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Daily Newsletter, Wednesday, 07/18/2001

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PremierInvestor.net Newsletter                Wednesday 07-18-2001
                                                    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
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In section one:

Market Wrap: A Penny For Your Thoughts
Market Sentiment: Win, Place, or Show
Play-of-the-Day: Cerus Corporation - CERS
Watch List: Something For Everyone!

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
        07-18-2001        High      Low     Volume Advance/Decline
DJIA    10569.83 - 36.56 10594.54 10480.88 1.03 bln   1326/1760 
NASDAQ   2016.17 - 51.15  2056.06  2003.95 1.48 bln   1381/2347
S&P 100   623.06 -  3.85   629.91   617.40   totals   2707/4107
S&P 500  1207.71 -  6.73  1214.44  1198.33
RUS 2000  483.62 -  6.95   490.57   483.62
DJ TRANS 2976.32 - 30.76  3003.97  2953.00
VIX        26.31 +  0.95    26.94    25.89
Put/Call Ratio      0.71
-----------------------------------------------------------------

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

A Penny For Your Thoughts

If it's not one thing it's another.  While everyone is worried
about the economy slowing and corporate earnings, the "worry of
the day" was in the currency markets and potential ramifications
of a weakening U.S. dollar.

What got things off to a shaky start for stocks was this
morning's economic data that had the Consumer Price Index "CPI"
showing prices at the consumer level rising by 0.2% and the core
rate (excluding food and energy) rising a surprising 0.3%.
Economists had expected the CPI to rise by 0.1% and the core rate
to only rise 0.2%.  Both numbers gave hint of some inflation
occurring at the consumer level.

While today's CPI numbers don't look to be all that inflationary,
what really had market participants worried is the decline taking
place in the U.S. dollar.  Inflation is a tricky little indicator
that has many variables.  One variable that has been favorable on
the inflation front is the effect of a strong U.S. dollar.  U.S.
consumers have been enjoying its purchasing power in recent
months and its strength has been giving the effect of lower
prices for foreign made products and services.  Here's what we're
looking at as it relates to the U.S. dollar versus the British
pound.

British Pound futures for Sept. 2001 - last 10 months



The chart for the British Pound Sep. 2001 futures (eu01u) shows
that the U.S. dollar is beginning to weaken versus the British
pound.  In simplistic terms, if a US consumer was paying $1.51
for a candy bar that a British candy bar manufacturer was wanted
1 British pound for back in January, the US consumer only had to
pay $1.36 for that same 1 British pound candy bar in early June.
But today, the price of that candy bar has risen to $1.41!

Now, while this can be perceived as "bad news" as it appears
inflationary, here's what the market is going to struggle with.
Remember how we've been noticing the deep cyclicals and the
Morgan Stanley Cyclical Index (CYC.X) showing a strong chart in
recent days?  Guess who the companies are in the United States
that sell a lot of their products overseas?  Now put yourself in
the shoes of the CEO of a U.S. multinational company that sells
its products in Britain.  Aha!  Now the tables have turned
haven't they?  In January the US$ was weak versus the pound and
your British customers could afford to buy lots of product from
you.  Since that time however, the British pound was weakening
and they probably started canceling some orders with you.  Ouch!
That hurts both the top line (revenue) and the bottom line
(earnings).  The only way you could turn a profit was to lay off
some employees as your foreign customers were canceling orders!
Ouch!  That could hurt the economy as the unemployment lines grow
in the United States.

Now, back to that strong chart we've been seeing in the deep
cyclicals.  Could it be that "smart money" saw all this coming
back in October of last year and started buying the deep
cyclicals well in advance of weakening US dollar that would help
alleviate some pressure on the deep cyclicals?

The big question now is this.  If the market is making a bet that
the U.S. dollar will weaken further against foreign currencies,
will the potential positive effect for the deep cyclicals
actually occur?  Remember, those foreign consumers must still
have to be willing to buy the products that are produced by U.S.
companies doing business there.  That is why I've been stressing
that we need to monitor the cyclicals so closely.

You can bet we'll be monitoring these things in coming sessions
very closely.

If any subscribers have questions regarding this, let me know.
I'm also going to be pulling in some things we saw in the
Gold/Silver Index (XAU.X) today.  Remember... gold is perceived
as a hedge against inflation!


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

Win, Place, or Show by Jeffery Canavan

I believe Alan Greenspan sums up the current market sentiment.
"The period of sub par economic growth...is not yet over, and we
are not free of the risk that economic weakness will be greater
than currently anticipated."

Technically the trend for most sectors is down, but as Al says,
"The rate of deterioration is clearly slowing."  I don't know if
I would say the decline in stocks is clearly slowing, but as long
as support levels continue to hold, bulls can be optimistic.

One blow to bullish optimism today was the flight to bonds.  With
the hint of more rate cuts, investors scooped on bonds, and sent
yields below some key support levels.  It also made bank and gold
stocks the smart bet today.  Some of the buying in gold can be
attributed to a pending strike in South Africa, but nevertheless,
gold won the horse race today, up 3.74%.

Drugs and healthcare stocks placed (came in second for those of
you who don't bet on horses), gaining over 3% today.  Retail and
chemical stocks showed, while semiconductors and networking
brought up the rear.  Internet and software stocks pulled up
lame, and couldn't even finish the race.  According to their
trainer, they were down over 6% due to a bad case of earnings.
Ebay only had symptoms of bad earnings, dropping 96 cents today,
and we won't know the full prognosis until the results are back
from the lab tomorrow after the bell.

Earnings continue to be the focus, and if I could fly to Vegas
and place a bet, I would only bet on technology to show - meet
earnings but lower guidance.  What horse is going to win the next
furlong?  Tough call, but odds favor a mudder, a horse that runs
well in poor conditions, like say cyclicals.

If you bet on a horse, that's gambling.
If you bet you can make three spades, that's entertainment.
If you bet cotton will go up three points, that's business.
See the difference?
-Blackie Sherrod


*************************Sector Watch****************************

            Weekly   Daily     Overbought    Support  Resistance
            Trend    Trend      Oversold

DJIA        Bearish  Bearish    Overbought    10,200   10,600
NASD        Bearish  Bearish    Overbought     1,940    2,125
S&P 500     Bearish  Bearish    Overbought     1,170    1,240
Rus 2000    Neutral  Neutral    Overbought       465      500

Semis       Bearish  Bearish    Overbought       525      585
Biotech     Bearish  Bearish    Oversold         490      550
Internet    Neutral  Bearish    Overbought       160      186
Networking  Bearish  Bearish    Overbought       300      365
Software    Bearish  Bearish    Overbought       188      210
Banking     Neutral  Bullish    Overbought       625      670
Retail      Neutral  Bullish    Overbought       850      900
Drugs       Bearish  Neutral    Neutral          385      410


                 Percent Change
            Last      Last       Last     Relative Strength
           5 Days    10 Days    30 Days      vs S&P 500
DJIA          -         -          -          Positive
NASD         2.2%     (5.8%)     (9.7%)       Neutral
S&P 500      2.3%     (2.2%)     (5.9%)       N/A
Rus 2000     1.6%     (2.7%)     (6.4%)       Neutral

Semis        0.8%    (12.0%)    (13.2%)       Negative
Biotech     (1.1%)   (13.9%)    (22.8%)       Negative
Internet     0.3%    (11.8%)    (26.8%)       Neutral
Networking   2.7%    (11.6%)    (28.1%)       Neutral
Software    (1.5%)   (13.3%)    (17.7%)       Negative
Banking      4.3%      0.5%      (1.0%)       Positive
Retail       7.7%      3.6%       0.0%        Positive
Drugs        3.7%      2.9%      (4.3%)       Neutral

*****************************************************************


=========================
Play-of-the-Day (Bullish)
=========================

Cerus Corporation - CERS Close:$71.31 Change:+0.96 Stop:$67.50

Original Comments When Selected on July 13th:

Company Description:
Cerus develops blood-pathogen inactivation systems intended to
purify donated blood and improve the safety of blood transfusions.
The company has just completed Phase III clinical trails for its
Intercept Platelet blood system, which uses proprietary small-
molecule compounds to prevent pathogens, including HIV, hepatitis B
and C viruses, and other bacteria and viruses, from replicating in
blood products. The firm is also researching technology for use in
bone-marrow transplants. It has collaboration agreements with Baxter
Healthcare Corporation (Baxter), the Pharmaceutical Division of
Kirin Brewery Co., Ltd. (Kirin) and the Consortium for Plasma Science
(the Consortium). Cerus has not received any revenue from product
sales, and all revenue recognized by the Company to date has resulted
from the agreements with Baxter and the Consortium and federal
research grants.

Fundamentals:
Last year the firm lost $2.73 per share.  In the current fiscal year,
analysts expect the firm to lose $3.04 per share and $2.15 in 2002.

Why We Like It:
Cerus is the typical research development story.  It has deep losses
and a deep pipeline with several key products working towards final
approvals in the US and Europe.  Its stock performance also tells a
promising story.  The recent weakness in drug and biotech shares has
not had a big effect on CERS.  After driving from a low of $32.25 on
April 4th to $76 on June 6th, the shares began trading in a range
bounded by approximately $65.75 and $76.  After twice attempting to
best $76 the shares dropped to the lower range. The third time may be
the charm as the shares are yet once more bouncing off the lower
trading range.  If history is being repeated the shares are gearing
up for another run at $76.  Each time an important level of resistance
is tested it weakens, perhaps this is the time for a breakthrough.
In any event, even a failed test of $76 would put a 10-percent gain
on the table with prospects for more.  Support exists at the before
mentioned $65.75.  We will institute a $65.00 stop.

Updated Comments:
The last two trading sessions have been painful for the general
market, but they were pure pleasure for CERS shares.  After
dropping $3.40 on Monday, a Bullish reversal set in and the shares
gained $4.50 on Tuesday and 96-cents on Wednesday.  This last gain
pushed the shares above resistance at $70 and coupled with a nice
spike in volume, suggests the stock is poised for a leg up.  The
next area of significant resistance is still at $76.  For those
considering taking a position in this play watch for a positive
move to provide further confirmation of the Bullish momentum.  We
are going to snug up our stop to $67.50.

Picked on July 13th at $69.25
Gain Since Picked      +2.06
Earnings Date           7/24(Not Confirmed)





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

Loews Corp. - LTR - close: 59.32 change: +2.78

WHY WE LIKE IT:  Many people don't know that Loews is a holding
company with a number of different focuses.  LTR owns 87% of CNA
Financial (NYSE:CNA), 100% of Lorillard, a cigarette manufacturer,
100% of Loews Hotels, 53% of Diamond Offshore Drilling (NYSE: DO),
and 97% of Bulova Corp, the watch maker.  With so many revenue
streams one might expect LTR to be somewhat protected from a
market downturn.  Not true.  The stock has been in a steady down
trend since its mid-May highs near $72.  So why do we like it?
It looks like shares of LTR may have hit bottom.

POTENTIAL TRIGGER EVENT:  The stock saw almost a 5% bounce today
after wonderful reversal in yesterday's trading.  If you enjoy
use retracement patterns, one can use the bottom back in January
and the top in May to show that Tuesday's bottom was a perfect
bounce off its 61.8% retracement level (a Fibonacci number popular
with fans of technical analysis).   The volume today and yesterday
was significantly above average and investors are not expecting
an earnings announcement from LTR until the 1st week of August.
Whether you believe in Fibonacci numbers or not we are going to
set our potential trigger to evaluate a long play at $60.  If
LTR can close over $60 on good volume we may have a winner.




---

Sony Corp. - SNE - close: 56.74 change: -1.56

WHY WE LIKE IT:  One of the most well known Japanese
conglomerates, Sony has its hands in everything.  Electronic
equipment, musical instruments, computer hardware, video
games systems, are just a few of the products Sony produces
on top of their on recording label and a sizeable movie
production unit.  While this list of Sony ventures is not complete
you should be familiar with the name.  What do we like about
Sony?  Bulls should look the other way as SNE is not looking
that strong right now.  The stock has been in a steady decline
since late May.  The slippery slope got a lot steeper in early
July when Sony announced they would be forced to recall some of
their phone handsets with a potential cost of $161 million.
This expense was not going to bode well for the April-June
quarter.

POTENTIAL TRIGGER EVENT:  The company is fast approaching its
earnings announcement on July 26th.  Shares have found some
measure of support at the $56 level but after a brief bounce
it is struggling to maintain its health.  Our potential trigger
to evaluate a short play would be a close under $56.  Please
be aware that as an ADR the stock constantly gaps up or down
based on how the parent stock trades in Japan.  This means that
the earnings announcement will likely be announced before the
U.S. market opens on the 26th.  Trade accordingly.




---

Americredit Corp. - ACF - close: 60.25 change: +0.05

WHY WE LIKE IT:  More than doubling since the first of the year,
investors should be pretty happy with ACF.  Prone to significant
two or three week retracements, buyers have taken these
opportunities to pick up shares of ACF at easy to identify
levels of support.  We recently displayed ACF on the Watch List
back on July 13th.  Since then shares have been consolidating
near $60 as we discussed last Friday.  The apparent strength
in the stock is encouraging but a the volume on the stock
is a big red flag in our book!

POTENTIAL TRIGGER EVENT:  Odds are good that ACF will break out
again soon the question is whether it will be up or down.  The
bias looks to be up.  As we mentioned last week the stock could
consolidate back to $55 but the bulls are maintaining a strong
hold of the stock and a recent dip only fell as low as 58.80.
Earnings are not expected until August 7th so investors still
have plenty of time to move in (or out) of the security before-
hand.  Closing above $60 today is exactly what we would have
wanted but the declining volume is the wildcard.  Aggressive
traders could jump on this one now but we would recommend a
tight stop.  If shares continue upward tomorrow we might see
this on the play list soon.





-------------------------
-- Continuing to Watch --
-------------------------

Some stocks on the Watch List will be carried over from one day
to the next if they continue to show potential but have not yet
breached the trigger point.  Some stocks have met our conditions
for a trigger point but other factors hold us back from making it
a full-time stock pick.

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

Procter & Gamble - PG - close: 69.20 change: -0.35

Still need to see a close over $70.
Below is the original write up from July 17th:

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.




---

Taro Pharmaceucticals - TARO - close: 90.09 change: +5.59

TARO is up 6.6% since we watch listed the stock yesterday.
For many traders the move from $77 to $90 in two days should
cause one to hesitate before placing any new bullish bets on
the stock.  We are keeping TARO on the watch list even though
it has satisfied our trigger with a close over $90.  The rocket-
like moves make the stock appear way over bought and we would
not recommend a bullish position until the stock has had time
to digest these gains.  Look for some consolidation over the
next couple of days and then maybe we'll get an entry point before
the last few days ahead of its earnings/split date.

Below is the original write up from July 17th:

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.




---

Quaker Oats Co. - OAT - close: 87.79 change: -0.80

OAT has fulfilled our conditions for a potential short play.
We are leaving it on the watch list because of the risk
associated with holding over an earnings report.  The earnings
are expected tomorrow before the market opens.  Active traders
might have an opportunity tomorrow if the report surprises
one way or the other.  There is probably a lack of any bullish
expectation for the earnings report so if OAT truly surprises
to the upside with a positive conference call then shares could
catch the bears unaware.

Below is the original write up from July 17th:

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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Copyright  2001  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.

PremierInvestor.net Newsletter                Wednesday 07-18-2001
                                                    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/3030_2.asp
=================================================================

In section two:

Split Trader
  Split Announcements: WTSLA, FFIC, KMP
  New Plays: No new ST play
  Play Updates: Updates to stops
  Closed Plays: No closed ST plays

Net Bulls
  New Play: Check Point Software - CHKP (Bearish)
  Play Updates: Updates to stops
  Closed Plays: Borland Software - BORL

Stock Bottom / Active Trader
  New Play: Professional Detailing - PDII (Bearish)
  Play Updates: Updates to stops
  Closed Plays: No closed SB plays


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

===================
Split Announcements
===================

Splitting The Wet Seal

Before today's opening bell, teen apparel retailer The Wet Seal
Inc. (Nasdaq:WTSLA) announced that shareholders have approved a
proposal to increase the number of authorized common shares. This
motion opened the doors to the expected 3-for-2 stock split
announcement by the Board of Directors today.

Dividends of one additional share for every two owned will be
payable on July 24, 2001. The stock will trade on a split-
adjusted basis on July 25, and at that time there will be
approximately 22 million shares outstanding and 14 million in the
float. The number of authorized shares is now 60 million.

WTSLA was on the Split Trader Expected list in anticipation of
today's announcement. When the Board filed a proxy with the SEC
on June 11 for last Friday's shareholder meeting, they stated
that the sole purpose of increasing the authorized shares was to
implement a 3:2 stock split.

Wet Seal shares traded as high as $24.17 on Wednesday, with
average volume of 289,900. Recent trading is at $23.86.

About the Company:

The Wet Seal, Inc., a specialty retailer of fashionable and
contemporary apparel and accessory items, is headquartered in
Foothill Ranch, California. The Company currently operates a
total of 558 stores in 43 states, the District of Columbia and
Puerto Rico, of which 363 are Wet Seal stores and 94 are Contempo
Casuals stores which cater to the junior customer, 83 are Arden
B. stores which focus on a fashionable, sophisticated,
contemporary customer and 18 are Zutopia stores.




===

Flushing Approves Stock Split, Delivers Positive Earnings

Flushing Financial Corporation (Nasdaq: FFIC) announced before
the opening bell today that the Board of Directors approved a 3-
for-2 stock split, payable in the form of a 50 percent dividend.
The payable date is set for August 30 at which time eligible
shareholders will receive one additional share for every two
shares owned.

Flushing currently has 9.2 million shares outstanding, a float of
5.1 million, and 20 million shares authorized for issuance. This
marks the second split announced since the Company's IPO in 1995.

Following the split announcement, FFIC announced record Q2
earnings results. Net income was $3.6 million, or 43 cents a
share, up from $3.2 million, or 38 cents a share in the
comparable period a year ago.

FFIC shares closed at $24.30 on Tuesday, just off the 52-week
high of $24.80. Volume on the 3-month average is 26 thousand.

About the Company:

Flushing Financial Corporation is the holding company for
Flushing Savings Bank, FSB, a federally chartered stock savings
bank insured by the FDIC. The Bank conducts its business through
ten banking offices located in Queens, Brooklyn, Manhattan,
Bronx, and Nassau County.




===

Kinder Morgan Sets Stock Split on Results of Record Q2

Following Wednesday's closing bell, Kinder Morgan Energy
Partners, L.P. (NYSE:KMP) declared a 2-for-1 stock split on its
common stock, payable August 31, 2001. The decision was partially
based on strong earnings results for its second quarter, which
reportedly met estimates with net income of $104.2 million, or
$0.72 per share, versus $71.8 million, or $0.70 per share for the
year-ago period.

This marks the second stock split announced for KMP since it
began trading publicly in 1997. It will effectively increase the
number of outstanding shares to 130 million on the execution date
of September 2, 2001.

The Company also declared a quarterly cash dividend of $1.05 per
share payable on August 14, 2001 to shareholders of record as of
July 31, 2001.  This marks a 24 percent increase from the $0.85
dividend of the second quarter of 2000.

Kinder Morgan has executed several acquisitions and developments
during the past quarter. The most recent project on the board is
the purchase of a 2,600-mile Texas pipeline from an affiliate of
Occidental Petroleum for $360 million.

KMP shares are coming off 52-week highs of $73.99, closing down
-1.04 on the day to $70.30.

About the Company:

Kinder Morgan Energy Partners, L. P. is the nation's largest
pipeline master limited partnership with an enterprise value of
approximately $8 billion. It owns and operates one of the largest
product pipeline and terminal systems in the country. In
addition, it is a major transporter of natural gas, operating
more than 10,000 miles of pipeline; is the nation's leading
provider of CO2 for use in enhanced oil recovery projects; and is
one of the largest operators of bulk terminals, with over 30
facilities that transload more than 50 million tons of coal,
petroleum coke and other products annually.

The general partner of KMP is owned by Kinder Morgan, Inc., one
of the largest midstream energy companies in America, operating
more than 30,000 miles of natural gas and product pipelines. KMI
also has significant retail distribution, electric generation and
terminal assets. Combined, the two companies have an enterprise
value of more than $17 billion. (press release)





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

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

Stops Changed:
  Alliant Techsystems (ATK) from $90.00 o $91.00
  Cerus Corporation (CERS) from $65.00 to $67.50
  NVR, Inc. (NVR) from $157.00 to $164.00


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

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

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

Check Point Software - CHKP Close:$40.09 Change:-3.81 Stop:$44.50

Company Description:
The Israeli-based company makes firewalls that form a kind of
electronic moat around networks protecting them from hackers and
viruses.  Its FireWall-1 product protects networks from
unauthorized access and security threats while its VPN-1 software
sets up virtual private networks for secure internal and remote
communications.  The company sells its products through resellers,
manufacturers and systems integrators such as IBM and EDS.
Competitors include RSA Security, Symantec and Internet Security
Group.

Fundamentals:
At its second-quarter earnings announcement on July 23rd, analysts
expect the company to earn 32-cents per share on revenue of $150
million.  In the same period a year ago the company earned 17-cents
per shares on revenue of $91 million.  For the year, analysts
forecast the company will earn $1.28 per share on sales of $630
million.  Last year, the company earned 84-cents per share on
revenue of $425 million.  The company has an estimated forward 2001
P/E of 31.  The industry average P/E is 45.

Why We Like It:
Once the beneficiary of investors confidence in its predominate
position in the recession resistant security sector, it is now
being hammered as investors have realized no place is safe from
corporate budget cutters.    The shares have been sliced almost in
half from its $80.16 high from April 19th.  The catalysts have been
 a string of earning warnings and anemic reports from Checkpoint and
its rivals.  Checkpoint warned in early July that revenue, although
sharply higher than last year, would be would be slightly below
expectations.  Late-Wednesday, competitor Internet Security Group
followed through on its warnings when it reported a second-quarter
loss.  With the complete absence of good industry news there is also
an absence of a catalyst for a bullish reversal.  This means CHKP
shares should remain weak at least through to its earnings report.

By the end of Wednesday's trading, Checkpoint shares close of $40.09
left it staring off the edge of a precipice.  Once through the $39.50
session low of last April 3rd and the $38.65 session low of April 4,
2000 there is little support until $30.00.  Rising bearish sentiment
is clearly in evidence.  This is shown by the lack of resistance on
the part of bulls during Wednesday's trading session and a spike in
volume from 6 million on Tuesday to 9.5 million on Wednesday.  We
will set our initial stop on this Bearish selection to just above
recent session highs at $44.50.

Picked on July 18th at $40.09
Earnings Date            7/23 (Not Confirmed)





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

  -----------------------
  NB Bearish Play Update
  -----------------------

Changed stop for Brocade (BRCD) from $39.00 to $34.00


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

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

Borland Software - BORL Close:$14.97 Change:-1.13 S Stop:$15.40

The Bullish outlook for these shares changed abruptly with
Microsoft's latest salvo in its ongoing war against Sun
Microsystems over the computer desktop.  Microsoft made a surprise
announcement that it was dropping support for the popular Java
programming language in its new Windows XP operating system.
Although other attempts by Microsoft to squash Java have failed,
as a developer of Java programming tools Borland shares took a hit.
We closed this play when it hit our stop of $15.50 leaving us
with a slight 58-cent per share loss.

Picked on July 13th at $15.98
Gain since picked:      -0.58
Earnings Date:           7/24 (not confirmed)





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

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

  ---------------
  New Short Plays
  ---------------

Professional Detailing - PDII Close:$70.00 Change:-3.31 Stop:$74.25

Company Description:
Professional Detailing, Inc. provides customized product detailing
programs and other marketing and promotional services to the
United States pharmaceutical industry. For the 3 months ended
3/31/01, revenues totaled $173.1M, up from $71.3M. Net income rose
95% to $10.9M. Revenues reflect the recording of product sales of
Ceftin for the first time. Earnings were partially offset by
higher facilities expansion and field selling expenses.

Fundamentals:
For the 2001 fiscal year the company's net income is
expected to increase 22-percent.  Analysts project company
earnings to rise from $2.40 in 2001 to $3.14 in 2002.  This
gives PDII shares a low current P/E of 29 and a forward 2001 P/E
of 22.

Why We Like It:
PDII reached a high of $90.00 at the end of July.  Since then,
however, the stock has fallen lock, step, and barrel
with the Pharmaceutical industry that it serves.  Today's drop
below support at $72.00 looks as if it might be indicative of
further declines in the stock.  Technical indicators show minor
support around $65.00 and more substantive support at the $60.00
level, but today's strong downside volume suggests that the
current climate is far from positive.

Closing at a critical support level tonight ($70.00 a share), we
think that a concerted drop under $70.00, coupled with requisite
conviction in the form of solid volume could lead to further
declines in the stock.  If this pattern takes shape tomorrow, look
for shares to test support at $65.00 in the short-term, with
$60.00 the next likely level to be tested.  The Pharmaceutical
sector has been punished over the last month, however, there
could be more downside on the horizon before things pick up.

Picked on July 18th at $70.00
Earnings Date            N/A (Not Confirmed)





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

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

Changed Stops:
  Laboratory Corporation of America (LH) from $79.25 to $82.00.
  Tenet Healthcare (THC) from $52.50 to $53.75.


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