PremierInvestor.net Newsletter Tuesday 07-03-2001 section 1 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/070301_1.asp ================================================================= In section one: Market Wrap: Down, But Not Out! Market Sentiment: Investors Appear Quite Timorous Play-of-the-Day: QLGC - Bearish Sentiment Confirmed Watch List: Still Watching HRB and WHR ----------------------------------------------------------------- U.S. Market Numbers ----------------------------------------------------------------- MARKET WRAP (view in courier font for table alignment) ----------------------------------------------------------------- 7-3-2001 High Low Volume Advance/Decline DJIA 10571.11 - 22.61 10595.13 10531.52 .62 bln 1594/1350 NASDAQ 2140.80 - 7.92 2148.18 2123.75 .88 bln 1604/1846 S&P 100 638.55 - 1.41 639.94 636.22 Totals 3198/3196 S&P 500 1234.45 - 2.27 1236.71 1229.43 RUS 2000 496.83 - 1.56 499.04 495.00 DJ TRANS 2809.37 + 2.87 2817.06 2790.05 VIX 20.95 + .66 21.41 20.84 Put/Call Ratio 0.64 ----------------------------------------------------------------- =========== Market Wrap =========== Down, But Not Out! by Jeff Bailey Today's shortened trading session ahead of the 4th of July holiday held little excitement for traders and the session ended with very little taking place. Two groups of stocks we're monitoring closely traded with mixed results today, but both may still play key role in how the NASDAQ trades in future sessions. One casualty came in the form of Rational Software (RATL) as that company warned late Tuesday that is would miss analysts estimates by a penny and the market punished the stock as it traded lower by 19% to finish the day's trading at 22.20. Volume was brisk in the shortened trading session with 9.2 million shares traded. I still think the software group is showing some signs of recovering as Microsoft (MSFT) continues to hold tough at the 70 level and other stocks like Citrix Systems (CTXS) are also trying to hold near recent highs, but today's action from RATL did set back the GSTI Software Index (GSO.X) by 2.6% and leaves some technology investors wondering if things really are improving in the sector, or was the recent signs of strength in the group simply due to the recent appeals court ruling regarding Microsoft (NASDAQ:MSFT). GSTI Software Index Chart - last eleven months Rational Software (NASDAQ:RATL) accounts for just 1.72% of the GSTI Software Index (GSO.X), but you can see how just one stock giving some bad news can put pressure on the group. The GSO.X is by no means "knocked out," but the tentative technicals and longer-term downward trend undoubtedly has bullish traders walking on egg shells. I think today's "bad news" from RATL probably had some bulls taking profits on stocks in the group considering there was some negative news with RATL. Once the long-term trend is broken to the upside, I'd expect bad news like the group experienced today to have less of an effect as market participants begin to feel that not all bad news is an indication of the sector, but more stock specific. What we'll be doing from here on out is to monitor both trends (down and up) for the sector and also monitor stocks that have been acting strong as well as stocks like RATL that have gotten bad news. Often times all the bad news comes out at the bottom. For now, we will note that RATL traded as low as $12.50 on April 4th and the GSO.X traded as low as 153.54. That low for the GSO.X also came on April 4th! Coincidence? Not if you believe in "sector/stock" theory. Big Guns to be monitoring in Software As of June 15th, the GSO.X comprised over 50 stocks. At that time the following five stocks carried the largest weighting and traders can follow them to also get a good indication of sector strength/weakness. MSFT 9.13%, ORCL 8.56%, VRTS 7.88%, CA 6.59% and SEBL 6.39%. This then leads into today's title of "Down but not out!" If you believe the MARKET is made up of sectors and those sectors are made up of stocks (like the GSO.X is made up of stocks like RATL) then perhaps we will want to be monitoring the technicals and current trading of the Biotechnology Index (BTK.X). Right now, I'd say the BTK.X is still the strongest sector in technology and the broader NASDAQ Composite (COMPX). Biotechnology Index Chart - last ten months Whether you're a "technology trader" or only a "NASDAQ trader" you should be monitoring the Biotechs. The NASDAQ won't move higher or lower without some sector pulling the wagon. By simply monitoring trends we see that the Biotechnology Index (BTK.X) broke a downward trend on April 27th and just recently the upward trend was tested near the 570 level. Notice how the 200-day moving average (longer-term moving average) has come into play in recent sessions and how it certainly looks to be acting like a point of resistance. I don't feel like I'm going to far out on a limb by writing "the NASDAQ goes nowhere without the biotechs." It's my belief that the stronger indexes lead and right now the BTK.X looks to be the strongest index where the bulk of the stocks are listed on the NASDAQ Composite. If the BTK.X can get above the 615 level, then the probabilities of the NASDAQ showing some signs of strength are improved. Notice too how our retracement technique of "fitting" certainly seems to be working here also. By anchoring the retracement bracket at the low of 382 and then "fitting" the 38.2% retracement level at the April 24th pullback at 496 it really seems to have defined a range that the market has been trading. Notice the recent pullback in the BTK.X at 567. Notice the wonderful correlation between the upward trend and 61.8% retracement, which is a result of the fitted bracket. With MACD starting to round out and still above the zero level, this is the group I'm currently looking to for strength in the NASDAQ. Whether you're bullish or bearish on the NASDAQ, you'd better be monitoring this group. If there's one group I currently think that would be capable of pulling the NASDAQ higher, then this is the horse that could pull the wagon. If this horse doesn't move higher, then we'll need to find another candidate. ================ Market Sentiment ================ Investors Appear Quite Timorous by Jeffrey Canavan Investors still look apprehensive about putting any new money into stocks. Our own surveyed revealed that 47.50% of our readers are bullish, 31.25% are neutral, and only 18.75% are bearish. But clicking on a survey and putting hard earned money on the line is two different things. Today's investor apathy, no sector gained or lost more than one percent, can largely be attributed to the holiday-shortened trading session. Traders are more focused on making sure they have the proper food and beverage to party guest ratio, than writing market sentiments...I mean buying or selling stocks. As my esteemed colleague Mr. Utley pointed out yesterday, the VIX is approaching historically low levels. Is it foretelling a market top? Previous VIX readings below 20 were also accompanied by a sharp run up in the broader markets. We haven't had that, so I'm only mildly concerned about a low VIX reading. However, I wouldn't want to see it drift much lower. One oddity in the market sentiment today was the put/call ratio of the Nasdaq-100 dropping to a bearish .15. The ratio had been averaging a reading of .55, so the drop is quite precipitous. It was the result of 37,518 calls being bought today, compared to only 5,762 puts. The shortened trading day has me questioning this data a little bit, but combine this with the VIX, and it might be time to snug up some stops on long positions in technology. I can't be completely bearish on technology with the Nasdaq-100 bullish percent getting ready to go bull confirmed, but until that happens, I remain quick to take any bullish profits. It may take a week or so to see which way this meandering market is going move. ----------------------------------------------------------------- Market Volatility VIX 20.95 VXN 45.14 Put/Call Ratio Total .64 Equity Only .56 OEX .82 QQQ .15 Bullish Percent Data Current Change Status NYSE 42 - Bull Alert NASDAQ-100 50 +16 Bull Alert DOW 44 - 2 Bear Confirmed S&P 500 54 - Bear Alert Readings above 70 are considered overbought, and readings below 30 are considered oversold. Bull Confirmed - Aggressively long Bull Alert - Cautiously long Bull Correction - pause or pullback in upward trend Bear Alert - Take defensive action if long Bear Confirmed - High risk if long, good conditions for shorting Bear Correction - Pause or rebound in downtrend 10-Day Arms Index 1.25 Readings above 1.25 are bullish, and readings below .85 are bearish. These signals don't occur often and tend be early, but when the do, they can signal significant market turning points. Advancers Decliners NYSE 1587 1353 NASDAQ 1597 1850 New Highs New Lows NYSE 94 20 NASDAQ 45 40 Advisory Sentiment Bullish Bearish 48% 30% Commitments Of Traders Report: 06/26/01 Weekly COT report discloses positions held by small specs and commercial traders of index futures contracts at the Chicago Mercantile Exchange and Chicago Board of Trade. Small specs are the general trading public with commercials being financial institutions. Commercials are historically on the correct side of future trend changes while small specs tend to be wrong. S&P 500 -No significant changes in the S&P 500. Institutions remain net bearish, and increased that stance only slightly last week. This should translate into the S&P 500 bouncing between 1200 and 1240 until this number budges one way or another. Commercials Long Short Net % Of OI 6/12/01 353,074 423,257 (70,183) ( 9.04%) 6/19/01 301,376 371,121 (69,745) (10.37%) 6/26/01 307,889 379,955 (72,066) (10.48%) Most bearish reading of the year: (111,956) - 3/6/01 Most bullish reading of the year: ( 41,144) - 5/1/01 Small Traders Long Short Net % of OI 6/12/01 167,720 100,610 67,110 25.01% 6/19/01 128,296 56,038 72,258 39.20% 6/26/01 130,914 56,269 74,645 39.88% Most bearish reading of the year: 36,513 - 5/01/01 Most bullish reading of the year: 91,122 - 3/06/01 NASDAQ-100 -Institutions added more long positions last week than they did short positions. They remain net short, but are slowly getting more bullish. Commercials Long Short Net % of OI 6/12/01 33,586 44,234 (10,648) (13.68%) 6/19/01 23,480 34,097 (10,617) (18.44%) 6/26/01 26,263 35,690 ( 9,427) (15.22%) Most bearish reading of the year: (15,521) - 3/13/01 Most bullish reading of the year: (1,825) - 1/02/01 Small Traders Long Short Net % of OI 6/12/01 18,374 16,264 2,110 6.09% 6/19/01 14,284 8,403 5,881 25.92% 6/26/01 10,519 6,064 4,455 26.86% Most bearish reading of the year: (1,028) - 1/02/01 Most bullish reading of the year: 8,460 - 3/13/01 DOW JONES INDUSTRIAL -This is probably the most surprising data of the week. Institutions have actually turned net bearish on the Dow for the first time since 3/20/01. May that's why the Dow is having trouble getting above 10,600. Commercials Long Short Net % of OI Open Interest 6/12/01 24,724 18,485 6,239 14.4% 37,886 6/19/01 12,346 10,470 1,876 8.2% 22,611 6/26/01 11,371 12,759 (1,388) (5.8%) 23,163 Most bearish reading of the year: (8,322) - 1/16/01 Most bullish reading of the year: 8,925 - 5/22/01 Small Traders Long Short Net %Change 6/12/01 5,332 9,637 (4,305) (28.76%) 6/19/01 3,844 7,555 (3,711) (32.56%) 6/26/01 4,756 6,341 (1,585) (14.28%) Most bearish reading of the year: (7,572) - 5/08/01 Most bullish reading of the year: 1,909 - 1/16/01 ----------------------------------------------------------------- =============== Play-of-the-Day =============== QLogic QLGC $59.11 -$3.42 Stop: $66.00 Original Comments When Selected: 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. In May, 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. For the year, the company earned $1.03 per share on sales of $358 million. For the fiscal first-quarter ending in June, the company is projected to earn 23-cents per share on sales of $95 million. In the year ago quarter, the company earned 21-cents per share on revenue of $77 million. The consensus estimate of analysts for the current fiscal year is for the company to earn $1.05 on sales of $422 million. This gives the shares a P/E of 61. Qlogic shares have been on a roll since the early April low of $17.81. However, the past two days have shown signs of a topping pattern. Each day has produced a failed test of resistance at the 200-day moving average currently at $65.81. After reaching a $66.16 high about midday last Friday, the shares faded badly into the $63.60 close. Monday was more of the same with a midday high of $65.67 slumping into a $62.53 close. The trend of failed highs and tests with lower closes suggests selling sentiment is on the rise. Conservative traders can wait for additional bearish confirmation with a close below $60 on volume in excess of 6.6 million shares traded. If the shares can produce this $60 break we have a bearish price objective in the range of $54 to $47. Updated Comments: We got the break below $60 we had hoped for when the shares closed at $59.11 on Tuesday. This puts us up $3.42 per share thus far on this Bearish selection and reaffirms our Bearish price objective in the range of $54 to $47. The next areas of significant support are at $58.36 and $55. We believe the shares are poised to break the first area but $55 could be more significant, so tighten up your stops should we approach this level. For now we want to give this volatile play plenty of room so we will move our stop to $66.00, which is just above resistance offered by the 200-day moving average of $65.61. Picked on July 2nd at $62.53 Gain Since Picked: $3.42 Earnings Date N/A (Not Confirmed) ========== Watch List ========== HRB - H&R Block Inc. $68.41 +3.86 WHY WE LIKE IT: There is no denying that the trend on HRB has been bullish ever since it took off on Nov. 30th, 2000. While there has been a few bumps in the road it has certainly turned in an enviable performance over the last several months. Bulls definitely have a strong grip on this stock. POTENTIAL TRIGGER EVENT: On Monday the shares spike was too much too chase and we were waiting for a pullback to present a more favorable buying opportunity. Although we received the pullback we were looking for on Tuesday, we are concerned. Volume was higher than we would have preferred. The day before a holiday we would anticipate much lighter than average volume. Instead, we saw 699k shares traded - this is well above the 583k daily average. So we will wait for the first sign of a bullish turn to stake our claim. The shares have support at 65 and a bounce back to 65 before the next leg up would make a good entry point. Split traders should know that HRB has a 2:1 split coming on August 1st which can't hurt investors' enthusiasm for the stock. --- WHR - Whirlpool Corp. $63.98 -0.62 WHY WE LIKE IT: This one stays on our watch list. Tuesday's light pre-holiday trading does not change our outlook. As we said before, this is a real company with real products and real profits. Plus it's up 85% from last October but who's counting? WHR's chart or more specifically its investors make it a little more easy to identify entry and exit points. When reading the chart there is always noise but opportunities exist for traders willing to watch this stock. POTENTIAL TRIGGER EVENT: With the share price building on higher lows from the recent pull back in June the stock is approaching resistance again at the 65.00 - 65.50 level. A solid break above this would be a clear signal for bulls. Look for a speed bump at 67.50 and more resistance at 70. ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. 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PremierInvestor.net Newsletter Tuesday 07-03-2001 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/070301_2.asp ================================================================= In section two: Split Trader New Plays: ICOS - Viagra Competitor Ready For Approval (Bullish) Play Updates: Fuse Still Burning For Bullish Stocks Closed Plays: BMET - Biodegrading Net Bulls New Plays: SFA - Breaking Out Off Of Bottom (Bullish) Play Updates: Give an Inch, Take An Inch Closed Plays: No closed NB plays Stock Bottom / Active Trader New Plays: No new SB/AT play Play Updates: Trading Range Closed Plays: Stopped out of Citrix for a nice gain ================================================================= Split Trader (ST) section ================================================================== ============ ST New Plays ============ ------------------------- New Split Candidate Plays ------------------------- ICOS Corporation ICOS $64.89 +0.64 Stop: $62.00 ICOS has partnered with Eli Lilly to develop Cialis, the first competitor to the hugely successful Viagra. it facilitates blood flow and is being developed as a treatment for both male and female sexual dysfunction. It has completed its clinical trials and has been submitted to the FDA for approval. Cialis should have a warm welcome to the marketplace. The trails showed it to work faster, last longer and have fewer safty concerns than Viagra. Estimates by Gruntal & Co analysts are for the drug to produce sales of $75 million in 2002, $175 million in 2003, $250 million in 2004 and $325 million in 2005. Other drug candidates include Pafase for severe sepsis, a potentially life-threatening bacterial infection, being developed with Japan's Suntory. The company has also teamed with Texas Biotechnology to develop therapies for cardiovascular conditions. Microsoft chairman and ICOS director Bill Gates owns about 10% of the firm, while George Rathmann, chairman of genome database developer Hyseq, owns about 5%. Last year the firm lost $1.33 per share. The consensus estimates of analysts are for the company to lose $1.79 in 2001 on sales of $58 million and $1.70 per share on $90 million in 2002. For the earnings announcement on July 26th, analysts forecast the company will announce a loss of 43-cents for the quarter ending in June. However it bears noting that the company has topped analysts' estimates in each of the last four consecutive quarters. ICOS shares have plenty of bullish momentum. Since closing at $41.88 on April 6th they have risen 55-percent into Tuesday's $64.89 close. With approval of a blockbuster drug in near future and a solid earnings report in the imminent future we think the shares are highly likely to top the 52-week high of $70.10 set on June 5th. Tuesday's pre-holiday move on solid volume suggests the shares are set to begin the next leg up. Support from a down move exists between $64.19 and $63.00. Picked on July 3rd at $64.89 Earnings Date 7/26 (Not Confirmed) =============== ST Play Updates =============== ----------------------- Split Candidate Updates ----------------------- Alliant Techsystems ATK $87.01 -0.20 Stop: $84.00 Needing to close the gap that formed on Friday, ATK has pulled back on light volume. The lack of volume suggests the previous two days action is an intermittent blip before ATK moves higher. Today's low also managed to hold above yesterday's, a short-term show of strength, and support still looks strong at $85. Curious George's defense friendly policy still makes us bullish on this stock. Picked on June 29th at $89.90 Gain since picked: -2.89 Earnings Date N/A (Not Confirmed) === The BISYS Group BSYS $61.00 +.34 Stop: $57.50 Two out of three aint bad. Since being picked on 6/28/01, BSYS has been higher two of the past three days. Today's price action pushed the stock past a group of relative highs are $60.50, on volume that was better than the average of the last 60 days. Not bad considering the trading day was shortened by 3 hours. Now at a 52-week high, BSYS is free to roam higher. Picked on June 28th at $59.91 Gain since picked: +1.09 Earnings Date N/A (Not Confirmed) === ITT Educational Services ESI $43.90 +.65 Stop: $41.88 Educational stocks still look like a smart play, even though ESI is only 20 cents higher from where we picked it. Yesterday saw some volatile price action, as ESI broke out to a new high, only to later test the consolidation low, and settle somewhere in the middle. Shares moved higher today, and closer to breaking out of this pesky trading range. As long as the breakaway gap remains open, we remain bullish on this stock. Picked on June 12th at $43.70 Gain since picked: +.20 Earnings Date N/A (Not Confirmed) =============== ST Closed Plays =============== ---------------------------- Closed Split Candidate Plays ---------------------------- Biomet BMET $46.25 -0.60 Stop: $46.50 Shares of Biomet lost steam, and hit our stop at $46.50. The longer-term update remains in place, but that's more heat than we are willing to take. Picked on June 21st at $48.79 Gain since picked: -2.54 Earnings Date N/A (Not Confirmed) ================================================================== Net Bulls (NB) section ================================================================== ============ NB New Plays ============ -------------- New Long Plays -------------- Scientific-Atlantic SFA $44.45 +2.52 Stop: $41.50 In this tough business climate, there are few companies that are beating analyst forecasts and raising forward guidance. When you find one, it is a buy on any dip. One such company is Scientific- Atlantic. The firm makes set-top boxes that link TV's to cable systems. Profit hungry cable operators are finding that their customers are also hungry for the expanded product offerings these digital boxes make possible such as pay-per-view, Internet access and e-mail. So, despite the weakening economy spending on this technology is skyrocketing. SFA has sold over 6 million of its Explorer set-top boxes. AOL-Time Warner and its affiliates account for 23-percent of sales. The impact on their bottom line has been impressive. For its fiscal third-quarter ended March 30th earnings doubled to $76.2 million (or 46-cents per share) on a 51-percent pop in revenue to $663.7 million. This beat analysts' forecast by 4-cents. The company also increased its guidance from $1.64 per share to $1.72 per share in the fiscal year ending in June. In addition, after selling 1.4 million boxes in the third-quarter they raised their 2001 fiscal year estimate by 200,000 to 4.9 million. And although they see the rate of growth slowing in 2002, they still anticipate double-digit revenue growth. While the lack-of-visibility mantra has been a standard refrain in most conference calls this earnings season, it was conspicuously absent from Scientific-Atlantic's. The company has an investor-reassuring backlog of $1 billion. SHA shares took a beating in early June dropping from $57.10 on June 7th to a $40.90 close one week later. The culprit was concerns that Motorola is getting a step on the company both in technology and in overseas sales. Whereas these are valid concerns, we believe they are fully expressed in the stock price. And given the company's strong fundamentals we view this as a buying opportunity. Company shares have an estimated 2001 P/E of 26 and 22 for 2002 against the industry average P/E of 95. The company has a strong balance sheet with no long-term debt; $586 million in cash or equivalents and its gross margin have increased 5 consecutive years. Coupled with anticipated annual sales growth in excess of 50-percent, the shares are clearly undervalued. After the early June slide the shares entered congestion trading within a tight range of approximately $40 to $43.29. On Tuesday, the shares broke from this basing pattern with a $2.52 gain to $44.45. Normally we would have preferred to see this break confirmed by a spike in volume. Although we did not get that spike, volume during the half-day pre-holiday session was solid at 1.8 million. The daily average volume is 2.5 million. Strong down side support is nearby at $42.50, weak upside resistance at $46.21 and more significant resistance in the $51.75 to $52.25 range. This presents a Bullish opportunity with minimal bearish risk. Picked on July 3rd at $44.45 Earnings Date 7/19 (Confirmed) =============== NB Play Updates =============== ----------------------- NB Bullish Play Updates ----------------------- Yahoo! Inc. YHOO $19.81 -0.23 Stop: $17.25 Football and not the stock market is normally thought of as a game of inches. But Yahoo shares must be thinking of trying out for the local team. They have been inching towards a test of resistance in the range of $20 to $20.50, but yesterday they went back one inch. Over the last 5-trading sessions, the widest spread between the session highs and lows was $1.30 last Wednesday. This has been one slow motion bull run. Our recommendation still stands - conservative traders should wait for a break over $21 before taking a position. This breakout would confirm bullish momentum and place resistance levels at $25.94 and $30 square in our sights. If this break does not occur, the shares are liable for a pullback and in that case weak downside support is at the 50-day moving average of $19.14 and stronger support at $17.50. Picked on June 25th at $19.77 Gain since picked 0.22 Earnings Date 7/11 (Not Confirmed) === Applied Materials AMAT $50.23 +0.27 Stop: $48.10 Applied Materials shares recovered from the anomalous drop experienced when tech gremlins laid waste to the Nasdaq's computer systems. There were few lessons to be gleaned from Tuesday's trading. The session was flat as traders headed out the door of the shortened pre-holiday session. The good news is that AMAT shares managed to close above the significant $50 resistance level, the bad news is that it happened on next to nothing volume of 6.6 million shares traded. A normal day for AMAT is 17 million shares. Still, any gain is good and those that move above resistance are doubly so. We hope that as the traders and volume return to the market following the holiday, they continue to put some distance between the current price and $50. We are maintaining our stop at $48.10. Picked on June 22nd at $49.05 Gain since picked 1.18 Earnings Date 8/14 (Not Confirmed) ----------------------- NB Bearish Play Updates ----------------------- Computer Sciences Corporation CSC $34.26 -1.16 Stop: $36.00 The bears grabbed the upper hand on Tuesday. Although the shares remain in congestion they backed off of resistance at $35. Our outlook remains the same and we hope this is the resumption of the earlier strong down trend. We will watch for a close above $35.25 on strong volume to indicate the bulls are gaining the upper hand, whereas a close below $33.15 would suggest the bears are in full control. We will keep our stop at $36.00. Picked on June 21st at $35.00 Gain since picked: 0.74 Earnings Date N/A (Not Confirmed) === Automatic Data Processing, Inc. ADP $51.81 +0.15 Stop: $52.90 Longs will not receive much encouragement from Tuesday's slight gain. The shares open of $52.60 was also the session high. The shares then spent the remainder of the session giving back the momentary 84-cent gain. Our outlook remains the same. After completing a double top, ADP shares are still consolidating around $51.50. If that level is lost, this stock could go into freefall. Any pullbacks should meet stiff resistance around $52.75. Picked on June 29th at $49.70 Gain Since Picked (1.11) Earnings Date 8/13 (Not Confirmed) ================================================================== Stock Bottom / Active Trader (AT) section ================================================================== =============== AT Play Updates =============== ----------------- Long Play Updates ----------------- BEA Systems BEAS $30.01 -1.35 Stop: $28.25 Home, home on the range seems to be the theme for BEA Systems, since it has been bouncing around in a trading range. The good news is that near term support looks good at $30. The bad news is that resistance still looms overhead at $32. The longer the consolidation, the bigger the move. Picked on June 17th at $30.80 Gain since picked: -0.79 Earnings Date N/A (Not Confirmed) === Corning GLW $17.00 +0.20 Stop: $14.50 Corning closed up 20 cents, and right at today's high. It failed to take out yesterday's high, but is still up $1.20 since we picked it. Looming overhead at $19.44 is the 50-day moving average, but another $2.40 cent gain would gladly be accepted. Picked on June 28th at $15.80 Gain since picked: +1.20 Earnings Date N/A (Not Confirmed) === Intuitive Surgical ISRG $13.77 +.47 Stop: $12.90 ISRG has moved ahead with surgical precision, up 24% since we picked it on June 17th. Today's action bumped it up 47 cents, and closer to taking out Friday's volatile high of $14.78. The fact that the stock hasn't broken down over the past three days has me thinking there might be some more upside potential. Our stop still sits close by to lock in our profits. Picked on June 17th at $11.05 Gain since picked: +2.72 Earnings Date N/A (Not Confirmed) === Medimmune Inc. MEDI $46.57 +.52 Stop: $42.50 Medimmune hasn't been immune to a minor setback in its current advance. The reason for that setback is the meddlesome 200-day moving average that has been holding prices back. In order bust through that line, volume is going to have to pick up, but overall the up trend still looks healthy. Picked on June 21st at $47.48 Gain since picked: -0.91 Earnings Date N/A (Not Confirmed) === Neurocrine Bioscience NBIX $38.90 +.25 Stop: $36.00 After exploding past resistance on June 29th, NBIX has pulled back the past two days. After gaining $3.50 in three days, it could use a bit of a break. As long as the stock stays above $37.79, Friday's low, I'm not overly worried about a pullback, because this stock certainly looks like it wants to move higher. Picked on June 29th at $39.99 Gain since picked: -1.09 Earnings Date N/A (Not Confirmed) === Schuler Homes, Inc. SHLR $14.10 +0.06 Stop: $11.94 On Friday SHLR traded in a $3 range. Quite large since its a $14 dollar stock. After the dust settled, SHLR has continued to move higher, and should continue to do so as long as the housing market remains strong. Picked on June 25th at $13.57 Gain since picked: +0.53 Earnings Date N/A (Not Confirmed) === Tenet Healthcare THC $50.68 -0.02 Stop: $49.75 THC still remains in a strong up trend, but has succumbed to a little profit taking this week. As long as the stock remains above our stop at $49.75, all should be well. Picked on June 17th at $51.09 Gain since picked: -0.41 Earnings Date N/A (Not Confirmed) === TJX Companies TJX $32.93 +0.44 Stop: $31.70 After peaking on June 21st, TJX has slowly been working its way higher. The last two days have done a lot to help that. With the trend now looking higher, this stock needs to exceed the previous high at $34.26. Picked on June 13th at $34.25 Gain since picked: -1.32 Earnings Date N/A (Not Confirmed) === ViroPharma VPHM $31.20 -0.30 Stop: $27.50 It has to be a bad tic. My chart is showing a high of $40 and a low of $29 on Friday. Regardless, VPHM has broken its April downtrend, closing above $22 would help to solidify the uptrend. Picked on June 22nd at $29.94 Gain since picked: +1.26 Earnings Date N/A (Not Confirmed) ------------------ Short Play Updates ------------------ See Play-Of-The Day QLogic QLGC in section 1 =============== AT Closed Plays =============== ---------------- Closed Long Play ---------------- Citrix Systems CTXS $33.61 -1.35 Stop: $33.20 It was a nice run while it lasted. We were finally stopped out of our Citrix position for 3.47 gain. After 7 straight up days, CTXS was due to pullback. Unfortunately it pulled back too far and hit our stop. Picked on June 20th at $30.14 Gain since picked: +3.47 Earnings Date N/A (Not Confirmed) ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. 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