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  Jeff Bailey   4/8/02,  10:28:52 PM
Sony Corp. (SNE) $52.35 +1.65% ... may be a stock to watch for bulls tomorrow. I have a retracment "fitted" from $33.20 to $78.04, which has 19.1% at $41.76, 38.2% at $50.32 (served as support for pullback on 03/25/02. Link

Catalyst for move higher may just be the Japanese Yen and the Yen June futures (jy02m). If Yen finds a bid, then may hint that some money is staying in Japan. I have retracement on this contract from 87.49 down to 74.71. This is "range" of retracment. On 03/07/02, this contract jumped to 79.55 (very close to 38.2% retracement of 79.59), that same day, Sony (SNE) closed $56.06 after a "coincident" rise with the Yen versus the U.S. Dollar. SNE hasn't pulled back as much as Yen, perhaps giving hint that some money is committed to SNE. Yen has a nice gap to fill to the 77.56 level. If so, SNE may be back on the move.

 
 
  Jeff Bailey   4/8/02,  10:11:07 PM
Genesco (GCO) $27.16 +0.4% ... with Kenneth Cole (KCP) (see 09:42) guiding higher today, then day trader might take a look at fellow "shoe-maker" GCO tomorrow morning as bullish at $27.26 for a scalp trade to $28.25, stop just under today's low of $26.75. GCO shows 50-day MA rising Link and recently served as support. Bullish vertical count was/is bullish to $27, but shorts may be little nervous if stock gets above the Friday's high and threatens 03/21/02 high of $28.30.

Just looking to play a little "soft shoe" for day-traders. Keep an eye on KCP and if stock starts running in morning, then could help drive GCO to target for decent day-trade. Close out before the end of tomorrows trading if triggered at $27.26. Link

Similar perhaps to recently profiled day-trade in Oakley (OO) after test of 50-day MA Link . May want to note similarity of a rounding MACD. Need a cross above signal for further move in OO.

 
 
  Jeff Bailey   4/8/02,  9:42:46 PM
Kenneth Cole (KCP) $24.30 +24% ... stock traded strong today after raising Q1 and Q2 guidance. Company increased Q1 outlook to $0.26 a share, compared to previous guidance of $0.16-$0.18 a share. For Q2, KCP sees EPS of $0.14-$0.16 versus previous guidance of $0.10-$0.12. Company remains comfortable with 2nd-half outlook of $0.62 a share.

Point/figure Link shows KCP getting through bearish resistance today and volume was brisk at 1.4 million, which is quite heavy. Bullish vertical count is $30. I wish bullish vertical count were greater than $30 as I like this bar chart pattern Link that gaps from a 10-month base on BIG volume. Would like to put on a bullish trader's watch list for a pullback to $21, then play a longer-term call and target $30. Stock could always exceed the bullish count, but nice stock to look for pullback on light volume.

Similar bar-chart to that of OHP Link from 01/09/02 gap higher. Also similar to Office Depot (ODP) gap higher back on 07/19/01 at/near $12.00.

These "gaps" from larger bases can become "break out" gaps, that then are followed by a "running" gap, that eventually plays out to a final "exhaustion gap" near a top.

 
 
  Jeff Bailey   4/8/02,  9:30:23 PM
Microchip Technology (MCHP) $41.49 ... Link in after-hours trading, stock trades higher by $1.40 to $42.89 after company says it expects to exceed guidance provided in its March 12 mid-quarter business update. MCHP puts EPS at approx. $0.19 a share versus consensus of $0.18 and sales at $148.5 million (consensus $144.77 million). For June quarter, company raises its outlook to $0.21 a share on rev. of approx. $156 million (consensus $0.19 and $151.7 million).

 
 
  Jeff Bailey   4/8/02,  9:22:17 PM
ImClone Systems (IMCL) $21.91 -1.3% ... Link stock jumps +$1.24 to $23.15 in after-hours when company announces that data has demonstrated that treatment with ERBITUX plus a three-drug chemotherapy regimen significantly inhibited the growth of two colorectal carcinoma xenograft models when compared to controls. Further, the conbination of ERBITUX and the three-drug chemotherapy regimen demonstrated enhanced anti-tumor activity when compared to either the 3-drug chemotherapy regimen or ERBITUX alone, and showed extensive tumor necrosis, decreased tumor cell proliferation, and increased tumor cell apoptosis.

 
 
  Jeff Bailey   4/8/02,  9:12:57 PM
Broadcom (BRCM) $33.89 +3.95% Link said it has entered into a definitive agreement to acquire Mobilink Telecom for 5.6 million shares. The acquisition is expected to be neutral to slightly accretive in 2002. Mobilink Telecom is a supplier of chipsets and reference designs for mobile phones, PDAs and cellular modem cards. In after-hours trading shares of BRCM traded as high as $34.19.

 
 
  Jeff Bailey   4/8/02,  9:10:00 PM
Citrix Systems (CTXS) $16.26 +2.26% ... stock trading down -$1.00 in after hours after company said it expects Q1 revenue and EPS to be $141-$143 million and $0.15-$0.16, versus consensus of $152.9 million and $0.17. The company will hold a conference call today at 04:45 PM EST, accessible via webcast at Link .

 
 
  Jeff Bailey   4/8/02,  4:52:54 PM
JDA Software (JDAS) $28.10 -3.66% ... after the bell company announces its Q1 pro forma EPS forecast is now $0.19-$0.20 per share, which exceeds the consensus estimates of $0.17 a share. Stock jumping to $30.30 in after hours action. Link

 
 
  Jeff Bailey   4/8/02,  4:49:50 PM
Compaq Computer (CPQ) $9.59 +0.31% ... company saying it expects to meet or beat Q1 consensus estimates. Company expected to report earnings after the bell on Aprill 22nd. Consensus as polled by Multex is for company to earn $0.01 a share. Stock trading higher at $10.00 a share in after-hours trading.

See earlier comments regarding trade management from 09:42:31 AM in market monitor.

 
 
  Jeff Bailey   4/8/02,  4:03:39 PM
Specialty Labs (SP) $18.62 +1.19% ... CIBC World Markets research note is downgrading Impath (IMPH) $35.13 -7.81% to "hold" and firm advising clients to swap into Specialty Labs (SP). CIBC notest that SP has moved up its reporting date, which CIBC views as a good sign.

 
 
  Jeff Bailey   4/8/02,  3:51:26 PM
Applied Materials (AMAT) $52.59 +0.43% .... I've taken retracement from the 04/19/01 closing high of $59.05 to the 10/03/01 low close of $30.34. This gives good "fit" to trading from the September lows. Has 80.9% retracement right in here at $52.76, 61.8% at $46.80, which is level to look for potential bullish buy.

 
 
  Jeff Bailey   4/8/02,  3:40:34 PM
Applied Materials (AMAT) $52.28 -0.22% ... Not sure of everyone's "risk" profile. As such, lets keep a tigher stop just above the $54 level if short the underlying stock. The 60-minute interval chart shows a flattening out 50-pd MA at $53.58.

the 30-minute interval chart shows the 50-pd MA having come into play earlier today at/near the $53.00 level.

 
 
  Leigh Stevens   4/8/02,  3:40:30 PM
Market Update: New York Financial Index (NF)- Trading right now at 615.61, its Q-charts symbol is $NF.X; If you don't watch this index, start following it, as it is a good bellwether for the NYSE & S&P.

The NF index is an index of all the financial stocks on the big board. It will lead or move ahead of the overall market at times. Right now, NF is consolidating in a bullish flag pattern on the weekly chart, Implications of this pattern, assuming a decisive upside break out above 619-620, is that NF will go to an eventual new high, above 650. This bodes well for an eventual new high in the S&P & DJIA.

 
 
  Leigh Stevens   4/8/02,  3:21:42 PM
Market Update: Time to buy? - contu. - OEX: The S&P 100 got VERY close to my downside objective of 555 (low: 557) and the rebound here looks pretty good, as a potential bottom. AGain, the decline looks it was at least a good opportunity to take profits on OEX puts. Key near overhead resistance is right at today's intraday high around 564, or just a bit higher at 565. A close over 565 would make this daily reversal look pretty good. Of course, short-covering does not a sustained rally make, but it helps a LOT in making a bottom.

NAS 100 (NDX) & QQQ - NDX also got right to the low end of its downtrend channel, in 1340 area, not far above my "ideal" downside objective at 1326. Nothing perfect in life, including my targets; watch key overhead resistance at 1400. - The Q's fell to my 33-33.50 target area and made an almost picture perfect double bottom, relative to the late-Feb. bottom. Buying QQQ on a further dip over the next 1-2 days is looking good.

 
 
  Leigh Stevens   4/8/02,  3:05:27 PM
Market Update: Time to buy? - contu. - SPX: The S&P 500 got down exactly to the low end of its downtrend channel at 1122.7. This completes a 62% retracement of the 2/22 - 3/19 advance. I thought we might see 1100-1105, which is an "ideal" target. But we are probably not going to see lay up type levels. Another move down into the 1115-1110 area may present a buying opportunity. I'll continue to update on what my timing is to get long this market, which is my prefered next trade on a risk to reward basis. Market may not have huge sustainable upside, but recent lows are becoming attractive -especially as you have a definable place to set stops; i.e, just under the lows. The business media talking heads seem to be surprised today that oil and gold prices didn't shoot up again on the Iraqi announcement, etc. What makes an overbought (or oversold) market is just this kind of thing -- the market stops going up (or down) on bullish (or bearish) news.

 
 
  Leigh Stevens   4/8/02,  2:53:24 PM
Market Update: Time to buy?: Since prices of at least some of the indices bounced rebounded from the low end of their downtrend price channels and were near some of my downside price objectives, I got some quiries with the question, is it time to do some buying?

Tough question, as I would like to see how the day ends and what else develops over the next couple of days. Doing some short-covering and taking profits on Index puts was a good idea in my book. Looking at each index, here's how it shapes up so far this week.

DJIA - Intraday low at 10,120 got close to my 10,025 target; since everyone sees 10,200 as support and the institutions are not going to sell the Dow stocks in a major way ahead of earnings, except maybe to lighten up on IBM (or other earnings disapointers), 10,000 area is probably too much to hope for. By the way, DJIA bounced from the area of its 50-day moving avg. at 10,171.

 
 
  Jeff Bailey   4/8/02,  2:16:08 PM
Bold move from the retailers as the RLX.X moves back above the 50-day MA Link

This too may hint that IBM news and recent technology warnings aren't necessarily indicative of the economy. Retailers very sensitive to economy and consumer and seeing some strength today.

 
 
  Jeff Bailey   4/8/02,  2:12:27 PM
GSTI Software Index (GSO.X) $147.46 +1.25% ... this is only "tech sector" showing a gain of +1% or more today. It has been "tail of the snake" and very weak sector. Action today hints "sold out" near-term and perhaps just too many shorts looking to cover.

As such, sector bears short some "software" stocks just need to understand near-term rebound and assess potential risk to previous entry points in trades you may hold in group.

50-day MA on GSO.X is up at 167 and 200-day up at 172.Link

MACD still trending lower. If break above 150, could see bears step up covering and then 160 becomes risk for bears. With money NOT rushing into bonds, bear in sector needs to be careful near-term.

 
 
  Jeff Bailey   4/8/02,  1:55:09 PM
Treasuries earlier this morning we noted we didn't see a "rush" into their perceived saftey. Now th 30-year, 10-year and 5-year YIELD all higher and in the green. Only the 13-week ($irx.x) YIELD is in the red. It is the shortest-term Treasury and "safest," but not seeing the rush.

This should have a short-term bear that is holding some gains in his/her shorts snugging down some stops or taking some chips off the table if close to a support level or bearish target they were trading.

 
 
  Jeff Bailey   4/8/02,  1:48:18 PM
Phelps Dodge (PD) $39.74 +0.78% ... Jeff, PD had inside day Friday, breaking to upside today. Looks a little oversold on Daily Sto (5,3,3). Thinking maybe people see it as an inflation hedge, similar to oil. Downside is lack of economic pickup, which would suggest lower copper prices..... Any thoughts?

Short-term bullish trader "has" to be bullish PD on break above inside day today. With Morgan Stanley Cyclical Index (CYC.X) holding upward trend, then this is "easy" trade for short-term bull. PD long, stop under Thursday's low of $38.71 or Friday's low of $39. Link

 
 
  Jeff Bailey   4/8/02,  1:40:14 PM
Jeff,

Numerous gaps today that have not refilled: AVE, BEAS, COMS, CSCO, EMC, EMLX, IBM, MSFT, MYGN, NOK, RFMD.

One exception that I noticed is SEBL. It has refilled its gap down and now seems to be forming a base at 28. What impressions do you get from you charts?

I think one must really understand and make some "sector associations" with all of the above. One thing we've seen last week was that software got drilled to the downside. This morning, it's IBM (hardware/computer) getting smacked. This make have some software bears continuing to lock in some gains on broader weakness. I will note last week we were not too hesitant to have CHKP bears lock in gains when targets were achieved or damage done. SEBL getting a bid today after drilled on Wednesday. I still think SEBL lower and rolling 50-day up at $32.89 should be rather firm resistance. Assess risk to there. SEBL trading right at 200-day here. I would rather not have SEBL as long/bullish in my account.

 
 
  Jeff Bailey   4/8/02,  12:18:27 PM
EMC Corporation (EMC) $10.42 -6.29% ... stock traded $10.00 even this morning. Thursday evening in the market monitor Link (06:08:41) after McData (MCDT) warned, we posed the thought that EMC may not be able to warn ahead of earnings as they entered quiet period ahead of earnings. Today's warning from IBM has the profiled EMC May $10 puts (EMCQB) trading $0.65 x $0.75 and looking good for those that played Friday. Just waiting to here from EMC which is scheduled to report earnings on April 18th before the bell.

With McData warning and IBM warning, EMC could between the proverbial "rock and a hard place."

 
 
  Jeff Bailey   4/8/02,  12:05:57 PM
Morgan Stanley Cyclical Index (CYC.X) 566 -0.35% ... trading down just fractional. This may become very key sector for traders to be monitoring for signs from MARKET about the future of economy. With energy prices on the rise, those prices have adversely impacted the transports. The CYC.X helps "remove" energy's impact and may give "clearer" picture to MARKET's perception of economic growth/weakness. Link

Break much below the 557 level could be trouble.

Tech bulls that felt it was tech that would lead U.S. economy out of recession now have to be second guessing that scenario with IBM getting crushed today.

Perhaps past commentary in OI regarding the deeper cyclicals actually being the leaders out of recession now making an impact. Transports (TRAN) down 1.4% tdday as oil jumps. Are the TRAN weak due to oil prices rising or because economy is weak? Answer may eventually be found from the CYC.X.

 
 
  Jeff Bailey   4/8/02,  11:51:42 AM
Dow Breadth not overly bearish with 13 up and 17 down.

Gainers are BA +1.36% Link , KO +1.68% Link , MMM +1.13% Link , XOM +1.26% Link .

Keep an eye on PG +0.31%. On 12/13/02 03:00 EST Update Link I thought PG might just trade the $99-$100 level by end of year (2002) and she's been strong. Nice consolidation for about the past two-weeks at $90. A little pullback to the $85 level would be a nice gift for a new bull, but she may be too strong. Link

 
 
  Jeff Bailey   4/8/02,  11:43:00 AM
Celestica (CLS) correction.... today's trade at $31 was a spread triple-bottom sell signal. I've corrected the 11:23 entry to reflect this.

 
 
  Jeff Bailey   4/8/02,  11:23:03 AM
Clestica (CLS) $30.20 -8.87% ... I have retracement from $48.02 to $23.02 (have for some time). This has 38.2% at $38.47, 50% at $35.52 and 61.8% at $32.57. Target for bears near-term then becomes the 80.9% level at $27.79.

I will recall from prior bearish count that we were looking at bearish count of $19. That count was "negated" after the double-top buy signal at $38, that then found resistance at bearish resistance of $42 (first test of bearish resistance can be painful for the bulls).

Today's trade at $31 gives a Spreadtriple-bottom. According to Professor Davis' study, the Spread triple-bottom sell signal is profitable 86.5% of the time, for an average gain of 24.9% in 4.6 months on average.

With that... we might look for CLS to trade $24 by the end of August. Isn't there a "lull" for technology stocks during the summer? Link

 
 
  Jeff Bailey   4/8/02,  10:40:37 AM
Oakley Inc. (OO) $17.85 +1.07 ... a little "surprised" stock holds all of Friday's gains. Look for move above $18.00 to get the MACD on the daily interval hooking around. Want to see MACD cross back above signal for a little run into earnings. Link

 
 
  Jeff Bailey   4/8/02,  10:35:19 AM
HMO Index (HMO.X) 525.96 +0.4% ... breaking to another 52-week high today. Will again note upward end of regression at/near the 530 level and bulls should either be selling some strength with partial positions, or at least snugging up some stops.

Should other parts of market continue to erode, might expect that to have negative impact on group eventually as bulls hold their losers (technology) and start selling their winners.

 
 
  Leigh Stevens   4/8/02,  10:29:36 AM
Looking at some of the harbingers of global political turmoil and insecurities, that of Crude Oil and Gold, both continue to look toppy to me. Nearby crude oil, on the Irag news has not surmounted the previous nearest futures high in the $28 area. Nearby gold futures has an apparent double top in the $307 area. Have been trying to buy the precious metals index XAU May 65 and 60 puts on a further rally to 73 and higher (last at 68.81) but XAU high already made at 72 might not be exceeded.

 
 
  Jeff Bailey   4/8/02,  10:22:00 AM
Hanover Compressor (HC) $19.40 +3.19% ... stock getting a nice rebound today as energy stocks back in the spotlight. This name has been added to the "long-term" play list at PI. I think option trader does well to add it to their longer-term play options too.

Thos that already have position, can wait until break of downward trend to round up to full. Strategy has been 1/2 of either the September $17.50's (HCIW) or September $20's (HCID). Link

Longer-term target is near $30, but willing to settle for $28-$29 if we have to.

 
 
  Jeff Bailey   4/8/02,  10:16:14 AM
Applied Materials (AMAT) $50.63 -3.3% ... would consider 1/2 position short/put here. Have been waiting for this name to pull back into the mid-high $40's for bullish entry.

Would short/put here with ultimate thought of eventually getting long. Short/put may help a trader build some cash near-term on IBM news. Look to cover then reverse and go long near $48.

 
 
  Jeff Bailey   4/8/02,  9:54:53 AM
Treasuries not seeing a "rush" to safety of these bond. As such, would not want to be moving my entire account into put options in a "Willy Nilly" fashion. Think things through and don't go overboard. Keep some powder dry.

30-year YIELD ($TYX.X) unchanged, 10-year YIELD ($TNX.X) down just fractionally (price up fractionally).

 
 
  Jeff Bailey   4/8/02,  9:46:12 AM
Black Box (BBOX) $46.00 -2.29% ... getting downside alert here and would take it short. Would prefer the June $45 puts (QBXRI) offered $3.21.

 
 
  Jeff Bailey   4/8/02,  9:42:31 AM
Compaq Computer (CPQ) $9.40 -1.57% ... on 03/28/02 near the close of trading, profiled this name short/put. Stock hitting target this morning of $9.50. With "bad news" out on IBM, would hold this one, but snug stop down to $9.55 if still short/put.

I have retracement from $12.35 to $7.66. This has 50% at $10.00, 38.2% at $9.45 (just broken) and 19.1% becomes next potential bear target at $8.55.

 
 
  Leigh Stevens   4/8/02,  9:41:00 AM
IBM has not opened for trading yet due to an order imbalance. Once it is open, the Dow Industrial Average will drop further - how much is not apparent just yet. Minnosota Mining and Manufacturing (MMM) becomes 3M today, which will be a lot easier to say, and remember.

 
 
  Jeff Bailey   4/8/02,  9:39:44 AM
Black Box (BBOX) $46.43 -1.5% ... would keep my eye on this name for short/put on trade at $46. Would be break of trend and double-bottom. Would look at May or longer puts. Link

 
 
  Jeff Bailey   4/8/02,  9:37:13 AM
S&P 100 Bullish % ($BPOEX) ... Friday's action was bearish enough to generate further sell signals from the point/figure charts and now has this market reversing into "bull correction" status at an "overbought" level. This is defensive in nature. Link

In last week's market monitor I felt bears should be looking short/put and that looks to be good call this morning. Would be looking to lock in partial gains from that trade in the $555-$545 range.

 
 
  Leigh Stevens   4/8/02,  9:34:46 AM
ON THIS DAY in 563 B.C., Buddha was born according to the historical records -- he began life as an Indian prince, but life around the palace didn't suit him and he went out into the world to determine the nature of things which he discovered while sitting a long time under a tree by the river. In honor of this day, take a break from the market today and smell the flowers or stop and admire a scenic view.

 
 
  Jeff Bailey   4/8/02,  9:30:02 AM
Ameritrade (AMTD) $6.25 ... stock bidding higher at $6.80 after agreeing to buy Datek in a $1.3 billion stock deal. The company announces a merger with Datek Online Holdings will creat the largest online brokerage measured by equity trades per day. The combination is expected to be immediately accretive and cash flow posiitive, with synergies of approximately $100 million after-tax when fully realized. Link

 
 
  Leigh Stevens   4/8/02,  9:22:05 AM
With the sharply lower opening it will begin to put the indices at or under into the lower (envelope) bands where I begin to have buying interest -- that is, in the DJIA (Dow Jones Industrial Avg. - INDU)around 10,025; S&P 500 (SPX) in the 1100-1105 area; S&P 100 (OEX) around 555; NAS 100 (NDX) around 1350 and QQQ near 33 or under.

 
 
  Jeff Bailey   4/8/02,  9:17:45 AM
Celestica (CLS) $33.14 ... with IBM mentioning "OEM" slowdown, I'd be looking short/put CLS at the open if we get a tick above the $32 level. Link

This is an OEM we mentioned several times in March as potential short/put. Vertical count is bearish to $28, but could grow with current column of O growing. Stock gave double-bottom sell signal on Friday. Trade at $31 would be triple-bottom sell.

 
 
  Jeff Bailey   4/8/02,  9:16:12 AM
IBM (IBM) IBM saying it saw continued slowdown in customer buying decisions in Q1, with particular weakness in the OEM technology business; IBM expects revenue in this group to decline approx. 35% and show a $0.08 loss for the quarter.

 
 
  Leigh Stevens   4/8/02,  9:12:01 AM
It's Earnings Time! IBM prewarned on its earnings and Irag warned that they were going to turn off the oil spigit and the pre-opening looks sharply lower! Right now, per the futures, the Dow looks down to be down -160, S&P off about 13 and NAS (Composite) -31.

 
 

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