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Daily Newsletter, Thursday, 06/21/2001

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PremierInvestor.net Newsletter                 Thursday 06-21-2001
                                                    section 1 of 2
Copyright  2001, All rights reserved.
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In section one:

Market Wrap: Good looking rally, with one exception
Market Sentiment: Survey Says
Play-of-the-Day: Medimune
Watch List: FNM, MLNM, BK, WMT

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
        06-21-2001        High      Low     Volume Advance/Decline
DJIA    10710.33 + 68.10 10759.64 10597.14 1.47 bln   1741/1351	
NASDAQ   2058.76 + 27.50  2077.43  2014.33 2.13 bln   2049/1664
S&P 100   642.35 +  8.92   644.47   632.48   totals   3790/3015
S&P 500  1236.19 + 13.90  1240.24  1220.25             
RUS 2000  497.45 +  1.96   498.46   494.41 
DJ TRANS 2707.20 + 45.75  2711.68  2648.70 
VIX        21.91 -  1.95    24.40    21.65 
Put/Call Ratio      0.60
-----------------------------------------------------------------

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

Good looking rally, with one exception

You can really feel and see some of the uncertainty by many 
market participants just by looking at what took place in today's 
trading session.  Early in the session, I got the feeling that 
some very good things were starting to take place.  Lately I've 
been talking about how the Biotechnology Index (BTK.X) should 
give us some insight into building strength for some NASDAQ 
Composite stocks and a potential rally there.  That's exactly 
what we saw again today when the BTK.X added another 5 points and 
traded as high as 624 before settling back to close at 618.  The 
BTK.X dillydallied around the 610 level for the first part of the 
trading session and once it got above an early morning's session 
high of 616 we did see further interest in the group, but not at 
what I'd consider aggressive levels.

One thing I feel that held the biotechs back is that there's not 
a lot of new money being committed to stocks.  One thing I really 
want to see in order to start pounding my fist on the table with 
the belief that we're in for one heck of a rally is to see bond 
YIELDS turn higher.  This is the "exception" that I'm talking 
about in today's rally.  With about three-hours left in trading 
the 5-year YIELD ($FVX.X) jumped from negative levels to 
unchanged and we did see some buyers come into stocks.  Right 
about then, the Dow Industrials and broader market indexes found 
a bid and started to show some life.

5-year Treasury Bond YIELD - 60-minute intervals


 

The only thing that drives a bond's YIELD is market participants 
buying or selling the bond.  Lower YIELD on the 5-year has been 
caused by buyers in the bond.  We did see some selling take place 
at around 10:30 AM EST, but I feel we need to see downward trend 
broken to the upside for a prolonged rally to occur in stocks.

Dow Jones Industrial Average - 60-minute intervals


 

One of the main reasons I think the last two session rally is 
mostly due to short covering is by posing this question.  Where 
is the money to buy stocks coming from?  I haven't heard any 
reports anywhere of big inflows into mutual funds.  I haven't 
heard of any brokerage firms reporting spectacular earnings as 
customers throw money into their accounts and buy stocks that 
generates commissions.  Since bond YIELDS aren't turning 
drastically higher that leaves short-covering as the only reason 
I can come up with.  Now... the bond market closes at 03:00 EST 
time and the stock market closes at 04:00 EST.  Notice how the 5-
year YIELD ticked lower in its last interval today.  Just as its 
jump early this morning looked to fuel stocks higher, the bond 
YIELD finishing somewhat softly lower coincides with the "peak" 
that the Dow Industrials experience at the same time frame.

The reason we're looking at the above charts on a 60-minute 
interval is that it really shows how quickly the markets can 
react to moves in bond YIELDS.  If we start thinking short-term 
and begin building out, we might very well say this.  "Look, I'm 
not really interested in stocks unless I feel there is going to 
be some type of cash coming into them or that stocks I'm looking 
at buying really lacks sellers."

Today we highlighted shares of Citrix Systems (NASDAQ:CTXS) as 
the point and figure chart (supply/demand chart) indicates that 
the number of sellers (supply) in the stock are starting to be 
overcome buy buyers (demand).  Since we're still seeing a lack of 
selling in bonds we want to play things close to the vest and 
only commit small amounts of capital to bullish trades where it 
truly looks as if demand is overcoming supply.  The reason we 
want to at least commit some capital is this.  A sharp move 
higher in bond YIELDS could be a preemptive move that has stocks 
surging.  Still, at the end of every day, we want to be honest 
with ourselves to see how things shape up.

In summary, I liked today's rally in stocks with one exception.  
I didn't see enough selling in bonds to convince me that stocks 
will see much of a prolonged rally.  If the YIELD on the 5-year 
were to have finished above the 4.7% level, I'd be more 
optimistic.  Tomorrow's a new day and anything can happen.

Jeff Bailey
Senior Analyst
PremierInvestor.net


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

Survey Says
By Jeffrey Canavan

If you believe in polls, one conducted by Pew Research Center 
revealed that 43% of America is satisfied with the current 
direction of the country, and 52% are dissatisfied. Perhaps 
President Bush's tax cut will help to change that?  Nope.  60% of 
those surveyed said they haven't thought about it, and only 30% 
said they were looking forward to it.  I guess most of that money 
won't be finding its way into the markets.  Most likely that 
money will be used to payoff some debt, since 30% of the people 
reported that they have more debt than they can afford.  Maybe 
that's why those bank stocks are doing so well.

While polls are nice, where are investors putting their money?  
According to Thursday's action, it looks like Treasury Bonds 
yielding 5.6% are becoming more attractive than shares of Lucent.  
But then again, $5 worth of lottery tickets is more attractive 
than a share of Lucent.  Seriously, as money continues to flow 
into the safety of government bonds, that's less money available 
to push stocks through some upcoming resistance levels.  

Perhaps the amount of earnings warnings that is starting pile up 
is chasing money into bonds.  It is now estimated that over 1,000 
companies will issue earnings warnings this quarter, which would 
eclipse the record of 935 that was set in the first quarter.  
Investors have stayed the course through the first wave of 
warnings this quarter, but how long can their bullish optimism 
hold up?  It certainly isn't doing much to pull in that money 
sitting on the sidelines.

Bullish money that is finding its way into stocks is being very 
selective.  Banks and biotechs are attracting the most interest, 
with some dabbling in software and semiconductors.  I believe the 
third knight in Indiana Jones and the Last Crusade gives the best 
bullish advice - choose, but choose wisely.

===

VIX 
Thursday 06/21 close: 21.91

VXN
Thursday 06/21 close: 52.06

30-yr Bonds
Thursday 06/21 close:  5.63

Total Put/Call Ratio: .67

Equity Option Put/Call Ratio: .65

Index Option Put/Call Ratio:  .87

===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   33.60
Current close: 43.35

Volume/Open Interest
Maximum calls: 50/95,210
Maximum puts : 40/69,082

Moving Averages
 10 DMA 43
 20 DMA 45
 50 DMA 45
200 DMA 60

===

S&P 100 Index (OEX)
52-Week High:  834.93
52-Week Low:   548.16
Current close: 642.97

Volume/Open Interest
Maximum calls: 650/4,990
Maximum puts : 600/6,341

Moving Averages
 10 DMA  637
 20 DMA  645
 50 DMA  645
200 DMA  684

===

S&P 500 (SPX)
52-Week High:  1530.01
52-Week Low:   1081.19
Current close: 1237.02

Volume / Open Interest
Maximum calls: 1250/13,061
Maximum puts : 1200/24,709

Moving Averages
 10 DMA 1233
 20 DMA 1251
 50 DMA 1245
200 DMA 1310

===

DJIA (INDU)
52-Week High:  11,518.83
52-Week Low:    9,047.56
Current close: 10,715.43

Volume / Open Interest
Maximum Calls: 110/17,244
Maximum Puts   108/18,069

Moving Averages:
 10 DMA 10,763
 20 DMA 10,898
 50 DMA 10,827
200 DMA 10,621

*****

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
===============

MEDI - Medimune, Inc. $47.48 +2.71  Stop Loss: $40.00

Sector - Biotechnology

MedImmune, Inc. is a biotechnology company with several products 
on the market and a diverse product development portfolio. The 
company is focused on using advances in immunology and other 
biological sciences to develop important new products that 
address significant medical needs in areas such as infectious 
diseases, immune regulation and oncology.

As the biotech group has reasserted itself as one of the 
leadership groups in the market, names such as MEDI have started 
to shine again as the promise of their drugs outweighs the 
generally negative tone of the market as a whole. The company 
reported 1st quarter eps of $0.36 per share, in-line with 
consensus estimates. The firm's blockbuster drug, Synagis, 
contributed $236 million to the revenue stream, with expectations 
for the drug to post sales of $609 million by years end. Synagis 
is a monoclonal antibody and the leading therapeutic for 
respiratory infections in infants and young children caused by 
Respiratory Syncytial Virus (RSV). Bear Stearns initiated 
coverage on the company today with a $60.00 12-month price target 
and a Buy rating, citing a strong drug pipeline and attractive 
valuation compared to its peers. MEDI is currently trading at an 
estimated price to 2002 estimated earnings of 39x versus the peer 
group large cap average of 49x. Looking at the chart, shares 
clearly broke out of the recent trading range between $41 & $45 
with the $2.71 more higher. Key resistance at the 200-dma 
($48.62) sits just over $1.00 away, but with the sector surging, 
this level should be soon left behind. MACD readings showed a 
bullish cross of the trigger line today, potentially bringing on 
technical buyers, and once the 200-dma is surpassed to the 
upside, the mid-fifties should be a realistic objective for a 
trade in MEDI. Volume was more than adequate in the session, and 
in fact was more than 55% higher than the 30-day average share 
count. Those traders with less aggressive tendencies would want 
to wait for a breaching of the 200-dma before getting on board. 
With the BTK displaying very bullish characteristics, however, we 
want to initiate a position here, with an objective of $55.00, a 
gain of more than 17%. Our stop would trigger at $40.00, giving 
the stock room to pause and refresh from its recent run.

Average Daily Volume = 3.2 mln 
52-week High = $86.12 
52-week Low  = $44.15
Next Earnings 07-25 est = -0.04 versus = -0.04

 




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

FNM - Fannie Mae, Inc. $86.13 +2.12  

WHY WE LIKE IT:  Traders and investors alike are starting to pay 
attention to the fact that financials will be printing their own 
money as the Fed's interest rate cutting actions start to work 
their way into our economy. Even the broker dealers are beating 
estimates in recent earnings reports, buoying the sector as a 
whole. This group acting well, along with the deep cyclicals, 
could lead us out of the current market trough.

POTENTIAL TRIGGER EVENT:  Today's close north of $85.00 would 
normally do it for us, and the fact that volume in the ascent was 
above normal certainly bodes well going forward. We would expect 
a pullback to the $84.50-$85.00 level, where, if volume again 
traded at 3.2 million shares, (30-day avg) we would give FNM a 
shot for a run at the 52-week high ($89.37).

 


---

MLNM - Millennium Pharmaceuticals, Inc. $35.78 +0.27  

WHY WE LIKE IT: With the biotech sector stubbornly holding its 
50-dma at 579 in the recent Nasdaq sell-off, it is evident that 
relative strength in the group is high. Wednesday, the BTK.X 
surged north of the critical 200-dma at 607, although today the 
sector mostly traded sideways today. With interest in the group 
high, MLNM should benefit as traders quit resting and start 
bidding. Millennium's LDP-977 asthma drug began Phase IIb trials 
last week, earlier than most people expected, and positive news 
from the trials could propel the stock into the stratosphere, 
considering its blockbuster potential.

POTENTIAL TRIGGER EVENT: A break and close above the 50-dma at 
$36.86 should be the catalyst to get the stock moving again, and 
we would give it a shot when this occurs. Participation is 
starting to increase, with the 30-day trend surpassed in 2 of 4 
days this week. As the FOMC meeting approaches, expect volatile 
trading to potentially cause an explosive upside move.

 


---

BK - Bank of New York, Inc. $52.70 +1.30  

WHY WE LIKE IT:  Playing on the financials are their own mint in 
a lower interest rate environment theme, Bank of New York should 
truly shine as the aggressive rate cutting by the Fed works it 
self into their earnings stream. With BK having a very large 
portion of their income derived from non-interest income, credit 
deterioration concerns as addressed by Chairman Greenspan should 
not affect their income or stock performance in the near term.

POTENTIAL TRIGGER EVENT:  While the closing north of the 200-dma 
($52.43) looks very appealing, we prefer to wait for settlement 
north of $53.50, further solidifying the move above key 
resistance and allowing for a run to $55.50, potentially $58.00. 
For those with a longer term horizon, the potential price 
appreciation with BK should entice an entry at current levels. 

 


---

WMT - Wal-Mart, Inc. $50.45 +0.65  

WHY WE LIKE IT:  A bounce off of support near $47-$48 for the 
third time this year, a third day of higher highs and lows and a 
sector that is again attracting attention all add up to 
potentially higher prices in the world's largest retailer. The 
company's planned opening of 170-180 supercenters this year is 
also largely front end loaded. That is, with more than 140 of 
these stores on track to open by FYQ2, WMT should benefit from 
the expanded store base during the key back-to-school and winter 
holiday periods, allowing for a surge in earnings late in 2001.

POTENTIAL TRIGGER EVENT: WMT sits just below the key 200-dma at 
$50.46, and a settlement above this mark will likely result in a 
run to the mid fifties. While the 50-dma at $51.45 could present 
a speed bump in the ascent, we doubt it will considering the 
benefit retailers as a whole should enjoy heading into seasonally 
excellent times coupled with an attractive rate environment.

 





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PremierInvestor.net Newsletter                 Thursday 06-21-2001
                                                    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/1990_2.asp
=================================================================

In section two:

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

Split Trader
  Split Alert: KG
  Play Updates: LOW (Split Run), ESI (Candidate)
  Closed Plays: BJ (Candidate)

Stock Bottom / Active Trader
  New Plays: MEDI (Long)
  Play Updates: ELN, WM, WMI (Longs), CMVT (Short)


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

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

  ----------------
  New Bearish Play
  ----------------

Computer Sciences Corporation - CSC $35.00 -0.84 Stop: $37.50

This El Segundo, California-based CSC is one of the world's 
largest information technology services companies.  CSC has more 
than 800 locations worldwide.  Its offerings include outsourcing 
(applications development, business process management, systems 
analysis), management consulting (business process reengineering,
change management) and systems integration.  The company shuns 
publicity and focuses on developing long-lasting relationships 
with clients  Long-term outsourcing contracts with the US 
government (25% of sales), AT&T and Nortel Networks shield CSC 
from the industry wide slowdown in systems integration spending, 
and continue to fuel sales growth of more than $1 billion a year 
since 1994.

Last May, shares took a hit when the company lowered guidance.  
They anticipated 2002 earnings per share to be in the range of 
$2.25 to $2.35.  At the time, analysts were forecasting profits 
of $2.37 per share.  The company cited the difficult economy and 
reduced IT spending for the move and said they expect the slowdown 
to continue into fiscal 2002.  The current analysts' consensus 
forecast is for the firm to earn $2.06 on revenue of $11.5 billion 
in the fiscal year ending March 2002 and $2.72 per share on $12.5 
billion in 2003.  Last year, the firm earned $2.28 per share on 
sales of $10.5 billon.  

The May 19th earnings warning sliced a whopping $21.40 off the 
stock price in one day leaving it at $32.70.  Although the shares 
rebounded from that loss to reach $46.00 on June 6th, additional 
bad news has pumped up the selling pressure.  On Thursday, Credit 
Suisse First Boston reported that CSC was not awarded an Air Force 
Range contract estimated at $2.5 billion over 14 years.  Worse yet,
part of the deal was a re-compete and they expect the loss of 
business will reduce revenue for the coming year by $80 million.  
The broker thinks that CSC won't be able to make fiscal 2002 guidance 
even if they win most of the contracts in their pipeline.  

CSC shares ended Thursday right at $35 support.  A move through 
this level would make likely a test of support at $32.50 and $30.  
Thursday's volume at 3.3 million shares traded was well ahead of 
the 1.4 million daily average.  This represents the second 
consecutive day of rising volume and suggests the bears have a good 
head of steam up.  Conservative traders can wait for a move through 
$35 before taking a position.  We are implementing a stop loss 
at $37.50.

Picked on June 21st at $35.00
Earnings Date            N/A (Not Confirmed)






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

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

Retek Incorporated - RETK $42.02 -0.68 Stop Loss: $40.75

Retek shares are giving a clinic in candlestick charting patterns. 
A doji pattern last Friday, which signifies market indecision was 
resolved by the bulls.  The rally that followed may have ended on 
Thursday with a failed test of significant resistance at $43.00.  
This is a level that has been bested only three times since December 
and each time it has held.  To add to the bearish case, the 
candlestick chart produced a spinning top pattern that often 
signifies an end to a bullish move.  To maintain our bullish bias 
we will need to the shares to produce a sustainable break above 
$43.00.  Just in case it is not successful, we are going to protect 
our solid $3.35 per share gain by tightening our stop to $40.75, 
which is just below Thursday session low of $40.83.

Picked on June 7th at $38.67
Gain since picked      +3.35
Earnings Date           N/A (Not Confirmed)




---

Macrovision Corporation - MVSN $58.90 -1.10 Stop Loss: $58.00

The session low of $58.20 came within a whisker of our $58.00 
stop.  The session close of $58.90 is resting right at resistance. 
The next few days will tell the tale.  If the shares can regain 
momentum and close above the 200-day moving average at $61.03 our 
bullish bias will be reinforced.  A failure will most likely preface 
a move to either the next level of support at the 50-day moving 
average of $55.58 or the lower end of the stock's current trading 
channel near $51.

Picked on June 17th at $53.95
Gain Since Picked       +4.95
Earnings Date            7/30 (Not Confirmed)






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

Scientific-Atlantic - SFA $39.98 -0.52 Stop Loss: $41.50

The caution flag is still out on this bearish play, however we 
are waving it less hard than last Tuesday.  The bears regained 
control on Wednesday with a $1.55 drop, but were only able to 
drive the shares down 52-cents on Thursday.  Fortunately, the 
bear case was enforced by Thursday's higher than average volume 
of 2.7 million shares.  This suggests there are plenty of sellers 
still in vicinity.  A move through $38.60 should result in an 
increase in bearish sentiment.  We are tightening up our stop 
to $41.50.

Picked on June 12th at $49.18
Gain since picked       +9.20
Earnings Date            7/19 (Not Confirmed)
 



---

Storage Networks - STOR $12.70 -0.25 Stop Loss: $14.00

Once more, STOR shares are showing signs of having found a bottom. 
Support at $12.50 is holding for now and volume, although solid, 
is beginning to decline.  If the shares do close below $12.50 the 
next target support will be $10.00.  Therefore, we are moving our 
stop to $14.  This should give our $9.30 per share gain some 
protection, while giving the stock some wiggle room in the event 
the bearish move resumes.
 
Picked on May 17th at $22.00
Gain since picked      +9.30
Earnings Date           N/A (Not Confirmed)




---

PMC Sierra - PMCS $26.25 +0.86 Stop Loss: $28.00

Our Bearish selection seems to have found some support at $25.00.  
This level has held for the last four trading sessions.  Although 
the shares have put in two positive days in a row, the volume is 
beginning to trend lower.  This usually means the bulls have not a 
full head of steam just yet.  We will maintain our stop at $28.00, 
which should give us enough room to see if the bearish sentiment 
can rise and take control.  Beyond $25.00 the next level of 
resistance is $20.  The next level of upside resistance is 
approximately $31.00.    

Picked on June 14th at $29.25
Gain since picked       +3.00
Earnings Date            N/A (Not Confirmed)






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

  --------------------
  Closed Bearish Plays
  --------------------

Digital Lightwave - DIGL $29.50 +1.10 Stop Loss: $29.91

(CLOSED ON WEDNESDAY)

DIGL shares have halted their bearish slide when significant 
support at $27.50 held.  On Wednesday, the shares tripped our $29.91 
stop leaving us in the black $1.00 per share on this Bearish 
selection.  The stock appears to have moved into a basing pattern 
with neither bulls nor bears having enough momentum to move the 
stock an appreciable amount.  This means it will probably bounce 
around in a tight trading range bounded by resistance at $32.00 
and support at $27.50. 

Picked on June 17th at $30.91
Gain since picked       +1.00
Earnings Date            7/17 (Not Confirmed)
 




===

QLogic - QLGC $53.69 +1.81 Stop Loss: $53.75

Once in a while a play flat out does not work and this is one of 
them.  Despite a technical picture on Tuesday that involved a 
significant down side break of support at $47.79 on heavy volume, 
the shares made a complete bullish reversal on Wednesday.  The 
reason for the sudden increase in bulling sentiment is not clear, 
as there was no company specific news of significance to the 
market.  This is why we have stops and ours was tripped at $53.75. 
Support remains unchanged at $47.50 and resistance to a further 
move up should exist at $55.00. 

Picked on June 19th at $46.99
Gain since picked       -6.70
Earnings Date             N/A (Confirmed)
 





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

=================
Stock Split Alert
=================

King Pharmaceuticals (NYSE:KG) Announced a 4:3 split payable 7/19

  For more details click here:
http://www.PremierInvestor.net/stocksplits/announcements/062101_1.asp



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

   ---------------------
   Split Run Play Update
   ---------------------

LOW - Lowes Companies, Inc.  $78.90 +$1.51 Stop Loss: $76.00

Lowes is maintaining its forward momentum, tacking on higher 
prices seemingly everyday since we added the stock in 
anticipation of a split run to the payable date of 6/29. Shares 
added even more on Thursday, adding $1.51 on heavy volume, and 
the 10-dma still is holding a firm support at $74.42. With the 
payable date now only one week away, we hope to add on to our 
current gain of $4.90 or 6.2%. We'll need to see volume north of 
2.6 million shares a couple of days in order to pad current 
profits. Our stop moves to $76.00.





   ---------------------
   Candidate Play Update
   ---------------------

ESI - ITT Educational Systems  $42.46 -$0.34 Stop Loss: $41.50

Shares of ESI have gone almost nowhere since our last update 
Tuesday, losing a mere $0.02. In the news,  the company's CEO, 
Omer E. Waddles,  testified Wednesday to the House Committee on 
Education and the Workforce on H.R. 1992, the Internet Equity and 
Education Act of 2001. Mr. Waddles testimony supported the 
proposed amendments to the Higher Education Act of 1965, and 
believes they are needed to update the nation's higher education 
policies to meet the demands of today's students. Looking at the 
chart, shares of the company still continue to form a bullish 
pennant, but oscillating indicators are still giving undecided 
readings. We sit with a minor loss of $1.24 and keep our stop at 
$41.50.






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

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

BJ - BJ's Wholesale Club  $54.53 Stop Loss: $53.25

(FROM WEDNESDAY)

On no news, shares of BJ suddenly dropped like a stone early 
Wednesday, compromising both the 10-dma ($52.55) as well as our 
raised stop loss at $53.25. What disturbs us is the fact that 
shares recovered in quick order,  actually finishing the day 
higher by $0.26. We still managed to achieve a gain of $4.94 or 
10.2% for our readers, so we won't complain too much.

Picked on May 26th  @  $48.31
CLOSED OUT @           $53.25

Gain/Loss = +4.94 or + 10.2% 
Best Gain = +6.53 or + 13.5%






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

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

  New Long (Bullish) Play
  ------------------------

MEDI - Medimune, Inc. $47.48 +2.71  Stop Loss: $40.00

Sector - Biotechnology

MedImmune, Inc. is a biotechnology company with several products 
on the market and a diverse product development portfolio. The 
company is focused on using advances in immunology and other 
biological sciences to develop important new products that 
address significant medical needs in areas such as infectious 
diseases, immune regulation and oncology.

As the biotech group has reasserted itself as one of the 
leadership groups in the market, names such as MEDI have started 
to shine again as the promise of their drugs outweighs the 
generally negative tone of the market as a whole. The company 
reported 1st quarter eps of $0.36 per share, in-line with 
consensus estimates. The firm's blockbuster drug, Synagis, 
contributed $236 million to the revenue stream, with expectations 
for the drug to post sales of $609 million by years end. Synagis 
is a monoclonal antibody and the leading therapeutic for 
respiratory infections in infants and young children caused by 
Respiratory Syncytial Virus (RSV). Bear Stearns initiated 
coverage on the company today with a $60.00 12-month price target 
and a Buy rating, citing a strong drug pipeline and attractive 
valuation compared to its peers. MEDI is currently trading at an 
estimated price to 2002 estimated earnings of 39x versus the peer 
group large cap average of 49x. Looking at the chart, shares 
clearly broke out of the recent trading range between $41 & $45 
with the $2.71 more higher. Key resistance at the 200-dma 
($48.62) sits just over $1.00 away, but with the sector surging, 
this level should be soon left behind. MACD readings showed a 
bullish cross of the trigger line today, potentially bringing on 
technical buyers, and once the 200-dma is surpassed to the 
upside, the mid-fifties should be a realistic objective for a 
trade in MEDI. Volume was more than adequate in the session, and 
in fact was more than 55% higher than the 30-day average share 
count. Those traders with less aggressive tendencies would want 
to wait for a breaching of the 200-dma before getting on board. 
With the BTK displaying very bullish characteristics, however, we 
want to initiate a position here, with an objective of $55.00, a 
gain of more than 17%. Our stop would trigger at $40.00, giving 
the stock room to pause and refresh from its recent run.

Average Daily Volume = 3.2 mln 
52-week High = $86.12 
52-week Low  = $44.15
Next Earnings 07-25 est = -0.04 versus = -0.04

 




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

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

ELN - Elan Corporation $62.50  Stop Loss: $60.75

Researchers in London said today that Elan Corp's drug NeuroBloc 
may also be useful in treating spasticity. The drug is already 
approved for cervical dystonia, a condition characterized by 
involuntarily neck muscle contraction. While shares lost $2.50 or 
3.8% Thursday, some selling was to be expected, considering the 
impressive run up the chart and new 52-week high ($65.00) set 
just Wednesday. Support resides with the 10 & 21 dma's, plotted 
at $59.92 and $58.82, respectively. With the biotechnology index 
breaking through key resistance at the 200-dma yesterday, ELN's 
pause today could be the one that refreshes. The fact that the 
decline came on volume that was not appreciably higher than 
yesterday's also bodes well going forward. Since our entry at 
$62.36, we are basically flat.

Next Earnings: 07/23/2001




---

WM - Washington Mutual  $39.39 +$0.09 Stop Loss: $38.50

Washington Mutual continues to impress, achieving even higher 
prices since our last update, and doling so on increased 
participation. As of the close Thursday,  we are enjoying a gain 
of $2.31 or 6%. While there have been no news stories to link the 
recent move up the chart to, we believe investors are simply 
starting to see how beneficial the lower interest rate 
environment is to financials such as WM. Looking at the chart, 
there is nothing but blue skies ahead, with yet another 52-week 
high ($39.80) logged Thursday. We have ratcheted our stop up to 
$38.50.




---

WMI - Waste Management, Inc.  $29.90 -$0.32 Stop Loss: $29.51

Waste Management got a nice boost Wednesday, engulfing Tuesday's 
price action and setting yet another 52-week high. More 
impressive was the close a mere $0.03 off of the day's high on 
volume that was 37.5 percent above the 30-day trend. Arthur 
Anderson's settlement with the SEC related to audits done at the 
company from 1996-1998 likely drew attention to the stock, even 
though WMI was never named in the charges. To continue its 
winning ways, WMI will need to completely fill the gap from 
7/28/99 at $31.00, a mere $1.10 away. Gains in the play have 
increased to $1.39 or 4.8% since our entry 6/6 at $28.51, and our 
stop moves to $29.51.






  ------------------
  Short Play Updates
  ------------------

CMVT - Comverse Technologies, Inc. $53.79  Stop Loss: $58.00

Pacific Crest Securities initiated coverage on Comverse 
Technologies this morning at a Buy rating, although the positive 
press did little for the stock. Even Advest's reiteration of 
their Strong Buy coupled with a 12-month price target of $90.00 
did not impress traders. CMVT continues to be mired with a  chart 
pattern displaying extreme liquidation characteristics, and the 
bears will likely not be satisfied until $48.00 is seen. With the 
communications sector still in the gutter, CMVT has a struggle on 
its hands in order to maintain current price levels, even with 
the Fed likely to cut rates next week. Support is non-existent, 
and the path of least resistance still appears to be lower. Our 
stop loss remains at $58.00.

Next Earnings: 09/03/2001







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