PremierInvestor.net Newsletter Weekend Edition 09-21-2001 section 1 of 3 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/092101_1.asp ================================================================= In section one: Market Wrap: Some signs of capitulation Market Sentiment: John Templeton Play-of-the-Day: Right Mgmt Consultants - RMCI (Bullish) Watch List: DIA, ORCL, VIA.B, SANM, ITRI, BLL, CMVT ------------------------------------------------------------------ U.S. Market Numbers ------------------------------------------------------------------ MARKET WRAP (view in courier font for table alignment) ------------------------------------------------------------------ 9-21-2001 High Low Volume Advance/Decline DJIA 8235.81 -140.40 8438.41 8062.34 2.6 bln 802/2440 NASDAQ 1423.19 - 47.74 1454.04 1387.06 2.5 bln 1213/2794 S&P 100 491.70 - 9.32 503.02 480.07 Totals 2015/5234 S&P 500 965.80 - 18.74 984.54 944.75 RUS 2000 378.89 - 8.76 387.65 373.62 DJ TRANS 2054.84 + 20.98 2071.73 1942.01 VIX 48.27 - 0.77 57.31 47.28 VXN 77.73 - 4.76 91.79 77.73 TRIN 0.69 Put/Call Ratio 1.09 ------------------------------------------------------------------ =========== Market Wrap =========== Some signs of capitulation by Jeff Bailey Earlier this week, many market analysts were saying that they felt the broader market indices had further downside, as there was a lack of capitulation. Some floor traders felt that many investors were not selling stocks as a gesture of patriotic spirit and were going to stand firm. As stock prices declined and recent events set in, stock prices continued to fall. "Who's doing all the selling?" is the question from many investors as they watched their stocks fall in value. The answer? Investors/traders that had to in order to either keep their job, meet redemptions from their mutual fund holders, or investors that had to prevent further damage to their life savings and retirement. The list of sellers could be long and all could have different reasons for selling. I would be hard pressed to say that any American is acting unpatriotic if they had to make a decision regarding food on the table, roof over their head when deciding whether to hold onto a stock that was declining in value. What does all this have to do with capitulation? On Monday, it may have been easier to hold 1,000 shares long of International Business Machines (IBM) at the opening of trading (94). The first 10-minutes of trading that day saw just 915,000 shares trade hand. As Monday passed, then Tuesday, Wednesday and Thursday, many holders of IBM (a Dow Industrials component) watched the Dow Industrials lose nearly 1,000 points! That's painful and puts pressure on investor psychology. Friday morning we started seeing some signs that capitulation is perhaps starting to set in. In the first 10-minutes of trading Friday, IBM traded 2.7 million shares. That 4 decline from 94 on Monday morning to the 90 level on Friday morning was a point where some had to call it quits. Intl. Business Machines - 10-minute interval chart The above chart of International Business Machines (NYSE:IBM) is displayed on a 10-minute interval (each bar represents 10-minutes of trading). We're doing this to show that traders/investors were rather calm earlier in the week at the opening of trading. Today however, we saw over 2.7 million shares trade hands in the first 10-minutes. On Monday, we only saw 915,000 shares trade in the first 10-minutes. Why would investors be willing to sell more stock at lower prices? Perhaps they had too, were scared or just plain wanted out! All three are signs of capitulation starting to occur. It's not just IBM either. You can go down the list of Dow components and find a similar pattern. Caterpillar (CAT) is a great example. Caterpillar Chart - 10-minute interval On Monday, Caterpillar (NYSE:CAT) opened at 47 (down just $1.02 from the September 10 close of $48.02) and trades 95,000 shares. 10-minutes later the stock's trading $48.30 (higher than before WTC and Pentagon events). No capitulation there! On Friday, after the stock has declined nearly 14% and opens at $41, sellers show up and dump 658 thousand shares. Of course, the stock trades higher from that point on and finishes at $44. Again, it makes no sense that an investor would willingly sell shares of CAT at $41 today, when they could have sold/hedged their position at $47 on Monday morning. The only thing that makes sense is that the pain has become too great, fear is starting to set in and the position wasn't hedged! All three are good indicators that we're starting to see some capitulation. Another reason of course is that an institution was "forced" to sell some stock in CAT to meet mutual fund redemptions. Are we at a bottom? It's tough to say for sure. You get the feeling that we'll have to undercut Friday's lows at some point, just to make sure all the weak holders are cleared out. This is often times the process that occurs to help the market put in a bottom. It's very similar to testing someone's resolve. During a market climate like we're in right now, there's a belief held by many that stock passes from weak hands to stronger hands. Once the strongest hands get hold of a stock and are unwilling or do not need to sell, then the bottom is put into place. Right now, due to the downward trend of the market and multi-year lows are being set, we have to start with some very short-term observations and begin building from there. Homework! Whether you consider yourself a trader or investor, try doing this. Look at different charts like we're doing above. I like looking at Dow charts to try and build some observations as it relates to the broader market perception of things. To be listed in the Dow Industrials, the company has most likely proven over time that it has some long-term viability. These stocks are widely held by institutions and these stocks can give great insight as to what is going on. As you go through the Dow stocks, make note of where they closed for trading before the most recent tragic events (Sept. 10). Then make note of where they opened for trading on Monday morning, and where they are trading now. What you begin doing is getting some intimate knowledge and building observations of RELATIVE strength! Once you've done that, start comparing things day-by-day. Where's the stock trading today relative to Wednesday? How does that compare to the Dow Industrials? Once you've gone through the 30-stocks, try and answer, "Why would this stock be acting this way." If you find a stock where the only answer is "because the Dow Industrials are down" then you're onto something! List those other thoughts that you make observation on and then try and test those observations against some other stocks in the same type of industry (need not be Dow Components). Most often, you'll find a lot of commonality in your explanations. Remember though, what you really want to be looking for is DIVERGENCE! That's where the best investment opportunities are found. If you really get into this stuff (like I do) then start looking at some sectors. There are basically three sectors right now that catch my eye as far as short-term divergence. The Oil Service Index (OSX.X) has not broken below Wednesday's low, while the Dow Industrials, S&P 500 and NASDAQ Composite have. This is DIVERGENCE and worth a look. Oil Service Index (OSX.X) - last ten months I started out working with a "fitted" retracement, but what I found was almost identical to "standard" retracement of anchoring from a relative low to relative high. The above retracement bracket from $65.12 to $142.24 gives hint that the Oil Service Index and basket of stocks making up the index are at a level of support. It's hard to imagine that stock could actually trade levels, but look at some of the major inflection points and where some meaningful reversals took place. In the current market environment, I'm not looking for a move to $94.50 (61.8% retracement), but a move to the $79 level or close to 80.9% retracement is not out of the question. An investor that is looking at some stocks in this group will want to have some type of hedge strategy in place on a break below this weeks low of $62.63. On Monday, we're highlighting shares of Schlumberger (NYSE:SLB) as a bullish candidate for traders on PremierInvestor.net. Under current market conditions we want to tread lightly and not load the boat, but start exposing some cash to the group. A shorter-term trader that likes to trade some size will want to set a tighter stop than the recent lows of $42.18 (correlating with the OSX.X). A longer-term investor might be willing to give SLB some room to the $42 level, but be open to either hedging his/her position with a protective put should the stock trade $42 or write a covered call to raise some cash. Take a look at the Biotech Index (BTK.X) and Natural Gas Index (XNG.X) too. Hopefully you'll see some of the same type of short-term divergence there that you can begin to see in the Oil Service Index as it relates to some of the broader market averages and other sectors. Final note! It may have been a tough week for some traders and many investors. Difficult times are at hand or so it would appear. Hopefully everyone has gotten through this week in good shape. If you didn't hedge some positions on Monday and wish you had, then PLEASE start a logbook and write down some of your observations and feeling about this week's events. What should you have done and what shouldn't you have done? What were you feeling at the end of each day? Did it look like the "end of the world" was at hand? What stocks/sectors did well? What stocks/sectors got hit the hardest. Try making some notes as to why certain stocks did what they did. While we hopefully kept you abreast of the did well and didn't do so well, it will also be interesting to go back and check some of the articles we wrote in the trader's corner section of the site. I quickly reviewed the "Spotlight on the oil sector" and the chart history we did dating back to the Persian Gulf War. We used past history to try and help guide us as it related to shares of Exxon Mobil (NYSE:XON). In that analysis, it didn't look like XON would be a very good bullish play based on history. I heard more than one analyst on CNBC say that oil stocks would be a good place for investors to look for value. Shares of Exxon Mobil (XON) fell from their opening of trading of $41.24 to finish today's session at $35.83. Ouch if you bought at the open on Monday. We'll continue to follow things here and look for DIVERGENCE from past history. So far, things have gone for XOM like they did back in August of 1990. How did Suncor Energy (NYSE:SU) do? It was the "domestic" oil related stock. It opened for trading on Monday at $30 and it too traded as low as $27.30 yesterday, but did manage to hold its 50- day moving average and bounce up to close at $28.86. Not fantastic, but the stock look technically stronger than shares of Exxon Mobil (XOM). Maybe there is something in play as it relates to domestic or international risk after all? If for no other reason than something to hand down to a new generation (son/daughter or grandson/granddaughter) your thoughts, emotions and observations will perhaps help you or someone who reads your trading journal in the future. I wish my grandparents had written such a journal. It would make for excellent reading! Jeff ================ Market Sentiment ================ John Templeton by Jeffrey Canavan A 14% drop in the Dow, a bullish percent reading of zero for the Nasdaq-100, a plethora of layoffs and constant prattle about a global recession is enough to make any investor want to join the $66 billion that has found its way into money market funds over the past two weeks. Admittedly the constant barrage of bad news was even starting to wear on my psyche. So I was thumbing through my mail last night when I came upon a belated birthday present from my brother. As is customary between us, any birthday or Christmas present is somehow related to trading. This particular gift was an audiotape series - Secrets of Great Investors - Bargain Hunters, Contrarians, Cycles, and Waves. So I popped in the tape on my way to work this morning, and here was the very first story. It was 1939 and war had broken out in Europe. U.S. Investors were paralyzed with fear. A young John Templeton borrowed some money from his father, called up his broker friend and said that he wanted to buy $100 worth of every stock that was trading under $1. He ended up buying stock in 104 companies, 34 that were bankrupt. After four years his investment had climbed to $40,000. Timely story, but can we expect the same results now? Over the years contrarians have developed tools to help identify extremes in market sentiment, and two of those, the VIX and Put/Call ratios, have been screaming that the market is oversold. Yet we continue to head lower, so what's a trader to do? Keep the defense on the field. Sellers remain in control, and any bounce continues to elude us. Nasdaq Composite and S&P 500 Monthly Charts Technically the October 1998 lows continue to hold for the Nasdaq and S&P 500, and those will be the levels to monitor next week. Other than that there are not a lot of support levels to rely on, apart from a bunch of oversold indicators. Tuesday should be an interesting day with pre and post-attack consumer confidence numbers, existing home sales, and API energy stocks being released. Thursday sees the release of initial jobless claims, durable orders, help wanted index, and new home sales data. Nervous investors don't need much of a reason to keep selling. ----------------------------------------------------------------- Market Volatility Close High VIX 48.27 57.31 VXN 77.73 91.79 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Data not available, but it's safe to assume all put/call ratios are overly bearish. Total 1.23 Equity Only OEX QQQ ----------------------------------------------------------------- Bullish Percent Data The bullish percent for the Nasdaq-100 has dropped to zero. That means no Nasdaq-100 stocks are currently trading on a buy signal. Current Change Status NYSE 18 -4 Bear Confirmed NASDAQ-100 0 -2 Bear Confirmed DOW 18 -2 Bear Confirmed S&P 500 16 -6 Bear Confirmed S&P 100 16 -2 Bear Confirmed Bullish percent measures the number of stocks in an index currently trading on a buy signal on their point and figure chart. 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 ----------------------------------------------------------------- 5-Day Arms Index 0.98 10-Day Arms Index 1.16 21-Day Arms Index 1.21 55-Day Arms Index 1.26 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. ----------------------------------------------------------------- Advancers Decliners NYSE 799 2433 NASDAQ 1198 2693 New Highs New Lows NYSE 18 766 NASDAQ 12 735 Volume (in millions) NYSE 2,310 NASDAQ 2,584 ----------------------------------------------------------------- Advisory Sentiment *New data not yet available Bullish Bearish Correction Net Bullish Change 44.3% 30.9% 24.8% 13.4% +0.1% 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: 09/18/01 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 This week's data only reflects trading on Monday and Tuesday, but in those two days commercial traders added 47,027 long positions and only 29,753 short positions. That drops their net bearish stance by 17,274 contracts. Small traders on the other hand loaded up with 31,441 short contracts. Right now it looks like small traders made the right move, but we shall see next week. Commercials Long Short Net % Of OI 9/04/01 350,626 430,613 (79,987) (10.24%) 9/10/01 359,360 442,070 (82,710) (10.32%) 9/18/01 406,387 471,823 (65,436) ( 7.45%) 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 9/04/01 147,080 62,004 85,076 40.69% 9/10/01 156,500 69,090 87,410 38.75% 9/18/01 172,988 100,531 72,457 26.49% Most bearish reading of the year: 36,513 - 5/01/01 Most bullish reading of the year: 91,122 - 3/06/01 NASDAQ-100 Small traders have gotten more bearish, and are approaching their most bearish levels of the year. Commercials Long Short Net % of OI 9/04/01 28,757 38,119 ( 9,362) (14.00%) 9/10/01 26,784 37,912 (11,128) (17.20%) 9/18/01 35,497 45,731 (10,234) (12.60%) 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 9/04/01 12,341 9,806 2,535 11.45% 9/10/01 15,263 12,555 2,708 9.73% 9/18/01 22,876 21,702 1,174 2.63% 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 continue to increase their net long position in Dow futures. Commercials Long Short Net % of OI 9/04/01 23,459 14,099 9,360 24.9% 9/10/01 25,445 13,033 12,412 32.3% 9/18/01 28,425 15,077 13,348 30.7% Most bearish reading of the year: (8,322) - 1/16/01 Most bullish reading of the year: 13,348 - 9/18/01 Small Traders Long Short Net % of OI 9/04/01 6,952 12,744 (5,792) (29.41%) 9/10/01 7,460 12,735 (5,275) (26.12%) 9/18/01 7,335 15,044 (7,709) (34.45%) Most bearish reading of the year: (7,572) - 5/08/01 Most bullish reading of the year: 1,909 - 1/16/01 COT Commercial Net Position Charts ----------------------------------------------------------------- ========================= Play-of-the-Day (Bullish) ========================= Right Mgmt Consultants - RMCI - close: $25.22 change: +0.52 stop: $22.00 Original Comments When Selected on September 20th: Company Description: For Philadelphia-based Right Management a weak economy with hoards of layoffs is a growth opportunity. The company specializes in career transition and management consulting services through over 200 company-owned and franchised offices worldwide. Right consults on termination interviews, severance and termination benefits and provides career planning services for employees. It also runs group seminars and on-site career transition centers. Its management consulting practice (about 20-percent of revenue) is focused on leadership development and organizational performance. The company suffered in the 1990's due to the booming economy and low unemployment, which encouraged the company to develop its management consulting practice. However, the recent economic downturn has brightened prospects as many employers are reducing headcount. Fundamentals: What a difference a changed economy makes. The company that earned 89-cents a share in 2000, is expected by analysts to earn $1.66 in 2001 and $2.42 in 2002. These forecasts are up sharply from consensus estimates of $1.19 for 2001 and $1.38 for 2002 made just 90-days ago. RMCI shares are low priced on a fundamental basis when compared to industry averages. The firm has forward P/E's of 14.8 for 2001 and 10.2 for 2002; as compared to an industry average P/E of 28.82. It has a bargain basement PEG (Price/Earnings Growth) of 0.97 as opposed to the industry average of 1.81. Why We Like It: There are a number of reasons for long and short-term investors to like this stock. The company is cheap on a valuation basis and in the right sector during an economy that is showing few signs of a pulse. Its shares are in a well-established up trend extending back to December of 2000. Our point and figure analysis produced a bullish 6-month price target of $34.50; however, as the economy continues to degrade it is likely we will see this target within a much shorter time frame. The stock blasted through critical resistance at $24.50 on Friday. This represented a move out of the top-end of congestion the shares have been in for the past month. With a solid base underneath and only slight resistance in the $26 to $27 range, the shares seem poised to put in a short-term test of the $29.49 52-week high set in mid-July. Depending on their personal tolerance for pain, long- term investors can start with a stop at either $18.50, which would indicate a violation of big time support that has held since May, or our shorter-term trader stop of $22.00. Updated Comments: On a day when decliners beat up on advancers 2437 to 806 at the NYSE, we'll take a 75-cent gain in RMCI. Volume was nice and heavy, which Right Management will need as it continues to close a big gap that formed back in July. A company that specializes in career transition should see plenty of business in the coming months. Picked on September 20th at $24.70 Gain since picked: +0.52 Earnings Date N/A ========== Watch List ========== Diamonds, Based on the Dow Jones - DIA - close: 82.80 change: -0.85 WHAT TO WATCH: Many investors are not familiar with Diamonds. As you can see above the symbol is DIA and you can buy and sell them like a stock. This is a very easy way for individuals to trade the market or in this case the Dow Jones Industrial Average. Basically, for every 100 points the DJIA moves, the DIA moves one point. If you're expecting a big rally in the Dow next week then one way to trade it would be to buy shares of the DIA. If the DJIA rallies 300 points then the DIA should move 3 points from 82.80 to 85.80. For active traders this probably doesn't offer enough excitement for them. A 300-point move in the DJIA could be traded several ways not the least of which would be options on the DJX or even options on the OEX which would probably offer substantial returns. Speaking of the OEX, if trading options on the S&P 100 index interests you, consider checking out our sister website, www.IndexSkybox.com, their sole focus is trading index options and educating individuals how to do it profitably. All right, back to the stock traders here on Premier, we would be watching the DIA for another dip to 80 or a break above 83 or 85. You realize a break above 85 would require a 300-point move in the DJIA but those seem to be more common place these days. Depending on your entry point we would consider stops at today's low of 79.50 or just under 81.00. Obviously, you should confirm market direction before considering a long play. --- Oracle Corp. - ORCL - close: 10.76 change: -0.55 WHAT TO WATCH: The GSO software index may have just finished its fifth down day in a row but ORCL has been trading sideways for several days now. The ship that Larry Ellison commands has been stuck in a trading range between 10.25 and 11.50. Depending on your style of trading you could try and enter near the bottom of this range or wait for the close above resistance of 11.50 or 12.00. We might see resistance at $13 but our goal would be to get out at $14 capturing a 10% to 15% move. We would suggest a stop at 10.00 or 11.50 based on your entry. --- Viacom Inc Class B - VIA.B - close: 30.75 change: +1.20 WHAT TO WATCH: Maybe it was the positive close today or maybe it was the drop from $45 to less than $30 in the last few weeks but VIA.B caught our attention on Friday. The media giant took it on the chin when the market's opened up again on Monday and the selling had been non-stop until Friday. Viacom owns the CBS television company and the 24 hour coverage that many T.V. channels offered last week have put a huge crimp in advertising revenues for most T.V. networks. We think it's possible that VIA.B might be at a bottom here and even if it isn't any significant bounce in the markets could give VIA.B enough fuel to at least rebound to $35. We would look for a close over $31 as a trigger to consider a long position with a stop at or just under $29. Resistance is at $35 or if the bulls are lucky, the stock might make it to $37 and close the gap overhead but that could take awhile. --- Sanmina Corp. - SANM - close: 13.30 change: +0.39 WHAT TO WATCH: It's no secret that the manufacturing sector is in the pits right now. SANM is a far cry from where it started the year over $50 and there are renewed concerns for demand after last week's attack on New York. Despite these concerns we look at SANM as a potential short-term trade. While most of the market was steadily falling all week, SANM spent most of the week hovering in a 50 cent trading range. Friday saw the stock gap lower like many others but shares quickly traded higher and managed a 3% gain on the day. The company also saw positive news with an approval by the EU commission for SANM to acquire SCI Systems (NYSE: SCI). The new company would be one of the globe's largest electronics manufacturers. Depending on your level of aggressiveness, we would look for a close over $13.50 or over $14.00 as a trigger to go long shares of SANM. The stock should see strong overhead resistance at $17.50 but that would be a nice return of 15% to 20% or more. Consider a stop 50 to 75 cents below your entry. =================== CONTINUING TO WATCH =================== Itron, Inc - ITRI - close: 20.04 change: +0.30 UPDATE: This stock is still climbing and has not succumbed to the selling pressure in the broader markets. We still believe that traders should wait for the stock to close (higher) over the $20 level or better yet to wait for the close over $21. It's worth watching. -- Highlighted on Sept. 19th, 2001 -- -- original write up below -- WHAT TO WATCH: Most of us have probably never heard of Itron Inc. but its stock has been showing incredible strength over the last three sessions making gains in each of them. To steal a line from MarketGuide's business description, "Itron Inc. is a provider to the utility industry of data acquisition and wireless communications solutions for collecting, communicating and analyzing electric, gas and water usage". The stock has been in a long-term up trend since late December of last year and while it has seen some consolidation and dips shareholders should be impressed with its $4 to $20 appreciation. In late July, shares of ITRI dipped to $14.50 intraday before bouncing back to $20 in the next few days. The stock has seen very strong resistance at the $20 level and the few times the bulls have been able to breakthrough it the bears took it back down the next day. As of this Monday the intraday low was $14.25 and the stock has bounced back to $19.60. The bulls are making another run at resistance and if they are successful we want you to be aware of it. We would watch for two consecutive closes over the $20 level or a better strategy would be to wait for two closes over $21 which is also strong resistance. You'll be missing the 5% move from 20 to 21 but it might forecast that the stock could be ready for another stronger move up. The past year has shown moves of 20% to 30% or more when it successfully breaks out above resistance. On the positive side, the company also announced its efforts in a stock buy back program this week. --- Ball Corp. - BLL - close: 54.05 change: -0.71 UPDATE: It's possible that BLL might not get as much attention if the broader market finally produces a large rally. Traders and investors will be drawn to more beaten down stocks in hopes of capturing greater percentage gains but BLL is still worth keeping an eye on. The dip on Friday down to the $52.40 level was a great chance for traders to buy at support created in the last week of August. With a stop just under $52 there wouldn't be much to worry about. -- Highlighted on Sept. 19th, 2001 -- -- original write up below -- WHAT TO WATCH: Many of our readers who work in the technology field are probably familiar with the Ball Corp. through its Ball Aerospace division. What a lot of investors don't know is that the majority of their revenues come from food packaging. More correctly, Ball is one of the world's largest suppliers of metal and plastic packaging for food and beverages (example: aluminum cans). Ball announced 2000 sales of $3.7 billion, of which $3.3B came from packaging and only $400 million from its aerospace division. Their technology division focuses on civil space and defense systems. We are unsure how a slowing economy might affect the packaging operations if at all and some may see it as a potential defensive play. On the other hand, anything defense related is going to get positive press as the U.S. pursues its new anti-terrorist agenda. Looking at the chart, one can see the slow steady long-term trend is up. The stock appears to be prone to 5 and 10% corrections and for weeks it battled with overhead resistance at $50. However, the bulls broke through resistance in mid-August and the share price quickly ran up to $58. We've seen a pullback to $54 and the last two days have seen positive closes. Both traders and investors can keep this stock on their watch list as potential entry points to go long exist with a pullback to $54, $52.50 or a more bullish close over $58. If the markets remain sour, a dip to $50 might be a tempting entry point but overall market conditions should be considered. --- Comverse Technology - CMVT - close: 25.08 change: -0.91 UPDATE: Trading between new support at $25 and resistance at $26 we still feel that CMVT might offer nimble traders a chance to capture any move up to $28 or $30. Unfortunately, the 50-dma at 27.31 could also act as overhead resistance. Keep your eyes on the NASDAQ for a relief rally that might signal the move up for CMVT. This would be a short-term trade only. Look for that close over $26 (not 25.99 like Thursday). We suggest a very tight stop. -- Highlighted on Sept. 19th, 2001 -- -- original write up below -- WHAT TO WATCH: Is the bad news over? We saw CMVT get hammered in July after warning that earnings would be significantly less than expected. The stock had been stuck in limbo under resistance at $30 until they confirmed the bad news with their earnings report in late August. Earnings were indeed down and investors were not happy with numbers 20% less than the year before. The next several sessions saw sustained selling in CMVT. Now it appears that CMVT may have found a bottom at $20. This is purely speculation and what we are witnessing could just be an oversold bounce and short covering but its possible shares might trade up to $27.50 or even $30 again. There is resistance at 25.75 but if the tech sector rallies it might be the case of a "rising tide lifts all boats". Keep your eyes on it if this sector interests you or you like to do a little bottom-fishing. ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. PremierInvestor.net staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control. 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PremierInvestor.net Newsletter Weekend Edition 09-21-2001 section 2 of 3 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/092101_2.asp ================================================================= In section two: Split Trader New Plays: none Play Updates: No active plays at this time, Closed Plays: none Net Bulls New Plays: none Long Term Play: General Electric - GE Bullish Play Updates: QUALCOMM - QCOM, Genentech - DNA Bearish Play Updates: MEDI, MMM, PSFT Closed Bullish Plays: SBC Comm. Inc - SBC Closed Bearish Plays: Mercury Cmptr - MRCY Stock Bottom / Active Trader New Plays: Schlumberger Limited- SLB (Bullish) Argosy Gaming Co - AGY (Bearish) Bullish Play Updates: MO, RMCI, SZA Bearish Play Updates:.ACF, TCB, TROW Closed Bullish Plays: Campbell Soup - CPB Closed Bearish Play: none ================================================================== Net Bulls (NB) section ================================================================== ============ NB New Plays ============ ================= NB Long Term Play ================= General Electric - GE - September 21st close: $31.30 change: +0.93 Company Description: This conglomerate to fit into any category that is large and successful. Its recently retired CEO Jack Welch was widely considered to be the best corporate executive in the U.S. His hand picked successor Jeff Immelt, the former President and CEO of GE Medical Systems is well regarded and investors should see no letup in GE's success. He will continue Welch's mandate that the firm be #1 or #2 in every industry it is in. Currently the firm makes aircraft engines, appliances, industrial products, lighting and electrical distribution systems, plastics, nuclear reactors, gas turbines, medical imaging systems, locomotives and more. The company owns the NBC and CNBC television networks. Its financing arm GE Capital Services supplies over one-half of sales. GE is probably the largest growth company in the world, it has averaged over 100 acquisitions in each of the last three years. Its growth strategy emphasizes expanding outside the U.S. and doing more business over the Internet. Fundamentals: Last year the company earned $1.27 per share on revenue of $129 billion. Analysts forecast the firm will earn $1.41 a share in 2001 on revenue of $135 billion and $1.61 in 2002. Why We Like It: GE is one and will remain one of the most successful firms in history. When circumstances cause the shares to dip, savvy long- term investors see this as an opportunity that does not come around often. The attack on the WTC put GE shares into a decline it has not seen in years. One of its subsidiaries, GE's Employers Reinsurance Corp. is among the companies providing insurance and reinsurance coverage of the World Trade Center and the four aircraft used in the terrorist attacks. Last week it said it would have $600 million in pretax insurance losses. This news dropped the shares from the $39.35 close on September 10th to $30.37 on Thursday. Friday saw the shares rebound as bargain-hunting investors took advantage of the weakness to scoop up some shares. Monday may see more weakness in the shares as the company said Friday it expected 2001 per-share earnings growth of 11 percent to $1.41 per share. Before the attacks, the company had forecast earnings of $1.45. However as its new CEO Immelt said, "The GE model works." He added, "I was chairman for two days, and then I had jets with my engines hit a building I insured which was covered by a network I owned, and we still grew (2001) earnings by 11 percent. I think we're in pretty good shape." Ultimately, investors will agree with Immelt's words and GE shares will rise. Patient investors should look at any further weakness in the shares as a K-Mart blue light special on one of the best companies in the world. For investors who yearn for growth but want to sleep at night during times of economic uncertainty, General Electric is an easy choice. Earnings Date N/A (Not Confirmed) =============== NB Play Updates =============== ----------------------- NB Bullish Play Updates ----------------------- QUALCOMM - QCOM - close: 44.89 change: -0.65 stop: 42.00 Hmm.. what can we say but see yesterday's comment about relative strength. QCOM has really impressed us here. The Dow drops 140 points, the NASDAQ slips almost 3.25% and QCOM dips to its April lows and bounces. The bulls are really trying to hang on at this level. If the market can stage any sort of rebound we might get a decent rally in QCOM. We still feel that this is a play for veteran traders and those willing to take on more risk than our normal strategies in the newsletter but even from here near $45, an individual should be able to limit their potential loss to only $3 with a stop at $42. If you'd like to see more confirmation of a new bullish move up, consider waiting for shares to close over $46. The only concern you might have with that strategy is that the stock might get away from you on a short-term move up. We might see some overhead resistance at $48 but I would expect more at $50. Note, for the technical traders out there, it looks like there is the beginnings of a bullish divergence in the MACD's histogram vs. the overall trend of its fast and slow moving averages. I wouldn't base a trade on this observation but it might confirm that the downward momentum is slowing in QCOM. Picked on September 19th @ $45.00 Gain since picked: - 0.11 Earnings Date: N/A (not confirmed) --- Genentech - DNA - close: 39.88 change: -1.32 stop: 37.50 With many stocks gapping lower this morning with the broader markets doing the same, the Biotech sector felt the BTK.X drop another 22 points or 5% to 417. It is hoped that this level between 410 to 420 on the BTK might offer some support as the sector found support here in April. Of course the intraday low in March was 382 but alas no one said the biotechs were a conservative play. Shares of DNA actually held up okay after the initial gap lower to $38.75. The stock is currently trading near support and with a stop at $37.50 our risk/reward scenario looks good. Be aware that another gap down below the stop is always a potential risk. While our trading target is $48 more conservative traders may want to wait for the stock to close above $42. We might see some resistance at $46 as well but a move from 40 to 46 is still 15%. Confirm stock and market direction on Monday before initiating any new plays. Picked on September 20th @ $41.20 Gain since picked: - 1.32 Earnings Date: N/A (not confirmed) ----------------------- NB Bearish Play Updates ----------------------- MedImmune - MEDI - close: 32.01 change: -1.00 stop: 34.50 With the overseas markets falling it wasn't hard to expect a lower open on Friday morning for U.S. stocks. It was a little surprising to see the NASDAQ composite along with large numbers of equities gapping lower on the open. Shares of MEDI opened at 29.51 on Friday and volume for the day closed at over 5 mln shares trading. The stock managed a strong comeback but rolled over at the $33.50 level. The overhead resistance line remains intact but we become increasingly concerned that a relief rally could be around the corner. Since the bears had probably been targeting the $30 level the strong rebound was probably fueled by short covering. We would encourage traders to start taking profits if you have not done so already. As of Friday's close the newsletter is showing a 20% gain since the we picked the play on August 28th. Could the stock keep falling? Yes, but the sector and the stock are very oversold and could easily bounce 10% to 15% in a very short time. Bears are keeping their eyes on the BTK.X which closed near its April lows. The risk/ reward outlook to short from here does not look as profitable a week or two weeks ago. We would not initiate any new plays unless the stock closed below the $30 mark and then only with a very tight stop. Those traders that want to lock in as much of their gains as possible might want to consider moving their stop to 33.50 instead of the newsletter's 34.50. Picked on August 28th @ $40.46 Gain since picked: + 8.45 Earnings Date: 10/24 (not confirmed) --- 3M - MMM - close: 86.98 change: -3.34 stop: 90.50 *new* After the fifth worst week in the Dow's history, investors should not be surprised to see one of its components fall almost point for point on a percentage basis. MMM has dropped almost 15% in the last five days with the week culminating into Friday's session with over 6.1 million shares trading. We've said it before so bear with us but MMM is going to take its direction from the Dow. As soon as we get a rally in the index we should see shorts start to cover and momentum traders trying to scalp a few points all trying to buy MMM. However, until that happens we'll keep lowering our stop to protect the gains in this successful short play. Currently, our bearish play is up 19.77 points or 18.5%. We've chosen to lower our stop to $90.50 giving MMM 3.50 in room to maneuver. Picked on August 29th @ $106.75 Gain since picked: + 19.77 Earnings Date: N/A --- PeopleSoft - PSFT - close: 20.23 change: +0.25 stop: 21.26 *new* PSFT was one of 18 stocks out of the NASDAQ 100 that closed in the green today but the 25 cent gain probably feels like a hollow victory for shareholders. The stock opened lower like most of the market but short covering helped bring it back to the $20 level before midday. The software sector continues to slip and the GSO.X dropped another 3% in tandem with the NASDAQ. We've said it before... the stock is very oversold and everyone is expecting a bounce soon. This is not a good position to be initiating new short plays. This bearish play has been sitting at or near a 40% gain for a few days now. If you have not begun to take profits yet we would encourage you to do so. Instead of just closing the play we're going to lower our stop another 49 cents and give the stock the opportunity to fall further despite our doubts. The risk is that PSFT could gap higher on Monday or Tuesday and cut into any gains. Picked on August 31st @ $ 34.48 Gain since picked: + 14.23 Earnings Date: N/A =============== NB Closed Plays =============== ----------------------- NB Closed Bullish Play ----------------------- SBC Comm. Inc - SBC - close: 44.25 change: -1.65 stop: 44.00 We are really disappointed that shares of SBC dipped below our stop of $44.00 in late trading on Friday. One might think that the negative news about California regulators fining Pacific Bell, a subsidiary of SBC, $25.5 million for "deceptive marketing practices" on top of a market that turned in its 8th down day in a row was too much for traders and some of them didn't want to be long going into the weekend. SBC said the company would appeal the regulators decision and we doubt that the $25 million will be felt by a corporation with sales over $40 billion. What could have been the weakness in SBC was news of their offer to buy the remaining shares of Prodigy, the ISP, whom SBC already owned 42%. SBC offered a 54% premium over Prodigy's closing price of $3.54 or $5.45 a share. We know it looks like the news came out after the markets were closed but no one knows if someone didn't already have an inside scoop. Volume has been tremendous the last few days but volume for the entire markets has been record breaking. What should concern bullish traders is the close below $45 and the close below the stock's 200-dma (44.71). If you still like the stock, keep an eye on it. Traders might be able to see the stock bounce at $44 or maybe a dip to $43.50. Picked on September 18th @ $45.65 Gain since picked: - 1.65 Earnings Date: 10/22 (not confirmed) ----------------------- NB Closed Bearish Play ----------------------- Mercury Cmptr - MRCY - close: 33.94 close: -0.92 stop: 36.00 MRCY may have opened lower with the rest of the markets but it didn't stay down for long. How could it? After the rousing speech by the President last night investors jumped into anything that might benefit from the increase in defense spending. By the end of the day MRCY had gained 6.74%. Do we still think it's too much too soon? Yes, as the company probably hasn't received all these new orders from the gov't yet. Fortunately, we raised our stop on Thursday so we close the play with a 13 cent loss. Picked on September 18th @ $35.87 Gain since picked: - 0.13 Earnings Date: N/A ================================================================== Stock Bottom / Active Trader (AT) section ================================================================== ============ AT New Plays ============ -------------- New Bullish Plays -------------- Schlumberger Limited- SLB - close: $46.96 change: +1.96 stop: $43.00 Company Description: Schlumberger is the #2 oil and gas field services firm in the world (#1 is Hallibuton - HAL). Services the company provides includes seismic surveys, drilling, wireline logging, well construction and completion, and project management. Schlumberger also makes metering and payment systems for utilities and produces smart cards. In addition it produces semiconductor testing equipment. Its Omnes unit creates and operates information technology and communications networks. Fundamentals: Last year, the company earned $1.27 per share on revenue of $9.6 billion. Analysts project the company will earn $1.59 on $14.3 billion in 2001 and $2.31 on $16.2 billion in 2002. SLB shares have forward 2001 P/E of 29.5. The industry average P/E is 11.84. Why We Like It: The markets are oversold to the extreme making shorts vulnerable to an equally extreme snapback rally. In preparation, it is necessary to begin to balance out overly short portfolios with some long positions. Yet it takes a certain amount of courage to take a long position in the face of a rampaging Kodi the Bear. Therefore it makes sense to look for a sector that has already been mauled to reduce the downside risk, yet is showing early signs of life. Then search within that for a gorilla that is showing greater relative strength than its peers. Such a sector is oil service and the animal is Schlumberger. The oil service sector index ($OSX) gained an impressive 4.5- percent on a crummy Friday for the overall market. Our master market strategist Jeff Bailey in today's (9/21) Market Wrap gave some other reasons why we like this sector and ways to play this bullish selection. So make certain to read his piece. Searching for companies that are outperforming its peers brought us to Schlumberger. Don't be fooled that the higher P/E of SLB shares as compared to the industry average suggests these shares are overvalued, nor that SLB shares have been sliding with every other oil service company. As one of the best names in the industry, on a relative basis SLB shares have suffered less than the rest of the sector, making it a good candidate to outperform its peers when the sector turns. In addition, since the oil service sector has been hammered since its August 2000 highs it probably doesn’t have a lot of downside left making it a relatively safer place to go long. In the short-term, we have a bullish price target of $52. In the event the bears keep attacking, we will protect ourselves with a $43.00 stop, which is just below Friday's $43.69 session low. Longer-term investors, who like this sector, may want to consider a stop at $42. This level would be our preferred stop, as reaching it would represent a new 52-week low, however it is a bit too far from our $46.96 entry point for a short-term trade. Picked on September 21st at $46.96 Earnings Date 10/24 (Not Confirmed) -------------- New Bearish Plays -------------- Argosy Gaming Co - AGY - close: $23.00 change: -0.70 stop: $24.50 Company Description: Argosy runs six riverboat casinos on the Ohio, Mississippi, and Missouri rivers, serving the St. Louis, Cincinnati (about 50- percent of company sales) and Kansas City areas, and also in Baton Rouge, Louisiana, Joliet, Illinois and Sioux City, Iowa. Its riverboats contain more than 6,400 slots and about 265 table games. Fundamentals: Analysts forecast the company will earn $2.14 per share in 2001 and $2.78 in 2002. Last year, the firm earned $1.74 per share on revenue of $694.8 million. The company has approximately $589.9 million in long-term debt. On September 20th, the company reaffirmed its guidance of third-quarter earnings of 60-63-cents per share, saying the recent airline troubles should not effect them as they serve primarily local markets. Why We Like It: When the market is oversold to this extreme, shorting strategies carry additional risk. However, since the market continues to plummet they carry the potential for significant gain. To reduce our risk, we search for a bearish play that is near significant resistance in a weak sector. Argosy fits this bill to a tee. A suffering economy and the WTC tragedy have sent gaming industry shares into a tailspin. Argosy shares have mirrored the rest of the industry, dropping $9.80 (or 23-percent) since September 4th. Of that loss $5.50 (or 19-percent) has occurred since the markets reopened on September 17th. Clearly the shares have bearish indications. Last Wednesday, the shares broke through their $23.80 200-day moving average. And although the shares managed to limit their losses to an additional 87-cents, this sets up an attractive bearish opportunity. We can enter this position with a $25.50 stop, which is just above the 200-day moving average thereby limiting our risk in the event of a market turnaround. To the downside, there is decent support at $22.00. If these shares can manage to break through this level, there is some slight support in the $19.50 to $20.74 area, but we think a move to the $16 to $17 range is likely. This gives us a $1.50 risk for a potential reward of $7 to $8. Another legitimate approach would be to wait for the break below $22, but then the risk/reward ratio s would have to be adjusted accordingly. Picked on September 21st at $23.00 Earnings Date 10/23 (Not Confirmed) =============== AT Play Updates =============== ----------------- Bullish Play Updates ----------------- Phillip Morris - MO - close: 46.68 change: -0.75 stop: 45.00 The performance of Phillip Morris today was enough to make me start smoking. MO dipped down to $45.33 before bouncing off its low to close at $46.68 on heavy volume. 2 million shares traded hands in the first hour, as the stock dropped $1. MO stabilized around noon, and managed to close back above both moving averages and support at $46.40. Options expiration and nervous traders wanting to get out before the weekend most likely affected Phillip Morris today. Picked on August 30th at $47.94 Gain since picked: -1.26 Earnings Date 10/17/01 (unconfirmed) --- Right Management - RMCI - close: 25.22 change: +0.75 stop: 22.00 On a day when decliners beat up on advancers 2437 to 806 at the NYSE, we'll take a 75-cent gain in RMCI. Volume was nice and heavy, which Right Management will need as it continues to close a big gap that formed back in July. A company that specializes in career transition should see plenty of business in the coming months. Picked on September 20th at $24.70 Gain since picked: +0.52 Earnings Date N/A --- Suiza Foods - SZA - close: 60.00 change: +0.75 stop: 54.00 Suiza Shareholders approved the buyout of Dean Foods today. The merger will create a company with $10 billion in annual revenue, but still awaits federal antitrust approval. Suzia was subject to some profit taking/selling out of the gate Friday morning, but staged a nice rally to close up $0.75. That takes out resistance at $59.45 on decent volume. Picked on September 19th at $57.01 Gain since picked: +2.99 Earnings Date N/A ----------------- Bearish Play Updates ----------------- AmeriCredit - ACF - close: 28.36 change: -0.46 Stop: 31.00 ACF quickly dipped below support at $28, but managed to rally back to $28.36 by the end of the day. We thought this level would be tough to crack, and it has proved so. We'll keep our stop at $31. This locks in some nice gains, but still gives ACF some wiggle room until it decides if it wants to break support or not. Picked on September 7th at $40.00 Gain since picked: +11.64 Earnings Date N/A --- TCF Financial - TCB - close: 40.78 change: -0.62 stop: 42.00 NEW TCF Financial was trading as low as $39.45 by noon, but managed to close above support at $40.50. We would have felt more comfortable if this stock would have closed below that level. Now it looks a little suspicious of wanting to rally. We are lowering our stop one more notch to $42 in case that happens. Picked on August 24th at $47.60 Gain since picked: +6.82 Earnings Date N/A --- T. Rowe Group - TROW - close: 25.70 change: -1.87 stop: 30.50 Funds still continue to attract money - money market funds. With T. Rowe's reliance on stock funds, investors continue to shy away from the company. Today a larger than average number of shares changed hands, and TROW closed down $1.87. That puts the stock below support at $28 and primed to fall further. Picked on September 20th at $27.57 Gain since picked: +1.87 Earnings Date 10/19/01 (unconfirmed) =============== AT Closed Plays =============== ----------------- Closed Bullish Plays ----------------- Campbell Soup - CPB - close: 26.80 change: -1.46 stop: 27.00 Stocks suffered a steep sell off in the first hour of trading, and we were stopped out of CPB in the first ten minutes of trading. The stock closed below its 50-day moving average and on its low. The overall market sentiment has cancelled out Campbell's otherwise reliable seasonal tendencies. Picked on September 17th at $28.35 Gain since picked: -1.35 Earnings Date N/A ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. PremierInvestor.net staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control. Please read our disclaimer at: http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html ***************************************************************** ADVERTISING INFORMATION For more information on advertising in PremierInvestor.net Newsletter, or any Premier Investor Network newsletter please contact Contact Support. ***************************************************************** Copyright © 2001 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter Weekend Edition 09-21-2001 Section 3 of 3 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/092101_3.asp ================================================================= In section three: Split Announcement: Redwood Empire Bancorp - REBC Expected/Likely Split Announcements For The Coming Week New Split Candidates: AdvancePCS - ADVP Market Watch for Week of September 23rd - Major Earnings - Board of Directors Meetings - Stock Splits - Economic Reports Trading Ideas Value Plays With Bullish Signals Breakout to Upside (Stocks $5 to $20) Breakout to Upside (Stocks over $20) Breakout to Downside (Stocks over $20) Recently Overbought With Bearish Signals (Stocks over $20 ================================================================= ================== Split Announcement ================== Friday, September 21, 2001, 11:24 AM ET Redwood Seeks "Wider Distribution" Trading under 5,000 shares daily on the average, Redwood Empire Bancorp (Nasdaq:REBC) will be executing a 3-for-2 stock split of its outstanding common shares. Payable on October 19, shareholders will receive one additional common share for every two shares owned. The Board of Directors made their announcement late Thursday. The split will raise the number of outstanding shares to approximately 3.6 million and the float will increase to 2.1 million. There are currently 10 million shares authorized for issuance. President and CEO Patrick W. Kilkenny stated that Thursday's release was prompted by "a strong desire on our part to obtain a wider distribution and improve the market liquidity in our stock and by our confidence that the value of Redwood Empire Bancorp stock will continue to increase over time." REBC shares closed Thursday at $34.76 and were trading up +0.19 on strengthening volume by Friday's mid-day session. Shares have appreciated by 67 percent for the 52-weeks and are trading just below the high of $36. About the Company: Redwood Empire Bancorp, through its principal operating subsidiary, National Bank of the Redwoods, provides diverse financial products and services. The Company offers commercial banking services primarily to businesses and professionals in the North Coast counties of California and conducts residential lending activities throughout Northern and Central California. The Company's business strategy includes the development of fee- based products and services, which will provide insulation to the Company's results from changes in interest rates. (press release) ================================================= Expected/Likely Announcements For The Coming Week ================================================= Date Expected Symbol Company To Announce ================================================= ADVP AdvancePCS 11/01 ================================================= EXPLANATION: AdvancePCS - ADVP - 52-week range: 28.31 - 76.46 Calling itself "the nation's leading health improvement company" this current split candidate is a provider of health benefit management services to pharmaceutical manufacturers and health plan supporters. The stock has performed well even with the Nasdaq hitting its worst levels recently. The company also confirmed that it is still comfortable with prior Q2 earnings estimates and it has not been materially affected by the tragedy of 9/11. We bring this stock to the attention of split traders due to the SEC filing of September 18, which calls forth shareholders to vote at the annual meeting of stockholders on November 1, 2001. The issue of interest is the proposal to amend the certificate of incorporation to increase the number of authorized common stock. The number of Class A shares would increase form 86.3 million to 186.9 million if the motion is approved. There are currently 37.6 million shares outstanding; therefore, there would be ample leeway for a 2-for-1 split after the amendment is passed, should it be the Board's intention. The last split announcement, a 2:1 in 1999, was at the $40 level. PremierInvestor is not recommending this stock as a "play" at this time, but please view the "Current Play List" for the possible addition of ADVP in the near-term future. chart = ================================================== Market Watch for the week of June 25th - June 29th ================================================== ------------------------ Major Earnings This Week ------------------------ Symbol Company Date Comment EPS Est GY GenCorp Mon, Sep 24 After the Close 0.37 FGP Ferrellgas Partners Mon, Sep 24 ----- n/a ----- -0.02 CCR Countrywide Credit Tue, Sep 25 Before the Bell 1.20 DF Dean Foods Tue, Sep 25 Before the Bell 0.50 LEH Lehman Brothers Tue, Sep 25 Before the Bell 1.08 AZO AutoZone Tue, Sep 25 After the Close 1.04 CHBS Christopher & Banks Tue, Sep 25 After the Close 0.31 CMGI CMGI Tue, Sep 25 After the Close N/A FULL H.B. Fuller Tue, Sep 25 After the Close 0.83 MU Micron Technology Tue, Sep 25 After the Close -0.31 BBBY Bed Bath&Beyond Tue, Sep 25 ----- n/a ----- 0.18 GUC Gucci Group Tue, Sep 25 ----- n/a ----- 0.56 SOSA Stolt Offshore SA Tue, Sep 25 ----- n/a ----- 0.17 V Vivendi Tue, Sep 25 ----- n/a ----- N/A BSC Bear Stearns Wed, Sep 26 Before the Bell 0.90 GS Goldman Sachs Wed, Sep 26 Before the Bell 0.81 NSI National Service Ind Wed, Sep 26 After the Close 0.52 EDP EDP Electricidade Wed, Sep 26 ----- n/a ----- N/A LNR LNR Property Wed, Sep 26 ----- n/a ----- 0.96 SWY Safeway Fri, Sep 28 09:00 am ET 0.60 ------------------------------- Upcoming Stock Splits This Week ------------------------------- Symbol Company Name Splits Payable Executable MOGa Moog Inc. 3:2 09/21 09/24 FHRX First Horizon Pharm 3:2 09/24 09/25 JNC John Nuveen Company 3:2 09/27 09/28 CECO Career Education 2:1 09/28 10/01 AAON AAON, Inc. 3:2 09/28 10/01 CEFT Concord EFS Inc. 2:1 09/28 10/01 -------------------------- Economic Reports This Week -------------------------- Next week's main economic events include the Consumer Confidence report, Existing Home Sales and New Home Sales. Earnings warnings from several sectors will garner some additional attention, but the political front is likely to be the primary focus. Monday ====== Leading Indicators Aug Forecast: -0.1% Previous: 0.3% Tuesday ======= Consumer Confidence Sep Forecast: 109.0 Previous: 114.3 Existing Home Sales Aug Forecast: 5.20M Previous: 5.17M Wednesday ========= None Thursday ======== Initial Claims 9/22 Forecast: 410K Previous: 387K Durable Orders Aug Forecast: -0.4% Previous: -0.7% Help-Wanted Index Aug Forecast: N/A Previous: 58 New Home Sales Aug Forecast: 922K Previous: 950K Friday ====== Chain Deflator-final Q2 Forecast: 2.2% Previous: 2.2% GDP-final Q2 Forecast: 0.1% Previous: 0.2% Mich sentiment-rev Sep Forecast: 79.0 Previous: 83.6 Chicago PMI Sep Forecast: 42.3% Previous: 43.5% Week of October 1 ==================== Oct 01 Auto Sales Oct 01 Truck Sales Oct 01 Personal Income Oct 01 PCE Oct 01 Construction Spending Oct 01 NAPM Index Oct 02 FOMC Meeting Oct 03 NAPM Services Oct 04 Initial Claims Oct 04 Factory Orders Oct 04 FOMC Minutes Oct 05 Nonfarm Payrolls Oct 05 Unemployment Rate Oct 05 Hourly Earnings Oct 05 Average Workweek Oct 05 Consumer Credit ================== Trading Ideas ================== This section contains stocks that meet criteria which may make them of interest to long and short side traders. These are not recommendations, nor have they been reviewed by PremierInvestor editors for investment potential. However, each of them has technical and fundamental characteristics that make them worthy of further review by traders and investors looking for fresh ideas. New stocks will appear daily following the market close. --------------------------------- Value Plays With Bullish Signals --------------------------------- Ticker Company Name Close Change BRP Brasil Telecom Partic Sa 23.61 +0.51 SZA Suiza Foods Corp 60.00 +0.75 CDCY Compudyne Corp 16.20 +3.85 NXY Nexen Inc 21.63 +0.68 SCM Swisscom Ag Ads 29.14 +0.89 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- Ticker Company Name Close Change PCG PG&E Corp Holdings 17.00 +1.28 ATPX Advanced Technical Products 17.55 +1.55 BLDP Ballard Power Systems 18.55 +2.84 FCEL FuelCell Energy 14.35 +1.84 VSNX Visionics Corp 10.40 +1.59 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- Ticker Company Name Close Change TEF Telefonica Sa 31.21 +1.01 GD General Dynamics 84.02 +4.66 RTN Raytheon Co 34.04 +1.54 CBH Commerce Bancorp Inc 65.50 +1.70 PLCM Polycom Inc 27.37 +3.10 ----------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change AZN Astrazeneca Plc 42.60 -1.22 XOM Exxon Mobil Corp 35.83 -1.19 UN Unilever N.V. 54.90 -2.20 SGP Schering-Plough 32.65 -1.49 PG Procter & Gamble 67.00 -5.81 ------------------------------------------------------------ Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------------------------- Ticker Company Name Close Change GIS General Mills 43.40 -2.30 ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. PremierInvestor.net staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control. Please read our disclaimer at: http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html ***************************************************************** ADVERTISING INFORMATION For more information on advertising in PremierInvestor.net Newsletter, or any Premier Investor Network newsletter please contact Contact Support. ***************************************************************** Copyright © 2001 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form.
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