The Option Investor Newsletter Sunday 04-18-2004 Copyright 2004, All rights reserved. 1 of 5 Redistribution in any form strictly prohibited. In Section One: Wrap: Tech Wreck Futures Market: See Note Index Trader Wrap: Editor's Plays: Electric Shock? Market Sentiment: Investors Still Cautious Ask the Analyst: Warning! Two stop rule .... Coming Events: Earnings, Splits, Economic Events Posted online for subscribers at http://www.OptionInvestor.com ****************************************************************** MARKET WRAP (view in courier font for table alignment) ****************************************************************** WE 04-16 WE 04-09 WE 04-02 WE 03-26 DOW 10451.97 + 9.94 10442.0 - 28.56 10470.6 +257.62 + 26.37 Nasdaq 1995.74 - 57.12 2052.86 - 4.31 2057.17 + 97.15 + 19.55 S&P-100 554.94 - 1.18 556.12 - 1.98 558.10 + 14.58 - 0.16 S&P-500 1134.57 - 4.76 1139.33 - 2.48 1141.81 + 33.75 - 1.68 W5000 11078.08 - 87.98 11166.1 - 36.36 11202.4 +362.24 - 12.80 SOX 480.14 - 31.64 511.78 - 2.08 513.86 + 34.61 + 15.90 RUT 583.37 - 14.51 597.88 - 5.57 603.45 + 30.53 + 2.18 TRAN 2939.47 + 12.59 2926.88 - 39.78 2966.66 +130.76 + 49.07 VIX 14.99 - 1.35 16.34 + .69 15.64 - 1.69 - 1.82 VXO 15.67 - 0.16 15.83 + .27 15.56 - 1.65 - 1.95 VXN 22.30 + 0.92 21.38 + .03 21.35 - 1.69 - 2.95 TRIN 1.47 0.82 0.52 0.89 Put/Call 0.76 0.74 0.68 0.77 ****************************************************************** Tech Wreck by Jim Brown The Nasdaq struggled with the psychological 2000 level Friday as the list of techs with earnings problems continues to grow. The Nasdaq was negative most of the day while the cyclical heavy Dow rallied out of its mid week slump. Helping keep the major indexes out of the ditch was the Russell which moved higher and away from the 575 support. Dow Chart - Daily Nasdaq Chart - Daily SOX Chart - Daily Friday produced another mixed message with the Dow up +55 and the Nasdaq down -6. Earnings messages and the economic outlooks were mixed and traders could not make up their mind between rising economy and higher rates or weaker economy and continued lower rates. You can't have both and traders were trying to decide how much of a rate increase they could bear and what stocks were worth at that rate. Complicating the outlook was less than expected earnings and guidance from numerous tech leaders. While most companies were beating estimates and raising guidance they were lost in the crowd. Those posting less than expected results or weak guidance produced significant disappointments and the market fixated on those few. Leading the losers list were IBM, IPIX, LEXR, NFLX, SNDK, NOK, SUNW, INTC, MCDT, DCLK and CY to name a few. All were a disappointment to traders and most suffered substantial losses. Those losses knocked the Nasdaq for a -57 point loss for the week and where it closed under 2000 once again. The excuse for the week was given as the threat of rising interest rates but there are still those voices in the background suggesting the economy is not as hot as the economics suggest. We had an unexpected drop in Industrial Production in March as reported on Friday. The -0.2% drop compared to estimates for a +0.2% gain may not have earth shaking but it was looked at carefully for signs of weakness. There was no major change in any of the components and Capacity Utilization only fell -0.2%. Consumer Sentiment numbers for April also fell unexpectedly to 93.2 from 95.8 in March and well below estimates as high as 98.5. This is the lowest level for the index since Dec-03. The present conditions component dropped -2.7 points. Most analysts feel the drop is due to high energy prices, the recent drop in the market, terror news and candidates bashing the economy. If the jobs environment continues to improve and the tax refunds appear this drop in confidence should evaporate. The initial fund flows for the week according to estimates from TimTabs.com were in the neighborhood of +$1.6 billion into equity funds. While this is not a lot of money it was a positive number and suggests there was not a rush of tax withdrawals. It is however only an estimate through Wednesday. By the time we get the final numbers next week it could be negative. The economic calendar for next week is light with the real danger coming not from reports but from the eleven speeches from Fed heads. Greenspan speaks on Tuesday and Wednesday with the Wednesday speech being the critical event. Broadus went on record Friday as saying the Fed would have to wait for "some time" before raising rates. He also said the Fed would have to see definite confirmation of the recovery before they could take action. This tended to calm the rate fears for the day but the Greenspan speech on Wednesday before the Joint Economic Committee of Congress has been used in the past to warn of coming changes. Traders will be watching carefully for signs of patience or signs of change. On Thursday Bies and Bernanke both speak on the current economic outlook in separate appearances. This flurry of speeches on the economic recovery should put the bond groupies into overload mode. Putting traders into information overload mode will be earnings from over 500 companies. Some of the more visible companies include AMZN, AMGN, BRCM, MCHP, MSFT, UTX, EBAY, JNPR, QCOM, MMM, MO. There are at least 20 chip companies reporting and the SOX needs a lot of help. It remains to be seen if these earnings will help it or hurt it. The semiconductor earnings so far have been split almost equally between positive and negative. The lack of excitement over the current crop of earnings is not because they are bad. In fact they are excellent. Of the 94 S&P companies already reported 68 beat estimates, 16 reported inline and only 10 missed estimates. This is very strong results and First call said today the current numbers are just over +19% growth. Even with the crop of high profile disappointments they are still expecting something over 20% for the quarter. The challenge as I have pointed out before is that this is the peak quarter. It is all down hill from here. According to First Call today they are only expecting earnings growth in the second quarter of +15%, +12% for Q3 and +13% for Q4. Stocks are currently priced for that 20% growth we have seen for the last three quarters and a drop to 12-13% would be a letdown. Obviously investors are hoping the numbers for the next three quarters are revised up after the current earnings cycle but without some better guidance than what we have seen already the odds are slim. Without some better economics the chances decline even further. Add in a rate hike in August and another in November as the Fed funds futures are predicting and the odds decrease even further. It is not that +15% growth per quarter is not good it is just that investors are spoiled after the great run we had over the last year and the last three quarters of +20% growth. They have been promised the economic moon for over a year and the skies are still cloudy. Investor risk is growing and we are not seeing a lot of buyers stepping up to buy that risk. Investors buy risk at the lows not at the highs. I listened to one fund manager on Friday that said his universe of buyable stocks had dropped from over 600 two years ago to less than 100 today and he was already invested in most of the 100. He was a value buyer and we do not know what his selection criteria was but in his eyes the market was still over valued based on the 12-18 month outlook. Another manager of a growth fund said he was 35% in cash. Same problem in his eyes, everything is overpriced compared to future earnings and event risk. Both said retail investors were chasing results based on historical results (last 12 months) and not pricing in the future outlook. These are just two funds out of thousands but the sentiment seems to be the same day in and day out. I do not want to be seen as Chicken Little. I am not trying to paint a picture of a market crash ahead. I don't see it at this time. What I am seeing is a lack of excitement and lack of a catalyst to drive the market to new highs. Maybe that excitement will appear after next weeks earnings but that is not a normal historical April trend. I think we are entering a stock pickers market. The out performers are going to move higher and the rest of the pack is going to consolidate for the summer. Jeff and I were talking this week about market outlook and I based my cautionary view on the breakdown in those stocks that have been bullet proof like SYMC and EBAY. Plus, the market is not going up with the four biggest techs, INTC, MSFT, IBM and HPQ trading at or near their recent support lows. Intel is 42 cents from a seven-month low. HPQ is 90 cents from a six month low. IBM is only $2 from a multi month low and after the weak guidance on Thursday it should be there soon. There is simply no strength in techs and this is a normal April/May syndrome. It is nothing to worry about as it is just a normal consolidation phase while traders become accustomed to the new outlook. The Dow rebounded +54 on Friday to end the week flat at 10450. Considering we spent three days testing 10325 support this is a positive sign. We have strong support below us and strong resistance above at 10550-10650. This would be a great range to trade while we wait for the earnings cycle to pass. It is high enough to keep investors from fleeing the market but not at the nosebleed levels that would tempt the hedge funds to load up on shorts. Should the range break at 10300 then 10000 would be the next natural level for buyers to appear. The Nasdaq closed just under 2000 with a -57 point loss for the week. This puts it right in the middle of its range from 1900-2100. Again, this would be a great range to trade while we wade through earnings from several hundred more techs. For next week I am expecting a positive open on Monday if there are no negative events over the weekend. I would expect any Monday rally to fail as we approach the Greenspan testimony on Wednesday. Microsoft does not report until Thursday but several hundred other companies will keep our focus blurred. Monday earnings include MMM, LLY, FNM, LXK, CD, JDAS, KFT, IDXX and CNF to name a few. CNF is on the verge of a breakout at $36 and is leading a transportation sector rebound. MMM is nearing resistance at $85 and could see some profit taking on less than exciting numbers but I think they will surprise. CD is the sleeper and needs some good news to justify its rise but I think it to will beat. Don't be too quick to jump into the next trade and try to look for entries at the top and bottom of the ranges I mentioned. Entering in the middle significantly increases your risk. Enter Very Passively, Exit Very Aggressively! Jim Brown ************** FUTURES MARKET ************** Futures wrap is not emailed due to the excessive number of charts. It may be read on the website at this address. http://www.OptionInvestor.com/indexes/futureswrap.asp ******************** INDEX TRADER SUMMARY ******************** SAME OH SAME OH By Leigh Stevens lstevens@OptionInvestor.com THE BOTTOM LINE – All the indices have fairly similar patterns from a technical perspective - that is, significant tops seem to have formed and the indices now look like they are headed down to retest prior lows again. If so, what happens at the support areas that I will describe in my specific index comments will tell us if there is going to be a further downswing that carries prices lower than the initial bottoms that formed recently. Prices are in mid range between downtrend and uptrend lines and those lines form the two sides of a triangle pattern. To stake out any major call or put position requires waiting for a breakout one way or the other. Puts bought at the recent top should be held as momentum is down. The market appears to have discounted better earnings but not what happens next with the Fed and interest rates. This influence is causing potential buyers to back off and take a wait and see attitude. FRIDAY'S TRADING ACTIVITY - The interest-rate sensitive stocks rallied this past week, after the latest economic data sent conflicting signals on the health of the economy, raising hopes of a slower pace in the expected rise in interest rates. This accounted for the run up in the Dow and only marginal decline in the S&P. In a continuation of the range bound trade that I thought would unfold over this past week, the S&P 500 Index (SPX) fell 0.4 percent to finish the week at 1,134. The Dow ended at 10,451, managing to eke out a 1 tenth of a percent gain. The Nasdaq lost nearly 3% on the week, closing at 1995. We got some reports on Friday, with March industrial production figures showing a 0.2% decline. This was weaker than the consensus forecast of +0.3%. This figure came after a large 0.8% rise in February. Capacity utilization held steady at 76.5%, down slightly from February's 76.8% - as noted on our morning report on Friday, there is plenty of idle capacity that can get ramped up in the future in our nation's factories. The University of Michigan's April Sentiment reading of 93.2, which was below economists' forecast of 97.0 and just off March's 95.8 reading. The U. of M. survey showed that some decline in April's consumer positive sentiment appeared to be largely due to the Iraq war and other international tensions, included terrorism such as occurred in Spain. However, sentiment toward the job outlook was more optimistic then reported previously. On Tuesday, the Fed chairman Greenspan is due to address the Senate Banking Committee; on Wednesday, he's slated to testify before the Joint Economic Committee. The Street seems to feel that Chairman Greenspan may use his appearance to suggest that the days of the Fed accommodation toward keeping rates low might be nearing an end. No doubt eyes will be on this testimony and what happens in Iraq. The UN mission there seemed to make some headway with our Administration as far as going along with suggestions to not hand things over to our hand-picked Council in the power transfer ahead. Rather, the idea is to reach out to more popular or at least well-known and trusted figures in the country. March leading indicators for last month (March) is due on Monday and the talk was for a slight rise, after an unchanged February. There is a supplier delivery index release due, as well as March durable-goods orders - release is Friday and while it is expected to show a rise of maybe 1 and half percent, this would be off from a 2.5% increase for February. MY INDEX OUTLOOKS – S&P 500 Index (SPX) – Daily chart: The rounding top pattern outlined on the S&P 500 Daily chart below is bearish unless prices manage to break out about the circular arc at 1140. A close over this level is needed to negate this bearish view, coupled with an ability to find support at the same level - 1140 - on subsequent pullbacks. Major resistance is indicated at 1160, the approximate area of all the rally highs that have been formed over the first months of this year. Support is implied at the intersection of the up trendline in the 1105 area. A dip under 1100-1105 would suggest that the prior relative lows at 1087-1090 could be tested as support - any close under this area would suggest that a second down leg was underway. S&P 100 Index (OEX) – Daily chart: Resistance is at 560 at the current intersection of the down trendline. A close over 560-563 is needed to turn the chart bullish and suggest that a retest of strong resistance in the 570 area was possible. The large number of relative highs in this area over several weeks suggest that a new influence is needed in the market to get buyers to bid S&P stocks through this area. Hey, the bulls have had their chance - many times! Support is at 540 - a break of the trendline there would suggest at least a re-test of the prior swing lows at 532-533. I figure that if the trendline doesn't hold, that the prior lows won't either. Indicators such as my Call to Put volume indicator and the stochastic model are suggesting lower levels ahead. S&P 100 Index (OEX) – Weekly chart: The weekly chart below doesn't show a lot that is different from the Daily chart, but the weekly price history is a good reminder of far the rally has carried the big S&P stocks, without there being much of a downside correction. The 522-524 area, at the last cluster of weekly highs in the fall, is a likely next support if 532-533 gives way. What was resistance over several weeks could now represent a next support. Dow Industrials (INDU) Daily: The key "line" of resistance in the Dow 30 is at 10,535-10,575. Not much new to say here, except that it seems more likely the INDU will fall to the area of lower (up) trendline rather than achieve a bullish breakout above the resistance and selling interest apparent at the lows made back in late-Feb/early-March. Support at the lower trendline is at 10,200. Major support is in the 10,000 area. So, what else is new. The rally that developed off the midweek low may not go anywhere in the coming week. The stochastic and RSI indicators shown above, as well as the same kind of rounding top pattern apparent in the S&P, suggest still-downward momentum ahead. It would be a common pattern for there to be a second decline (after the first), when there were so many weeks when the market couldn't get to new highs. Stay tuned on that. Nasdaq Composite (COMPX) Index – Daily: I mentioned the triangular pattern formed from a series of lower relative highs versus the long-standing up trendline which is now intersecting just above the 200-day moving average. Support is at 1950, 1925, then at 1900. I consider that what happens if the Composite gets back down to the 1950 area as the most significant technically. I would like to think bullishly on the outlook for my tech stock darlings (I'm sort of a technophile), but can't get to this view unless there is a close over 2075. Nasdaq 100 (NDX) Index – Daily: 1500 is key resistance, at the trendline - a close over this level AND the ability to hold this area on pullbacks to it, would get me bullish for at least a re-test of the prior 1550 high. The upside price gap of two weeks ago was "filled in", consistent with the old adage that gaps (tend to) get filled - the gap area is the space marked by the two parallel green lines on the chart below. Support is highlighted at 1400, by both the intersection of the up trendline and the 200-day moving average. The trend looks to be for lower prices ahead. Nasdaq 100 tracking Stock (AMEX:QQQ)– Hourly: Resistance levels are at 36.15, 36.75, then 37.25 - this later level being pretty key as highs formed in the 36.25-36.50 area over an extended period of time. Hey, you only get so long to prove your case and the bulls have not been able to carry QQQ to new highs. The hourly chart shows a definite bearish aspect as tops have Support looks to be at 35.50 based on prior highs, then prior lows, on the hourly chart below - at the green dashed level line. I would consider being a buyer if QQQ got to 34-34.50 again, especially if prices then held this area over a 2-3 day period. I suggest selling at 36.60, buying at 34.25-34.50, if reached. Good Trading Success! ************************Advertisement********************************** Option traders, check what PreferredTrade offers: - true direct access to each option exchange - stop and stop loss online option orders - contingent option orders based on the price of the option or stock - online spread order entry for net debit or credit - fast option executions - rates as low as $1.50 per contract ($14.95 min) PreferredTrade, Inc. Call 888-889-9178 or Click http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN Member NYSE, Other Principal Exchanges, NFA, MSRB and SIPC *********************************************************************** ************** Editor's Plays ************** Electric Shock? With TASR acting like an Internet stock in 1999 with monster moves on a daily basis I am resurrecting a strategy we used on those high flyers. This is the combination write. It requires the ability to write "naked" options. The combination write involves writing both a naked call and a naked put on the same stock at the same time. You take in two premiums but only have one margin requirement as there is no way you can be in the money on both at the same time. Using TASR which closed at $114 on Friday I am going to draw the example using the May $120 Call and the May $110 Put. We will sell both naked at the open on Monday and then wait. If TASR moves over $120 we go long the stock to cover the naked call. That puts us in an in the money covered call play. We will remain long the stock as long as it is over $120. Should it fall back under $120 we close the stock position and leave the call open. The same strategy is true regarding the put. Should TASR drop below $110 we will short the stock to cover our put. (make sure your broker has TASR available to short before starting this play) As long as TASR stays under $110 we will remain short the stock. If it rebounds back over $110 we will cover the stock position and leave the put open. This may seem like a high-risk trade but if you think about it the risk is minimal. If TASR goes in the money on either side we either go long or short and it becomes a covered play with no risk. If TASR remains between $110-$120 both options will expire worthless. Obviously the chances of that happening are very slim. It will definitely be directional before the week is out. It could be $50 or $150 but either direction would be covered. It is just a fancy covered call/put and produces more premium income than just a single side alone. Risk: Yes there is risk. The risk is that TASR will bounce around one of the strike points ($110/$120) and cause you to sweat the direction and the cover order. Let's put this in perspective. The May $120 Call is currently $10.30 The May $110 Put is currently $12.90 If you sell them both at the open on Monday you receive $23.20 in premium income. Regardless of the outcome of the stock price that income is yours to keep. That $23.20 also provides you a cushion for your stock fills. Let's say you have an order to buy TASR at $120 and you are filled at $120.25. No sweat you have a lot of cushion left. You could fill .25 away from the order a dozen times and still only lose $3.00. The object of this game is not to trade the stock. We do not want to trade it any more than necessary. THE BEST SCENARIO IS FOR A TRIGGER THE FIRST DAY THAT IS NEVER HIT AGAIN. We want the stock to rocket over $120 or plunge under $110 and stay there the next four weeks. With that scenario we cover once and let it ride. At the end of the four weeks we are either called away or the stock is put to us to cover our short position. Either way is perfectly fine. Based on Friday's trading and the Taser earnings on Tuesday it should be highly directional by Wednesday. Penthouse or basement, we don't care. Assume the stock rocketed over $120 in anticipation of earnings. We go long the stock and sit back and wait. It could stay at nose bleed heights for a week or two and then fall back through the trigger zone. When it drops below $120 you sell the stock and remain flat the stock unless it goes below $110 or over $120 again. You simply cover whichever side is triggered and maintain a watch and a reverse order in case it happens again. The risk remains that you could be forced to cover only once or possibly multiple times over the next four weeks. YOU MUST REMAIN COVERED WHENEVER YOU ARE IN THE MONEY. May $120 Call QUR-ED $10.30 bid May $110 Put QUR-QB $12.90 bid If this is your first exposure to this strategy I suggest you paper trade this one until expiration to get the hang of it. There is always another trade in the future. Here is the only catch: TASR has announced a 2:1 split for April-30th. If TASR is well above or below the trigger points and you are in a covered position I would continue to let the position run. The strikes will be cut in half and you will end up with two $55 puts and two $60 calls. You will need to adjust your stock position on any future buy/sells to account for the extra shares/contracts. Another reason for holding over the split is the normal drop in volatility and premiums the following day. The more the premiums shrink the better should you decide to cover before expiration. If you have any questions email me and I will try to answer them. If you want to reduce your risk of over trading then simply move out to farther strikes. Sell the $125 call and the $105 put. That produces smaller premium income but gives you a $20 spread in the middle where you do not need to be covered. TASR Chart - Daily Warning: If this TASR trade is not managed correctly extreme losses may occur. By entering this trade you acknowledge the risks and accept responsibility for your actions. This is NOT a fire and forget play. *********************** Two Thirds Completed The NWS leap play from last Sunday called for a staggered entry into six Jan-2006 $40 calls. The game plan called for buying (2) Call leaps with a touch of $37 and (2) more with a touch of $36. Both of those should have been filled on Tuesday and Thursday of last week. The final (2) contracts are targeted for an entry on a touch of the 200dma currently at $34.68. We are ready to begin writing short-term calls against this position to reduce our cost. The first lesson is that you do not sell calls on a dip. You only sell calls on a spike. This increases the value and reduces the risk the spike will continue and have the calls expire in the money. We will continue to monitor the price and look for something in the $40 range to sell the $45 calls. Recap: If you are following this play you should have filled on these two entries. Buy (2) Jan-2006 $40 Calls WLN-AH at $37 = $4.30 Buy (2) Jan-2006 $40 Calls WLN-AH at $36 = $3.90 Still unfilled: Buy (2) Jan-2006 $40 Calls WLN-AH with a touch of 200dma (currently $34.68) http://members.OptionInvestor.com/editorplays/edply_041104_1.asp **************** MARKET SENTIMENT **************** Investors Still Cautious - J. Brown Whew! Friday just ended a very busy week with dozens of corporate earnings reports and a basketful of economic news all vying for investors' attention against a backdrop of rising violence in Iraq, hostages being taken by insurgents, Bin Laden tapes, 9/11 commission hearings and a Presidential press conference. At the top of the list was concern over a strong rise in inflation and when the Federal Reserve will raise rates. Considering this cacophony of news and worries I'm encouraged that the markets held up as well as they did. Granted the NASDAQ's breakdown under the 2000 level on Friday is concerning but it was hastened by a big decline in the semiconductor and Internet sectors. This coming week will release a flood of earnings reports with hundreds of companies announcing. Through the billowing cloud of announcements stands one event Wall Street will most likely focus on. That is Alan Greenspan's appearances on Tuesday and Wednesday before congress. What he has to say about the state of the economy and any hints he may drop regarding monetary policy will be paramount. Hopefully, he'll reiterate some of Fed governor Broadus' comments on Friday suggesting the Fed can still afford to be "patient". Personally, I'm cautiously optimistic for stocks next week but the declining trendline on the Dow needs to be broken. Plus the NASDAQ needs to recover the 2000 level soon or I fear it may move to retest support at its 200-dma. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 10753 52-week Low : 8235 Current : 10451 Moving Averages: (Simple) 10-dma: 10464 50-dma: 10448 200-dma: 9911 S&P 500 ($SPX) 52-week High: 1163 52-week Low : 877 Current : 1134 Moving Averages: (Simple) 10-dma: 1138 50-dma: 1133 200-dma: 1067 Nasdaq-100 ($NDX) 52-week High: 1559 52-week Low : 1051 Current : 1449 Moving Averages: (Simple) 10-dma: 1481 50-dma: 1458 200-dma: 1400 ----------------------------------------------------------------- Despite all the volatility and options expiration this last week the volatility indices remain near their lows, which indicates little investor fear. CBOE Market Volatility Index (VIX) = 14.94 -0.80 CBOE Mkt Volatility old VIX (VXO) = 15.67 -0.57 Nasdaq Volatility Index (VXN) = 22.55 -0.28 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.77 1,220,955 936,934 Equity Only 0.61 1,043,624 637,847 OEX 1.08 63,054 67,883 QQQ 1.01 96,686 97,984 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 78.3 - 4 Bull CONFIRMED *new change* NASDAQ-100 54.0 + 0 Bear Correction Dow Indust. 90.0 + 0 Bear Correction S&P 500 75.8 + 0 Bear Confirmed S&P 100 79.0 + 0 Bull Correction 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-dma: 1.29 10-dma: 1.09 21-dma: 1.16 55-dma: 1.18 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 they do, they can signal significant market turning points. ----------------------------------------------------------------- Market Internals -NYSE- -NASDAQ- Advancers 2022 1601 Decliners 811 1495 New Highs 111 101 New Lows 92 26 Up Volume 1110M 518M Down Vol. 655M 1289M Total Vol. 1780M 1829M M = millions ----------------------------------------------------------------- Commitments Of Traders Report: 04/12/04 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 We continue to see little change in commercial traders' positions. Small traders are adding to positions and remain bullish although there is a decent jump in new shorts. Commercials Long Short Net % Of OI 03/23/04 401,456 418,732 (17,273) (2.1%) 03/30/04 407,987 420,624 (12,673) (1.5%) 04/06/04 409,429 419,471 (10,042) (1.2%) 04/12/04 412,827 419,910 ( 7,083) (0.9%) Most bearish reading of the year: (111,956) - 3/06/02 Most bullish reading of the year: 23,977 - 12/09/03 Small Traders Long Short Net % of OI 03/23/04 130,648 89,943 40,705 18.5% 03/30/04 130,112 81,937 48,175 22.7% 04/06/04 130,262 80,174 50,088 23.8% 04/12/04 135,840 89,090 46,750 20.8% Most bearish reading of the year: (1,657)- 5/27/03 Most bullish reading of the year: 114,510 - 3/26/02 E-MINI S&P 500 Commercials have reduced the long positions and added to their shorts, which is bearish for the markets. Small traders remain net long and have increased their bullish positions significantly. Commercials Long Short Net % Of OI 03/23/04 268,647 294,930 (26,283) ( 4.7%) 03/30/04 265,492 305,797 (40,305) ( 7.1%) 04/06/04 270,904 328,862 (57,958) ( 9.7%) 04/12/04 261,889 341,163 (79,274) (13.1%) Most bearish reading of the year: (354,835) - 06/17/03 Most bullish reading of the year: 133,299 - 09/02/03 Small Traders Long Short Net % of OI 03/23/04 131,879 59,210 72,669 38.0% 03/30/04 123,494 59,550 63,944 35.0% 04/06/04 148,737 46,235 102,502 52.6% 04/12/04 172,473 52,274 120,199 53.5% Most bearish reading of the year: (77,385) - 09/02/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 Almost no change in commercial traders' positions here. The same can be said for small traders. Commercials Long Short Net % of OI 03/23/04 52,014 34,017 17,997 20.9% 03/30/04 52,749 67,967 (15,218) (12.6%) 04/06/04 54,862 34,762 20,100 22.4% 04/12/04 54,144 34,432 19,712 22.3% Most bearish reading of the year: (21,858) - 08/26/03 Most bullish reading of the year: 13,386 - 03/16/04 Small Traders Long Short Net % of OI 03/23/04 9,884 12,887 (3,003) (13.2%) 03/30/04 8,928 16,551 (7,623) (30.0%) 04/06/04 7,971 20,721 (12,750) (44.4%) 04/12/04 8,297 20,746 (12,449) (42.9%) Most bearish reading of the year: (10,769) - 06/11/02 Most bullish reading of the year: 19,088 - 01/21/02 DOW JONES INDUSTRIAL Still no change in commercial traders' positions here either. It's an even race between longs and shorts. Small traders have actually grown more bearish. Commercials Long Short Net % of OI 03/23/04 23,048 22,119 929 2.1% 03/30/04 23,642 22,180 1,462 3.2% 04/06/04 23,101 22,108 993 2.2% 04/12/04 23,501 22,748 753 1.6% 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 03/23/04 8,344 6,734 1,610 10.7% 03/30/04 7,020 6,711 309 2.3% 04/06/04 7,316 8,085 (769) (5.0%) 04/12/04 6,136 7,450 (1,314) (9.7%) Most bearish reading of the year: (12,106) - 3/09/04 Most bullish reading of the year: 8,523 - 8/26/03 ----------------------------------------------------------------- ************************Advertisement********************************* Option Traders: Pay Attention Use the online options trading system built by option traders for options traders. Featuring direct access to each option exchange, stop and stop loss option orders, contingent option orders, online spreads, fast executions, and rates as low as $1.50 per contract ($14.95 min.). PreferredTrade, Inc. Call 888-889-9178 or Click http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN Member NYSE, Other Principal Exchanges, NFA, MSRB and SIPC ******************************************************************** *************** ASK THE ANALYST *************** Warning! Two stop rule .... While the following article may seem like a lecture, I hope you'll read the article in its entirety, but also consider a trading discipline called the two stop rule. This article hopes to address various e-mail I received this week regarding some stocks, and trades I profiled in the OptionInvestor.com Market Monitor. Those traders/investors that have been with us for a while have a pretty good feel for my personality and philosophy on investing. I try to express myself with a caring, but firm stance on the use of stops, and while it can be frustrating to some traders when a trade is stopped out for a loss, to then see the trade work out in the direction we had intended, most traders and investors have learned it is better to have played it safe, than to have been sorry later. To try and calm some trader's nerves, I'm going to disclose how I (Jeff Bailey) really trade / invest in stocks in my own account. I'm calling it "the two stop rule." The first stop loss is a level I (Jeff Bailey) don't think a stock should trade, if it is to have a chance at meeting my initial trade objective. The second stop loss is a level I (Jeff Bailey) now concede I may have been completely wrong, want out of the trade, before the trade harms my account any more than it has. Recently, management informed me, and other analysts that we could no longer trade individual stocks that we personally profile in any of the newsletters. At first, I had mixed thoughts on this decision, but I fully understand the reasons for the decision, based on what we have all seen happen when the Securities Exchange Commission begins looking into analyst's/mutual fund's/hedge fund's trade activity in stocks they recommend. Gone are the days where full disclosure of ownership or investment banking is the "get out of jail free" card, if there is an inkling that the analyst/mutual fund/hedge fund may have said anything positive or negative about a stock, where that piece of positive or negative information could have been mentioned to favorable impact the analyst's/mutual fund's/hedge fund's financial position in said security. I had always preferred to have the same position that I was profiling, where my position was established AFTER I had profiled the trade. This gave the trader/investor the confidence that I (Jeff Bailey) had my money on the line, just as those traders/investors had their money on the line, based on the confidence I knew what the heck I was doing. Why do I discuss the trade policies here? It is because I have ALWAYS been more protective of other people's money, or less aggressive with other people's money than I will be from time to time with my own. It is probably for this reason, that I will sometimes use "too tight of a stop" as noted by some traders, in stock trades that I profile. I'm open to "criticism" and I don't take it personally, but I (Jeff Bailey) must consider that I don't fully know just who my audience is any given day. Is it Bob, who just got laid off from his job and is trying to make a little extra money while looking for a new job, and is now trading or investing on his own for the first time? Or is it Martha, who has been trading/investing in stock markets long before my parents had ever met? When I profile a trade, it always comes with an entry point, a stop loss point and target. Not every stop is triggered, nor is every target achieved. No analysts would expect their following (you) to agree with everything they say or write. Some disagree with a trade/investment direction the analyst has profiled. Other disagree with the analyst's price objective, with the thought that the analyst has underestimated the price/profit potential of the trade. All of the above disagreements are understandable, as even these types of disagreements are what make up a market to begin with. As long as there are stock markets, there will have to be some type of disagreement. That's what makes a stock, or market move. It's when there is total agreement that things would come to a halt and there would be no trading taking place. So where am I taking us with some today's discussion? How would you feel if you told your close friend to buy ABCD stock at $25, then told them to sell it at $24, then days later your friend ask you what is happening to their investment at ABCD as it has fallen to $20? "What!??? I thought you sold it at $24!" you proclaim. Your friend isn't guilty of anything we haven't done with our own money at some point in time. There's always a good reason why we may have not honored a stop. Something Alan Greenspan said that day was taken wrong by the market, and tomorrow, everything will be back to normal and my stock trade will resume the trend I had predicted. There, I fell better and now we've helped explain to ourselves why the stock traded a price level we didn't think it would trade, and all is OK, except for the paper loss in our account. On and on it can go. A reason can be found to help explain everything wrong with the world and why a trade has worked against us, which certainly will be back on course in an hour, a day, a week, or a month. Like I said. We've all done it. Sometimes we're correct in our explanation, and sure enough, a minute, hour, or day passes, and the trade does resume the course we thought it would. For those that have traded/invested for sometime, we've seen stocks not recover to the direction of trade we thought they were going to move as time passed, but we've also seen stocks not trade as planned, soon regain the direction of our analysis, where it was a good idea to have not honored the original stop. I will often trade/invest the latter scenario, where a stock doesn't act like I thought it should in the early stages of trade (minutes, hours, days) and will use what I call the two stop rule. When I look at a trade on my own, I have a general feel, or idea for what the stock "should" do, within certain bounds, if it is to achieve my eventual profit target. I also look at a trade and determine a second level of trade, where my conviction then grows that I really have had no clue, feel, or idea of what the stock is doing, or what the MARKET is telling me about the stock. This second level is when its time to admit my mistake, and move on. As an analyst that contributes to the market monitor, I think I can speak for all analysts, that it would be a nightmare to profile a trade with two separate stops. Did Bob stop out at the first stop, but Margaret hang in there with her stop at the second stop? Margaret would still be owed coverage of the trade, as her money is still at risk. How do I (Jeff Bailey) trade the two stop rule? I sit at a computer terminal from the opening bell to the closing bell, and when I do trade, there is rarely a minute that goes by if I'm day trading that I'm not keeping an eye on the stocks I'm trading. I usually can't handle/monitor more than 2 or 3 day trades at any given time. Swing trades, which may last 1, 2, 3 days or several weeks, don't warrant a lot of intra-day attention, where instead of risking a lesser dollar amount to a stop as in a day trade, there is greater room given to a stop in a swing trade, where a larger dollar gain is hopefully achieved over days, if not weeks. What the "two stop rule" allows a trader and even an investor the opportunity to do is this. Let's say I'm day trading Intel (NASDAQ:INTC) $26.45, and on any given day, a $1 move in the stock, would be deemed a BIG move. Intel (INTC) is a stock that trades very liquid, where there is a great deal of volume traded each second, minute, hour, where for the most part if it were to trade my FIRST stopping point, I begin to get the feel that my initial analysis might be wrong, and as the stock trades my FIRST stop, I begin to think there is little chance that my original profit target will be achieved. It is at this point that I begin to devise an exit strategy, where at a worse case scenario, I'd be happy with a break-even trade, if not a small profit. However, it will HAVE TO BE the SECOND stop, where I've got to cut the trade (can be a longer-term investment) as things aren't making any sense as to my original analysis. Intel (INTC) - 60-minute interval chart A rather simplistic example of the two stop rule, but easily understandable would be a bull's thought toward Intel (INTC) if having traded the stock bullish at $28, based on what appeared to be a reverse head and shoulder break above the neckline, just as the Semiconductor Index (SOX.X) was really starting to show some sign of renewed strength earlier this month. Stop #1 at $27 may have made sense, as a stop placed at $26.90 would have equated to a 3.9% loss from the bullish entry at $28, which for most traders/investors might be deemed a tolerable amount of risk for a semiconductor stock. Still, to keep the trader in the trade, under the scenario of the reverse head and shoulder pattern still being in play, a trade below $26.72, say $26.50, would then negate the pattern. Is there any question that a trade below $26 would negate the reverse head and shoulder pattern? Answer: NO! Stop #2 at $26 is the ultimate admission that original scenario was invalid, or in error. Loss would be taken for a 7.14% loss, which by most investment/trading discipline is within the 10% rule generally accepted for risk management. What the "two stop rule" does at this point, is still allow the trader/investor the opportunity to assess their trade. One fact we know at this point is that the Semiconductor Index (SOX.X) 480.14 has fallen back below some important near-term support of 500.00, where in a past February 29, 2004 Ask the Analyst column, we actually discussed the head and shoulder top pattern presenting itself in the Semiconductor Index (SOX.X), a BEARISH pattern, where a downside objective of 412.00 was derived. While any pattern is not 100% reliable, a trader long Intel (INTC) at $28, where having now seen the reverse head/shoulder pattern negated in the above chart, might wish they had stopped out at Stop #1. Sometimes, the "two stop rule" allows the trader an opportunity to exit a trade closer to entry point, where ultimate risk is still being assessed to Stop #2. Most day traders would never allow Intel (INTC) to move $1 against them in a single day's trade, but if the above chart were a 2-minute interval, or 5-minute interval chart day traders may begin to see the concept of how the "two stop rule" could be utilized, but where Stop #1 was 25-cents above Stop #2, where after bullish entry at $28, if Stop #1 were traded, the day trader may immediately begin reassessing their bullish trade decision, and looking for an exit on a bounce back to their entry points, but ready to concede the trade, and take the loss should Stop #2 be at $27.50 be traded. Longer-term investors can also utilize the "two stop rule" where the investor may initiate a bullish position in a stock at $28.00, where within a short period of time, a news event suddenly changed the landscape, or the investors scenario toward the stock, or market environment, and finds the stock at Stop #1 just days after the bullish (or bearish) position was established. In essence, the ability of the stock to trade Stop #1 so soon after bullish entry, may serve as an alert that something is wrong with the investment scenario, where the investor may then begin thinking, "If my scenario is to still be in play, then I expect the stock to return to my bullish entry point within X-number of days. If the stock does NOT return to my bullish entry point within X-number of days, given the original timeframe for the investment, then either cut the trade from the account, sell strength back toward entry price, but HONOR Stop #2." Conclusion: What the "two stop rule" may allow traders/investors, is to still have a disciplined approach to trading/investing OUTSIDE the scope of trades they see profiled at premierinvestor.net, or OptionInvestor.com, where you the trader/investor may not entirely agree with where a stop has been profiled. Again, every trader/investor has their own tolerance for RISK, and just because a trade may be profiled where the profiled stop hopes to limit risk to a 5% loss, YOU the trader/investor may be willing to take on 10% risk. If so, YOU the trader/investor may then begin to view the profiled 5% stop loss as Stop #1, where YOUR 10% allowance of RISK becomes Stop #2, and may still allow the trade to reach the potential you and one of the analysts originally had built the scenario for. Jeff Bailey ************* COMING EVENTS ************* ----------------- Earnings Calendar ----------------- Symbol Co Date Comment EPS Est ------------------------- MONDAY ------------------------------- MMM 3M Co Mon, Apr 19 Before the Bell 0.87 CD Cendant Corp Mon, Apr 19 After the Bell 0.41 CF Charter One Finl Mon, Apr 19 After the Bell 0.69 ZNH China So Airlines Mon, Apr 19 -----N/A----- N/A CNF CNF Inc. Mon, Apr 19 After the Bell 0.36 CYH Comm Health Sys, Inc. Mon, Apr 19 Before the Bell 0.38 DOV Dover Corp Mon, Apr 19 After the Bell 0.38 LLY Eli Lilly Mon, Apr 19 -----N/A----- 0.66 RE Everest Re Group, Ltd Mon, Apr 19 After the Bell 2.64 FNM Fannie Mae Mon, Apr 19 Before the Bell 1.91 FII Federated Investors Mon, Apr 19 Before the Bell 0.49 HAS Hasbro, Inc. Mon, Apr 19 Before the Bell 0.03 HU Hudson Un Bancorp Mon, Apr 19 After the Bell 0.68 IDXX Idexx Laboratories Mon, Apr 19 Before the Bell 0.46 ICBC Ind Comm Bank Mon, Apr 19 After the Bell 0.70 AHO Koninklijke Ahold NV Mon, Apr 19 -----N/A----- N/A KFT Kraft Foods Mon, Apr 19 After the Bell 0.43 LXK Lexmark Intl, Inc. Mon, Apr 19 Before the Bell 0.87 LNCR Lincare Hldg Mon, Apr 19 After the Bell 0.56 MAN Manpower Mon, Apr 19 Before the Bell 0.27 MVK Maverick Tube Corp Mon, Apr 19 After the Bell 0.46 PKG Pack Corp America Mon, Apr 19 After the Bell -0.02 PRK Park National Mon, Apr 19 -----N/A----- N/A PH Parker Hannifin Corp. Mon, Apr 19 Before the Bell 0.89 PPDI Pharm Product Dvlpmnt Mon, Apr 19 After the Bell 0.43 PCL Plum Creek Timber Mon, Apr 19 After the Bell 0.35 PCH Potlatch Mon, Apr 19 After the Bell 0.71 RGF R&G FINL Mon, Apr 19 -----N/A----- 0.64 SEIC SEI Invsts Mon, Apr 19 Before the Bell 0.36 SWBT Southwest Bank Texas Mon, Apr 19 After the Bell 0.47 SNV Synovus Finl Corp. Mon, Apr 19 -----N/A----- 0.33 TRBS Texas Regional Mon, Apr 19 -----N/A----- 0.55 UNT Unit Mon, Apr 19 -----N/A----- 0.36 UDR Un Dominion Rlty TrustMon, Apr 19 After the Bell 0.37 WB Wachovia Corp Mon, Apr 19 Before the Bell 0.90 WM Wash Mutual Mon, Apr 19 After the Bell 1.05 ------------------------- TUESDAY ------------------------------ NDN 99 CENTS Only Tue, Apr 20 Before the Bell 0.19 ADO Adecco SA Tue, Apr 20 Before the Bell N/A ADO Adecco SA Tue, Apr 20 Before the Bell N/A ACS Affiliated Comp Serv Tue, Apr 20 After the Bell 0.68 AKZOY Akzo Nobel N.V. Tue, Apr 20 -----N/A----- N/A ACL Alcon Inc. Tue, Apr 20 After the Bell 0.49 MO Altria Group, Inc. Tue, Apr 20 Before the Bell 1.13 AMTD Ameritrade Hldg Corp. Tue, Apr 20 Before the Bell 0.18 AMCC App Micro Circ Corp Tue, Apr 20 After the Bell -0.01 ARB Arbitron Inc. Tue, Apr 20 Before the Bell 0.58 ARMHY ARM Hldg Plc. Tue, Apr 20 Before the Bell 0.03 ASKJ Ask Jeeves Tue, Apr 20 After the Bell 0.18 AVB Avalonbay Communities Tue, Apr 20 After the Bell 0.78 AVY Avery Dennison Corp Tue, Apr 20 During the Market 0.65 ONE Bank One Tue, Apr 20 Before the Bell 0.81 BDK Black & Decker Corp Tue, Apr 20 Before the Bell 0.92 BLK BlackRock, Inc. Tue, Apr 20 Before the Bell 0.69 BCC Boise Cascade Tue, Apr 20 Before the Bell 0.29 BSX Boston Scientific CorpTue, Apr 20 Before the Bell 0.22 EAT Brinker Intl Tue, Apr 20 Before the Bell 0.53 CHRW C.H. Robinson Wrldwd Tue, Apr 20 After the Bell 0.34 BCR C.R. Bard, Inc. Tue, Apr 20 After the Bell 1.03 CECO Career Education Tue, Apr 20 After the Bell 0.32 CNT CENTERPOINT PPTYS TR Tue, Apr 20 -----N/A----- 1.12 EXP Centex Const Products Tue, Apr 20 After the Bell 0.74 CTX Centex Corp Tue, Apr 20 After the Bell 1.74 CHKP Chck Pnt Sftwr Tech Tue, Apr 20 Before the Bell 0.23 CKFR CheckFree Tue, Apr 20 After the Bell 0.27 COH Coach, Inc. Tue, Apr 20 Before the Bell 0.27 CGNX Cognex Tue, Apr 20 After the Bell 0.16 CTSH Cognizant Tech Sltns Tue, Apr 20 Before the Bell 0.27 CTC Co de Telecom de ChileTue, Apr 20 After the Bell 0.14 CVG Convergys Corp Tue, Apr 20 After the Bell 0.21 CPO Corn Products Intl Tue, Apr 20 Before the Bell 0.48 COT Cott Corp Tue, Apr 20 Before the Bell 0.19 CYMI Cymer, Inc. Tue, Apr 20 After the Bell 0.17 DV DeVry Tue, Apr 20 After the Bell 0.25 DO Dmnd Offshr Drll Inc. Tue, Apr 20 Before the Bell -0.06 DBD Diebold Tue, Apr 20 Before the Bell 0.40 DNEX Dionex Tue, Apr 20 After the Bell 0.47 D Dominion Resources IncTue, Apr 20 Before the Bell 1.39 ELNK EarthLink Tue, Apr 20 Before the Bell 0.07 ESV ENSCO Intl Tue, Apr 20 Before the Bell 0.13 ETH Ethan Allen Interiors Tue, Apr 20 Before the Bell 0.62 FNFG 1st Niagara Finl GroupTue, Apr 20 Before the Bell 0.15 FTN 1st Tennessee NationalTue, Apr 20 Before the Bell 0.88 FBC Flagstar Bancorp Tue, Apr 20 After the Bell 0.54 FRX Forest Laboratories Tue, Apr 20 Before the Bell 0.37 FCX Frprt-McMoRan Cpr Gld Tue, Apr 20 -----N/A----- -0.17 GM General Motors Corp. Tue, Apr 20 Before the Bell 1.79 GNTX Gentex Tue, Apr 20 -----N/A----- 0.39 GDW Golden West Finl Tue, Apr 20 -----N/A----- 1.92 GPT GreenPoint Finl Tue, Apr 20 Before the Bell 0.90 HE Hawaiian Electric Tue, Apr 20 -----N/A----- 0.73 HMA Health Mgmt Ass, Inc. Tue, Apr 20 Before the Bell 0.37 HUBb Hubbell Incorporated Tue, Apr 20 During the Market 0.44 ITW Illinois Tool Works Tue, Apr 20 Before the Bell 0.82 RX IMS Health Tue, Apr 20 After the Bell 0.24 N Inco Tue, Apr 20 -----N/A----- 1.03 IR Ingersoll-Rand Co. Tue, Apr 20 Before the Bell 0.87 JKHY Jack Henry & Ass Tue, Apr 20 After the Bell 0.17 JRN Journal Com, Inc. Tue, Apr 20 Before the Bell 0.16 KELYA Kelly Serv, Inc. Tue, Apr 20 Before the Bell 0.03 LIN Linens 'n Things Inc. Tue, Apr 20 Before the Bell -0.02 LU Lucent Tech Inc. Tue, Apr 20 Before the Bell 0.02 MTB M&T Bank Corp Tue, Apr 20 Before the Bell 1.38 MAT Mattel Tue, Apr 20 -----N/A----- 0.09 MDU MDU Resources Tue, Apr 20 -----N/A----- 0.28 MDCO MEDICINES CO Tue, Apr 20 After the Bell 0.05 MEL Mellon Finl Corp Tue, Apr 20 Before the Bell 0.44 MRBK Mercantile Bankshares Tue, Apr 20 Before the Bell 0.69 MICC Millicom Intl CellularTue, Apr 20 During the Market N/A MIL Millipore Corp. Tue, Apr 20 After the Bell 0.51 MKSI MKS Instruments Tue, Apr 20 After the Bell 0.23 MOT Motorola Inc. Tue, Apr 20 After the Bell 0.07 NCI Navigant Consulting Tue, Apr 20 Before the Bell 0.14 NTRS Northern Trust Tue, Apr 20 -----N/A----- 0.55 JNC Nuveen Invsts, Inc. Tue, Apr 20 Before the Bell 0.41 OSI Outback Steakhouse Tue, Apr 20 Before the Bell 0.64 OI Owens Illinois Tue, Apr 20 After the Bell 0.24 BTU Peabody Energy Corp. Tue, Apr 20 Before the Bell 0.28 PFE Pfizer Tue, Apr 20 Before the Bell 0.51 RSH RadioShack Corp Tue, Apr 20 Before the Bell 0.38 RGS Regis Corp Tue, Apr 20 Before the Bell 0.53 RG Rogers Com Inc. Tue, Apr 20 Before the Bell N/A RCN Rogers Wireless Com Tue, Apr 20 Before the Bell N/A SAFC Safeco Corp. Tue, Apr 20 Before the Bell 0.89 SANM Sanmina-SCI Corp. Tue, Apr 20 After the Bell 0.04 STX Seagate Tech Tue, Apr 20 After the Bell 0.07 SCSS Select Comfort Corp Tue, Apr 20 After the Bell 0.17 SLG SL Green Rlty Tue, Apr 20 After the Bell 0.83 SOV Sovereign Bancorp Tue, Apr 20 After the Bell 0.39 PCS Sprint Corp Tue, Apr 20 Before the Bell -0.09 FON Sprint FON Group Tue, Apr 20 Before the Bell 0.15 STN Station Casinos Tue, Apr 20 Before the Bell 0.46 STK Storage Tech Tue, Apr 20 After the Bell 0.21 TASR Taser Intl, Inc. Tue, Apr 20 Before the Bell 0.22 TER Teradyne Inc. Tue, Apr 20 After the Bell 0.15 ALL The Allstate Corp Tue, Apr 20 After the Bell 1.41 CAKE The Cheesecake FactoryTue, Apr 20 After the Bell 0.32 JOE The St. Joe Co Tue, Apr 20 Before the Bell 0.17 TMA Thornburg Mortgage Tue, Apr 20 After the Bell N/A TMIC Trend Micro Tue, Apr 20 -----N/A----- N/A TRI Triad Hospitals, Inc Tue, Apr 20 After the Bell 0.60 0TRMK Trustmark Corp Tue, Apr 20 -----N/A----- 0.51 TUP Tupperware Tue, Apr 20 After the Bell 0.21 USB U.S. Bancorp Tue, Apr 20 Before the Bell 0.51 UB UnionBanCal Tue, Apr 20 After the Bell 0.98 WHI W Hldg Co, Inc. Tue, Apr 20 After the Bell 0.29 WRE Wash Rl Est Invst TrstTue, Apr 20 After the Bell 0.52 WEBX WebEx Com, Inc. Tue, Apr 20 After the Bell 0.21 WFC Wells Fargo & Co Tue, Apr 20 -----N/A----- 0.98 XTO XTO Energy Inc. Tue, Apr 20 Before the Bell 0.51 ZION Zions Bancorp Tue, Apr 20 After the Bell 1.07 ------------------------ WEDNESDAY ----------------------------- TW 21st Century InsuranceWed, Apr 21 After the Bell 0.21 AFFX Affymetrix Wed, Apr 21 After the Bell -0.08 ALB Albemarle Corp Wed, Apr 21 Before the Bell 0.40 ALEX Alexander & Baldwin Wed, Apr 21 After the Bell 0.52 ALFA Alfa Corp Wed, Apr 21 Before the Bell 0.25 ADS Alliance Data Sys CorpWed, Apr 21 -----N/A----- 0.28 AGI Alliance Gaming Corp. Wed, Apr 21 -----N/A----- 0.27 ALTR Altera Corp Wed, Apr 21 After the Bell 0.13 ABK Ambac Finl Group Wed, Apr 21 Before the Bell 1.49 DOX Amdocs Limited Wed, Apr 21 -----N/A----- 0.27 APPX Am Pharm Partners, IncWed, Apr 21 -----N/A----- 0.17 AME AMETEK Inc. Wed, Apr 21 Before the Bell 0.34 APH Amphenol Wed, Apr 21 -----N/A----- 0.36 AMR AMR Corp Wed, Apr 21 Before the Bell -1.05 ACI ARCH COAL INC Wed, Apr 21 Before the Bell 0.10 ASCL Ascential Software Wed, Apr 21 After the Bell 0.08 ASML ASML Hldg NV Wed, Apr 21 -----N/A----- 0.09 ATML Atmel Corp Wed, Apr 21 After the Bell 0.00 BOL Bausch & Lomb Wed, Apr 21 Before the Bell 0.37 BLC Belo Wed, Apr 21 Before the Bell 0.17 BBI Blockbuster Inc. Wed, Apr 21 Before the Bell 0.37 CAI CACI Intl Wed, Apr 21 After the Bell 0.50 CDN Cadence Design Sys Wed, Apr 21 After the Bell 0.10 CWG CanWest Global Com Wed, Apr 21 -----N/A----- N/A COF Capital One Finl Corp.Wed, Apr 21 After the Bell 1.52 CRR CARBO Ceramics Wed, Apr 21 Before the Bell 0.53 CERN Cerner Corp Wed, Apr 21 After the Bell 0.32 CEY Certegy Wed, Apr 21 Before the Bell 0.31 CHIR Chiron Wed, Apr 21 After the Bell 0.27 CHZ Chittenden Wed, Apr 21 After the Bell 0.49 CHH Choice Hotels Intl IncWed, Apr 21 After the Bell 0.29 CTXS Citrix Sys Wed, Apr 21 After the Bell 0.18 CL Colgate-Palmolive Wed, Apr 21 -----N/A----- 0.59 COLT COLT Telecom Group Wed, Apr 21 Before the Bell N/A CFC Countrywide Finl Corp Wed, Apr 21 Before the Bell 1.75 CVD Covance Wed, Apr 21 After the Bell 0.33 DNB D&B Wed, Apr 21 After the Bell 0.62 DCN Dana Wed, Apr 21 Before the Bell 0.40 EK Eastman Kodak Co Wed, Apr 21 Before the Bell 0.17 EBAY eBay Wed, Apr 21 After the Bell 0.26 ELUX Electrolux AB Wed, Apr 21 -----N/A----- 1.00 EFII Electronics Imaging Wed, Apr 21 After the Bell 0.20 ENDP Endo Pharms Wed, Apr 21 Before the Bell 0.23 ERES eResearch Tech Wed, Apr 21 After the Bell 0.18 FFIV F5 Networks Wed, Apr 21 -----N/A----- 0.14 FR 1st Indl Rlty Trust Wed, Apr 21 After the Bell 0.79 FMBI 1st Midwest Bancorp Wed, Apr 21 Before the Bell 0.51 FLIR FLIR Sys, Inc. Wed, Apr 21 Before the Bell 0.31 F Ford Motor Co Wed, Apr 21 Before the Bell 0.44 GD General Dynamics Wed, Apr 21 Before the Bell 1.19 GG Goldcorp Wed, Apr 21 After the Bell 0.11 GXP Great Plains Energy Wed, Apr 21 Before the Bell 0.30 GBBK Greater Bay Bancorp Wed, Apr 21 Before the Bell 0.40 HET Harrah's EntertainmentWed, Apr 21 -----N/A----- 0.66 HHS Harte-Hanks Wed, Apr 21 Before the Bell 0.21 HRH Hilb Rogal & Hobbs Co Wed, Apr 21 After the Bell 0.65 HNI HON INDUSTRIES Inc. Wed, Apr 21 Before the Bell 0.32 HON Honeywell Wed, Apr 21 Before the Bell 0.30 HYSL Hyperion Wed, Apr 21 After the Bell 0.32 IMN Imation Corp. Wed, Apr 21 Before the Bell 0.55 IMO Imperial Oil Limited Wed, Apr 21 -----N/A----- N/A IFX Infineon Tech AG Wed, Apr 21 Before the Bell 0.04 ICST Integrated Circuit SysWed, Apr 21 Before the Bell 0.25 ISIL Intersil Corp Wed, Apr 21 After the Bell 0.19 IPCR IPC Hldg Wed, Apr 21 Before the Bell 1.23 JPM J.P. Morgan Chase & CoWed, Apr 21 Before the Bell 0.86 JNPR Juniper Networks Wed, Apr 21 After the Bell 0.08 KMI Kinder Morgan Wed, Apr 21 After the Bell 1.00 KLAC KLA-Tencor Wed, Apr 21 After the Bell 0.29 NITE Knight Trading Group Wed, Apr 21 Before the Bell 0.22 LF LeapFrog Enterprises Wed, Apr 21 After the Bell -0.20 LEG Leggett & Platt Wed, Apr 21 After the Bell 0.29 MHM Masonite Intl Corp Wed, Apr 21 -----N/A----- 0.51 MXO Maxtor Corp Wed, Apr 21 After the Bell 0.12 MEDI MedImmune Wed, Apr 21 Before the Bell 0.42 MEOH Methanex Wed, Apr 21 -----N/A----- 0.35 MGG MGM MIRAGE Wed, Apr 21 Before the Bell 0.46 MHK Mohawk Industries, IncWed, Apr 21 After the Bell 1.00 MPS MPS Group Wed, Apr 21 Before the Bell 0.05 NCEN New Century Finl Corp Wed, Apr 21 After the Bell 1.86 NYB New York Comm Bancorp Wed, Apr 21 Before the Bell 0.50 NSC Norfolk Southern Corp Wed, Apr 21 Before the Bell 0.31 NCX NOVA Chemicals Wed, Apr 21 Before the Bell 0.04 NUS Nu Skin Wed, Apr 21 -----N/A----- 0.18 OO Oakley, Inc. Wed, Apr 21 After the Bell 0.06 PFCB P.F. Chang's Wed, Apr 21 Before the Bell 0.27 PTV Pactiv Wed, Apr 21 After the Bell 0.26 PMTC PARAMETRIC TECH CORP Wed, Apr 21 Before the Bell -0.01 PENN Penn National Gaming Wed, Apr 21 Before the Bell 0.41 PJC Piper Jaffray Wed, Apr 21 Before the Bell 0.75 PNC PNC Finl Serv Group Wed, Apr 21 Before the Bell 0.98 PGN Progress Energy Wed, Apr 21 Before the Bell 0.78 PFGI Provident Finl Group Wed, Apr 21 -----N/A----- 0.54 QCOM QUALCOMM Inc. Wed, Apr 21 After the Bell 0.48 RDN Radian Group Wed, Apr 21 After the Bell 1.00 RCL Ryl Crbbn Cruises Ltd Wed, Apr 21 Before the Bell 0.42 RYL Ryland Group Wed, Apr 21 After the Bell 1.63 SBC SBC Com Wed, Apr 21 Before the Bell 0.32 S Sears, Roebuck and Co Wed, Apr 21 Before the Bell -0.10 SSTI Silicon Storage Tech Wed, Apr 21 After the Bell 0.12 SIRI Sirius Satellite RadioWed, Apr 21 -----N/A----- -0.10 SKYF Sky Finl Group Wed, Apr 21 Before the Bell 0.45 SON Sonoco Products Wed, Apr 21 Before the Bell 0.33 SSI SpectraSite, Inc. Wed, Apr 21 After the Bell 0.12 STJ St. Jude Medical, Inc Wed, Apr 21 Before the Bell 0.50 SBUX Starbucks Wed, Apr 21 After the Bell 0.17 STM STMicroelectronics Wed, Apr 21 After the Bell 0.12 SDS SunGard Data Sys Wed, Apr 21 After the Bell 0.30 SWFT Swift Transportation Wed, Apr 21 After the Bell 0.09 SY Sybase Wed, Apr 21 Before the Bell 0.19 TK TK SHIPPING MARSHALL Wed, Apr 21 After the Bell 4.23 TLTOB Tele2 AB Wed, Apr 21 -----N/A----- N/A TLAB Tellabs Wed, Apr 21 Before the Bell 0.00 TLS Telstra Corp Limited Wed, Apr 21 -----N/A----- N/A TEX Terex Corp Wed, Apr 21 After the Bell 0.36 TTEK Tetra Tech Wed, Apr 21 After the Bell 0.23 BK The Bank of New York Wed, Apr 21 Before the Bell 0.45 KO The Coca-Cola Co Wed, Apr 21 Before the Bell 0.43 FAF The 1st American Corp Wed, Apr 21 Before the Bell 0.58 REY Reynolds & Reynolds Wed, Apr 21 Before the Bell 0.36 TBL The Timberland Co Wed, Apr 21 Before the Bell 0.62 TDW Tidewater Wed, Apr 21 Before the Bell 0.18 TMK Torchmark Wed, Apr 21 After the Bell 1.03 TKC Trkcl Iltsm Hzmtlr Wed, Apr 21 -----N/A----- N/A UTX Un Tech Wed, Apr 21 Before the Bell 1.12 WCN Waste Connections Wed, Apr 21 After the Bell 0.52 WFT Weatherford Intl Wed, Apr 21 -----N/A----- 0.37 WLP WllPnt Hlth Ntwrks Wed, Apr 21 After the Bell 1.58 WHR Whirlpool Corp Wed, Apr 21 06:00 am ET 1.38 WTNY Whitney Hldg Corp Wed, Apr 21 -----N/A----- 0.61 WPS WPS Resources Wed, Apr 21 -----N/A----- N/A WYE WYETH Wed, Apr 21 Before the Bell 0.55 YUM Yum! Brands, Inc. Wed, Apr 21 After the Bell 0.45 ------------------------- THUSDAY ----------------------------- AD ADVO Thu, Apr 15 After the Bell 0.41 RKY Adolph Coors, Co. Thu, Apr 22 Before the Bell 0.15 ALGN Align Tech Thu, Apr 22 -----N/A----- 0.04 ALE Allete Thu, Apr 22 Before the Bell 0.54 AED Allied Domecq PLC Thu, Apr 22 Before the Bell N/A AT ALLTEL Corp. Thu, Apr 22 -----N/A----- 0.76 AMZN Amazon.com, Inc. Thu, Apr 22 -----N/A----- 0.19 AXP American Express Co Thu, Apr 22 -----N/A----- 0.62 AIG American Intl Group Thu, Apr 22 Before the Bell 1.06 ACF AmeriCredit Corp. Thu, Apr 22 After the Bell 0.28 AMGN Amgen Thu, Apr 22 -----N/A----- 0.56 APA Apache Corp Thu, Apr 22 Before the Bell 1.06 AHG Apria Healthcare GroupThu, Apr 22 Before the Bell 0.54 ARW Arrow Electronics, IncThu, Apr 22 Before the Bell 0.29 ASBC Associated Banc-Corp Thu, Apr 22 -----N/A----- 0.76 AF Astoria Finl Corp Thu, Apr 22 After the Bell 0.71 T AT&T Thu, Apr 22 Before the Bell 0.33 ALV Autoliv Thu, Apr 22 Before the Bell 0.74 ADP Auto Data Processing Thu, Apr 22 Before the Bell 0.50 AVCT Avocent Corp Thu, Apr 22 Before the Bell 0.33 ABX Barrick Gold Thu, Apr 22 -----N/A----- 0.07 BAX BAXTER INTL INC Thu, Apr 22 Before the Bell 0.31 BZH Beazer Homes USA Inc. Thu, Apr 22 Before the Bell 3.26 BDX Becton, Dickinson and Thu, Apr 22 Before the Bell 0.61 BLS BellSouth Corp Thu, Apr 22 Before the Bell 0.47 BMS Bemis Co, Inc. Thu, Apr 22 Before the Bell 0.35 BHE Benchmark Electronics Thu, Apr 22 Before the Bell 0.35 BSG BISYS GROUP INC Thu, Apr 22 Before the Bell 0.22 BWA BorgWarner, Inc. Thu, Apr 22 Before the Bell 1.81 BYD Boyd Gaming Thu, Apr 22 After the Bell 0.29 BDN Brandywine Rlty Trust Thu, Apr 22 After the Bell 0.63 BGG Briggs & Stratton CorpThu, Apr 22 Before the Bell 2.30 BRCM Broadcom Thu, Apr 22 After the Bell 0.27 BR Burlington Resources Thu, Apr 22 Before the Bell 1.62 CZR Caesars Entertainment Thu, Apr 22 -----N/A----- 0.18 ELY Callaway Golf Thu, Apr 22 After the Bell 0.70 CNI Canadian Natl Railway Thu, Apr 22 -----N/A----- 0.53 CAH Cardinal Health, Inc. Thu, Apr 22 Before the Bell 0.99 CAT Caterpillar Inc. Thu, Apr 22 Before the Bell 0.70 CLS Celestica Thu, Apr 22 After the Bell -0.03 CELG Celgene Corp. Thu, Apr 22 Before the Bell 0.08 CX CEMEX S.A. Thu, Apr 22 -----N/A----- 0.61 CNP CenterPoint Energy Thu, Apr 22 -----N/A----- 0.12 CHRT Chartered Semicon ManuThu, Apr 22 After the Bell -0.02 CPS ChoicePoint, Inc. Thu, Apr 22 Before the Bell 0.36 CINF Cincinnati Finl Corp Thu, Apr 22 Before the Bell 0.67 CIT CIT Group Thu, Apr 22 Before the Bell 0.76 CBCF Citizens Banking Thu, Apr 22 -----N/A----- 0.40 CNX CONSOL Energy Thu, Apr 22 Before the Bell 0.17 ED Consolidated Edison. Thu, Apr 22 -----N/A----- 0.68 CBE Cooper Industries Ltd Thu, Apr 22 Before the Bell 0.77 CTB Cooper Tire & Rubber Thu, Apr 22 Before the Bell 0.29 GLW Corning Thu, Apr 22 After the Bell 0.05 CMI Cummins Inc. Thu, Apr 22 Before the Bell 0.69 CYT Cytec Industries Inc. Thu, Apr 22 After the Bell 0.59 DHR Danaher Thu, Apr 22 Before the Bell 0.84 ECL Ecolab Inc. Thu, Apr 22 Before the Bell 0.24 EW Edwards Lifesciences Thu, Apr 22 After the Bell 0.41 ELX Emulex Thu, Apr 22 After the Bell 0.25 EC Engelhard Corp Thu, Apr 22 Before the Bell 0.39 ELAB Eon Labs Thu, Apr 22 Before the Bell 0.47 EFX Equifax Inc. Thu, Apr 22 Before the Bell 0.37 ERIE Erie Indemnity Thu, Apr 22 After the Bell 0.72 FILE FileNet Thu, Apr 22 Before the Bell 0.09 FDC 1st Data Thu, Apr 22 -----N/A----- 0.44 FMD 1st Marblehead Thu, Apr 22 After the Bell -0.06 FISV Fiserv Thu, Apr 22 -----N/A----- 0.44 FPL FPL Group Thu, Apr 22 Before the Bell 0.86 BEN Franklin Resources Thu, Apr 22 -----N/A----- 0.72 FULT Fulton Finl Thu, Apr 22 -----N/A----- 0.33 GMT GATX Corp Thu, Apr 22 Before the Bell 0.33 GYI GETTY IMAGES INC Thu, Apr 22 After the Bell 0.35 GILD Gilead Sciences Thu, Apr 22 -----N/A----- 0.33 GTI GrafTech Intl Ltd Thu, Apr 22 -----N/A----- 0.10 GLK Great Lakes Chemical Thu, Apr 22 -----N/A----- 0.09 GDT Guidant Thu, Apr 22 Before the Bell 0.56 HSC Harsco Corp Thu, Apr 22 Before the Bell 0.36 HCA HCA Thu, Apr 22 Before the Bell 0.71 HP Helmerich & Payne Thu, Apr 22 -----N/A----- 0.12 HSY Hershey Foods Corp Thu, Apr 22 Before the Bell 0.81 IEX Idex Thu, Apr 22 -----N/A----- 0.49 IDTI Integrated Device TechThu, Apr 22 After the Bell 0.06 IGT Intl Game Tech Thu, Apr 22 Before the Bell 0.32 IVGN Invitrogen Corp Thu, Apr 22 Before the Bell 0.60 SFI iStar Finl Thu, Apr 22 Before the Bell N/A ESI ITT Edu Serv, Inc. Thu, Apr 22 Before the Bell 0.25 ITT ITT Industries Thu, Apr 22 Before the Bell 0.89 JEC Jacobs Engineering Thu, Apr 22 -----N/A----- 0.61 JBLU JetBlue Airways Thu, Apr 22 Before the Bell 0.12 K Kellogg Co. Thu, Apr 22 Before the Bell 0.51 KMB Kimberly Clark Thu, Apr 22 Before the Bell 0.91 LFL LAN Chile Thu, Apr 22 -----N/A----- 0.44 LYO Lyondell PetrochemicalThu, Apr 22 Before the Bell -0.24 MAR Marriott Intl Thu, Apr 22 Before the Bell 0.42 MEE Massey Energy Co Thu, Apr 22 After the Bell -0.07 MYG Maytag Thu, Apr 22 -----N/A----- 0.53 KRB MBNA Thu, Apr 22 After the Bell 0.40 MWV MeadWestvaco Thu, Apr 22 Before the Bell -0.29 MENT Mentor Graphics Thu, Apr 22 -----N/A----- 0.06 MRK Merck & Co., Inc. Thu, Apr 22 Before the Bell 0.72 MERQ Mercury Interactive Thu, Apr 22 After the Bell 0.22 MCRL Micrel Semicon Thu, Apr 22 After the Bell 0.05 MCHP Microchip Tech Thu, Apr 22 After the Bell 0.20 MSFT Microsoft Thu, Apr 22 After the Bell 0.29 NTY NBTY Inc. Thu, Apr 22 Before the Bell 0.47 NXTL Nextel Com Thu, Apr 22 Before the Bell 0.44 NVS Novartis Corp Thu, Apr 22 -----N/A----- 0.53 NUE Nucor Thu, Apr 22 Before the Bell 0.89 ODP Office Depot Inc. Thu, Apr 22 Before the Bell 0.36 ONB Old National Bancorp Thu, Apr 22 After the Bell 0.29 PSFT PeopleSoft Thu, Apr 22 After the Bell 0.18 PKI PerkinElmer Thu, Apr 22 After the Bell 0.13 PHLY Phila Cnsldtd Hldg Thu, Apr 22 -----N/A----- 0.94 PLCM Polycom Incorporated Thu, Apr 22 After the Bell 0.11 POT Potash Corp Ssktchwn Thu, Apr 22 -----N/A----- 0.58 PFS Provident Finl Serv Thu, Apr 22 After the Bell 0.15 PVN Providian Finl Corp Thu, Apr 22 After the Bell 0.19 DGX Quest Diagnostics Thu, Apr 22 Before the Bell 1.05 RBK Reebok Thu, Apr 22 Before the Bell 0.67 RESP Respironics, Inc. Thu, Apr 22 Before the Bell 0.55 RHI Robert Half Intl Thu, Apr 22 After the Bell 0.06 RSAS RSA Security Thu, Apr 22 After the Bell 0.09 TSG Sabre Hldg Corp. Thu, Apr 22 Before the Bell 0.33 SAP SAP AG Thu, Apr 22 Before the Bell 0.23 SLE Sara Lee Thu, Apr 22 Before the Bell 0.44 SAY Satyam Comp Serv Lmtd Thu, Apr 22 -----N/A----- 0.19 SGP Schering-Plough Thu, Apr 22 Before the Bell 0.01 SGMS Scientific Games Corp Thu, Apr 22 After the Bell 0.19 SFA Scientific-Atlanta IncThu, Apr 22 After the Bell 0.31 POOL SCP Pool Corp Thu, Apr 22 Before the Bell 0.05 SRA Serono S.A. Thu, Apr 22 Before the Bell 0.17 SWIR Sierra Wireless, Inc Thu, Apr 22 After the Bell 0.13 SIAL Sigma-Aldrich Corp Thu, Apr 22 After the Bell 0.78 SIVB Silicon Valley Bancsh Thu, Apr 22 After the Bell 0.34 SSD Simpson Manu Thu, Apr 22 After the Bell 0.54 SNA Snap-on Incorporated Thu, Apr 22 Before the Bell 0.29 SFG StanCorp Finl Group Thu, Apr 22 Before the Bell 1.32 HOT Starwood Hotels ResortThu, Apr 22 Before the Bell 0.09 SUN Sunoco Thu, Apr 22 -----N/A----- 1.31 SLVN Sylvan Learning Sys Thu, Apr 22 Before the Bell 0.01 TKLC Tekelec Thu, Apr 22 After the Bell 0.08 TMX Telefonos De Mexico Thu, Apr 22 After the Bell 0.91 TPX Tempur Pedic Intl Thu, Apr 22 After the Bell 0.14 TGN Texas Genco Hldg, Inc Thu, Apr 22 Before the Bell N/A TXT Textron Inc. Thu, Apr 22 Before the Bell 0.51 TKR The Timken Co Thu, Apr 22 Before the Bell 0.27 TAC TRANSALTA CORP Thu, Apr 22 Before the Bell N/A TRH Transatlantic Hldg Thu, Apr 22 -----N/A----- 1.46 TUES Tuesday Morning Corp Thu, Apr 22 Before the Bell 0.19 TLRK Tularik Inc. Thu, Apr 22 -----N/A----- -0.44 UDI Un Defense Industries Thu, Apr 22 Before the Bell 0.66 UPS UN PARCEL SERVICE INC Thu, Apr 22 Before the Bell 0.61 URI Un Rentals Thu, Apr 22 Before the Bell -0.10 UHS Universal Health Serv Thu, Apr 22 After the Bell 0.66 UST UST Inc. Thu, Apr 22 Before the Bell 0.68 VCI Valassis Com Inc. Thu, Apr 22 Before the Bell 0.46 VLY Valley Natl Bancorp Thu, Apr 22 -----N/A----- 0.41 VRSN VeriSign, Inc. Thu, Apr 22 After the Bell 0.13 VC Visteon Corp Thu, Apr 22 Before the Bell 0.12 VTSS Vitesse Semicon Thu, Apr 22 After the Bell 0.01 WC WellChoice, Inc. Thu, Apr 22 After the Bell 0.68 WEN Wendy's Intl Thu, Apr 22 -----N/A----- 0.43 WSTC West Corp Thu, Apr 22 -----N/A----- 0.37 WDC Western Digital Corp. Thu, Apr 22 After the Bell 0.21 XLNX Xilinx, Inc. Thu, Apr 22 -----N/A----- 0.25 YELL Yellow Roadway Corp Thu, Apr 22 After the Bell 0.33 YRK York Intl Corp. Thu, Apr 22 Before the Bell -0.14 ------------------------- FRIDAY ------------------------------- ABY Abitibi-Consolidated Fri, Apr 23 -----N/A----- N/A ARM ArvinMeritor, Inc. Fri, Apr 23 Before the Bell 0.42 BVN Co Minas Buenaventura Fri, Apr 23 After the Bell 0.43 ERICY Ericsson LM Telephone Fri, Apr 23 -----N/A----- 0.14 FO Fortune Brands Fri, Apr 23 -----N/A----- 0.82 IP Intl Paper Co. Fri, Apr 23 Before the Bell 0.14 KB Kookmin Bank Fri, Apr 23 -----N/A----- N/A LZ Lubrizol Fri, Apr 23 Before the Bell 0.53 HCR Manor Care Inc Fri, Apr 23 Before the Bell 0.44 NJ Nidec Fri, Apr 23 -----N/A----- N/A OXY Occidental Petroleum Fri, Apr 23 Before the Bell 1.22 PCBC Pacific Capital BncorpFri, Apr 23 Before the Bell 1.20 PGL Peoples Energy Corp. Fri, Apr 23 Before the Bell 1.52 PRGO Perrigo Fri, Apr 23 Before the Bell 0.19 SCG SCANA Fri, Apr 23 Before the Bell 0.78 SLB Schlumberger Fri, Apr 23 Before the Bell 0.47 SII Smith Intl, Inc. Fri, Apr 23 Before the Bell 0.42 SSCC Smurfit-Stone Cont Fri, Apr 23 -----N/A----- -0.23 STE Steris Fri, Apr 23 Before the Bell 0.43 SYNT Syntel, Inc. Fri, Apr 23 Before the Bell 0.21 TRP TransCanada Corp Fri, Apr 23 -----N/A----- N/A VOLVY Volvo AB Fri, Apr 23 -----N/A----- 0.30 WY Weyerhaeuser Co. Fri, Apr 23 Before the Bell 0.56 XRX Xerox Corp Fri, Apr 23 Before the Bell 0.15 ---------------------------------------------- Upcoming Stock Splits In The Next Two Weeks... ---------------------------------------------- Symbol Co Name Ratio Payable Executable HIBB Hibbett Sporting Goods 3:2 Apr 16th Apr 19th AVD American Vanguard Corp 3:2 Apr 16th Apr 19th MSFG MainSource Financial Group3:2 Apr 16th Apr 19th SHFL Shuffle Master, Inc 3:2 Apr 16th Apr 19th UNFI United Natural Foods, Inc 2:1 Apr 19th Apr 20th MTLM Metal 2:1 Apr 20th Apr 21st CRED CREDO Petroleum Corp 3:2 Apr 20th Apr 21st ARO Aeropostale, Inc 3:2 Apr 26th Apr 27th BKST Brookstone, Inc 3:2 Apr 26th Apr 27th NSSC NAPCO Security Systems 2:1 Apr 27th Apr 28th OMTL Omtool, Ltd 2:1 Apr 27th Apr 28th UCBI United Community Banks 3:2 Apr 28th Apr 29th TASR TASER Intl 2:1 Apr 29th Apr 30th TCBK TriCo Bancshares 2:1 Apr 30th May 3rd -------------------------- Economic Reports This Week -------------------------- Earnings season will be in full swing this week and we do mean full. There parade of corporate reports is overwhelming. Plus, the markets will get to hear from Alan Greenspan twice as he speaks before congress. ============================================================== -For- ---------------- Monday, 04/19/04 ---------------- Leading Indicators (DM) Mar Forecast: 0.3% Previous: 0.0% Semi Book-to-Bill numbers ----------------- Tuesday, 04/20/04 ----------------- Fed governor Alan Greenspan before the Senate Fed governor Pianalto makes an appearance Chain Store Sales Redbook Retail Sales ------------------- Wednesday, 04/21/04 ------------------- Fed governor Alan Greenspan before Joint Economic Committee Fed's Beige Book (DM) Crude Oil & Gasoline inventories ------------------ Thursday, 04/22/04 ------------------ Initial Claims (BB) 04/17 Forecast: N/A Previous: 360K Natural Gas inventories Fed governor Bies makes an appearance Fed governor Bernanke makes an appearance ---------------- Friday, 04/23/04 ---------------- Durable Orders (BB) Mar Forecast: 0.7% Previous: 2.5% To Be Announced: PPI (BB) DATE TBA Mar Forecast: 0.3% Previous: 0.1% Core PPI (BB) DATE TBA Mar Forecast: 0.1% Previous: 0.1% Definitions: DM= During the Market BB= Before the Bell AB= After the Bell NA= Not Available ************************Advertisement************************* Full Service Brokers Man Financial announces the formation of the OneStopOption Brokerage Group, addressing the demand for personalized, experienced service for both securities* and futures trading within the same firm. Licensed Option Principals Andrew Aronson and Alan Knuckman specialize in live assistance of stock*, option* and futures traders. The combination of the proven Man Financial global presence and the convenience of one group for all trading needs provide customers with the tools needed for success. Live Broker and Online Trading Available 888-281-9569 http://www.OneStopOption.com ************************************************************** 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 $49.95. The quarterly price is $129.95 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 Sunday 04-18-2004 Sunday 2 of 5 In Section Two: Watch List: A handful of bullish candidates Dropped Calls: None Dropped Puts: None ************************Advertisement************************* Live Securities Brokerage Service with Licensed Option Principals OCO Stop & Profit Orders OneStopOption All types of Spreads and Buy Writes 888-281-9569 Auto-Trade Market Monitor Signals Personal Service and Education **Services available for Foreign Traders including Canada** http://www.OneStopOption.com ************************************************************** ********** Watch List ********** A handful of bullish candidates ___________________________________________________________________ How to use this watch list: Readers can use the candidates below as a springboard for their own research. Many are in the process of breaking support or resistance or in the process of starting new trends or extending old ones. With your own due diligence these could be strong potential plays. ___________________________________________________________________ Best Buy Co - BBY - close: 53.00 change: +1.35 WHAT TO WATCH: Earnings were March 31st for BBY and the stock gapped higher over resistance at $50.00 and its 200-dma after beating estimates by 3 cents per share. The rally continued until it faded under resistance at $54-$55. The consolidation pulled back toward the $50 level, now support, and we're seeing traders buy the dip. We feel it's a bit early to go long and traders are probably better off waiting for BBY to breakout over the $55.00 mark. Chart= --- Avid Technology - AVID - close: 50.63 change: +5.19 WHAT TO WATCH: AVID beat earnings estimate by 8 cents when it reported on Thursday night. Investors rewarded the stock with an 11% gain on volume four times the norm. We like the breakout over resistance at $50.00 and its 200-dma but traders probably want to look for a dip and a bounce from $48.00-48.50 before you consider any bullish positions. The $55 level would be a good target. Chart= --- ONYX Pharmaceuticals - ONXX - close: 43.25 change: +0.95 WHAT TO WATCH: ONXX has turned in an absolutely incredible run from its lows in February 2003. It continues to out perform its biotech brethren and the pull back to round-number support near $40.00 could be a bullish entry point. Earnings should be in May but we can't confirm that. A stop loss under $40.00 might work well. If you're feeling conservative use a trigger over $44.40 to go long. Chart= --- Urban Outfitters - URBN - close: 47.81 change: +2.27 WHAT TO WATCH: URBN is a retail apparel play that has been pretty consistent with its bullish march higher. Traders have been buying dips to its 50-dma for months. The company just had its earnings estimates raised by Piper Jaffray and the stock surged from psychological support at $45.00 and technical support at its 50-dma (again). We'd probably target a move to $52.50 over the next four weeks. Chart= ----------------------------------- RADAR SCREEN - more stocks to watch ----------------------------------- JP $54.65 +0.42 - The strong bullish trend and the very consistent support at its 50-dma makes this one look pretty tempting with the dip back to support. It might be a decent covered-call candidate. DHR $96.05 +0.83 - The recent consolidation near the $95 level appears to be ending and DHR looks poised to run toward the $100 level and beyond but earnings should be on April 22nd. ENR $48.10 +1.45 - Have you got the bunny inside? ENR certainly looks energized the last two sessions. The stock is breaking out to new highs with its MACD producing a new buy signal. Earnings should be April 28th. BCR $99.00 +0.36 - We like the action in shares of BCR and think it could be a worthy bullish candidate on a breakout over $100 but earnings should come out on April 20th. LOGI $47.10 +1.12 - Volume is very light on this stock and that makes us cautious but bulls could try for a run back toward its highs on a breakout above $48.00. CRR $66.61 +2.56 - The MACD buy signal, the P&F buy signal, the new closing high over resistance at $66.00. This looks pretty good but earnings are due out on April 21st. ************************Advertisement************************* No time to follow the Market Monitor? Tired of missing good Trades because you stepped away from your computer? OneStopOption Group can follow the Market Monitor for you. You choose the number of contracts, we take care of the rest!! Trade Stock Options, Stocks and ALL Futures with the same Group. Call us 888 281-9569 to see if you qualify to have us rebate your subscription cost. http://www.OneStopOption.com ************************************************************** ************************** 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 ^^^^^ None PUTS ^^^^ None *********** DEFINITIONS *********** SL = Suggested stop loss. Sell if bid breaks this price. OI = Open Interest - the number of open contracts outstanding. ITM = In the money ATM = At the money OTM = Out of the money ADV = Average Daily Volume 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. RISKS of SELLING PUTS: The risk of selling naked puts is always the possibility of a catastrophic event that drops the stock below the strike price and could result in the stock being PUT to you. Always protect yourself with a "buy to cover" limit order to take you out before this can happen. ************************Advertisement************************* Stock Option and Futures Brokerage OneStopOption teams the best trading technology with varying levels of professional assistance at very competitive prices. Commission costs are comparable to discount brokerage and tailored to individual customer needs. The power of one brokerage group with experience and expertise in the Securities* and Futures Markets offers unprecedented convenience for traders. Access To All Futures Markets Toll Free 888-281-9569 Stock Option Principals www.OneStopOption.com ************************************************************** ********** 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 Sunday 04-18-2004 Sunday 3 of 5 In Section Three: Current Calls: CAT, EBAY, ESRX, PDCO, WFMI, ZBRA New Calls: AET, BEC Current Put Plays: LEH, PD, QLGC, UTSI New Puts: AMG ************************Advertisement************************* OneStopOption.com Trade: Securities, Stock Options, Futures Contracts Service: Experienced Brokers Personal Assistance Convenience of One Brokerage Online and Live Broker Trading Experience... The Difference OneStopOption.com 888-281-9569 *************************************************************** ****************** CURRENT CALL PLAYS ****************** Caterpillar - CAT - close: 81.97 change: +1.17 stop: 79.99 Company Description: For more than 75 years, Caterpillar Inc. has been building the world's infrastructure and, in partnership with its worldwide dealer network, is driving positive and sustainable change on every continent. With 2003 sales and revenues of $22.76 billion, Caterpillar is a technology leader and the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. More than half of all sales were to customers outside of the United States, maintaining Caterpillar's position as a global supplier and leading U.S. exporter. The company employs nearly 70,000 people around the world. (source: company press release) Why We Like It: Time is running out for our bullish play in Dow component CAT. Throughout the recent market volatility shares of CAT pulled back to support at the $80.00 level and the small bounce on Friday actually looks like a potential bullish entry point. However, CAT is due to announce earnings on Thursday morning, April 22nd. We are not going to hold over the event so that means we'll be closing the play on Tuesday or Wednesday evening. Hopefully, the markets just needed some more time to consolidate its gains from the March low rebound and we'll see some strength next week. In the news CAT and the Auto Works Union (UAW) extended their contract again, this time to April 25th, so union members can look over the latest offer from CAT. Suggested Options: We are not suggesting any new positions this close to CAT's earnings report. Annotated Chart: Picked on April 02 at $ 80.25 Change since picked: + 1.72 Earnings Date 04/22/04 (confirmed) Average Daily Volume: 2.5 million Chart = --- eBay Inc - EBAY - close: 74.86 change: -0.50 stop: 73.80*new* Company Description: eBay is The World's Online Marketplace(TM). Founded in 1995, eBay created a powerful platform for the sale of goods and services by a passionate community of individuals and businesses. On any given day, there are millions of items across thousands of categories for sale on eBay. eBay enables trade on a local, national and international basis with customized sites in markets around the world. (source: company press release) Why We Like It: Time is almost up for our bullish EBAY play as well. We were planning on a pre-earnings run up and the strength over the last couple of weeks has been great. Unfortunately, EBAY's recent bounce from its simple 10-dma was stunted on Friday when Internet advertising company DoubleClick issued a sour earnings report on Thursday night. Shares of DCLK dropped 25% on Friday and acted as a wet blanket for the INX Internet index, which fell 3.5%. EBAY is due to report its Q1 earnings on Wednesday, April 21st after the closing bell. That means we'll be planning on an exit either Tuesday night or Wednesday right before the closing depending on how EBAY performs. This close to earnings we do not suggest any new bullish positions. We're going to raise our stop to Wednesday's low at $73.80. Suggested Options: We are not suggesting any new bullish positions this close to EBAY's earnings report. Annotated chart: Picked on April 01 at $ 72.25 Change since picked: + 2.61 Earnings Date 04/21/04 (confirmed) Average Daily Volume: 7.0 million Chart = --- Express Scripts - ESRX - close: 77.22 change: +1.21 stop: 74.00 Company Description: Express Scripts provides health care management and administration services on behalf of clients that include health maintenance organizations, health insurers, third-party administrators, employers and union-sponsored benefit plans. The company's fully integrated pharmacy benefit management services include network claims processing, mail pharmacy services, benefit design consultation, drug utilization review, formulary management, disease management, medical information management services and informed decision counseling services through its Express Health Line division. Why we like it: Traders that kept the faith got a shot at a solid entry point into our ESRX play last week as the stock dipped to strong support near $75 and rebounded from there to close out the week above $77. Ever since tagging new all-time highs a couple weeks ago, the stock has been tracing out what looks like a bull flag continuation pattern above the recent breakout level. Note how the $78 level has been providing resistance over the past week. A breakout back over that level will have the stock moving through the top of its flag pattern and another breakout to new highs won't be far behind. Support at $75 is growing stronger now, with the 20-dma at $75.27 and the 30-dma at $74.91. Aggressive traders can target entries on one more dip and rebound near that level early next week, but the more likely scenario is that we're going to see a breakout entry setup as ESRX pushes to new highs above $78.60. Recall our initial target was for a move to the $80 level, with an outside shot at a push still higher. We are running out of time on this play though, as earnings are set to be released on April 28th. Clearly we'll be dropping the play ahead of that report, hopefully at significantly higher levels. Maintain stops at $74. Suggested Options: Aggressive traders can use the May $80 Call, while the more conservative approach will be to use the May $75 strike. Our preferred option is the May $75 strike, as it is currently in the money and should provide sufficient time for the play to move in our favor. Note that we haven't listed any longer-duration options, as we'll be closing the play before earnings, which are less than 2 weeks away. BUY CALL MAY-75*XTQ-EO OI=2152 at $4.40 SL=2.75 BUY CALL MAY-80 XTQ-EP OI=1035 at $1.75 SL=0.75 Annotated Chart of ESRX: Picked on April 4th at $75.36 Change since picked: +1.86 Earnings Date 4/28/04 (unconfirmed) Average Daily Volume = 1.03 mln Chart = --- Patterson Dental Co - PDCO - cls: 78.62 chg: +0.81 stop: 77.35*new* Company Description: Patterson Dental Company is a value-added distributor serving the dental, companion-pet veterinarian and rehabilitation supply markets. (source: company press release) Why We Like It: Too bad all our plays aren't this easy. PDCO's breakout over major resistance at $70.00 was fueled on strong volume and the stock shot from $70 to $75 in a short time while bucking weakness in the broader market. Then PDCO consolidated those gains in a tight sideways trading pattern before launching higher on Wednesday. Volume has once again been above average on the rallies. We've been cinching up our stop losses the last few days to try and protect a good chunk of the move higher. Our original play description suggested that traders plan to take profits when PDCO traded into the $77.50-80.00 range. It hit $77.49 on Wednesday and has continued to climb higher. We have since set an official exit point at $79.95 and we will close the play if PDCO can trade there or above. In the meantime we're going to raise our stop loss to $77.35, just under Friday's low. In the news PDCO announced that it has already completed its ProVet acquisition. Suggested Options: This close to our planned exit point we are not suggesting new bullish positions. Annotated Chart: Picked on April 04 at $ 72.14 Change since picked: + 6.48 Earnings Date 02/19/04 (confirmed) Average Daily Volume: 493 thousand Chart = --- Whole Foods Market - WFMI - cls: 76.91 chng: +0.90 stp: 73.40*new* Company Description: Whole Foods Market, Inc. owns and operates a chain of natural and organic foods supermarkets in the United States. As of September 28, 2003, it operated 145 stores in 26 states, the District of Columbia and Canada. Regional distribution centers, bakehouse facilities, commissary kitchens, seafood processing facilities, produce procurement centers and a coffee roasting operation support the Company's stores. WFMI's product selection has a heavy emphasis on perishable foods designed to appeal to both natural foods and gourmet shoppers. Its product categories include, but are not limited to, produce, seafood, grocery, meat and poultry, bakery, prepared foods and catering, specialty (beer, wine and cheese), whole body (nutritional supplements, vitamins, body care and educational products such as books), floral, pet products and household products. Why we like it: It looks like we initiated coverage on WFMI just in the nick of time, as the stock delivered the breakout we were looking for on Friday. We needed to see a breakout over $76.50 to satisfy our entry trigger and that move arrived in the middle of the day, as the stock surged above $77 on solid volume. Holding most of those gains right into the closing bell, the stock has cleanly broken both horizontal resistance and the descending trendline and now looks poised to run up and challenge the March highs just over $79. Traders that missed the breakout entry on Friday can now look for a slight pullback near $76 or even enter near current levels. Once through the March highs, look for a continued rally to the $83-84 area ahead of earnings in the first week of May. Following Friday's breakout, support should now be rock-solid at $74, so it should be safe to raise our stop to $73.40, just under last Wednesday's intraday low. Suggested Options: Shorter Term: The May $75 Call will offer short-term traders the best return on an immediate move, as it is currently in the money. Longer Term: Aggressive longer-term traders can use the May $80 Call, while the more conservative approach will be to use the August strike. Our preferred option is the May $75 strike, as it is currently in the money and should provide sufficient time for the play to move in our favor ahead of earnings. BUY CALL MAY-75*FMQ-EO OI= 613 at $4.10 SL=2.50 BUY CALL MAY-80 FMQ-EP OI= 678 at $1.65 SL=0.75 BUY CALL AUG-80 FMQ-HP OI= 303 at $3.40 SL=1.75 Annotated Chart of WFMI: Picked on April 15th at $76.01 Change since picked: +0.90 Earnings Date 5/05/04 (confirmed) Average Daily Volume = 686 K --- Zebra Technologies - ZBRA - cls: 71.96 chg: +0.35 stop: 69.99 Company Description: Zebra Technologies Corp. delivers innovative and reliable on- demand printing solutions for business improvement and security applications in 90 countries around the world. More than 90 percent of Fortune 500 companies use Zebra-brand printers. A broad range of applications benefit from Zebra-brand thermal bar code, "smart" label, receipt, and card printers, resulting in enhanced security, increased productivity, improved quality, lower costs, and better customer service. The company has sold more than three million printers, including RFID printer/encoders and wireless mobile solutions, and also offers software, connectivity solutions, and printing supplies. (source: company press release) Why We Like It: News has been quiet for ZBRA but we still feel that this is a stock to watch for the RFID rollout that will be coming over the next couple of years. Short-term we're a little disappointed to see the stock pull back under the $73.50 level but the dip toward $70 may actually be a more attractive entry point. Some of ZBRA's technical oscillators look a little bearish so conservative traders may want to wait for the bounce back above $73.50. Fortunately, Friday's candlestick looks like a small "hammer", which is normally a clue to a bullish reversal at the end of a downtrend. Of course the downtrend is only three days old but hopefully that's enough! No change in our stop at $69.99 and no change in our target range of $77.50 to $80.00. Keep in mind we only have a week and a half left before ZBRA's earnings on the 28th. Suggested Options: Our favorite calls are the May 70s and 75s but remember we don't plan to hold over ZBRA's earnings report in late April. BUY CALL MAY 70 ZBQ-EN OI=434 at $4.20 SL=2.10 BUY CALL MAY 75 ZBQ-EO OI=226 at $1.80 SL=0.95 Annotated Chart: Picked on April 11 at $ 73.26 Change since picked: - 1.30 Earnings Date 04/28/04 (unconfirmed) Average Daily Volume: 332 thousand Chart = ************** NEW CALL PLAYS ************** Aetna Inc. - AET - close: 87.40 change: +1.66 stop: 83.50 Company Description: Aetna Inc. is a provider of healthcare, dental, pharmacy, group life, disability and long-term care benefits in the United States, serving approximately 13 million medical members, 10.9 million dental members, 7.4 million pharmacy members and 12.3 million group insurance customers as of December 31, 2003. The company has a nationwide provider network of more than 600,000 healthcare services providers, including over 362,000 primary care and specialty physicians and 3,626 hospitals. Its operations include three business segments: Healthcare, Group Insurance and Large Case Pensions. Healthcare consists of health and dental plans offered on both a risk basis and an employer- funded basis. The Group Insurance segment includes group life insurance products offered on a risk basis. Large Case Pensions manages a variety of retirement products primarily for defined benefit and defined contribution plans. Why we like it: After breaking out to new highs in early January, shares of AET have been on a tear, reaching a new all-time high of $95 earlier this month before some much-needed profit taking appeared. The stock plunged last week, falling back to support near $85, just over the 50-dma ($83.58) and the buyers reappeared in volume on Friday, sending the stock back up by nearly 2%. This isn't a play for the timid, as we're going to go with the still-bullish trend and look for a run into the company's earnings report, which is less than 2 weeks away. Normally, we wouldn't try to pick a bottom in a stock that has fallen so sharply and so recently, but the rebound from the $85 level looks very encouraging and odds are good that investors will drive the stock higher ahead of the quarterly report in anticipation of another blowout earnings performance like the company delivered in February. While the PnF chart is still bullish, the fact that the bullish price objective of $89 was already met (and exceeded) does make this a higher risk play. We'd like to see a mild dip back near the $86 level early next week to provide a better entry point, but may have to content ourselves with entering on further strength as AET pushes back over the $88 level. Look for resistance to be found on the way back up at the 20-dma ($89.73) and then again at the 10-dma ($91.57). Since we're looking for a strong run into earnings (scheduled for April 29th), we'll target a rally back to the $95 level ahead of that report. Because of the higher risk associated with this play, we're going to use a tight stop at $84.50, just under Thursday's intraday low. If AET breaks below there, then want to let it go. Suggested Options: Aggressive traders can use the May $90 Call, while the more conservative approach will be to use the May $85 strike. Our preferred option is the May $85 strike, as it is currently in the money and should provide sufficient time for the play to move in our favor. Note that we have listed a July strike, but going that route may be too conservative since we'll be closing the play ahead of earnings, which are less than 2 weeks away. BUY CALL MAY-85*AET-EQ OI= 1026 at $5.10 SL=3.00 BUY CALL MAY-90 AET-ER OI= 417 at $2.30 SL=1.25 BUY CALL JUL-90 AET-GR OI=15845 at $4.10 SL=2.50 Annotated Chart of AET: Picked on April 18th at $87.40 Change since picked: +0.00 Earnings Date 4/29/04 (confirmed) Average Daily Volume = 1.52 mln Chart = --- Beckman Coulter - BEC - cls: 56.16 chg: +1.04 stop: 53.99 Company Description: Beckman Coulter, Inc. is a leading manufacturer of biomedical testing instrument systems, tests and supplies that simplify and automate laboratory processes. Spanning the biomedical testing continuum -- from systems biology and clinical research to laboratory diagnostics and point-of-care testing -- Beckman Coulter's 200,000 installed systems provide essential biomedical information to enhance health care around the world. The company, based in Fullerton, Calif., reported 2003 annual sales of $2.2 billion with 64 percent of this amount generated by recurring revenue from supplies, test kits and services. (source: company press release) Why We Like It: We're adding BEC to the call play list based on its bullish technical picture. The stock has a very nice longer-term rising trend. This bullish picture is also supported on BEC's point- and-figure chart, which points to a $90.00 price target. Short- term we think BEC can trade to the $60 level and possibly higher. Driving the bullish breakout on Friday was news that BEC had just signed some three-year agreements with Premier, Inc. worth $130 million a year in revenues for BEC. We're going to suggest plays at current levels although a dip back to the $55 level would be an attractive entry point as well. The stock has held support near the $54 mark for several days so we'll start the play with a stop loss at $53.99. Our short-term target is $60.00. Suggested Options: This is a short-term play before BEC reports earnings in early May so we don't see a need to buy the longer-term calls. The May strikes should work fine. Our favorite is the May 55s. BUY CALL MAY 50 BEC-EJ OI=2017 at $6.70 SL=4.75 BUY CALL MAY 55*BEC-EK OI= 905 at $2.50 SL=1.25 Annotated Chart: Picked on April 18 at $ 56.16 Change since picked: + 0.00 Earnings Date 05/03/04 (unconfirmed) Average Daily Volume: 333 thousand Chart = ************************Advertisement********************************* Option Traders: Pay Attention Use the online options trading system built by option traders for options traders. Featuring direct access to each option exchange, stop and stop loss option orders, contingent option orders, online spreads, fast executions, and rates as low as $1.50 per contract ($14.95 min.). PreferredTrade, Inc. Call 888-889-9178 or Click http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN Member NYSE, Other Principal Exchanges, NFA, MSRB and SIPC ******************************************************************** ***************** CURRENT PUT PLAYS ***************** Lehman Brothers - LEH - close: 79.21 change: +1.72 stop: 80.00 Company Description: Through its subsidiaries, LEH constitutes one of the leading global investment banks, serving institutional, corporate, government and high-net-worth individuals clients. The company is engaged primarily in providing financial services, including securities writing and direct placements, corporate finance and strategic advisory services, private equity investments and securities sales and trading. Completing its array of banking, research and trading capabilities, LEH also engages in the trading of foreign exchange, derivative products and certain commodities. Why we like it: Friday's rebound in the Brokerage sector (XBD.X) was not what we wanted to see, and the fact that LEH went along for the ride is doubly discouraging. Following the breakdown under $80, the stock dropped as low as $76 before beginning its oversold rebound and we noted on Thursday the potential for a rally back to test its breakdown level. Due to that risk, we suggested conservative traders use a tighter stop just over $78 and it looks like that was good advice based on the strong rally on Friday. If there's any hope of the stock reaching our downside target near the 200- dma, then LEH should find resistance at the 10-dma ($79.96), which should encounter price action near the $79.50 level on Monday. Should the stock continue its rebound (which appears to be the more likely scenario at this point), then we'll accept the pain of exiting the play at breakeven. Only aggressive traders should consider new entries on a rollover below resistance, as it looks like the tide has shifted in favor of the bulls over the near term. Suggested Options: Aggressive short-term traders will want to use the May $75 put, while the more conservative approach will be to use the May 80 put. Our preferred option is the May 80 strike, as it is currently in the money and should provide ample time for the play to move in our favor. BUY PUT MAY-80*LES-QP OI=1703 at $3.20 SL=1.50 BUY PUT MAY-75 LES-QO OI=3206 at $1.25 SL=0.60 Annotated Chart of LEH: Picked on April 6th at $81.77 Change since picked: -2.56 Earnings Date 3/16/04 (confirmed) Average Daily Volume = 2.32 mln Chart = --- Phelps Dodge - PD - close: 75.10 chg: +1.55 stop: 77.51 Company Description: Phelps Dodge Corp. is the world's second-largest producer of copper, a world leader in the production of molybdenum, the largest producer of molybdenum-based chemicals and continuous- cast copper rod, and among the leading producers of magnet wire and carbon black. The company and its two divisions, Phelps Dodge Mining Co. and Phelps Dodge Industries, employ more than 13,000 people in 27 countries. (source: company press release) Why We Like It: We added PD to the put list based on its bearish technical picture. Copper prices, while off their highs, were still very long-term overbought and PD had broken several support levels. Both copper and PD continued to trade lower midweek and on huge volume for PD. Yet both managed to bounce on Friday. Oversold bounce or reversal? We're betting on the former. However, we would like to state that our fundamental outlook on PD and copper is long-term bullish. The expanding global economies have driven up demand for the metal and demand is not likely to subside any time soon. On Thursday we suggested that traders could use a failed rally toward $75 or $76 as a potential bearish entry point for new positions. Now we've got the bounce but we need to see it roll over. Earnings are a week and a half away and we don't plan to hold over the event. Suggested Options: With such a short time frame given PD's earnings report our favorite puts are the May strikes. Even though they're at-the- money strikes the May 75's will probably work well. BUY PUT MAY 80 PD-QP OI= 627 at $6.90 SL=4.50 BUY PUT MAY 75 PD-QO OI=2499 at $3.90 SL=1.95 BUY PUT MAY 70 PD-QN OI=5876 at $1.95 SL=0.95 Annotated Chart: Picked on April 13 at $ 75.15 Change since picked: - 0.05 Earnings Date 04/28/04 (confirmed) Average Daily Volume: 2.3 million Chart = --- QLogic Corp. - QLGC - close: 28.80 change: -1.25 stop: 31.50*new* Company Description: QLogic Corporation designs and develops storage networking infrastructure components sold to original equipment manufacturers (OEMs), resellers and system integrators. The company's products include the SANblade host bus adapters (HBAs), SANbox Fibre Channel Switches and SANsurfer Management Suite HBA and Switch management software. QLGC's Fibre Channel HBAs support small computer systems interface (SCSI) protocol, Internet protocol (IP), virtual interface (VI) and fiber connection (FICON) protocol. In addition, the company designs and supplies controller chips used in hard drives and tape drives, as well as enclosure management and baseboard management chip solutions that monitor the health of the physical environment within a server or storage enclosure. Why we like it: We suspected that once QLGC broke its $31 support level, the pain level would begin to increase for the bulls, and that certainly seems to be the way things are playing out. After Thursday's drop to $30, the stock lost another 4% on Friday, closing at its worst level in well over a year. And with volume on the rise and the stock ending the day at its low, it doesn't look like the downtrend is going to end anytime soon. The $31 level should have now transformed itself into strong resistance and any rebound into the $30-31 area should be viewed as a continuation entry point. Traders that jumped into the play on the initial breakdown likely got the best possible entry point, as the stock hasn't looked back since and appears to be picking up speed. Following a more than 10% drop in the past week, it is hard to justify new momentum entries at current levels until we get some semblance of an oversold rebound. Lower stops to $31.50 this weekend, which is just above the 10-dma ($31.39). Suggested Options: Aggressive short-term traders can use the May 27 Put, while the more conservative approach will be to use the May 30 strike. Our preferred option is the May 30 strike, as it is in the money and should provide ample time for the play to move in our favor. BUY PUT MAY-30 QLC-QF OI=4584 at $2.40 SL=1.25 BUY PUT MAY-27*QLC-QY OI=1068 at $1.10 SL=0.50 Annotated Chart of QLGC: Picked on April 13th at $31.00 Change since picked: -2.20 Earnings Date 4/28/04 (confirmed) Average Daily Volume = 4.61 mln Chart = --- UTStarcom, Inc. - UTSI - cls: 27.69 chng: +0.06 stop: 29.50*new* Company Description: UTStarcom, Inc., headquartered in Alameda, California, is a global provider of wireless and wireline access and Internet protocol (IP) switching solutions. The company designs, manufactures, sells and installs an integrated suite of future- ready access network and next-generation switching solutions. It enables wireless and wireline operators in fast-growth markets worldwide to offer voice, data and Internet access services rapidly and cost effectively by utilizing their existing infrastructure. UTSI's products provide a seamless migration from wireline to wireless, from narrowband to broadband and from circuit- to packet-based networks by employing next-generation network technology. The company's customers include public telecommunications service providers that operate wireless and wireline voice and data networks in rapidly growing communications markets worldwide. Why we like it: The long-awaited breakdown in shares of UTSI finally occurred on Wednesday and as expected, this breakdown was for real. The stock plunged through $28 and then actually probed the $27 level on both Thursday and Friday before settling out just above that level. With support now cleanly broken, our focus turns to the next likely level of support near $26. That is the next level likely to produce a meaningful bounce before UTSI heads down towards our $24 target. The company is scheduled to report earnings on the 27th of April, so time is growing short. There is probably just enough time for one more round of entries on the next failed rebound in the $28.50-29.00 area. Aggressive traders can enter on a break below Friday's low, but need to watch for a potential bounce from the $26 area. Lower stops to $29.50 this weekend. Suggested Options: Aggressive short-term traders can use the May 25 Put, while the more conservative approach will be to use the May 30 strike. Our preferred option is the May 30 strike, as it is in the money and should provide ample time for the play to move in our favor. BUY PUT MAY-30*UON-QF OI=8751 at $3.40 SL=1.75 BUY PUT MAY-25 UON-QE OI=3491 at $0.80 SL=0.40 Annotated Chart of UTSI: Picked on March 30th at $29.38 Change since picked: -1.69 Earnings Date 4/27/04 (confirmed) Average Daily Volume = 3.11 mln Chart = ************* NEW PUT PLAYS ************* Affiliated Mgrs Grp. - AMG - cls: 52.91 chng: -0.07 stop: 56.00 Company Description: Affiliated Managers Group, Inc. is an asset management company with equity investments in a diverse group of mid-sized investment management firms (the Affiliates). As of December 31, 2002, the Company's affiliated investment management firms managed approximately $70.8 billion in assets across a range of investment styles and in three principal distribution channels: High Net Worth, Mutual Fund and Institutional. In its investments in Affiliates, it typically holds a majority equity interest in each firm, with the remaining equity interests retained by the management of the Affiliate. The company's investment approach addresses the succession and ownership transition issues facing the founders and principal owners of many medium-sized investment management firms by allowing them to preserve their firm's entrepreneurial culture and independence and to continue to participate in their firm's success. Why we like it: Investors in AMG had an enjoyable ride from the January lows near $46 up to the $58 area, but after the recent bearish price action, it looks like it is time to pay the piper. After failing to rally back to the area of its prior highs earlier this month, the stock broke down hard last week, pressured by the weakness in the rest of the Financial sector on fears of rising interest rates. The stock finally found some support at the 100-dma ($52.14) over the past 2 sessions and managed to recover to close back on top of the 38% retracement ($52.54) of the rally from the November low on Friday. But that rebound came too late to prevent more damage on the PnF chart, which issued a new Sell signal with the trade at $53, reinforcing the prior Sell signal. While the bearish price target is only $49, the price action suggests that we could see substantially more price weakness ahead of the company's earnings report on April 28th. Of course, with the 62% retracement ($48.62), the 200-dma ($48.46) and next horizontal support coming in at $48, looking for a substantial break below $49 may be a bit too optimistic. While aggressive traders can use a breakdown under the 100-dma to trigger bearish entries, our preference is to enter on a failed rebound near the $54 level, which should serve as strong resistance. Regardless of the entry strategy chosen, traders should keep in mind that this is a more aggressive trade, simply due to the nearness of earnings, which are now less than 2 weeks away. We want to give the stock room to rebound and allow us entry on the rollover, so we're setting a generous stop at $56, just over the 50-dma ($55.90). We'll look to exit the play on a drop to touch $49, which will hopefully come next week, well in advance of the company's earnings report. Suggested Options: Aggressive short-term traders can use the May 50 Put, while the more conservative approach will be to use the May 55 strike. Our preferred option is the May 55 strike, as it is in the money and should provide ample time for the play to move in our favor. BUY PUT MAY-55*AMG-QJ OI= 60 at $2.95 SL=1.50 BUY PUT MAY-50 AMG-QK OI=100 at $0.60 SL=0.30 Annotated Chart of AMG: Picked on April 18th at $52.91 Change since picked: +0.00 Earnings Date 4/28/04 (unconfirmed) Average Daily Volume = 561 K Chart = ************************Advertisement********************************** Option traders, check what PreferredTrade offers: - true direct access to each option exchange - stop and stop loss online option orders - contingent option orders based on the price of the option or stock - online spread order entry for net debit or credit - fast option executions - rates as low as $1.50 per contract ($14.95 min) PreferredTrade, Inc. 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The Option Investor Newsletter Sunday 04-18-2004 Sunday 4 of 5 In Section Four: Leaps: Option Spreads: This Week Has Been A Real Trip – May CPTI Positions Traders Corner: Floating the Turnover - Part Deux Traders Corner: Adapting To Change - One More Time ************************Advertisement************************* Full Service Brokers Man Financial announces the formation of the OneStopOption Brokerage Group, addressing the demand for personalized, experienced service for both securities* and futures trading within the same firm. Licensed Option Principals Andrew Aronson and Alan Knuckman specialize in live assistance of stock*, option* and futures traders. The combination of the proven Man Financial global presence and the convenience of one group for all trading needs provide customers with the tools needed for success. Live Broker and Online Trading Available 888-281-9569 http://www.OneStopOption.com ************************************************************** ***** LEAPS ***** Complacency Still Reigns By Mark Phillips mphillips@OptionInvestor.com For all the earnings-driven volatility over the past week, you would think that we'd see some sort of uptick in the volatility indices, but that certainly wasn't the case. Oh sure, there was a bit of a move up mid-week, but by Friday's close, the VIX was back, under 15, the VXO was back under 16 and the VXN was lurking near the 22 level. For all intents and purposes, these measures of market volatility are back near their multi-year lows. There's no doubt that fear of the downside has yet to really make an appearance. While earnings news has certainly taken center stage (and will likely remain there for another couple weeks), what seems to be the dominant factor in expectations for the market going forward is that interest rates will be rising due to inflation beginning to rear its ugly head. Already, some of the Fed heads have been making statements to calm those fears, pointing out that more data points from the various economic indicators before the Fed will even consider changing its extremely accommodative monetary stance. With a veritable parade of Fed governors set to take to the speaking circuit next week, we can expect them to continue trying to cool fears of rising rates. Of course, the bond vigilantes have already placed their bets and if the action in the bond market over the past 2 weeks is any indication, it is (like I said 2 weeks ago) only a matter of time before interest rates begin to climb. Whether it is in June, August or later really isn't the issue, as the initial rate increases can be expected to be small and spaced as far apart as possible. Greenspan won't want to burst any of the asset bubbles that are currently in place ahead of the election, so I would be surprised to see more than a 25 bp hike prior to November. A token increase like that will do very little to affect the investment landscape for equities. As we move into the end of the year and into 2005 though, I think we can expect significant rate hikes to try to put a damper on what we can now see is strengthening inflation. We got the latest data point on that front from the CPI report last week, which came in much stronger than expected at 0.5%. Doing the math, we can see that lines up with an annual rate of 6%, which is solid confirmation of what came out from the PPI report a couple months ago, showing inflation ticking along at a 7.2% annual rate. The market is a forward-looking mechanism and with a strong showing from both PPI and CPI in recent months, bond investors have clearly seen the light and knocked the price of the 30-Year Bond off its lofty pedestal up near 116 down to last week's low of 107. That's a whale of a drop and it corresponds to the interest rate on the long bond rising from soaring from 4.6% to above 5.2%. That is not a trivial move, with the downtrend in yields from August through March now decisively broken. The next key level will be for the yield to challenge the summer highs near 5.5% and if we see a move through that level, then I think it will be clear that no matter what we've heard from the Fed, we can conclude the rate hike process is underway. Of course, this is all being driven by very few data points from the monthly economic reports and I would have to agree with the assessment of the Fed here -- we need to see more data to confirm that the high readings we've recently received in the form of the CPI and PPI are not aberrations. Based on what I've seen across the board in the price of raw materials, I do think we're seeing real inflation leap into the economy, but that will only be confirmed by more data points showing an inflationary trend. The reality that rising interest rates are on the horizon hasn't been lost on the equity market, and despite the DOW and S&P indices holding up fairly well, the NASDAQ looks to be in trouble, led lower by the weakening Semiconductor index. By Friday's close, the SOX is closing in on the $475 support level again and the NASDAQ Composite closed back under 2000. That certainly sets the stage for another drop towards critical support near 1900. It will be interesting to see what develops on the next drop, as a trade at 1900 would break the 200-dma this time around. Pulling up our PnF chart of the COMPX, we can see that last week's drop gave us a fresh Sell signal and a tentative price target of - - you guessed it -- 1900! Each 10-point drop in the index that occurs without a 3-box reversal will have the target dropping by 20 points. So if we were to drop straight down to 1900 from here (perish the thought), that would equate to a bearish PnF price target of 1700, a level we last visited back in August of 2003. The Bullish Percent chart of the COMPX certainly confirms the downside potential, with a big Sell signal putting the index into Bear Confirmed status at roughly 61%. Except in very special circumstances, being long Technology stocks right now does now seem like a wise move. The S&P 500 is looking a bit better, as at least it hasn't given a Sell signal. With the recent rise into a column of X though, the stage is set for a powerful Sell signal if the bears are able to pressure the index below the 1080 level. From the current level, that would give us a minimum downside objective of 1000. Once again, that's not a pretty picture, as it would drop the SPX back to levels not seen since last September and would constitute a major breakdown under the 200-dma, which we haven't even visited for a year. The Bullish Percent chart also confirms the bearish condition as the recent drop to the 72% level puts this index in Bear Confirmed status as well. The anomaly in this bearish parade -- believe it or not -- comes in the form of the DOW. The picture we see there is most interesting indeed. Take a look at the PnF chart of the DOW and you can see why I've been reticent to initiate a play on this index in either direction. We recently had a Sell signal with a price target of 9400. That was never approached before we got a Buy signal with a target of 11,600. Obviously we never got anywhere near there before last week's new Sell signal, now with a tentative target of 10,100. My thoughts of a rangebound market for the near to intermediate-term seems likely to come to fruition, and the standard scale INDU PnF chart is creating more confusion than it's worth. So just for grins (and a little bit of sanity) I pulled up a PnF chart with a 100-point box size. Now that looks meaningful. The DOW is still on a Buy signal, with a target of 10,600, which has already been met. It will take a breakout over 10,800 to generate a confirming bullish signal and a breakdown under 10,000 to give us a new Sell signal. That gives the DOW an 800 point range it can meander around in through the summer doldrums without really picking a direction. Like I said last week, we're likely to be in a very finicky stock-picker's market for the next few months. The best that can be seen ahead was already priced into the overall market and now we'll see some of those expectations deflated in the weeks and months ahead as investors begin to price in the risk of rising interest rates, trying to guess how soon and how much. There's one last piece of data on the DOW that I find most intriguing and that's the Bullish Percent chart. After giving a Bear Confirmed signal by only one box when it dropped down to the 78% level, the BP chart has reversed sharply higher, ending the week at 90% in Bear Correction status. Should we see push above 94%, that would actually have the DOW back in Bull Confirmed. I think that's unlikely, but it is a risk that bears need to be aware of. After perusing the different scale on the DOW which removed the recent reversals of fortune, I decided to go back and choose a different box size on the COMPX. Instead of the normal 10-point box size, I doubled the scale, just like I did on the DOW. Now that chart really speaks volumes, as the March drop stopped right at the bullish support line and reversed sharply higher. But what really catches my attention is that the rally stopped just shy of giving a fresh PnF Buy signal at the 2080 level and price has now reversed back into a column of O's. More interesting still is the fact that the bearish price objective is 1900, the same as on the standard scale chart. So what are we to make of all this? My interpretation is that we can expect volatile and confusing oscillations between key support and resistance for the major indices, without a definitive break unless there is a major unexpected exogenous event like another major terrorist attack in the United States. Specifically, that means the DOW should meander between 10,000-10,800 the SPX should bounce between 1080-1160 and the COMPX should bounce around between 1900-2060, quite possibly for the next several months. In fact, it is entirely possible that we'll see these ranges hold right into the November election. What that means for us is that we need to be more discriminating than ever in choosing our long-term trades. We'll need to pick the right plays, be very picky about our entry points and then aggressively harvest gains when the trend we're in has run its course. With that said, let's dive into our list of plays, as there was a lot of action this week that we need to cover. Portfolio: NEM - Precious metals stocks have really taken it on the chin over the past couple weeks and it has driven our NEM play right down to key support in the process. NEM broke down through its 50-dma, its short term rising trendline (now at $42.65) and all the way to $42 before a bounce materialized just above the 200-dma ($41.89). The stock did manage a rebound into the end of the week, but clearly the bullish outlook is in danger. The price of gold has come down to once again test the $400 level and the XAU even broke its 200-dma in its test of key support near $94, issuing a PnF Sell signal in the process. NEM is holding just above our stop at $41, and a break below that level will be our final signal to drop the play. Until then, we'll hope for the bulls to prevail, as it becomes understood that the fears of rising interest rates diminishing the attractiveness of gold are overblown. In fact, if we do acknowledge we're in an inflationary environment and interest rates do kick significantly higher, that would also be quite bullish for gold in the long run. While gold has been falling in terms of the dollar, we are seeing the yellow metal rising in terms of other currencies like the Euro and the Yen. Recall that a breakout relative to these other currencies is what we're looking for to kick off the next leg of the bull market in gold, so all hope is not lost yet. Maintain stops where they are for now. HD - More directionless slop was what last week had to offer, at least as it relates to our HD play. Sure the stock acted a bit weak mid-week, but as has become the norm, it bounced right back into the end of the week. There's nothing to be done here but sit and wait for resolution of this dull pattern. MLNM - I actually thought I'd be writing a drop for MLNM this weekend, with the stock acting poorly throughout the past week. But miraculously, the bulls stepped in and bought the dip to support on Friday, keeping the stock in play. I'm turning more negative by the week on this play, but at the same time, I'm willing to ride it to the bitter end. Our stop is at the right place at $16, just under the 200-dma and right at the PnF bullish support line. Hopefully we'll see a more concerted rally off this support test, maybe even enough to turn the PnF chart bullish again. Hey, I can hope, can't I? That would take a rally back to the $19 level to get the job done, and we'll probably need the BTK index to cooperate with another run back towards the $560 level. CHK - We noted last week that CHK looked ready to break out to new multi-year highs and the bulls certainly gave it an honest effort. The stock managed an intraday push as high as $14.15 on Friday, closing right at $14 for a new closing high. That continued strength is impressive, especially in light of the pullback and in the price of natural gas last week, and with the company's earnings report just over a week away. Hopefully we'll see this tenuous breakout solidified with some further upside progress ahead of the company's earnings report in just over a week. Note that I've raised the stop to $12 this weekend. The stock has put in two convincing rebounds from just above that level in recent months and I really wouldn't feel good about still being in the position if that level is broken on any post-earnings weakness. LUV - We shouldn't have expected LUV to simply soar higher, especially not with the price of Crude moving too new highs again last week. To its credit, the stock has been holding up fairly well after rallying to the $15 level. But it looks like the 100- dma is a bit too strong of a resistance level, at least on the first attempt. We can expect price to retrace back near the 50- dma ($14.29) and then make another bullish attempt. We should probably be thankful that last week's earnings report didn't have an appreciable impact on the stock and that should mean the underlying technicals will reign, along with the typical bullish trend in Airline stocks heading into the busy summer travel season. Maintain stops where they are for now. EBAY - For all the weakness in Technology stocks last week, EBAY held up remarkably well. Clearly the breakout over the $70 level is very much intact and I had to laugh as I was preparing to write this update. I actually ran across some commentary that talked about the "breakdown" in the stock last week. Really?? Less than a $3 drop from all time highs and not even a 3-box reversal on the PnF chart? EBAY is even finding support at its 10-dma! That said, next week is fraught with peril, as EBAY is set to report earnings. We ought to expect another bullish report from management, but as we've seen already, investors are in a "Sell first, ask questions later" mood and there is the distinct possibility that a "Sell the News" event could unfold. For that reason, I'll suggest that conservative traders may just want to harvest gains and avoid the risk of holding over the announcement. We'll maintain our position with our stop at $70 and hope for enough good news with the announcement for another injection of bullish enthusiasm. Watch List: TYC - It's hard to make a case for a bullish play when the stock gets mired in such a long-term consolidation pattern. Sure we can guess that the pattern will break to the upside, but that's little more than an educated guess, supported by the PnF chart. TYC still looks bullish as it holds within its rising channel and above the 100-dma. That's bullish. But note how the last tow rally attempts have stalled at the middle of the channel and that implies a weakening trend. I'm content to let the play stagnate of the Watch List for the time being, at least until the weekly Stochastics get closer to oversold territory. Then we might have something in terms of an attractive entry point. Radar Screen: APA - Well, I said we'd dump this potential play if it broke out without us and that's precisely what happened last week as the stock soared through resistance to new highs. That's the nature of what's happening in the Natural Gas sector right now unfortunately APA never really afforded us a viable point at which to enter the bullish trend. Better luck next time. GM - Anybody want to take a bet on whether GM is going to bounce here? It certainly looks like it wants to on the daily chart, as support is holding firm near $45, just above the 200-dma. With Stochastics and MACD on the weekly chart, I certainly wouldn't want to bet against a near-term upward move. But our long-term bearish view is still very much intact. We'll just watch and wait as price moves back up to the top of the falling channel and then we'll look to "Get Shorty!" DJX - As noted above, I think the DOW has now entered a protracted consolidation phase, where it's likely that we'll be trapped in this range for the next several months. That means there's nothing productive to be gained by trying to take long-term positions. I'm dropping the DJX as a play candidate this weekend. EK - Still trolling along near the $25 support level, it looks like EK is getting ready to make its next rally attempt. I find it interesting that the removal from the DOW has had little impact on the stock, showing just how out of favor the stock has been, currently is and it will remain so for some time to come, punctuated by those brief, explosive upward moves. We simply want to capture the next one of those, but it is still quite a ways away. That said, we can probably now expect EK to trade sideways to up, as weekly Stochastics are now trying to turn bullish. AIG - AIG still looks great to me as a long-term position, and I liked last week's consolidation price action. But I just can't bring myself to make a move prior to the company's earnings report. There have been some wild price moves following earnings reports this time around and not all of them have been favorable. Let's wait one more week and add the stock to our Watch List officially next weekend -- that is, provided the response to earnings doesn't change the overall picture. Closing Thoughts: What? Another week with no new plays. You got that right and quite honestly I'm feeling pretty good about that. We're in the heart of earnings season and there are all sorts of violent gyrations taking place as expectations are brought into line with reality. This is NOT the time to be adding new long-term plays, but it IS the time to be making observations so that once the volatility dies down we can pick another play or two that are likely to benefit through the quarter ahead (and hopefully beyond). With the VIX now back under 15, there is clearly very little fear of the downside. At the same time, we can see that the bullish percent readings are giving us mixed signals, despite some technically weak-looking index charts. Range-bound slop is what we're currently seeing and quite honestly, I don't expect that to change in the next couple weeks. Let's stick with what's working and be very selective about what we allow into our Portfolio. Have a great week! Mark LEAPS Portfolio Current Open Plays LEAPS Watchlist Current Possibles SYMBOL SINCE TARGET PRICE TARGETED LEAP SYMBOL CALLS: TYC 03/07/04 $27 JAN-2005 $ 30 ZPA-AF CC JAN-2005 $ 25 ZPA-AE JAN-2006 $ 30 WPA-AF CC JAN-2006 $ 25 WPA-AE PP JUL-2004 $ 25 TYC-SE PUTS: None New Portfolio Plays None New Watchlist Plays None Drops SNDK $27.91 Now THAT was unpleasant. After soaring nearly $7 from our entry point, shares of SNDK got annihilated following the disappointing earnings report Wednesday night. And the situation only got worse following competitor LEXR's dismal outlook Thursday night. This is the danger of holding ANY position over an earnings announcement, and the primary reason I suggested conservative traders just harvest their gains ahead of the earnings report. Fortunately, despite the precipitous drop, SNDK did allow us to exit at our $28 stop on Thursday, resulting in a nominal breakeven on the play. Not the result I was hoping for, but at least we didn't get hurt. If this had been a short-term trade, there's no question we would have taken our exit ahead of the report. But it's rather counter-productive to be jumping in and out of long-term plays every earnings cycle. The negative news on pricing pressures in the flash memory industry suggests that SNDK will be under pressure for a while. But we'll keep our eye on it just in case it comes back to life. ************************Advertisement************************* Live Securities Brokerage Service with Licensed Option Principals OCO Stop & Profit Orders OneStopOption All types of Spreads and Buy Writes 888-281-9569 Auto-Trade Market Monitor Signals Personal Service and Education **Services available for Foreign Traders including Canada** http://www.OneStopOption.com ************************************************************** ************************ Option Spread Strategies ************************ This Week Has Been A Real Trip – May CPTI Positions By Mike Parnos, Investing With Attitude It's been a trying week. I'm currently on a cruise ship a long long way from home. They advertised wine, women and song – and they delivered. All are essentials for most people for a great trip. But something is missing – something very important. No, not cable TV, but that's a good guess. Yes, I do miss my couch, but I adapt pretty easily. What is missing is the Internet. It's uncanny how dependent we can become and how we can take it for granted. From ten minutes out of port, the ship's Internet didn't work – and I was trapped. Talk about withdrawal. I feel like a need to be fed stock and option quotes intravenously to get back to normal (whatever that is). I'm writing this from a little hole in the wall in Puerta Vallerta. Their Internet connection is slower than dial-up – if that's possible. It's truly painful. The sacrifices I make . . As of this writing, our April CPTI positions look pretty good. One more day to go. We could be staring at a very profitable April. Looking Ahead To May Let's see what we can dream up for May. Remember, May is a five- week option cycle. There may be a little more premium available, but that comes with an extra week of exposure. May Position #1 – SPX Iron Condor – 1128.83 Sell 10 SPX May 1080 puts Buy 10 SPX May 1070 puts Credit: $1.90 ($1,900) Sell 7 SPX May 1175 calls Buy 7 SPX May 1190 calls Credit: $1.40 ($980) Total net credit and potential profit of: $2,880. Range: 1080 to 1175. Maintenance: $10,500. May Position #2 – RUT Iron Condor - Sell 10 RUT May 620 calls Buy 10 RUT May 630 calls Credit: $1.20 ($1,200) Sell 10 RUT May 540 puts Buy 10 RUT May 530 puts Credit: $1.30 ($1,300) Total net credit and profit potential of $2,500. Range: 540 to 620. Maintenance: $10,000. May Position #3 – MNX Iron Condor - $145.94 Sell 10 MNX May $152.50 calls Buy 10 MNX May $157.50 calls Credit: $.80 ($800) Sell 10 MNX May $140 puts Buy 10 MNX May $135 puts Credit: $.95 ($950) Total net credit and profit potential of $1,750. Range: $140 to $152.50. Maintenance $5,000 May Position #4 – BBH Iron Condor - $145.88 This seems to be a pretty safe play. I know BBH has a tendency to be volatile. It's bitten us in the butt more than once, but here's a 20-point range you may find attractive. Sell 10 BBH May $155 calls Buy 10 BBH May $165 calls Credit: $.70 ($700) Sell 10 BBH May $135 puts Buy 10 BBH May $125 puts Credit: $.70 ($700) Total net credit and profit potential of $1.40 x 10 contracts = $1,400. Range: $135 to $155. Maintenance: $10,000. ONGOING POSITIONS QQQ ITM Strangle - $36.15 Refer to my most recent column for the position details. But we had the April $34 calls and the $37 April puts. We rolled them out to the May $34 calls and the May $37 puts for a total of $.80 or $800. Next month it will probably be time to roll out our LEAPS to 2006. OSX Calendar Spread - $105.33 We are currently short the May 110 calls and long the June 115 calls. Our cost basis is only $.20. On Friday, aggressive traders should also sell the May $100/$95 bull put spread for a credit of $.95. That will bring our cost basis to a positive $.70. ___________________________________________________________ APRIL CPTI POSITIONS I have limited time and resources here in Mexico. So, I suggest you refer to my previous column for the other April positions. If we're lucky, they will all expire worthless tomorrow and you'll never have to look at them again. Besides, you'll be too busy counting your profits. TTFN I'm not sure if I will be near an Internet portal on Saturday or if the ship's Internet will be prepared by then. So, if the monthly wrap-up doesn't appear on Sunday, it should be in the Monday newsletter. Just remember that all of our posted positions are hypothetical and educational. If you don't know what you're doing, stay the hell out of the market or you'll lose the family jewels – and you only get a limited number of family jewels. ************** TRADERS CORNER ************** Floating the Turnover - Part Deux Jane Fox I have seen so many different ways of interpreting markets I truly didn't think there were any ways left and if there were they were so far out in left field that they didn’t have any relevancy. At least that was way I though until I ran across the Float Turnover Channel. The Float Turnover Channel is a unique and inventive way using a stocks float to calculate a channel from which you can see distribution or accumulation. Float Analysis definition is: by adding up volume cumulatively and comparing it to the number of shares actually available for trading (the float), we can see areas on a chart where the stock goes through a change of ownership. We can see where the Smart Money is accumulating at the bottom and we can see were they get out at the top. But we have already been through all this in my previous article called "Floating the Turnover." What I promised in this article was some examples of the Float Turnover Channel and how to apply Float Analysis to them. The first chart I would like to show you is of Novastar Financial (NFI). Novastar is a REIT, Real Estate Investment Trust, so I figured would be susceptible to interest rate hikes or the possibility of them. Here is NFI with the Float Turnover Channel on April 2nd. It came off its high with very high volume, made a small bounce and then got hit a second time to the downside again on heavy volume. I will draw blue line at the bottom channel because this channel changes each day and I want you to see where it was. The magenta lines show where the channel had been also. Here is NFI on April 5th. It crashed through its lower float turnover channel line and appears to have made a top. If this is the case, it will likely move higher for a few days and stall at its 50% float channel line (the middle magenta line) or the blue line I have drawn. Lets advance three more days to April 8th. Notice how the channel has moved with each day but my blue line shows where it "used" to be and where you would expect price to retrace. It was at this point that I bought a put. Oh my goodness, the only thing I have to think about now is when do I take profits. This, of course, was out of the ordinary but I thought an excellent example of how to use Float Analysis. Let's look at another example, Glamis Gold (GLG). From June to November 2003 GLG traded from $10.00 to $15.00 but on November 12th if broke out with volume. From November 12th to November 17th GLG tests the original channel line and then on the 18th it takes another jump to 16.47. Here is GLG on December 2nd for a 20% rise. Let's look at another example. From October to January, the markets experienced a very nice upward move but we all knew it had to come to an end at some point, or at least come to a rest. On January 20th the SOX index made a lower high giving us an idea that lower prices may be in the making and time to start looking for Semiconductor short candidates. You didn't have to look far. Here is a semiconductor Lam Research (LRCX) on January 23rd. LRCX has not given us a sell signal yet but I would be watching it. On January 24th LRCX breaks out of its Float Turnover Channel with volume. By February 19th LRCX has revisited the breakout point and was headed down again. If you were an aggressive trader you could have shorted at this point but that could have been tricky. It would have been better if you waited until it broke the low on February 24th at 25.50. LRCS subsequent lows were 22.50 for a 12% move. Well I have thrown a lot at you in one article but I hope you can see how well this analysis can work. There are other refinements that can be added but I think this is enough for now. Remember plan your trade and trade your plan. Jane Fox ************** TRADERS CORNER ************** Adapting To Change - One More Time by Mark Phillips mphillips@OptionInvestor.com It may seem like only a few weeks ago, but it was actually more than four months ago that we last spoke about the necessity of rolling with the punches and being willing to make major changes to our trading plan, if mandated by fundamental changes in the character of the market. We began that process of discovery, first with a frank discussion showing why I felt the ES had become essentially untradable on a consistent basis. We then extended our analysis to show how and why the NQ was a more forgiving contract for intraday traders looking to ride the major swings during the session. It is still my position that the ES is a tough horse to ride, primarily due to the frequent and frequently opposing program trades that have become prevalent enough in recent months to relegate that market to the domain of agile scalpers. Oh sure, there are days like this past Tuesday where it's pretty easy to hitch a ride on the trend of the day and make a pretty penny. Where the problem comes in is trying to guess which 1 or 2 days out of ten will provide that trend and then stay out of the other 8 or 9 which will chop up the intraday trend trader. While the NQ is significantly better in terms of trending behavior and program trade driven spikes, it still has a lot of problems in those arenas, which means a fair number of false signals. One of my key beliefs in the current market is that this erratic behavior in the market will continue until we see the VIX make a sustained move over the 20-22 area. That little wiggle up into the 20-22 area last month won't cut it -- we need to see the VIX return to its historically normal (at least over the last few years) range before we'll be able to rely on a market consistently moving through a large enough intraday range for us to routinely capture 10 ES and 20 NQ point moves with a relatively small number of whipsaw moves in between. Alright, that's the gist of what we discussed in the prior two installments and I don't want to belabor the point here. If you missed the articles the first time around or you'd like a more comprehensive review, I invite you to peruse those articles to your heart's content. Here are the links: Adapting To Change http://www.OptionInvestor.com/futurescorner/fc_111903_01.asp Adapting To Change - Part II http://www.OptionInvestor.com/futurescorner/fc_120303_01.asp Now we've got some new material to cover! I've been playing around with the Russell e-mini (MR02M = June Contract) lately and I'm sure those of you frequenting the Futures Monitor have noticed that symbol getting a fair amount of airtime. There's always a bit of mystique and apprehension whenever we begin trading a new symbol, primarily because of the familiarity we've developed with the symbol we've previously been trading. But profitable trading is NOT about being in the comfort zone! In reality, making the jump from one e-mini contract to another is not that big a deal. Sure the margin requirements are a bit different, the $/point will vary, and the character of the new market will have its own little wrinkles. But for the most part, the tools and lessons learned on the ES or NQ can be applied quite easily to the MR contract. We may have to tweak this tool a little bit here or modify a setting here, but in most cases, our trading strategy should translate easily to a new symbol. In fact, the fewer changes necessary, the better. That gives us a good feel for how robust our chosen trading strategy is. In order to maintain consistency, we're going to look at the MR contract using the same technical setup we used in our prior analysis on the ES and the NQ. I want to make sure everyone understands I'm not representing this simple oscillator setup as a great system for trading any of the e-mini contracts. What we've done though is established a baseline against which the performance of each contract RELATIVE TO THAT TRADING APPROACH can be measured. So let's dive right in and see what the MR contract has to offer. Please note that the initial margin required ($1750) for one contract is roughly the same as the margin required for controlling either the NQ ($1875) or the ES ($2000) contracts. But with each point on the MR contract worth $100, we clearly have more bang for our buck here (i.e. more leverage) per point of movement than on either the ES or NQ. Looking at the action across the three contracts, we can see that Tuesday's big slide down had the MR sliding from a high of 602 to a low of 582 for a total range of 20 points. Compare that to the 22.5 point range for the ES and the 34 point range for the NQ, and it's easy to make the argument that our MR contract gives the biggest moves in terms of dollars. Just to put it in black and white, Tuesday's move in the MR was equivalent to $2000, in the ES it was equivalent to $1175 and in the NQ, roughly $680. If margin requirements are roughly the same, I hope you can see where it makes sense to focus on the MR contract simply on the basis of potential gain. This past Tuesday was what I call an easy day. A monotonic trend throughout the day with virtually zero false signals to whip us in and out of positions throughout the day. Regardless of which contract we end up trading, all we had to do on Tuesday was remain on the right side of the intraday trend, which was quite clearly down. If that wasn't clear to you, then may I suggest you incorporate some market breadth studies in your toolbox? As I've written before, my personal choice is the difference between Advancing and Declining Volume or ADVDECV.NY and ADVDECV.NQ in Qcharts. I haven't shown those here, but pull up a 2- or 5-minute chart of either indicator from Tuesday and you'll see that there was no way to make an argument for anything but weakness from about 10-15 minutes after the open all the way to the closing bell. As simple as trend determination was on Tuesday, I think it will prove instructive to compare the signals given on that day for our 5/10-minute chart montage for each of the symbols and see how each of them stack up. Ready? Let's start with the ES. 5/10 Minute Chart Montage of the ES from Tuesday, April 13th It wasn't rocket science to short the classic gap and crap setup on Tuesday, especially once the opening gap was filled. Using the Stochastics settings above, we can see that clear Sell signals were there on both the 5- and 10-minute timeframes shortly after the open. It should have been easy to get a fill in the 1145-1147 area. Just hold it all the way down to the low of the day or take a very easy 10 points off the table by the middle of the day. Note that I've shown where the Stochastics Buy signals were, but we knew to ignore those because of the breadth readings from the ADVDECV indicators, right? 5/10 Minute Chart Montage of the NQ from Tuesday, April 13th We have an almost identical picture here on the NQ. Short the classic setup with confirming Sell signals on the Stochastics oscillator and an entry in the 1495-1500 area should have been easy. What's different here is that we got secondary entry points near 1487-88 near the noon hour and even a third (albeit aggressive) opportunity around 1:30 pm ET as price dropped through the 1485 level for the last time of the day. 5/10 Minute Chart Montage of the MR from Tuesday, April 13th Now the picture is much the same here, but I thing probably the cleanest and easiest to play of the three contracts. The initial Sell signal could have been filled in the 597-598 area, which was good for a quick drop to the 590 area. Either close the play there or let it ride. The second short entry looked almost as clean as the first. Note how much smoother the oscillators are on the MR than either the ES or the NQ? Note also how smooth the price action is as well. This is the key factor that really makes the MR look attractive -- fewer whipsaws. Alright, that was an easy example and I showed it the way I did for a couple of reasons. First off, I wanted to show that no matter which contract we were trading on Tuesday, it should have been a reasonably painless process to harvest a solid gain. But more importantly, I hope you can see the progression from ES (noisiest) to MR (smoothest) in terms of what is more easily tradable. Now let's up the ante and throw a difficult session into the mix and see if the MR contract still comes out on top. In order to make our charts easier to read and annotate, we're going to dispense with the dual timeframe charts and just use the 10-minute chart. It's not a change in method -- we're just doing it for readability. Note that on the following examples, we're willing to consider both the long and the short side, because the ADVDECV breadth indicator is not giving us the strong bias that it did on Tuesday. 10-Minute Chart of the ES for April 14th and 15th That's a lot of chopping around for two days, so it ought to provide plenty of challenges for the active day trader, don't you think? Let's see what we can find. Note that I labeled the first Stochs Buy signal as "Ignore" as it's a short-cycle reversal in the first hour of the day. I've found these to be unreliable signals or else the type that force me to chase a runaway move. I've just listed the Buy and Sell signals on the chart and I think the notations should be self-explanatory -- Red for Sell and Green for Buy. Rather than discuss each one, let's just list the results in summary form so we can compare to the NQ and MR later on. For the sake of consistency, let's assume we enter each day flat and after the first trade is entered, we're following a reversing system. What I mean by that is that in the chart above, we're flat until S1, then short until B1, which we ride right into the close for an exit near 1129. On the following morning we are flat again until S2, then short until B2, long until S3, short until B3 and then long until the close. Make sense? S1 - Short @ 1131, exit at 1124 -- Gain = 7 points B1 - Long @ 1124, exit at 1129 -- Gain = 5 points S2 - Short @ 1129, exit at 1126 (chart marked wrong) -- Gain = 3 points B2 - Long @ 1126, exit at 1125 -- Gain = 1 point S3 - Short @ 1125, exit at 1122 -- Gain = 3 points B3 - Long @ 1122, exit at 1127 -- Gain = 5 points Note that we haven't addressed the issue of stops for this analysis and that's deliberately omitted. For the sake of discussion here, we're assuming an "always in" system during the day, so that one position is exited as the next is entered. I'm not saying this is a good way to trade, but it does aid in the process of doing objective analysis. So where does our tally end up? At the end of two pretty choppy days, this approach would have netted 24 points before trade costs and slippage are factored in. Six trades for 24 points or an average of 4 points per trade. At $50 per point, that gives us a gain of $1200 per contract ($200 per trade). Not great, but not bad. Sure it's idealized, but that's the nature of analysis. Now let's take a look at the NQ and see how it stacks up. 10-Minute Chart of the NQ for April 14th and 15th There's no need for discussion, other than to point out that the oscillators are substantially noisier here and The effect can be seen in several trades that didn't go our way. Here's the results. While I didn't point it out, note that there's the potential for another short trade entry on the little blip up and back down between S3 and S4. Also, I neglected to annotate what should have been another long signal just prior to S4, which clearly would have been another loser, to the tune of 2-3 points. S1 - Short @ 1482, exit at 1479 -- Gain = 3 points B1 - Long @ 1479, exit at 1474 -- Loss = 5 points S2 - Short @ 1474, exit at 1472 -- Gain = 3 points B2 - Long @ 1472, exit at 1482 -- Gain = 10 points S3 - Short @ 1477, exit at 1457 -- Gain = 20 points S4 - Short @ 1462, exit at 1457 -- Gain = 5 points B3 - Long @ 1457, exit at 1463 -- Gain = 6 points Tallying it all up and adding in the missing long trade just prior to S4 (loss of 3 points), we get a grand total of 39 points in 8 trades, for roughly 5 points per trade (rounding up). At $20 per point, that would make the NQ good for just under $800 per contract in two days (roughly $100 per trade), prior to transaction costs and slippage. 10-Minute Chart of the MR for April 14th and 15th Finally we come to the meat of the matter, the analysis of the contract that we think (hope) will be shown to be the most friendly to intraday traders. Let's take a look at the results and see how she stacks up against the ES and NQ. Note that we've also labeled that first short-cycle reversal on Stochastics as "Ignore" just like we did on the ES. S1 - Short @ 586, exit at 579 -- Gain = 7 points Note: S1b is simply shown as a second entry point for S1 B1 - Long @ 578, exit at 582 -- Gain = 4 points S2 - Short @ 582, exit at 577 -- Gain = 5 points B2 - Long @ 577, exit at 578 -- Gain = 1 point S3 - Short @ 578, exit at 575 -- Gain = 3 points B3 - Long @ 575, exit at 579 -- Gain = 4 points Well for starters, we don't have any losers here, although B2 was close. In six trades, the MR contract offers up 26 points of gains in 6 trades for an average of 4.33 points per trade. At $100 per point, the MR clearly comes out on top with a total gain of $2400 per contract ($433 per trade) prior to transaction costs and slippage. So just on a bang for the buck basis, we would clearly have a preference for trading the MR over ES and NQ. More importantly though, I invite you to take another look at each of those last three charts. Which one(s) has the cleanest looking oscillator signals? Which one has the ugliest oscillator signals? Now take a look at the actual price action on those charts. Once again, I'd certainly prefer to be trading the MR, as it has the least "spiki-ness" on the price action, which we see directly translated to the smoothness in the oscillators. Sure there will be false signals and certainly we could probably find days where this approach to trading the MR contract would get beaten up pretty badly. But if we're going to engage in intraday trading in the e-minis, I think it's a fair conclusion that the MR contract is currently the most friendly to technical traders like me. I hope you found this as interesting and useful as I did! Questions are always welcome! Mark ************************Advertisement************************* No time to follow the Market Monitor? Tired of missing good Trades because you stepped away from your computer? OneStopOption Group can follow the Market Monitor for you. You choose the number of contracts, we take care of the rest!! Trade Stock Options, Stocks and ALL Futures with the same Group. 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The Option Investor Newsletter Sunday 04-18-2004 Sunday 5 of 5 In Section Five: Covered Calls: Conservative Stock Ownership: Covered Calls Spreads and Straddles: A Market Without Conviction... Premium-Selling Plays: Naked Puts & Calls ************************Advertisement************************* Stock Option and Futures Brokerage OneStopOption teams the best trading technology with varying levels of professional assistance at very competitive prices. Commission costs are comparable to discount brokerage and tailored to individual customer needs. The power of one brokerage group with experience and expertise in the Securities* and Futures Markets offers unprecedented convenience for traders. Access To All Futures Markets Toll Free 888-281-9569 Stock Option Principals www.OneStopOption.com ************************************************************** ******************************************* CONSERVATIVE STOCK OWNERSHIP: COVERED-CALLS ******************************************* Many investors find that writing "in-the-money" covered-calls fits their criteria for a conservative, easy-to-manage options strategy. __________________________________________________________________ SUMMARY OF PREVIOUS CANDIDATES The following summary is a reasonable account of the positions previously offered in this section. However, no representation is being made as to the actual performance of a position and in fact, there are frequently large differences between the summary results and those of our subscribers, due to the variety of ways in which each play can be opened, closed, and/or adjusted. In addition, the summary might not be completely representative of the manner in which the average trader would react to changing conditions in a position and to the options market in general. The editor of this section does not take actual positions in any published plays and the summary comments are simply a service to help new traders understand when positions might be opened and closed. In most cases, actions taken based on the commentary would be far too late to be effective, thus it is not intended as a substitute for personal trade management nor does it in any way replace your duty to diligently monitor and manage the positions in your portfolio. Note: Margin not used in calculations. Stock Price Last Option Price Gain Potential Symbol Picked Price Series Sold /Loss Mon. Yield ADCT 2.66 2.82 APR 2.50 0.30 0.14* 6.4% LGND 18.84 21.71 APR 17.50 2.00 0.66* 4.3% NANX 9.01 8.85 APR 7.50 1.75 0.24* 3.6% AKS 5.45 6.09 APR 5.00 0.60 0.15* 3.4% ROXI 5.19 4.60 APR 5.00 0.55 (0.04) 0.0% ABMD 7.81 11.29 APR 7.50 0.75 0.44* 6.8% TELK 28.08 27.33 APR 25.00 3.80 0.72* 3.2% * Stock price is above the sold strike price. Editor's Comments: Roxio (NASDAQ:ROXI) was a "loser" this month, however traders who like the outlook for the issue might consider selling the MAY-$5 Call ($0.25 X $0.35) to further reduce the cost basis in the issue. Positions Previously Closed: None ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ NEW COVERED-CALL CANDIDATES ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ The following group of issues is a list of potential candidates to supplement your search for profitable trading positions. As with any investment, you must decide if the selections meet your criteria for potential plays. Only you can know what strategies and positions are suitable for your experience level, risk-reward tolerance and portfolio outlook. __________________________________________________________________ Sequenced by Target Yield (monthly basis) Stock Last Option Option Last Open Cost Days Target Symbol Price Series Symbol Bid Int. Basis Exp. Yield GNTA 11.34 MAY 7.50 GJU EU 4.50 10,585 6.84 33 8.9% CLZR 15.84 MAY 15.00 UKZ EC 1.90 2,123 13.94 33 7.0% ANDW 20.02 MAY 20.00 AQN ED 1.35 496 18.67 33 6.6% FCEL 19.44 MAY 17.50 FQG ET 2.80 786 16.64 33 4.8% NSTK 13.61 MAY 12.50 QUH EV 1.70 17 11.91 33 4.6% ENDP 24.61 MAY 22.50 IUK EX 3.10 1,576 21.51 33 4.2% MGAM 24.01 MAY 22.50 QMG EX 2.45 267 21.56 33 4.0% SAPE 6.25 MAY 5.00 SQC EA 1.45 40 4.80 33 3.8% MXWL 16.27 MAY 15.00 QMW EC 1.80 94 14.47 33 3.4% ASTE 16.40 MAY 15.00 QYA EC 1.90 10 14.50 33 3.2% Legend (for play description below) LB-Last Bid price, OI-Open Interest, CB-Cost Basis or break-even point, DE-Days to Expiry, TY-Target Yield (monthly basis). __________________________________________________________________ GNTA - Genta $11.34 *** Genasense Speculation Only! *** Genta Incorporated (NASDAQ:GNTA) is a biopharmaceutical company with a diversified product portfolio that is focused on delivering innovative products for the treatment of patients with cancer. The company's research platform is anchored by two major programs that center on oligonucleotides (RNA/DNA-based medicines) and small molecules. Genasense (oblimersen sodium), the firm's lead compound from its oligonucleotide program, is being developed with Aventis and is currently undergoing late-stage, Phase 3 clinical testing. The leading drug product in Genta's small molecule program is Ganite (gallium nitrate injection), which is for treatment of cancer-related hypercalcemia that is resistant to hydration. MAY-7.50 GJU EU LB=4.50 OI=10,585 CB=6.84 DE=33 TY=8.9% __________________________________________________________________ CLZR - Candela $15.84 *** Strong Sector! *** Candela (NASDAQ:CLZR) develops, manufactures, and distributes innovative clinical solutions that enable physicians, surgeons, and personal care practitioners to treat selected cosmetic and medical conditions using lasers, aesthetic laser systems, and other advanced technologies. Founded near Boston in 1970, the company markets and services its products in over 60 countries from offices in the United States, Europe, Japan and other Asian locations. Candela established the aesthetic laser market 14 years ago, and currently has an installed base of over 6,000 lasers worldwide. Quarterly earnings are due April 27, 2004. MAY-15.00 UKZ EC LB=1.90 OI=2,123 CB=13.94 DE=33 TY=7.0% __________________________________________________________________ ANDW - Andrew Corporation $20.02 *** New Trading Range? *** Andrew Corporation (NASDAQ:ANDW) is a supplier of communications products and systems to the wireless subsystem infrastructure market. The company classifies its offerings into five primary product groups: Antennas, Base Station Subsystems, Cable Products, Network Solutions and Wireless Innovations. The Antenna segment products include base station antennas, earth station antennas, multi-band antennas and point-to-point antennas. Base Station Subsystems products are components of wireless base stations. Cable Products include coaxial cables, connectors, assemblies and accessories. Network Solutions includes software and equipment to locate wireless 911 callers, as well as equipment and services for testing and optimizing wireless networks. Wireless Innovations products are used to extend the coverage of wireless networks in areas where signals are difficult to send or receive and include both complete systems and individual components. Earnings are due April 29, 2004. MAY-20.00 AQN ED LB=1.35 OI=496 CB=18.67 DE=33 TY=6.6% __________________________________________________________________ FCEL - FuelCell Energy $19.44 *** Alternate Energy! *** FuelCell Energy (NASDAQ:FCEL), based in Danbury, Connecticut, is a world-recognized leader for development and commercialization of high efficiency fuel cells for electric power generation. The company's DFC technology eliminates external fuel processing to extract hydrogen from a hydrocarbon fuel. This results in a product whose cost, combined with high efficiency, simplicity and reliability, results in product advantages for stationary power generation. MAY-17.50 FQG ET LB=2.80 OI=786 CB=16.64 DE=33 TY=4.8% __________________________________________________________________ NSTK - Nastech Pharmaceutical $13.61 *** Uptrend Intact! *** Nastech Pharmaceutical Company (NASDAQ:NSTK) is a formulation science company concerning nasal drug delivery technology. The firm's technical competency involves research, development and manufacture of nasally administered prescription pharmaceuticals. Nastech's sole approved and marketed product is Nascobal Gel for treatment of Vitamin B-12 deficiency. The company's products under development include Apomorphine Hydrochloride, Morphine Gluconate, Interferon Beta, Interferon Alpha, Sumatriptan and Somatatropin. Quarterly earnings are due April 21, 2004. MAY-12.50 QUH EV LB=1.70 OI=17 CB=11.91 DE=33 TY=4.6% __________________________________________________________________ ENDP - Endo Pharmaceuticals $24.61 *** Entry Point? *** Endo Pharmaceuticals (NASDAQ:ENDP) is a specialty pharmaceutical company specializing in pain management. The company is engaged in the research, development, sale and marketing of branded and generic prescription pharmaceuticals used primarily to treat and manage pain. The company's primary area of focus is analgesics, with a portfolio of branded products that includes Percocet, Lidoderm, Percodan and Zydone. Endo's generic portfolio is comprised of products that cover a broad range of indications, most of which are focused in pain management. Earnings are due April 21, 2004. MAY-22.50 IUK EX LB=3.10 OI=1,576 CB=21.51 DE=33 TY=4.2% __________________________________________________________________ MGAM - Multimedia Games $24.02 *** Next Leg Up? *** Multimedia Games (NASDAQ:MGAM) is the leading supplier of interactive electronic games and player stations to the rapidly growing Native American gaming market. The company's games are delivered through a telecommunications network that links its player stations with one another both within and among gaming facilities. Multimedia Games designs and develops networks, software and content that provide its customers with a range of gaming systems. The company's development and marketing efforts focus on Class II gaming systems and Class III video lottery systems for use by Native American tribes throughout the United States. Quarterly earnings are due April 28, 2004. MAY-22.50 QMG EX LB=2.45 OI=267 CB=21.56 DE=33 TY=4.0% __________________________________________________________________ SAPE - Sapient $6.25 *** Earnings Speculation! *** Sapient (NASDAQ:SAPE) is a business and technology consultancy that helps large clients achieve explicit business outcomes through the rapid application and support of advanced information technology (IT), primarily on a fixed-price basis. The company's global presence enables it to understand and address the business issues that its clients are facing in both local and global con- texts. The company's global distributed delivery model, which is primarily operated through its office in New Delhi, allows it to provide solutions at a lower cost and the ability to work 24 hours each day across all time zones. Earnings are due April 29, 2004. MAY-5.00 SQC EA LB=1.45 OI=40 CB=4.80 DE=33 TY=3.8% __________________________________________________________________ MXWL - Maxwell Technologies $16.27 *** Rally Mode! *** Maxwell Technologies (NASDAQ:MXWL) develops, manufactures and markets electronic components and systems that perform for the life of the products and systems into which they are integrated. The firm's power products address applications in transportation, telecommunications, consumer and industrial electronics, electric utility infrastructure, medical imaging and industrial automation systems. The company's microelectronics products mainly address applications in aerospace. Its power product lines consist of ultracapacitors, high-voltage capacitors and custom power and energy-storage systems. Maxwell's microelectronic product lines are composed of radiation-shielded power modules, memory modules and single-board computers. MAY-15.00 QMW EC LB=1.80 OI=94 CB=14.47 DE=33 TY=3.4% __________________________________________________________________ ASTE - Astec Industries $16.40 *** Near 2-Year Highs! *** Astec Industries (NASDAQ:ASTE) designs, engineers, manufactures and sells equipment and components used in road building and related construction activities. The firm's products are used in each phase of road building, from quarrying and crushing the aggregate to testing the mix for application of the road surface. Astec also makes certain equipment and components unrelated to road construction, including trenching, auger boring, directional drilling, environmental remediation and industrial heat transfer equipment. Quarterly earnings are due April 21, 2004. MAY-15.00 QYA EC LB=1.90 OI=10 CB=14.50 DE=33 TY=3.2% ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ SEE DISCLAIMER IN SECTION ONE ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ******************* SPREADS & STRADDLES ******************* A Market Without Conviction... By Ray Cummins Stocks closed the week in mixed fashion as differing opinions among investors prompted buying interest in financial and real estate shares while selling pressure emerged in hi-tech issues. The Dow Jones Industrial Average ended up 54 points at 10,451 with banking-related stocks among the blue-chip leaders. The NASDAQ Composite closed down 6 points at 1,995 amid a slump in semiconductor and networking companies. The S&P 500 gained 5 points to 1,134 on strength in energy and utility stocks. In the broader market, advancers led decliners 3 to 1 on the NYSE where trading volume was 1.1 billion. On the NASDAQ, winners slipped past losers by a small margin with 1.46 billion shares changing hands. Treasury prices extended their gains after the release of mediocre industrial production data and some positive comments from a Federal Reserve governor. The 10-year note was up 13/32 at 97 8/32 to yield 4.35%. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ SUMMARY OF CURRENT POSITIONS - AS OF 04/16/04 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ The following summary is a reasonable account of the positions previously offered in this section. However, no representation is being made as to the actual performance of a position and in fact, there are frequently large differences between the summary results and those of our subscribers, due to the variety of ways in which each play can be opened, closed, and/or adjusted. In addition, the summary might not be completely representative of the manner in which the average trader would react to changing conditions in a position and to the options market in general. The editor of this section does not take actual positions in any published plays and the summary comments are simply a service to help new traders understand when positions might be opened and closed. In most cases, actions taken based on the commentary would be far too late to be effective, thus it is not intended as a substitute for personal trade management nor does it in any way replace your duty to diligently monitor and manage the positions in your portfolio. PUT-CREDIT SPREADS Symbol Pick Last Month L/P S/P Credit C/B G/L Status APOL 77.82 91.86 APR 65 70 0.60 69.40 0.60 Closed KBH 78.71 73.50 APR 65 70 0.55 69.45 0.55 Closed COF 73.50 73.72 APR 60 65 0.50 64.50 0.50 Closed SYMC 44.64 45.67 APR 37 40 0.35 39.65 0.35 Closed DNA 106.82 108.78 APR 90 95 0.60 94.40 0.60 Closed FDX 71.59 74.50 APR 65 70 0.85 69.15 0.85 Closed LLL 56.67 61.59 APR 50 55 0.50 54.50 0.50 Closed TASR 61.80 114.10 APR 45 50 0.60 49.40 0.60 Closed DE 68.23 73.31 APR 60 65 0.40 64.60 0.40 Closed FFIV 31.87 30.80 APR 25 30 0.55 29.45 0.55 Closed MRVL 42.67 44.95 APR 37 40 0.20 39.80 0.20 Closed NCEN 48.56 44.84 APR 40 45 0.45 44.55 0.29 Closed RIMM 104.14 100.55 APR 85 90 0.50 89.50 0.50 Closed YHOO 50.15 54.14 APR 45 47 0.35 47.15 0.35 Closed HSIC 75.81 76.26 MAY 65 70 0.45 69.55 0.45 Open NAV 49.90 48.53 MAY 40 45 0.60 44.40 0.60 Open HDI 55.63 58.00 MAY 47 50 0.25 49.75 0.25 Open PDCO 74.97 78.62 MAY 65 70 0.65 69.35 0.65 Open L/P = Long Put S/P = Short Put CB = Cost Basis G/L = Gain/Loss Previously closed positions in Hughes Supply (NYSE:HUG), Beazer (NYSE:BZH) and KB Home (NYSE:KBH); $75 strike, ended the April expiration period profitably. Countrywide Financial (NYSE:CFC) finished with a debit of $2.90, however the position was closed early to limit potential losses. CALL-CREDIT SPREADS Symbol Pick Last Month L/C S/C Credit C/B G/L Status DISH 35.50 33.01 APR 42 40 0.30 40.30 0.30 Closed NVLS 31.15 31.15 APR 37 35 0.35 35.35 0.35 Closed VSEA 40.85 40.03 APR 50 45 0.60 45.60 0.60 Closed SFA 31.96 31.56 APR 40 35 0.55 35.55 0.55 Closed BBBY 39.04 38.53 APR 45 42 0.25 42.75 0.25 Closed MSTR 52.64 50.89 APR 65 60 0.60 60.60 0.60 Closed NTLI 53.12 58.55 APR 65 60 0.60 60.60 0.60 Closed SINA 35.96 35.58 APR 45 40 0.70 40.70 0.70 Closed AFCO 27.85 28.56 APR 35 30 0.55 30.55 0.55 Closed CCMP 42.13 37.11 APR 50 45 0.45 45.45 0.45 Closed PHM 52.87 48.55 APR 60 55 0.40 55.40 0.40 Closed SOHU 25.46 23.14 MAY 35 30 0.60 30.60 0.60 Open SFNT 31.65 29.66 MAY 40 35 0.70 35.70 0.70 Open MERQ 45.59 45.68 MAY 55 50 0.60 50.60 0.60 Open NEM 42.86 43.06 MAY 50 47 0.25 47.75 0.25 Open RYL 77.41 78.18 MAY 90 85 0.60 85.60 0.60 Open L/C = Long Call S/C = Short Call CB = Cost Basis G/L = Gain/Loss Bearish spreads on Xilinx (NASDAQ:XLNX), which is profitable, as well as those on Adobe (NASDAQ:ADBE), Cognos (NASDAQ:COGN), and Cooper-Cameron (NYSE:CAM), have previously been closed to limit potential losses. INDEX-BASED CREDIT SPREADS (BULLISH) Symbol Pick Last Month L/P S/P Credit C/B G/L Status OEX 543.68 554.94 APR 515 520 0.40 519.60 0.40 Closed SPX 1109.78 1134.57 APR 1050 1060 0.80 1059.20 0.80 Closed L/P = Long Put S/P = Short Put CB = Cost Basis G/L = Gain/Loss INDEX-BASED CREDIT SPREADS (BEARISH) Symbol Pick Last Month L/C S/C Credit C/B G/L Status OEX 543.68 554.94 APR 575 580 0.45 570.45 0.45 Closed SPX 1109.78 1134.57 APR 1170 1160 1.00 1161.00 1.00 Closed L/C = Long Call S/C = Short Call CB = Cost Basis G/L = Gain/Loss DEBIT STRADDLES Stock Pick Last Exp. Long Long Initial Max Play Symbol Price Price Month Call Put Debit Value Status GLBC 13.86 19.00 APR 15 12 1.80 5.50 Closed SNP 40.74 37.45 APR 40 40 5.70 5.70 Closed CCMP 44.55 37.11 APR 45 45 5.90 8.00 Closed BRKS 22.66 19.13 APR 22 22 1.60 3.90 Closed GCI 90.42 90.10 APR 90 90 1.75 2.10 Closed SEBL 12.15 11.40 APR 12 12 0.75 1.25 Closed AMX 35.66 37.44 MAY 35 35 3.65 5.00 Closed AIG 74.28 75.18 MAY 75 75 5.60 7.80 Closed SLB 65.13 64.15 MAY 65 65 6.75 6.50 Closed LF 19.67 21.97 JUN 20 20 3.50 3.25 Open BSTE 30.63 40.00 JUL 30 30 6.00 11.50 Open? MKSI 23.10 21.82 JUL 22 22 4.70 5.50 Open The straddles portfolio offered some outstanding candidates in April with big (potential) winners in Biosite (NASDAQ:BSTE), Brooks Automation (NASDAQ:BRKS), Siebel Systems(NASDAQ:SEBL), and Global Crossing (NASDAQ:GLBC). Cabot Micro (NASDAQ:CCMP) also achieved profitability during last week's slump. Prices for the new positions in American International (NYSE:AIG) and Schlumberger (NYSE:SLB), as well as any potential gains (max. value) for straddles in play during my recent absence from the market, will not be accurate. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ NEW POSITIONS ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ This following group of plays is simply a list of candidates to supplement your search for profitable trading positions. As with any new investment, you must decide if the selections meet your criteria for potential plays. Only you can know what strategies are suitable for your personal skill level, risk-reward tolerance and portfolio outlook. In addition, we recommend that you avoid any trading techniques in which you are not completely comfortable with the potential capital loss, the necessary adjustments, and the common entry-exit strategies. __________________________________________________________________ INDEX-BASED CREDIT SPREADS As a trader, you may be familiar with options on individual stocks where you have the right to buy (call option) or the right to sell (put option) a particular stock at some predetermined price within some predetermined time. The buyer has the rights and the seller the obligations. With index options the basic ideas are the same. Index options allow you to make investment decisions on a specific industry group or on the market as a whole. Spread strategies can be made with index options similar to those made with individual stock options and professional traders also employ index spreads in common hedge strategies. Traders who participate in OTM credit spreads often utilize index options because they generally contain favorable "premium" and also provide an underlying instrument less prone to huge, gapping moves. __________________________________________________________________ OEX - S&P 100 Index $554.94 *** Index Spreads *** Standard & Poor's 100 Index is a capitalization-weighted index of 100 stocks from a broad range of industries. The component stocks are weighted according to the total market value of their outstanding shares. The impact of a component's price change is proportional to the issue's total market value, which is the share price times the number of shares outstanding. Trading in S&P-100 options will ordinarily cease on the business day preceding the expiration date. OEX options generally may be exercised on any business day before the expiration date. OEX - S&P 100 Index $554.94 PLAY (conservative - bullish/credit spread): BUY PUT MAY-525.00 OEB-QE OI=1200 ASK=$2.40 SELL PUT MAY-530.00 OEB-QF OI=4690 BID=$2.85 INITIAL NET-CREDIT TARGET=$0.50-$0.55 POTENTIAL PROFIT(max)=11% B/E=$529.50 __________________________________________________________________ SPX - S&P 500 Index $1134.61 *** Index Spreads *** Standard & Poor's 500 Index is a capitalization-weighted index of 500 stocks from a broad range of industries. The component stocks are weighted according to the total market value of their outstanding shares. The impact of a component's price change is proportional to the issue's total market value, which is the share price times the number of shares outstanding. These are summed for all 500 stocks and divided by a predetermined base value. The base value for the S&P 500 Index is adjusted to reflect changes in capitalization resulting from mergers, acquisitions, stock rights, substitutions, etc. Trading in SPX options will ordinarily cease on the business day (usually a Thursday) preceding the day on which the exercise-settlement value is calculated. SPX options generally may be exercised only on the last business day before expiration. SPX - S&P 500 Index $1134.61 PLAY (conservative - bullish/credit spread): BUY PUT MAY-1090.00 SPQ-QR OI=1 ASK=$7.60 SELL PUT MAY-1100.00 SPT-QT OI=31913 BID=$8.50 INITIAL NET-CREDIT TARGET=$0.95-$1.00 POTENTIAL PROFIT(max)=10% B/E=$1099.05 __________________________________________________________________ BEARISH PLAYS - CREDIT SPREADS All of these positions are favorable candidates for "bear-call" credit spreads, based on the current price or trading range of the underlying issue and its recent technical history or trend. The probability of profit from these positions may be higher than other plays in the same strategy, due to disparities in option pricing. However, current news and market sentiment will have an effect on these issues, so review each play individually and make your own decision about its future outcome. __________________________________________________________________ OEX - S&P 100 Index $554.94 *** Index Spreads *** Standard & Poor's 100 Index is a capitalization-weighted index of 100 stocks from a broad range of industries. The component stocks are weighted according to the total market value of their outstanding shares. The impact of a component's price change is proportional to the issue's total market value, which is the share price times the number of shares outstanding. Trading in S&P-100 options will ordinarily cease on the business day preceding the expiration date. OEX options generally may be exercised on any business day before the expiration date. OEX - S&P 100 Index $554.94 PLAY (less conservative - bearish/credit spread): BUY CALL MAY-580.00 OEB-EP OI=5461 ASK=$1.00 SELL CALL MAY-575.00 OEB-EO OI=4214 BID=$1.60 INITIAL NET-CREDIT TARGET=$0.65-$0.70 POTENTIAL PROFIT(max)=15% B/E=$575.65 __________________________________________________________________ SPX - S&P 500 Index $1134.61 *** Index Spreads *** Standard & Poor's 500 Index is a capitalization-weighted index of 500 stocks from a broad range of industries. The component stocks are weighted according to the total market value of their outstanding shares. The impact of a component's price change is proportional to the issue's total market value, which is the share price times the number of shares outstanding. These are summed for all 500 stocks and divided by a predetermined base value. The base value for the S&P 500 Index is adjusted to reflect changes in capitalization resulting from mergers, acquisitions, stock rights, substitutions, etc. Trading in SPX options will ordinarily cease on the business day (usually a Thursday) preceding the day on which the exercise-settlement value is calculated. SPX options generally may be exercised only on the last business day before expiration. SPX - S&P 500 Index $1134.61 PLAY (conservative - bearish/credit spread): BUY CALL MAY-1170.00 SPT-EN OI=0 ASK=$5.00 SELL CALL MAY-1165.00 SPT-EM OI=3292 BID=$5.40 INITIAL NET-CREDIT TARGET=$0.45-$0.50 POTENTIAL PROFIT(max)=9% B/E=$1165.45 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ DEBIT SPREADS ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ This strategy offers a risk-reward outlook similar to credit spreads, however there is no margin requirement as the initial debit for the position is also the maximum loss. Since these positions are based primarily on technical indications, traders should review the current news and market sentiment surrounding each issue and make their own decision about the outcome of the position. SUPPLEMENTAL CANDIDATES The following group of issues is a list of additional candidates to supplement your search for profitable trading positions. As with any investment, you must decide if the selections meet your criteria for potential plays. Only you can know what strategies and positions are suitable for your experience level, risk-reward tolerance and portfolio outlook. They will not be included in the weekly portfolio summary. __________________________________________________________________ CALL DEBIT SPREADS Stock Current Long Ask Short Bid Cost Spread ROI Symbol Price Call Price Call Price Basis Debit in% BIIB 59.46 IDKEJ 10.10 IDKEK 5.60 54.50 4.50 11.1 CECO 62.31 CUYEJ 13.10 CUYEK 8.60 54.50 4.50 11.1 ELAB 70.90 ESQEL 11.60 ESQEM 7.10 64.50 4.50 11.1 LXK 93.85 LXKEP 14.50 LXKEQ 10.00 84.50 4.50 11.1 MEE 24.34 MEEED 4.60 MEEEX 2.35 22.25 2.25 11.1 LEND 33.78 QFWEE 9.20 QFWEF 4.70 29.50 4.50 11.1 MTG 69.70 MTGEL 10.10 MTGEM 5.60 64.50 4.50 11.1 NAV 48.53 NAVEH 8.80 NAVEI 4.30 44.50 4.50 11.1 NTES 51.68 NQGEH 12.40 NQGEI 7.90 44.50 4.50 11.1 RJR 60.04 RJREJ 10.40 RJREK 5.90 54.50 4.50 11.1 PUT DEBIT SPREADS Stock Current Long Ask Short Bid Cost Spread ROI Symbol Price Put Price Put Price Basis Debit in% INTU 42.09 IQUQW 5.60 IQUQI 3.40 45.30 2.20 13.6 NANO 15.30 QNKQD 5.30 QNKQW 3.10 17.80 2.20 13.6 SINA 35.58 NOQQI 10.10 NOQQH 5.70 40.60 4.40 13.6 UTEK 20.64 UQTQE 4.80 UQTQX 2.60 22.80 2.20 13.6 AMAT 20.80 ANQQE 4.30 ANQQX 2.10 22.80 2.20 13.6 ABI 19.00 ABIQX 3.60 ABIQD 1.40 20.30 2.20 13.6 IFIN 40.25 FLQQI 5.20 FLQQV 3.00 42.80 2.20 13.6 ISSI 16.40 IUHQD 4.10 IUHQW 1.85 17.75 2.25 11.1 MERQ 45.68 RQBQK 9.60 RQBQJ 5.10 50.50 4.50 11.1 HELX 21.34 HHQQE 4.30 HHQQX 2.05 22.75 2.25 11.1 AMZN 45.50 ZQNQK 9.80 ZQNQJ 5.30 50.50 4.50 11.1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ STRADDLES AND STRANGLES ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Based on analysis of the historical option pricing and technical background, these positions meet the fundamental criteria for favorable volatility-based plays. _________________________________________________________________ SSYS - Stratasys $20.88 *** Earnings Speculation! *** Stratasys (NASDAQ:SSYS) manufactures and sells a line of rapid prototyping and three-dimensional printing devices that create physical models from computerized designs. The company's rapid prototyping systems are based on its patented fused deposition modeling technology or on its patented Genisys technology. The company is also involved in the office prototyping market (rapid prototyping) and develops, manufactures and markets a family of rapid prototyping devices and 3-D printers that enable engineers and designers to create physical models, tooling and prototypes out of plastic and other materials directly from a computer-aided design workstation. Earnings are due 4/28/04. SSYS - Stratasys $20.88 PLAY (speculative - neutral/debit strangle): BUY CALL MAY-22.50 QQG-EX OI=229 ASK=$1.05 BUY PUT MAY-20.00 QQG-QD OI=170 ASK=$1.20 INITIAL NET-DEBIT TARGET=2.05-$2.15 INITIAL TARGET PROFIT=$0.75-$1.40 _________________________________________________________________ ZMH - Zimmer Holdings $80.84 *** Probability Play *** Zimmer Holdings (NYSE:ZMH) is primarily engaged in the design, development, manufacture and sale of orthopaedic reconstructive implants and trauma products. Orthopaedic implants restore joint function lost due to disease or trauma in joints such as knees, hips, shoulders and elbows. Trauma products are devices used primarily to reattach or stabilize damaged bone or tissue to support the body's natural healing process. The company also manufactures and markets orthopaedic surgical products, which include surgical supplies and instruments designed to aid in orthopaedic surgical procedures. Earnings are due 4/26/04. ZMH - Zimmer Holdings $80.84 PLAY (speculative - neutral/debit straddle): BUY CALL MAY-80.00 ZMH-EP OI=969 ASK=$3.00 BUY PUT MAY-80.00 ZMH-QP OI=72 ASK=$2.05 INITIAL NET-DEBIT TARGET=4.75-$4.90 INITIAL TARGET PROFIT=$2.00-$3.25 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ SEE DISCLAIMER - SECTION 1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ************************Advertisement************************* OneStopOption.com Trade: Securities, Stock Options, Futures Contracts Service: Experienced Brokers Personal Assistance Convenience of One Brokerage Online and Live Broker Trading Experience... The Difference OneStopOption.com 888-281-9569 *************************************************************** ***************************************** PREMIUM-SELLING PLAYS: NAKED PUTS & CALLS ***************************************** All of these issues have robust option premiums and favorable technical indications. However, current news and events as well as market sentiment, will have an effect on these stocks so review each position thoroughly and make your own decision about its outcome. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ SUMMARY OF CURRENT POSITIONS - AS OF 04/16/04 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ The following summary is a reasonable account of the positions previously offered in this section. However, no representation is being made as to the actual performance of a position and in fact, there are frequently large differences between the summary results and those of our subscribers, due to the variety of ways in which each play can be opened, closed, and/or adjusted. In addition, the summary might not be completely representative of the manner in which the average trader would react to changing conditions in a position and to the options market in general. The editor of this section does not take actual positions in any published plays and the summary comments are simply a service to help new traders understand when positions might be opened and closed. In most cases, actions taken based on the commentary would be far too late to be effective, thus it is not intended as a substitute for personal trade management nor does it in any way replace your duty to diligently monitor and manage the positions in your portfolio. MONTHLY YIELD FOR UNCOVERED OPTIONS: MAXIMUM & SIMPLE The Maximum Yield (listed in the summary and with "naked" option selling plays) is the greatest possible profit available in the position. This amount, expressed as a percentage, is based on the initial margin requirement as determined by the Board of Governors of the Federal Reserve, the U.S. options markets and other self-regulatory organizations. Although increased margin requirements may be imposed either generally or in individual cases by various brokerage firms, our calculations use the widely accepted margin formulas from the Chicago Board Options Exchange. The "Simple Yield" is based on the cost of the underlying issue (in the event of assignment), including the premium from the sold option, thus it reflects the maximum potential loss in the trade. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ NAKED PUTS Stock Strike Strike Cost Current Gain Max Simple Symbol Month Price Basis Price (Loss) Yield Yield APPX APR 33 32.48 43.48 0.90 5.98% 2.77% NEOL APR 15 14.65 19.44 0.35 5.57% 2.39% OSTK APR 25 24.30 33.89 0.70 7.25% 2.88% APPX APR 33 32.73 43.48 0.65 5.76% 1.99% ASKJ APR 25 24.15 36.11 0.85 9.04% 3.52% CLZR APR 11 11.07 15.85 0.17 4.72% 1.54% JNPR APR 22 21.85 25.17 0.65 7.82% 2.97% NEOL APR 15 14.65 19.44 0.35 6.74% 2.39% PDII APR 22 21.80 25.93 0.70 8.31% 3.21% SWIR APR 22 22.15 42.16 0.35 5.03% 1.58% APPX APR 33 33.03 43.48 0.35 4.71% 1.06% BRCM APR 35 34.55 39.76 0.45 4.64% 1.30% ELN APR 15 14.65 22.00 0.35 9.84% 2.39% OSTK APR 22 22.25 33.89 0.25 4.47% 1.12% PCLN APR 20 19.75 24.64 0.25 4.90% 1.27% SYMC APR 40 39.40 45.67 0.60 4.89% 1.52% XMSR APR 25 24.40 27.32 0.60 7.74% 2.46% YHOO APR 40 39.40 54.14 0.60 5.13% 1.52% APPX APR 35 34.45 43.48 0.55 6.27% 1.60% ASKJ APR 25 24.55 36.11 0.45 7.51% 1.83% CMC APR 30 29.60 29.60 0.00 0.00% 1.35% CSGS APR 15 14.65 16.26 0.35 7.65% 2.39% ECLG APR 17 17.20 20.52 0.30 6.26% 1.74% JILL APR 17 17.15 19.99 0.35 6.38% 2.04% MGAM APR 22 22.05 24.01 0.45 6.80% 2.04% PBY APR 25 24.50 27.62 0.50 5.97% 2.04% SUPG APR 7 7.15 7.74 0.35 16.86% 4.90% AGI APR 30 29.55 31.09 0.45 5.39% 1.52% ASKJ APR 25 24.60 36.11 0.40 6.62% 1.63% ENDP APR 20 19.75 24.61 0.25 4.98% 1.27% NFLD APR 12 12.15 15.35 0.35 12.17% 2.88% PBY APR 25 24.55 27.62 0.45 6.18% 1.83% PLMO APR 15 14.65 20.65 0.35 9.66% 2.39% RSAS APR 15 14.55 17.58 0.45 10.23% 3.09% SHFL APR 40 39.60 47.83 0.40 4.13% 1.01% SYMC APR 40 39.35 45.67 0.65 5.79% 1.65% ASCA APR 30 29.70 32.91 0.30 4.73% 1.01% ASKJ APR 30 29.40 36.11 0.60 9.72% 2.04% ERJ APR 30 29.40 29.38 (0.02) 0.00% 2.04% IMM APR 15 14.70 19.44 0.30 11.43% 2.04% INSP APR 30 29.70 39.97 0.30 5.70% 1.01% MICC APR 18 16.90 23.60 0.60 15.59% 3.55% MNST APR 22 22.20 27.90 0.30 5.95% 1.35% TKTX APR 15 14.50 15.50 0.50 17.25% 3.45% APPX APR 43 42.63 43.48 0.75 8.92% 1.76% ASKJ APR 30 29.70 36.11 0.30 6.44% 1.01% COCO APR 30 29.75 32.83 0.25 4.55% 0.84% TTN APR 17 17.25 19.53 0.25 8.43% 1.45% TTWO APR 35 34.55 31.25 (3.30) 0.00% 1.30% * BARZ APR 35 34.35 40.80 0.65 12.11% 1.89% TRID APR 15 14.75 15.36 0.25 12.19% 1.69% UTHR APR 22 22.05 22.76 0.45 13.47% 2.04% XMSR APR 27 27.20 27.32 0.12 3.08% 1.10% PDII APR 25 24.55 25.93 0.45 15.04% 1.83% FWHT MAY 17 17.15 21.01 0.35 4.27% 2.04% MICC MAY 17 17.15 23.60 0.35 4.39% 2.04% MNST MAY 22 21.95 27.90 0.55 4.48% 2.51% PLMO MAY 17 16.90 20.65 0.60 6.80% 3.55% HNT MAY 22 22.00 26.05 0.50 4.76% 2.27% IPXL MAY 20 19.50 23.24 0.50 5.43% 2.56% SSNC MAY 22 21.60 25.00 0.90 7.85% 4.17% TINY MAY 15 14.70 18.73 0.30 4.60% 2.04% ACCL MAY 17 17.25 17.19 (0.06) 0.00% 1.45% ADEX MAY 20 19.45 21.17 0.55 6.05% 2.83% IMM MAY 15 14.70 19.44 0.30 5.24% 2.04% IPXL MAY 20 19.65 23.24 0.35 4.93% 1.78% JBLU MAY 22 22.15 24.60 0.35 4.11% 1.58% LSCP MAY 22 21.95 26.97 0.55 6.11% 2.51% TINY MAY 17 17.00 18.73 0.50 7.27% 2.94% USG MAY 15 14.25 15.46 0.75 11.45% 5.26% XMSR MAY 25 24.50 27.32 0.50 4.90% 2.04% ASKJ MAY 30 29.50 36.11 0.50 5.42% 1.69% BRCM MAY 37 36.70 39.76 0.80 5.86% 2.18% CLZR MAY 15 14.25 15.85 0.75 12.47% 5.26% FWHT MAY 20 19.35 21.01 0.65 8.83% 3.36% IMM MAY 17 17.05 19.44 0.45 8.37% 2.64% INSP MAY 35 34.45 39.97 0.55 5.28% 1.60% MRVL MAY 42 41.55 44.95 0.95 6.00% 2.29% NFLX MAY 27 27.10 30.75 0.40 4.65% 1.48% ESIO MAY 22 22.10 23.55 0.40 6.15% 1.81% HOLX MAY 20 19.50 22.07 0.50 8.05% 2.56% GVHR MAY 25 24.65 28.20 0.35 5.85% 1.42% HSII MAY 22 22.25 24.30 0.25 3.81% 1.12% IMM MAY 17 17.25 19.44 0.25 6.08% 1.45% LF MAY 20 19.55 21.97 0.45 7.54% 2.30% TOMO MAY 12 12.25 13.03 0.25 6.96% 2.04% TSAI MAY 20 19.80 22.71 0.20 4.37% 1.01% TSO MAY 20 19.50 21.25 0.50 8.18% 2.56% Some of the new positions may not have been available at the listed prices, due to the recent market rallies. Positions in Amylin (NASDAQ:AMLN) and Nektar (NASDAQ:NKTR), although positive, have been closed to limit potential losses. The position in Take-Two Interactive (NASDAQ:TTWO) should have been closed prior to the earnings report, for a smaller than published loss, when the price of the issue dropped to the sold put strike at $35.00. NAKED CALLS Stock Strike Strike Cost Current Gain Max Simple Symbol Month Price Basis Price (Loss) Yield Yield SEAC APR 20 20.40 13.45 0.40 7.86% 1.96% ERES APR 35 35.30 29.81 0.30 4.73% 0.85% FARO APR 30 30.40 22.44 0.40 7.33% 1.32% AFCI APR 25 25.50 20.41 0.50 8.84% 1.96% FLSH APR 22 22.75 19.01 0.25 5.62% 1.10% ADTN APR 35 35.80 28.13 0.80 9.56% 2.23% DISH APR 35 35.65 33.01 0.65 6.34% 1.82% MTLM APR 40 40.60 35.90 0.60 9.68% 1.48% NIHD APR 35 35.30 34.54 0.30 4.43% 0.85% BRL APR 50 50.40 46.15 0.40 4.08% 0.79% SCHN APR 32 33.68 32.25 0.30 7.13% 0.89% OVTI APR 30 30.50 25.65 0.50 10.89% 1.64% SNDK APR 32 32.75 26.52 0.25 6.38% 0.76% HOV APR 42 42.90 39.25 0.40 7.29% 0.93% AFCI MAY 25 25.75 20.41 0.75 7.73% 2.91% QLGC MAY 37 37.95 28.80 0.45 4.22% 1.19% AVCT MAY 37 38.15 33.13 0.65 6.74% 1.70% INTU MAY 47 48.00 42.09 0.50 4.10% 1.04% PPCO MAY 20 20.30 16.39 0.30 10.11% 1.48% Positions in NII Holdings (NASDAQ:NIHD) and Schnitzer Steel (NASDAQ:SCHN), which finished the April expiration period profitable, and Career Education (NASDAQ:CECO), have been closed to limit potential losses. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ NEW POSITIONS ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ This following group of plays is simply a list of candidates to supplement your search for profitable trading positions. As with any new investment, you must decide if the selections meet your criteria for potential plays. Only you can know what strategies are suitable for your personal skill level, risk-reward tolerance and portfolio outlook. In addition, we recommend that you avoid any trading techniques in which you are not completely comfortable with the potential capital loss, the necessary adjustments, and the common entry-exit strategies. The positions with "*" will be included in the weekly summary. Those with "TS" (Target-Shoot) are below our minimum monthly return, but may offer a favorable entry price with a limit order, due to the daily volatility of the underlying issue. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ WARNING: THE RISK IN SELLING UNCOVERED OPTIONS IS SUBSTANTIAL! The sale of uncovered puts entails considerable financial risk, far more than the initial margin or collateral required to open a position. The maximum financial obligation for the sale of a naked put is the strike price (of the underlying stock) that is sold. Although this obligation is reduced by the premium from the sale of the option, a writer of puts should have the cash or collateral equivalent of the sold strike price in reserve at all times. In addition, there is one very important rule when using this strategy: Don't sell puts on stocks that you don't want to own! Why? Because stocks occasionally experience catastrophic declines, exponentially increasing the margin maintenance and possibly causing a devastating shortfall in your portfolio. It is also important that you consider using trading stops on naked option positions to help limit losses when a stock's price falls. Many professional traders suggest closing the position when the underlying share value moves below the sold strike, or using a "buy-to-close" stop order at a price that is no more than twice the original premium received from the sold option. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ NEW NAKED-PUT CANDIDATES Stock Strike Strike Cost Current Max Max Simple Symbol Month Price Basis Price Profit Yield Yield APPX MAY 35 34.40 43.48 0.60 5.81% 1.74% BLDP MAY 10 9.75 11.22 0.25 6.55% 2.56% ELN MAY 17 17.30 22.00 0.20 4.01% 1.16% ERES MAY 25 24.50 29.81 0.50 6.05% 2.04% HOLX MAY 20 19.65 22.07 0.35 4.54% 1.78% LSCP MAY 22 22.10 26.97 0.40 5.49% 1.81% PDII MAY 22 21.75 25.93 0.75 8.99% 3.45% TELK MAY 22 22.20 27.33 0.30 4.32% 1.35% TNOX MAY 15 14.50 16.64 0.50 8.35% 3.45% __________________________________________________________________ APPX - American Pharma Partners $43.48 *** Premium-Selling! *** American Pharmaceutical Partners (NASDAQ:APPX) is a specialty drug company that develops, manufactures and markets injectable pharmaceutical products, focusing on the oncology, anti-infective and critical care markets. The company is one of the largest producers of injectables, with more than 130 generic products in more than 350 dosages and formulations. APPX - American Pharma Partners $43.48 PLAY (sell naked put): Action Month & Option Open Last Cost Max. Simple Req'd Strike Symbol Int. Price Basis Yield Yield SELL PUT MAY 35 AQO QG 1226 0.60 34.40 5.8% 1.7% * SELL PUT MAY 40 AQO QH 1207 1.85 38.15 10.8% 4.8% __________________________________________________________________ BLDP - Ballard Power Systems $11.22 *** Re-Energized! *** Ballard Power Systems (NASDAQ:BLDP) develops, manufactures and markets zero-emission proton exchange membrane (PEM) fuel cells. BLDP is commercializing fuel cell engines for the transportation market, electric drives for both fuel cell and battery-powered electric vehicles, power conversion products for fuel cell generators, microturbines and other distributed generation technologies, and fuel cell systems for markets ranging from portable power products to larger stationary generation products. BLDP - Ballard Power Systems $11.22 PLAY (sell naked put): Action Month & Option Open Last Cost Max. Simple Req'd Strike Symbol Int. Price Basis Yield Yield SELL PUT MAY 10 DUJ QB 569 0.25 9.75 6.6% 2.6% * __________________________________________________________________ ELN - Elan Corporation $22.00 *** Rally Mode! *** Elan Corporation (NYSE:ELN) is an integrated biopharmaceutical firm engaged in research and development in Alzheimer's disease, Parkinson's disease, multiple sclerosis, pain management and autoimmune diseases. The company's objective is to discover and develop products that will fulfill the unmet medical needs of patients. Elan conducts its global business, including research, development, manufacturing and marketing, through subsidiaries incorporated in Ireland, the United States, the United Kingdom and other countries. ELN - Elan Corporation $22.00 PLAY (sell naked put): Action Month & Option Open Last Cost Max. Simple Req'd Strike Symbol Int. Price Basis Yield Yield SELL PUT MAY 17.5 ELN QW 1393 0.20 17.30 4.0% 1.2% TS SELL PUT MAY 20 ELN QD 4341 0.75 19.25 9.2% 3.9% __________________________________________________________________ ERES - eResearch Technology $29.81 *** Uptrend Resumes! *** eResearch Technology (NASDAQ:ERES) is a provider of technology and services that enable the pharmaceutical, biotechnology and medical device industries to collect, interpret and distribute cardiac safety and clinical data more efficiently. The company offers a range of products and services, including Diagnostics Technology and Services and Clinical Research Technology. Their Diagnostics Technology and Services include centralized diagnostic services and clinical research operations, including clinical trial and data management services. Their Clinical Research Technology and Services include the developing, marketing and support of clinical research technology and services. ERES - eResearch Technology $29.81 PLAY (sell naked put): Action Month & Option Open Last Cost Max. Simple Req'd Strike Symbol Int. Price Basis Yield Yield SELL PUT MAY 25 UDB QE 317 0.50 24.50 6.1% 2.0% * SELL PUT MAY 27.5 UDB QY 440 1.10 26.40 9.5% 4.2% __________________________________________________________________ HOLX - Hologic $22.07 *** Near "All-Time" Highs! *** Hologic (NASDAQ:HOLX) is engaged in the development, manufacture and distribution of diagnostic and medical imaging systems for the healthcare needs of women. Its healthcare businesses are focused on bone densitometry, mammography and direct-to-digital radiography. In addition, Hologic develops, makes and supplies other x-ray-based imaging systems, such as direct-to-digital radiography equipment and mini C-arm imaging products. The firm has begun to sell, distribute and service complementary products that were developed and manufactured by other original equipment manufacturers. HOLX - Hologic $22.07 PLAY (sell naked put): Action Month & Option Open Last Cost Max. Simple Req'd Strike Symbol Int. Price Basis Yield Yield SELL PUT MAY 20 QHX QD 100 0.35 19.65 4.5% 1.8% * __________________________________________________________________ LSCP - Laserscope $26.97 *** Next Leg Up? *** Laserscope (NASDAQ:LSCP) designs, manufactures, sells and services on a worldwide basis an advanced line of medical laser systems and related energy devices for the medical office, outpatient surgical center and hospital markets. The firm pioneered development and commercialization of lasers and advanced fiber-optic devices for a variety of applications. The company's product portfolio consists of more than 150 medical laser systems and related energy delivery devices. The firm's primary medical markets include dermatology, aesthetic surgery and urology. Its secondary markets include ear, nose & throat surgery, general surgery, gynecology, photo-dynamic therapy and other surgical specialties. LSCP - Laserscope $26.97 PLAY (sell naked put): Action Month & Option Open Last Cost Max. Simple Req'd Strike Symbol Int. Price Basis Yield Yield SELL PUT MAY 22.5 LXQ QX 57 0.40 22.10 5.5% 1.8% * SELL PUT MAY 25 LXQ QE 85 1.10 23.90 10.2% 4.6% __________________________________________________________________ PDII - PDI Incorporated $25.93 *** In A Trading Range? *** PDI (NASDAQ:PDII) is an innovative healthcare sales and marketing provider to biopharmaceutical and medical devices companies and and the diagnostics industry. Its three business units offer service and product-based capabilities for companies seeking to maximize profitable brand sales growth. The three units include PDI Pharmaceutical Products, PDI Sales and Marketing Services, and PDI Medical Devices and Diagnostics. PDII - PDI Incorporated $25.93 PLAY (sell naked put): Action Month & Option Open Last Cost Max. Simple Req'd Strike Symbol Int. Price Basis Yield Yield SELL PUT MAY 22.5 PKU QX 56 0.75 21.75 9.0% 3.4% * SELL PUT MAY 25 PKU QE 25 1.45 23.55 12.3% 6.2% __________________________________________________________________ TELK - Telik $27.33 *** New Drug Speculation! *** Telik (NASDAQ:TELK) is a biopharmaceutical company working to discover, develop and commercialize small-molecule drugs to treat serious diseases, including cancer and diabetes. Among Telik's most advanced product development programs is TLK286. TLK286 is a small-molecule tumor-activated cancer drug that the company is evaluating initially to treat cancers which are resistant to standard chemotherapy drugs. Another advanced product, TLK199, is a small-molecule bone marrow stimulant being developed for the treatment of blood disorders associated with low white blood cell levels. TLK19781 is a proprietary, orally active small-molecule insulin receptor activator for the potential treatment of Type II diabetes and other conditions related to insulin resistance. TELK - Telik $27.33 PLAY (sell naked put): Action Month & Option Open Last Cost Max. Simple Req'd Strike Symbol Int. Price Basis Yield Yield SELL PUT MAY 22.5 ZUL QX 0 0.30 22.20 4.3% 1.4% TS SELL PUT MAY 25 ZUL QE 423 0.95 24.05 9.2% 4.0% __________________________________________________________________ TNOX - Tanox $16.64 *** Xolair Settlement = Rebound! *** Tanox (NASDAQ:TNOX) discovers and develops therapeutic monoclonal antibodies to address significant unmet medical needs in the areas of asthma, allergy, inflammation and other diseases affecting the human immune system. Their products are genetically engineered antibodies that target a specific molecule (antigen). Tanox has discovered a novel approach for treating allergies and asthma by using anti-immunoglobulin E antibodies capable of blocking IgE, a causative agent of the allergy pathway, thus preventing the onset of disease symptoms. TNOX - Tanox $16.64 PLAY (sell naked put): Action Month & Option Open Last Cost Max. Simple Req'd Strike Symbol Int. Price Basis Yield Yield SELL PUT MAY 15 TMQ QC 335 0.50 14.50 8.4% 3.4% * ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ BEARISH PLAYS - NAKED CALLS Based on analysis of option pricing and the underlying stock's technical background, these positions meet our fundamental criteria for bearish "premium-selling" strategies. Each issue has robust option premiums, a well-defined resistance area and a high probability of remaining below the target strike prices. As with any recommendations, these positions should be carefully evaluated for portfolio suitability and reviewed with regard to your strategic approach and personal trading style. WARNING: THE RISK IN SELLING UNCOVERED OPTIONS IS SUBSTANTIAL! The sale of uncovered calls entails considerable financial risk, far more than the initial margin or collateral required to open the position. The maximum financial obligation for the sale of a naked option is the strike price (of the underlying stock) that is sold. Although this obligation is reduced by the premium from the sale of the option, a writer of options must have the cash or collateral equivalent of the sold strike price in reserve at all times. The simple fact is: stocks often experience large price swings, exponentially increasing the margin maintenance and very possibly causing a devastating shortfall in your portfolio. It is also important that you consider using trading stops on naked option positions to help limit losses when a stock price moves in a volatile manner. Many professional traders suggest closing the position when the underlying share value moves beyond the sold strike, or using a "buy-to-close" stop order at a price that is no more than twice the original premium received from the sold option. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ NANO - Nanometrics $15.30 *** "Nano" Craze Fading? *** Nanometrics (NASDAQ:NANO) designs, manufactures, markets and supports the thin film metrology systems for the semiconductor, flat panel display and magnetic recording head industries. The company's measurement systems use microscope-based, non-contact spectroscopic reflectometry. Some of the firm's systems provide complementary spectroscopic ellipsometry to measure the thickness and optical characteristics of films on a variety of substrates. In addition, the firm has both integrated and standalone optical critical metrology systems to measure critical dimensions of the patterns on semiconductor wafers. The company also manufactures a line of optical overlay registration systems that are used to determine the alignment accuracy of successive layers of chip patterns on wafers in the photolithography process. NANO - Nanometrics $15.30 PLAY (sell naked call): Action Month & Option Open Last Cost Max. Simple Req'd Strike Symbol Int. Price Basis Yield Yield SELL CALL MAY 20 QNK ED 288 0.40 20.40 10.7% 2.0% SELL CALL MAY 17.5 QNK EW 891 1.00 18.50 18.7% 5.4% __________________________________________________________________ SINA - SINA Corporation $35.58 *** Next Leg Down? *** SINA Corporation (NASDAQ:SINA), formerly known as SINA.com, is an online media company and value-added information service provider for China and the global Chinese communities. With a branded network of localized Websites targeting China and overseas Chinese, the company provides an array of services to its users including region-focused online portals, search, directory, interest-based and community-building channels, free and premium e-mail, wireless short messaging, online games, virtual Internet service provider, classified listings, e-commerce, e-learning, and enterprise e-solutions. In turn, SINA generates revenue through advertising, fee-based services, e-commerce and enterprise services. SINA - SINA Corporation $35.58 PLAY (sell naked call): Action Month & Option Open Last Cost Max. Simple Req'd Strike Symbol Int. Price Basis Yield Yield SELL CALL MAY 45 NOQ EI 4048 0.55 45.55 6.6% 1.2% * SELL CALL MAY 40 NOQ EH 2902 1.40 41.40 11.5% 3.4% ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ SEE DISCLAIMER - SECTION 1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ************************Advertisement************************* OneStopOption.com Trade: Securities, Stock Options, Futures Contracts Service: Experienced Brokers Personal Assistance Convenience of One Brokerage Online and Live Broker Trading Experience... 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