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Daily Newsletter, Tuesday, 06/19/2001

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PremierInvestor.net Newsletter                  Tuesday 06-19-2001
                                                    section 1 of 2
Copyright  2001, All rights reserved.
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In section one:

Market Wrap: Market has a mind set
Market Sentiment: Deciphering the Data
Play of the Day: Bearish on QLGC
Watch List: PLMD, IVGN, ACDO, ERTS

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
        06-19-2001        High      Low     Volume Advance/Decline
DJIA    10596.67 - 48.71 10740.79 10563.66 1.17 bln   1500/1543	
NASDAQ   1992.66 +  4.03  2057.19  1978.25 1.97 bln   1589/2159
S&P 100   626.66 +  2.19   634.40   624.18   totals   3089/3702
S&P 500  1212.58 +  4.15  1226.11  1207.71             
RUS 2000  489.73 -  1.80   495.63   488.71 
DJ TRANS 2660.58 - 36.84  2703.60  2654.54 
VIX        24.92 -   .91    25.71    24.63 
Put/Call Ratio      0.73
-----------------------------------------------------------------


===========
Market Wrap
===========

Market has a mind set

Lately, the market seems to have a mind of its own.  Regardless 
of what kind of news we get, the market seems to be thinking 
about levels.  Late Monday's "lack of bad news" from Oracle 
(NASDAQ:ORCL) and the company announcing earning of 15 cents a 
share versus estimates for 14 cents a share got a positive 
response early.  Shares of Oracle ended the session higher with a 
12.9% gain to finish at $16.76, but some of the widely followed 
indexes didn't fair as well.

The Dow Industrials jumped at the open, but found sellers at the 
10,740 level and finished the session at 10,596.  I find today's 
trading very correlative with that of a retracement bracket 
overlaid on top of the Dow Industrials ($INDU) from the January 
14, 2000 high of 11,750 and the March 22, 2001 low of 9,106.  
What we're finding is that the 61.8% retracement level at 10,740 
seems to be a point of contention where the bulls are having a 
tough time overcoming selling at that level.  Until that 10,740 
level is broken to the upside it sure looks like this index is 
looking a tired.  Who can blame it though after a very 
impressive move from the 9,106 level to a recent high of 11,345 
or 24% gain in just two months?

Dow Jones Industrial Average - last eleven months


 

Today's high of 10,740 correlates with the 61.8% retracement 
level from our retracement bracket.  It's almost as if market 
participants had determined beforehand that it would sell this 
basket of stocks at that level.  Right now, I'd say we should be 
looking for this index to be somewhat range bound between the 
10,428 and 10,740 level and look for accumulation.  If we think 
about where we've been in recent months it seems reasonable that 
things need to take a rest.  It would be a good sign for the 
longer-term if this index could begin building a base of 
consolidation between the 10,400 and 10,700 levels from which to 
mark another advance.  For now, a retest of the 10,400 level 
would not surprise me and I would not rule out a possible test of 
the 10,116 level or 38.2% retracement level should we get some 
further earnings warnings in the coming week.  Just remember that 
there are undoubtedly some shorts still holding some bearish 
positions in stocks below the 10,000 level and should be willing 
to close out positions as buyers near that level should that time 
come.

The NASDAQ Composite (COMPX) did manage to finish up on the day, 
but it too found selling into early morning strength.  I'd remain 
skeptical of holding big positions in many technology stocks 
still and feel that the 1,960 level needs to hold to have me the 
least bit bullish for many four-lettered stocks.  A retracement 
bracket on this index does little good as it does not give me any 
levels to monitor, so I'm looking at relative highs and lows to 
help me establish levels I feel traders should be monitoring.

NASDAQ Composite Index - last eleven months



 

The NASDAQ Composite is setting just on top of what I feel is a 
key area of support should a summer rally be in the cards.  The 
fact that MACD has fallen below the zero level has me cautious of 
implementing bullish trades and any trading near current levels 
(bullish or bearish) should be followed with relatively tight 
stops.  Should the NASDAQ be able to put in a positive session 
tomorrow, we could see bearish trades begin to lock in some 
short-term profits thinking that their risk to an upside move of 
2,250 is a possibility.  Look for some extreme volatility here in 
the next couple of sessions.

Jeff Bailey
Senior Analyst


================
Market Sentiment
================

Deciphering the Data
By Jeffrey Canavan

Commitments of Traders data can be a little deceiving if you just
focus the net position of traders, or it can be downright
confusing if you don't follow the data on a regular basis.  Let's
wade our way through it, and see if we can make some sense of it. 

Currently commercial traders (institutions) are net short S&P 500
futures by 70,183 contracts.  This may look bad on the surface,
but lets go back in time a little to see how this developed.  The
most bearish S&P 500 reading of the year was (111,956) on 3/6/01.
Institutions continued to get less bearish as the year progressed,
and lowered their net short position to (41,144) on 5/1/01.
Things were looking up, but then out of nowhere the net bearish
position fell back down to (72,034) on 5/15/01.  How could
institutions be getting more bearish when we were on the brink of
a new raging bull market?  

Lets suppose we all manage a $1 billion worth of stock.  Perhaps
the market looks a little over extended on 5/15/01 and due for a
pullback.  There is also the threat of the upcoming warning season
that could ravage our portfolio, so how could we protect our
assets?  We could write 10 million covered calls on the stock we
own, or we could short some S&P futures to give us a little
insurance.  As warning season starts to unwind, we can start to
unload some of our insurance, and the net short position should
start to drop.

That could help to explain why the commercial net short position
improved by 9.4% last week to a reading of (70,183), and the S&P
500 continues to hold above 1,200.  If the S&P 500 remains above
1,200 I would like see that confirmed by a further improvement in
the net bearish position of commercial traders.  

The Dow continues to be the only index with a commercial net long
position, but even the bearish reading in the Nasdaq-100 managed
to improve by 6%.  

The market volatility indices are also telling us that the current
market sentiment is more cautious, than panicked.  Even with the
Dow closing in negative territory, the VIX fell to a less fearful
reading of 24.92.  The Nasdaq-100 Volatility Index (VXN.X) did the
same, and fell to a reading of 55.24.

In conclusion, I would currently call the market sentiment
cautiously optimistic, but that is contingent on some key support
levels holding.

===

VIX 
Tuesday 06/19 close: 24.92


VXN
Tuesday 06/19 close: 55.24


30-yr Bonds
Tuesday 06/19 close:  5.69


Total Put/Call Ratio: .73


Equity Option Put/Call Ratio: .53


Index Option Put/Call Ratio:  1.42

===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   33.60
Current close: 41.82

Volume/Open Interest
Maximum calls: 50/98,296
Maximum puts : 40/51,984

Moving Averages
 10 DMA 44
 20 DMA 46
 50 DMA 45
200 DMA 61

===

S&P 100 Index (OEX)
52-Week High:  834.93
52-Week Low:   548.16
Current close: 626.66

Volume/Open Interest
Maximum calls: 650/4,788
Maximum puts : 600/5,817

Moving Averages
 10 DMA  640
 20 DMA  649
 50 DMA  644
200 DMA  686

===

S&P 500 (SPX)
52-Week High:  1530.01
52-Week Low:   1081.19
Current close: 1212.58

Volume / Open Interest
Maximum calls: 1250/12,190
Maximum puts : 1200/24,448

Moving Averages
 10 DMA 1241
 20 DMA 1258
 50 DMA 1244
200 DMA 1313

===

DJIA (INDU)
52-Week High:  11,518.83
52-Week Low:    9,047.56
Current close: 10,596.67

Volume / Open Interest
Maximum Calls: 114/ 5,956
Maximum Puts   108/13,093

Moving Averages:
 10 DMA 10,843
 20 DMA 10,948
 50 DMA 10,799
200 DMA 10,627

*****

CBOT Commitment Of Traders Report: Friday 06/15
Weekly COT report discloses positions held by small specs
and commercial traders of index futures contracts on the 
Chicago Board Of Trade. 

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 are not. 
Extreme divergence between each signals a possible market turn in 
favor of the commercial trader’s direction.   

                    Small Specs               Commercials
S&P 500         (Current)  (Previous)     (Current) (Previous)
Open Interest
Net Value        +67110     +77601        -70183     -77490
Total Open
Interest %       (+25.01%)  (+33.61%)    (-9.04%)   (-10.71%)
                 net-long   net-long      net-short  net-short


                     Small Specs             Commercials
DJIA futures     
Open Interest
Net Value          -4305      -4251          +6239     +5829
Total Open
interest %      (-28.76%)    (-35.39%)      (+14.44%)  (+14.71%)
                 net-short   net-short     net-long    net-long


                     Small Spec              Commercials
NASDAQ 100      
Open Interest
Net Value         +2110      +1155         -10648    -11335
Total Open
Interest %        (+6.09%)   (+5.43%)     (-13.68%) (-18.42%)
                 net-long   net-long      net-short net-short


What COT Data Tells Us
----------------------
Indices: Commercials did lighten their net-short positions on the 
S&P but not by a notable amount. 

Gold: Commercials continued to lessen their net-short positions 
dropping 32,000 contracts since May 29. Inflation concerns may 
usher in a new wave of buyers and it looks like the Commercials 
are thinking along those lines.

5/15: 13,915 contracts net-short
5/22: 65,250 contracts net-short
5/29: 68,443 contracts net-short
6/05  42,314 contracts net-short
6/12  36,544 contracts net-short

Data compiled as of Tuesday 06/12 by the CFTC.



===============
Play of the Day
===============

  Bearish Play
  ------------

QLogic QLGC $46.99 -1.91 (-5.12 this week)

- Company Description -
QLogic chips, switches and adapters help keep data flowing 
between computers and storage devices.  Although the company 
sells components for IDE and storage area network (SAN) Fibre 
Channel technologies, the bulk of their sales come from their 
SCSI (small computer system interface) adapters used to manage 
communication inside a computer with its hard disks, scanners 
and tape drives.  Principal customers include Fujitsu (30-percent 
of sales), Sun Microsystems (13-percent), Dell, IBM and Compaq. 

- Play Write Up - 
Last month, the firm reported that fourth-quarter earnings, 
adjusted for a sales discount to Sun Microsystems, increased 55-
percent from the year ago period to 27-cents per share.  Analysts 
had forecast earnings between 25 to 29 cents per share according 
to First Call.  Gross revenue rose 55-percent from the previous 
year to $100.5 million.  

QLogic shares broke important support to the downside on heavy 
volume.  This suggests it is prime for further declines and thus 
a easy Bearish selection.  Since hitting $47.79 on May 30th, the 
shares rallied spending much of last week bouncing off of 
resistance at $60.00.  This week the shares began to correct.  
Tuesday's move past the earlier $47.79 low represents a technical 
bearish reversal, confirmed by well above average volume.  This 
puts the next levels of resistance at $40 and $35 well within 
target range.  

Picked on June 19th at $46.99
Gain since picked        0.00
Earnings Date            N/A (Confirmed)
 






==========
Watch List
==========

PLMD - Polymedica, Inc. $39.02 +4.06  

PolyMedica Corporation is a national medical products and 
services company best known through its Liberty brand name. The 
Company serves the senior chronic disease marketplace and focuses 
on Compliance Management using its Technology Platform to help 
seniors manage their disease more effectively. Like a fire was 
lit underneath them, shares of PLMD took off like a rocket today, 
surpassing the all-important 200-dma ($36.36) in the process. The 
stock vaulted ahead by $4.06 or 11.6% in the session, but volume 
was only average in the ascent, causing reason for some 
suspicion. Looking at the fundamental picture for reasons of the 
impressive move up the chart, we can see that back on May 15th 
the company reported record earnings per share (diluted) of $2.18 
for the fiscal year ended March 31, 2001, a 57% gain from 
earnings per share (diluted) of $1.39 in fiscal 2000. Earnings 
for the fiscal fourth quarter came in at $0.61, lower than the 
company's pre-announced $0.63 expectations, a likely reason the 
stock did not continue its ascent when the results were 
announced. MACD readings on the daily chart remain across the 
trigger line and in positive territory, although faster moving 
stochastics made a bearish cross near the 80 plot, potentially 
signaling a near term reversal. We would be interested in adding 
shares of the medical equipment company in the event shares can 
settle above the $40.00 level on volume north of 640k, the 
average daily share count over the past 30-days. Conversely, 
should the BTK.X break the key 50-dma (575), PLMD could offer an 
excellent opportunity from the other side of the tape.

 


---

IVGN - Invitrogen Corporation, Inc. $67.77 -5.74  

Invitrogen Corporation develops, manufactures and markets more 
than 10,000 products for the life sciences markets. The Company's 
products are principally research tools in reagent and kit form, 
biochemicals, sera, media, and other products and services, which 
the Company sells to corporate, academic and government entities. 
Despite positive coverage from conservative brokerage firm Bear 
Stearns & Co. back on May 23rd, shares of IVGN look to be headed 
for lower ground. In trading Tuesday, the stock lost support of 
two key support levels, namely the 50 & 200 dma's ($69.72, 
$69.01). More crucial to watch was the increased participation in 
the $5.74 decline, with 3.6 mln shares changing hands in the 
session, 389% more than the 30-day average count. These two, 
definitively negative technical factors, coupled with the BTK.X 
perched precariously above its own 50-dma (575) could spell 
significantly lower prices for IVGN in the near term. Looking at 
the oscillating indicators for further confirmation, MACD 
readings on the daily chart made a bearish cross back on June 8th 
and are headed decidedly south, now only 0.58 from the zero plot. 
Stochastics are also in the gutter, with %K seen at a bearish 8.1 
as of today's close. Minor support resides for IVGN at $64.75, 
the relative low from 5/4/01, but we doubt it would hold, 
considering pressure from the bid side of the tape. Firmer 
support exists near $60.00, and it would be reasonable to assume 
an objective near this point should a closing below $67.00 is 
seen. Despite the company beating earnings estimates by 20% back 
on 4/26, the chart pattern is clearly telling traders that money 
is being taken off of the table, and we want pay attention in 
order to profit from the liquidation. A trip to support near 
$60.00 from our proposed entry at $67.00 would represent gains of 
10.4%.

 


---

ACDO - Accredo Health, Inc. $33.05 -2.65  

Accredo Health, Incorporated provides specialized contract 
pharmacy and related services pursuant to agreements with 
biotechnology drug manufacturers relating to the treatment of 
patients with certain costly chronic diseases. Despite a 
healthcare sector that is showing clear signs of momentum, shares 
of Memphis, TN based Accredo Health are bucking the trend, losing 
key support today by compromising $33.00, representing the 50 day 
simple moving average. After the company reported record earnings 
back on 4/30 of $.18 per diluted share, the ninth time the 
company exceeded consensus estimates in as many quarters, an 
attempt was made by bulls to take out the 200-dma near $40.00. 
Despite increasing volume in the effort from the low $30's to 
$39.37, ACDO failed to settle above this key resistance mark and 
quickly retreated, although the 16.5% decline from 6/6/01 has 
come on participation that is well below the average 30-day share 
count. In fact, in the prior 8 trading sessions, ACDO has not 
traded above the 30-day volume trend one single time. Oscillating 
indicators are showing very bearish readings, with %K plotted at 
10.06 as of Tuesday's close, and MACD showing a bearish cross as 
well. The company is slated to present at a First Union analyst 
conference on June 28th, and any positive mutterings from the CEO 
David Stephens could provide very volatile price surges in the 
stock, considering the tiny 22.7 million share float. With the 
company sporting a 46% EPS growth for fiscal 2001 (June), keeping 
tabs on ACDO could prove a lucrative endeavor. While the negative 
technical pattern would negate us adding the stock as a long at 
current levels, the next few days price action should provide 
better clues. Excellent support resides at $30.00 and then at 
$28.00, and so long as volume does not pick up if the selling 
continues, an excellent risk/reward scenario would develop for a 
long position in ACDO.

 


---

ERTS - Electronic Arts, Inc. $58.00 +1.35  

Electronic Arts operates in two principal business segments: EA 
Core and EA.com. Through EA Core, the Company creates, markets 
and distributes interactive entertainment software for a variety 
of hardware platforms. Have you seen the stocks in the 
electronics sector lately? Names like THQI and TTWO, as well as 
ERTS, have been on absolute fire, with the group heating up in 
anticipation of Microsoft's long awaited debut of the X-Box 
gaming console. Mr. Softie has put aside an advertising budget of 
$500 million dollars for this highly touted product, so sales are 
expected to be strong. When you couple this budget with Nintendo 
and Sony's,  which are $250 million combined, it is easy to see 
the sweet spot all of these companies are in. Indeed, the 
industry is expected to grow from 300 million today to $2 billion 
by 2004, fueled largely by a surge in on-line gaming, an segment 
of the market that ERTS currently owns outright. Looking at the 
technical snapshot, after hitting a fresh 52-week high of $63.75 
on 5/22, ERTS retreated sharply, losing support of the 50-dma 
($58.16) back on 6/11. Of note in the decline is the fact that in 
spite of losing this key support on a closing basis, shares of 
the company did not compromise the sharply up sloping trendline 
formed from the most recent lows in early January 2001. Volume in 
the sell-off was also diminishing, providing more bullish 
ammunition looking forward. While the $1.35 advance today 
breached the 50-dma to the upside, ERTS failed to close back 
above, instead finishing just below at $58.00. Participation was 
also lackluster, with only 1.9 million shares crossing the tape 
as compared to the 2.7 million average count over the prior 30 
sessions. Should ERTS be able to settle above $60.00 on volume 
near 3 million shares, one could assume an attempt at new 52-week 
highs would be attempted, and we would want to add the stock as a 
new long position.

 





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Do not duplicate or redistribute in any form.


PremierInvestor.net Newsletter                  Tuesday 06-19-2001
                                                    section 2 of 2
Copyright  2001, All rights reserved.
Redistribution in any form is strictly prohibited.

The entire newsletter is best viewed in COURIER 10 for alignment
=================================================================
To view this email newsletter in HTML format with imbedded
charts and graphs, click here:
http://www.PremierInvestor.net/htmlemail/061901_2.asp
=================================================================

In section two:

Split Trader
  Play Updates: LOW (Split Run); BJ, ESI, MTG (Candidates) 
  Closed Plays: EPIQ (Candidate)

Net Bulls
  New Plays: QLGC (Short)
  Play Updates: RETK, MVSN (Longs); DIGL, PMCS, STOR, SFA (Shorts)
  Closed Plays: EPIQ (Long)

Stock Bottom / Active Trader
  New Plays: CMVT (Short)
  Play Updates: FFIV, BEBE, WM, WMI (Longs)
  Closed Plays: CB (Long) & CSCO (Short)


=================================================================
Split Trader (ST) section
==================================================================

===============
ST Play Updates
===============

  -----------------
  Split Run Updates
  -----------------

LOW - Lowes Companies, Inc. $75.96  +1.41  s/l $68.00

Shares of Lowes continued their winning ways today, as selling in 
to strength in technology only benefited the retailing sector. 
Volume was well above average, with 3.1 million share changing 
hands, some 19.2% above the 30-day average share count. From our 
entry at $74.00, we are sitting on a gain of $1.96 or 2.65%. 
Perhaps a positive note on LOW from Steven Goldman, market 
strategist at Weeden Securities added to the $1.41 advance 
Tuesday. Firm support still resides at the 10-dma ($73.40), 
which, by the way, is on the rise.

Picked on June 7th @ $74.00
Change Since Picked 1.96
Stop Loss @ $68.00     





  -----------------
  Candidate Updates
  -----------------


BJ - BJ's Wholesale Club  $53.74  -0.41  s/l $53.25

With technology fading since our last update, retailers have 
shined, including our play in BJ. Since our last update 6/17, BJ 
has tacked on another $0.94 or 1.78%. We now sit with a gain of 
11.2% since our entry at $48.31 on 5/26/01.  There have been no 
news related stories to associate to the higher prices, and the 
10-dma continues to provide support in the stock's ascent. 
Considering shares hit yet another 52-week high again today, we 
have tightened our stop loss to $53.25 to protect the gains 
achieved.

Picked on May 27th @ $48.31
Change Since Picked 5.43
Stop Loss @ $53.25     





---

ESI - ITT Educational Systems  $42.48  -0.50 s/l $40.00

Our play in ESI has gone practically nowhere since Sunday, losing 
on a mere $0.32 . Like reasons for the lackluster price 
appreciation include a lack of participation from investors and 
traders, with the 30-day average volume trend in steady decline. 
Shares still sit just underneath the 10-dma ($43.15), but appear 
to be developing a bullish pennant formation on the daily chart, 
perhaps signaling an attempt near term on the 52-week high of 
$44.90. As of today's close, we are sitting on a loss of $1.22 or 
2.7%.

Picked on June 12th @ $43.70
Change Since Picked -1.22
Stop Loss @ $40.00     





---

MTG - MGIC Investment  $73.40  +0.23  s/l $72.50

After closing at the high last Friday on heavy volume, MGIC has 
seen trader's interest peter out, and this is reflected in the 
stock price. In the past two trading sessions, MGIC has lost $0.98 
or 1.32%, decreasing our gain  to 4.3%. Volume was healthy both 
Monday and Tuesday, and support still resides with the 10-dma 
($72.67) initially, and then with the 21-dma ($70.32), although 
compromising this level would trigger our newly adjusted stop at $72.50.

Picked on May 31st @ $70.37
Change Since Picked 3.03
Stop Loss @ $72.50     






===============
ST Closed Plays
===============

  ----------------------
  Candidate Closed Plays
  ----------------------

EPIQ - EPIQ Systems, Inc.  $31.14 -3.50  s/l $31.00

EPQI saw a flood of sellers late in the session, with shares 
losing more than $3.00 in the last hour of trading. We could find 
no reason for the mass exodus late in the day, but the fact that 
volume was well above average makes us happy to have had a firm 
stop.  While EPIQ managed to settle above our stop trigger, we 
would be surprised if the fury of sellers do not return in the 
morning. The 21-dma was compromised with the$ 3.35 decline.

Picked on Jun 14th  @  $35.10
CLOSED OUT @          $31.00

Profit/Loss = -4.10 or -11.68% 
Best Profit = +2.29 or +  6.5%






==================================================================
Net Bulls (NB) section
==================================================================

============
NB New Plays
============

  -------------
  Bearish Plays
  -------------

QLogic QLGC $46.99 -1.91 (-5.12 this week)

- Company Description -
QLogic chips, switches and adapters help keep data flowing 
between computers and storage devices.  Although the company 
sells components for IDE and storage area network (SAN) Fibre 
Channel technologies, the bulk of their sales come from their 
SCSI (small computer system interface) adapters used to manage 
communication inside a computer with its hard disks, scanners 
and tape drives.  Principal customers include Fujitsu (30-percent 
of sales), Sun Microsystems (13-percent), Dell, IBM and Compaq. 

- Play Write Up - 
Last month, the firm reported that fourth-quarter earnings, 
adjusted for a sales discount to Sun Microsystems, increased 55-
percent from the year ago period to 27-cents per share.  Analysts 
had forecast earnings between 25 to 29 cents per share according 
to First Call.  Gross revenue rose 55-percent from the previous 
year to $100.5 million.  

QLogic shares broke important support to the downside on heavy 
volume.  This suggests it is prime for further declines and thus 
a easy Bearish selection.  Since hitting $47.79 on May 30th, the 
shares rallied spending much of last week bouncing off of 
resistance at $60.00.  This week the shares began to correct.  
Tuesday's move past the earlier $47.79 low represents a technical 
bearish reversal, confirmed by well above average volume.  This 
puts the next levels of resistance at $40 and $35 well within 
target range.  

Picked on June 19th at $46.99
Gain since picked        0.00
Earnings Date            N/A (Confirmed)
 





===============
NB Play Updates
===============

  --------------------
  Bullish Play Updates
  --------------------

Retek Incorporated. RETK $39.60 +2.35 (+2.45 this week)

This weekend we reported that the candlestick chart for Retek 
formed a doji pattern on Friday.  This pattern signifies 
indecision on the part of traders.  We also said that this is a 
positive sign for our Bullish selection, as indecision is better 
than the bearish bias they had been experiencing and may suggest 
the bulls are getting ready to make a turn at the controls.  This 
indecision usually resolves itself over the next couple of days 
following the appearance of the doji.  Although on Monday the 
shares managed to end in the black, the 10-cent gain was too 
slender to consider it confirmation of a bullish reversal.  However, 
in the closing minutes of trading on Monday, the shares moved from 
$36.50 to the $37.25 based on an analyst rating change to strong 
buy by Paul Rabbit.  This bullish momentum combined with the 
positive after market reaction to the Oracle earnings report, 
carried into Tuesday.  On Tuesday, the shares gapped up $2.10 and 
managed to hold those gains into the close.  The strong move pushed 
the shares above resistance at $39.00.  Several levels of resistance 
exist between $40 and $43, leading us to conclude the likelihood 
of a retracement is definite.  Therefore we are tightening our 
stop to a tight $38.75.

Picked on June 7th at $38.67
Gain since picked       0.93
Earnings Date           N/A (Not Confirmed)




===

Macrovision Corporation MVSN $54.29 -0.51 (+0.34 this week)

MVSN shares march to the top of their trading range near $60 may 
be short-circuiting.  Tuesday started well enough when the shares 
reached $57.79 in the early minutes of the trading day.  
Unfortunately, this turned out to be the session high as the 
shares performed poorly through the remainder of the day.  The 
sudden onset of bearish momentum and the late fade by the general 
market is not a good sign for Wednesday.  We are tightening our 
stop to our breakeven point of $53.95.

Picked on June 17th at $53.95
Gain Since Picked        0.34
Earnings Date            7/30 (Not Confirmed)





  --------------------
  Bearish Play Updates
  --------------------

Scientific-Atlantic SFA $42.05 +0.70 (-0.12 this week)

The flag of caution we have on this bearish play is still waving. 
The tug of war between bulls and bears ended in a slight gain.  
However, the shares spent the opening of Tuesday's trading day 
climbing $1.94 to reach the session high of $43.29 and then gave 
back much of that gain before the close.  This gives us reason to 
not put away the bearish case just yet.  Volume has dropped 5 
sessions in a row.  Tuesday's volume of 2.4 million shares is dead 
even with the daily average.  Clearly the shares are beginning to 
form a basing pattern of sideways movement, but it is not evident 
which way the shares will break when they resume a bullish or 
bearish bias.  For our part, we will maintain a stop at $43.88 
to protect our $7.13 per share gain to date and stay in the play 
to leave us open to further gains should the bears will win out. 

Picked on June 12th at $49.18
Gain since picked        7.13
Earnings Date            7/19 (Not Confirmed)
 



---

StorageNetworks STOR $13.61 -0.72 (-3.29 this week)

As a bearish play, this is the gift that keeps giving.  Every 
time the shares begin to show signs of bottoming out they find a 
new bottom.  This weekend we identified Friday's move through 
$16.35 as significant and should portend a test of $15.  Monday's 
close of $14.33 set up $12.50 as the next level of support and 
Tuesday's move to $13.61 puts it well along the way to giving it 
a test. One more, volume dropping from 4.7 million on Thursday to 
2.46 million suggests the bears are losing momentum.  However, we 
have seen this before so we have reason to stick around.  To 
protect our handsome $8.39 gain, we will move our stop to $16.50, 
which is just above Monday's $16.49 session high and Tuesday's 
$16.26 session high.

Picked on May 17th at $22.00
Gain since picked       7.13
Earnings Date           N/A (Not Confirmed)




---

PMC Sierra PMCS $24.85 -0.26 (-2.21 this week)

Our Bearish selection is $4.40 to the positive side since its 
selection on June 14th.  A spike in volume from Monday's 5.9 
million shares traded to 8.86 million and the shares close 
below support at $25 are good signs the selling pressure will 
continue.  The next levels of downside support are the early 
April lows at about $20.00.  For those considering a little 
bottom fishing we remind you that even at these depressed 
levels the shares are selling for a sky-high forward P/E 
of 430. 

Picked on June 14th at $29.25
Gain since picked       4.40
Earnings Date           N/A (Not Confirmed)




---

Digital Lightwave DIGL $28.40 +1.53 (-1.50 this week)

Despite Tuesday's move to the black, we remain $2.51 per share to 
the positive side on this Bearish selection.  For the moment, 
selling pressure is stalled out against support at $27.50.  The 
shares have tested this level during each of the last two trading 
sessions to no avail.  Volume is still well above the 1.8 million 
daily average at 2.6 million share traded suggesting there is 
still quite a bit of volatility in this play, but is not clear as 
to which direction this volatility will manifest itself.  We will 
ensure we stay in the black on this play by setting our stop 
at $29.91.       .  

Picked on June 17th at $30.91
Change since picked      0.00
Earnings Date            7/17 (Not Confirmed)
 





===============
NB Closed Plays
===============
  

  --------------------
  Closed Bullish Plays
  --------------------

EPIQ Systems EPIQ $31.14 -3.35 (-4.86 this week)

EPIQ shares fell of a cliff yesterday tripping our stop in the 
process.  There was no company specific news to account for the 
drop.  The likely cause was a bout of profit taking by traders 
who have enjoyed the shares strong move from  $14.00 last 
February.  Support exists to stem the downward move at $31 and 
$30.

Picked On June 14th at $35.10
Gain Since Picked       (4.10)
Earnings Date............7/19







==================================================================
Stock Bottom / Active Trader (AT) section
==================================================================

============
AT New Plays
============

New Short (Bearish) Play
------------------------

CMVT - Comverse Technology, Inc. $53.60 -2.42  s/l $58.00 

Sector - Software

Comverse Technology, Inc. designs, develops, manufactures, 
markets and supports computer and telecommunications systems and 
software for multimedia communications and information processing 
applications. The Company's products are used in a broad range of 
applications by wireless and wireline telephone network 
operators, government agencies, call centers, financial 
institutions and other public and commercial organizations 
worldwide. The Company provides enhanced services platform 
products, digital monitoring and recording systems for call 
centers, customer relationship management applications, public 
networks and government agencies, network signaling software for 
wireless, wireline and Internet communication services known as 
Signalware, and other telecommunications hardware and software 
products and services.

Despite better than expected earnings from technology stalwart 
Oracle after the bell Monday, traders quickly sold into strength, 
solidifying the bearish sentiment of most on Wall Street as we 
approach the FOMC meeting next Tuesday and Wednesday. Shares of 
Comverse are displaying extreme weakness, finishing near the lows 
of the session Tuesday on volume that was well above average. 
CMVT also broke support near $55.00 that had halted shares in the 
most recent declines, opening the door for lower ground in the 
near term. Speculation that Cicso Systems CEO John Chambers was 
hinting at continued weakness in the sector in an interview with 
Reuters today could further CMVT's  plunge as early as Wednesday, 
and traders willing to go short could not ask for a better 
looking chart. Oscillating indicators are in the gutter with the 
$2.42 loss today, and it is very likely CMVT retests the 52-week 
lows at $44.84. With no floor in site until the high $40's, the 
time to get on board the sinking ship CMVT is now. With short 
term market indicators displaying extremely oversold conditions 
(ARMS 10-day), we have set a tight stop loss at $58.00 in the 
event a snapback rally occurs. Our objective for the short sale 
is $49.00, and we feel this is easily achievable within the next 
few days, if not tomorrow.

Average Daily Volume = 5.5 mln 
52-week:  High = $124.75 Low = $44.84
Next Earnings 09-03 est = 0.43 versus = 0.36

 



===============
AT Play Updates
===============

  -----------------
  Long Play Updates
  -----------------


FFIV - F5 Networks, Inc. $13.55  -1.56   s/l $12.00

Shares of FFIV suffered liquidation pressure throughout the 
session Tuesday, finally ending at $13.55, down $1.56 or 10.3%. 
The close brings the stock to support of the converged 10 & 21 
dma's ($13.17, $12.70), but the settlement a mere 15 cents off of 
the day's low could be indicative of more pressure in the 
morning. With traders selling into any rally in technology, FFIV 
could well trigger our stop at $12.00 near the opening bell 
Wednesday. Stochastics showed a bearish cross and volume was 
above the 30-day average share count, technical indicators you 
don't want to see with a long position.

Next Earnings: 07/19/2000

 


---

BEBE - Bebe Stores, Inc.  $29.75  -0.25  s/l $28.25

Despite a largely positive story on retailers including BEBE last 
Sunday, shares of the company have continued to decline this 
week. Janet Kloppenburg, an analyst at Robertson Stephens, 
said..." "We continue to believe bebe currently offers one of the 
most exciting, fashion-forward and appealing merchandise 
assortments in the mall." Since our last update, BEBE has shed 
$0.68, compromising the 10-dma ($30.53) in the process. MACD 
readings also are showing a bearish cross, which could be 
indicative of lower ground in the near term. As such, we have 
adjusted our stop loss to $28.25 to minimize losses if the 
selling continues.

Picked on June 8th @ $30.80
Change Since Picked -1.05
Stop Loss @ $28.25     

 


---

WM - Washington Mutual  $38.97  +1.07  s/l $37.08

WM is one of the few financials that has preformed as one would 
expect the sector to have since the fed began its aggressive rate 
cutting actions in January. Today, yet another 52-week high was 
achieved at $38.97, and was done so on healthy volume totals of 
5.9.3 million shares, 51 % above the average 30-day share count. 
The stock has now clearly broken out of its most recent trading 
range between $36 and $37, and technically has nothing to hold it 
back from continuing its recent trend. The only news released 
since our last update was the announcement of Kerry Killinger's 
intent to speak at a Friedman, Billings, Ramsey & Co. investment 
conference in September. We have ratcheted our stop loss to break 
even effective today. As of the close, we sit with a $1.89 or 
5.1% gain.

Picked on June 15th @ $37.08
Change Since Picked 1.89
Stop Loss @ $37.08     

 


---

WMI - Waste Management, Inc.  $29.47  +0.24  s/l $28.75

WMI has given up ground, albeit slightly, since we last discussed 
the stock Sunday. The shorter term moving averages are still 
offering support in the assault on new yearly highs, the last of 
which was set on Friday 6/15 at $29.98. A settlement was 
announced today by Arthur Anderson related to an audit of Waste 
Management that took place for the years 1993--1996, in which the 
company restated its financial statements. While WMI was never a 
party to the suit against Arthur Anderson, it is seen as more 
water under the bridge related to the myriad of suits brought 
after the 1998 accounting scandal. As of the close Tuesday, we 
sit with a gain of $0.96 or 3.3%. We have lifted our stop to 
$28.75 effective today.

Picked on June 6th @ $28.51
Change Since Picked 0.96
Stop Loss @ $28.75     

 




===============
AT Closed Plays
===============

  ----------------
  Closed Long Play
  ----------------


CB - Chubb Corp. $78.21 -0.04 

After apparently topping out at $79.37 last Friday, CB has seen 
little but sellers surrounding their post as evidenced by the 
recent chart action. Shares set their second consecutive day of 
lower lows with the $-0.04 decline Tuesday, triggering our stop 
down at $78.25 in the process. In the end, we still managed to 
grab $2.05 or 2.6%; not a killing, but still a gain. In this 
market, we'll take it.

Picked on May 30th @ $76.20
CLOSED OUT @         $78.25

Profit/Loss = +2.05 or +2.6% 
Best Profit = +3.17 or + 4.1%

 



  -----------------
  Closed Short Play
  -----------------


CSCO - Cisco Systems, Inc. $16.64 +0.14 

Our stint with networking behemoth Cisco Systems comes to an end 
today, but not before we bagged a tidy 21.8% for our readers. We 
had steadily ratcheted our stop loss lower as the stock was 
crumbling, and for some time, it seemed we would never get hit. 
Leave it Oracle to give the Nasdaq a boost today, getting just 
enough traders willing to put in a bid for some CSCO to hit our 
stop loss. No disappointments here, however, as 21% in this 
market is something worth smiling about.

Picked on Jun  5th  @  $21.54
CLOSED OUT @         $17.00

Profit/Loss = +4.54 or +21.8% 
Best Profit = +5.21 or + 24.1%

 





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