Option Investor
Newsletter

Daily Newsletter, Thursday, 03/21/2002

HAVING TROUBLE PRINTING?
Printer friendly version
The Option Investor Newsletter                Thursday 03-21-2002
Copyright 2001, All rights reserved.                       1 of 3
Redistribution in any form strictly prohibited.


Posted online for subscribers at http://www.OptionInvestor.com
******************************************************************
MARKET WRAP  (view in courier font for table alignment)
******************************************************************
        2-21-2002           High     Low     Volume Advance/Decline
DJIA   10,479.84 - 21.73 10505.72 10354.74  1.3 bln   1627/1419
NASDAQ   1868.83 + 35.96  1870.16  1825.99  1.6 bln   2132/1332
S&P 100   582.44 +  0.27   583.43   574.86   Totals   3759/2751
S&P 500  1153.58 +  1.73  1155.10  1139.48
RUS 2000  505.44 +  6.40   505.45   497.91
DJ TRANS 2852.98 - 41.13  2900.63  2808.59
VIX        19.98 -   .75    21.76    19.98
VXN        36.98 -  1.18   39.38     36.98
TRIN         .98
CBOE Put/Call Ratio: .69
******************************************************************

SECTOR DIVERGENCES AND INTRADAY WHIPSAWS
Leigh Stevens

ON THIS DAY in 1871, journalist Henry M. Stanley began his famous 
expedition to Africa to locate the missing David Livingston. The end of 
his travels led to the famous meeting and question, "Dr. Livingston I 
presume?" Today, the similar question is "will the real market stand 
up?"  

STOCKS -  
What do you make of a day when the utility index (UTY.X) breaking out 
big time and the high-techs, including bio-tech, software, 
semiconductors, networking and some internet stocks are also 
rebounding? In a word, ROTATION!  What money manager and individuals 
do, moving from overexploited to beaten down areas, when the market as 
a whole has many cross currents, reflecting the underlying mixed 
economy.

Some moves made sense in terms of the economic data today.  The utility 
stocks were movers based on the expectation that rates would have to go 
up, making these stocks a play based on their high dividends.  This 
stock group (per the chart below), especially the specific picks 
highlighted by Jeff Bailey today, looks like a good place to park some 
widow's and orphan's money. 



   

Meanwhile, what else to do, but take some profits out of the S&P 
universe, especially with bellwether General Electric (GE) down almost 
3.5%, based on the continued shock that GE may be a bit debt heavy -- a 
chink in the house that Jack built. 

Hey, one place to put the money is to nibble in the oversold tech 
stocks thinks the money manager herd. The Nasdaq Composite (COMPX) rose 
2%, with the Nasdaq 100 (NDX) up 2.6%. Rotational movement of money is 
apparent as profit taking hit year-to-date strong performers like 
International Paper (IP) Caterpillar (CAT) and WalMart (WMT). The Dow 
would have been down more of course, without the rebound of long-
suffering AT&T (T) and struggling Intel (INTC) and Microsoft (MSFT). 

Phillip Morris (MO) was up on their continued ability to raise prices 
on tobacco as evidenced by the 3,8% rise in tobacco prices according to 
CPI stats. Good thing we are all going to quit, at least one of these 
days.   

EARNINGS FRONT -  
Not surprisingly, there were some tech stocks that reported better than 
expected. Before the opening, Tech Data (TECD) reported earnings that 
were up 3 cents more (+.63) than anticipated. After the close, 3Com 
Corp (COMS), reported a 3 cent less loss (-.12) than consensus, which 
was good for a 3% gain in the aftermarket. Also, after the bell, Palm 
Inc. (PALM) shaving a penny (-.02) off the consensus of -.03 and was up 
several percentage points in after hours trade.  

ECONOMY - 
Minutes of the Federal Reserve's January meeting showed that board 
members were surprised by the speed of the economic recovery. Of 
course, these are the folks that were surprised at how fast the economy 
tanked last time. Reading the details of the minutes reinforces the 
expectation that rates will be adjusted upward from very low levels and 
some rate tightening will occur later this spring.  

Meanwhile, consumer prices, as measured by the CPI, rose only 0.2%. 
Inflation did not accelerate in the past year through February. Housing 
prices (40% of CPI) continue to rise, up .3%, otherwise the overall CPI 
would have been flat. Inflation news seems good, but the market was 
more unsettled by the latest Fed minutes.

Last but not least, the Conference Board said its index of leading 
indicators was unchanged following a revised .8% increase in Jan. 
Rather a mixed signal, in that while the economy is out of recession, 
growth is likely to be slow.  Slow growth means scant increases in 
earnings. Weekly jobless claims dropped a bit, as reported by the Labor 
department. 

OVERALL STRATEGY - 
In recent days, a lot is heard about this being a "stock-pickers" 
market, given the market being spooked by the prospect of higher rates 
and the Fed being more inclined to tighten than ease, coupled with the 
reality of both bright and weak spots in the economy. The truth of the 
market rewarding only select stocks is evident in the recent less than 
robust advance-decline figures which show a narrow-based advance. 

NYSE net advance-decline figures (advances minus declines) during the 
tail end of the recent advance did not show more than a few hundred 
stocks advancing over declining, versus late-February/early March A/D 
figures that were in the +1000 to +1500 range on the NYSE.  

There was also mention in our monitor and intraday updates of the 
anemic advancing volume totals -- advancing volume, or willingness to 
buy on up ticks, being a key determinant of a strong market. 

Fortunately, you take advantage of some superb stock picking by our 
people AND index traders can simply be more selective and wait for 
moves to the low or high end of trading ranges, etc. 

The watchword is to trade more selectively. As you are not concerned 
about how many times you trade (only your broker loves you for that), 
you need only be concerned about your profits for the year. If you took 
action only on 3-4 solid ideas a month, this would translate into an 
outstanding end-of-year bottom line.

I was looking to buy after a good-sized pullback, which is underway. 
Austin was suggesting playing puts and the short side at the recent 
highs and this strategy has been rewarding. Do you stay on the short 
side?  Odds favor the downside with momentum oscillators moving lower 
and the low option volatility as seen in the recent low VIX numbers 
around 20. 

WHAT TO WATCH - S&P 500 (SPX) 
BEARISH: Any closing break of the 200-day moving average in the S&P 500 
(SPX), currently at 1144.7 and the 21-day moving average at 1141, 
coupled with an inability for the index to climb back above the 1140-
1145 area on any subsequent rally attempts, should lead to a next 
downswing to the 1120-1125 zone. 

NEUTRAL: An ability to hold 1140 and then to drift sideways, will 
"throw off" the oversold condition as surely as another drop.  In which 
case, the correction proves to be shallow due to window dressing. 



  
 
SPX has corrected close to 38%, the area of a "minimum" 33-38% 
retracement.  I rate it more likely that the correction will be deeper, 
to the 1120-1125 area, perhaps after a deflection from overhead 
resistance in the 1160 area. Unlikely we'll see SPX closing back above 
1160 in the near-term and staying short can be determined by the SPX 
staying below this level. 1160 is also an area to look to do renewed 
selling.  

BULLISH SCENARIO: I'll be evaluating trading on the long side if there 
is a move down to the 1120-1125 zone. There is no rush to get long 
absent a further drop. Time is on the side of put holders in the coming 
1-2 weeks. Hourly chart below is showing a pretty good top right now.



 


Leigh Stevens
Chief Market Strategist
LStevens@OptionInvestor.com


********************
INDEX TRADER SUMMARY
********************

Reversal Day?

What began as another large leg down for the Dow and S&Ps reversed 
in bullish fashion as I'm sure Jim noted above. With bullish 
"hammer" candles in the old economy and bullish engulfing candles 
in tech sector daily charts, indexes should continue higher on 
Friday.

But how far? Everyone anticipates a rally into eom window dressing 
and earnings season beyond, so dipsters are not letting any bounce 
off support get away. Longer-term charts across all major indexes 
remain mixed to bearish although that could change tomorrow. 
However, most index and sector charts are not where I'd look to 
get long right now save for the popular techs sporting oversold 
extreme. Examples of our logic follow:

(Weekly/Daily Charts: DTX and DUX)


 



 

These charts were pulled from OI Index Wrap Tuesday, 02/26. We 
noted that the DTX was getting everyone's attention, even CNBC 
profiled its breakout all day. But the times of buying breakouts 
and expecting an endless run to follow are slim pickin's right 
now. At that time the DUX looked like a better place to get long 
near support with stochastics just emerging from oversold extreme 
instead of toppy like the DTX.

And where are they tonight?

(Daily Charts: DTX & DUX)


 

Transports on the left, utilities on the right. Both made equal 
moves up from that post three weeks ago but looked what happened 
since. Transports posted an inside week, broke to the downside and 
are still running lower today. Utilities are still "movin' on up" 
with George & Louise Jefferson (remember that TV show? I loved 
it!) while transports are finished for now.

This same picture exists in the tech sectors versus Dow and S&Ps. 
Expect techs to out-perform on any further ramp but sustained 
rallies at new recent highs are not likely past Memorial Day. Big 
pros are salivating over the prospects of shorting new breakouts 
ahead and stepping on the pedal when earnings season ends.

We'd best consider doing the same!

Best Trading Wishes,
Austin P


************************Advertisement*************************
Tired of waiting on trades to execute?
Does your broker offer Stop Losses on Options?

Trade instantly with Stop Losses at PreferredTrade Inc.
Stop Losses based on the option price or the stock price.
Move your trading into the next millennium with PreferredTrade.

Anything else is too slow!

http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN
**************************************************************


****************
MARKET SENTIMENT
****************

Still More On The VIX
By Eric Utley

The CBOE Market Volatility Index (VIX.X) closed below the 20.00
level for the first time in a long time.  Is it time to load up
on out-of-the-money (OTM) distant month puts?  Where's Austin
when I need him?

Before I get a slew of questions, let me answer what 'OTM' and
'distant month' mean.  OTM is away from the market; lower.  It
varies from each trader and depends on individual risk
preference.  Distant month means not the front-month; it can
mean as soon as May or as distant as January.  Again, it depends 
on the individual.

With that out of the way, let me observe.  The VIX hasn't traded
below 20.00 since August 2000.  You can pull-up a chart of any
major average to find out what happened to stocks following
August 2000.  It's important to note, however, that the VIX
traded below 20.00 for about three weeks back in August 2000.
Prior to that period, the VIX traded below 20.00 during the
summer of '99.  It did so for about four weeks.  That's why the
common mantra among traders is to use distant month puts, not
the ones that expire in a few weeks, when adopting a bearish
bias based upon a low VIX.

Before I delve in further, let me step back.  A VIX at or below
20.00 means that implied volatility is relatively low, using
recent history as a guide.  Implied volatility is the biggest
contribution to premiums next to underlying price.  Therefore,
options are on sale.  The discount means that buying options is
a much better practice than selling options in terms of the
risk trade-off.  In other words, selling covered calls or naked
puts is not smart in this market, at least in my opinion.  What
is smart is finding stocks at inflection points and using a
straddle or strangle to take advantage of a big forthcoming
move.  Leverage, baby, it's great!

To digress, there's been a lot of talk about the VIX recently.
Some on Option Investor, coming from Austin and Mark, but also
from other media outlets.  Each offering different opinions and
observations.  Hopefully I can shed some clarity.  But I hate to
view the VIX from a micro standpoint, because it's really no
that difficult to use.  Nevertheless, at the request of more than
one reader, I'm setting forth some levels and ideas for the VIX
using a point and figure chart.

There are two important levels to take away from the chart
below, which employs a 0.50 point box.  First, the current
vertical count is 16.00.  Yes, the VIX could work that low.
Second, the current set-up won't generate a new buy signal
(increased fear) until the 23.50 level, which would break a
triple-top.  Such a move may be more meaningful and reveal a
heightened state of fear, something to watch for.

VIX - 0.50 Point Box


 

-----------------------------------------------------------------

Market Averages


DJIA ($INDU)

52-week High: 11350
52-week Low :  8062
Current     : 10480

Moving Averages:
(Simple)

 10-dma: 10564
 50-dma: 10072
200-dma:  9998



S&P 500 ($SPX)

52-week High: 1316
52-week Low :  945
Current     : 1154

Moving Averages:
(Simple)

 10-dma: 1161
 50-dma: 1128
200-dma: 1145



Nasdaq-100 ($NDX)

52-week High: 2071
52-week Low : 1089
Current     : 1489

Moving Averages:
(Simple)

 10-dma: 1504
 50-dma: 1498
200-dma: 1547



Biotech ($BTK)

The BTK was the day's best performing sector Thursday with its
3.87 percent pop.  The BTK's gain narrowly out paced the 3.56
run in the Disk Drives ($DDX).

Leader gainers in the biotech space included Protein Design
Labs (NASDAQ:PDLI) with its 21.83 percent rally despite its
seemingly bad news Wednesday night.  Others included ImClone
(NASDAQ:IMCL), Millennium (NASDAQ:MLNM), and Incyte
(NASDAQ:INCY).

52-week High: 676
52-week Low : 382
Current     : 535 

Moving Averages:
(Simple)

 10-dma: 522
 50-dma: 510
200-dma: 537


Paper ($FPP)

The FPP was the worst performing sector in Thursday's session
with its 1.88 percent drop.  The cyclicals were the poorest
performing broad group of stocks for the day, which was
interesting because the group has been the market leader
recently.

Leading to the downside in the FPP included Louisiana
Pacific (NYSE:LPX), Abitibi (NYSE:ABY), Weyerhaeuser (NYSE:WY)),
and International Paper (NYSE:IP)

52-week High: 381
52-week Low : 270
Current     : 367

Moving Averages:
(Simple)

 10-dma: 371
 50-dma: 347
200-dma: 330

-----------------------------------------------------------------

Market Volatility

WHOA!  The VIX closed below the 20.00 level Thursday for the
first time in 18 months.  The late-day rally in stocks and
earlier reversal in bonds contributed to the VIX's demise
Thursday.

Meanwhile, nothing new in the VXN.  It traced another all-time
low.

CBOE Market Volatility Index (VIX) - 19.98 -0.75
Nasdaq-100 Volatility Index  (VXN) - 36.98 -1.18

-----------------------------------------------------------------

          Put/Call Ratio  Call Volume   Put Volume
Total          0.93        434,545       405,047
Equity Only    0.82        397,048       324,129
OEX            1.18          8,669        10,189
QQQ            0.72         34,965        25,172
 
-----------------------------------------------------------------

Bullish Percent Data

           Current   Change   Status
NYSE          63      + 0     Bull Confirmed
NASDAQ-100    65      - 4     Bull Confirmed
DOW           77      + 0     Bull Confirmed
S&P 500       76      + 0     Bull Confirmed
S&P 100       78      + 0     Bull Confirmed

Bullish percent measures the number of stocks in an index 
currently trading on a buy signal on their point and figure 
chart.  Readings above 70 are considered overbought, and readings 
below 30 are considered oversold.

Bull Confirmed  - Aggressively long
Bull Alert      - Cautiously long
Bull Correction - Pause or pullback in upward trend
Bear Alert      - Take defensive action if long
Bear Confirmed  - High risk if long, good conditions for shorting
Bear Correction - Pause or rebound in downtrend

-----------------------------------------------------------------

 5-Day Arms Index  0.94
10-Day Arms Index  1.05
21-Day Arms Index  1.03
55-Day Arms Index  1.22

Extreme readings above 1.5 are bullish, and readings below .85 
are bearish.  These signals don't occur often and tend be early, 
but when the do, they can signal significant market turning 
points.

-----------------------------------------------------------------

Market Internals

        Advancers     Decliners
NYSE      1666           1498
NASDAQ    2158           1359

        New Highs      New Lows
NYSE      143             63
NASDAQ    149             25

        Volume (in millions)
NYSE     1,323
NASDAQ   1,429

-----------------------------------------------------------------

Commitments Of Traders Report: 03/12/02

Weekly COT report discloses positions held by small specs
and commercial traders of index futures contracts at the 
Chicago Mercantile Exchange and Chicago Board of Trade. COT data 
can be found at www.cftc.gov.

Small specs are the general trading public with commercials being 
financial institutions. Commercials are historically on the 
correct side of future trend changes while small specs tend 
to be wrong.  

S&P 500

Attention!!  Commercial traders continued to build their net
bearish position while small traders reached an extreme
bullish position.

Commercials   Long      Short      Net     % Of OI 
02/26/02      366,258   432,258   (66,000)   (8.3%)
03/05/02      361,254   445,989   (84,735)  (10.5%)
03/12/02      396,050   483,606   (87,556)   (9.9%)

Most bearish reading of the year: (111,956) -   3/6/01
Most bullish reading of the year: ( 36,481) - 10/16/01

Small Traders Long      Short      Net     % of OI
02/26/02      139,183     62,087   77,096     38.3%
03/05/02      161,711     60,941  100,770     45.3%
03/12/02      179,825     75,025  104,800     42.6%

Most bearish reading of the year:  36,513 - 5/01/01
Most bullish reading of the year: 104,800 - 3/05/02
 
NASDAQ-100

Nasdaq commercial traders added a number of short positions for
a big increase in the group's net bearish position.  Meanwhile,
small traders grew slightly more bullish.

Commercials   Long      Short      Net     % of OI 
02/26/02       33,589     34,091      (502)  (0.7%)
03/05/02       33,549     35,419    (1,870)  (2.7%)
03/12/02       37,415     42,942    (5,527)  (6.9%)

Most bearish reading of the year: (15,521) -  3/13/01
Most bullish reading of the year:   7,774  - 12/21/01

Small Traders  Long     Short      Net     % of OI
02/26/02        9,517    11,416    (1,899)    (9.1%)
03/05/02       11,961    11,214       747      3.2% 
03/12/02       14,571    13,045     1,526      5.5%

Most bearish reading of the year:  (9,877) - 12/21/01
Most bullish reading of the year:   8,460  -  3/13/01

DOW JONES INDUSTRIAL

Dow Jones commercial traders dropped both long and short
positions, while maintaining their net bullish position.
Small traders dropped a number of longs and added a small number
of shorts of an increase in their net bearish position.

Commercials   Long      Short      Net     % of OI
02/26/02       33,322    21,110   12,212     22.4%
03/05/02       37,036    25,554   11,482     18.3% 
03/12/02       35,080    23,204   11,876     20.4%

Most bearish reading of the year: (8,322) -  1/16/01
Most bullish reading of the year: 15,135  - 10/16/01

Small Traders  Long      Short     Net     % of OI
02/26/02        6,333    12,547    (6,214)   (32.9%)
03/05/02        6,589    13,057    (6,468)   (32.9%) 
03/12/02        6,400    13,070    (6,670)   (34.3%)

Most bearish reading of the year:  (8,777) - 10/12/01
Most bullish reading of the year:   1,909  -  1/16/01

-----------------------------------------------------------------


************************Advertisement*************************
”If you haven’t traded options online – you haven’t really 
traded options,” claims author Larry Spears in his new compact 
guide book:  

“7 Steps to Success – Trading Options Online”.  

Order today and save 25% (only $15) by clicking on PreferredTrade 
and clicking on the link to the book on its home page.

http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN
**************************************************************


***********************
INDEX TRADER GAME PLANS
***********************

Index Trader Swing-Trade Game Plan: Thursday, 03/21/2002 
Buying Those Dips

News & Notes: 
"Bargain" hunters couldn't resist hitting the dips today when 
price action reached areas of recent support. Daily chart 
candlestick patterns are bullish and portend Friday's action 
should follow thru and run higher. The intraday picture does not 
agree:

Featured Markets: 
[60/30-Min Chart: OEX] 


 

Today's bounce took all indexes right back to the tops of recent 
channels and very short-term resistance points of retracement. 
Stochastic values are nearly overbought and will become so 
tomorrow, but could remain pinned up there. Bulls could look to 
test longs above this channel at 584+ OEX with stops held just 
below at 582. I'm more inclined to test puts on failure & break 
below these measures instead, based upon all chart signals looking 
more bearish than anything right now.

[60/30-Min Chart: SPX] 


 

Same for the SPX. Longs above 1156+ might work, but watch for 
failure at or back down thru this level for higher-odds shorts. 
1156 area might be the session high if markets turn tail early and 
drop, so watch this dual pivot carefully!

[60-Min Chart: QQQ] 


 

QQQ is banging against round number of 37.00 and could run either 
way Friday. That's the pivot point to trade, but for option trades 
I'm holding off on call plays and expect a solid chance of 
downward direction again.

Summation: 
All charts suggest we go lower again tomorrow, but today's bullish 
close and Friday's pattern of green cannot be ignored. Call 
players be careful and use these clear measures of resistance / 
support to stay above. Odds favor puts below resistance 
if chart signals roll down from overbought zones, which is the way 
I'd play options on Friday.

Trade Management: 
Option traders may choose listed In-The-Money (ITM) or Out-The- 
Money (OTM) contracts by personal preference. They are selected 
based on volume, open interest and "Delta" values in that order. 
Our preference is usually OTM contracts except for the last few 
days of expiration when ATM or ITM contracts are preferred. 

Entry triggers are points where plays are tracked when price 
action breaks above for calls or below for puts. Stops are the 
exact opposite of that. Sell targets are points to exit based on 
index levels or %gain on option contract price as noted. 

*No entry targets listed mean the models are idle at that time. 
New Play Targets:


         QQQ                          DJX
Apr Calls: 38 (QQQ-DL)            Apr Calls: 106 (DJV-DB)  
Long: BREAK ABOVE none            Long: BREAK ABOVE none
Stop: Break Below                 Stop: Break Below 
                                

Apr Puts: 37 (QQQ-PK)             Apr Puts: 105 (DJV-PA) 
Long: BREAK BELOW none            Long: BREAK BELOW none
Stop: Break Above                 Stop: Break above 

         OEX                         SPX
Apr Calls: 600 (OEY-DT)           Apr Calls: 1175 (SPT-DO)
Long: BREAK ABOVE none            Long: BREAK ABOVE none
Stop: Break Below                 Stop: Break Below 


Apr Puts: 590 (OEB-PR)            Apr Puts: 1150 (SPT-PJ)
Long: BREAK BELOW none            Long: BREAK BELOW none
Stop: Break Above                 Stop: Break Above 


Open Plays:
None

Index Trader Sector-Trade Game Plan: Thursday, 03/21/2002 
Drop & Pop


News & Notes: 
Indexes dropped precipitously in the first half and bounced back to 
close the day. Current shorts performed quite well but finished near 
where they began. Intraday trading rules right now.. everything else is 
a distant-second at best.


Featured Plays: 
None 


Summation: 
No new plays to buy (or sell) & hold at this time, but tech sectors look 
poised to pop higher soon.


Trade Management: 
Entry triggers are points where plays are tracked when price action 
breaks above for calls or below for puts. Stops are the exact opposite 
of that. Sell targets are points to exit based on index levels or %gain 
on share price as noted. No entry targets listed mean the model is idle 
at that time. 
** Asterisk means symbol has listed options as well 

New Play Targets:


None


Open Long Plays:


None                 

Open Short Plays


XLB **          XLP **          
Short: 23.75    Short: 26.00    
Stop:  24.50    Stop:  26.75    

XLV **          XLY **          
Short: 29.00    Short: 29.90    
Stop:  30.25    Stop:  31.00    

IYD             IYK             
Short: 45.25    Short: 45.90    
Stop:  47.00    Stop:  47.00    

IYR             UTH **          
Short: 84.75    Short: 93.25    
Stop:  86.00    Stop:  95.00    

RTH **          PPH **          
Short: 98.00    Short: 98.75    
Stop: 102.00    Stop:  97.00    

DIA **[DJX]     IYM
Short: 105.90   Short: 42.00 
Stop:  107.00   Stop:  43.00

IYE
Short:  49.70
Stop:   52.00

IJJ
Short:  97.00
Stop:   99.00


************************Advertisement*************************
If you trade options online, then you need an online broker 
that:
offers true direct access to each option exchange
offers stop and stop loss online option orders
offers contingent option orders based on the price of the 
option or stock
offers online spread order entry for net debit or credit
offers fast option executions

PreferredTrade offers these online option trading features and 
more; call 1-888-889-9178 or click for more information.

http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN
**************************************************************


FREE TRIAL READERS
******************
If you like the results you have been receiving we
would welcome you as a permanent subscriber.

The monthly subscription price is 39.95. The quarterly
price is 99.95 which is $20 off the monthly rate.


We would like to have you as a subscriber. You may
subscribe at any time but your subscription will not
start until your free trial is over.

To subscribe you may go to our website at

www.OptionInvestor.com

and click on "subscribe" to use our secure credit
card server or you may simply send an email to

 "Contact Support"

with your credit card information,(number, exp date, name)
or you may call us at 303-797-0200 and give us the
information over the phone.

You may also fax the information to: 303-797-1333


**********
DISCLAIMER
**********

Please read our disclaimer at:
http://www.OptionInvestor.com/page/oin/aboutus/disclaimer.html


**************************************************************
ADVERTISING INFORMATION

For more information on advertising in OptionInvestor Newsletter,
or any Premier Investor Network newsletter please contact:

Contact Support
The Option Investor Newsletter                 Thursday 03-21-2002
Copyright 2001, All rights reserved.                        2 of 3
Redistribution in any form strictly prohibited.


****************
PICKS WE DROPPED
****************

When we drop a pick it doesn't mean we are recommending a sell
on that play. Many dropped picks go on to be very profitable.
We drop a pick because something happened to change its
profile. News, price, direction, etc. We drop it because we
don't want anyone else starting a new play at that time.
We have hundreds of new readers with each issue who are
unfamiliar with the previous history for that pick and we
want them to look at any current pick as a valid play.


CALLS:
*****

SYMC $40.82 -0.83 (-0.64) J.P. Morgan analysts initiated
coverage on SYMC with a lukewarm market perform rating early
this morning.  The firm also set a $46 price target on shares.
The lukewarm actions were accompanied with a less than bullish
view of the company.  Analysts said the company will be
adversely impacted by slower longer term growth rates of the
software anti virus market.  That news stuck with SYMC all day
as the stock under performed the broader tech measures in a
big way.  With the sentiment appearing to shift to the bear
camp, we're dropping coverage.  Use any early rally tomorrow
to exit open plays or set a tight stop just below $40.

KSS $70.13 -0.78 (-1.22) The Retail Sector Index ($RLX) couldn't
get out of its own way in today's session.  The index finished
lower by more than 1%.  Same goes for KSS.  With the index
looking toppy, it may prevent KSS from breaking out of its
trading range.  We'll revisit KSS if the RLX pulls back in the
coming sessions, but until then we're dropping coverage as a
protective measure.  Look to exit plays on any strength in the
RLX early tomorrow.


PUTS:
*****

CCMP $67.39 +3.66 (+2.76) Short-covering in the Chip sector
killed our CCMP play prematurely today, as the stock rebounded
more than $4 from the morning lows to end the day with a 5.74%
gain.  The stock has refused to break down below the $63 support
level and with today's sharp rebound we're going to pull the plug
before our stop gets taken out.  Use any weakness in the morning
to gain a favorable exit.

CTX $51.96 -1.80 (-5.93) Being in place to profit from a breakdown
takes solid conviction, but often the results are worth it.  CTX
is a perfect example of being in the right place at the right
time.  We anticipated that with all the good news out for the
Housing sector, it was time for some serious bearish action and
that's just what has unfolded over the past 2 weeks, with CTX
shedding more than $10 in the process.  With the selling climax
this afternoon and the stock being deeply oversold, its time to
harvest those profits and look for fresh plays with which we can
repeat the process.

NVDA $48.99 +2.47 (-3.78) The bounce in Chip stocks on Thursday
has us hastening to close out our NVDA play.  Once again, the
bearish trend in this stock paid off, as we rode it down from the
mid-$50s to as low as $46 this morning.  But the solid recovery
throughout the day indicates that the bearish trend is going to
take a bit of a break, and so will we.  Close out open positions
for a gain here and keep an eye on NVDA.  Odds are good we'll be
back for another helping real soon.


***********************************************************
DAILY RESULTS
***********************************************************

Please view this in COURIER 10 font for alignment
*************************************************

CALLS              Mon    Tue    Wed    Thu

ACS      55.56    3.71  -0.75   0.35  -0.79  Protect your profits
BAC      68.00   -0.37   0.05  -1.02   0.16  Next leg higher???
SYMC     40.82    0.57   0.37  -0.75  -0.83  Dropped, diverged
IDPH     70.16    1.03  -0.62  -2.72   2.54  Rebounded, leading
CEPH     67.69    0.83  -0.36  -1.70   1.55  Following BTK higher
GENZ     50.83    0.91  -0.38  -1.03   1.32  Retesting the 200-dma
COF      62.27    0.43   1.33  -1.66   0.12  Consolidating, entry
KSS      70.13    0.40  -1.29   0.45  -0.78  Dropped, poor sector
EOG      41.15    0.53   0.89  -0.33   0.72  Trading very nicely
EXPE     68.51    2.55   0.43   1.59   1.01  New, window dressing
TXN      34.16   -0.09   0.57  -1.07   0.66  New, chip rebound
KLAC     66.00    0.37   0.91  -1.82   1.05  New, equipment leader


PUTS

CTX      51.96   -1.73   0.95  -3.35  -1.80  Dropped, take gains
NVDA     48.99    0.00  -1.12  -5.13   2.47  Dropped, protection
RYL      85.09   -1.63   1.35  -3.81   0.48  More downside ahead?
CCMP     67.39    2.22  -0.58  -2.54   3.66  Dropped, shorts lose
ISSX     27.33    0.34  -0.55  -2.13   1.46  Still below supply
MIL      45.00   -0.41  -1.24   0.10   0.08  Shorts are covering
GDW      62.01   -0.70  -1.38  -1.54  -0.17  New, higher rates


************************Advertisement*************************
Tired of waiting on trades to execute?
Does your broker offer Stop Losses on Options?

Trade instantly with Stop Losses at PreferredTrade Inc.
Stop Losses based on the option price or the stock price.
Move your trading into the next millennium with PreferredTrade.

Anything else is too slow!

http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN
**************************************************************


********************
PLAY UPDATES - CALLS
********************

IDPH $70.16 +2.54 (+0.23) IDPH followed the AMEX Biotechnology
Sector Index (BTK.X) higher after the recent two day pullback
in the group.  The BTK.X rebounded from a fractional lower
opening and finished the day higher by 3.87%.  For its part,
IDPH finished 3.75% higher.  The stock continues to trade in
synch with its index which is why it's important to continue
monitoring the BTK.X when gauging entry points and exit points
in the IDPH call play.  Watch the BTK.X in tomorrow's session
as it approaches its 200-dma.  That potential resistance
level sits just overhead of the BTK.X at the 536.65 level.  A
move through there could bring more buyers into the group and
most likely carry IDPH along for the ride.  Above the 200-dma,
the BTK.X faces short term resistance only at its recent
relative high above the 540 level.  An advance past 545 could
confirm the recent rebound in the BTK.X and lead to higher
prices in biotech shares.  Look for IDPH to track its sector
closely and watch for the stock to breakout above the $72
level.  From there, we'll keep our eyes on the $73 and $74
resistance range.  On intraday dips, look for buyers to
emerge around the 10-dma at the $68.67 area.  Confirm
weaker volume on pullbacks.

CEPH $67.69 +1.55 (+0.32) CEPH spent the last two days
pulling back and consolidating its recent rally.  The pullback
may or may not be over after today's rebound.  We expected
the Biotech Sector ($BTK) to take more time consolidating its
recent gains, but the buyers didn't share our opinion as
evidenced by today's rally in the BTK.  The index finished the
day almost 4% higher, easily out performing the broader market
measures such as the Nasdaq Composite (COMPX), which finished
less than 2% higher.  CEPH briefly bounced below its 10-dma
in today's trading, but shot back higher into the close of
trading along with its sector.  The stock could be setting up
for another breakout in tomorrow's session if the biotech
bulls return.  Look for early strength in the BTK tomorrow
morning and watch for CEPH to trade up to its recent highs
around the $68.50 to $69 level.  A breakout above the $69
level could lead to a move into the low $70s, where traders
can look to book gains.

COF $62.27 +0.12 (+0.22) COF's recent pullback came on
relatively lighter volume, which may have helped to reveal
a profit taking type of move.  The stock came back down into
its recent breakout area just above the $60 level.  In fact
the stock rebounded from its 10-dma on an intraday basis.
The move back through the 10-dma could've potentially been
used as confirmation of a rebound.  Additionally, we find
the out performance on the part of COF in today's session
encouraging.  Both of the bank measures finished
fractionally lower, while the brokers finished fractionally
higher.  Although COF doesn't belong to the aforementioned
sector indexes, it tends to trade in unison with them, so
its out performance was proof of serious buying in today's
session.  We're looking for that to continue into tomorrow's
session.  Look for additional intraday bounces above the $61
to $61.50 levels for entry opportunities on weakness.

ACS $55.56 -0.79 (+2.52) Still in consolidation mode after
Monday's SG Cowen upgrade that propelled the stock through
resistance, shares of ACS gave back a bit of ground on Thursday.
But volume was very light, adding credence to the theory that
this is simple profit taking.  It is encouraging that there is
no rush for the exits and even with the sharp dips in the broad
markets, ACS has been holding above the $55 level.  Use the
current weakness as an opportunity to position for the next move
higher, scaling into positions each time support is successfully
defended by the bulls.  But don't forget to keep those stops in
place.  Ours is at $54.50, as a drop below that would indicate
that ACS is likely to fill its gap down to the $53 level.

BAC $68.00 +0.16 (-1.18) Following the FOMC's change of bias on
interest rates on Tuesday, the Banking index (BIX.X) has been
showing some weakness, and it was encouraging to see the bulls
step in to defend the $675 support level today.  Shares of BAC
have likewise been giving back some ground, but have held up
nicely above the critical $67 support level.  Today's dip to just
above that level could have been giving us a decent entry point,
but it was a bit tough to call with the rather tepid volume (only
about 60% of the ADV).  We need to see some more buying conviction
before we'll know the bulls are serious about continuing to push
BAC to new yearly highs.  Use intraday dips and bounces above the
$67 level to initiate new positions, but remember to keep stops in
place at $66.75.  If the BIX begins to weaken substantially, it is
a pretty safe bet that BAC will follow suit.

EOG $41.15 +0.72 (+1.90) With a little bit of a dip on Wednesday,
EOG gave us a nice entry point right at the $40 level before
launching higher today.  Helped along by a rebound in the price
of Natural Gas and the breakout in the Utility sector (UTY.X)
today.  As if that weren't enough, the Natural Gas index (XNG.X)
pushed higher again on Thursday and is working its way towards
the psychologically important $200 resistance level.  Shares of
EOG have been working higher throughout the past month and with
the breakout over $40, the stock looks like it still has room to
run, especially with the recent quad-top breakout on the PnF
chart.  Use the sector strength to maintain your bullish
conviction on this one, buying the dips near support (currently
$40), or venturing into new positions as EOG pushes through to
new 9-month highs.  Our stop is set at $39.

GENZ $50.83 +1.32 (+0.82) Uncertainty in the Biotechnology sector
(BTK.X) on Wednesday, gave way to bullish enthusiasm today after
Morgan Stanley upgraded shares of PDLI following the firms
disappointing drug tests.  That put the BTK index in rally mode
throughout the afternoon session, and GENZ put in a respectable
performance by reversing off the $49 level.  Turning a loss into
a 2.6% gain is encouraging, but we'll need to keep a sharp eye on
the stock as it approaches its 200-dma at $52.18, where there is
also a fair amount of historical resistance.  We want to continue
using intraday dips near the $49-50 level to initiate new
positions on the rebound.  Traders looking to enter on strength
will want to wait for GENZ to power through the $52.25 level on
strong volume before taking the plunge.  So long as the BTK
continues to work its way higher, GENZ should continue to benefit
due to its strength relative to the broader sector.


**************
NEW CALL PLAYS
**************

EXPE - Expedia $68.51 +1.01 (+3.58 this week)

Expedia, Inc. is a provider of branded online travel services for
leisure and small business travelers. The Company operates full
service travel agency Websites targeted at customers in a number
of geographies. The Company operates Expedia.com in the United
States; Expedia.co.uk in the United Kingdom; Expedia.de in
Germany; and Expedia.ca in Canada.

The major carriers' recent moves to severe ties with travel
agents only added momentum to this online travel player.  The
stock is one of the best performing year to date.  Delta Air
Lines (NYSE:DAL) said earlier this week that it had partnered
with Expedia to market air travel packages.  The announcement
was well received as EXPE traded up to another all-time high.
That pattern was repeated in today's session as EXPE cruised
up to the $69 level.  The stock is up an amazing 68% so far
this year.  That performance makes EXPE one of the best
performing high profile Nasdaq stocks for the first quarter of
this year.  What we're looking for is the big mutual fund
buyers who own this stock to carry it higher into early next
week as the quarter comes to an end.  The basic premise is that
money managers like to show their investors that they've held
the best performing stocks through the end of the quarter when
they send out their investment reports.  If a fund has a big
position, then it will try to make the price higher (mark-up)
of the stock through aggressive buy orders into the end of
the quarter.  It's a practice that traders can capitalize on,
but it's by no means a sure bet.  It's an aggressive strategy
for aggressive traders only.  What we'll be looking for is a
quick $3 to $5 pop higher in EXPE into early next week.
Traders can get on the move by entering positions early
tomorrow and looking for EXPE to continue along its intraday
path of higher lows and highs.  Intraday bounces between the
$66 and $67 levels may serve as entries on weakness.
Breakouts above resistance, such as the $69 level, are
playable, but entries on weakness may offer less risk and
more potential upside.  Our stop is initially in place at the
$64 level.  We'll look to target exits by next Tuesday or
Wednesday.

BUY CALL APR-65 UED-DM OI= 134 at $6.00 SL=4.75 
BUY CALL APR-70*UED-DN OI=1295 at $3.10 SL=1.50 
BUY CALL APR-75 UED-DO OI= 110 at $1.45 SL=0.50  Aggressive!! 
BUY CALL MAY-70 UED-EN OI=  20 at $4.60 SL=2.50 

Average Daily Volume = 715 K


KLAC – KLA-Tencor Corporation $66.00 +1.05 (+0.51)

KLA-Tencor is a supplier of process control and yield management
solutions for the semiconductor and related microelectronics
industries.  The company's comprehensive portfolio of products,
software, analysis, services and expertise id designed to help
integrated circuit manufacturers manage yield throughout the
entire wafer fabrication process, from research and development
to final mass production yield analysis.  The company offers a
broad spectrum of products and services that are used by every
major semiconductor manufacturer in the world.  These customers
turn to KLAC for in-line wafer defect monitorin, reticle and
photomask defect inspection, CD SEM metrology, wafer overlay,
film and surface measurement and overall yield and fab-wide
data analysis.

At the forefront of the Semiconductor food chain, the stocks of
the chip equipment makers have been outperforming the
Semiconductor index (SOX.X) for the past 6 months.  If recovery
for the chip sector is just around the corner (already beginning,
according to some sources), then this group should continue to
outperform as manufacturers gear up for the next expansion in
the industry.  Not only that, but demand for new equipment is
likely to be boosted by the push to adapt to the next generation
of chip design.  KLAC has been one of the leaders in the chip
equipment space over the past several months and it has been
looking even better after breaking out over long-standing
resistance at the $60 level earlier this month.  That ushered in
a wave of short-covering that briefly drove the stock above the
$70 level.  That was unsustainable though and KLAC has now gone
through some much needed consolidation and is finding support
repeatedly at the 20-dma (currently $64.07).  Add to that the
support provided by the 2-month ascending trendline (currently
$63), the site of last week's lows, and it looks like the bulls
are ready to launch this one higher.  We want to target intraday
dips near support in the $63-64 level for initiating new
positions.  We're setting a fairly tight stop at $62.75, just
below the supportive trendline.  An interesting note is that
Applied Materials, another chip equipment vendor, announced a
2-1 split after the bell and we can see KLAC trading up by
nearly $2 in the extended session.  If that strength holds into
Friday's trading, a breakout over the $68 level looks like it
could provide a decent entry for momentum traders.  Make sure to
monitor the SOX for continued sector strength before playing.

BUY CALL APR-65*CKV-DM OI=4944 at $4.30 SL=2.75
BUY CALL APR-70 CKV-DN OI=6945 at $1.90 SL=1.00
BUY CALL MAY-70 CKV-EN OI= 160 at $4.00 SL=2.50
BUY CALL MAY-75 CKV-EO OI= 128 at $2.20 SL=1.00

Average Daily Volume = 9.54 mln


TXN – Texas Instruments $34.16 +0.66 (+0.07)

How about Semiconductors R Us?  TXN has broad-based exposure
to the semiconductor market, especially in digital signal
processors and analog integrated circuits.  TXN's products are
used in a diverse range of electronic systems, including
digital cell phones, computers, printers, hard disk drives,
networking equipment, and digital cameras.  TXN also supplies
electronic controls equipment, sensors, radio-frequency
identification systems, and sophisticated graphing
calculators.

The Semiconductor sector (SOX.X) is one of the most volatile
in the technology arena as hot money still chases the momentum
stocks of yesteryear.  Taking a quick look at the SOX chart shows
the inherent volatility in this area of the market, but there are
definitely some solid bullish trends starting to shape up in some
of the SOX components.  Shares of TXN have been on a volatile ride
since the September lows, confined to the range between $25-35.
But what really captures our attention is the ascending trendline
that connects the series of higher lows in January and February.
This trendline currently rests at $32, an area of prior resistance
that is now providing support.  With TXN's brief push up to $35.94
a couple weeks ago, the stock came within 6 cents of giving a
double-top buy signal on the PnF chart, and we think it is going
to do just that in the near future.  The SOX appears to be posting
a bullish reversal from its $580 support level, and with strong
earnings news from MU and a 2-1 stock split announcement from
AMAT tonight after the closing bell, we're looking for some
bullish action straight ahead.  We'd like to see the stock come
back a bit and give us an entry off an intraday bounce in the
$32.50-33.00 area, but with the bullish catalysts listed above, we
may have to settle for trading a breakout above the $35 resistance
level on this one.  A breakout over $36 would be even better.  Set
stops at $31.75.

BUY CALL APR-32*TXN-DZ OI=13333 at $3.00 SL=1.50
BUY CALL APR-35 TXN-DG OI=32303 at $1.45 SL=0.75
BUY CALL APR-37 TXN-DU OI= 9877 at $0.60 SL=0.25
BUY CALL MAY-35 TXN-EG OI=  748 at $2.25 SL=1.00
BUY CALL MAY-37 TXN-EU OI=  457 at $1.35 SL=0.75

Average Daily Volume = 10.7 mln



************************Advertisement*************************
”If you haven’t traded options online – you haven’t really 
traded options,” claims author Larry Spears in his new compact 
guide book:  

“7 Steps to Success – Trading Options Online”.  

Order today and save 25% (only $15) by clicking on PreferredTrade 
and clicking on the link to the book on its home page.

http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN
**************************************************************


*******************
PLAY UPDATES - PUTS
*******************

MIL $45.00 +0.08 (-1.47) The recent rebounds in the broader
technology and biotechnology segments of the market has
supported MIL.  The stock has by no means participated in
the recent rally as noted by today's fractional gain in the
face of solid gains in the sector indexes.  But without
weakness in the broader markets, the bulls may find some
support in MIL at current levels.  The continues to attract
bids just below the $45 and has been coiling around the
level in recent days.  What we need to be on the look out for
is a big short covering rally in the coming days.  It looks
as if the shorts are getting nervous enough to begin
covering, especially if the broader market continues higher.
Traders with open positions taken in the last two days need
to set very tight stops in order to protect against such a
development as a sharp short covering rally.  If that short
covering does come in the coming sessions, then it may
actually offer a better entry point near resistance overhead.
One level to consider as a possible entry point overhead is
at the 10-dma, which is still descending and currently sits
at the $46.07 level.  A rollover from there would offer a
low risk entry point.  Otherwise, wait for broader market
weakness in conjunction with a breakdown below the $44
level on heavy volume.

ISSX $27.33 +1.46 (-0.87) It didn't take a rocket scientist to
see that shares of ISSX were likely to bounce in the $25-26 area
with all the clustered historical support there and the 50%
retracement level just above $25.  So when yesterday's selloff
dropped the stock to this level, buyers stepped in to support the
stock, which has been gradually creeping back up since
Wednesday's lows.  The big question is whether this bounce marks
the end of our play or the setup for a fresh entry.  Based on
looming resistance between $28-29 and the descending 20-dma
($27.57) just overhead, it looks like an entry point to us.  Wait
for the current round of short-covering to run its course, and
then look to enter new positions as the stock rolls over at
resistance.  We're keeping our stop in place at $29.50 tonight.

RYL $85.09 +0.48 (-3.61) Despite the fact that Housing stocks
have continued to tumble (as measured by the DJUSHB index) in the
wake of Tuesday's FOMC meeting, shares of RYL finally seemed to
find some support on Thursday, rebounding ever so slightly from
the $84 level.  The real tell-tale sign of the stock's weakness
came early on Wednesday, as RYL failed to push through the $90
resistance level and rolled over right at the 20-dma.  Based on
the fact that support doesn't really appear until the $80 level,
we think there is more downside in the play, especially with no
signs of strength in the DJUSHB index.  A rebound from current
levels could set us up very nicely for fresh entries on a
rollover from the $87.50-89.00 area, the site of some recent
price congestion that should act as resistance.  Our stop
remains at $89.50.


*************
NEW PUT PLAYS
*************

GDW - Golden West Financial $62.01 -0.17 (-3.79 this week)

Golden West Financial Corporation is a savings and loan holding
company, the principal business of which is the operation of a
savings bank business through its wholly owned savings bank
subsidiary, World Savings Bank, FSB. The Company operates 120
savings branch offices in California, 37 in Florida, 36 in
Colorado, 22 in Texas, 15 in Arizona, 11 in New Jersey, eight
in Kansas, and four in Illinois. 

The recent rise in long term interest rates is hurting some
sectors of the market.  The prospects of the Federal Reserve
rising short term rates is adding to the momentum.  The
recent pullback in the housing stocks reflects the market's
belief of higher rates in the intermediate to longer terms.
It's stemming from the anticipation for inflation to rear its
ugly head, which brings us to one of the bigger savings and
loans companies in Golden West.  We took a close look at
Washington Mutual (NYSE:WM) for this play, but decided to go
with GDW because it's a higher priced stock and typically
trades faster than WM.  We noticed that the stock failed to
trade above its recent top at the $66 to $67 range and has
since rolled over in a big way.  While the stock may be
slightly oversold in the short term, we're looking for
either a further breakdown below support or a rollover near
resistance for a favorable entry point into new bearish
positions.  If today's bounce continues into tomorrow's
session, then traders might hold off before aggressively
entering new puts.  Letting the stock run up to either its
50-dma at $63.15 or its 10-dma at $64.23 would be the best
bet from there.  Conversely, if the sellers return as early
as tomorrow, then look for GDW to breakdown below the $60
level.  Below there sits the 200-dma at $59.46, which could
cause a short-term bounce.  But the breakdown below $60 may
overpower any potential for a bounce.  Our downside price
target is at the $55 level, while our stop is in place at
$65.

BUY PUT APR-65 GDW-PM OI=360 at $3.80 SL=2.00
BUY PUT APR-60*GDW-PL OI=127 at $1.35 SL=0.75

Average Daily Volume = 780 K



************************Advertisement*************************
If you trade options online, then you need an online broker 
that:
offers true direct access to each option exchange
offers stop and stop loss online option orders
offers contingent option orders based on the price of the 
option or stock
offers online spread order entry for net debit or credit
offers fast option executions

PreferredTrade offers these online option trading features and 
more; call 1-888-889-9178 or click for more information.

http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN
**************************************************************


**********
DISCLAIMER
**********

Please read our disclaimer at:
http://www.OptionInvestor.com/page/oin/aboutus/disclaimer.html


**************************************************************
ADVERTISING INFORMATION

For more information on advertising in OptionInvestor Newsletter,
or any Premier Investor Network newsletter please contact:

Contact Support
The Option Investor Newsletter                 Thursday 03-21-2002
Copyright 2001, All rights reserved.                        3 of 3
Redistribution in any form strictly prohibited.



**********************
PLAY OF THE DAY - CALL
**********************

IDPH - IDEC Pharmaceuticals $70.16 +2.54 (+0.23 this week)

IDEC Pharmaceuticals Corporation is a biopharmaceutical company
engaged primarily in the research, development and
commercialization of targeted therapies for the treatment of
cancer and autoimmune and inflammatory diseases. The company's
first commercial product, Rituxan, and its most advanced product
candidate, ZEVALIN (ibritumomab tiuxetan), are for use or
intended for use in the treatment of certain B-cell non-Hodgkin's
lymphomas (B-cell NHLs).

Most Recent Update 

IDPH followed the AMEX Biotechnology Sector Index (BTK.X) higher
after the recent two day pullback in the group.  The BTK.X
rebounded from a fractional lower opening and finished the day
higher by 3.87%.  For its part, IDPH finished 3.75% higher.  The
stock continues to trade in synch with its index which is why
it's important to continue monitoring the BTK.X when gauging
entry points and exit points in the IDPH call play.  Watch the
BTK.X in tomorrow's session as it approaches its 200-dma.  That
potential resistance level sits just overhead of the BTK.X at
the 536.65 level.  A move through there could bring more buyers
into the group and most likely carry IDPH along for the ride.
Above the 200-dma, the BTK.X faces short term resistance only at
its recent relative high above the 540 level.  An advance past
545 could confirm the recent rebound in the BTK.X and lead to
higher prices in biotech shares.  Look for IDPH to track its
sector closely and watch for the stock to breakout above the
$72 level.  From there, we'll keep our eyes on the $73 and $74
resistance range.  On intraday dips, look for buyers to
emerge around the 10-dma at the $68.67 area.  Confirm
weaker volume on pullbacks.

Comments

The shorts are scrambling after today's late day rally in the
biotechs.  Just when it looked like the sector would rollover,
it came rolling back.  The late move today should have the
bears on the run in tomorrow's session, in which the BTK.X
could continue leading to the upside.  Watch for IDPH to
carry the torch.  Use a move above the $71.50 mark to position
ahead of a possible breakout in this leader.

BUY CALL APR-65 IHD-DM OI=3401 at $7.50 SL=5.00 
BUY CALL APR-70*IHD-DN OI=6426 at $4.00 SL=2.75 
BUY CALL APR-75 IHD-DO OI=2719 at $1.70 SL=0.50 
BUY CALL MAY-70 IHD-EN OI=  37 at $5.60 SL=4.00 
BUY CALL MAY-75 IHD-EO OI=3225 at $3.10 SL=2.00 

Average Daily Volume = 3.65 mln



************************Advertisement*************************
Tired of waiting on trades to execute?
Does your broker offer Stop Losses on Options?

Trade instantly with Stop Losses at PreferredTrade Inc.
Stop Losses based on the option price or the stock price.
Move your trading into the next millennium with PreferredTrade.

Anything else is too slow!

http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN
**************************************************************


**************
TRADERS CORNER
**************

Milking Q-Charts, Part XI, An Owner's Manual
Buzz Lynn
buzz@OptionInvestor.com

Return of the Son of Q-Charts, Part 19.  Seems like a fitting 
title for a zombie movie, doesn't it?  I'm still amazed that this 
column continues to run.  But as long as the Q-Chart questions 
keep coming, we'll keep the column running for all to use.  In 
retrospect, I have to admit that I'm gratified by the positive 
response.  I originally looked at it as just a column - a sterile 
"how to" on a useful chart application.  But now I realize how it 
fits the old Skybox, and now the OIN credo of, "Give a man a fish, 
feed him for a day.  Teach him how to fish, feed him for a 
lifetime".  The continued interest and questions on the subject 
from loyal readers tells me that there is a big audience of 
willing fisherman (and fisherwomen!) out there.  When I figure out 
how to be a "catcherman" from all this, I'll pass that along too!

So let's pick up where we left off last week.  Oh, wait.  First, 
for those just joining us tonight, you can catch the previous 10 
episodes on the following links:

http://www.OptionInvestor.com/traderscorner/011002_1.asp

http://www.OptionInvestor.com/traderscorner/011702_1.asp

http://www.OptionInvestor.com/traderscorner/012402_1.asp

http://www.OptionInvestor.com/itrader/archive/traderscorner/031801_2.asp

http://www.OptionInvestor.com/traderscorner/013102_1.asp

http://www.OptionInvestor.com/traderscorner/020702_1.asp

http://www.OptionInvestor.com/traderscorner/021402_1.asp

http://www.OptionInvestor.com/traderscorner/022602_1.asp

http://www.OptionInvestor.com/traderscorner/022802_1.asp

http://www.OptionInvestor.com/traderscorner/030702_1.asp

http://www.OptionInvestor.com/traderscorner/031402_1.asp

OK, we left off last week with me noting that no matter how hard 
we try to find the industry of a particular symbol in Q-Charts (or 
to push a string uphill), it can't be done.

DOH!  Fundamentals Guy pulled a muscle in his head that night and 
gave bad information.  Fortunately, readers caught my gaff and 
pointed out (with gentle and kind words, I might add) a very easy 
way to find this information.  Yes, there is an easy way to get 
this, but I'll let the readers do the talking tonight, as they 
clearly had more sense than I did.  The fact is that I'd used this 
function a couple of years ago and forgot all about it - just got 
hooked on other fundamental sites and that brain cell died 
accordingly.  Here's a sampling.

"Hi Buzz,
Wanted to send a quick note that may be of some help.  It involves 
your Q-charts article on 3/14 regarding the sector a particular 
stock belongs to.  I find it easier to set up that information in 
my quote sheet.  That way, when I enter a new symbol, the 
information is already there.  If you click on a blank tab at the 
top of your quote sheet, then go down to Market Guide, and then 
Corporate, you will find Sector Name.  I also set up Industry Name 
next to it because it will break down the sector further.  I find 
this much easier because sometimes I have a symbol I want to look 
at but may not have a clue which sector it belongs to.  This way I 
don't have to try and figure it out.  So much for a quick note, 
eh?  Keep up the informative articles.

MH"

Then,

"Buzz, Regarding the question of identifying a stocks sector: This 
may be a somewhat simpler method I've found just by exploring Q-
charts (had it for three weeks and find it well worth the 
additional money compared to my previous charting service).  
First, right click on the stocks chart, on the popup put your 
cursor on NEW, then on STOCKS, then click on company profile and, 
voila', on the right side of the Lycos screen you'll see Industry 
and Sector for that issue.  Your excellent series on Q-charts has 
saved the day for me and many others.  I'm sure I'd still be 
trying to arrange my screens if not for your detailed guidance. 
Thanks and keep them coming. By the way what's the PRICE MAGNET 
button used for?  [More on that in a minute]  Hope this helps, 

TR"

Finally,

Buzz, in your article last Thursday regarding QCharts and finding 
sectors, there is a way QCharts can give you the sector when you 
key in a symbol.  On a quote sheet, if you right click on a blank 
header, move down to market guide, follow the right arrow to 
corporate, follow the right arrow to a drop down list that 
includes: Beta, Industry Code, Industry Name, and Sector Name.  
Left click on Sector Name and that becomes a column header.  
Subsequently, each time you key in a symbol, the sector is shown. 
I find this a helpful tool in customizing my quote sheets.  Hope 
this helps. Enjoy your columns very much!

GB"

And to all the others who wrote in noting the same, thank you for 
the very appropriate corrections.  All that said, what's it look 
like on the screen?  Let's open a quote sheet and get started.



 


Remember opening a quote sheet?  Click on the "double quote" icon.  
Just as readers noted above, right click on an empty header 
column.  That creates the dropdown menu on the left.  From there, 
select Market Guide, select Corporate on the next menu, and then 
select any of these that you like.  

Figuring that if we like one, we might like more, I took the 
liberty of loading the Industry Code in the first column, the 
Industry Name next, and then the Sector Name all into the same 
quote sheet.  Then I plugged in some symbols.  These are random 
symbols off the top of my head that I made up special for this 
column.  There is no meaning.  I'm not watching them.  They just 
came to mind.  Please do me a favor.  Don't trade these just 
because you saw them here.  I know our readers are smarter than 
that.

This is what the finished product looks like:


 


As readers noted, this could be really handy for watching 
industries and/or sectors.  But what if we don't want to create a 
quote sheet and just want thumbnail info?  There is a solution.

Remember the Snapshot Bar icon?


 


Clicking on that puts the Snapshot Bar in whichever chart we have 
active at the moment.  From there, just like the header bars 
above, we right-click in any of the spaces.  Here's what we see:



 


Be sure to right-click where you want the industry data to appear.  
You can take an extra step and "Insert" a field in the Snapshot 
Bar, but it isn't necessary since selecting Market Guide, 
Corporate, then the Sector Name or Industry Name will insert the 
field automatically.  Let's say we select Industry Name.  Here's 
what the finished product looks like:



 


So in this chart, as long as we save the file before shutting down 
Q-Charts, the Industry Name will always be displayed here.

OK, last item about the Price Magnet button as mentioned above in 
TR's e-mail.  What is it?  We use it with our drawing tool.  I'll 
let the Resident Rocket Man answer this one in his own words:

"That's what makes trendlines and other drawing tools lock to 
either the top or bottom of a candle in the vicinity of where you 
click the mouse to either start or stop the line.  Turn it off and 
then there is no locking of the trendline to the candle..."

There that was easy!  Once again, out of time and out of space.  
Questions always welcome!


************************Advertisement*************************
”If you haven’t traded options online – you haven’t really 
traded options,” claims author Larry Spears in his new compact 
guide book:  

“7 Steps to Success – Trading Options Online”.  

Order today and save 25% (only $15) by clicking on PreferredTrade 
and clicking on the link to the book on its home page.

http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN
**************************************************************


************
MARKET WATCH
************

The roles reversed in Thursday's session.  Will these tech stocks 
complete breakouts?


To Read The Rest of The OptionInvestor.com Market Watch Click Here
http://members.OptionInvestor.com/watchlist/032102.asp


**************
MARKET POSTURE
**************

Major movements in the averages.  But sectors stay mostly put.


To Read The Rest of The OptionInvestor.com Market Posture Click Here
http://www.OptionInvestor.com/marketposture/032102_1.asp


**********
DISCLAIMER
**********

Please read our disclaimer at:
http://www.OptionInvestor.com/page/oin/aboutus/disclaimer.html


**************************************************************
ADVERTISING INFORMATION

For more information on advertising in OptionInvestor Newsletter,
or any Premier Investor Network newsletter please contact:

Contact Support

DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

To ensure you continue to receive email from Option Investor please add "support@optioninvestor.com"

Option Investor Inc
PO Box 630350
Littleton, CO 80163

E-Mail Format Newsletter Archives