PremierInvestor.net Newsletter Monday 10-10-2001 section 1 of 2 Copyright © 2001, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= To view this email newsletter in HTML format with imbedded charts and graphs, click here: http://www.PremierInvestor.net/htmlemail/484_1.asp ================================================================= In section one: Market Wrap: NAPM declines with PMI at 47% Market Sentiment: Slowdown, you are now in a Fed Zone Play-of-the-Day: Phillip Morris - MO (Bullish) Watch List:.DRG.X, TXN, PCS, VZ, AXP, ----------------------------------------------------------------- U.S. Market Numbers ----------------------------------------------------------------- MARKET WRAP (view in courier font for table alignment) ----------------------------------------------------------------- 10-01-2001 High Low Volume Advance/Decline DJIA 8836.83 - 10.73 8850.67 8732.14 1.36 bln 1295/1871 NASDAQ 1480.46 - 18.34 1491.45 1458.41 1.50 bln 1394/2489 S&P 100 533.40 + 0.05 534.34 526.88 Totals 2689/4360 S&P 500 1038.55 - 0.22 1040.94 1026.76 RUS 2000 397.60 - 1.79 404.87 393.00 DJ TRANS 2142.16 - 2.39 2196.33 2119.77 VIX 34.78 - 1.16 36.55 34.71 Put/Call Ratio 0.94 ----------------------------------------------------------------- =========== Market Wrap =========== NAPM declines with PMI at 47% by Jeff Bailey Today's National Association of Purchasing Management's (NAPM) reports was about as mixed as today's stock trading. The report measures monthly change and depicts the state of U.S. manufacturing for September and today's reading of 47% was below the 50% level signifying expansion, but remained above the 42.7% level which over time has indicated a period of growth. Many survey respondents (those purchasing managers that fill out the survey), felt that it was too early to determine the full effects of the terrorist attacks on the U.S. economy. Overall, the report indicated that the manufacturing sector continues to decline, which has been the trend since August 2000. The report showed that backlogs for new orders declined for the 17th consecutive month. Of the 20 industries in the manufacturing sector, eight reported growth (leather, petroleum, paper, food, tobacco, fabricated metals, glass/stone/aggregate, and miscellaneous). "Miscellaneous" is a grouping of (jewelry, toys, sporting goods, and musical instruments.). There were no commodities reported on the "short supply list." Coal, diesel fuel, and propylene showed some price increases, while commodities like aluminum, copper, natural gas, steel and zinc showed price declines. For a more detailed report of today's NAPM, subscribers can visit http://www.napm.org/NAPMReport/ROB102001.cfm Income and spending Other data released today showed that many consumers may have pocketed their recent tax rebate checks, rather than spending them. The Commerce Department said personal income was flat in August while spending rose just 0.2%. S&P Retail Index (RLX.X) - last eleven months With incomes showing little growth, and personal spending up just 0.2%, the retail index gives hint of just how "forward looking" the markets can be. In the latter part of August, the RLX.X began falling noticeably below our upward trend and eventually broke below the 830 level and 38.2% retracement. The most recent sharp decline below the 696 level and the October 2000 low of 696 was brought along by recent terrorist activities. Near-term, we'll be monitoring the RLX.X trading as one of the Dow components we've noticed since September 10th that has shown some nice upside gains is Wal-Mart (NYSE:WMT). The discounting retail giant is up 7.6% since its September 10th close of $46.23 and was a stock we had noticed was acting strong in our Dow Industrials "hypothetical portfolio." There are 35 stocks that make up the S&P Retail Index (RLX.X) but shares of Wal-Mart (WMT) account for 33.46% of the sector weighting. Next in line is Home Depot (NYSE:HD) at 15.49%, with a steep falloff from there in Walgreen (NYSE:WAG) at 4.94%. Nothing new Tomorrow's FOMC meeting has many traders/investors and economists factoring in a 50-basis point rate cut. Today's PMI data was not as bad as some had feared, but tomorrows FOMC data and release of interest rate news at 02:15 PM EST will most likely have stocks trading sideways during the bulk of the session. The toughest question to answer is, "Which way will stocks go?" This is tough, but there are some "good things" still in play for higher stock prices. I think the market direction will be up to bearish traders and right now its a matter of "will they cover or stay their course?" In the market wrap on September 27th, I felt the Biotechnology Index (BTK.X) had to assert some leadership and that a break above the 452 level could find some nervous bears in the group "rushing to cover." On Friday, we did see a spike in this index to the 469 level and today's 1.12% gain to 455 gives some hint that there's still an interest from the buy side of things. Subscribers will note that PremierInvestor.net has profiled bullish shares of Genentech (NYSE:DNA) and bearish shares of Gilead Sciences (NASDAQ:GILD) and this offers the trader/investor two ideas to still be playing depending on tomorrow's action. While the Retail Index (RLX.X) is more economically sensitive, the Biotech's aren't. I think they (the biotechs) give us some insight to the psychology of the market (is it willing to buy something.... anything?) As of today's close, there still looks to be some buy side interest in the group and this is a positive for the bulls. For any market to advance you need some type of group to lead and right now, this group continues to show signs of strength. Therefore, I place it in the category of "leader." I think this is a group to be following tomorrow to perhaps get an early read on things before the FOMC results are known. I think bearish traders are going to try and sit tight early tomorrow and take a wait and see approach to things. They've locked in some gains on those stocks where they had some handsome profits where risk/reward became too unfavorable to not lock in some profits. The stocks they don't want to be short are those in upward trends. If there's any doubt, they'll get out and this is where bullish traders need to be focusing. Bulls on the other hand are going to be a bit nervous. They've had it up to the base of their horns with buying a stock, watching it appreciate, not selling and then finding they've held onto a losing trade as the broader markets have moved against them. We understand this and is one reason why we've been fairly aggressive with our raising of stops once we get a profit going. Today for example, traders may have pulled the plug on the Suiza Foods (NYSE:SZA) at $62.50. This is ok in my book. The trade resulted in a gain and that's what we wanted to see. Perhaps this type of action is a "positive" near-term as other market participants lock in some profits and may provide another bullish opportunity on a pullback to the $57.75 level, which would be right near upward trend. One stock I might mention that we've had profiled on the bullish side since August 30th is Philip Morris (NYSE:MO). This stock is a Dow component and another stock we've notice has been showing very good relative strength in the Dow (kind of like T, SBC and WMT). In today's NAPM report, one of the 8 industries showing growth was "tobacco" and "big MO" could see a nice advance should the stock get above the $50 level tomorrow. Today's close was $49.37. Another stock we've talked about lately has been shares of WebEx Communications (NASDAQ:WEBX). On Friday, the stock set up an "inside day" after gaining nearly 14%. Today's break above Friday's high was a bullish break for those trading the "inside day" and by sessions end, the stock had added another 4.3% gain. Friday evening, we added WEBX to the watch list "Two Bulls and Three Bears" and those that are getting familiar with the inside day trading technique may want to follow this stocks progress. Friday morning (09:00 EST Update) we weren't sure which way the stock was going to go, but we were leaning to the bullish side. Today's break to the upside of the inside day gives hint that we might have been leaning the right way. We'll be looking for similar patterns and volume similarities for some other trades in coming sessions ================ Market Sentiment ================ “Slowdown, you are now in a Fed Zone” by Russ Moore “Slowdown, you are now in a Fed Zone” A tedious, low volume session ushered in the new quarter, as investors chose to abstain ahead of tomorrow’s FOMC release. Compared to recent volume levels, today’s 982 million shares on the NYSE, and 1.26 billion shares on the NASDAQ were very light. Trading action was tight, as evidenced by the 14 point intraday move on the SPX. The DOW ended the day with a minimal loss of –0.5 percent. The NASDAQ and NDX were off –1.2 percent. Losers out-dueled winners by a 19/12 count on the NYSE and 23/13 on the NASDAQ. Positive sector action was limited to gold, biotech, utility, healthcare and drugs. Economic data included the National Association of Purchasing Managers Index coming in at 47, down from the previous months reading of 47.9, but much better than the 44.8 forecast. The sub- 50 reading marked the fourteenth consecutive month of contraction. Personal income was flat while personal spending rose +0.2 percent. Economists were expecting both numbers to show a gain of +0.3 percent. August construction spending showed some increased weakness with a decline of –1.1 percent. Expectations were for a flat performance. Another batch of profit warnings made their way to Wall Street with Compaq Computers heading the list. The company now expects to lose –0.05 to –0.07 cents versus expectations for a gain of +0.05 cents. Revenue is expected to come in at 7.4 billion dollars, a 12 percent sequential decline. Fed funds futures are now showing an 80 percent chance of a .50 basis point cut when the FOMC meets tomorrow afternoon. The Fed action may not have much of an impact with investor focus on verseas events and corporate earnings. VIX Monday 10/01 close: 34.78 VXN Monday 10/01 close: 64.98 30-yr Bonds Monday 10/01 close: 5.30 Total Put/Call Ratio: .72 Equity Option Put/Call Ratio: .65 Index Option Put/Call Ratio: 1.10 === NASDAQ 100 Index (NDX/QQQ) 52-Week High: 103.51 52-Week Low: 28.19 Current close: 28.73 Volume/Open Interest Maximum calls: 30/104,479 Maximum puts : 25/ 39,321 Moving Averages 10 DMA 29 20 DMA 32 50 DMA 37 200 DMA 47 Fibanocci Retracements Relative High: 51.95 (05/22/01) Relative Low: 27.00 (09/21/01) 38% 36.60 50% 39.57 62% 42.59 === S&P 100 Index (OEX) 52-Week High: 834.93 52-Week Low: 491.70 Current close: 533.20 Volume/Open Interest Maximum calls: 600/6,230 Maximum puts : 440/5,670 Moving Averages 10 DMA 517 20 DMA 543 50 DMA 584 200 DMA 634 Fibanocci Retracements Relative High: 680.03 (05/22/01) Relative Low: 480.07 (09/21/01) 38% 556.14 50% 579.65 62% 603.55 === S&P 500 (SPX) 52-Week High: 1530.01 52-Week Low: 965.80 Current close: 1038.24 Volume / Open Interest Maximum calls: 1050/17,271 Maximum puts : 1050/20,118 Moving Averages 10 DMA 1011 20 DMA 1064 50 DMA 1140 200 DMA 1228 Fibanocci Retracements Relative High: 1315.93 (05/22/01) Relative Low: 944.75 (09/21/01) 38% 1086.75 50% 1130.62 62% 1175.23 == DJIA (INDU) 52-Week High: 11,518.83 52-Week Low: 8,235.81 Current close: 8,836.56 Volume / Open Interest Maximum Calls: 100/26,413 Maximum Puts 100/42,733 Moving Averages: 10 DMA 8,647 20 DMA 9,232 50 DMA 9,938 200 DMA 10,423 Fibanocci Retracements Relative High: 11,350.05 (05/22/01) Relative Low 8,062.34 (05/21/01) 38% 9,308.92 50% 9,693.99 62% 10,085.60 == Biotech Index (BTK) 52-Week High: 811.61 52-Week Low: 383.28 Current close: 454.52 Volume / Open Interest Maximum Calls: 520/ 301 Maximum Puts: 440/2000 Moving Averages 10 DMA 435 20 DMA 477 50 DMA 500 200 DMA 551 Fibanocci Retracements Relative High: 811.61 (09/25/00) Relative Low: 383.28 (03/22/01) 38% 546.22 50% 596.57 62% 646.71 == Semiconductor Index (SOX) 52-Week High: 1280.84 52-Week Low: 362.00 Current close: 362.49 Volume / Open Interest Maximum Calls: 370/ 393 Maximum Puts: 390/2,120 Moving Averages 10 DMA 390 20 DMA 462 50 DMA 538 200 DMA 599 Fibanocci Retracements Relative High: 710.78 (05/22/01) Relative Low: 343.93 (09/27/01) 38% 484.50 50% 527.18 62% 570.57 == Pharmaceutical Index (DRG) 52-Week High: 455.28 52-Week Low: 339.49 Current close: 394.09 Volume / Open Interest Maximum Calls: 400/531 Maximum Puts: 360/660 Moving Averages 10 DMA 374 20 DMA 379 50 DMA 388 200 DMA 397 Fibanocci Retracements Relative High: 448.43 (12/29/00) Relative Low: 339.49 (03/22/01) 38% 382.22 50% 395.69 62% 409.03 ***** CBOT Commitment Of Traders Report: Friday 09/28 Weekly COT report discloses positions held by small specs and commercial traders of index futures contracts on the Chicago Board Of Trade. Small specs are the general trading public with commercials being financial institutions. Commercials are historically on the correct side of future trend changes while small specs are not. Extreme divergence between each signals a possible market turn in favor of the commercial trader’s direction. S&P 500 Commercials Long Short Net %Change 9/11/01 359,360 442,070 (82,710) 3.4% 9/18/01 406,387 471,823 (65,436) (20.8%) 9/25/01 357,873 407,036 (49,163) (24.9%) 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 %Change 9/11/01 156,500 69,090 87,410 2.7% 9/18/01 172,988 100,531 72,457 (5.6%) 9/25/01 122,613 71,721 50,892 (29.7%) Most bearish reading of the year: 36,513 - 5/01/01 Most bullish reading of the year: 91,122 - 3/06/01 NASDAQ-100 Commercials Long Short Net %Change 9/11/01 26,784 37,912 (11,128) 18.9% 9/18/01 35,497 45,731 (10,234) (8.0%) 9/25/01 26,761 36,812 (10,051) (1.8%) 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 %Change 9/11/01 15,263 12,555 2,708 6.8% 9/18/01 22,876 21,702 1,174 (56.6%) 9/25/01 10,699 6,580 4,119 251.0%) 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 Commercials Long Short Net %Change 9/11/01 25,445 13,033 12,412 32.6% 9/18/01 28,425 15,077 13,348 7.5% 9/25/01 20,013 7,806 12,207 (8.5%) Most bearish reading of the year: (8,322) - 1/16/01 Most bullish reading of the year: 8,925 - 5/22/01 Small Traders Long Short Net %Change 9/11/01 7,460 12,735 (5,275) (8.9%) 9/18/01 7,335 15,044 (7,709) 46.1% 9/25/01 4,530 12,621 (8,091) 4.9% Most bearish reading of the year: (7,572) - 5/08/01 Most bullish reading of the year: 1,909 - 1/16/01 Small Specs Commercials S&P 500 (Current) (Previous) (Current) (Previous) Open Interest Net Value +50,892 +72,457 -49,163 -65,436 Total Open Interest % (+26.19%) (+26.49%) (-6.43%) (-7.45%) net-long net-long net-short net-short Small Specs Commercials DJIA futures (Current) (Previous) (Current) (Previous) Open Interest Net Value -8091 -7709 +12207 +13348 Total Open interest % (-64.11%) (-34.45%) (+43.88%) (+30.68%) net-short net-short net-long net-long Small Spec Commercials NASDAQ 100 (Current) (Previous) (Current) (Previous) Open Interest Net Value +4119 +2708 -10,051 -11,128 Total Open Interest % (+23.84%) (+9.73%) (-15.81%) (-17.20%) net-long net-long net-short net-short What COT Data Tells Us ---------------------- Indices:.Both the Commercials and Small Specs held steady on their S&P net-short positions. The big move came on the DJIA where the Commercials added on to their net-longs while the Small Specs were loading up on net-short contracts. Gold:.Talk about a shift in contracts the Commercials went from 49,456 contracts net-short to 36,638 contracts net-long. Gold has been relatively flat since Tuesday so we’ll have to keep on eye on this one and see if they reverse their positions next week.. 8/28 50,852 contracts net-short 9/04 49,839 contracts net-short 9/11 No Data. 9/18 49,456 contracts net-short 9/25 36,638 contracts net-long Data compiled as of Tuesday 09/25 by the CFTC. ========================= Play-of-the-Day (Bullish) ========================= Phillip Morris - MO - close:$49.37 change:+1.08 Stop:$45.00 Original Comments When Selected on August 30th: Company Description: Philip Morris is the world's largest tobacco firm. It owns half of the US tobacco market and the Marlboro name is one of the world's most recognizable brands. It also makes the Benson & Hedges, Parliament, and Virginia Slims brands. Outside of tobacco, Philip Morris owns 84-percent of Kraft Foods, the world's second largest food company that makes leading brands such as Jell-O, Kool-Aid, Maxwell House, and Post cereal. In 2000 the company bought Nabisco, adding brands such as Chips Ahoy, Oreo, and Ritz to Kraft's food portfolio. In addition, Philip Morris owns Miller Brewing, the second largest US beer producer. Fundamentals: Analysts project Phillip Morris will earn $4.05 per share in 2001 and $4.57 in 2002. Last year, the company produced earnings of $3.71 per share. This gives the company a low forward 2001 P/E of 11.81, which is in line even with the industry average P/E of 11.7. Other valuation ratios such as Price/Book, Price/Cash Flow and gross profit margin are also inline with industry averages. Why We Like It: It's tough to go long when Kodi the Bear is on the prowl, but if you do, a company that just fattened its dividend by 9.4-percent should be high on your shopping list. In a world of plunging equity prices getting a safe 4.8-percent with the potential for equity appreciation is not a bad option. More aggressive investors may even consider selling some out-of-the-money calls to earn an additional premium. On Wednesday, Phillip Morris announced shareholders of record on September 17 would receive a quarterly dividend of 58-cents a share. On an annualized basis, this increases their dividend from $2.12 to $2.32 per share and gives MO shares the highest dividend of the 30 companies in the Dow Jones Industrials. For short-term traders, it also means that between now and September 17th, Phillip Morris shares are more likely to go up than down. This bullish momentum is not new. The shares have been rising since bouncing off of $43.05 support on August 16th. An opportunity to take a position at a better price than the $47.94 close may occur on Friday. Although the shares were up strongly in the morning hours to a $48.46 high they did fade somewhat before the close. Although we are unlikely to see significant downward pressure, dips are possible and should be considered buying opportunities. We will start this play with a stop at $45.00, which is just below the $45.80 200-day moving average. Updated Comments: Sporting a handsome and stable dividend, an expected FOMC interest rate cut on Tuesday will make these defensive shares look even better. On Monday the shares began to inch past significant resistance in the $49.25 to $50.00 range. If these shares can make the break above $50, a test of the $54.40 52-week high is a likely next move. If you are already in this play you've got a $1.42 per share gain and can afford to sit tight. New entrants should wait for a close above $50. Picked on August 30th at $ 47.94 Gain since picked +1.43 Earnings Date 10/17 (Confirmed) ========== Watch List ========== Pharmaceutical Index - DRG.X - close: 394.09 change: +4.57 WHAT TO WATCH: The symbol may be a little different on your charting service but looking at the AMEX drug index shows the drug sector is up six days in a row making a full 10% gain. It is not surprising since most investors have been taught that the drug sector is a classic defensive play in recessionary times. However, that is a pretty big move and looking at the point-and-figure chart on the index shows it right at its overhead resistance. The daily chart also shows overhead resistance is close with the 200-dma at 397 and price resistance near 400. We think traders should be watching this group for a strong retracement of these gains or a breakout. Stocks to be watching are PFE, MRK, BMY, LLY, and JNJ just to name a few. (FYI, your charting service might use $DRG as the symbol) --- Texas Instruments - TXN - close: 24.99 change: +0.01 WHAT TO WATCH: The semiconductor sector is extremely oversold but it has been bouncing along the 350 level and closed at 362 today (down 11 points). TXN is also very oversold from its late August highs but the last few days the stock appears to be showing strength compared to its sector. Now it is never a good idea to go long a stock that is stuck in a sector with a clear downtrend... at least not for short-term trading. So we highlight TXN as a speculation play for traders quick enough to move in and out of an equity before they do too much damage to their accounts. We see TXN trying to build a bullish wedge with higher lows as bulls battle resistance near $25. Volume has been sliding from recent highs and the MACD is about to produce a bullish crossover. MACD followers would note the histogram had been showing a divergence for days now which is typically a clue that momentum in the current direction is changing. A close over $25 or $25.75, depending on your risk tolerance, might be the entry point to go long. We're not looking for too much as overhead resistance looms at the 28.50 to 29.00 range. Keep your eyes on the SOX while watching TXN. --- Sprint Corp - PCS - close: 27.40 change: +1.11 WHAT TO WATCH: This stock has been basing in a volatile sideways pattern for months. Its 200-dma finally caught up with it in the middle of July and hopefully the same long-term moving average might begin to curve up in the coming weeks. Shares of PCS have been struggling with overhead resistance at $27.00 since late February. Today is the first day shares have closed over this level in seven months. The question now is will there be a follow through. More than once we've seen stocks make a technical breakout only to be crushed by the bears the very next day. Therefore we cautiously add this to the watch list. Aggressive traders can see this as a play now or conservative traders can consider a long position but only do so with a relatively tight stop. Shares of PCS have been in a decent up trend since the Sept. 11th attack as more and more people see the need for mobile phones. Today, PCS announced they will be offering mobile phones with GPS functionality in the Rhode Island area for users that make 911 calls. This will allow emergency services to pinpoint the location of the caller instead of relying on the caller's ability to identify landmarks to direct emergency or law enforcement vehicles to the scene. Chart --- Verizon Comm. - VZ - close: 55.30 change: +1.19 WHAT TO WATCH: Playing to the same interest in mobile services, we highlight Verizon. This is another stock that has been in a volatile up trend since the attacks but an up trend nonetheless. The close over $54.50 is encouraging and the bulls will be looking for $54 to offer some support if we see profit taking. We're adding it to the watch list now but don't see it as a potential play until VZ can overcome very strong resistance at the $57 mark. VZ has been unable to hold above the $57 mark since late 2000. Thus we're probably a few days away from an entry point to go long unless you want to try and scalp a few points between here and $57 (if $54 doesn't hold, VZ might get a bounce at 53.25). --- American Express - AXP - close: 29.38 change: +0.32 WHAT TO WATCH: AXP was already in a down trend before the WTC attacks. Unfortunately, they were directly affected as their New York headquarters were located in the WTC towers. When the markets opened up again the stock dropped from $35 to the $30 level and traded down to the $25 level during one of the worst weeks in the Dow's history (AXP is a Dow component). These last several sessions have seen a slow rebound with Friday and Monday showing the greatest gains but the stock is now looking at overhead resistance at $30. Normally, financial companies tend to benefit when the Fed cuts rates but most believe the markets have already priced in a 50 bps cut tomorrow. The cut should benefit AXP's credit card business' profit margins but the hit to America's psyche will still do a lot of damage to AXP's travel services division. We all know there has been an extreme drop off in corporate travel. Don't forget that AXP now has to find new space for their New York offices. We are highlighting AXP because we see it at a crossroads. Investors might discount the bad news and the coming earnings disaster because they already expect earnings to be bad. That could mean AXP could trade back up to $35 or more. On the other hand, the new stream of info that appears to confirm we are in a recession could prove too much and the stock could rollover from here and back to the $25 mark. Keep AXP on your watch list and see if a bullish or a bearish play develops. A close over $30 might be the entry to go long (with a tight stop) or another failed rally under the $30 mark might be tempting to go short (w/ a tight stop). ================================================================= 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 Monday 10-10-2001 section 2 of 2 Copyright ) 2001, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= To view this email newsletter in HTML format with imbedded charts and graphs, click here: http://www.PremierInvestor.net/htmlemail/484_2.asp ================================================================= In section two: Split Trader Split Announcements: none New Plays: none Play Updates: none Closed Plays: none Net Bulls New Plays: SunGard Data Systems - SDS (Bearish) Bullish Play Updates: Stop updated Bearish Play Updates: none Closed Plays:none Stock Bottom / Active Trader New Plays: none Bullish Play Updates: See Phillip Morris - MO Play-of-the-Day Bearish Play Updates: none Closed Plays: Suiza Foods - SZA 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) ================================================================== Net Bulls (NB) section ================================================================== ============ NB New Plays ============ ------------------------ New Bearish (Short) Play ------------------------ SunGard Data Systems - SDS - close: $20.53 change: -2.84 Stop: $22.50 Company Description: SunGard Data Systems supplies a high availability IT infrastructure for the financial services industry. . The company has more than 10,000 customers, including nearly all of the world's 50 largest financial services institutions. Almost 70-percent of Nasdaq trades are handled by SunGard's investment support systems (75- percent of sales), which process transactions, supply calculations, and track assets. The company also provides data collocation and disaster recovery services, and sells workflow and document imaging systems to the health care industry. Top competitors are Reuters, ADP and DST. Fundamentals: Last year, the company earned 82-cents per share on sales of $1.66 billion. Analysts project the firm will earn 96-cents per share on sales of $1.9 billion in 2001 and $1.15 on $2.1 billion in 2002. This gives the firm a forward 2001 P/E of 21. The industry average P/E is 31. Early Monday the company warned that third-quarter earnings would be just 21 to 22 cents per share, less than the 23 to 26 cents estimated by analysts. They cited the business disruptions that took place after the Sept. 11 terrorist attacks, saying it expects lower revenue from trading, software licenses and professional services. They added it is unlikely to make up the shortfall in the fourth quarter Why We Like It: Monday's warning pushed SunGard's shares through critical long-term support at $22. If the shares can continue through support in the $19 to 18 range there is little stopping them from testing the July lows in the $13.50 to $15 area. Bargain hunters may cause an early morning pop, so more aggressive traders can use this as an opportunity to get a more attractive entry point. We will start this play with a stop at $22.50, which is just above the before mentioned $22 long-term support. Picked on October 1st at $20.53 Earnings Date 10/18 (Not Confirmed) =============== NB Play Updates =============== ----------------------- NB Bullish Play Updates ----------------------- Stop updated for Genentech (DNA) from $41.50 to $42.75 ================================================================== Stock Bottom / Active Trader (AT) section ================================================================== =============== AT Play Updates =============== ----------------- Bullish Play Updates ----------------- See Phillip Morris - MO - Play-of-the-Day =============== AT Closed Plays =============== ------------------- Closed Bullish Play ------------------- Suiza Foods - SZA - close: 62.32 change: -0.82 stop: 62.50 We identified $63 as being big-time resistance for shares of this dairy giant. Since we were sitting on a handsome gain on this long selection, and it did not seem to make sense to get greedy during a bear market, we tightened up our stop to $62.50 in preparation for a dip. Today, we got that dip and stopped out with a $5.49 per share gain. We will look for a move to the $57 to $58 range to present an attractive entry point to reenter this play. However, once the shares reached the session low of $61.00 at about 10:00 EST the shares rallied nicely through to the close. This indicates we may not see a move to those levels. We do not have the confidence or the risk/reward to jump back in just yet without more evidence of bullish momentum, but if we were still holding shares we'd consider hanging on little longer with a tighter than tight stop to see if today's strength carries into Tuesday's trading. Picked on September 19th at $57.01 Gain since picked: +5.49 Earnings Date N/A ================== 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 AEE Ameren Corp 38.92 +0.52 GPC Genuine Parts 32.90 +1.04 CCR Countrywide Credit 44.69 +0.76 RNR Renaissance Holdings 94.00 +5.09 PWR Quanta Services 15.91 +1.66 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- Ticker Company Name Close Change NWAC Northwest Airlines 12.74 +1.33 PWR Quanta Services 15.91 +1.66 ISSX Internet Security System 12.08 +2.97 MCAF Mcafee.com Corp 13.75 +2.20 BEAV Be Aerospace 8.65 +1.05 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- Ticker Company Name Close Change VZ Verizon Communications 55.30 +1.19 WPI Watson Pharmaceuticals 56.54 +1.83 HRB H&R Block Inc 40.01 +1.45 GPC Genuine Parts 32.90 +1.04 AZO Autozone Inc 53.46 +1.60 ----------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change TRB Tribune Co 30.23 -1.17 GP Georgia Pacific 27.30 -1.49 DOV Dover Corp 28.77 -1.34 SDS Sungard Data Systems 20.53 -2.84 YUM Tricon Global Resturants 38.12 -1.10 ------------------------------------------------------------ Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------------------------- Ticker Company Name Close Change none ================================================================= 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. 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