1 of the current top 5 computer makers would be forced out of business, according to a Reuter's report. That's a bold reference, even for Michael Dell. In the same report, Dell further commented, "There are NOT (emphasis, ours), we believe, dramatic, fundamental changes going on in the industry. Prices have declined at fairly predictable levels similar to trends in other industries, and in this kind of environment the superior business model thrives and those without it flounder." On a chart, Dell showed Compaq's cost structure as "about double" that of Dell's. Can you guess which of the 5 might have been referring to? Sure, we knew you could. But that doesn't mean load up the truck on DELL, or short CPQ. That's a long-term trend and not conducive to options trading. In other news from the shareholders' meeting, DELL also announced that it would not likely buy an ISP, including Mindspring (they don't want to pay the inflated multiple). Instead they will likely build up their own ISP, dell.net, which is popular in Europe. No options listed yet. Be patient Picked on July 11 at $(not yet!) PE = 70 Change since picked +0.00 52 week low =$20.38 Analysts Ratings 10-9-12-0-0 52 week high=$55.00 Last earnings 05/99 est 0.16 actual 0.16 Next earnings 08-18 est 0.17 versus 0.13 Average daily volume = 26.13 mln. Chart = http://quote.yahoo.com/q?s=DELL&d=3m ***** GTW - Gateway $70.56 (+2.93) Gateway is #2 in the direct marketing of PCs in the U.S. Second only to Dell, Gateway is unique in their marketing approach. Computer users may order by phone, or on the Web. GTW makes desktop, portable PC's, PCTV's, and servers. Overall GTW had a pretty good week. Thursday Gateway made an intraday high of $75.75, which is over an $8.00 move for the week, and over $7.00 since we added it on Tuesday. With the exception of the previous quarter Gateway has moved about $15-$20 higher over the three week period prior to earnings. July 1st, the low of the day was $56.75. By our calculations that's about $19.00. We are not giving up on GTW. So look for the $70.00 area to provide mild support with stronger support at the $67 level. Volume has been below average the last two sessions. We would like to see GTW resume its upward movement along with better than average volume. However, a close below support at $67 in front of earnings this week would signal some weakness in the stock. Actually, traders should be concerned if GTW closes below $70 any time this week. We would be cautious at this time about entering any new plays on Gateway with earnings so close. You'll have to be quick. This week earnings season really kicks into high gear. GTW is scheduled to announce on Thursday. Be sure to play with stop losses to protect yourself from the trade going against you. There is really nothing in the news to report on Gateway. Everyone that's not on "FED WATCH", is waiting patiently for earnings to come out. With PC prices falling like a rock, those involved in the PC industry are trying to figure out how to give away computers and sign customers up for their Internet service. BUY CALL AUG-65*GTW-HM OI=1293 at $8.25 SL=$7.00 ITM $5 BUY CALL AUG-70 GTW-HN OI=1388 at $5.38 SL=$4.50 BUY CALL AUG-75 GTW-H0 OI= 858 at $3.13 SL=$2.50 BUY CALL SEP-70 GTW-IN OI=1794 at $7.13 SL=$6.00 Picked on July 13th at $68.31 PE = 30 Change since picked +$ 2.25 52 week high=$84.50 Analysts' ratings 7-8-6-1-0 52 week low =$36.13 Last earnings 3/99 est 0.60 actual 0.62 surprise=+3% Next earnings 7/22 est 0.55 versus 0.38 Average daily volume 1.35 mln. Chart = http://quote.yahoo.com/q?s=gtw&d=3m ***** HWP - Hewlett Packard $114.00 (+7.31)(+4.94)(+9.12) Hewlett Packard is best known as the #2 worldwide provider of computers, peripherals, and computer related services standing only behind the "Big Blue". Almost 85% of sales revenue is derived from this aspect of the business. But HWP also makes testing and measurement equipment and medical equipment products which it plans on developing and combining into a separate company. HWP lead the Silicon Valley stocks this week demonstrating its strength and ability to climb even higher. The stock packed on the power making over $7 in gains and setting new highs along the way. The latest record was reached on Friday at $114.56. For the most part, volume has been moderate or only slightly above normal. Its 10 dma is below the current price down around $107. The upward trend originally started at the beginning of July as HWP charged forward with its sector. It has not looked back. The anticipation of a possible split announcement around its earnings date (August 16th) is growing. The stock last split 2:1 in July of 1996 when it was at $80-85. The price level is obviously way above that now! Lots of HWP news this week. On Monday, a big contract was awarded to Hewlett-Packard. They announced a 3-year, $100 mln. deal with Rockwell, a world leader in electronic controls and communications. Rockwell is primarily buying higher-end Vectra desktops ($1000-1700 each) from HP. Considering the sluggish PC market, this is a very welcome pact. Also, CSFB announced they raised their 1999 fiscal numbers for HWP to $3.55 from 3.45 and but kept their "buy" rating. On Wednesday, Merrill Lynch analyst, Steve Milunovich, raised his target price to $122 from $100. He believes HWP is "hitting new highs thanks to the upturn in H-P's business and the rising tide carrying Internet infrastructure vendors." Hewlett Packard was also given highest honors in the 'Channel Champions' survey conducted by Computer Reseller News. This is the 6th consecutive year HWP has had the highest reseller's satisfaction rating in both scanner and laser-printer categories. Then on Friday, developing leading-edge technology between HP and the University of California at Los Angeles hit the newsrooms. They announced they have developed a chemical process to create an integrated circuit that produces a computer speed 100 bln. times faster than that now exists. Presently light beams are used to etch the silicon wafers and size is limited by the light's wavelength. BUY CALL AUG-110*HWP-HB OI=1317 at $ 8.13 SL=6.25 ITM $4 BUY CALL AUG-115 HWP-HC OI= 163 at $ 5.63 SL=4.00 BUY CALL AUG-120 HWP-HD OI=1215 at $ 3.38 SL=1.75 BUY CALL NOV-115 HWP-KC OI= 39 at $11.13 SL=9.00 BUY CALL NOV-120 HWP-KD OI= 599 at $ 8.75 SL=6.75 Picked on July 1st at $102.00 PE = 36 Change since picked +12.00 52 week high=$114.56 Analysts Ratings 6-10-9-0-0 52 week low =$ 47.06 Last earnings 04/99 est= .80 actual= .88 surprise=10% Next earnings 08-16 est= .79 versus= .58 Average daily volume = 3.28 mln. Chart = http://quote.yahoo.com/q?s=HWP&d=3m ***** SUNW - Sun Microsystems $76.13 (+3.19)(+2.88)(+5.19)(+0.81)(+4.38) UltraSPARCs, Netra servers, SPARCstations, and Solaris (for Unix) are all products of Sun Microsystems. Sun is also the creator of the Java, a programming language designed to create software that can run unchanged on any kind of computer. They are known for their saying, "The network is the computer." Just like clockwork SUNW bounced off of support at its 10-dma and powered ahead to close up for the 5th week in a row. In fact SUNW hit its 52-week high on Friday before closing just underneath it. Is this a text book earnings run or what? The stock should continue to rise until Thursday when earnings are released as investors are anticipating a possible split. The NASDAQ also looks strong ahead of a week where we will see lots of earnings reports. There is no clearly defined price which you could call resistance since we are at a new high but be cautious of the overall market sentiment. We could see increased selling after all the earning reports are released. We, of course, will not be holding over earnings so you may want to plan your exit strategy ahead of time. That means any new plays this week will have to be quick ones. Use caution since we are nearing the end and remember to sell too soon. The interesting news of the week came on Thursday when Sun formally named its project StoreX platform. They will call it Jiro. The Jiro open management platform is designed to work with Java and Jini technology to enable the deployment of flexible applications that allow the management of disparate, networked storage devices, applications and services. It should be available in its earliest form in August. BUY CALL AUG-70*SUQ-HN OI=4289 at $8.50 SL=6.50 ITM $6 BUY CALL AUG-75 SUQ-HO OI=5790 at $5.38 SL=3.75 BUY CALL AUG-80 SUQ-HP OI=2972 at $3.25 SL=1.75 BUY CALL OCT-75 SUQ-JO OI=2059 at $8.75 SL=6.50 Picked on June 20th at $64.06 P/E = 55 Change since picked +12.06 52-week high=$76.44 Analysts Ratings 9-9-4-0-0 52-week low =$19.19 Last earnings 04/99 est= .35 actual= .36 Next earnings 07/22 est= .46 versus= .37 Average Daily Volume = 12.75 mln Chart = http://quote.yahoo.com/q?s=SUNW&d=3m ***** UIS - Unisys Corp. $45.88 (+3.13) Computer based information systems and related services is the main focus for Unisys. They integrate hardware and software for financial and other niche market customers. Some of their main customers include Bell South, Eli Lilly and the US government. UIS released earnings Thursday. Earnings rose to $0.38 per share from $0.24 in the second quarter of 1998 (estimates for Thursday had been $0.33). Revenues grew 9% to 1.9 bln from 1.7 bln a year ago. All in all UIS beat the street by over 15%. Friday, Wallstreet rewarded UIS with a show of support adding $1.44 per share on strong volume of just under 2.3 mln. shares. It made a new 52 week high of $46.13, closing near its high of the day at $45.88. Normally we will hold off and let the impact of earnings run its course, before introducing a new play. However the impact in this case seems to have propelled UIS into new territory. The Technology Sector, specifically the computer services industry has been gaining strength recently and we feel that UIS is on its way to making further gains. It was in a narrow $3 range for most of the month of June. On July 1st UIS, broke through the $40 level of resistance and has been gradually moving up the last two weeks. A glut of earnings continue to come out this week, which could help to propel UIS higher. Support is at $45.00. Look for positive direction confirmed by solid volume before starting a play on UIS. AS always assess your risk profile and set your stops. Not much other news on UIS at this time other than its earnings news released this week. BUY CALL AUG-40*UIS-HH OI= 660 at $6.63 SL=$5.25 ITM $5.88 BUY CALL AUG-45 UIS-HI OI=1068 at $3.00 SL=$1.75 BUY CALL OCT-40 UIS-JH OI=1274 at $7.63 SL=$5.75 BUY CALL OCT-45 UIS-JI OI= 334 at $4.50 SL=$2.75 Picked on July 17that $45.88 PE = 32 Change since picked + 0.00 52 week high=$46.13 Analysts' ratings 8-2-3-0-0 52 week low =$17.63 Last earnings 7/15 est 0.33 actual 0.38 surprise=+15% Next earnings 10/15 est 0.34 versus 0.26 Average daily volume 1.58 mln. Chart = http://quote.yahoo.com/q?s=uis&d=3m ******** Internet ******** EXDS - Exodus Communications $138.00 (+1.62)(+17.63) Exodus Communications strives to be a perfect host (the Web type, that is). EXDS offers server hosting and Internet connectivity, among other services, which let businesses outsource management of their Internet sites. Exodus has thirteen Internet Data Centers (8 more planned by year-end) where clients store their servers in secure vaults. Often, these are called "server farms". In addition to providing storage space, the company furnishes connections and maintenance of its clients' networks. Its client list includes CBS Sports, eBay, and MSN Hotmail and is growing at an average rate of 2 major customers per day. Exodus is expanding its geographic penetration. Their growth comes from acquisitions and development of new server farms or data centers. Earnings are scheduled Wednesday, July 21 after the close (company confirmed). This is one volatile play. You've probably noticed the $10 daily swings that have made it difficult to take a position. During the week, EXDS had a trading range of $132 to $148. Until 2 hours before the close on Friday, EXDS had climbed to $146. Then a 2 hour selling wave ensued sending it down $8 to close at $138. Frankly, that's a lousy sign, and we can find no news explaining the reason. Until then, support was $140. Perhaps it was option expiration-induced selling and may recover on Monday. Watch to see if gets solidly back over $140 within the first 2 hours of trading on Monday. If there is a bounce back with volume, that's ideal. A gap open on low or average volume is much less convincing. With only 35 mln. shares in float and average volume of over 2 mln. shares per day, EXDS is fast mover in both directions. Don't leave your screen to play this one and use stops to protect yourself. VOLATILITY = HIGH RISK! We also need to put EXDS officially on our split candidate list. They last announced a 2:1 split on Jan. 27 1999 when the stock traded at $86. To accommodate the split, at a special meeting on March 18, shareholders authorized 100 mln. shares. The split became effective in trading on April 12 when the stock was then at $180. After the split, the price rose from $90 (split adjusted) to its current level. Since then, in June shareholders again authorized 300 mln. shares with only 41 mln. issued. The current price vastly exceeds the price at which they announced the last split. The most recent vote would allow two 2:1 splits, or even a 3:1 (don't bet on it) and enough additional shares to permit for acquisitions. B of A Securities issued a buy rating last week with a new price target of $170. This could be fun, but not for the weak-stomached. ***Extremely high-priced. Time value erosion will average about $0.60 per trading day (a little less now, a little more later) until expiration if the price remains flat. BUY CALL AUG-130*EXF-HF OI=176 at $20.50 SL=16.25 ITM $8 BUY CALL AUG-135 EXF-HG OI=165 at $18.13 SL=14.00 BUY CALL AUG-140 EXF-HH OI=393 at $15.88 SL=12.50 BUY CALL AUG-145 EXF-HI OI=273 at $13.63 SL=10.50 (only AUG is listed since earnings are 7/22. Everyone should be out by then.) Picked on July 11 at $136.38 PE = N/A Change since picked +1.62 52 week low =$ 7.75 Analysts Ratings 10-3-1-0-0 52 week high=$148.19 Last earnings 4/99 est -0.57 actual -0.55 Next earnings 7-22 est -0.50 versus -0.36 Average daily volume = 2.07 mln. Chart = http://quote.yahoo.com/q?s=EXDS&d=3m ***** VRIO - Verio Inc $82.38 (+7.63)(+7.94)(+4.13)(P4W +8.13) Verio is a national provider of Internet services to primarily small and medium sized business. With a huge wad of cash from a host of venture-capital firms and an IPO, Verio is buying regional and local Internet service providers (ISPs) across the US. It owns or has majority stakes in more than 35 business-oriented providers across the US. Verio is buying ISPs with a large number of dedicated accounts (business accounts with direct lines to the provider). The firm's customers include General Electric, Microsoft, Princeton University, and Ziff-Davis. Brooks Fiber Properties, a unit of MCI WorldCom, owns approximately 17% of Verio. VRIO had a great week with gains of $7.63. First, VRIO broke its overhead resistance on Monday! The stock broke through the $78 opposition (now its former 52-week high) during a big run-up mid-morning and peaked at $78.75. The stock managed to keep a fractionally gain after the profit takers were finished for the day. VRIO continued with steady gains the next two days, then spiked up over 5 points on Thursday on news of a $300 mln. private, preferred stock offering. 6 mln. shares of the 6.75% Series A convertible preferred stock are being offered to institutional investors at a price of $50 p/s. These preferred shares can be converted to common stock when Verio's stock price reaches $96.56 (a 25% premium over the closing price of $77.25 on July 14th). The offering will close on July 20th. Investor excitement was evident with triple the normal trading volume and another new 52-week high set at $83.50. After 7 consecutive days of gains and new highs we expected some consolidation on Friday. As it turned out, the stock maintained its new trading level never dipping below $81.50. Expect a pullback soon and please consider using stops for protection. The proceeds from the preferred stock offering will be used to fund acquisitions and other company investments. After the recent purchase of digitalNATION for $100 mln. cash and the $42.5 mln. used in March for AOL to provide exclusive Web-page hosting, Verio will certainly welcome the cash. On Tuesday, the company announced they had purchased privately held digitalNATION. This acquisition further strengthens their leading-edge position in the Web hosting business. Remember, the stock's upward trend began with the positive response from investors regarding the software deals Verio negotiating with AOL and MSFT. Plus, earnings are not too far away. They're expected on August 20th. The run-up could possible continue through earnings' season. However, play smart. Don't expect VRIO to continue up unabated through August 20th. Look for your entry points. BUY CALL AUG-75*RLQ-HO OI= 453 at $11.50 SL= 9.25 lower premium BUY CALL AUG-80 RLQ-HP OI= 707 at $ 8.25 SL= 6.50 BUY CALL AUG-85 RLQ-HQ OI= 0 at $ 5.63 SL= 4.00 new strike BUY CALL NOV-80 RLQ-KP OI=1609 at $15.88 SL=12.50 BUY CALL NOV-85 RLQ-KQ OI= 0 at $13.63 SL=11.00 new strike Picked on June 27 at $62.68 PE = N/A Change since picked +19.70 52 week high=$83.50 Analysts Ratings 6-2-1-0-0 52 week low =$13.00 Last earnings 03/99 est= -1.31 actual= -1.24 surprise=5.34% Next earnings 08-20 est= -1.30 versus= -1.33 Average daily volume = 797 K Chart = http://quote.yahoo.com/q?s=VRIO&d=3m ************** Semiconductors ************** AMAT - Applied Materials Inc. $78.56 (+4.43) Advanced Micro Devices, Intel, Lucent and Motorola are some of Applied Materials best customers. AMAT is a leading manufacturer for the semi-conductor industry. They develop, manufacture, and service wafer fabrication equipment and spare parts for the industry. They also make metrology systems and photomask inspection equipment. The recent strength of the semi-conductor industry has benefited this manufacturing company. AMAT has about a 20% share of the $20 billion global market for semi- conductor manufacturing equipment. The momentum for AMAT picked up Wednesday, when AMAT gained over $5.00, on over 10 mln. shares (volume) making a new high of $77.63. Applied Materials had been stuck in a $20 range since the first of the year, trading between $50 and $70 until June 30th when AMAT managed to push its way through the $70.00 mark. This is primarily a momentum play for AMAT, based not only on its own strength but that of the industry as well. Applied Materials continued to make its way higher for the balance of the week. AMAT hit another 52 week high Friday at $79.63, and closed up $2.19 for the day. Volume was somewhat light, at 5.30 mln. shares, although it was an options expiration Friday. Earnings don't come out until August 18, but AMAT could be setting up for a run to higher highs. We would look for the $77-$78 area to provide support for AMAT. Enter a new play on further upward movement accompanied by strong volume, and don't forget to set your stops accordingly. Not much in the news at this time. Monday AMAT announced it had been honored with the 1998 Supplier Excellence Award from Texas Instruments. Winners of the TI Supplier Excellence Award are companies that have demonstrated their commitment to quality and continuous improvement. BUY CALL AUG-75 ANQ-HO OI=2570 at $ 8.25 SL=$6.75 BUY CALL AUG-80*ANQ-HP OI=1733 at $ 5.25 SL=$4.00 BUY CALL OCT-75 ANQ-JO OI=1453 at $11.75 SL=$9.50 BUY CALL OCT-80 ANQ-JP OI=4328 at $ 9.00 SL=$7.25 Picked on July 17, at $78.56 PE = 282 Change since picked + 0.00 52 week high=$79.63 Analysts' ratings 17-11-3-0-0 52 week low =$21.56 Last earnings 4/99 est 0.26 actual 0.36 surprise=+38% Next earnings 8/18 est 0.52 versus 0.19 Average daily volume 8.13 mln. Chart = http://quote.yahoo.com/q?s=amat&d=3m ******************************* PLAYS CONTINUED IN SECTION FOUR ******************************* SEE DISCLAIMER IN SECTION ONE *******************************
The Option Investor Newsletter 7-18-99 Sunday 4 of 7 ************************ SEMICONDUCTORS CONTINUED ************************ SLR - Solectron $71.06 (-0.88)(+4.81)(+4.31) Founded in 1977, Solectron is the largest OEM electronics contract manufacturer in the world. Throughout a range of industries including avionics, communications, industrial and medical instrumentation, and of course, consumer electronics and computers, Solectron provides product design and prototyping, assembly, packaging and warehousing. Hewlett-Packard, Cisco Systems, and Mitsubishi are among its customers. Solectron is the first company to twice win the Malcolm Baldrige Award, given for manufacturing excellence. SLR started the week strong. It made a new 52 week high at $73.25 after gapping up $1 at the open Monday morning. The bears decided to come to the party and began to have their way with Solectron. By late Tuesday afternoon, SLR had fallen to its 10dma to a low of $69.31. It traded in a narrow $3 range for the balance of the week. SLR has been a momentum play since the start. SLR has recently had a pattern of moving up on good volume, stalling and consolidating on lower than average volume and then making another move. This is what we are continuing to expect from Solectron. It closed right on its 10dma and we are expecting another bounce from here. Technically $69.60 is a key level of support for SLR. Any advance up accompanied by greater than average volume would be viewed as a potential buying opportunity. The electronics industry has been consolidating recently. Any surprises in the broader markets this week could temporarily knock the legs out from underneath this bull and take SLR with it. Keep your stops close. SLR announced yesterday it had completed its acquisition of Sequel, Inc. Sequel is privately held company that specializes in the repair of notebook computers and liquid crystal display's. SLR will now be able to expand its global services capabilities by offering its OEM customers direct end-user support. BUY CALL AUG-70*SLR-HN OI=428 $5.50 SL=$4.25 BUY CALL AUG-75 SLR-HN OI=150 $3.13 SL=$2.50 BUY CALL OCT-70 SLR-JN OI= 98 $7.13 SL=$5.75 (Low OI) BUY CALL OCT-75 SLR-JO OI=166 $5.75 SL=$3.50 Picked on June 20th at $64.06 PE = 61 Change since picked +$ 7.00 52 week high=$73.25 Analysts' ratings 6-6-6-0-0 52 week low =$26.81 Last earnings 6/99 est 0.20 actual 0.29 surprise=+7% Next earnings 9/99 est 0.32 versus 0.23 Average daily volume 1.30 mln. Chart = http://quote.yahoo.com/q?s=slr&d=3m ***** TXN - Texas Instruments $154.19 (+7.63)(+4.87)(+5.69)(P3W+16.63) TXN sold its defense electronics and memory chip units almost 2 years ago to focus their digital signal processor (DSP) business. TXN is the world's largest supplier of DSP's, commanding over 45% of the segment. You will find them in over half the world's cell phones, modems, cars, and camcorders to name a few items. In addition, they manufacture microcontrollers, microprocessors, and analog and logic chips. Only one third of its business is in the U.S. 75% of its revenues is derived from semiconductor sales. TXN will report earnings on July 20 (company confirmed). They announced a 2:1 split Thursday after the close, which is payable August 16. Typically a split announcement prior to earnings is a strong sign of management's confidence in the earnings number. After all, why would they split only to report poor, expected, or even the low end of the whisper number? Remember when QCOM reported blowout earnings last quarter? They needed a blowout after announcing the split; otherwise the stock would have fallen to earth like a meteor. Same for TXN. Now that we've said that, remember that it is only a theory, and Murphy frequently pokes big holes in arguments that otherwise make logical sense. Despite our inclination to back up the truck, DON"T DO IT! We never recommend holding over earnings and you should be out of the play by Monday night (just in case they announce Tuesday morning. Technically, TXN is looking good and set another new high on Friday. Support is in the $147 range. Be aware that there was some selling from its high after the bell, and based on OI, there is strong resistance at $150, indicating that investors aren't willing to bid the price any higher. Protect the profits and plan to exit the play. We'll probably pick it back up later to play the split. No new news. . .like a split isn't enough? Options BELOW are for DAYTRADERS ONLY. Play is almost over! BUY CALL AUG-150 TXN-HV OI=3267 at $12.50 SL=10.00 BUY CALL AUG-155 TXN-HX OI= 133 at $ 9.75 SL= 7.25 BUY CALL AUG-160 TXN-HY OI= 851 at $ 7.50 SL= 5.75 Picked on June 10th at $125.75 PE = 98 Change since picked +28.44 52 week low =$ 45.38 Analysts Ratings 11-8-5-0-1 52 week high=$154.69 Last earnings 04/99 est 0.61 actual 0.65 Next earnings 07-20 est 0.76 versus 0.35 Average daily volume = 2.51 mln. Chart = http://quote.yahoo.com/q?s=TXN&d=3m ******************* Drugs/Biotechnology ******************* SEPR - Sepracor Inc $92.94 (+5.69) Sepracor researches, develops, and commercializes improved compounds of existing pharmaceuticals and biopharmaceuticals. These products are new and patented formulas. They can provide the consumer with fewer side effects, improved safety, new uses, and even refined dosages. For instance, Sepracor made Allegra as an alternative to Seldane, which the FDA had pulled its approval of in 1997. In this drug and biotech industry mergers are becoming the watchword as more companies are consolidating. Last month, Sergio Traversa of Mehta Partners named Sepracor as a top takeover pick; especially by an overseas company searching for more US exposure. Then in a BusinessWire article on Thursday, Pharmaceutical & Biotech analyst David Saks of Gruntal & Company stated he foresees the industry's earnings as positive and believes "as more drugs are approved by the FDA the biotech sector should do well". Put all that together and you have the ingredients for a profitable earnings run. SEPR is expected to report in a couple weeks on August 6th. This week SEPR found a new support level at $85 and $87 which put it right on its 10 dma. Then at the open on Wednesday, SEPR cracked its near term resistance of $88.75 (a daily high set on July 6th) and tested new waters above the $90 mark. We picked up the stock on Thursday when we got further confirmation of its direction. SEPR had advanced another $3.63 on strong volume to close at $93.75. There was some immediate profit taking Friday morning (a nice entry point if you could catch it) but SEPR recovered and proceeded to trade steadily around $93 and $94. Remember to confirm stock direction and market sentiment before you begin a new play. BUY CALL AUG- 90*ERQ-HR OI=612 at $ 9.50 SL=6.75 BUY CALL AUG- 95 ERQ-HS OI= 0 at $ 7.00 SL=5.25 new strike BUY CALL AUG-100 ERQ-HT OI 0 at $ 4.63 SL=3.00 new strike BUY CALL OCT- 95 ERQ-JS OI= 72 at $12.00 SL=9.50 BUY CALL OCT-100 ERQ-JT OI=297 at $10.00 SL=7.50 Picked on July 15th at $93.75 PE = N/A Change since picked -0.81 52 week high=$140.87 Analysts Ratings 3-3-5-0-0 52 week low =$ 42.25 Last earnings 03/99 est= -1.10 actual= -.93 surprise=15.45% Next earnings 08-06 est= -1.22 versus= -.63 Average daily volume = 780 K Chart = http://quote.yahoo.com/Q?s=SEPR&d=3m ********************************* Telecom/Communications/Networking ********************************* CMVT - Comverse Technology Inc $81.38 (+4.25) Comverse is the world's leading supplier of enhanced services platforms to wireless and wireline network operators. For instance, their AudioDisk and Ultra lines are communication monitoring systems used by police, emergency 911, and even financial institutions. They are also the 3rd largest firm in the voice-mail market, only behind Lucent and Northern Telecom. On Monday, Salomon Smith Barney started new coverage on CMVT with a "strong buy" rating and set a short-term target price of $95. Relative support became firmly established at $77 and $79. Then on Thursday, CMVT jumped out of support and advanced 3.2% ($2.47) on positive news and analyst coverage. Ladenburg Thalmann & Co reiterated a "buy" rating and set their target price at $90. The big news came from Comverse. They announced their subsidiary, Comverse Network Systems, licensed advanced voice technology for their Unified Messaging Service from the Belgian Speech Technology firm, Lernout & Hauspie Speech Products. The Text-to-Speech system allows callers to hear e-mails over the phone. Comverse is presently focusing its attention on attracting wireless and wireline network operators, and ISP's to their Unified Messaging Service which allows a user to access e-mail, faxes, v-mail, and database information from a single mailbox via any terminal, desktop PC, laptop, or phone. No financial terms of the licensing agreement were available. Friday the stock proved it could hold its new level and even set another 52-week high at $82.38 on fair volume. Take a look at a 5 or 10-day chart and you can see the opportunities for solid entry points intraday. However, the fluctuations aren't so dramatic as to hamper the use of stop losses (versus the wild and risky Internet plays). Earnings are expected to be positive and are due on August 25th. Earlier at the end of June, two other analyst also reiterated coverage for CMVT. Lehman Brothers put out their "buy" rating and a target price of $90 while SunTrust Equitable had a "strong buy" rating, but only a mark of $85. Note: at this time there are no strikes above 90 are available. BUY CALL AUG-75 CQV-HO OI= 37 at $9.25 SL=7.00 BUY CALL AUG-80*CQV-HP OI=148 at $5.75 SL=4.00 BUY CALL AUG-85 CQV-HQ OI=119 at $2.94 SL=1.50 BUY CALL OCT-80 CQV-HP OI=204 at $9.00 SL=6.75 BUY CALL OCT-85 CQV-HQ OI= 51 at $6.38 SL=4.75 Picked on July 18th at $81.38 PE = 48 Change since picked +0.00 52 week high=$82.38 Analysts Ratings 8-1-0-0-0 52 week low =$29.37 Last earnings 04/99 est= .44 actual= .47 surprise=9.36% Next earnings 08-25 est= .49 versus= .37 Average daily volume = 973 K Chart = http://quote.yahoo.com/q?s=CMVT&d=3m ***** CSCO - Cisco Systems $66.00 (-1.06)(+5.75)(+2.81 Split Adjusted) Cisco builds 85% of the routers and switches that make the Internet work. They are the leading supplier of products that link local and wide area networks. The company's other products include dial-up access servers and network management software. Cisco has been on an acquisition binge (about 35 since 1993) to broaden its product line. It also derives revenue by licensing products as it seeks to widen the influence of its Cisco Internetwork Operating System (Cisco IOS) software, in hopes of making it an industry standard. Strategic relationships with the industry's biggest players (including Alcatel, Microsoft, Qwest, and U S WEST) are boosting Cisco's influence on the networking industry. More consolidation and a flat looking chart. . .ho hum. Since the end of June, CSCO has traded in a range between $63 and $67, give or take a spike in either direction. As we noted all week, that's OK with us. The longer CSCO forms a base, the stronger the anticipated run into earnings on August 10 (company confirmed). $65.50 seems to be holding as intra-day support. Resistance is way up over $69. Any breakout over $67.50, as long as it is not a gap-up opening, and is accompanied by strong volume is buyable. We still have time. Wait for the play to come to us. If you are already in the play, just be sure to set a stop in case of a market-wide reversal (something we may see after setting 3 new highs in a row). In agreements reached this week, CSCO will build a national flight information and reservations network for the Civil Aviation Administration of China, and Intel will begin using CSCO technology to build high-speed DSL modems. Regarding the Intel deal, INTC says that with the standardization of modem protocol and proliferation of users, it is now profitable to mass-produce the product for a large market, based on CSCO's patented technology. BUY CALL AUG-60*CYQ-HL OI= 5155 at $7.63 SL=5.75 ITM $6 BUY CALL AUG-65 CYQ-HM OI=11852 at $4.13 SL=2.50 BUY CALL AUG-70 CYQ-HN OI=19101 at $1.94 SL=1.00 BUY CALL OCT-65 CYQ-JM OI= 7917 at $6.88 SL=5.25 BUY CALL OCT-70 CYQ-JN OI=11817 at $4.38 SL=2.75 Picked on June 29th at $62.50 PE = 115 Change since picked +3.50 52 week low =$20.56 Analysts Ratings 19-12-0-0-1 52 week high=$69.25 Last earnings 05/99 est 0.37 actual 0.38 surprise = 2.7% Next earnings 08-10 est 0.40 versus 0.32 Average daily volume =15.18 mln. Chart = http://quote.yahoo.com/q?s=CSCO&d=3m ***** LU - Lucent Technologies, Inc. $78.44 (+6.50)(+1.25)(+7.00)(+3.00) LU is a spin off of mama bell AT&T. The company makes telecom equipment and software, along with business communications systems and wireless networks. LU is, in fact, the largest producer of these products in North America. Actually, it is technology by Bell Labs that provides the basis for a lot of LU's products. The company has strengthened its broadband networking market through acquisitions. Major competitors include Nortel Networks, Alcatel and Cisco Systems. LU continues to make moves forward and rightly so as the Tech sector continues to make new highs. LU has earnings in one week and the feeling is the company will announce very strong numbers. The stock continually keeps making new 52 week highs and has very strong technicals. We will only be keeping this stock as a play for the next half week, as we don't advise holding stocks over earnings. This earnings season, even stocks that announce strong numbers are getting hit after they announce. Take a look at Yahoo!, Ameritrade, and Earthlink to name a few. Lucent has recently bought a few companies to help add strength do different areas of its business. The company was also listed as a stock that Fidelity Investment's fund managers have been buying aggressively (actually, one of their new top 10 holdings). BUY CALL AUG-75*LU-HO OI=10190 at $6.25 SL=4.75 ITM $3.00 BUY CALL AUG-80 LU-HP OI= 7217 at $3.50 SL=1.75 BUY CALL OCT-80 LU-JP OI= 7074 at $6.25 SL=4.75 BUY CALL OCT-85 LU-JQ OI= 724 at $4.25 SL=3.25 Picked on June 29th at $66.69 PE = 56 Change since picked +11.31 52 week low =$26.72 Analysts Ratings 9-11-11-0-0 52 week high=$79.75 Last earnings 04/99 est 0.15 actual 0.17 Next earnings 07-22 est 0.23 versus 0.16 Average daily volume = 9.12 mln Chart = http://quote.yahoo.com/q?s=LU&d=3m ***** NOK - Nokia Corp $98.13 (+3.69)(-.12)(+9.31)(-.88)(+4.13)(+3.62) Nokia is the world's leading mobile phone supplier and a leading supplier of mobile and fixed telecom networks including related customer services. Nokia also supplies solutions and products for fixed and wireless datacom, as well as multimedia terminals and computer displays. Nokia has been on a run since early June, with a couple of short periods of consolidation. After its latest four days of consolidation, Nokia headed north again mid-week, kick-started by good earnings from Motorola. It pushed back above its 10 dma, where it remains. Motorola's growth was attributed to improving chip sales and strong growth in wireless phone sales. That bodes well for NOK, the leading wireless phone maker, as it heads toward its own earnings date. Nokia has also announced a number of new telecom network deals in recent months. Another positive for NOK is that its trading volume picked up a bit on Friday, when the stock gained $1.13. Market permitting, the stock should provide another 2 to 3 days of good gains. Nokia reports earnings July 22nd, BEFORE the bell, so plan to close your positions by the end of trading on Wednesday. On Friday, Nokia announced an agreement with Fujian Mobile Telecommunications Bureau to provide both equipment and services as part of an expansion of Fujian's GSM network in China. BUY CALL AUG- 95*NAY-HS OI=1337 at $7.63 SL=6.00 BUY CALL AUG-100 NAY-HT OI=1643 at $4.88 SL=3.00 BUY CALL OCT-100 NAY-JT OI= 529 at $8.50 SL=6.50 Picked on June 15th at $82.00 PE = 44 Change since picked +$16.13 52 week low =$29.53 Analysts Ratings 9-5-0-0-0 52 week high=$97.63 Last earnings 03/99 est 0.39 actual 0.48 surprise=+26% Next earnings 07-22 est 0.49 versus 0.35 Average daily volume = 2.15 mln. Chart = http://quote.yahoo.com/q?s=NOK&d=3m ***** NXLK - Nextlink Communications, Inc. $95.94 (+2.94)(+14.94) Nextlink Communications is a local exchange carrier that provides telecommunication services via its own fiber-optic network. They provide switched local and long distance services to primarily small to medium-sized businesses. This fast growing broadband telecommunication provider has 26 networks in 15 states and services in 41 markets. Just this week they began offering commercial service in Northern and Central New Jersey. This company is proving itself to be one of the fastest growing end to end broadband providers in the industry. An unexpected, but very welcome surprise hit the press on Thursday. Nextlink announced they are having a 2:1 stock split payable on August 27th! However, it is subject to shareholders' approval of increasing the number of authorized shares. According to information we previously had for NXLK, there's 110.33 mln. shares authorized and only 35.76 mln. issued; therefore plenty of shares available for the proposed 2:1 stock split. After contacting Investor Relations at Nextlink, they explained there is a necessity for a further increase in the number of shares. Many of the existing shares authorized are actually part of reserve designated for company options, convertibles, 401K plans, etc. and cannot be used for a common stock split. NXLK was unstoppable Monday gaining another $4.75 and setting its newest 52-week high at $98.44. For the next two days the stock pulled back slightly trading in a narrower range around $92-94. Then bang, a 2:1 split announcement drove NXLK upwards as it tested near resistance and claimed $5.13 for the day. Friday, the stock came out strong but experienced some minor consolidation on moderate volume. At this point, solid support is difficult to determine with the stock jumping between $90 and $98. But now the sky's the limit for NXLK. Earnings are expected on July 30th followed by a proposed 2:1 stock split on August 27th. The run-up may continue. Keep stop losses in place for protection! BUY CALL AUG- 90*QNF-HR OI=124 at $11.25 SL= 9.00 wait for a dip BUY CALL AUG- 95 QNF-HS OI=231 at $ 8.50 SL= 6.50 BUY CALL AUG-100 QNF-HT OI=105 at $ 6.50 SL= 4.75 BUY CALL OCT- 95 QNF-JS OI= 58 at $13.63 SL=11.00 BUY CALL OCT-100 QNF-JT OI= 19 at $11.50 SL= 9.25 Picked on July 11th at $93.00 PE = N/A Change since picked +2.94 52 week high=$98.44 Analysts Ratings 7-0-4-0-0 52 week low =$10.56 Last earnings 03/99 est= -2.28 actual= -2.17 surprise=4.82% Next earnings 07-30 est= -2.43 versus= -1.42 Average daily volume = 546 K Chart = http://quote.yahoo.com/q?s=NXLK&d=3m **** VOD - Vodaphone AirTouch $214.25 (+7.13)(+1.63)(+.75)(-8.06) Vodaphone is the number one mobile communications company in the UK and recently doubled its size by purchasing AirTouch Communications. The new Vodaphone AirTouch operates analog and digital cellular networks, along with paging and mobile data services. The company serves 29 million customers in 23 countries. VOD's major competitors are British Telecom, AT&T and Cable & Wireless. After a bout of four straight down days, VOD came back strong and has now gained the last three days in a row. The stock is at a critical resistance level. VOD is now trading just below its 52 week high and has formed a triple top. If the stock can break its high on strong volume, it could really jump up. VOD does have a tendency to channel up and down, so don't expect a straight up gain, but with a 4-1 stock split announcement in the works to be announced on July 21, we do see VOD breaking to new highs [Well, we would like to see VOD break to a new high. Nothing is guaranteed and this almost seems too easy. That means you have to be on guard and watch your play! - Kimo] Not much news to report on the VOD front, but the stock seems to be the beneficiary of its strong new customer numbers that the company announced last week. The company added 587,000 net new customers last quarter, which was an increase over the previous years quarter of 206,000. BUY CALL AUG-210 VOD-HB OI=1806 at $12.50 SL= 9.75 ITM $4.25 BUY CALL AUG-220*VOD-HD OI=2041 at $ 7.50 SL= 5.75 BUY CALL OCT-210 VOD-JB OI= 222 at $20.63 SL=16.00 ITM $4.25 BUY CALL OCT-220 VOD-JD OI= 258 at $16.25 SL=12.50 BUY CALL OCT-230 VOD-JF OI= 63 at $11.88 SL= 9.25 Picked on June 26th at $204.75 PE = 80 Change since picked +9.50 52 week low =$ 94.00 Analysts Ratings 4-4-1-0-0 52 week high=$216.44 Last earnings 04/99 est ? actual ? Next earnings ? est 1.56 versus ? Average daily volume = 1.16 mln Chart = http://quote.yahoo.com/q?s=VOD&d=3m ******* Retail ******* BBY - Best Buy $75.69 (-.31)(+3.00)(+9.56)(+3.44) Best Buy Company sells personal computers and other home office products, consumer electronics, entertainment software, major appliances and related accessories nationwide through its retail stores. It is one of the fastest growing retail specialty companies in the country. Best Buy took off following a record first quarter. After it was added to the S&P 500 on June 29th, it exploded further to the upside. On July 9th, however, the succession of daily new highs came to an end and the stock entered a period of consolidation to digest its gains. Technical indicators have turned negative, and we recommend that new positions be added only after volume returns and the price begins to climb again. Like its competition, Circuit City, BBY has managed to thrive in the cut-throat competition in the discount electronics business, even as others have fallen by the wayside. The company is capitalizing on the digital revolution, as consumers spend big bucks on everything digital. It operates 314 "superstores" in 36 states with plans to open 45 to 50 new stores each year. In fact, BBY plans to double its size and sales in the next 5 years. (Sales were just over $10 bln. last year.) In addition to more stores, the company will add new products and services and further develop its Internet strategy, where it currently offers music and movies online. BBY beats earnings estimates quarter after quarter. It has even surpassed its own sales projections for digital products, and while PC prices are declining, high volume is making up for lower per unit revenue. There is no new news on BBY. The period of consolidation the stock has been stuck in may be nearing an end, since the daily lows have gotten a bit higher over the last few days. With a reported positive inflow to mutual funds over the last few weeks, index fund managers will have buy more Best Buy soon. If Greenspan says anything this week that suggests a rate hike is becoming more likely, high growth retail stocks like BBY would really suffer. BUY CALL AUG-75*BBY-HO OI=318 at $6.38 SL=4.75 BUY CALL AUG-80 BBY-HP OI=436 at $4.38 SL=2.75 BUY CALL SEP-75 BBY-IO OI=210 at $8.63 SL=6.50 BUY CALL SEP-80 BBY-IP OI=131 at $6.50 SL=4.75 Picked on July 1st at $68.81 PE = 51 Change since picked +$ 6.88 52 week low =$15.97 Analysts Ratings 6-7-3-0-0 52 week high=$80.50 Last earnings 05/99 est .20 actual .22 surprise=10% Next earnings 09-15 est .29 versus .21 Average daily volume = 1.83 mln. Chart = http://quote.yahoo.com/q?s=BBY&d=3m ***** EL - Estee Lauder Cos $56.00 (+4.19) For those not familiar with the Estee Lauder name, welcome to the world of beauty. The Estee Lauder Cos. sell high end cosmetics, skin care and fragrances. The company owns popular brands like Clinique, Bobbi Brown essentials and jane. These products aren't found in your local drugstore, but at specialty retailers and department stores. A few of its competitors are L'Oreal and Revlon. EL recently broke out of a consolidation phase and since has made strong moves up. The stock closed right on its daily and 52 week high on Friday and has very strong technicals. Last earnings season, stock in EL ran from $43.25 to $49.00 the week before earnings. We are now 7 trading days from earnings and though we could see some sporadic profit taking, we feel EL will continue to run up higher into its earnings date. There isn't any news to account for the recent run up in EL shares, but it looks like the stock went through a little bit of a post split lull and now has decided to start a new move up. Be careful of profit taking since the shares have gained about $8 in the last few weeks. This is quite a bit for a slower moving stock like EL. BUY CALL AUG-50*EL-HJ OI=161 at $6.50 SL=4.75 ITM $6.00 low prem BUY CALL AUG-55 EL-HK OI= 41 at $3.38 SL=1.75 ITM $1.00 BUY CALL AUG-60 EL-HL OI= 0 at $1.25 SL=0.00 BUY CALL OCT-55 EL-JK OI= 97 at $4.38 SL=3.25 ITM $1.00 BUY CALL OCT-60 EL-JL OI= 0 at $2.75 SL=1.50 (60 strikes are new, wait for open interest) Picked on July 16th at $56.00 PE = 55 Change since picked +0.00 52 week low =$23.34 Analysts Ratings 1-6-1-0-0 52 week high=$56.00 Last earnings 04/99 est 0.19 actual 0.19 Next earnings 07-27 est 0.18 versus 0.16 Average daily volume = 343 K Chart = http://quote.yahoo.com/q?s=EL&d=3m ***** HD - Home Depot $69.63 (+3.81) Toys R Us for Men. Every new Home Depot contains over 130,000 square feet of tool, hardware, construction material and gardening heaven in a discount warehouse environment. With over 800 stores across the U.S. and Canada, HD is the largest home improvement chain in the country offering discount prices with a helpful, generally knowledgeable staff that prides itself on good service. Technically, HD has an exceptionally fine looking chart with indicators in strong positive territory over the last 45 days. Over a period of 10 days, beginning 12 days ago, HD showed good basing activity between prices of $63 to $66. Then Abby Joseph Cohen took over and specifically named HD in favorable light on CNBC. Also Fidelity Magellan holds HD as 1 of its top 10 picks. That's all it took for HD to march to a new high on Thursday of $69.94 on strong volume. Though you could call it a loss of $0.31 cents Friday, that was also just $0.31 off it's high of the day, still a bullish pattern. Earnings are not until August 18, so we're calling this a momentum play for now, but will switch it to an earnings play about 2 weeks prior if the pattern holds. Confirm market direction before playing or target shoot your entry. Use stops to protect profits and enjoy the ride. Some news is noted in the play above. Though customers can not yet purchase goods from the Home Depot Internet site, the ability to do so will be available in late Fall. ***No SEP or OCT strikes available yet BUY CALL AUG-65*HD-HM OI=6839 at $5.88 SL=4.25 ITM $4.63 BUY CALL AUG-70 HD-HN OI=6054 at $2.63 SL=1.25 BUY CALL AUG-75 HD-HO OI=2269 at $0.88 SL=0.00 BUY CALL NOV-70 HD-KN OI=3078 at $5.75 SL=4.00 BUY CALL NOV-75 HD-KO OI= 0 at $3.75 SL=2.00 feeling brave? Picked on July 18 at $69.63 PE = 60 Change since picked +0.00 52 week low =$31.62 Analysts Ratings 6-14-6-0-0 52 week high=$69.94 Last earnings 5/99 est 0.28 actual 0.32 surprise = 14.29% Next earnings 8-18 est 0.39 versus 0.31 Average daily volume = 3.51 mln. Chart = http://quote.yahoo.com/q?s=HD&d=3m ****************************** SEE DISCLAIMER IN SECTION ONE ******************************
The Option Investor Newsletter 7-18-99 Sunday 5 of 7 RETAIL CONTINUED **************** SNE - Sony Corp $125.56 (+11.18)(+1.63)(8.56) Established in 1946 in Japan, Sony is engaged in the development, design, manufacture, and sale of various kinds of electronic equipment, instruments and devices for the consumer and professional markets. Sony's principal manufacturing facilities are located in Japan, North America, Europe and Asia. In addition Sony is engaged in leasing, credit card business, satellite distribution services. The company is also actively engaged in the worldwide music and image-based software markets. Amazing, simply amazing is what we would have to say concerning Sony. SNE moved up over $11.00 for the week. The volume behind this move has been very strong, averaging over 250K. This move has come primarily on the news that by all indicators the Japanese economy is recovering, boosted by a string of favorable earnings reports from several brokerages on Thursday. The tensions between Taiwan and China did put a damper on trading on Friday. The Nikkei fell 183.56 or about 1% to end the day at 18,248.30. SNE has given back only $1.50 after setting a new high of $126.88 on Thursday. Technically SNE still looks strong. We would be remiss if we didn't remind you that profit taking could happen at any time. SNE has moved up from the $89.25 level since early June. That's over a 42% increase in the last six weeks, and it has only paused twice to catch its breath. If SNE keeps going then great, but please move your stops up to maximize your profits on this great play. We really are expecting some kind of pullback soon. SNE's 10 dma (previous support) is several points below it. Aside from Friday, SNE has been up several days in a row. Not much new in the way of news at this time. **Keep your stops tight if considering a new position.** BUY CALL AUG-120*SNE-HD OI=150 at $8.88 SL=$7.00 wait for dip BUY CALL AUG-125 SNE-HE OI= 19 at $6.00 SL=$4.75 (Low OI) BUY CALL OCT-125 SNE-JE OI= 8 at $9.63 SL=$7.50 (Low OI) Picked on June 29th at $108.19 PE = 30 Change since picked +$ 17.37 52 week high=$126.88 Analysts' ratings 1-0-0-0-0 52 week low =$ 26.81 Last earnings 3/99 est N/A actual N/A surprise=+0% Next earnings 3/00 est N/A versus N/A Average daily volume 196K Chart = http://quote.yahoo.com/q?s=sne&d=3m MISCELLANEOUS ************* GE - General Electric $118.88 (+1.75) GE might not call itself a conglomerate, but it is. Its 14 divisions make airplane engines, appliances, lighting, medical systems, plastics, power systems, and also include NBC, financial services, and electrical distribution and control. It is one of the largest and most diversified industrial corporations in the world. GE has been in a general uptrend with intermittent pullbacks since early June. On July 7th, just ahead of earnings, it pushed through resistance at its old all-time high of $177.43 and broke out to a new high of $118.75. It also set a new closing high of $117.94 on strong volume. Earnings came in a penny ahead of expectations for GE, whose earnings consistently meet analysts' estimates, but even so, GE fell back to bounce off its 10 dma and did not retest the new high again until Friday. On Friday, July 16th, GE not only set a new all-time high of $119.00, but it also CLOSED above the recently set $118.75--a bullish sign for a stock with over 3.2 bln shares outstanding. GE gained $1.31 that day, and it closed right near the day's high. Market permitting, GE will light up in the coming days. In recent news, GE made the top spot on both Forbes Global Super 100 list and its World Super Fifty list for the second year in a row. It also appointed David L. Calhoun as president and CEO of GE Employers Reinsurance Corp. Mike Zafirovski will take Calhoun's former job as President and CEO of GE Lighting. In a display of the company's commitment to the Internet, John F. Welch, chairman of GE, will join the board of NBC Internet, a GE unit. Overseas, the British government has given the O.K. for GE Power Systems and BP Amoco to build a $500 million, 500 megawatt power plant in South Wales--designed to be the most efficient gas-fired power station in existence. Finally, GE Capital Corp. will begin selling trust funds in Japan in August. BUY CALL AUG-115*GE-HC OI=3832 at $6.50 SL=4.75 BUY CALL AUG-120 GE-HD OI=2661 at $3.25 SL=1.75 BUY CALL SEP-115 GE-IC OI=4343 at $7.88 SL=6.25 BUY CALL SEP-120 GE-ID OI=3764 at $5.00 SL=3.25 Picked on July 1st at $118.88 PE = 39 Change since picked $+ 0.00 52 week low =$ 69.00 Analysts Ratings 7-9-2-0-0 52 week high=$118.75 Last earnings 06/99 est .84 actual .85 surprise=01% Next earnings 10-08 est .79 versus .69 Average daily volume = 5.00 mln. Chart = http://quote.yahoo.com/q?s=GE&d=3m PUTS, PUTS, PUTS ***************** Put plays can be very profitable but have a larger risk than call plays. When a stock is falling the entire investment community (except the shorts) is hoping it will reverse and start back up. The company management is also doing everything they can to shore up their stock price. The company issues press releases, brokers talk it up, analysts try to put a positive spin on everything. Then of course there is the death knell, the "buy recommendation" simply because the price has dropped to some level that analysts feel attractive again. Buyers who like the stock wait until it appears a bottom has been reached and then jump on it in a feeding frenzy. They may already have a large position and are averaging down. Many factors can stop a free falling stock in mid drop. Recommended Puts **************** FDX - Federal Express Corp. $47.44 (-1.06)(-6.43) Headquartered in Memphis, TN, FedEx is the world's largest express shipping company. Its 192,000 employees ship over 3.2 million packages daily to 210 countries around the world. In addition to air freight, FDX offers business-to-business delivery through its RPS ground shipping unit. Its entire hub and spoke shipping system (not just its airplanes and trucks) operates like finely tuned, well-oiled machine. We added FedEx last week after it went into a tailspin the week before. It began its descent when it failed to meet the high market expectations in its fourth quarter earnings results. Although the company beat analysts' estimates by $.02, and topped last year's fourth quarter by $.16, it could not deliver the "whisper number" built into the stock price. An earnings warning from Airborne Freight 10 days ago did not help matters, either. Perhaps the biggest reason FDX continues to lose altitude is the rising cost of fuel. Oil prices passed their 18 month high last week, and set a new high on Friday. High oil prices are depressing the entire Transportation Index, since fuel is a large portion of expenses for an airline. Although FDX uses hedging to offset fluctuations in oil prices, an extended period of high fuel costs will still hurt the airline. FedEx has remained below its 10 dma for the last 2 weeks. Long term, FedEx is a healthy and strong company, but in the short term, we expect it to fall lower. Caution: a significant drop in oil prices would hurt this play. BUY PUT AUG-45 FDX-TI OI= 84 at $1.88 SL=1.00 BUY PUT AUG-50*FDX-TJ OI=471 at $4.38 SL=2.75 Average daily volume = 1.39 mln. Chart = http://quote.yahoo.com/q?s=FDX&d=3m **** JCP - J.C. Penney $46.50 (+1.06)(-4.19) J. C. Penney Company, Inc. main business consists of providing merchandise and services to consumers through department stores that include catalog departments. The company markets apparel, accessories, home furnishings, jewelry and shoes. To boost sales at its JCPenney stores, the company is expanding that chain's private-label brands (Arizona Jean Co., Hunt Club, Worthington) and plans to feature them in special boutiques within the stores. The Company also has several direct marketing insurance subsidiaries which market life, health, accident and credit insurance as well as a growing portfolio of non-insurance products. JC Penney started the week off slowly but got a series of management changes to end the week on a positive note. It appeared that JCP was about to crack the $45 support level until the announced a management shake up that involved hiring Vanessa Castagna as Executive Vice President and Chief Operating Officer. This is the first time in awhile that JCP has hired from outside their company but she is more than qualified after her experience at Wal-mart. She has played a big role in WMT's success. JCP also announced some other changes in upper management. This was the reason for the pop up on the open Thursday. We are keeping the stock as a put play since it has failed to move above 50-dma at $49. This was the kind of news that really only has a short term impact. The new management can't turn things around over night so we expect the stock to challenge support at $45 again soon. Plus any market correction will punish the weakest stocks first and JCP falls into that category. BUY PUT AUG-50 JCP-TJ OI=640 at $4.50 SL=2.75 BUY PUT AUG-45*JCP-TI OI=777 at $1.56 SL=0.75 Average Daily Volume = 844 K Chart = http://quote.yahoo.com/q?s=JCP&d=3m **** WPI- Watson Pharmaceutical $34.06 (-1.88)(-2.25) Watson Pharmaceuticals manufactures and markets generic and proprietary drugs, focusing on hard-to-make niche pharmaceuticals. The company makes generic versions of brand- name products, including anti-hypertensives Tenex and Dilacor, analgesics Vicodin and Lortab, and asthma drugs Proventil and Ventolin. Watson's proprietary drugs include Microzide, an anti-hypertensive, Loxitane, an anti-psychotic drug, and Norco, an analgesic. The company markets its products to drug distributors, wholesalers, drugstore chains, hospitals, and HMOs. Watson is showing all the signs of a company in deep trouble regardless of the company announcements saying everything is ok. As you all know, there is never a sure thing in the market and it pays to use caution but let's look at some of the signs. First, look at a chart with the 50-dma. The company has been saying for months that everything is being taken care of but the stock has on numerous occasions been denied passage through the 50-dma. Not only denied but fervently pushed back down. This is usually a sign of shorting, which is confirmed by the high short ratio of 6.00. Second, you should always be weary of a company that delays its filing of quarterly results until the last minute. They have 45 days after each quarter to release the results unless it is the year end, which allows them 90 days after the quarter. WPI is scheduled for Aug 12 or 3 days before the deadline. Third, check out action recently on the put contracts. It's usually tough to find good volume and open interest for put plays but not with WPI. Their puts are more active than the calls, even on the out of the money contracts like the $30s. So it is appearing as if the writing is on the wall for Watson. We do want to emphasize the importance of stops with this play. If a surprise of some sort rattles the stock, it could cause the short players to cover. This would cause a spike up in the stock price so keep your stops set. BUY PUT AUG-40*WPI-TH OI= 823 at $6.63 SL=4.75 ITM BUY PUT AUG-35 WPI-TG OI=2867 at $3.00 SL=1.50 Average Daily Volume = 578 K Chart = http://quote.yahoo.com/q?s=WPI&d=3m ***** DE - Deere and Company $35.69 (-2.50) Deere is involved with providing & administering financing for retail purchases of new & used equipment manufactured by the Company's agricultural, industrial and commercial & consumer equipment divisions. The company makes a full line of farming, construction, earth-moving, forestry, and lawn and garden maintenance machines. Its construction equipment includes backhoes and excavators. These and other products make Deere the world leader in farm equipment and other specialized products. DE and other heavy equipment makers are struggling recently as profit warnings are emerging for the sector. On Wednesday industry analysts began announcing that the sector earnings for the current quarter will come in below last year and under forecast. They cited the Asian crisis and falling commodity prices for slowing demand for new equipment. CAT proved the analysts correct on Friday by reporting results that were .02 cents below expectations. CAT also said the rest of the year looks weak. These concerns have sent DE tumbling toward year lows. The stock is currently hovering near the 200-dma. This may provide support for the stock over the next couple sessions but it looks to have broken just underneath that mark. Cautious investors may want to wait for the stock to fall below $35 before opening new plays. The next stop from there should be the old 52-week low at $28.38. If we get the pullback in the market that we are expecting, it should trigger even more selling in DE and start a new push downward. BUY PUT AUG-40*DE-TH OI= 204 at $4.75 SL=3.25 Higher Delta BUY PUT SEP-35 DE-UG OI=1123 at $1.75 SL=0.88 Average Daily Volume = 1.06 mln Chart = http://quote.yahoo.com/q?s=DE&d=3m **** NDB - National Discount Brokers $48.44 (-5.75) NDB is a holding company engaged in NYSE and AMEX specialist activities and also offers online retail brokerage trading. They are a national trading firm with offices all over the country that acts as market makers for some 3400 different NASDAQ and OTC stocks. Through their division Triak, they offer deep-discount trading for individual investors. This part of the business has been put in the forefront as the online trading war heats up. Has anyone noticed the weakness in online brokers at a time when they have normally sparkled in the past? This group usually has a fabulous earnings run as companies tell investors of the thousands of new customers signed up during the previous quarter. But it has been relatively quiet this time around. Charles Schwab who released earnings on Friday probably summed it up best when they said the second half of the year would show signs of slow down and lower profits. All the major companies have reported earnings expect for E-trade which is the first part of this week. There may be some anticipation for EGRP's numbers but that could be the entry point we are looking for. Then the group will be in a good position to under perform in the near term, as long as E-trade doesn't have some sort of surprise with their earnings. We especially like NDB since it had a big move up the end of June. It looks over-valued and may have some catching up to do with other stocks in the sector. Watch out for support from the 50-dma around $47.50 but any break of that level will be a bearish indicator for NDB. BUY PUT AUG-50 NDB-TJ OI=566 at $5.38 SL=3.75 BUY PUT AUG-45*NDB-TI OI=619 at $3.25 SL=1.75 Average Daily Volume = 1.32 mln Chart = http://quote.yahoo.com/q?s=NDB&d=3m **** U - USAir Group Inc. $40.19 (-4.81) As one of the top 10 airlines in the U.S., US Airways Group is the holding company for US Airways, Inc., Shuttle, Inc., Allegheny Airlines, Inc., Piedmont Airlines, Inc., and PSA Airlines, Inc. As a certified air carrier, they are engaged primarily in the business of transporting passengers, mail, and property. USAir is still trying to emerge from a rough decade which has included low-fare competition, labor disputes, and early retirement by more than 300 pilots. Currently one of their more popular routes comes from Shuttle, Inc. which operates the US Airways Shuttle between New York and Washington. Higher oil prices and lingering problems have sparked a new round of selling in USAir. It seems the company is unable to put old problems behind them and are now facing other troubles as well. On Thursday U warned for the second time this year that earnings will miss estimates. They cited recent revenue trends coupled with higher labor costs and fuel prices for the shortfall which is expected to last the remainder of 1999. This announcement caused one analyst downgrade from ING Barings who lowered U from a buy to a hold. It also caused S&P to revise the USAir's debt rating lower to stable from positive. The final blow came Friday when their mechanics rejected a tentative labor pact and approved a strike, if necessary. All of this has put U's stock in a nose dive. We don't see much support for the stock or any possible change in sentiment over the short- term. In fact, it closed right near the low on Friday. But be careful picking the entry point because of the spike down it had on Thursday and Friday. We might get a bounce from investors looking for an oversold position. It is also important to watch the entire sector for signs of life since they usually move in tandem. The price of oil will play a role also as Airlines are nervous now that we are back above the $20 a barrel level. BUY PUT AUG-45 U-TI OI=330 at $5.38 SL=3.75 BUY PUT AUG-40*U-TH OI=327 at $2.06 SL=1.00 Average Daily Volume = 859 K Chart = http://quote.yahoo.com/q?s=U&d=3m ********** Combos ********** Breaking Records For Breaking Records... U.S. stocks continued their record-breaking achievements across the board Friday, ending a week of solid corporate earnings. The Dow industrial average rose another 23 points to 11,209, beating the previous record of 11,200. The Nasdaq index of technology stocks gained 25 points to close at 2,864, its third consecutive record finish. The S&P 500 index climbed to another new high, rising 9 points to 1,418. In the broader market, advancers edged out decliners 1,451 to 1,446 on a day of active trading (double expiration of stock/index options); 710 million shares on the New York Stock Exchange. Thursday's new plays (positions/prices): QualComm QCOM AUG125C/140C $11.00 debit Cyberian Outpost COOL AUG12-CC $11.12 debit Cyberian Outpost COOL AUG12-PUT $1.38 credit Amazon AMZN AUG105C/120C $12.50 debit Qualcomm (QCOM) was subdued during the morning session and the bullish debit spread was easily opened at the target entry price before it moved higher later in the day. Cyberian Outpost (COOL) was quite a different story. The stock price moved up quickly, threatening to leave everyone behind. It faltered near the end of amateur hour and the selling came on in earnest. Technical traders noticed that the stock had moved up significantly over the past two days and most of the new players were waiting for a lower entry price. In our case, we bought the position at the recommended target even though it traded below that price later in the day. Amazon (AMZN), a position that we commented on but didn't have time to publish, was available at the recommended net debit (tracking play only). Portfolio plays: Network Associates was an interesting volatility play. The stock price finished right at our sold position and a 'market on close' order produced a $0.50 profit on the overall spread (three days). In our case, we rolled forward to the August $20 call, hoping to increase our profit with the sale of another overpriced option. Other big winners this month include the credit-spread butterfly on British Telephone (BTY) that finished at the maximum profit; $2.12, the Sandisk (SNDK) debit straddle that is now trading at a $30+ return (we closed for $5 credit), and the Earthlink (ELNK) covered-combo that returned $2.12 on a position that was $10 ITM. Sun Microsystems was a big mover today in the long term portfolio. The stock price climbed $2.38, allowing the perfect roll-out to August positions for our 2001 LEAP. General Motors (GM) continues to recover from last week's lawsuit news and Monday should offer an excellent opportunity to sell new positions in our January 2001 calendar spread. NEW PLAYS ********** RAD - Rite Aid $23.37 *** Volatility Play *** Rite Aid is one of the nation's leading drugstore chains with annual revenues of nearly $13 billion and approximately 3,800 stores in 30 states and the District of Columbia. RAD plans to open 100 new stores each year and the prototype store features easy access, expanded parking, a full-service and drive-thru pharmacy, one-hour photo finishing, express mail service, convenience foods, and expanded cosmetics departments. Rite Aid also owns PCS Health Systems, which provides pharmacy benefit management programs and services that can help improve patient health and reduce health care costs. Rite Aid's private label program is one of the industry's largest, with over 1,200 brands that enjoy a high level of customer loyalty. Revenues are everything in retail and Rite Aid just announced that same-store sales for June rose 8% percent over the prior year period led by a 15% increase in the pharmacy department. This type of profit is exactly what the company needs to return to investor's favor and analysts say the stock is becoming more attractive at the current price. There are also those who think that a large scale merger makes sense now for the giants in the industry. Options traders believe it may be Wal-mart (WMT) or some other large retail chain and implied volatility and volume increased this week on rumors that the drugstore company is now a takeover candidate. Both Wal-Mart and Rite Aid declined comment but the fact that Wal-Mart said it will sell up to $10 billion in debt securities fueled the speculation. The front-month disparity offers us an excellent opportunity to speculate on the outcome of the rumors. PLAY (speculative - bullish/calendar spread): BUY CALL OCT-25 RAD-JE OI=1370 A=$2.31 SELL CALL AUG-25 RAD-HE OI=1011 B=$1.56 INITIAL NET DEBIT TARGET=$0.62 TARGET ROI=50% It is generally best to establish this type of spread at least 2 - 3 months before the long option expires, capitalizing on the ability to sell another option against the longer-term position. That is the basic idea in this spread play; selling time value in the options when they are overpriced (high implied volatility) and buying it back (if necessary) when they return to intrinsic value. Ideally, the spreader would like to have the stock finish just below the sold strike when the near-term option expires. If the short options are in-the-money at expiration, he will have to buy them back to preserve the long-term position. Chart = http://quote.yahoo.com/q?s=RAD&d=3m ***** RIGS - Riggs National Corp. $20.50 *** Something Fishy Here! *** Riggs National Corporation, the largest bank holding company headquartered in the nation's capital, has 53 branches in the Washington, D.C. metropolitan area, as well as three locations in London, England. The share price was up almost $1 at the close Friday after an abrupt change in direction last week. The stock appears to have shed the effects of mediocre earnings and is now making a run at the intermediate resistance area near $20. The company said a variety of factors including non-recurring securities gains and a lower income tax rate in the second quarter of 1998, together with a reduction in net interest reduced their income for the second quarter of 1999. So the earnings report is old news but volatility and volume both climbed last week as investors sold puts and bought calls. One customer aggressively bought about 500 August $22 calls on Friday and the specialist says the same account reappears on the buy side whenever the stock begins rising and disappears when the stock falters. The chart is interesting and there is now an excellent disparity in the front-month options. A unique bullish position exists for those who like diagonal spreads. PLAY (conservative - bullish/diagonal spreads): BUY CALL NOV-15 RNQ-KC OI=65 A=$6.87 SELL CALL AUG-20 RNQ-HD OI=418 B=$2.31 INITIAL NET DEBIT TARGET=$4.38 TARGET ROI=35% Chart = http://quote.yahoo.com/q?s=RIGS&d=3m ***** BNBN - Barnes&noble.com $19.19 *** Conservative Speculation *** BNBN is an online retailer of books and complementary information, entertainment and intellectual property-based products. Since launching its online business in May 1997, BNBN has become one of the world's largest Web sites and is the fifth largest e-commerce retailer. Focused largely on the sale of books & related products, the company has capitalized on the recognized brand value of the Barnes & Noble name to become the second-largest, and one of the fastest growing, online distributors of books. The big news is the new referral program and a partnership with online recipe site Ucook.com. Under the new referral plan, the company is asking its customers to embed a special link to the site within their email. In return for the free link, customers will receive a 5% commission on each purchase that comes from the Web link. Barnesandnoble.com has struggled to overcome the impression that it is playing catch-up to the e-commerce leader, Amazon (AMZN). Despite being one of the Web's top e-commerce sites in traffic and sales, BNBN always seems to follow in Amazon's footsteps. This new program really makes e-commerce participation available to the public so "look out Amazon"! BNBN isn't worried about the competition anymore, because they are fast becoming the competition. A unique deep ITM position exists for those who are bullish but extremely conservative. PLAY (conservative - bullish/debit spread): BUY CALL AUG-12.50 BEU-HV OI=147 A=$7.00 SELL CALL AUG-17.50 BEU-HW OI=385 B=$2.75 INITIAL NET DEBIT TARGET=$4.12 ROI(max)=21% B/E=$16.62 And for those who are more aggressive. PLAY (aggressive - bullish/debit spread): BUY CALL AUG-12.50 BEU-HV OI=147 A=$7.00 SELL CALL AUG-20.00 BEU-HD OI=944 B=$1.43 INITIAL NET DEBIT TARGET=$5.37 ROI(max)=39% B/E=$17.87 Chart = http://quote.yahoo.com/q?s=BNBN&d=3m ***** TA - Transamerica Corp. $75.50 ** Aegon Merger *** Transamerica is a financial services organization which engages primarily through its subsidiaries in life insurance, commercial lending, leasing and real estate services. Transamerica's life insurance business is generated through lines of business which include individual life insurance, asset management, structured settlements, annuities, and reinsurance. Commercial lending is provided by two core business units: distribution finance and business credit. Transamerica Leasing leases, services and manages containers, chassis and trailers throughout the world. Transamerica, famous for its pyramid-shaped headquarters, is being bought by AEGON NV (AEG) and recently shares in the Dutch insurer have fallen significantly. Aegon now says its largely share-funded deal to buy Transamerica is not under threat and also said they might just re-negotiate if the stock price falls further. The $9.7 billion transaction, most of it in stock, has been structured around a pivot price of $95.20 with upper and lower limits of $128.52 and $61.88. It seems logical to assume that both companies still want the transaction to occur and Aegon shares may be finding a bottom near the $70 mark. If it can remain anywhere near that price for the month of August, this play should expire profitably. PLAY (very conservative - bullish/debit spread): BUY CALL AUG-60 TA-HL OI=162 A=$16.00 SELL CALL AUG-70 TA-HN OI=474 B=$6.87 INITIAL NET DEBIT TARGET=$9.00 ROI(max)=11% Chart = http://quote.yahoo.com/q?s=TA&d=3m ***** PGR - Progressive Corp. $143.13 *** Technicals Only *** Progressive Auto Insurance is one of the nation's largest auto insurers. In business since 1937, the company provides drivers with competitive rates and innovative services designed to make it easy to shop for, buy, and own their insurance policies. Progressive provides policyholders with 24-hour services over the phone, the Internet, and through 30,000 Independent Agents in the United States. Progressive underwriters consistently receive high ratings from A.M. Best, an independent firm that rates the financial strength and performance of auto insurers. Earnings are expected next week and some investors are hopeful that a split will be announced. Others simply want a buyout or merger agreement with one of the industry giants like Allstate, Statefarm or Geico. In the case of either event, the stock price would rocket but we don't foresee any surprises, just another quarterly report. The current long-term, technical trend is slightly bullish with an excellent support area near $135. If the earnings are anything but horrendous, it should continue. PLAY (conservative - bullish/debit spread): BUY CALL AUG-125 PGR-HE OI=31 A=$20.00 SELL CALL AUG-135 PGR-HG OI=296 B=$11.62 INITIAL NET DEBIT TARGET=$8.25 ROI(max)=21% B/E=$133.25 Chart = http://quote.yahoo.com/q?s=PGR&d=3m ****************************** SEE DISCLAIMER IN SECTION ONE ******************************
The Option Investor Newsletter 7-18-99 Sunday 6 of 7 Earnings Calendar Week of July 19yh Day Symbol Est. Company Mon ATX N/A A.T. Cross Co. Mon ALDA N/A Aldila Inc. Mon AP N/A Ampco-Pittsburgh Corp. Mon ARQL -0.28 ArQule Inc. Mon ARV 1.21 Arvin Industries Inc. Mon AIC 0.37 Asset Investors Mon BAC 1.14 Bank America Corporation Mon BK 0.42 Bank of New York Mon BDK 0.77 Black & Decker Mon BRCD N/A Brocade Communications System Mon BTLR N/A Butler Manufacturing Co. Mon CNF 0.71 CNF Transportation Mon CHFC 0.49 Chemical Financial Corp. Mon CVAL N/A Chester Valley Bancorp. Inc. Mon CAST 0.28 Citation Corporation Mon C 0.64 Citigroup Mon CBCF 0.52 Citizens Banking Corp. Mon CTXS 0.31 Citrix Systems Inc. Mon PAR 0.24 Coastcast Mon COMR 0.4 Comair Holdings Inc. Mon CNAF N/A Commercial Natl Fincl Mon CQ 0.09 Comsat Corp. Mon CFWY 0.29 Consolidated Freightways Corporation Mon CAL N/A Continental Airlines Inc. - Class B Mon CALa N/A Continental Airlines Inc.-Class A Mon GLW 0.46 Corning Inc. Mon SM 0.24 dana corp Mon DLI N/A Del Laboratories Mon DAL 2.29 Delta Airlines Mon DP 0.37 Diagnostic Products Mon D 0.61 Dominion Resources Mon DCLK -0.13 DoubleClick Inc. Mon EGRP -0.1 E*Trade Group Inc. Mon ETN 1.56 Eaton Corp. Mon FEIC N/A Fei Company Mon FILE 0.1 FileNet Corp. Mon FAF 0.59 First American Financial Corp. Mon FSCO 0.35 First Security Corp. Mon UNTD 0.32 First United Bancshares Mon FISV 0.27 Fiserv Inc. Mon FWRD 0.25 Forward Air Corp Mon HRC 0.27 HEALTHSOUTH Corp. Mon HBR N/A Harborside Healthcare Corp. Mon HE 0.65 Hawaiian Electric Industries Inc. Mon HTLD 0.29 Heartland Express Mon HUBb N/A Hubbell Inc. Mon IBM 0.88 IBM-International Business Machines Mon IBP 0.66 IBP Inc. Mon IPS 0.32 IPSCO Mon ISSX 0.03 ISS Group Mon IFMX 0.07 Informix Corp. Mon INVX 0.18 Innovex Inc. Mon IGR N/A Integra Inc. Mon IMG N/A Intermagnetics General Mon IGT 0.38 International Game Technology Mon IVAC -0.2 Intevac Inc. Mon JEC 0.63 Jacobs Engineering Group Inc. Mon JNC 0.69 John Nuveen & Co. - Class A Mon KMET 0.09 KEMET Corp. Mon KWIC 0.11 Kennedy-Wilson Inc. Mon KSTN 0.51 Keystone Financial Inc. Mon LSCC 0.52 Lattice Semiconductor Corp. Mon LM 0.47 Legg Mason Inc. Mon LHSP N/A Lernout & Hauspie Speech Products Mon LXK 0.49 Lexmark International Group Inc. Mon LMT -0.13 Lockheed Martin Mon LCE 0.91 Lone Star Industries Mon MAFB 0.47 MAF Bancorp Mon MCBC N/A Macataw Bank Mon MNI 0.49 McClatchy Co. Mon MBNY N/A Merchants New York Bancorp. Mon MSFT 0.35 Microsoft Corporation Mon MEH 0.86 Midwest Express Holdings Mon MNES N/A Mines Safety Appliance Mon JPM 2.14 Morgan JP Co. Inc. Mon MOSX N/A Mosaix Inc. Mon NBTB 0.38 NBT Bancorp. Mon NNBR 0.12 NN Ball & Roller Inc. Mon NB N/A Nationsbank Corp.(BankAmerica) Mon NATR 0.29 Nature's Sunshine Products Mon NJR 0.17 New Jersey Resources Corp. Mon GAS 0.55 Nicor Inc. Mon NTRS 0.85 Northern Trust Corporation Mon OAK 0.47 Oak Industries Inc. Mon PNC 0.98 PNC Financial Corp. Mon PRIA -0.17 PRI Automation Inc Mon PPD 0.39 Pre-Paid Legal Services Inc. Mon PRGX 0.21 Profit Recovery Group Mon DGX 0.32 Quest Diagnostics Mon NGH N/A RJR Nabisco Holdings Corp. Mon RAL 0.27 Ralston Purina Co. Mon RYN 0.55 Rayonier Inc. Mon RBC 0.5 Regal-Beloit Corp. Mon RGA 0.51 Reinsurance Group Amer Mon RMDY 0.18 Remedy Corp. Mon RSHX N/A Rockshox Inc. Mon ROH 0.69 Rohm & Haas Mon RAM N/A Royal Appliance Mfg Mon RDK 0.25 Ruddick Corp. Mon SCG 0.36 SCANA Corp. Mon CKH 0.82 SEACOR Holdings Inc. Mon SEIC 0.76 SEI Investments Company Mon SCH 0.16 Schwab (Charles) Corp. Mon SG 0.43 Scientific Games Holding Corp. Mon VO -0.46 Seagram Company Ltd. Mon S 0.85 Sears Roebuck & Co. Mon SKV N/A Sentry Technology Corporation Mon SWD 0.29 Shorewood Packaging Corp. Mon SEBL 0.21 Siebel Systems Inc. Mon SKYT 0.06 SkyTel Communications Mon SNA 0.65 Snap-On Incorporated Mon SNC 0.31 Snyder Communications Inc. Mon SODK 0.17 Sodak Gaming Inc. Mon SJI -0.35 South Jersey Industries Inc. Mon SVRN 0.28 Sovereign Bancorp Inc. Mon SAJ N/A St. Joseph Light & Power Co. Mon STII N/A Stanford Telecommunications Mon STTX 0.32 Steel Technologies Inc. Mon SDRC 0.28 Structural Dynamics Research Mon SLM 0.78 Student Loan Marketing Association Mon SNB 0.16 Sunburst Hospitality Corp. Mon SYB 0.31 Sybron International Corp. Mon SYMC 0.44 Symantec Corporation Mon TCB 0.48 TCF Financial Corp. Mon TSCC 0.09 Technology Solutions Company Mon TLAB 0.3 Tellabs Inc. Mon TIN 0.64 Temple-Inland Inc. Mon TRA 0.49 Terra Industries Inc. Mon TWX 0.06 Time Warner Inc. Mon TKR 0.17 Timken Company Mon TOK N/A Tokheim Corp. Mon TKTX -0.55 Transkaryotic Therapies Mon TMN N/A Transmedia Network Inc. Mon TUP 0.44 Tupperware Corp. Mon UBS -0.05 U.S. Bioscience Inc. Mon USG 2 USG Corp. Mon USWB 0.1 USWeb Mon UB N/A UnionBanCal Corp. Mon UHS 0.71 Universal Health Services Inc. Mon UVN 0.15 Univision Communications Inc. Mon VALU N/A Value Line Inc. Mon VANS 0.05 Vans Inc. Mon VRC 0.14 Varco International Inc. Mon VIA 0.08 Viacom Inc. Mon VMC 0.66 Vulcan Materials Co. Mon WNC 0.39 Wabash National Corp. Mon WAVO -0.2 WavePhone Inc Mon WMK N/A Weis Markets Inc. Tue NDN 0.27 99 Cents Only Stores Tue ATHM -0.02 @Home-At Home Corporation Tue AD 0.59 ADVO Inc. Tue AMFI 0.36 AMCORE Financial Tue AMMB 0.29 AMRESCO Inc. Tue ACXM 0.18 Acxiom Corp. Tue AWA 0.9 America West Airlines Tue ABFS 0.37 Arkansas Best Corp. Tue ONE 0.93 Banc One Corporation Tue BHW 0.45 Bell & Howell Company Tue BCU -0.15 Borden Chemical/Plastics LP Tue BSX 0.26 Boston Scientific Tue BRYO 0.05 Brio Technology Tue BNI 0.54 Burlington North Santa Fe Corp. Tue CORR -0.43 COR Therapeutics Inc. Tue CDN 0.21 Cadence Design Systems Inc. Tue CBM 0.47 Cambrex Corp Tue CAC N/A Camden National Corp. Tue CNI 1.32 Canadian National Railway Company Tue CSAR 0.47 Caraustar Industries Inc. Tue CAFC 0.27 Carolina First Corporation Tue CGC 0.01 Cascade Natural Gas Tue CSE 0.49 Case Corporation Tue PWN 0.1 Cash America International Tue CSDS N/A Casino Data Systems Tue CTN N/A Centennial Technologies Inc. Tue CNT 0.71 CenterPoint Properties Corp. Tue ECP 0.54 Central Newspapers Inc. Tue CHKP N/A Check Point Software Technologies Ltd. Tue CKP 0.17 Checkpoint Systems Inc. Tue CSK 0.48 Chesapeake Corp. Tue CLP 0.77 Colonial Properties Trust Tue CCHM -0.02 CombiChem Tue CA 0.39 Computer Associates Inc. Tue CHRZ 0.24 Computer Horizons Corp. Tue CNG 0.39 Consolidated Natural Gas Co. Tue CTB 0.47 Cooper Tire & Rubber Co. Tue CVD 0.26 Covance Inc. Tue DHI 0.64 D.R. Horton Inc Tue DTL 0.25 Dal-Tile International Inc. Tue DL 0.29 Dial Corporation (The) Tue ETEK 0.14 E-Tek Dynamics Tue EASCO N/A Easco Inc. Tue ENC N/A Enesco Group Tue EPTO N/A Epitope Inc. Tue ATHM N/A Excite Inc. Tue FCN N/A First Chicago NBD Corp. Tue THFF N/A First Financial Corp. - Indians Tue SRCE 0.44 First Sentinal Bancorp Tue FTU 0.86 First Union Corporation Tue FWBI N/A First Western Bancorp. Tue FSH N/A Fisher Scientific International Inc. Tue FLGS 0.81 Flagstar Bancorp. Tue FLA N/A Florida East Coast Industries Tue FRX 0.27 Forest Laboratories Inc. Tue FCXa N/A Freeport McMoran Copper-CIass A Tue FCX 0.09 Freeport McMoran Copper-CIass B Tue FRIZ N/A Frisby Technologies Tue FULT 0.35 Fulton Financial Corp. Tue GEN 0.24 GenRad Inc. Tue GD 0.8 General Dynamics Tue GM 2.74 General Motors Tue GMH -0.24 General Motors - Class H Tue GNI N/A Great Northern Iron Ore Properties Tue GFF 0.2 Griffon Corporation Tue HGGR N/A Haggar Tue HCN 0.68 Health Care Reit Inc. Tue HMA 0.16 Health Management Assoc. Tue HELX 0.1 Helix Technology Corp. Tue HXL 0.14 Hexcel Corporation Tue HMS 0.14 Host Marriott Services Tue HUF 0.5 Huffy Corp. Tue HTCH -0.15 Hutchinson Technology Inc. Tue IBIS 0.03 IBIS Technolgy Tue IEX 0.48 IDEX Corp. Tue IMPH 0.28 IMPATH Tue RX 0.17 IMS Health Inc. Tue IIN 0.67 ITT Industries Inc. Tue ITW 0.78 IllinoisTool Works Inc. Tue IMNX 0.08 Immunex Corporation Tue INFM 0.05 Infinium Software Inc. Tue SEEK -0.43 Infoseek Corp Tue INOC 0.35 Innotrac Tue ISIG N/A Insignia Insurance Systems Tue INGR -0.27 Intergraph Corp. Tue IVC N/A Invacare Corp. Tue IRWN 0.34 Irwin FinancialCorp. Tue JSB N/A JSB Financial Tue JKHY 0.38 Jack Henry & Associates Inc. Tue JM 0.46 Johns Manville Corporation Tue JNJ 0.82 Johnson & Johnson Tue JNY 0.28 Jones Apparel Group Inc. Tue KGC -0.03 Kinross Gold Corp. Tue KNGT 0.26 Knight Transportation Tue KLIC -0.08 Kulicke & Soffa Tue LU 0.23 LUCENT Technologies Inc. Tue LH 0.05 Laboratory Corp. Of America Tue LDR N/A Landaver Inc. Tue LEE 0.4 Lee Enterprises Inc. Tue LNCR 0.42 Lincare Holdings Inc. Tue LNC 0.75 Lincoln National Corp. Tue MTMS 0.04 Made 2 Manage Systems Tue MADGF N/A Madge Network Tue MI 0.2 Marshall Industries Inc. Tue MCRE 0 MetaCreations Inc Tue MXT N/A Metris Companies Tue MLNM 0 Millennium Pharmaceuticals Inc Tue MIL 0.25 Millipore Corporation Tue MPL 0.37 Minnesota Power Tue NHI 0.75 National Health Investors Tue NPL N/A National Propane Partners L.P. Tue NEON -0.18 New Era of Networks Tue NWAC 0.98 Northwest Airlines - CIass A Tue OXY -0.05 Occidental Petroleum Corp. Tue PX 0.64 PRAXAIR Inc. Tue PTEC 0.03 Phoenix Technologies Ltd. Tue PNW 0.7 Pinnacle West Capital Corp. Tue PIOG -0.08 Pioneer Group Inc.(The) Tue PBI 0.57 Pitney-Bowes Inc. Tue PFNC 0.25 Progress Financial Corp. Tue PROX 0.15 Proxim Inc. Tue KWR 0.42 Quaker Chemical Corp. Tue QCOM 0.59 Qualcomm Inc. Tue QMRK 0.01 Qualmark Corp. Tue RTRSY N/A Reuters Holdings PLC Tue RLM 0.47 Reynolds Metal Co. Tue RHI 0.37 Robert Half International Inc. Tue ROK 0.75 Rockwell International Corp. Tue RSLN 0.34 Roslyn Bancorp Inc. Tue STBA 0.37 S & T Bancorp. Tue SBC 0.58 SBC Communications Inc. Tue SCOC 0.11 Santa Cruz Operations Inc. (The) Tue SGK 0.17 Schawk Tue SGP 0.36 Schering-Plough Corp. Tue SCHL 1.3 Scholastic Corp. Tue SHW 0.62 Sherwin Williams Co. Tue SBE N/A SmithKline Beecham PLC Tue LUV 0.45 Southwest Airlines Company Tue SMI 0.67 Springs Industries Inc. Tue STFR 0.39 St. Francis Capital Corp. Tue SCL N/A Stepan Co. Tue SPH -0.28 Suburban Propane Partners L.P. Tue SUB 0.72 Summit Bancorp Tue SUPC 0.3 Superior Consultant Holdings Tue TCSI -0.02 TCSI Corp. Tue TJCO 0.51 TJ International Inc. Tue TRW 1.05 TRW Inc. Tue TYC 0.79 TYCO Tue TANT N/A Tennant Tue TER 0.38 Teradyne Inc. Tue TXN 0.79 Texas Instruments Inc. Tue TRBS 0.51 Texas Regional Bancshares Tue TXU 0.39 Texas Utilities Co. Tue TWI 0.11 Titan Wheel Int'l. Inc. Tue TMK N/A Torchmark Corp. Tue TNI N/A Transaction Network Services Tue TQNT 0.23 TriQuint Semiconductor Inc. Tue TSX 0.24 TriStar Aerospace Tue YUM 0.59 Tricon Global Restaurants Inc. Tue TRN 1.04 Trinity Industries Inc. Tue TRST 0.34 Trustco Bank Corp NY Tue USTB 0.43 UST Corp. Tue UTX 0.82 United Technologies Tue UM N/A Utah Medical Products Inc. Tue WMS 0.11 WMS Industries Inc. Tue WPS 0.42 WPS Resources Corp. Tue WSFS 0.38 WSFS Financial Corp. Tue WAMU N/A Washington Mutual Inc. Tue WSO 0.38 Watsco Inc. Tue WCBO 0.35 West Coast Bancorp Tue WES 0.34 Westcorp Inc. Tue XLNX 0.28 Xilinx Inc. Wed AMR 1.68 AMR Corporation Wed AOL 0.11 AOL-America Online Inc. Wed ATMI 0.11 ATMI Wed AANB N/A Abigail Adams Bancorp Inc. Wed AKSY -0.28 Aksys Ltd. Wed AOG N/A Alberta Energy Company Ltd. Wed ALL 0.79 Allstate Corporation Wed AT 0.64 Alltel Corporation Wed AMZN -0.5 Amazon.com Inc. Wed ASD 1.12 American Standard Companies Inc. Wed ANLT 0.39 Analytical Surveys Wed ACI -0.01 Arch Coal Inc. Wed AS 0.22 Armco Inc. Wed ATML 0.13 Atmel Corp. Wed AVP 0.46 Avon Products Inc. Wed WHAL N/A Aware Inc. Wed AZR 0.09 Aztar Corporation Wed BSC 1.44 Bear Stearns Cos. Wed BDX 0.37 Becton Dickinson & Co. Wed BEL 0.75 Bell Atlantic Corporation Wed BLS 0.46 BellSouth Corporation Wed BMY 0.47 Bristol-Myers Squibb Co. Wed BC 0.87 Brunswick Corp. Wed BD 0.42 Budget Group Inc Wed BR 0.09 Burlington Resources Wed CCCG 0.13 CCC Information Services Wed CDCO N/A CIDCO Inc. Wed CMS 0.69 CMS Energy Corporation Wed CAER 0.19 Caere Corp. Wed CWT 0.29 California Water Services Group Wed CP 0.36 Canadian Pacific Ltd. Wed CTSI -0.21 CardioThoracic Systems Inc Wed CD 0.22 Cendant Corporation Wed CENL N/A Centennial Technologies Inc. Wed CSR 0.44 Central & Southwest Corp. Wed CERN 0.01 Cerner Corp. Wed CHB 0.6 Champion Enterprises Inc. Wed COFI 0.55 Charter One Financial Inc. Wed CMB 1.36 Chase Manhattan Corp. Wed CQB 0.09 Chiquita Brands International Inc. Wed CLF 1.04 Cleveland Cliffs Inc. Wed CGNX 0.14 Cognex Corp. Wed CL 0.34 Colgate Palmolive Wed CTV 0.29 CommScope Wed CPWR 0.21 Compuware Corp. Wed CGR 0.19 Cooker Restaurant Corp. Wed CACC 0.11 Credit Acceptance Corp. Wed CW N/A Curtiss-Wright Corporation Wed DHR 0.45 Danaher Corporation Wed DLTK 0.22 Deltek Systems Inc. Wed DEL 0.15 Deltic Timber Corp. Wed DTPI 0.18 Diamond Technology Partners Wed DLTR 0.2 Dollar Tree Stores Inc. Wed DNB 0.4 Dunn & Bradstreet Corp. Wed EWB 0.56 E. W. Blanch Holdings Wed EGG 0.34 EG & G Inc. Wed EMC 0.24 EMC Corp. Wed EK 1.51 Eastman Kodak Wed EDFY -0.26 Edify Corp Wed LLY 0.51 Eli Lilly & Co. Wed ESCC -0.03 Evans & Suthland Computer Corp. Wed EVR N/A Everen Capital Corp. Wed EXAR 0.11 Exar Corp. Wed EXDS -0.52 Exodus Communications Wed XON 0.53 Exxon Corporation Wed FNF 0.72 Fidelity National Financial Inc. Wed FSA 1.04 Financial Security Assurance Wed FR 0.81 First Industrial Realty Trust Inc. Wed FMBI 0.61 First Midwest Bancorp Inc. Wed FJ 0.63 Fort James Corp. Wed FSI 0.34 Freedom Securities Wed GSNX -0.19 Gasonics Intl. Corp. Wed GPU 0.69 General Public Utilities Corp. Wed GPC 0.51 Genuine Parts Wed GLE 0.33 Gleason Corp. Wed GNET N/A Go2net Inc. Wed GR 0.87 Goodrich B.F. Company (The) Wed GT 0.46 Goodyear Tire & Rubber Wed HCIA 0.06 HCIA Wed HMTT -0.23 HMT Technology Inc. Wed MAH 0.22 Hanna (M. A.) Company Wed HRBC 0.07 Harbinger Corp Wed HLIT 0.13 Harmonic Lightwave Inc. Wed HET 0.36 Harrah's Entertainment Wed HDIE -0.02 Healthdyne Information Enterprises Inc. Wed HLT 0.24 Hilton Hotels Wed HNI 0.37 Hon Industries Wed HON 1.07 Honeywell Inc. Wed ICOS -0.3 ICOS Corp. Wed IKOS 0.05 IKOS Systems Inc. Wed NSPR 0.14 Inspire Insurance Wed HIS N/A Integrated Health Services Wed ITX 0.27 International Technology Corp.(IT Corp) Wed JJSF 0.59 J & J Snack Foods Wed JOS 1.11 Jostens Inc. Wed JRC 0.3 Journal Register Corp. Wed NITE 0.35 Knight/Trimark Group Wed KNL 0.6 Knoll Inc. Wed KOPN 0 Kopin Corp. Wed KRON 0.38 Kronos Inc. Wed LSI 0.18 LSI Logic Corp. Wed LGTO 0.26 Legato Systems Inc. Wed LBY 0.77 Libbey Inc. Wed LIN 0.09 Linens 'n Things Wed MXM N/A MAXXAM Inc. Wed MOGN N/A MGI Pharmaceuticals Inc. Wed MKSI 0.11 MKSInstruments Wed MAIN 0.11 Main Street and Main Inc. Wed MEA 0.52 Mead Corp. Wed MEDQ 0.21 MedQuist Inc. Wed MEDI -0.22 Medimmune Inc. Wed MEOH N/A Methanex Corp. Wed MIKL 0.55 Michael Foods Wed MPDI 0.11 Microwave Power Devices Wed MNMD 0.16 Minimed Inc. Wed MODI 0.74 Modine Manufacturing Co. Wed MOLX 0.33 Molex Inc. Wed MOLXA 0.33 Molex Inc. - Class A Wed MCL N/A Moore Corp. Ltd. Wed MUR 0.37 Murphy Oil Corp. Wed NCR 0.44 NCR Corp. Wed TEE 0.6 National Golf Properties Wed NPTH -0.25 NeoPath Inc. Wed NETA -1.05 Network Associates Wed NPIX N/A Network Peripherals Wed OAKT N/A Oak Technology Wed OXE 0.34 Oec Medical Systems Inc Wed OV 0.58 One Valley Bancorp. Wed OMKT -0.09 Open Market Inc. Wed GOSHA N/A Oshkosh B'Gosh Inc. - Class A Wed GOSHB N/A Oshkosh B'Gosh Inc. - Class B Wed BOH 0.45 Pacific Century Financial Corp. Wed PKOH 0.37 Park-Ohio Industries Inc. Wed CHX 0.54 Pilgrim Pride Wed PII 0.58 Polaris Industries Inc. Wed PBKS 0.41 Provident Bankshares Wed PNM 0.45 Public Service of New Mexico Wed PRN N/A Puerto Rican Cement Wed REY 0.39 Reynolds and Reynolds Co. Wed R 0.45 Ryder Systems Inc. Wed SON 0.46 Sonoco Products Co. Wed SDW 1.55 Southdown Inc. Wed SEHI 0.14 Southern Energy Homes Wed SWK 0.53 Stanley Works Wed SYKE 0.27 Stryker Corp. Wed SYBS 0.08 Sybase Inc. Wed TBC 0.18 Tasty Baking Co. Wed TSG 0.56 The SABRE Group Holdings Inc. Wed TMC 0.86 Times Mirror Company Wed TWA -0.11 Trans World Airlines Inc. Wed TBI N/A Tuboscope Vetco International Corp. Wed UAL 2.64 UAL Corporation Wed ULTK 0.07 Ultrak Inc. Wed UDI 0.66 United Dominion Industries Wed VNTV -0.06 Vantive Corporation (The) Wed VVUS 0.02 Vivus Inc. Wed WBST 0.59 Webster Financial Corp. Wed WSBC 0.34 Wesbanco Inc. Wed WDC -0.95 Western Digital Corp. Wed ZOLT -0.04 Zoltek Companies Inc. Wed ITWO 0.11 i2 Technologies Inc. Thr ACX 0.4 ACX Technologies Inc. Thr AES 0.43 AES Corporation (The) Thr AFCX 0.56 AFC Cable Systems Thr AZA 0.32 ALZA Corporation Thr AR -0.62 ASARCO Thr ABDR 0.22 Abacus Direct Corp. Thr ATVI -0.19 Activision Inc. Thr ADPT 0.39 Adaptec Inc. Thr ACV 0.39 Alberto Culver Co. Thr ALSC 0.04 Alliance Semiconductor Corp. Thr ALRC 0.19 Alternative Resources Corporation Thr AAG 0.47 American Annuity Group Inc. Thr ABIG N/A American Bankers Insurance Group Thr AIG 0.99 American International Group Inc. Thr APCC 0.22 American Power Conversion Corp. Thr AMGN 0.48 Amgen Thr AMCT 0.37 Amresco Capital Trust Thr AIV 1 Apartment Investment & Management Thr AINN N/A Applied Innovations Inc. Thr ARDT N/A Ardent Software Thr ALV 0.47 Autoliv Inc. Thr AVL 0.25 Aviall Inc Thr AVID 0.24 Avid Technology Inc. Thr BSBN 0.61 BSB Bancorp Inc. Thr BANF 0.67 Banc First Corp. Thr BAX 0.69 Baxter International Inc. Thr BELM 0.22 Bell Microproducts Inc. Thr BVSN 0.11 BroadVision Thr BPL 0.69 Buckeye Partners L.P. Thr BMHC 0.47 Building Materials Holding Corp. Thr BSH 0.16 Bush Industries Thr CIT 0.58 CITGroup Thr CSX 0.46 CSX Corporation Thr COG -0.06 Cabot Oil & Gas 'A' Thr CCC 0.07 Calgon Carbon Corp. Thr CLBR -0.51 Caliber Learning Network Thr CPL 0.49 Carolina Power & Light Co. Thr CVH 0.24 Cavanaughs Hospitality Thr CNDS -0.96 Cell Net Data Systems Inc. Thr CTX 0.91 Centex Corporation Thr CNDX N/A Centocor Diagnostics Thr CEM 0.28 ChemFirst Inc. Thr CHE N/A Chemed Corp. Thr CIN 0.41 Cincinnati Gas and Electric(Cinergy) Thr CLFY 0.13 Clarify Inc. Thr CGP 0.45 Coastal Corp. Thr CES N/A Commonwealth Energy Systems Thr CMIN 0.34 Commonwealth Industries Inc. Thr CNMD 0.43 Conmed Corp. Thr RON N/A Cooper Cameron Corp. Thr CBE 0.9 Cooper Industries lnc. Thr RKY N/A Coors (Adolph) Company - Class B Thr CWLZ N/A Cowlitz Bancorporation Thr XTO 0.01 Cross Timbers Oil Thr XRAY 0.41 DENTSPLY International Inc. Thr DST 0.47 DST Systems Thr DGN -0.12 Data General Thr DPL 0.25 Dayton Power & Light Thr DDC 0.51 Detroit Diesel Corp. Thr DIMD 0.01 Diamond Multimedia Sys. Inc. Thr DGII 0.09 Digi International Thr DCTM -0.17 Documentum Inc Thr DON 0.54 Donnelly Corp. Thr DUK 0.76 Duke Energy Co. Thr ECL 0.32 Ecolab Inc. Thr EPG 0.47 El Paso Natural Gas Company Thr EGLS -0.19 Electroglas Inc. Thr EC 0.36 Engelhard Corporation Thr ETR 0.75 Entergy Corporation Thr SXC N/A Essex International Thr FIC 0.52 Fair Isaac & Company Inc. Thr FDC 0.4 First Data Corp. Thr FOM 0.58 Foremost Corporation of America Thr FRTE -0.06 Forte Software Inc. Thr GTW 0.55 Gateway 2000 Inc. Thr GENZ 0.43 Genzyme Corporation Thr GZTR N/A Genzyme Tissue Repair Div. Thr GHCI N/A Giant Cement Holdings Thr HAL 0.17 Halliburton Co. Thr HRD 0.59 Hannaford Brothers Thr HPRT -0.29 Heartport, Inc. Thr HLYW 0.19 Hollywood Entertainment Corp. Thr HI 0.68 Household International Inc. Thr HYSL 0.13 Hyperion Solutions Corp. Thr IDPH 0.57 IDEC Pharmaceuticals Inc. Thr IDXC -0.03 IDX Systems Corp. Thr IMO 0.17 Imperial Oil Limited Thr IR 0.98 Ingersoll-Rand Company Thr INHL -0.35 Inhale Therapeutic Systems Thr IFF 0.48 International Flavors & Fragrances Inc. Thr JDAS 0.02 JDA Software Group Thr KMB 0.69 Kimberly-Clark Thr KEX 0.33 Kirby Corp. Thr KRI 0.82 Knight-Ridder Inc. Thr KMAG -0.72 Komag Inc. Thr LLL 0.31 L-3 Communication Holdings Thr LAF 1.24 Lafarge Corp. Thr LNCE 0.25 Lance Inc. Thr LEG 0.37 Leggett & Platt Inc. Thr LLTC 0.33 Linear Technology Corp. Thr LPX 0.59 Louisiana-Pacific Thr LZ 0.5 Lubrizol Corp. Thr LDL 0.22 Lydall Inc Thr MDU 0.33 MDU Resources Group Inc. Thr MWL 0.27 Mail-Well Inc. Thr MAN 0.4 Manpower Inc. Thr MHC 0.53 Manufactured Home Communities Thr MRL -0.11 Marine Drilling Companies Inc. Thr MTSN -0.02 Mattson Technology Inc. Thr MCD 0.37 McDonalds Corp. Thr MEDA -0.16 Medaphis Corp. Thr MEL 0.45 Mellon Bank Corporation Thr KITS 0.12 Meridian Diagnostics Inc. Thr MCRL 0.36 Micrel Inc. Thr MLIN -0.01 Micro Linear Corp Thr MAK 0.34 Mohawk Industries Inc. Thr MTC 0.44 Monsanto Co. Thr MPO 0.32 MotivePower Ind Thr NSH N/A Nashua Corporation Thr NATI 0.32 National Instruments Corporation Thr NSOL 0.16 Network Solutions Thr NES 0.54 New England Electric System Thr NFX 0.09 Newfield Exploration Company Thr NHL 0.71 Newhall Land & Farming Co. Thr NE 0.15 Noble Drilling Corporation Thr OMP 0.57 OM Group Inc. Thr OLDB 0.44 Old National Bancorp. Indiana Thr ZEUS 0.2 Olympic Steel Inc. Thr OMC 0.58 Omnicom Group Inc. Thr PMWI -0.66 Pagemart Wireless Thr PPDI 0.26 Pharmaceutical Product Development Thr PRY 0.37 Pittway Corp. Thr POT 0.96 Potash Corp. of Saskatchewan Thr PHCC 0.2 Priority Healthcare Thr PVN 0.85 Providian Financial Corporation Thr PGS 0.1 Public Service of North Carolina Inc. Thr PSD 0.22 Puget Sound Energy Inc. Thr OAT 0.85 Quaker Oats Co. Thr QNTM 0.11 Quantum Corp. Thr QTRN 0.33 Quintiles Transnational Corp. Thr RSYS 0.28 Radisys Corp. Thr RAIN 0.16 Rainforest Cafe Inc. Thr RTN N/A Raytheon Co. Thr RBK 0.12 Reebok International Ltd. Thr RELY 0.58 Reliance Bancorp Inc. Thr RS 0.69 Reliance Steel & Aluminum Thr RGS 0.4 Rochester Gas and Electric Corporation Thr RCCK 0 Rock Financial Thr RYL 0.93 Ryland Corporation Thr SAPE 0.25 Sapient Thr SLB 0.25 Schlumberger Ltd. Thr SPP N/A Scott Paper Company Thr SQNT 0.06 Sequent Computer Systems Inc. Thr SIAL 0.44 Sigma-Aldrich Corporation Thr SLGN 0.53 Silgan Holdings Thr SIPX 0.15 Sipex Corporation Thr SII -0.04 Smith International Inc. Thr SNT 0.31 Sonat Inc. Thr PCU 0.04 Southern Peru Copper Corp Thr FON 0.45 Sprint Corp. Thr PCS -1.28 Sprint PCS Thr STJ 0.43 St. Jude Medical Inc. Thr SMAN N/A Standard Management Corp. Thr SR 0.6 Standard Register Company Thr SUGN N/A Sugen Inc. Thr SUN 0.39 Sun Co Inc.(Sunoco) Thr SUI 0.73 Sun Communities Thr SUNW 0.46 Sun Microsystems Inc. Thr SLVN 0.2 Sylvan Learning Systems Inc. Thr SYMM N/A Symmetricom Inc. Thr SNPS 0.64 Synopsys Inc. Thr TAN 0.28 Tandy Corp. Thr TTEC 0.09 TeleTech Holdings Inc. Thr TTI -0.09 Tetra Technologies Inc. Thr TXT 1.03 Textron Inc. Thr TOS 0.49 Tosco Corporation Thr TSCO 1.22 Tractor Supply Co. Thr TRH 1.36 TransAtlantic Holdings Inc. Thr TSAI 0.36 Transaction Systems Architects Thr TA 1 Transamerica Thr TRMB N/A Trimble Navigation Ltd. Thr TW 0.36 Twentieth Century Insurance Thr UCR 0.54 UCAR International Inc. Thr UNA 0.06 UNOVA Thr MRO 0.37 USX-Marathon Group Thr UTEK -0.08 Ultratech Stepper Inc. Thr UFI 0.21 Unifi Inc. Thr UNP 0.72 Union Pacific Corp. Thr UAM 0.23 United Asset Management Thr VCAI 0.32 Veterinary Centers of America Inc. Thr VVI 0.39 Viad Corp. Thr WLA 0.51 Warner-Lambert Company Thr WFT 0.01 Weatherford International Thr WS -0.22 Weirton Steel Corp. Thr WST 0.66 West Company (The) Thr WPSN 0.32 WestPoint Stevens Inc. Thr WSTL -0.12 Westell Technologies Inc. Thr WDHD 0.2 Woodhead Corp. Thr XRIT 0.15 X-Rite Inc. Thr XRX 0.62 Xerox Corp. Thr XICO N/A Xicor Corp. Thr ZION 0.66 Zions Bancorporation Fri APD 0.56 Air Products and Chemicals Inc. Fri AIN 0.32 Albany International Corp. Fri ADRX 0.21 Andrx Corp. Fri MED N/A Atrion Corp. Fri BMG -0.04 Battle Mountain Gold Company Fri BMS 0.56 Bemis Co. Inc. Fri CCJ N/A Cameco Corp. Fri CMO 0.14 Capstead Mortgage Fri CGI 0.51 Commerce Group Fri DOW 1.65 Dow Chemical Fri EMN 0.49 Eastman Chemical Co. Fri NEG 0.27 Energy East Corp. Fri ENN 0.48 Equity Inns Inc. Fri FWWB 0.4 First Washington Bancorp Inc Fri FO 0.58 Fortune Brands Inc. Fri FTL 0.03 Fruit Of The Loom Inc. Fri JJSC N/A Jefferson Smurfit Corp. Fri JH 0.29 John H. Harland Co. Fri KSWS 0.54 K Swiss Inc. - Class A Fri KDN 0.55 Kaydon Corp. Fri KFBI 0.32 Klamath First Bancorp. Fri LHSG N/A LTS Group Fri LTV -0.14 LTV Corp. Fri MRK 0.61 Merck & Co. Fri WPO 6.44 Washington Post Co. ***************************************************** DISCLAIMER ***************************************************** This newsletter is a publication dedicated to the education of options traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock or option but an information resource to aid the investor in making an informed decision regarding trading in options. It is possible at this or some subsequent date, the editor and staff of The Option Investor Newsletter may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. The newsletter staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control.
The Option Investor Newsletter 7-18-99 Sunday 7 of 7 ************* COVERED CALLS ************** Another Great Month... With equity markets trading near all-time-highs, many leading brokerages are now recommending conservative trading strategies, such as covered-calls, as a profitable method to diversify a successful portfolio. The Option Investor Newsletter is proud of their outstanding performance in this category. In the month of July, the Covered-Calls section had 35 profitable positions out of 38 potential candidates. This might appear to be an outstanding, one-time performance until you look at our past record of success. This section historically returns 4%-8% monthly in over 80% of the plays provided regardless of market conditions! There is no magic involved, just lots of hard work and extensive research. Our experienced and dedicated staff selects technically favorable stocks with over-valued, in-the-money, option premiums to produce consistent, monthly returns. The top plays for the month were Security Dynamics (SDTI) with a 21% return and Diamond Multimedia Systems (DIMD) at a 14% return. Positions with 30-day returns of 10% or better included: Marine Drilling Co. (MRL), IBM take-over target Sequent Computer Systems (SQNT), and Global Imaging Systems (GISX). Our average return this month was well above the 5% target and we had several issues that exceeded this goal including the following above 9%: NMSS, VVTV, FIBR; above 8%: NETG, FFD, SQNT; and long list of issues from 5% to 7%: PRGN, FIBR, SAVLY, TKLC, ENZN, PERI, LWIN, CAST, SKYC, PILL, KMET, AVIR, AAC, and NSM. For August, the portfolio is in great shape; currently at a 100% success rate, and we will work hard to maintain our outstanding record in the coming months. Good Luck! ****************************************************************** SUMMARY OF PREVIOUS PICKS (FINAL SUMMARY FOR JULY EXPIRATION) ****************************************************************** Stock Price Last Mon Strike Opt Profit ROI Monthly Sym Picked Price Price Bid /Loss ROI SDTI 22.56 20.75 Jul 20.00 3.50 *$ 0.94 4.9% 21.4% DIMD 5.06 5.22 Jul 5.00 0.63 *$ 0.57 12.9% 14.0% MRL 13.50 14.25 Jul 12.50 1.63 *$ 0.63 5.3% 11.5% SQNT 13.75 17.31 Jul 12.50 2.38 *$ 1.13 9.9% 10.8% GISX 18.25 21.13 Jul 17.50 1.88 *$ 1.13 6.9% 10.0% NMSS 8.13 12.63 Jul 7.50 1.38 *$ 0.75 11.1% 9.7% VVTV 19.00 26.63 Jul 17.50 2.56 *$ 1.06 6.4% 9.3% FIBR 14.00 13.44 Jul 12.50 2.00 *$ 0.50 4.2% 9.1% NETG 25.25 27.00 Jul 22.50 3.63 *$ 0.88 4.1% 8.8% FFD 16.38 16.00 Jul 15.00 2.50 *$ 1.12 8.1% 8.8% SQNT 16.94 17.31 Jul 15.00 2.50 *$ 0.56 3.9% 8.4% PRGN 26.38 26.75 Jul 25.00 2.25 *$ 0.87 3.6% 7.8% FIBR 12.63 13.44 Jul 10.00 3.25 *$ 0.62 6.6% 7.2% SAVLY 15.75 14.38 Jul 12.50 4.00 *$ 0.75 6.4% 6.9% TKLC 12.06 11.56 Jul 10.00 2.75 *$ 0.69 7.4% 6.4% ENZN 16.88 23.25 Jul 15.00 2.50 *$ 0.62 4.3% 6.2% PERI 15.13 22.38 Jul 12.50 3.13 *$ 0.50 4.2% 6.0% LWIN 20.06 19.38 Jul 17.50 3.25 *$ 0.69 4.1% 5.9% PRGN 24.75 26.75 Jul 22.50 3.13 *$ 0.88 4.1% 5.9% CAST 15.94 16.19 Jul 15.00 1.88 *$ 0.94 6.7% 5.8% SKYC 17.06 20.94 Jul 15.00 2.63 *$ 0.57 4.0% 5.7% PILL 13.88 15.56 Jul 12.50 2.13 *$ 0.75 6.4% 5.5% KMET 20.88 24.22 Jul 20.00 2.06 *$ 1.18 6.3% 5.4% AVIR 22.75 25.69 Jul 20.00 4.13 *$ 1.38 7.4% 5.4% GSTX 14.00 15.75 Jul 12.50 1.94 *$ 0.44 3.6% 5.3% AAC 7.69 8.06 Jul 7.50 0.69 *$ 0.50 7.1% 5.2% NSM 25.00 28.50 Jul 22.50 3.25 *$ 0.75 3.4% 5.0% CBTSY 16.50 23.75 Jul 15.00 2.44 *$ 0.94 6.7% 4.8% CPU 8.38 7.38 Jul 7.50 1.44 $ 0.44 6.3% 4.6% ARTT 14.69 14.00 Jul 12.50 2.75 *$ 0.56 4.7% 4.1% THNK 17.19 13.75 Jul 12.50 5.13 *$ 0.44 3.6% 4.0% DUSA 9.75 12.25 Jul 7.50 2.56 *$ 0.31 4.3% 3.7% AMES 47.50 43.13 Jul 45.00 4.75 $ 0.38 0.9% 1.0% THNK 17.19 13.75 Jul 15.00 3.25 $ -0.19 -1.4% 0.0% -------------------------------------------------------------- SNRS 13.06 16.56 Aug 10.00 4.38 *$ 1.32 15.2% 9.4% FRTE 11.63 12.19 Aug 10.00 2.75 *$ 1.12 12.6% 7.8% SQNT 17.50 17.31 Aug 15.00 3.88 *$ 1.38 10.1% 7.3% BNBN 19.25 19.19 Aug 17.50 3.13 *$ 1.38 8.6% 6.2% PAMC 33.69 34.00 Aug 25.00 10.63 *$ 1.94 8.4% 6.1% MESG 19.75 22.19 Aug 15.00 5.88 *$ 1.13 8.1% 5.9% LIPO 20.88 20.88 Aug 20.00 2.38 *$ 1.50 8.1% 5.9% WSTL 8.97 9.00 Aug 7.50 2.00 *$ 0.53 7.6% 5.5% IRF 13.19 13.06 Aug 12.50 1.63 *$ 0.94 8.1% 5.0% DGN 17.81 15.75 Aug 15.00 3.50 *$ 0.69 4.8% 3.5% July Plays Previously Closed: * NOVT - ended up a winner (Murphy's Law) * VLNC - ended just above break-even * PTEK - holding above $10.00 support * CYOE - ouch, a reason to close when breaking support. July Plays that were not playable (but profitable): * MCOM - a big mover, 3 day - $30 run! -ROI is equal to the profit (or loss) divided by the cost-basis. Monthly ROI represents the return on a monthly basis. Example: a 10% return in 20 days equals 15.2% ROI for a month). -Margin is not used in any calculations. -Profit/Loss Column: Asterisk indicates stock price above strike price and should be called. Stock that will not be called is assumed sold at current price (for tracking purposes). ****************************************************************** NEW PICKS ****************************************************************** Definitions: OI - Open Interest CB - Cost Basis (Prc pd - Prm rec'd = CB, the break-even point) RC - Return Called RNC - Return Not Called (Stock Price Unchanged) ****************************************************************** Sequenced by Company ****************************************************************** Stock Price Mon Strike Option Opt Open Cost RC RNC Sym Price Symbol Bid Intr Basis ATVI 15.50 Aug 15.00 AQV HC 1.44 1933 14.06 6.7% 6.7% CCCG 12.88 Aug 12.50 KDQ HV 1.19 0 11.69 6.9% 6.9% CIEN 37.13 Aug 35.00 EUQ HG 4.38 3300 32.75 6.9% 6.9% COOL 12.63 Aug 10.00 QOO HB 3.13 419 9.50 5.3% 5.3% CS 14.81 Aug 12.50 CS HV 3.00 2757 11.81 5.8% 5.8% IDTC 22.50 Aug 17.50 IQJ HW 5.88 88 16.62 5.3% 5.3% MESG 22.38 Aug 17.50 MUG HW 5.88 378 16.50 6.1% 6.1% NPIX 19.13 Aug 15.00 XMQ HC 4.75 106 14.38 4.3% 4.3% RRRR 11.81 Aug 10.00 RRU HB 2.50 74 9.31 7.4% 7.4% UBET 12.38 Aug 10.00 BUB HB 3.00 81 9.38 6.6% 6.6% ****************************************************************** Sequenced by Return Called ****************************************************************** Stock Price Mon Strike Option Opt Open Cost RC RNC Sym Price Symbol Bid Intr Basis RRRR 11.81 Aug 10.00 RRU HB 2.50 74 9.31 7.4% 7.4% CCCG 12.88 Aug 12.50 KDQ HV 1.19 0 11.69 6.9% 6.9% CIEN 37.13 Aug 35.00 EUQ HG 4.38 3300 32.75 6.9% 6.9% ATVI 15.50 Aug 15.00 AQV HC 1.44 1933 14.06 6.7% 6.7% UBET 12.38 Aug 10.00 BUB HB 3.00 81 9.38 6.6% 6.6% MESG 22.38 Aug 17.50 MUG HW 5.88 378 16.50 6.1% 6.1% CS 14.81 Aug 12.50 CS HV 3.00 2757 11.81 5.8% 5.8% IDTC 22.50 Aug 17.50 IQJ HW 5.88 88 16.62 5.3% 5.3% COOL 12.63 Aug 10.00 QOO HB 3.13 419 9.50 5.3% 5.3% NPIX 19.13 Aug 15.00 XMQ HC 4.75 106 14.38 4.3% 4.3% ****************************************************************** Company Descriptions ****************************************************************** ATVI - Activision, Inc. $15.50 *** Quake II *** Activision, Inc. is an international publisher, developer and distributor of interactive entertainment and leisure software, including action, adventure, strategy and simulation products. They make game software for the Sony Playstation, Nintendo 64, and computers; the recently released Quake II. The stock has broke-out above its recent trading range and looks ready to move. Earnings are expected this week. Aug 15.00 AQV HC Bid=1.44 OI=1933 CB=14.06 RC=6.7% RNC=6.7% Chart = http://quote.yahoo.com/q?s=atvi&d=3m ****************************************************************** CCCG - CCC Information Services $12.88 *** Stage I base *** CCC Information is the leading provider of technology-based business solutions for automotive claims. These solutions, comprising information, advanced software, communications and total claims outsourcing services, empower CCC's clients to compete more effectively by improving and streamlining their business processes. On Tuesday, CCC introduced a new Internet based service, Pathways Image Library. Technically in a lateral (can you say flat-line) consolidation. Earnings are expected this week. Aug 12.50 KDQ HV Bid=1.19 OI=0 CB=11.69 RC=6.9% RNC=6.9% Chart = http://quote.yahoo.com/q?s=cccg&d=3m ****************************************************************** CIEN - Ciena Corporation $37.13 *** Stage II *** CIENA's market leading optical networking systems form the core of telecommunications networks worldwide. Ciena's networking solutions utilize bandwidth expanding dense wavelength division multiplexing (DWDM) technology for long-haul, short-haul and metropolitan applications. Ciena was upgraded at the end of June and recently completed its purchase of privately held Omnia Communications. Technically in a Stage II climb and a hot sector. Aug 35.00 EUQ HG Bid=4.38 OI=3300 CB=32.75 RC=6.9% RNC=6.9% Chart = http://quote.yahoo.com/q?s=cien&d=3m ****************************************************************** COOL - Cyberian Outpost, Inc. $12.63 *** Next Merger? *** Cyberian Outpost is a global Internet retailer of computer hardware, software and accessories to consumers and small businesses. Cyberian's online store offers more than 160,000 products and has recently started selling IBM's Aptiva and Thinkpad product lines. Cyberian found a bottom near our cost basis and moved up sharply with the IBM deal. Add a touch of merger speculation (EGGS/ONSL - who will be next!) and you have the recipe for a great over-valued ITM call. Aug 10.00 QOO HB Bid=3.13 OI=419 CB=9.50 RC=5.3% RNC=5.3% Chart = http://quote.yahoo.com/q?s=cool&d=3m ****************************************************************** CS - Cabletron Systems, Inc. $14.81 *** Take-over? *** CS provides high-performance networking solutions and delivers dependable network access and communications through its scaleable products designed for enterprise networks and service providers. Cabletron jumped after Business Week reported that several investment professionals believed a global telecom giant might be interested in owning CS ($20 a share was quoted). CS has moved up sharply and may now test the June high. Aug 12.50 CS HV Bid=3.00 OI=2757 CB=11.81 RC=5.8% RNC=5.8% Chart = http://quote.yahoo.com/q?s=cs&d=3m ****************************************************************** IDTC - IDT Corporation $22.50 *** Net2Phone IPO *** IDT Corporation is a telecommunications company which offers a broad range of integrated long-distance telephone and Internet access services. IDT's Net2Phone (telephone calls through the Internet) is expected to price next week between $10 and $12. IDT already has distribution deals with Compaq & Snap and expects to integrate Net2Phone throughout the PC world. Sprint is also rumored to be eyeing IDT for a possible take-over. Aug 17.50 IQJ HW Bid=5.88 OI=88 CB=16.62 RC=5.3% RNC=5.3% Chart = http://quote.yahoo.com/q?s=idtc&d=3m ****************************************************************** MESG - MessageMedia Inc. $22.38 *** New High *** MESG is a services company which provides e-mail based customer relationship management and direct marketing services, which enables companies to integrate sales and marketing functions into e-mail messages to their customers. MessageMedia started moving in June after announcing plans to acquire closely-held Revnet Systems (to gain e-mail database-software technology) and Decisive Technology (provider of continuous customer feedback solutions). Closed at a new high on Friday! Aug 17.50 MUG HW Bid=5.88 OI=378 CB=16.50 RC=6.1% RNC=6.1% Chart = http://quote.yahoo.com/q?s=mesg&d=3m ****************************************************************** NPIX - Network Peripherals, Inc. $19.13 *** Conservative *** NPI designs and manufactures high performance network products including Layer2/Layer3 NuWave Architecture Gigabit Ethernet and FDDI switches, concentrator hubs, network adapters, application specific integrated circuits, and network management software. This is a conservative play that offers a high probability of a low return - about 3.5% monthly. Using margin effectively doubles the return. The chart is bullish and a technical support area exists at the strike price. Aug 15.00 XMQ HC Bid=4.75 OI=106 CB=14.38 RC=4.3% RNC=4.3% Chart = http://quote.yahoo.com/q?s=npix&d=3m ****************************************************************** RRRR - Rare Medium Group, Inc. $11.81 Rare Medium Group is an Internet business services firm, helping clients develop Internet strategies, improve business processes and develop interactive content using Internet-based technologies. Rare Medium recently launched ChangeMusic.com Network, whose four sites make it the top digital music destination on the web. RRRR was added to the Russell 2000/3000 on Monday. The stock is in a lateral consolidation with several bullish indicators and a cost basis at the 150 dma makes this a favorable entry point. Aug 10.00 RRU HB Bid=2.50 OI=74 CB=9.31 RC=7.4% RNC=7.4% Chart = http://quote.yahoo.com/q?s=rrrr&d=3m ****************************************************************** UBET - Youbet.com, Inc. $12.38 *** At the Races! *** Youbet.com has a proven track record in both the computer and horse racing industries, with critical proprietary technology and experience in online services, transaction processing, simulcasting, and interactive entertainment. You Bet developed and deployed the world's first PC-based totalisator - a computer system currently in use worldwide to operate all forms of wagering at racetracks. Youbet has recently been upgraded and now offers racing from Australia, where more than 50 race tracks offer year round turf racing. A speculative play on a business whose very nature is, well, speculative! Aug 10.00 BUB HB Bid=3.00 OI=81 CB=9.38 RC=6.6% RNC=6.6% Chart = http://quote.yahoo.com/q?s=ubet&d=3m ****************************** CALLS STRICTLY PERCENTAGE LIST ****************************** These Pct are not calculated using margin. These are pure returns. Margin will increase the percentages. No recommendation is made on these plays. This is only a numerically produced list of the options with the highest percentage of return for dollars invested. If you want to do your own research this is where to start. Stock Price Month Strike Symbol Price PctRtn OpnInt SNRS 16.56 Aug 17.50 RNUHW 2.75 16.60 1155 IRID 7.38 Aug 7.50 QAKHU 1.13 15.25 3516 IDTC 22.44 Aug 22.50 IQJHX 3.00 13.37 850 TIE 12.00 Aug 12.50 TIEHV 1.50 12.50 957 DDIM 4.13 Aug 5.00 QMHA 0.50 12.12 671 SNRS 16.56 Aug 20.00 RNUHD 2.00 12.08 4513 NAVR 9.94 Aug 10.00 QHQHB 1.19 11.95 359 PTVL 23.06 Aug 25.00 QUTHE 2.75 11.92 2388 PSSI 11.94 Aug 12.50 PYQHV 1.38 11.52 1082 TLXN 10.00 Aug 10.00 TNQHB 1.13 11.25 230 PERI 22.38 Aug 22.50 HQSHX 2.50 11.17 103 KERA 19.00 Aug 20.00 KVQHD 2.06 10.86 438 QMDC 9.31 Aug 10.00 QCDHB 1.00 10.74 1542 ICA 4.69 Aug 5.00 ICAHA 0.50 10.67 2 PAX 12.38 Aug 12.50 PAXHV 1.31 10.61 207 CS 14.81 Aug 15.00 CSHC 1.56 10.55 4458 CMTO 19.63 Aug 20.00 CQHHD 2.06 10.51 495 BYND 27.97 Aug 30.00 QYDHF 2.94 10.50 980 WORK 14.94 Aug 15.00 WUKHC 1.56 10.46 654 BEAM 19.94 Aug 20.00 BAQHD 2.06 10.34 824 NETA 19.94 Aug 20.00 CQMHD 2.06 10.34 5356 SATH 9.75 Aug 10.00 SQRHB 1.00 10.26 1384 OMKT 14.94 Aug 15.00 OQMHC 1.50 10.04 4067 GLFD 16.25 Aug 17.50 GQFHW 1.63 10.00 153 NVX 7.19 Sep 7.50 NVXIU 1.31 18.26 299 IDTC 22.44 Sep 22.50 IQJIX 4.00 17.83 279 CEGE 4.94 Sep 5.00 QIIIA 0.88 17.72 287 PAX 12.38 Sep 12.50 PAXIV 2.19 17.68 662 MEDA 4.63 Sep 5.00 MQAIA 0.81 17.57 1526 IONA 17.00 Sep 17.50 YWQIW 2.94 17.28 68 LOJN 10.88 Sep 12.50 LQJIV 1.81 16.67 366 MCHM 6.81 Sep 7.50 QQIU 1.13 16.51 236 NCDI 5.00 Sep 5.00 NQKIA 0.81 16.25 273 NCDI 5.00 Sep 7.50 NQKIU 0.81 16.25 139 TLXN 10.00 Sep 10.00 TNQIB 1.63 16.25 201 SKYC 20.94 Sep 22.50 KQFIX 3.38 16.12 22 NUS 19.31 Sep 20.00 NUSID 3.00 15.53 370 ASPT 11.38 Sep 12.50 ATQIV 1.75 15.38 648 NETA 19.94 Sep 20.00 CQMID 3.00 15.05 3476 IDTC 22.44 Sep 25.00 IQJIE 3.38 15.04 636 GHV 3.75 Sep 5.00 GHVIA 0.56 15.00 1032 DUSA 12.25 Sep 12.50 QDUIV 1.81 14.80 127 BEAM 19.94 Sep 20.00 BAQID 2.94 14.73 1435 HCIA 10.25 Sep 12.50 ZHQIV 1.50 14.63 202 SNC 30.00 Sep 30.00 SNCIF 4.38 14.58 1721 ROSI 6.91 Sep 7.50 QRSIU 1.00 14.48 414 AVL 16.63 Sep 17.50 AVLIW 2.38 14.29 190 PCYC 28.00 Sep 30.00 QPYIF 4.00 14.29 46 MATK 9.25 Sep 10.00 KQTIB 1.31 14.19 110 VNTV 9.69 Sep 12.50 QTZIV 1.38 14.19 194 EAII 24.75 Sep 25.00 QNEIE 3.50 14.14 218 PPRT 6.19 Sep 7.50 QPNIU 0.88 14.14 326 ZDZ 24.81 Sep 25.00 ZDZIE 3.50 14.11 352 BYND 27.97 Sep 30.00 QYDIF 3.88 13.85 1274 ABTE 12.19 Sep 12.50 QZBIV 1.69 13.85 388 PAGE 5.94 Sep 7.50 PGQIU 0.81 13.68 3721 COB 7.31 Sep 7.50 COBIU 1.00 13.67 480 TDFX 16.13 Sep 17.50 FQIW 2.19 13.57 437 BTIM 14.50 Sep 15.00 QBOIC 1.94 13.36 516 IHS 5.63 Sep 7.50 IHSIU 0.75 13.33 834 KMAG 3.75 Sep 5.00 KMQIA 0.50 13.33 995 RCII 23.50 Sep 25.00 RQGIE 3.13 13.30 1 BEV 6.63 Sep 7.50 BEVIU 0.88 13.21 6277 GLIA 20.81 Sep 22.50 QGLIX 2.75 13.21 161 MXWL 24.63 Sep 25.00 QMWIE 3.25 13.20 27 ONSL 18.94 Sep 20.00 QOLID 2.50 13.20 177 SVGI 16.13 Sep 17.50 VQQIW 2.13 13.18 513 AGTX 12.44 Sep 12.50 QDXIV 1.63 13.07 115 WERN 19.50 Sep 20.00 WQXID 2.50 12.82 38 CNDS 9.31 Sep 10.00 KQNIB 1.19 12.75 1661 CERN 19.63 Sep 20.00 CQNID 2.50 12.74 235 GLFD 16.25 Sep 17.50 GQFIW 2.06 12.69 74 GOSHA 18.31 Sep 20.00 QOKID 2.31 12.63 32 NBTY 6.94 Sep 7.50 NBQIU 0.88 12.61 4033 NPTH 4.00 Sep 5.00 DQWIA 0.50 12.50 225 TERA 5.00 Sep 5.00 QIPIA 0.63 12.50 236 OMQP 9.56 Sep 10.00 OJQIB 1.19 12.42 149 ESPI 12.13 Sep 12.50 AQIV 1.50 12.37 2595 ETV 6.06 Sep 7.50 ETVIU 0.75 12.37 422 SYBS 11.63 Sep 12.50 SBQIV 1.44 12.37 884 MRVT 10.63 Sep 12.50 SQDIV 1.31 12.35 200 VVUS 4.09 Sep 5.00 VVQIA 0.50 12.21 421 MATK 9.25 Sep 12.50 KQTIV 1.13 12.16 134 PRTL 21.19 Sep 22.50 PQWIX 2.56 12.09 118 AAIR 6.75 Sep 7.50 VJQIU 0.81 12.04 805 RAYS 14.63 Sep 15.00 RQYIC 1.75 11.97 181 RAYS 14.63 Sep 17.50 RQYIW 1.75 11.97 110 RSTO 13.06 Sep 15.00 QYHIC 1.56 11.96 147 KELL 13.19 Sep 15.00 KQCIC 1.56 11.85 70 PGA 9.50 Sep 10.00 PGAIB 1.13 11.84 165 ESA 11.13 Sep 12.50 ESAIV 1.31 11.80 114 VVTV 26.63 Sep 30.00 UVRIF 3.13 11.74 34 PSUN 20.81 Sep 22.50 PVQIX 2.44 11.71 45 PLMD 11.88 Sep 12.50 PMIV 1.38 11.58 83 PRGY 27.13 Sep 30.00 PUYIF 3.13 11.52 300 OCN 7.69 Sep 10.00 OCNIB 0.88 11.38 66 DRMD 14.38 Sep 15.00 DUQIC 1.63 11.30 4700 APOS 6.69 Sep 7.50 QAPIU 0.75 11.21 234 IDX 8.94 Sep 10.00 IDXIB 1.00 11.19 1436 PTEC 16.75 Sep 17.50 PKQIW 1.88 11.19 10 GCTI 28.00 Sep 30.00 QHFIF 3.13 11.16 652 VSIO 29.22 Sep 30.00 VQJIF 3.25 11.12 129 CKR 14.63 Sep 15.00 CKRIC 1.63 11.11 320 CRY 11.81 Sep 12.50 CRYIV 1.31 11.11 65 RURL 9.06 Sep 10.00 QWMIB 1.00 11.03 280 VIRS 16.00 Sep 17.50 VQPIW 1.75 10.94 145 RMDY 27.44 Sep 30.00 LRQIF 3.00 10.93 41 CSGS 27.88 Sep 30.00 QGAIF 3.00 10.76 324 ADLT 8.75 Sep 10.00 LQYIB 0.94 10.71 23 TSX 8.19 Sep 10.00 TSXIB 0.88 10.69 71 CRUS 9.38 Sep 10.00 CUQIB 1.00 10.67 863 NETA 19.94 Sep 22.50 CQMIX 2.13 10.66 1479 PRXL 12.31 Sep 12.50 VBQIV 1.31 10.66 52 INTS 10.56 Sep 12.50 QINIV 1.13 10.65 73 PATH 10.00 Sep 10.00 AQEIB 1.06 10.63 91 DMIC 14.81 Sep 15.00 DMQIC 1.56 10.55 130 STAA 14.81 Sep 15.00 SQTIC 1.56 10.55 19 PAGE 5.94 Sep 10.00 PGQIB 0.63 10.53 112 VLNC 6.59 Sep 7.50 VHQIU 0.69 10.43 1143 TTWO 9.06 Sep 10.00 TUOIB 0.94 10.34 442 DGN 15.75 Sep 17.50 DGNIW 1.63 10.32 1848 GSTX 15.75 Sep 17.50 QGSIW 1.63 10.32 86 MMWW 21.88 Sep 22.50 EQBIX 2.25 10.29 262 PRHC 14.63 Sep 17.50 PUHIW 1.50 10.26 3 ONSL 18.94 Sep 22.50 QOLIX 1.94 10.23 209 AEN 19.00 Sep 20.00 AENID 1.94 10.20 124 APCC 22.06 Sep 22.50 PWQIX 2.25 10.20 1123 PRXL 12.31 Sep 17.50 VBQIW 1.25 10.15 5 CCBL 29.75 Sep 30.00 LQEIF 3.00 10.08 45 SEHI 4.38 Sep 5.00 HSQIA 0.44 10.00 60 ISP 10.00 Sep 10.00 ISPIB 1.00 10.00 20 IRID 7.38 Oct 7.50 QAKJU 1.94 26.27 6673 NSTA 14.31 Oct 20.00 NQBJD 3.75 26.20 17 MCNS 11.94 Oct 15.00 UCSJC 3.00 25.13 279 MESG 22.19 Oct 22.50 MUGJX 5.50 24.79 38 KLOC 7.06 Oct 7.50 KCUJU 1.75 24.78 80 NAVR 9.94 Oct 10.00 QHQJB 2.44 24.53 297 CLPA 13.63 Oct 15.00 QJCJC 3.25 23.85 176 OXGN 9.13 Oct 10.00 QYOJB 2.13 23.29 56 AXPH 4.94 Oct 5.00 QARJA 1.13 22.78 374 FRTE 12.19 Oct 12.50 RQFJV 2.69 22.05 50 MCNS 11.94 Oct 12.50 UCSJV 2.63 21.99 32 TMBS 16.88 Oct 17.50 QVTJW 3.63 21.48 33 DAOU 4.97 Oct 5.00 QQXJA 1.06 21.38 64 PCTL 6.44 Oct 7.50 PTQJU 1.38 21.36 195 AGS 12.31 Oct 12.50 AGSJV 2.63 21.32 447 NEON 16.56 Oct 17.50 QNOJW 3.50 21.13 217 ADAP 22.63 Oct 25.00 CQIJE 4.75 20.99 36 ARQL 4.50 Oct 5.00 QETJA 0.94 20.83 240 PTVL 23.06 Oct 25.00 QUTJE 4.75 20.60 434 ITIG 6.31 Oct 7.50 ITUJU 1.25 19.80 94 PRGN 26.75 Oct 27.50 GQPJY 4.88 18.22 3 NBIX 4.81 Oct 5.00 QAVJA 0.88 18.18 184 CGZ 7.25 Oct 7.50 CGZJU 1.31 18.10 217 BRH 12.44 Oct 12.50 BRHJV 2.25 18.09 40 SANG 19.94 Oct 20.00 QDYJD 3.50 17.55 154 SPYG 17.25 Oct 17.50 YQGJW 3.00 17.39 128 AKSY 6.13 Oct 7.50 KQKJU 1.06 17.35 100 INPR 4.72 Oct 5.00 BLQJA 0.81 17.22 1351 DTPI 24.75 Oct 25.00 DUPJE 4.25 17.17 51 KING 28.44 Oct 30.00 QBKJF 4.88 17.14 38 SPNS 12.13 Oct 12.50 QHHJV 2.00 16.49 429 ESST 12.25 Oct 12.50 SEQJV 2.00 16.33 281 IUSAB 7.69 Oct 10.00 BQUJB 1.25 16.26 145 FFTI 10.00 Oct 10.00 QFOJB 1.63 16.25 53 PIN 6.94 Oct 7.50 PINJU 1.13 16.22 141 POSS 10.81 Oct 12.50 UPQJV 1.75 16.18 126 VANS 12.38 Oct 12.50 VQGJV 2.00 16.16 60 IRID 7.38 Oct 10.00 QAKJB 1.19 16.10 9965 CS 14.81 Oct 15.00 CSJC 2.38 16.03 3461 MAVK 12.50 Oct 12.50 KQGJV 2.00 16.00 238 CMTO 19.63 Oct 20.00 CQHJD 3.13 15.92 529 HMTT 3.16 Oct 5.00 HTQJA 0.50 15.84 808 PGEX 28.56 Oct 30.00 QAEJF 4.50 15.75 835 ELMG 13.50 Oct 15.00 EMQJC 2.13 15.74 25 LOR 20.94 Oct 22.50 LORJX 3.25 15.52 2239 CDO 25.19 Oct 27.50 CDOJY 3.88 15.38 24 WALL 10.56 Oct 12.50 WLQJV 1.63 15.38 235 CELG 16.31 Oct 17.50 LQHJW 2.50 15.33 95 CREAF 12.31 Oct 12.50 RFQJV 1.88 15.23 78 ENTU 28.88 Oct 30.00 QYEJF 4.38 15.15 202 NEON 16.56 Oct 20.00 QNOJD 2.50 15.09 318 SYNM 8.31 Oct 10.00 QSHJB 1.25 15.04 10 SGE 7.50 Oct 7.50 SGEJU 1.13 15.00 155 SCIXF 10.00 Oct 10.00 SXQJB 1.50 15.00 734 SRCM 15.88 Oct 17.50 SQJW 2.38 14.96 325 TLK 12.13 Oct 12.50 TLKJV 1.81 14.95 20 HEPH 15.19 Oct 17.50 HUPJW 2.25 14.81 306 NCSS 5.06 Oct 7.50 NQWJU 0.75 14.81 229 TIER 6.75 Oct 7.50 QTIJU 1.00 14.81 183 SPLH 7.25 Oct 7.50 QRXJU 1.06 14.66 57 TIE 12.00 Oct 12.50 TIEJV 1.75 14.58 245 TSFW 24.06 Oct 25.00 SUWJE 3.50 14.55 51 IMG 7.31 Oct 7.50 IMGJU 1.06 14.53 65 SPYG 17.25 Oct 22.50 YQGJX 2.50 14.49 131 JDAS 9.50 Oct 10.00 QAHJB 1.38 14.47 153 RDRT 6.06 Oct 7.50 RDQJU 0.88 14.43 2005 INFS 19.56 Oct 20.00 IQLJD 2.81 14.38 37 SUPG 20.00 Oct 20.00 UQGJD 2.88 14.37 766 HS 4.38 Oct 5.00 HSJA 0.63 14.29 5126 TWA 4.81 Oct 5.00 TWAJA 0.69 14.28 3009 KLOC 7.06 Oct 10.00 KCUJB 1.00 14.16 240 SANG 19.94 Oct 22.50 QDYJX 2.81 14.11 20 NEV 17.31 Oct 17.50 NEVJW 2.44 14.08 100 USWB 26.69 Oct 30.00 QWBJF 3.75 14.05 1182 WMS 14.69 Oct 15.00 WMSJC 2.06 14.04 3334 SK 13.38 Oct 20.00 SKJD 1.88 14.02 66 NETG 27.00 Oct 30.00 NUGJF 3.75 13.89 179 NAVR 9.94 Oct 12.50 QHQJV 1.38 13.84 346 ANSR 22.63 Oct 25.00 QRAJE 3.13 13.81 37 BJS 29.13 Oct 30.00 BJSJF 4.00 13.73 2694 GYMB 6.38 Oct 7.50 GMQJU 0.88 13.73 12 MRVC 15.06 Oct 17.50 VQXJW 2.06 13.69 74 APM 2.75 Oct 5.00 APMJA 0.38 13.64 6082 RPC 24.75 Oct 25.00 RPCJE 3.38 13.64 307 FILE 11.06 Oct 12.50 ILQJV 1.50 13.56 263 PLC 3.69 Oct 5.00 PLCJA 0.50 13.56 918 PTVL 23.06 Oct 30.00 QUTJF 3.13 13.55 651 QHGI 9.75 Oct 15.00 HQGJC 1.31 13.46 84 SYMC 29.75 Oct 30.00 SYQJF 4.00 13.45 213 INTL 20.00 Oct 20.00 TPQJD 2.69 13.44 56 LCP 9.31 Oct 10.00 LCPJB 1.25 13.42 15 BRKT 18.75 Oct 20.00 BUQJD 2.50 13.33 209 CLCI 9.88 Oct 10.00 QAZJB 1.31 13.29 223 SDC 21.75 Oct 22.50 SDCJX 2.88 13.22 291 SOI 19.88 Oct 20.00 SOIJD 2.63 13.21 20 DCTM 16.19 Oct 17.50 QDCJW 2.13 13.13 235 MCNS 11.94 Oct 20.00 UCSJD 1.56 13.09 130 MOGN 13.44 Oct 15.00 QOGJC 1.75 13.02 80 PAIR 11.06 Oct 12.50 PQGJV 1.44 12.99 747 ORG 11.56 Oct 12.50 ORGJV 1.50 12.97 540 MANU 15.44 Oct 17.50 ZUQJW 2.00 12.96 161 ARDM 9.69 Oct 10.00 QRQJB 1.25 12.90 63 ASHW 4.88 Oct 5.00 AQWJA 0.63 12.82 138 ERTH 7.81 Oct 10.00 QERJB 1.00 12.80 329 CMTO 19.63 Oct 22.50 CQHJX 2.50 12.74 125 RWAV 6.88 Oct 7.50 RQRJU 0.88 12.73 70 TALK 10.81 Oct 12.50 QQKJV 1.38 12.72 290 SIII 11.34 Oct 12.50 SQIJV 1.44 12.67 231 IUSAA 7.56 Oct 10.00 HAQJB 0.94 12.40 17 PRRC 9.63 Oct 10.00 MQXJB 1.19 12.34 135 MSM 9.63 Oct 12.50 MSMJV 1.19 12.34 12 PMRY 16.25 Oct 17.50 PBQJW 2.00 12.31 35 FRTE 12.19 Oct 15.00 RQFJC 1.50 12.31 45 SMRT 8.13 Oct 10.00 STQJB 1.00 12.31 26 ICO 14.25 Oct 15.00 ICOJC 1.75 12.28 306 ASTX 22.94 Oct 25.00 AUTJE 2.81 12.26 10 CELG 16.31 Oct 20.00 LQHJD 2.00 12.26 227 REV 26.50 Oct 30.00 REVJF 3.25 12.26 1153 ZIGO 11.25 Oct 12.50 UZYJV 1.38 12.22 28 BUR 8.19 Oct 10.00 BURJB 1.00 12.21 79 GSNX 16.38 Oct 17.50 GQSJW 2.00 12.21 55 AGS 12.31 Oct 15.00 AGSJC 1.50 12.18 99 CMTO 19.63 Oct 25.00 CQHJE 2.38 12.10 186 ALGO 26.88 Oct 30.00 GQLJF 3.25 12.09 206 AMSC 15.00 Oct 17.50 QAYJW 1.81 12.08 90 SDTI 20.75 Oct 22.50 QSDJX 2.50 12.05 222 MCNS 11.94 Oct 17.50 UCSJW 1.44 12.04 37 CMNT 17.75 Oct 20.00 QDOJD 2.13 11.97 88 RSLC 23.00 Oct 25.00 QRLJE 2.75 11.96 355 AU 19.38 Oct 20.00 AUJD 2.31 11.94 1106 SFY 11.00 Oct 12.50 SFYJV 1.31 11.93 300 WHX 6.81 Oct 7.50 WHXJU 0.81 11.93 133 MXTR 5.25 Oct 7.50 MQLJU 0.63 11.90 2263 TTEC 11.06 Oct 12.50 QTCJV 1.31 11.86 29 TSP 21.13 Oct 22.50 TSPJX 2.50 11.83 70 ESLTF 17.50 Oct 17.50 EQXJW 2.06 11.79 25 PENN 9.56 Oct 10.00 UQNJB 1.13 11.76 54 XLTC 13.88 Oct 15.00 XNQJC 1.63 11.71 232 BARZ 23.50 Oct 25.00 BJQJE 2.75 11.70 8 SFAM 17.13 Oct 17.50 FQFJW 2.00 11.68 477 PRMS 8.03 Oct 10.00 RQSJB 0.94 11.67 642 RADA 9.13 Oct 10.00 QDRJB 1.06 11.64 20 BPLS 5.38 Oct 7.50 QBPJU 0.63 11.63 20 LWIN 19.38 Oct 20.00 UINJD 2.25 11.61 74 BNYN 10.25 Oct 12.50 QYNJV 1.19 11.59 120 ACN 16.75 Oct 17.50 ACNJW 1.94 11.57 104 STN 21.63 Oct 22.50 STNJX 2.50 11.56 15 BKS 24.94 Oct 25.00 BKSJE 2.88 11.53 569 KLOC 7.06 Oct 17.50 KCUJW 0.81 11.50 339 TCA 10.88 Oct 12.50 TCAJV 1.25 11.49 472 KEG 3.81 Oct 5.00 KEGJA 0.44 11.47 799 SLMD 17.50 Oct 20.00 QSQJD 2.00 11.43 140 CVG 22.00 Oct 22.50 CVGJX 2.50 11.36 220 NRGN 16.50 Oct 17.50 NQOJW 1.88 11.36 8 KMET 24.22 Oct 25.00 KQEJE 2.75 11.35 124 NSTA 14.31 Oct 17.50 NQBJW 1.63 11.35 40 ESCMF 6.06 Oct 7.50 QFCJU 0.69 11.34 474 TEK 28.69 Oct 30.00 TEKJF 3.25 11.33 196 AKLM 6.63 Oct 7.50 KKQJU 0.75 11.32 468 NEON 16.56 Oct 22.50 QNOJX 1.88 11.32 61 MRX 24.38 Oct 25.00 MRXJE 2.75 11.28 423 AFWY 18.88 Oct 20.00 FQDJD 2.13 11.26 58 NR 9.44 Oct 10.00 NRJB 1.06 11.26 223 PSCX 10.00 Oct 10.00 QPSJB 1.13 11.25 70 CNS 16.69 Oct 17.50 CNSJW 1.88 11.24 33 WALL 10.56 Oct 15.00 WLQJC 1.19 11.24 59 WAXS 15.63 Oct 17.50 WXQJW 1.75 11.20 68 HYC 9.56 Oct 10.00 HYCJB 1.06 11.11 120 TSA 3.38 Oct 5.00 TSAJA 0.38 11.11 1105 WDC 6.19 Oct 7.50 WDCJU 0.69 11.11 1435 FAF 17.50 Oct 20.00 FAFJD 1.94 11.07 720 ENZ 13.56 Oct 15.00 ENZJC 1.50 11.06 805 SE 28.38 Oct 30.00 SEJF 3.13 11.01 1395 AIR 22.19 Oct 22.50 AIRJX 2.44 10.99 11 CS 14.81 Oct 17.50 CSJW 1.63 10.97 973 PAUH 6.88 Oct 7.50 PUQJU 0.75 10.91 117 ITIG 6.31 Oct 10.00 ITUJB 0.69 10.89 130 SPYG 17.25 Oct 20.00 YQGJD 1.88 10.87 343 ANSR 22.63 Oct 30.00 QRAJF 2.44 10.77 102 PRGN 26.75 Oct 30.00 GQPJF 2.88 10.75 207 FAF 17.50 Oct 17.50 FAFJW 1.88 10.71 88 IGL 17.50 Oct 17.50 IGLJW 1.88 10.71 54 TKN 7.00 Oct 7.50 TKNJU 0.75 10.71 30 NAUT 17.00 Oct 17.50 NQTJW 1.81 10.66 332 TSFW 24.06 Oct 27.50 SUWJY 2.56 10.65 43 UBB 21.75 Oct 22.50 UBBJX 2.31 10.63 4 PKD 4.13 Oct 5.00 PKDJA 0.44 10.61 2227 MPS 14.19 Oct 15.00 MPSJC 1.50 10.57 445 MENT 14.25 Oct 15.00 MGQJC 1.50 10.53 277 PSFT 16.06 Oct 17.50 PQOJW 1.69 10.51 2545 GTRC 11.31 Oct 12.50 GURJV 1.19 10.50 37 VSVR 10.13 Oct 12.50 UFQJV 1.06 10.49 132 ADVNA 19.81 Oct 20.00 AVQJD 2.06 10.41 351 NVH 24.63 Oct 25.00 NVHJE 2.56 10.41 60 POSS 10.81 Oct 15.00 UPQJC 1.13 10.40 382 TMBS 16.88 Oct 20.00 QVTJD 1.75 10.37 12 MRNT 21.75 Oct 22.50 QGMJX 2.25 10.34 125 SPLH 7.25 Oct 10.00 QRXJB 0.75 10.34 79 OII 17.00 Oct 17.50 OIIJW 1.75 10.29 231 MUEI 11.56 Oct 12.50 MQUJV 1.19 10.27 1238 SCBI 5.50 Oct 7.50 TQLJU 0.56 10.23 45 SFAM 17.13 Oct 20.00 FQFJD 1.75 10.22 189 HLYW 18.38 Oct 22.50 HWQJX 1.88 10.20 13 PLC 3.69 Oct 7.50 PLCJU 0.38 10.17 136 SOC 7.38 Oct 7.50 SOCJU 0.75 10.17 2050 RAD 23.38 Oct 25.00 RADJE 2.38 10.16 1370 BST 24.63 Oct 25.00 BSTJE 2.50 10.15 2443 SNRZ 28.38 Oct 30.00 QSRJF 2.88 10.13 51 RG 21.00 Oct 22.50 RGJX 2.13 10.12 210 KLIC 28.44 Oct 30.00 KQSJF 2.88 10.11 282 CTAL 13.00 Oct 15.00 QANJC 1.31 10.10 106 OCLR 17.94 Oct 20.00 QLOJD 1.81 10.10 109 HM 7.44 Oct 7.50 HMJU 0.75 10.08 2279 CPQ 27.31 Oct 27.50 CPQJY 2.75 10.0712077 CYBX 12.44 Oct 15.00 QAJJC 1.25 10.05 101 SSNC 7.50 Oct 10.00 QUQJB 0.75 10.00 15 ZILA 3.13 Oct 5.00 QWCJA 0.31 10.00 874 ***************** NAKED PUT SECTION ***************** Conservative Strategies Deliver Consistent Profits.. Put writing, also known as put selling, is designed to complement a stock trading portfolio because it offers two very conservative methods for generating profits: collecting premium by selling an out-of-the money option and/or acquiring a favorable stock at a reduced price. Our favorite technique involves selling an out-of-the-money put (sometimes two or more strikes away) on a stock that the investor expects to finish above the sold position . The majority of the time, the put sold will expire worthless, allowing the investor to pocket the premium and receive a reasonable profit without ever having to buy the stock. While there is a margin requirement when selling puts, this commitment of funds might be compared to the outright purchase of the equivalent number of shares. Put selling takes advantage of the concept of time decay - the premium an option sells for declines as the option approaches expiration. Also known as time erosion, time decay allows the options trader to profit without having to correctly predict the future direction of a stock's movement, as long as it remains above a predetermined price. Time premium will decay at a fairly predictable rate and will decay most rapidly the closer the option gets to its expiration. This month, the portfolio provided 31 profitable positions out of 32 potential candidates. The #1 play in our naked-put portfolio was Beyond.com (BYND) with a monthly return of 19%. There were several plays with a 30 day return above 10% which included: Customtracks (CUST), Proxymed (PILL), Carrier Access (CACS), Mercury Interactive (MERQ), Sbarro (SBA), Net.Bank (NETB), Sabratek (SBTK), Pharmacyclics (PCYC), Riggs National (RIGS), Sportsline USA (SPLN), & Icg Comm (ICGX). There were many other issues just under 10%: ANAD, STII, GALT, CIEN, EGRP, SGI, & NE; and above 8%: PWAV, REV, BOBJ, PRD, & CNTO. Our August positions are currently 100% successful and we expect the bullish trend to continue through the summer months. Good Luck! ------------------------------------------------------------------ *** WARNING!!! *** Occasionally a company will experience catastrophic news causing a severe drop in the stock price. This may cause a devastatingly large loss which may wipe out all of your smaller gains. There is one very important rule; Don't sell naked puts on stocks that you don't want to own! It is also important that you consider using trading STOPS on naked option positions to help limit losses when the stock price drops. Many professional traders suggest closing the position when the stock price falls below the sold strike or using a buy-to-close STOP at a price that is no more than twice the original premium from the sold option. ****************************************************************** SUMMARY OF PREVIOUS PICKS (FINAL SUMMARY FOR JULY EXPIRATION) ****************************************************************** Stock Price Last Mon Strike Opt Profit ROI Monthly Sym Picked Price Price Bid /Loss ROI BYND 27.81 27.97 Jul 22.50 0.56 *$ 0.56 8.8% 19.1% CUST 50.06 44.31 Jul 35.00 1.13 *$ 1.13 10.1% 14.7% PILL 13.88 15.56 Jul 12.50 0.81 *$ 0.81 16.3% 14.1% CACS 35.00 41.00 Jul 25.00 0.75 *$ 0.75 9.7% 14.0% MERQ 35.38 43.88 Jul 30.00 0.88 *$ 0.88 9.1% 13.2% NTBK 39.00 31.88 Jul 30.00 0.50 *$ 0.50 6.0% 13.1% SBTK 27.25 27.38 Jul 20.00 0.94 *$ 0.94 14.7% 12.8% PCYC 21.13 28.00 Jul 17.50 0.81 *$ 0.81 14.4% 12.5% SBA 27.38 27.81 Jul 25.00 0.50 *$ 0.50 5.5% 12.0% RIGS 20.63 20.50 Jul 17.50 0.44 *$ 0.44 7.9% 11.5% SPLN 34.31 39.88 Jul 25.00 0.38 *$ 0.38 5.2% 11.4% ICGX 23.13 27.00 Jul 20.00 0.31 *$ 0.31 4.8% 10.5% ANAD 31.31 37.44 Jul 25.00 0.63 *$ 0.63 9.1% 9.9% STII 25.00 27.94 Jul 20.00 0.50 *$ 0.50 9.1% 9.9% GALT 41.00 62.25 Jul 35.00 0.75 *$ 0.75 6.7% 9.7% CIEN 30.50 37.13 Jul 25.00 0.81 *$ 0.81 10.8% 9.4% EGRP 39.94 37.50 Jul 32.50 0.38 *$ 0.38 4.3% 9.3% SGI 14.63 16.94 Jul 12.50 0.25 *$ 0.25 6.3% 9.1% NE 20.00 21.06 Jul 17.50 0.50 *$ 0.50 8.3% 9.1% PWAV 30.50 37.94 Jul 25.00 0.44 *$ 0.44 6.2% 8.9% REV 30.38 26.50 Jul 22.50 0.69 *$ 0.69 10.2% 8.9% BOBJ 37.00 42.69 Jul 30.00 0.69 *$ 0.69 8.1% 8.8% PRD 27.50 22.88 Jul 22.50 0.38 *$ 0.38 6.0% 8.6% CNTO 50.94 54.25 Jul 40.00 0.81 *$ 0.81 7.4% 8.0% SUGN 22.75 30.75 Jul 17.50 0.44 *$ 0.44 8.8% 7.7% NRES 20.25 21.13 Jul 17.50 0.50 *$ 0.50 8.5% 7.4% CUBE 32.00 35.00 Jul 25.00 0.56 *$ 0.56 8.0% 7.0% CUBE 32.00 35.00 Jul 25.00 0.44 *$ 0.44 6.4% 7.0% TDW 28.75 31.75 Jul 25.00 0.50 *$ 0.50 6.1% 6.6% AMES 47.50 43.13 Jul 40.00 0.69 *$ 0.69 5.7% 6.1% EGRP 37.81 37.50 Jul 25.00 0.56 *$ 0.56 6.9% 6.0% SEEK 55.88 42.06 Jul 45.00 0.88 $ -2.06 -16.7% 0.0% -------------------------------------------------------------- MGCX 28.00 30.25 Aug 20.00 1.13 *$ 1.13 16.8% 12.2% NETS 19.56 24.50 Aug 15.00 0.75 *$ 0.75 16.1% 11.7% PTVL 23.63 23.06 Aug 17.50 0.81 *$ 0.81 14.6% 10.6% QNTM 24.56 25.81 Aug 17.50 1.00 *$ 1.00 16.9% 10.5% CDNW 19.94 22.69 Aug 15.00 0.56 *$ 0.56 12.3% 8.9% BYND 29.50 27.97 Aug 20.00 0.75 *$ 0.75 11.3% 8.2% LIPO 20.88 20.88 Aug 17.50 0.63 *$ 0.63 11.3% 8.1% DRIV 35.31 32.25 Aug 25.00 0.88 *$ 0.88 11.1% 8.0% AMTD 38.19 34.25 Aug 25.00 0.75 *$ 0.75 8.9% 6.5% ADAP 23.19 22.63 Aug 17.50 0.44 *$ 0.44 8.7% 6.3% PAMC 33.69 34.00 Aug 20.00 0.56 *$ 0.56 7.7% 5.6% July Plays that were not playable (and very profitable): * NLC - merger/take-over was announced before the open! -ROI is equal to the profit (or loss) divided by the original investment requirement (varies broker to broker). -Monthly ROI represents the return on a monthly basis. Example: a 10% return in 20 days equals 15.2% ROI for a month). -Profit/Loss Column: Asterisk indicates stock price above strike price and put option should expire - not be exercised. Stock to be exercised assumed sold at current price.(for tracking) ****************************************************************** NEW PICKS ****************************************************************** Definitions: OI - Open Interest CB - Cost Basis (break-even point if put exercised) ROI - Return On Investment - formula: premium received divided by the collateral required by the broker (the greater of 40% of the current price of the stock plus the premium, minus the difference between the cost of the stock and the strike price; or 20% of the current price of the stock plus the premium.) As you move further from the stock price, the 20% requirement will take precedence. ROI may vary based on equity required by each individual broker. ****************************************************************** Sequenced by Company ****************************************************************** Stock Price Mon Strike Option Opt Open Cost ROI Opt Sym Price Symbol Bid Intr Basis Expired CIEN 37.13 Aug 30.00 EUQ TF 0.63 362 29.37 7.5% DRIV 32.44 Aug 22.50 DQI TX 0.50 10 22.00 7.2% GISX 21.13 Aug 17.50 GQC TW 0.56 26 16.94 10.4% MCOM 35.38 Aug 20.00 MQM TD 0.44 48 19.56 5.9% MIPS 43.94 Aug 30.00 MUP TF 0.75 130 29.25 7.9% PRIA 38.63 Aug 30.00 UXQ TF 1.00 785 29.00 11.5% PSSI 12.00 Aug 10.00 PYQ TB 0.44 433 9.56 13.6% RMII 13.13 Aug 10.00 RMU TB 0.38 64 9.62 12.6% SNRS 16.63 Aug 7.50 RNU TU 0.31 227 7.19 8.5% ****************************************************************** Sequenced by Return on Investment ****************************************************************** Stock Price Mon Strike Option Opt Open Cost ROI Opt Sym Price Symbol Bid Intr Basis Expired PSSI 12.00 Aug 10.00 PYQ TB 0.44 433 9.56 13.6% RMII 13.13 Aug 10.00 RMU TB 0.38 64 9.62 12.6% PRIA 38.63 Aug 30.00 UXQ TF 1.00 785 29.00 11.5% GISX 21.13 Aug 17.50 GQC TW 0.56 26 16.94 10.4% SNRS 16.63 Aug 7.50 RNU TU 0.31 227 7.19 8.5% MIPS 43.94 Aug 30.00 MUP TF 0.75 130 29.25 7.9% CIEN 37.13 Aug 30.00 EUQ TF 0.63 362 29.37 7.5% DRIV 32.44 Aug 22.50 DQI TX 0.50 10 22.00 7.2% MCOM 35.38 Aug 20.00 MQM TD 0.44 48 19.56 5.9% ****************************************************************** Company Descriptions ****************************************************************** CIEN - Ciena Corporation $37.13 *** Stage II *** CIENA's market leading optical networking systems form the core of telecommunications networks worldwide. Ciena's networking solutions utilize bandwidth expanding dense wavelength division multiplexing (DWDM) technology for long-haul, short-haul and metropolitan applications. Ciena was upgraded at the end of June and recently completed its purchase of privately held Omnia Communications. Technically in a Stage II climb in a hot sector. Aug 30.00 EUQ TF Bid=0.63 OI=362 CB=29.37 ROI=7.5% Chart = http://quote.yahoo.com/q?s=cien&d=3m ****************************************************************** DRIV - Digital River $32.44 DRIV provides comprehensive electronic commerce outsourcing solutions to software publishers and online retailers. DRIV derives its revenue primarily from sales of 3rd party software by managing online stores for software publishers and retailers. Their strong distribution capability will enhance the benefit from several recent partnerships and acquisitions. Earnings are expected this week. Aug 22.50 DQI TX Bid=0.50 OI=10 CB=22.00 ROI=7.2% Chart = http://quote.yahoo.com/q?s=DRIV&d=3m ****************************************************************** GISX - Global Imaging Systems $21.13 *** New High? *** Global Imaging Systems is becoming a one-stop shop for office imaging solutions. The company provides a broad line of products including the sale and service of automated office equipment, network integration services, electronic presentation systems, and document imaging management systems. The company is a rapidly growing consolidator in the industry and was just added to the Russell 2000 index. Aug 17.50 GQC TW Bid=0.56 OI=26 CB=16.94 ROI=10.4% Chart = http://quote.yahoo.com/q?s=GISX&d=3m ****************************************************************** MCOM - Metricom $35.38 *** Roller Coaster *** Metricom is a leading provider of mobile data networking and technology. The Company's Ricochet service provides mobile professionals with high-performance, cost-effective untethered access to the Internet, private Intranets, local-area networks, e-mail, and other online services. Reported favorable earnings on Thursday (no surprises!) and should benefit from the infusion of capital - $600 million - from Vulcan and MCI Worldcom. Expect a consolidation but the $20 strike appears fairly safe. Aug 20.00 MQM TD Bid=0.44 OI=48 CB=19.56 ROI=5.9% Chart = http://quote.yahoo.com/q?s=MCOM&d=3m ****************************************************************** MIPS - Mips Technologies $43.94 MIPS Technologies is the world's primary architect of embedded RISC processors. They have a broad alliance that is delivering 32/64 bit solutions. MIPS licenses architectures, CPUs, cores and associated technology to chip manufactures, ASIC developers, foundries, and system OEMs. Recent agreements and strategic partnerships combined with a well-defined industry niche will contribute to the company's future success. Technical support near the cost basis. Aug 30.00 MUP TF Bid=0.75 OI=130 CB=29.25 ROI=7.9% Chart = http://quote.yahoo.com/q?s=MIPS&d=3m ****************************************************************** PRIA - PRI Automation, Inc. $38.63 PRI Automation is the leading global supplier of advanced factory automation systems and software that optimize the productivity of semiconductor and precision electronics manufacturers, as well as OEM process tool manufacturers. Coverage was initiated at the beginning of July by Hambrecht & Quist. On Monday, PRI announced its SFO-1000, a 300mm loadport product. PRI looks ready to test the January high with technical support near the sold strike. Earnings are expected this week. Aug 30.00 UXQ TF Bid=1.00 OI=785 CB=29.00 ROI=11.5% Chart = http://quote.yahoo.com/q?s=PRIA&d=3m ****************************************************************** PSSI - PSS World Medical, Inc. $12.00 PSSI is a specialty marketer and distributor of medical products to physicians, alternate-site imaging centers, long-term care providers, home care providers, and hospitals through 111 service centers to customers in all 50 states and three European countries. PSS has recently signed a distribution agreement with Philips Medical Systems and acquired four companies through its subsidiary Diagnostic Imaging (adding annualized revenues of approximately $15 million). The company's delayed annual report was released Friday. PSS World has not been near $10 since April. Aug 10.00 PYQ TB Bid=0.44 OI=433 CB=9.56 ROI=13.6% Chart = http://quote.yahoo.com/q?s=PSSI&d=3m ****************************************************************** RMII - Rocky Mountain Internet $13.13 * Second Tier Internet * RMII, a national full-service Internet based communications provider offers a wide range of services, including Internet access, Web Solutions, e-commerce, phone services and other related services. Rocky Mountain has been on a buying spree acquiring several companies since January and expanding across the Midwest. With the secondary Internets gaining attention, this play offers a chance at a favorable entry. Aug 10.00 RMU TB Bid=0.38 OI=64 CB=9.62 ROI=12.6% Chart = http://quote.yahoo.com/q?s=RMII&d=3m ****************************************************************** SNRS - Sunrise Tech. Int'l, Inc. $16.63 Sunrise Tech. develops, manufactures and markets laser systems and other products for applications in ophthalmology. They are developing a laser thermal keratoplasty (LTK) system to reshape corneas for treating hyperopia (farsightedness) which is currently in use in Europe and the Americas, and is in clinical trials in the United States. On Tuesday, Sunrise received approval from the FDA to treat the second eye on the same day it treats the first eye in clinical trials. The recent volatility has inflated premiums, providing an entry point with a cost basis well below technical support. Aug 7.50 RNU TU Bid=0.31 OI=227 CB=7.19 RC=8.5% Chart = http://quote.yahoo.com/q?s=SNRS&d=3m ***************************** SEE DISCLAIMER IN SECTION ONE *****************************
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