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Daily Newsletter, Thursday, 07/26/2001

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PremierInvestor.net Newsletter                 Thursday 07-26-2001
                                                  section 1 of 2
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In section one:

Market Wrap: The market already knew
Market Sentiment: Phylum Porifera
Play-of-the-Day: Alpha Industries - AHAA (Bullish)
Watch List: Will Tech Stocks Confirm the Rally?

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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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        7-26-2001          High      Low    Volume Advance/Decline
DJIA    10455.63 + 49.96 10459.02 10284.09 1.22 bln   1916/1153	
NASDAQ   2022.96 + 38.64  2025.88  1963.21 1.75 bln   2128/1531
S&P 100   619.14 +  5.19   619.85   608.67   totals   4044/2684
S&P 500  1203.20 + 12.44  1204.18  1182.65             
RUS 2000  484.75 +  8.08   485.07   475.74
DJ TRANS 2929.06 + 64.15  2931.78  2851.23 
VIX        25.15 -  1.55    27.40    25.15 
Put/Call Ratio      0.54
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===========
Market Wrap
===========

The market already knew

I'd argue today's after market disappointing "surprise" from JDS 
Uniphase (NASDAQ:JDSU) is only a disappointment to those bullish 
the stock, but not necessarily a "surprise" to the market.  And 
perhaps that's where bullish opportunity exists tomorrow morning!

JDS Uniphase Chart - $1 and $0.50 box



Was today's JDS Uniphase (JDSU) earnings a surprise?  C'mon!  I 
counted six sell signals without so much as a buy signal on the 
above chart.  The sell signal at $10.50 was enough to set off the 
most powerful of point and figure bearish chart patterns (bearish 
triangle).  That study by Professor Earl Davis at Purdue 
University indicated that even at $10.50 the bearish triangle was 
profitable for a bearish trader 87.5% of the time, which resulted 
in an average decline of 33.3% over a 2.5 month period.  Heck, 
that comes out to a decline to approximately $7.03.  Hey!  That's 
within $0.03 of the bearish price objective established on April 
26th!  Is the MARKET really that smart to see into the future?  
No, it can't be.  It's got to be a coincidence right?  Is it time 
to buy JDSU now that it's so close to a bearish price objective?  
Nope, not until the stock gives some type of a buy signal where 
we can establish risk/reward.  Besides... there's got to be some 
stocks with chart patterns indicating future potential to the 
upside.  

Now, I'd argue that today's earnings debacle by JDSU is not a 
surprise.  I'll admit it is a bit unnerving to think that 
analysts would have expected the company to earn $0.03 a share 
and the company report a loss of $0.36.  That's a BIG miss.  The 
chart above gives hint that the MARKET knew all too well what was 
in store for JDSU and didn't need a fundamental analyst to tell 
them otherwise.  This may be exactly where opportunity now exists 
tomorrow morning.

If the market is so much smarter than the fundamental analysts 
and industry analysts following JDSU, then we might say that the 
news from JDSU was already known by smart money.  This news from 
JDSU will undoubtedly have many technology investors pulling the 
plug on some of their tech holdings at the opening of trading.  
There will also be some "stock" investors that sell their stock, 
regardless of tech or non-tech similarity.  

What I'm going to be watching in the morning is... you guessed 
it!  Bond YIELDS!  If today's news from JDSU is gloom and doom, 
then smart money will run into bonds and dump stocks.  They'll do 
it only if the JDSU earnings are a real surprise and something 
they hadn't planned on.  However, if it wasn't a surprise, or 
isn't even meaningful to the market (lets face it, JDSU isn't as 
meaningful to the market at $9 as it was at $100, or $50) then we 
need to be watching for clues tomorrow morning.

If the MARKET is really worried over JDSU and thinks other 
companies are as poorly managed and are going to suffer the same 
consequences, then they'll run for bonds like there's no 
tomorrow.  If however the MARKET has factored this little 
earnings debacle into things, then "smart money" may try and pull 
a fast one and buy the weakness.  I'll be watching bonds very 
closely when they open before stocks do.

The stocks I'm looking to buy are those stocks that are diverging 
from the recent markets decline.  I think the market is declining 
more from the lack of cash as a result that money had been 
flowing back into Treasuries in June, but the past six days that 
has changed somewhat.  The past six days, we've actually seen 
bond YIELDS base a bit and start to move higher.  Remember, a 
higher bond YIELD is caused by the selling of bonds!  The result 
of selling in bonds is the generation of cash!  What that cash is 
doing and where it is going is where I want to be bullish!

I'll say this right now.  I'm mentioning bullish thoughts because 
that's where subscribers probably need the most guidance.  If the 
market buys bonds in the morning and drives YIELDS lower and 
stocks open lower, subscribers won't need much help.

Here is the kind of "divergence" that I've been talking about as 
it relates to the broader market trend, and the lower bond YIELD 
since June.  If you still disagree that a lower YIELD is bad for 
stocks, then simply look at a chart of the NASDAQ (COMPX) or the 
S&P 500 (SPX.X) or the Dow Industrials (INDU) since the 10-year 
YIELD fell lower on May 31st.

Now, if I believe from past observations that a lower bond YIELD 
is BAD for stocks (and I can confirm this by looking at the 
broader market indexes) then why is this stock acting so strong?  
Does the MARKET know something now (perhaps like the market knew 
something about JDSU) that we need to be aware of?

Nike Inc. - $1 box



The point and figure chart of Nike (NYSE:NKE) sure looks 
different than the chart of JDS Uniphase (JDSU).  So opposite 
that it makes one wonder if smart money knows something that we 
should be alert to and perhaps trying to participate in.  
Yesterday morning my alert went off at my trade station at 
$44.88.  I had set a "fitted" retracement bracket on the stock 
from $35.50 to $60 days before.  I first mentioned NKE back on 
07/18 at 09:00 EST when the stock had closed at $46.40.  The 
reason my alert went off yesterday was to alert me to a strong 
stock on pullback.  You can see that the trade at $45 on the 
chart above had the stock reversing three boxes and right back to 
the triple top and break of downward trend.  Today, shares of NKE 
closed at $47.84.  Even though bond YIELDS had been falling as 
money rotated out of most stocks and the result was a lower 
broader market, that hasn't been the case for NKE.  The 
supply/demand chart shows money rotating into the stock.  These 
are the kinds of stocks to be looking for I think.  This is 
DIVERGENCE!  JDSU was not diverging.  It was leading a decline!

When the markets were heading higher in May and June, JDSU and 
NKE both were heading higher.  But when JDSU turned south (the 
weakest always lead a decline) the NASDAQ soon followed as money 
rotated into bonds and drove YIELD lower.  But Nike (NKE) hasn't 
seen the rotation out of its stock.

Today we may see some pressure in technology stocks as they may 
be affected by "guilt by association."  If however we see selling 
in bonds, then looks for stocks that have shown DIVERGENCE from 
the past two months broader bond and stock market patterns.

For those bound to play technology, then take a look at the point 
and figure charts of FDRY and RFMD.  Heck, both of these stocks 
are technology, but they're charts are disgustingly different 
than that found in JDSU.


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

Phylum Porifera
 
Sponges feed off of microorganisms in the water that flow through 
small openings known as ostia.  Flagella then move the water 
through the sponge, absorbing food particles as the water passes.  
The water then exits through a cavity at the top of the sponge 
known as an osculum.

Why the biology lesson?  Investors have basically been acting 
like a sponge - they soak up bad news, but don't sell their 
stocks.  Today investors absorbed bad news from Hewlett Packard, 
Compaq, and a worse than expected 2% drop in orders for durable 
goods.

It took the better part of the trading day for investors to sop 
it all up, but eventually all three major averages finished in 
positive territory.  They didn't finish deep into positive 
territory, but enough to put the Nasdaq back above 2,000 and the 
S&P 500 above 1,200.

But a sponge can only absorb so much water before it must be 
wrung out.  Tomorrow the sponge will have to absorb and atrocious 
earnings report from JDS Uniphase.  The fiber-optic component 
maker was expected to report earnings of $0.03, but instead 
posted a loss of $0.36.  16,000 more jobs will be cut, and the 
company sees no signs that the situation is improving.  

Luckily Amgen and Qualcomm might be able to mitigate any losses 
in the broader indices.  Amgen posted earnings 2 cents a share 
greater than expectations, and reaffirmed guidance for the rest 
of the year.  Qualcomm earnings came in one penny above 
expectations, and revenues came in better than anticipated, $640 
million instead of the planned $608.

When we add it all up, the triple Qs are up 50 cents in after 
hours. 

Sponges live at the bottom of the ocean, and perhaps investors 
are feeling a little more confident about doing some bottom 
fishing as the treacherous waters earning's season begin to calm.

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Market Volatility  
VIX   25.15
VXN   52.72

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

          Put/Call Ratio  Call Volume   Put Volume
Total           .54        649,535       347,709
Equity Only     .47        581,714       273,540
OEX             .64         11,249         7,158
QQQ             .73         39,433        28,863

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

Bullish Percent Data

           Current   Change   Status
NYSE          34      -2      Bear Confirmed
NASDAQ-100    26       -      Bear Confirmed
DOW           36       -      Bull Alert
S&P 500       48      -2      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  1.15  

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      1793           1220
NASDAQ    2025           1560

        New Highs      New Lows
NYSE       64             38
NASDAQ     87             91

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

Advisory Sentiment 

Bullish  Bearish  Correction   Net   Change 
  52.5%     23.2%    24.3%    29.3%   +3.3%

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: 07/17/01
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. COT data 
can be found at www.cftc.gov.

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
Institutions have lightened up on their net bearish for the second 
straight week, and the S&P 500 remains above 1,200.  Coincidence?  
The commercial sentiment is still bearish, but improving.

Commercials   Long      Short      Net     % Of OI 
7/03/01      316,543   395,410   (78,867)   (11.08%)
7/10/01      309,374   385,178   (75,804)   (10.91%)
7/17/01      336,836   403,561   (66,725)   ( 9.01%)

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
7/03/01      133,098     54,865   78,233     41.62%
7/10/01      135,587     59,889   75,698     38.72%
7/17/01      122,525     50,211   72,314     41.86%

Most bearish reading of the year:  36,513 - 5/01/01
Most bullish reading of the year:  91,122 - 3/06/01
 
NASDAQ-100
About face!  After slowly reducing their net bearish position for 
seven straight weeks, institutions abruptly switched gears.  Keep 
in mind this data is from 6/17/01, before the start of earnings 
week.  Perhaps some institutions sold some futures contracts to 
limit their risk.  This change could be a one or two week 
anomaly.

Commercials   Long      Short      Net     % of OI 
7/03/01       26,544     34,880   ( 8,336)  (13.57%)
7/10/01       26,688     34,640   ( 7,952)  (12.97%)
7/17/01       26,721     37,225   (10,504)  (16.43%)

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
7/03/01       10,443     7,063    3,380      19.31%
7/10/01        9,073     7,486    1,587       9.58%
7/17/01       11,680     8,183    3,497      17.61% 	

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 got slightly more bullish on the Dow for the second 
week in a row.  This is the only index with a commercial net 
bullish position, and the Dow was the only index to finish the 
week higher than it started.

Commercials   Long      Short      Net     % of OI
7/03/01       12,761    14,623   (1,862)    (6.8%)
7/10/01       13,743    12,999      744      2.8%
7/17/01       14,145    12,963    1,182      4.4%

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
7/03/01        4,708     5,715    (1,007)   ( 9.66%)
7/10/01        5,048     7,835    (2,787)   (21.63%)
7/17/01        5,255     9,144    (3,889)   (27.01%)

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

Alpha Industries - AHAA Close:$38.60 Change +3.15 Stop:$33.50 NEW

Original Comments When Selected On July 24th:

Company Profile:
Alpha Industries, Inc. designs and manufactures gallium arsenide 
(GaAs) integrated circuits, silicon and GaAs discrete 
semiconductors and ceramic products for cellular telephones, 
global positioning systems and wireless equipment. For the FY 
ended 4/1/01, net sales rose 46% to $271.6M. Net income rose 86% 
to $33.4M. Revenues reflect increased demand for wireless and 
broadband products. Earnings also reflect increased interest 
income.

Fundamentals:
For the 2001 fiscal year the company's net income increased 86-
percent.  Analysts expect company earnings to rise from a loss of 
$0.10 in 2002 to a profit of $0.48 in 2003.  Because of the loss 
AHAA shares do not possess a current P/E.  However, the forward 
P/E is 75.

Why We Like It::
AHAA has rebounded nicely from the doldrums it sat in back in 
April.  And though it certainly wasn't uncommon for a tech stock 
to sink to its lows in April, recent performance from AHAA has 
been uncommon.  With a strong profit forecasted for the upcoming 
fiscal year end and recent upgrades from influential brokerage 
firms, AHAA could be ready to move.  The predominantly positive 
moves that have taken shape over the course of the month of July 
have typically aroused quite a bit of volume.  The intersection of 
the 20 and 200 DMAs on strong volume just days ago could indicate 
that the run will continue.

If you take a glance at the daily chart for AHAA, you'll 
undoubtedly notice that the stock has several gaps, both up and 
down.  The inherent volatility suggests that the stop be placed 
under the $33.00 support level at $32.50.  Significant support 
exists at $30.00, however, we are not prepared to risk a 
percentage loss of that magnitude.  For those leaning more toward 
a short-term time horizon, a $40.00 target above resistance of 
$36.00 would likely present the best exit price.  Those with a 
longer time horizon might look to the next level of resistance 
just above $44.00.  Keep in mind that the company caters to the 
cell phone industry and the battered sector may have most of its 
bad news out already.

Updated Comments:
By the end of Thursday's trading session AHAA shares had but in a 
strong day pulling free of consolidation in the $33.50 to $37.80 
range.  The only cloud on the horizon light volume of 989k shares 
traded.  Although it was lighter that the 1.4 million average, it 
was still higher than the previous day's 751k traded.  We are 
hopeful the up volume trend continues, as this would be 
confirmation of rising bullish sentiment and put $44 square in our 
sights.  We are running our stop up to $33.50.

.   
Picked on July 24th $36.00
Gain Since Picked:   +2.90
Earnings Date        10/17 (Not Confirmed)





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


Cisco Systems Inc. - CSCO - close: 19.38 change: +0.68

WHAT TO WATCH:  It seems that everyone is watching Cisco these 
days.  The stock has been unable to mount a serious comeback
after its recently failed rally from $14 to $24 (April/May).  
Traders should be watching for CSCO to close over resistance at 
$20.  Short-term players can probably play the 10% move to $22 
wherein lies the next level of serious resistance.  It will be 
interesting to see if JDSU's earnings will have any affect on 
this tech bellwether.




---

Intel Corp. - INTC - close: 29.83 change: +0.41

WHAT TO WATCH:  Another big boy, Intel, has also left momentum
traders dying for lack of any serious moves.  The stock has been
coiling into a pennant formation with higher lows and lower highs
since early June.  The closer it coils the sooner we can expect
a breakout one way or the other.  At the moment, shares are poised
near the top of the pattern and could breakout to the upside.
However, we're skeptical it will occur and thus, INTC is on the
watch list.  At this point traders should be watching for a 
strong close on heavy volume over $30 or a close under $28.
Either one will be a signal to watch this one further as there
is both support and resistance only a point or two away from 
either level.




---

E M C Corp. - EMC - close: 19.27 change: +1.10

WHAT TO WATCH:  We continue the parade of tech heavy-weights 
and add EMC to the watch list.  The stock responded well to 
the rally despite the bad news from HWP.  EMC has been so beat
up investors might begin to believe there is no bad news left.
Whether you agree with that theory or not, one might be able
to make a profitable trade if the bulls are going to push this
one through resistance at $20.  Volume has been pretty stagnant
the last few days so it would help if it could breakout on
stronger than average volume.




---

AOL Time Warner - AOL - close: 44.91 change: +1.16

WHAT TO WATCH:  We can't have a list of tech stock big caps
without including AOL.  The stock has been consolidating 
between $43 and $44 since the 19th of July.  Bullish traders
might consider a long play if shares close above resistance
at $45.  However, be forewarned that the 200 & the 100-dma's
are directly overhead in the $47.50 area.





-------------------------
-- 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.

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


Sun Microsystems - SUNW - close: 16.03 change: +0.50

WHAT TO WATCH: SUNW finally did it.  It managed to close over 
resistance at $16 but just barely.  A positive sign was the
slightly better than average volume.  We feel encouraged that
the stock has trigger our signal for a potential long play.
Nimble traders who can jump in and out quickly should consider
doing so.  The rest of us are going to watch this one for a
little more confirmation first.  FYI, the 50-dma = 16.36 and
the 100-dma = 17.00.

Wednesday, July 25th's write up:

POTENTIAL TRIGGER EVENT:  SUNW just finished its second up day
in a row.  It managed to close right on its most current down
trending resistance line (of lower highs).  Bullish tech traders
could watch SUNW for a break above $16 as a potential long-play.
Once over $16, potential resistance is at $17 and again near
$19.25.




---

Oracle Corp. - ORCL - close: 19.36 change: +0.10

WHAT TO WATCH: No change from yesterday.

Wednesday, July 25th's write up:

POTENTIAL TRIGGER EVENT:  Oracle has been on and off the watch 
list for weeks as it continues to consolidate under heavy 
resistance at $20.  The stock set a new higher low yesterday 
near $18 and today's 5.9% move is impressive.  Our potential
trigger to go long is still a close over $20.





-------------------
POTENTIAL PLAYS NOW

These Watch List candidates have met yesterday's potential 
triggers and many could be great plays for the active trader
now.  We are going to watch list them for another day to see
if they confirm the move.  Choose your stop wisely if you
proceed to trade them.

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


Siebel Systems, Inc. - SEBL - close: 34.71 change: +1.02

WHAT TO WATCH:  Up 3% today, shares of SEBL were able to close
above resistance at $34.  Aggressive traders should have no 
trouble picking their entry point and setting their stop loss
if you look at an intraday chart.  There was a comment made 
that SEBL might have true resistance at $35.  We're going to
keep it on the watch list another day to see if it can hurdle
this as well.

Wednesday, July 25th's write up:

POTENTIAL TRIGGER EVENT:  Now that earnings are already past for
SEBL, the worse may be over.  The stock put in a potential bottom
yesterday with its intraday dip to $30.  If the bulls can keep
this rally alive then shares of SEBL might be able to reach $40
again.  A nice trigger point would be a close over $34.




---

VERITAS - VRTS - close: 42.16 change: +3.10

WHAT TO WATCH:  Wow!  Up almost 8% today on better than average
volume.  We are encouraged by the move but it may be a little
aggressive for some investors.  More conservative traders could
consider a bounce on a dip back to $40 or $41.

Wednesday, July 25th's write up:

POTENTIAL TRIGGER EVENT:  Another stock that suffered a large 
drop after is earnings report is VRTS.   Shares of VRTS may
have put in a bottom with its intraday low near $34 back on
the 19th of July.  The stock has quietly been inching higher
since and if the market is going to climb higher the stock
might be able to fill the recent gap.  This would mean a 
potential climb back to the $48-$50 area.  An easy trigger
point to go long would be a close over $40. 




---

Check Point Software - CHKP - close: 42.00 change: +2.53

WHAT TO WATCH:  Another big mover, Check Point has broken through
resistance at $40 giving us a bullish signal to consider a long
play.  Like VRTS above, aggressive traders should consider a trade
now while more conservative folks may want to wait for a potential
dip back to $40 or $41 (but wait for that bounce!).

Wednesday, July 25th's write up:

POTENTIAL TRIGGER EVENT:  CHKP is another stock that has been
fighting its way back after the negative reaction to its earnings
report.  CHKP is currently a short-play on PremierInvestor.net 
but if the stock closes over $40, PI will likely close the
short play and bulls can look at this as a potential trigger
to go long the stock.  There is mild resistance at $42.50 but
above this the stock could climb to $50 or higher if the market 
puts in a prolonged rally.  Then again, if the market sours again 
the stock should return to $35 and we'll be looking for new lows.




---

Nokia Corp. - NOK - close: 20.50 change: +0.89

WHAT TO WATCH:  We don't want to sound like a broken record but
NOK has also made the list of triggered bullish signals.  Traders
should consider long positions now that it has closed over
resistance at $20.  More conservative moves would be to wait
for a possible dip (and bounce) back at $20 or wait for a close
over $21.50.  

Wednesday, July 25th's write up:

POTENTIAL TRIGGER EVENT:  NOK's next bullish move could be 
dependant on the development and implementation of the next
generation of handsets and the new wireless networks build to
make them work (both referred to as 3G or third generation).
The stock has been consolidating in a tight range between
$19 and $20.  Our potential bullish signal will be a strong
close over $20.  There is obvious resistance at the $21.50 level
but beyond that is anyone's guess.




---

Procter & Gamble - PG - close: 71.00 change: +1.00

WHAT TO WATCH:  Compared to the other stocks on this list, PG's
1 point move equated to a mild 1.4% gain in the stock.  Clearing
$70 is our trigger to evaluate a possible bullish position.
This chart on this stock looks pretty good and patient traders
could potentially see $76.  Don't forget to play with stops.

Wednesday, July 25th's write up:

POTENTIAL TRIGGER EVENT:  Shares of PG closed with an impressive
2.8% gain climbing throughout the day with a strong finish in
the last forty minutes of trading.  Without looking at the news
to see what has powered the move we see that there was a similar
move in the Retail Index (RLX.X).  PG's stock has seen a strong
climb from its recent June low near $62 and the stock has been
consolidating around its 200-dma and support at $68.  A bullish
trader's potential trigger event would be a close over $70.
Strong overhead resistance can be seen between $76 and $78.




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PremierInvestor.net Newsletter                 Thursday 07-26-2001
                                                   section 2 of 2
Copyright  2001, All rights reserved.
Redistribution in any form is strictly prohibited.

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In section two:

Split Trader
  New Plays: AmeriSource Health - AAS (Bullish)
  Play Updates: BMET, ATK
  Closed Plays: No closed plays for ST

Net Bulls
  New Plays: RF Micro Devices - RFMD (Bullish)
  Bullish Play Updates: Alpha Industries - AHAA
  Bearish Play Updates: No active bearish tech plays
  Closed Plays: BRCD, CHKP

Stock Bottom / Active Trader
  New Plays: NIKE Inc. - NKE (Bullish)
  Bullish Play Updates: APC, RAIL, SGU
  Bearish Play Updates: Professional Detailing - PDII 
  Closed Plays: ANF 


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

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

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

  -------------------------
  New Split Candidate Play
  -------------------------

AmeriSource Health - AAS Close:$57.50 Change:+2.17 Stop:$52.00

Company Description:
The Chesterbrook, Pennsylvania-based firm is the holding company 
for AmeriSource Corp., the forth-largest distributor of 
pharmaceuticals and health care products in the US (McKesson HBOC 
is the largest). AmeriSource supplies hospitals, managed care 
facilities, drugstores, nursing homes, clinics, supermarkets, and 
mass merchandisers through nearly 25 distribution facilities. The 
company also offers a variety of value-added products to enhance its 
own profitability and bolster customer loyalty. These include the 
ECHO Suite, which is a software system for ordering and inventory 
management assistance; the Family Pharmacy program, which provides 
online shopping through familypharmacy.com and helps connect 
independent and small chain drug stores to various merchandising and 
other services; and Pharmacy Healthcare Solutions, which offers 
hospital consulting aimed at improving operational efficiency.  
The federal government, which includes the Veterans Administration,
 accounts for about 20-percent of sales.   

AmeriSource has announced that it is acquiring Bergen Brunswig, a 
major drug-distributor rival. The company created by the merger will 
be called AmeriSource-Bergen.  Pending regulatory approval (expected 
sometime this summer) the combined entity will have revenues in the 
vicinity of $35 billion.  Under the terms of the agreement, which 
has been unanimously approved by both Boards of Directors, each share 
of Bergen Brunswig common stock will be converted into 0.37 share of 
AmeriSource-Bergen common stock while each share of AmeriSource 
common stock will be converted into one share of AmeriSource-Bergen 
common stock. The new Company will have approximately 103 million 
shares outstanding, with current AmeriSource shareholders owning 
approximately 51-percent of the combined company and current Bergen 
Brunswig shareholders owning about 49-percent.

Fundamentals: 
Earnings projections have not been made for the combined entity.  
However, AAS Chairman David Yost said, " This combination of two 
strong, service-oriented companies boosts our confidence that we 
can achieve a long-term earnings per share growth objective of about 
20 percent."

As a separate entity AAS is expected to earn $2.27 per share on 
sales of $13.8 billion in the fiscal year ending in September 2001.
  Last year, the company earned $1.89 on sales of  $11.6 billion.  

Bergan Brunswig (BBC) is expected to earn 80-cents per share on sales 
of $20.2 billion.  Last year, BBC earned 60-cents per share on sales 
of $22.8 billion.  

Why We Like It: 
The combination of these two companies ($34 billion in sales) should 
put it on a par with the industry giant McKesson HBOC (MCK $35.3 
billion in sales).  Investors evidently like the merger, since it 
was announced in March, AAS shares have climbed steadily from near 
$43.39.  To be fair, AAS shares have been on a solid winning streak 
since hitting $12.00 on March 14th of 2000.  

Wednesday saw the shares reverse a dip when the companies reported 
solid reports.  On Thursday, the shares built on the momentum and 
seem poised for the next leg up.  In the short-term, if the shares 
can push through $59 while maintaining strong volume (725k is daily 
average), then they are likely to make a run at resistance at $62.50 
and the longer-term upper trend line at about $65.00.  We suggest 
traders wait for this break of $59 before taking a position.  Solid 
support from a bearish reversal exists at $55.00, the 200-day moving 
average of $50.99 and the lower trend line at about $50.00.  We will 
start this Bullish play with a stop at $52.00.

Picked on July 26th at $57.50
Earnings Date            7/25 (Confirmed)





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

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

Biomet Inc. - BMET - close: 50.49 change: +1.66 stop: 45.50

News has been quiet since BMET's insider trading data became
available on Wednesday.  The bulls were able to push shares 
as high as 51.54 before closing half a point north of $50.
Volume was more than double the norm at 3.4 million shares
trading.  This is a very positive sign for the bulls and 
investors are hoping the up trend will continue into its 3:2 
split on August 7th.  We wouldn't be surprised to see shares
dip a little after the two big days but if they offer an
intraday bounce that could be a good entry point.  Our stop
may be a little wide for some traders.  If it's too far away
for you, move yours up tighter (but not too tight).

Picked on July 25th @ $48.83
Gain since picked:    + 1.66 
Earnings Date:        N/A    (not confirmed)





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

Alliant Tech - ATK - close: 97.57 change: +0.78 stop: 93.50 *new*

It keeps going and going and going...maybe they should rename this
stock the energizer bunny.  The stock has seen 10 positive days out
of the last 13 trading sessions.  Shares are quickly approaching 
resistance in the $100 - $101 area.  While everything looks great
we are beginning to be concerned over the lack of volume.  Today's
volume was just over 1/3 its average volume.  If volume continues
to be low like this there may not be enough steam behind this run
up to punch through resistance.  As a precaution we are going to
move our stop up to $93.50.  This is just under Tuesday's low.
More conservative traders could consider putting a stop at our 
cost of $95.44 but you risk being stopped out on an intraday swing.

Picked on July 24th @ $ 95.44
Gain since picked:    +  2.13
Earnings Date:        8/08/01 (confirmed)





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

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

  --------------
  New Long Play
  --------------

RF Micro Devices - RFMD Close: $27.79 Change: +2.20 Stop: $25.00

Company Profile:
RF Micro Devices designs, develops, manufactures and markets 
proprietary radio frequency integrated circuits for wireless 
communications applications, including cellular and PCS. For the 
fiscal year ended 3/31/01, revenues rose 16% to $335.4M. Net 
income decreased 30% to $35M. Revenues reflect increased demand 
for handset and broadband products. Earnings were offset by 
increases in research & development, and marketing expenses.

Fundamentals:
For the 2001 fiscal year the company's net income is estimated to 
decrease 28-percent, while it is anticipated that 2002 net income 
will rise by 52-percent.  Analysts expect company earnings to rise 
from $0.22 in 2001 to $0.41 in 2002.  The company is not currently 
profitable, therefore a current P/E can not be calculated.  The 
forward P/E is 103.

Strategy:
A surprise announcement of +10% revenue growth for the company's 
second quarter, followed by an upgrade in the stock and RFMD has 
begun to move.  Uncertainty has been somewhat mitigated with 
earnings announcements from NOK, MOT, ERICCY having already hit 
the wires.  A rebounding NASDAQ and strong revenue growth, despite 
a sluggish economy might prove to be the right formula for RFMD.  
Pushing through minor resistance of $27.00 today after two 
consecutive days of increasing upside volume, RFMD stands poised 
for its next challenge- $30.00.

Minor resistance exists just above the $30.00 level and it is here 
that short-term traders may need to re-evaluate their course of 
action.  Though the level is more psychologically influential than 
anything else, given the circumstances, this is probably the best 
exit point.  On the other hand, a longer-term perspective would 
allow for a potential move to resistance of $37.38.  I realize 
that this insinuates a +20% move but with technical indicators 
turning up after the last two weeks of consolidation, such a move 
could be a real possibility.

Picked on July 26th $27.79
Earnings Date        07/17 (Confirmed)





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

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

Alpha Industries - AHAA Close:$38.60 Change +3.15 Stop:$33.50 NEW

By the end of Thursday's trading session AHAA shares had but in a 
strong day pulling free of consolidation in the $33.50 to $37.80 
range.  The only cloud on the horizon light volume of 989k shares 
traded.  Although it was lighter that the 1.4 million average, it 
was still higher than the previous day's 751k traded.  We are 
hopeful the up volume trend continues, as this would be 
confirmation of rising bullish sentiment and put $44 square in our 
sights.  We are running our stop up to $33.50.

.   
Picked on July 24th $36.00
Gain Since Picked:   +2.90
Earnings Date        10/17 (Not Confirmed)


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

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

Brocade Comm. - BRCD - close: 32.70 change: +3.73 stop: 30.88

After bouncing between $30 and $28 for a couple of days, investors
piled into shares of BRCD sending the stock up almost 13% in a
late day rally.  There was no news as traders decided to snap up
shares of tech stocks as the NASDAQ made an afternoon run breaking
through 2000 again.  This is a good example of why you play with 
stops.  We still managed to close the play with a nice gain -
up over 9%.

Picked on July 16th @ $34.06
Gain since picked:    + 3.18
Earnings Date:          8/14 (not confirmed)




---

Check Point - CHKP - close: 42.00 change: +2.53 stop: 39.75

We certainly saw this one coming.  After a quick two day 
gain of 5 points on this short play the bulls pushed and
pushed and pushed to finally break back above what was
new resistance at $40.  If you've been reading our Watch List,
you'd know that we would consider CHKP a potential long
play now that its over $40.  Sometimes you just want to 
quit while you're ahead.

Picked on July 18th @ $40.09
Gain since picked:    + 0.34
Earnings Date:          7/23 





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

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

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

NIKE Inc. - NKE Close:$47.84 Change:+1.06 Stop:$44.00

Company Description:
The Beaverton, Oregon based firm is the world's largest athletic 
shoe and apparel maker.  It has over 40-percent of the entire US 
athletic shoe market.  The company also sells Cole Hann dress and 
casual shoes and a Nike-branded product line of athletic apparel and 
equipment.  The company also operates NIKETOWN stores and is opening 
JORDAN in-store outlets featuring Michael Jordan brand merchandise.  
As youth fashion tastes have moved toward hiking boots and other 
casual shoes, and consumer demand has slumped in Asia, NIKE has felt 
the pain.  To cut expenses, the firm has reduced athlete endorsements, 
downsized facilities, and released 6-percent of its employees.  The 
company, which relies on outside manufacturers, has taken steps to 
avoid more criticism of human rights violations in its factories.

Fundamentals: 
Analysts expect the firm to earn $2.34 per share on sales of $9.9 
billion in the fiscal year ending May 2002.  Last year, the company 
earned $2.16 per share on sales of $9.5 billion.   The company's 
earnings growth of 8-percent is inline with the industry average of 
7.8-percent.  The firm has a current P/E of 22 and a forward one of 
20, a premium over the industry average P/E of 15.   

Why We Like It: 
To gain a fuller understanding of why we like NKE shares please 
read Jeff Bailey's Market Wrap.  He discusses how the selling in 
Treasury bonds may not necessarily be needed for this stock to 
advance.  Bonds are the bank account for big money.  When they are 
buying bonds it often is because they are selling equities.  They 
reason it is better to be safe in bonds (and earn a little interest) 
than suffer equity losses.  Yet since March, Nike shares have been 
in a slowing ascending trading channel seemingly impervious to drops 
in the general market.  This suggests there is a lot of underlying 
strength in the shares.  Simply put, even when the market looks ugly 
money managers are not selling Nike shares to buy bonds.

What they (and we) are seeing is that this franchise company is 
making progress in reducing inventories and expenses, and 
improvements in future overseas orders are suggesting that historical 
double-digit growth is likely to return to Nike sometime next year.  

What is also improved is the short-term technical outlook for Nike 
shares.  For the last week and a half NKE shares have been 
consolidating between roughly $46 and $48.  On Wednesday the shares 
bounced off of this lower range on a slight rise in volume and 
followed through on Thursday with another jump in price and volume. 
 This indicates Nike shares are going to make a run at breaking 
through resistance at $48 and the upper trend line at 
approximately $48.75.  This would put the shares on a strong path 
to test subsequent level of resistance at $50, $52.50, $57.50 and 
$60.  We don't see this play as an aggressive short-term play, but 
rather a longer trending one.  Accordingly, we will start this play 
with a stop at $44, which is just below the 200-day moving average 
of $44.25.  

Picked on July 26th at $47.84
Earnings Date            N/A (Not Confirmed)





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

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

Anadarko Petroleum APC Close:$57.25 Gain:+1.55 Stop:$54.75 NEW

Shares of APC jumped $1.55 cents after the company reported 
better than expected earnings.  Wall street was expecting 
earnings per share of $1.10, but actual results came in $1.50, 36 
percent higher.   APC has now recouped 50% of its May to July 
decline, and is currently sitting just below the 50-day moving 
average.  We are cinching up our stop to $54.75.  This still 
gives APC some room to maneuver, but locks in a gain.   

Picked on July 20th at $51.51
Gain since picked:      +5.74
Earnings Date           7/26/01




RailAmerica RAIL Close:$13.20 Gain:+0.35 Stop:$11.50

RAIL finally did it!  After four days of trying, RAIL finally broke 
through support at $12.90.  The next point of resistance on this ride 
is $13.75, and then it's off to New52weekhighville.  Since $12.90 has 
been such stiff resistance, it should offer solid support.  If RAIL 
close above this level for a few more days, we will move our stop up to 
just below that level.  For now it remains at $11.50.

Picked on July 14th at $11.41
Gain since picked:      +1.79
Earnings Date            N/A




Star Gas Partners SGU Close:$21.39 Gain:-0.01 Stop:$19.50

We noted when we profiled this pick that this stock was a turtle and 
not a hare.  The stock is only up 1 percent since we picked it, but 
that could change if resistance at $21.50 is cleared.  Natural gas 
prices are starting to heat up, and so could this stock.

Picked on July 10th at $21.18
Gain since picked:      +0.21
Earnings Date           7/26/01





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

Professional Detailing PDII Close:$65.00 Gain:-0.13 Stop:$67.25

While the rest of the market rallied Professional Detail stayed 
put, actually it dropped 13 cents, but you get the point.  This 
is third day this stock consolidated, as buyers and sellers are 
indecisive about who is going to take control.  As long as our 
stop at $67.25 holds, we'll wait to see if sellers take control.

Picked on July 18th at $70.00
Gain since picked:      +5.00
Earnings Date            N/A





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

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

Abercrombie & Finch - ANF closed at $42.50

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