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Daily Newsletter, Tuesday, 07/17/2001

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PremierInvestor.net Newsletter                 Tuesday 07-17-2001
                                                   section 1 of 2
Copyright  2001, All rights reserved.
Redistribution in any form is strictly prohibited.

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In section one:

Market Wrap: Applied uncertain, Intel beats and KLA-Tencor confirms
Market Sentiment: Yearning For Earnings
Play-of-the-Day: Brocade - BRCD (Bearish)
Watch List: Keep Your Eye on Earnings!

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U.S. Market Numbers
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MARKET WRAP  (view in courier font for table alignment)
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       7-17-2001          High      Low     Volume Advance/Decline
DJIA    10606.39 +134.27 10628.48 10438.66 1.22 bln   1841/1204	
NASDAQ   2067.32 + 38.20  2067.44  2006.80 1.66 bln   2125/1593
S&P 100   626.91 +  6.31   627.62   616.45   Totals   3966/2797
S&P 500  1214.44 + 11.99  1215.36  1196.14             
RUS 2000  490.57 +  6.77   490.57   481.65 
DJ TRANS 3007.08 + 44.29  3007.81  2957.78 
VIX        25.36 +  0.05    26.87    25.12 
Put/Call Ratio      0.63
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===========
Market Wrap
===========

Applied uncertain, Intel beats and KLA-Tencor confirms by Jeff Bailey

Just wait 24-hours and things will change.  That's what seemed to 
have happened today, just 24-hours after semiconductor equipment 
maker Applied Materials (AMAT) had warned that visibility for the 
future was unclear.

This morning, the PHLX Semiconductor Index ($SOX.X) was under 
selling pressure early and was trading down nearly 3% to 552 when 
KLA-Tencor (KLAC) reaffirmed its guidance and financial targets 
at the SemiCon West trade show in San Francisco.  That news had 
semiconductor stocks reversing losses as the PHLX Semiconductor 
Index ($SOX) ended the session up 4.3% to 582.  Shares of KLA-
Tencor (KLAC) gained 5.4% by session's end to close at $49.20, 
but yesterday's gains were not enough to make back Monday's 
losses.

Semiconductor Index Chart - last ten months



There's no such thing as certainty in the market, but if you're 
looking for uncertainty and a whipsaw ride then the Semiconductor 
Index (SOX.X) is the place for speculators and high risk/reward 
trading.  The patter of lower high and lower lows since the 
beginning of the summer give some hint that the longer-term 
outlook for the group remains suspect.  We saw this yesterday 
with Applied Materials (NASDAQ:AMAT) saying things could improve 
as well as deteriorate.  Today, KLA-Tencor (NASDAQ:KLAC) the 
worlds leading supplier of process control and yield management 
solutions for the semiconductor industry affirmed its guidance 
and said it expected to meet earnings estimates of 25-27 cent a 
share on sales of $430-450 million.  This was welcomed news for 
the group and had the SOX reversing earlier losses of 2% to close 
just above the 50% retracement bracket.

After the closing bell, the long awaited news from semiconductor 
chipmaker Intel (INTC) hit the wires.  While the company reported 
earnings that showed a 76% decline in second-quarter profits on 
lower revenues versus a year ago, the reported earnings of 12 
cents a share did beat a previously lower analyst's estimate of 
10 cents.  During yesterday's trading, shares of Intel traded as 
low as $28.08 only to recover and finish the regular session at 
29.90.  Once earnings had been announced, trading was brisk, but 
showed signs of uncertainty.  Early after-hours trading took 
place as high as 30.70, but as I write these comments the stock 
has been slipping to the 29.13 level.

There were other stocks that reported earnings yesterday and much 
of those earnings reported outside the technology sector were 
perhaps not as bad as many had expected.  Dow component and 
heavy-equipment maker Caterpillar (CAT) jumped more than 6% 
during today's trading session to close at 53.55 after the 
company reported earnings of 78 cents a share, handily beating 
Wall Street's consensus estimates of 71 cents a share.

Paper products giant and another Dow component, International 
Paper (IP), rose 2% to 39 after the company reported earnings of 
13 cents a share.  That was good enough to beat lowered estimates 
by Wall Street of 6 cents a share.  International Paper said 
earnings were hurt by weak pulp and paper markets and its export 
competitiveness had decreased as a result of the strong U.S. 
dollar.

Morgan Stanley Cyclical Index - last eleven months



I continue to monitor and even trade many of the deep cyclical 
stocks on the bullish side.  Not because I think I will get rich 
overnight, but it sure looks to be like smart money is committed 
to this group.  Today I laughed along with Ms. Garzarelli when 
she said the bull market began back in October.  I think Ms. 
Garzarelli as well as our subscribers knows that the deep 
cyclicals lead in an economic cycle.  I also believe that 
institutions put their capital where risk/reward is most 
favorable.  While there may not be 100% reward in the deep 
cyclicals, there are probably a lot of institutions out there 
that perceive this group as being "less risky."  

Once visibility becomes more certain in the technology sector, 
those stocks might begin performing bullish on a more consistent 
basis.

Another Dow Industrials component, Johnson and Johnson (JNJ) 
produced a second quarter profit of 51 cents a share, but missed 
the average estimate of 53 cents.  That didn't keep the stock 
from setting a 52-week high and finishing the session up 2.19% to 
54.91.  While earnings fell short of consensus, today's reported 
earnings still managed to show growth of 16% when compared to 
year ago earnings of 44 cents.

One thing I think traders and investors can start to look for is 
some stability in earnings from some of the larger deep cyclicals 
and even some of the consumer products stocks.  The market sure 
seems more willing to buy and stay committed to some of the 
bigger named cyclicals almost as if it is expecting an economic 
turnaround at some point.  On the other hand, technology remains 
somewhat skeptical, as earnings visibility appears to be 
uncertain.  Institutional money appears to continually gravitate 
toward and accept the lesser potential reward of the deep 
cyclicals, but at the same time trying to sidestep the continued 
potholes that seems to present itself in the technology sectors.


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

Yearning For Earnings

Of the 52 companies that reported earnings during the day, 34 
beat estimates, 9 met, and 9 missed.  Of the nine companies that 
came up short, only two finished the day in negative territory.  
Overall the market responded well to earnings, but tomorrow is a 
new day.  

Intel was able to beat expectations by 2 cents a share, but the 
stock is trading 75 cents lower in after hours trading.  The 
details from the conference call aren't in yet, but profits fell 
by 76 percent, and it looks Intel was only able to post better 
than expected earnings by excessive expense reduction.  Gross 
margins are also expected to be lower in the 3rd quarter.  

Veritas posted a "pro forma" profit of 18 cents a share, which 
met analysts' expectations, but take away the creative 
accounting and it was a 32 cents a share loss.  The software 
maker also lowered its revenue growth by 30% for the rest of the 
year.  The stock is getting pummeled in after hours, down $7.

Apple beat estimates, but cautioned that they will fall short of 
full-year estimates.  Traders didn't like the news, and are 
making applesauce out of the stock, down $2.35.

So we have two tech companies that lowered future guidance, and 
one that gives a mixed outlook.  Theoretically that should lead 
to a lower open tomorrow.

Sentiment indicators are neutral, with a slightly bias to the 
downside.  While still neutral, advisory sentiment is starting to 
creep towards overly bullish levels.  The percent of bullish 
advisors has moved up 3% over the past three weeks to 51%. The 
net percentage now sits at 26%, and has jumped 8% over the same 
period.  

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Market Volatility  
VIX   25.36
VXN   54.84

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          Put/Call Ratio  Call Volume   Put Volume
Total           .63        721,413       451,645
Equity Only     .54        633,524       341,453
OEX             .83         23,992        19,811
QQQ             .84         41,689        34,902

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Bullish Percent Data

           Current   Change   Status
NYSE          36       -      Bear Confirmed
NASDAQ-100    26       -      Bear Confirmed
DOW           30      -2      Bear Confirmed
S&P 500       50       -      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

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10-Day Arms Index  1.20  

Extreme readings above 1.5 are bullish, and readings below .85 
are bearish.  These signals don't occur often and tend be early, 
but when the do, they can signal significant market turning 
points.

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        Advancers     Decliners
NYSE      1784           1259
NASDAQ    1925           1682

        New Highs      New Lows
NYSE       86             56
NASDAQ     92             82

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Advisory Sentiment 

Bullish  Bearish  Correction   Net 
  51%     25.0%      24.0%    26.0%

A bearish reading of 25% to 30%, combined with a bullish reading 
greater than 55% is typically considered bearish by contrairians.  
A net percentage greater than 30% is also viewed as bearish. 

-----------------------------------------------------------------

Commitments Of Traders Report: 07/03/01
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
Commercial traders have stopped their bearish trend, but no enough 
to signal any meaningful reversals.

Commercials   Long      Short      Net     % Of OI 
6/26/01      307,889   379,955   (72,066)   (10.48%)
7/03/01      316,543   395,410   (78,867)   (11.08%)
7/10/01      309,374   385,178   (75,804)   (10.91%)

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
6/26/01      130,914     56,269   74,645     39.88%
7/03/01      133,098     54,865   78,233     41.62%
7/10/01      135,587     59,889   75,698     38.72%

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 have decreased their net bearish position for seven 
straight weeks, and small traders are about to turn net bearish.  
The overall picture is still net bearish, but things are looking 
up.

Commercials   Long      Short      Net     % of OI 
6/26/01       26,263     35,690   ( 9,427)  (15.22%)
7/03/01       26,544     34,880   ( 8,336)  (13.57%)
7/10/01       26,688     34,640   ( 7,952)  (12.97%)

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
6/26/01       10,519     6,064    4,455      26.86%
7/03/01       10,443     7,063    3,380      19.31%
7/10/01        9,073     7,486    1,587       9.58%

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
Institutions have quickly reversed their position back to net 
bullish.  I would like to see this trend persist for a few more 
weeks before I buy it.

Commercials   Long      Short      Net     % of OI
6/26/01       11,371    12,759   (1,388)    (5.8%)
7/03/01       12,761    14,623   (1,862)    (6.8%)
7/10/01       13,743    12,999      744      2.8%

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     % of OI
6/26/01        4,756     6,341    (1,585)   (14.28%)
7/03/01        4,708     5,715    (1,007)   ( 9.66%)
7/10/01        5,048     7,835    (2,787)   (21.63%)

Most bearish reading of the year:  (7,572) - 5/08/01
Most bullish reading of the year:   1,909  - 1/16/01
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===============
Play-of-the-Day
===============

Brocade - BRCD Closed:$37.10 Change:+3.04 Stop:$39.00 New!

Original Comments When Selected on July 16th: 

Company Description:
Brocade Communications Systems, Inc. provides the infrastructure 
equipment and software for connecting multiple data storage 
devices in a storage area network (SAN).  The SAN model has 
higher reliability because data can be redundantly stored on 
multiple devices and can easily be expanded by adding addition 
storage device to the network. The company sells through OEM 
partners, systems integrators, resellers and service providers.

Fundamentals:
In March the economic blues caused the company to reduce 2001 
earnings and revenue guidance.  Analysts' forecast the company 
will earn 29-cents per share on revenue of $524 million.  This 
is flat against last year's earnings of 28-cents on revenue of 
$535 million.  This gives the shares a current P/E too high for 
nervous investors at 121 and a forward one of 117.  The industry 
average P/E is 110.

Why We Like It:
In fiscal 2000, 49-percent of total revenue for Brocade came from 
Compaq Computers and EMC Corporation.  With each of these 
companies issuing earning warnings citing global weakness in 
corporate spending it is difficult to see how Brocade will 
prosper.  Also problematic is a recent Merrill Lynch survey of IT 
executives.  The survey said that 72-percent of the executives see 
tech spending as flat in the 2nd half of 2001 and only 18-percent 
seeing an increase in spending.  All in all, these indications 
bode poorly for high-multiple growth stocks like Brocade.  

After bouncing off of $30 support the shares are now retracing off 
of $37 resistance.  In each of the last two trading sessions, the 
bulls have been able to manufacture a test of $37 only to be 
pushed back by the bears.  Friday saw a $37.31 high turn into a 
$35.84 close and a 14-cent loss.  On Monday, the test was slightly 
lower at $37.14 and the close much lower at $34.06 and a $1.88 
loss for the day.  With bearish sentiment on the rise the next 
test should be of support at $30.  If the shares break through 
this level the next areas of support are at $25 and $20.  We will 
start this Bearish play with a stop at just above resistance at 
$37.50.

Updated Comments:
A boost of optimism in the market today had this play narrowly 
missing our stop of $37.50.  The storage sector was trading with 
bullish enthusiasm.  However in after hours trading, weak numbers 
from Veritas (VRTS) sent BRCD heading in our favor to as low as 
$35.56.  We're going to move our stop up to $39 to avoid getting 
dropped out of the game prematurely, but we're anticipating a nice 
drop in BRCD shares tomorrow; more aggressive traders may want to 
adjust stops to $41 depending on the level of risk you're 
willing to take.  New entrants to this play should pass on the 
anticipated opening dip and wait for a bargain hunter's rise to 
present a better entry point.  Support exists at $32.73 and the 
before mentioned $30.

Picked on July 16 at   $34.06
Gain/loss since picked: -3.04
Earnings Date            8/14 (Not Confirmed)





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

Altera Corp - ALTR - close: 30.64 change: +1.15

WHY WE LIKE IT: Altera produces programmable logic devices or PLDs. 
This is part of the semiconductor industry, which was one of the 
many sectors that rallied today (SOX $582.27 +24.20). If the chips 
are coming back then ALTR could be one to watch.  We watch-listed 
ALTR back on July 11th, 2001.

POTENTIAL TRIGGER EVENT: Shares of ALTR have been stuck in a wide 
range for months. However, the stock has been creating a very long, 
drawn out pennant formation with lower highs and higher lows (since 
about early April).  After we put ALTR on the Watch List last 
Wednesday, shares gapped up the next day and closed at 32.88 off 
its high for the day of 33.59.  That was quite a jump from our 
trigger of a close over $30.  Since then shares have come back to
fill the gap and now it appears buyers might be stepping in again.
Late day buying pushed the stock to close near its high at 30.64
on Tuesday.  We like ALTR and it should probably be on the play
list.  However, earnings are next Monday, July 23rd.    Aggressive
traders can follow this one on their own.  Resistance is between
33.60 and 35.  




---

Merck Co Inc - MRK - close: 64.48 change: +1.50

WHY WE LIKE IT:  We like it only if you're a VERY short-term
trader.  You should also consider this one if you can handle 
the risk of holding a short-term trade over an earnings report,
which is something we rarely do.  However, if you think drugs
are oversold and due for a bounce then read on.  MRK was putting
in 52-week lows just a couple of days ago but it may have found
a bottom.  Bulls might be more attracted to MRK now that PFE 
and JNJ have announced their earnings and profits were up for
both companies.  Since MRK is one of the biggest drug companies
out there, expectation could be building and since the stock
is so beat up we could see significant upside surprises.

POTENTIAL TRIGGER EVENT:  Again, we repeat that normally we
do not, will not hold over an earnings report except for rare
circumstances.  We are watch-listing this strategy instead of
making it a play to reiterate our caution.  Now, if you're 
looking for a trigger point a close over $65 should do the
trick.  The stock has built several days of resistance at $65
and once shares are over it the price could see $70.  Look for
MRK's earnings announcement on Friday morning before the bell.




---

Procter & Gamble - PG - close: 69.93 change: +0.78

WHY WE LIKE IT:  A.G. Lafley, president of PG, probably hoped it
was a positive analyst meeting.  A month ago, Lafley told analysts 
that he was confident that PG would meet its commitments and do 
what it needed to grow in the future.  Investors might have 
panicked when word got out that the restructuring charge was to 
exceed $1.2 billion in the fourth quarter thus forcing PG to 
expect a loss.  Shares fell sharply on June 15th but quickly  
found a bottom near $62 the next day.  Once investors and analysts 
had time to digest the Fiscal 2002 Outlook and Growth plan that
Lafley discussed their fears appeared to be eased.  Buyers have
been steadily eating up the stock and the gains are accelerating.

POTENTIAL TRIGGER EVENT:  Shares of PG spent two or three days
fighting with its 200-dma but Tuesday marks the second day in 
a row that it has closed above it.  Mild support should be found
in the 68.00 - 69.00 area.  Our potential trigger would be a 
close over $70.  Earnings are not expected until August 7th
and the next level of steep resistance is not until $76.




---

Gemstar-TV Guide Intl - GMST - close: 49.83 change: +2.21

WHY WE LIKE IT:  Summertime may be full of reruns but GMST is
making a bullish run despite the season.  After a discouraging
fall from $55 to $20 (the low was April 3rd), GMST had a quick
recovery but found itself range-bound between 35.00 and 45.00.
$45 had been the key resistance to break through and the stock
did so on July 12th.  Directly above it was the 200-dma and 
two days later GMST tackled that obstacle as well.

POTENTIAL TRIGGER EVENT:  Breaking out and closing over the 
200-dma is great news.  Our trigger point now would be a close
over resistance at $50.  Once over $50 shares could appreciate
to $55, the next level of resistance.  We are concerned that
the stock might be overbought after the steep $5 move in the
last few days.  We hope the strong volume behind the rally
will continue to fuel the move even further.  Earnings are 
not expected until the middle of August.




---

Taro Pharmaceucticals - TARO - close: 84.50 change: +6.95

WHY WE LIKE IT: TARO is another returning stock from the July 11th
Watch List.  Overall TARO investors have plenty to be thankful for
as the stock is up big over the last several months.  Shares saw a
big move today as fellow drug companies PFE and JNJ both announced
earnings with rising profits for the quarter. Currently, TARO has a 
2:1 stock split payable on July 26th, which just so happens to be 
the same day they are expected to announce earnings. This double- 
whammy could continue to spur excite for investors up to the 26th. 

POTENTIAL TRIGGER EVENT:  Ultimate resistance is at $90 where the 
stock finally ran out of steam near the end of June.  Since then
shares have pulled back to establish new support at $75 and $80.
It has also developed another level of resistance that can produce
a short-term trigger for active traders.  If shares close over $85
there is a good chance the stock will continue to appreciate to 
$90.  More conservative traders could wait for a close over $90,
trading the $5 appreciation for a more defined breakout.  Whatever
you do, we still recommend caution over the July 26th earnings 
and 2:1 split payable date.  The stock could be victim of a "sell
the news" affect.




---

Electronic Arts - ERTS - close: 56.69 change: -0.76

WHY WE LIKE IT:  A recent play on PremierInvestor.net, ERTS still
has potential.  The stock is in a growing sector as the video game
boom is not expected to end for a long time.

POTENTIAL TRIGGER EVENT:  We're still looking to go long ERTS
but we want to be choosy in our entry point.  Look for a dip to 
54.00 or 55.00 (and a bounce) or a close, on good volume, over
$59.  Move conservative traders could wait for a close over $60.
Look for earnings on July 26th.




---

Quaker Oats Co. - OAT - close: 88.59 change: -0.41

WHY WE LIKE IT:  Who doesn't like hominy grits, cornmeal, and
hot cereal?  Well, okay, we're not big on grits but folks in
the South say they're not bad.  Evidently, investors don't 
appear to "hot" on Quaker Oats lately.  Considering that they are
in a very competitive packaged food industry its no wonder that
investors and fund managers were bullish when PepsiCo offer a
$13 billion merger with Quaker.  Unfortunately for investors,
the FTC has delayed the deal that was expected to close back on
June 30th, 2001.  The latest news shows that the FTC is likely
to have PepsiCo divest its All Sport drink line before they 
acquire Quaker's Gatorade division.

POTENTIAL TRIGGER EVENT:  About half of Quaker's revenues come
from their cereal division who's growth rate has almost come
to a complete halt.  Earnings are expected on July 19th and
if the company reports negatively then shares could fall 
despite the deal with PepsiCo.  Speaking of which, the longer
this merger is delayed the more nervous investors are going to
get.  This is one time where an aggressive investor might 
consider holding a position over earnings but since we are 
discussing a short play (and your risk is technically infinite)
we'd advise against it and wait for the report on the July 19th.
A close below $88 would be the trigger point.





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Do not duplicate or redistribute in any form.


PremierInvestor.net Newsletter                    Monday 07-17-001
                                                    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/425_2.asp
=================================================================

In section two:

Split Trader
  New Plays: NVR Inc - NVR
  Play Updates: ATK, CERS, JCI
  Closed Plays: Cabletron - CS

Net Bulls
  New Plays: Take-Two Inter. Soft. - TTWO (Bullish)
  Bullish Play Updates: BORL, PCLN
  Bearish Play Updates: Brocade - BRCD
  Closed Plays: IBM, ERTS

Stock Bottom / Active Trader
  New Plays: No new SB play
  Play Update: LH, PATH, RAIL, SGU, THC  
  Closed Plays: Nasdaq-100 Series Trust - QQQ


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

============
ST New Plays
============

  -------------------------
  New Split Candidate Plays
  -------------------------

NVR Inc - NVR Close:$166.30 Change:+3.39 Stop:$157.00

Company Description:
The McLean, Virginia-based firm builds and markets single-family 
homes, townhomes, and condominiums and provides mortgage-banking 
services.  NVR operates in 10 US states building homes under three 
trade names: Ryan Homes, NVHomes, and Fox Ridge Homes.  Almost one-
third of sales come from the Baltimore and Washington DC areas.  
It's NVR Mortgage Finance subsidiary offers mortgage loans for NVR 
customers only. To control capital risk, NVR buys purchase options 
on finished building lots and finds new-home buyers before it buys 
the lot.  During the first three months of the year, the company 
bought approximately 849,000 of its 8.14 million shares and intends 
to purchase additional shares in accordance with its stock repurchase
program. 

Fundamentals:
In April, NVR said that it expects second-quarter net income to beat 
the year ago period by 30-percent.  It also projected full-year 2001 
income to increase 25-percent from 2000.  The analysts' consensus 
estimates are for the company to earn $4.99 per share for the 
second-quarter that ended in June, $20.27 for the 2001 fiscal year 
and $22.53 in 2002.  Last year the company earned $14.57. .  Next 
year, analysts expect the company to earn $22.35 per share.  Company 
shares have a current P/E of 11 and a forward 2001 P/E of 8.  The 
industry average P/E is 12.  The company has a low debt to equity 
ratio of 0.78 when compared to the 1.53 industry average.  Other 
favorable fundamental industry comparisons are a Return on Asset 
ratio of 20.1-percent (industry 6-percent) and net profit margin of
 7.51-percent (industry 5.03-percent).      

Why We Like It:
Although this is a pricey stock, on a relative valuation basis it is 
a bargain against its competitors.  And the company is buying back 
gobs of its stocks, which ought to make those valuations look even 
better as the year goes on.  Despite the softening economy, unit 
sales in the first quarter were down only 1.3-percent and the firm 
was able to pass along a 7.5-percent rise in average selling price.  
On a fundamentals basis this Rolls-Royce stock is firing on all 
cylinders.  On a technical basis, the shares are also strong.  After 
breaking through support at $160 on Friday, the shares backed up 
slightly on Monday on low volume.  On Tuesday, a strong day and a 
spike in volume suggest the shares are ready to begin the next leg 
up.  The resistance levels are at even increments at $170, $175, 
$180, and $200.  We do not see $200 as an unreasonable target, as 
the shares are going well and should receive a boost into the 
company's earnings announcement.  The date of that announcement has 
not yet been released.  

Picked on July 17th at $166.30
Earnings Date             N/A (Not Confirmed)





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

  -----------------------
  Split Candidate Updates
  -----------------------

Alliant Techsystems ATK Close:$92.74 Gain:+0.55 Stop:$90.00

The moves haven't been explosive, but Alliant continues to move higher.  
The 50-day moving average looms overhead, but once that is cleared, ATK 
is free to run to 100.

Picked on July 12th at $89.90
Gain since picked:      +2.84
Earnings Date           8/9/01




===

Cerus Corporation Close:$70.35 Gain:+4.50  Stop:$65.00

Cerus looked in trouble on Monday, but today's $4.50 gain helped to 
change that.  On Monday the company reported that their European Phase 
III trial of the INTERCEPT Platelet System went well.  The incidents of 
acute reactions were low, with low incident of refractoriness. I have 
absolutely no idea what that means, but apparently it's good.

Picked on July 13th at  $69.25
Gain since picked:       +1.10
Earnings Date           7/24/01




===

Johnson Controls Close:$81.55 Gain:+1.55  Stop:$77.50

Johnson Controls set another 52-week high today, and gained $1.55 in 
the process.  If today's move was in anticipation of tomorrow's 
earnings, which are announced before the bell, it could be another good 
day.  JCI could see some profit taking in the coming days, even if 
earnings come in better than expected.

Picked on July 10 at   $76.20
Gain since picked:      +5.35
Earnings Date           7/18/01





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

  ----------------------
  Closed Split Run Plays
  ----------------------

Cabletron Systems  - CS Close:$23.00 Change:-0.75 Stop:$22.00

CS shares spent Tuesday morning running from the bears and the 
afternoon running with the bulls.  The shares bounced off the 
$21.90 session low to take back most of the mornings losses.  For 
those still in this play, the late momentum and that the shares 
managed to close back at $35 support are encouraging indications. 
Unfortunately our stop was hit at $23.00, so we close out this play 
with a slight 90-cent loss.   

Picked on July 12 at $23.90
Gain since picked     -1.90
Earnings Date          N/A(Not Confirmed)
 




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

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

  --------------
  New Long Plays
  --------------

Take-Two Inter. Soft. - TTWO Close:$19.96 Change:+2.06 Stop:$17.50

Company Description:
Take-Two Interactive Software develops and distributes games for PCs,
as well as for Sony PlayStation, Nintendo, and SEGA game consoles, 
and also for Microsoft's new Xbox product. Other titles include 
Smuggler's Run, Myth 3, Mafia and Duke Nukem.  Last Monday, the 
firm reported that it is ready to release Max Payne.  They expect 
this product to be one of the most popular PC games of the year.  
Take-Two has three development subsidiaries in the US: Mission 
Studios, PopTop Software, and Talonsoft. The firm's two Grand Theft 
Auto games account for more than 15-percent of sales.  

Fundamentals:
Last year, the company earned 88-cents per share on sales of $387 
million.  For the 2001 fiscal year ending in October, analysts 
predict the company will earn $1.01 per share in sales of $498 
million and $1.24 on $597 million in 2002.  This gives the shares 
a low forward 2001 P/E of 20 as compared to the industry average 
P/E of 33.  In early July the company reaffirmed guidance for the 
third and fourth-quarters.  Analysts forecast third-quarter 
(ends July) earnings of 4-cents per share and 61-cents for the 
fourth-quarter.  

Why We Like It:
With a holiday advertising battle royale looming between Microsoft's 
new xBox game console and Sony's Playstation 2 there is little doubt 
the big winner will be the game developers who sell across all 
platforms.  If Take-Two's Max Payne is anywhere as big as expected 
than this game developer is hitting its stride at just the right 
moment.  TTWO shares had been consolidating in the $17 to $18 range 
for the past two weeks.  On Tuesday the shares broke out in a big 
way with a high volume move to $19.96.  The MACD technical indicator 
is confirming the bullish momentum with a buy signal from deep 
oversold territory.  We believe a test of $24.36 52-week high is 
in the cards.  Given the shares strong one-day move it is possible 
some slight profit taking may set in.  Should this occur, a dip to 
$19 would present a desirable entry point.  We will set our initial 
stop to $17.50.

Picked on July 17th at $19.96
Earnings Date             N/A (Not Confirmed)





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

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

Borland Software - BORL - Close:$16.10 Change:+0.07 stop:$15.40

This morning, Borland Software announced their new TeamSource(TM)
Development Services Platform.  This is the company's first
DSP offering.  Unfortunately, the announcement failed to excite
their stock price.  Shares traded as high as 16.39 before closing
relatively unchanged.  Volume has declined for the second day
in a row.  There are five days left before the earnings 
announcement and we still might see share appreciation if the
NASDAQ can stay positive through the rest of the week.  However,
a late breaking announcement from Microsoft on Tuesday may cause 
this play some heartburn.  CNBC reported that Microsoft was 
declaring war on Java and that the popular Net programming language 
will not work on a future edition of Windows.  Borland's JBuilder 
is a very popular Java development tool and a major contributor to 
Borland's reemergence as a tech company of note.  We are tightening 
up our stop to $15.40. 

Picked on July 13th @ $15.98
Gain since picked:    + 0.12
Earnings Date:       7/24/01 (not confirmed)




===

PriceLine.com - PCLN - close: 9.01 change: +0.27 stop: 7.00

Shares of Priceline are apparently shrugging off what some are
calling bad news for the company and fellow rivals.  Yesterday,
USA Networks (USAI), the cable, shopping, travel and ticketing
conglomerate announced that it would be buying up to 75% of 
web-travel destination Expedia.com (EXPE) for about $1.5 billion.
What was already a fierce but growing section of the Internet
landscape just got tougher.  Shares of PCLN initially fell on
the news but the stock has managed to rebound.  Watch your stop
as we grow closer to the earnings report at the end of the 
month.

Picked on July 13th @ $ 8.70
Gain since picked:    + 0.31
Earnings Date:       7/31/01 (not confirmed)





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

Brocade - BRCD Closed:$37.10 Change:+3.04 Stop:$39.00 New!

A boost of optimism in the market today had this play narrowly 
missing our stop of $37.50.  The storage sector was trading with 
bullish enthusiasm.  However in after hours trading, weak numbers 
from Veritas (VRTS) sent BRCD heading in our favor to as low as 
$35.56.  We're going to move our stop up to $39 to avoid getting 
dropped out of the game prematurely, but we're anticipating a nice 
drop in BRCD shares tomorrow; more aggressive traders may want to 
adjust stops to $41 depending on the level of risk you're 
willing to take.  New entrants to this play should pass on the 
anticipated opening dip and wait for a bargain hunter's rise to 
present a better entry point.  Support exists at $32.73 and the 
before mentioned $30.

Picked on July 16 at   $34.06
Gain/loss since picked: -3.04
Earnings Date            8/14 (Not Confirmed)


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

  -----------------
  Closed Long Plays
  -----------------

IBM Corporation - IBM Close:$108.53 Change:+0.71 Stop:$107.00

The tale will be told late-Wednesday when Mother Blue reports 
earnings, however we will be sitting on the sidelines.  We tightened 
up our stop to protect gains and an early morning drop tripped us 
out at $107.  We close out this play with $3.15 per share gain.  

Picked on June 11t at $103.85
Gain since picked       +3.15
Earnings Date            7/18 (Confirmed)
 



===

Electronic Arts - ERTS Close:$56.69 Change:-0.76 Stop:$56.50

Expect this play to make a quick return trip to our Bullish play 
list.  As we reported earlier, for 5 consecutive years shares of 
this electronic game publisher have increased an average of 25-
percent from July 1st to September 30th.  This does not mean we 
can't play the dips.  With the bears lurking around the general 
market and us sitting on a handsome gain we tightened up our stop 
to $56.50.  That stop was hit early Tuesday morning leaving us with 
a $2.12 per share gain.  We will now move this play to the Watch 
List as we look for another entry point.  That will be either a 
dip back to support in the $54 to $55 range or an undeniable return 
of the bulls with a close above $59.00.

Picked on July 7th at $54.38
Gain since picked      +2.12
Earnings Date           7/26 (Confirmed)





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

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

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

Laboratory Corporation - LH Close:$86.40 Gain:+1.20 Stop:$79.25

Biotechnology stocks had a good day, and Laboratory Corporation 
jumped on board.  After break through resistance on Friday, LH 
has continued its winning ways.  As goes biotechs, so could go 
LH.

Picked on July 13th at $83.98
Gain since picked:      +2.42
Earnings Date           7/23/01




===

AmeriPath - Path Close:$34.50 Gain:+1.01 Stop:$31.95

AmeriPath is the stock that just won't stop.  PATH has been on a 
bullish run for eight straight days.  It's overdue to pullback or 
consolidation, but we'll continue to ride the train.

Picked on July 11th at $30.95
Gain since picked:      +3.55
Earnings Date           7/31/01




===

RailAmerica - RAIL Close:$12.50 Gain:-0.10 Stop:$10.25

Transport and cyclical stocks continue to do well, and RailAmerica has 
been chugging right along.  Today was a minor setback, but RAIL 
remained above the rising 50-day moving average.  Some overhead 
resistance sits around $13, but one more good day will clear that.

Picked on June 14th at $11.41
Gain since picked:      +1.09
Earnings Date            N/A




===

Star Gas Partners - SGU Close:$21.00 Gain:-0.01 Stop:$19.50

Star Gas had a volatile day, but when all was said and done, it lost a 
penny.  That keeps the stock in its congestion area, and waiting to 
explode.

Picked on June 17th at $21.18
Gain since picked:      -0.18
Earnings Date           7/26/01




==

Tenet Healthcare - THC Close:$54.70 Gain:+0.50 Stop:$52.50

After briefly pulling back on Thursday and Friday, THC is once again 
moving higher.  $56 will be mild resistance.

Picked on June 17th at $51.09
Gain since picked:      +3.61
Earnings Date           7/25/01





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

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

Nasdaq-100 Series Trust - QQQ Close:$43.30 Change:+0.95 Stop:$42.00

Intel's earnings (late Tuesday) and IBM's earnings (late Wednesday)
 are going to be the driving force behind the tech market over the 
next few days.  The results will likely drive the QQQ's sharply up 
or down.  A dip to $41.54 Tuesday morning hit our $42.00 stop 
dropping us out of this play with a slight 35-cent per shares gain.

Picked on July 6th at $41.65
Gain Since Picked      +0.35
Earnings Date           N/A (Confirmed)





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