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Daily Newsletter, Tuesday, 10/02/2001

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PremierInvestor.net Newsletter                Tuesday 10-02-2001
                                                  section 1 of 2
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In section one:

Market Wrap: Some sectors performed after Fed's rate cut 
Market Sentiment: Fed Cuts- Markets Confused
Play-of-the-Day: Chevron Corp. - CHV (Bullish)

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
       10-2-2001           High     Low     Volume Advance/Decline
DJIA     8950.60 +113.80  8950.60  8798.40  1.3 bln   2072/1055
NASDAQ   1492.33 + 11.87  1504.24  1473.13  1.7 bln   1973/1578
S&P 100   539.57 +  6.17   539.57   530.02   Totals   4045/2633
S&P 500  1051.33 + 12.78  1051.33  1034.47
RUS 2000  401.79 +  4.19   402.12   397.53
DJ TRANS 2170.44 + 28.28  2179.34  2142.79
VIX        34.07 -   .71    35.77    33.93
VXN        63.84 -  1.10    64.71    63.20
TRIN        0.90
Put/Call Ratio       .72
-----------------------------------------------------------------

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

Some sectors performed after Fed's rate cut
by Jeff Bailey

The broader market averages faired well after today's 50-basis 
point rate cut by the Fed, but some sectors didn't benefit as 
much as others.  

Here's a quick snapshot I took from my trading screen right when 
the FOMC announced rate cuts.  By sessions end there was enough 
market action to give hint of what is "in favor" and what may be 
"out of favor" as it relates to the effects of today's Fed rate 
cuts.

Major Indices and Averages when Fed cut rates





Strength -

Dow Industrials -  The Dow Industrials (INDU) finished the 
session up 1.24% to 8,950 after trading just fractionally 
positive prior to the FOMC meeting.  After the FOMC rate cut was 
announced, the Dow did dip into negative territory, but stormed 
back by sessions end.  For those keeping track, shares of Wal-
Mart (NYSE:WMT) has now gained roughly 12% since September 10th 
close and is atop the leader board of Dow gainers since that time 
frame.  

S&P 500 - The SPX traded very much in step with the Dow 
Industrials.  It too was showing fractional gains prior to the 
Fed rate cut, but by sessions end had tacked on a 1.2% gain to 
finish at 1,051.  We'll note here that "information technology" 
make up just 15% of the SPX and lack of technology may be the 
difference between the S&P 500 and the NASDAQ today.

Retail - Retailing stocks acted quite well today.  Prior to the 
FOMC rate cut, the S&P Retail Index (RLX.X) was trading higher by 
1.6%, but by sessions end, the group tacked on further gains and 
finished up 3.27% at 787.  Discount retailing giant Wal-Mart 
(NYSE:WMT) surged 4.5% to $52.  In yesterday's wrap, we talked 
about the makeup of the Retailing Index (RLX.X) and noted WMT's 
heavy weighting in this index.  Wal-Mart (WMT) is a component of 
the S&P 500 with a 2% weighting.

Airlines - The Airline Index (XAL.X) was having a good day prior 
to the FOMC rate cut and found some marginal gains afterward.  
The sector finished up 5.05% to 72.10.  Still looks like a sector 
that could see some wild swings as more information trickles out 
from carriers.  Many are reporting increased business in recent 
days, but discounting of tickets being used to bring in 
customers.

Banks - Both the BIX.X (more regional in components) and the 
BKX.X (regional/international) were trading right near the break-
even level prior to the rate cuts.  Tone of FOMC was that they're 
concerned about effects of terrorist attacks on economy and 
poised to do what it takes near-term in regards to further rate 
cuts should economic slowing continue.  Banking sector can 
benefit from lowered discount rate and their margins spread due 
to lower borrowing cost from Fed.  Stocks responded favorably.  
Risk remains "bad loans," but today's reaction looked bullish.
Financials comprise roughly 14% of the S&P 500 Index.

Treasuries - Treasury bonds finished the day strong as YIELD 
across the various maturities all fell.  The longer-end of the 
bond market and the 30-year ($TYX.X) saw its yield fall to 
5.328%, which is the lowest level found since late March.  Just 8 
sessions ago, the YIELD on the 30-year was as high as 5.63%, but 
today's close at 5.32% gives hint that there is still a lot of 
money flowing into this bond and others.

Internet - Today's move in the CBOE Internet Index (INX.X) was 
interesting.  Just prior to the FOMC, gains of 2.4% were found 
and by session's end they had grown to 3.29%, with a closing 
trade at 85.82.  We're going to keep an eye on things here for 
some technology stock traders, but right now this doesn't make 
sense.  First thought was that the group may have benefited on 
the though of growing ad spending, but I'm having trouble finding 
any "advertising" stocks showing much of a gain.

Weakness

NASDAQ Composite - While the NASDAQ Composite (COMPX) did manage 
to post gains by sessions end, there were some pockets of 
weakness worth noting.  Prior to the FOMC announcement, the 
NASDAQ was up 0.71%, but by sessions end finished up just 0.80%.  
This may be disappointing to may technology stock investors, but 
does give some credence to the belief that some of the deeper 
cyclicals have to get their earning going to free up some 
information technology (IT) budgets.  Without them, fund managers 
and institutional investors are going to be hard pressed to pump 
a lot of money into some technology related stocks.  

Semiconductors - The Semiconductor Index (SOX.X) was one area 
that felt some selling pressure after today's FOMC meeting.  
Prior to the FOMC rate cuts we saw fractional losses of 1% turn 
into a loss of 3% at one point as the SOX dipped to a session low 
of 350.  There seemed to be some "psychological support" at the 
350 level as we did see some recovery from the lows (probably due 
to broader market averages turning higher).  However, the closing 
bell found the SOX trading down 2.16% on the session at 354 and 
this gives hint that the group currently lacks interest, even 
with a 50-basis point rate cut.

Networking - Networking stocks finished pretty much in line with 
where they were trading right when the FOMC announced it's rate 
cut.  The Networking Index (NWX.X) finished down 1.09% at 209 and 
looks to be suffering from the same type of disinterest as the 
semiconductors.  Today's after-market warning from Nortel 
Networks (NYSE:NT) that it expects to post a $3.6 billion loss in 
the 3rd-quarter and shed an additional 20,000 employees through 
the sale of assets and layoffs, is further sign of the slowing 
taking place in this group.  Shares of Nortel (NT) closed down 
3.2% to $5.29 and sector bellwether Cisco Systems (NASDAQ:CSCO) 
fell 3.5% to close at $11.48.

Looking forward

I think there's still some "hope" for the NASDAQ near-term, but 
it should be evident that any gains there will most likely be in 
response to bullishness found in the Dow Industrials and S&P 500.  
Yes, there can be some "big gains" in some technology stocks when 
the shorts come in and cover, but those "big gains" don't come 
without some downside risk.  When trading technology right now, 
I'd be looking relatively short-term or very long-term.  If 
you're a "swing trader" and can't keep an eye on things, then 
it's best to trade lightly in technology.  If you get a gain of 
more than 10%, then snug up that stop and be willing to take 
profits!

Part of the NASDAQ's "hope card" can be found in the 
Biotechnology Index (BTK.X).  As I mentioned before, this group 
of stocks is less interest rate sensitive and seems to trade more 
on market psychology and various discoveries in the biotech world 
than anything.  Fundamentals?  Those are hard to find for many 
biotechs, thus my belief that the group is more of a pulse on 
market psychology.  Technology fund managers may have thrown in 
the towel on "computer related" tech for the fourth quarter and 
could be concentrating on this sector for exposure to technology.  
I didn't mention the BTK.X as a "strength" sector above only 
because the group didn't really budge from the FOMC data.  Still, 
the group managed to post a 1.9% gain and the 480-500 level still 
looks achievable near-term.

Currencies look to be in check and it looks as if the market has 
calmed down here.  If our original thoughts that a weaker US$ was 
a sign of "market instability," then the recent strengthening of 
the US$ against major foreign currencies is a sign that many 
market participants are calming down.  

The currency issue then plays into what we've seen in bonds.  
It's very difficult to actually track money flows as it relates 
to currencies, but relatively simple to see where money is 
flowing when it comes to bonds.  Since the US$ started to regain 
some strength, we've seen lower YIELDS for many of the Treasury 
bonds.  Right after trading resumed back on September 12th, we 
did see a flood of selling in the longer-end 30-year, but as we 
noted, there's been a lot of buyers come back in the past several 
sessions, that really started once the US$ started gaining back 
some strength.  I think from here, equity bulls want to see some 
selling in the 30-year (riskiest end of the bond market) and the 
US$ to maintain current levels.  If our past observations was 
that we saw selling in bonds, selling in US$ and selling in 
stocks, then equity bulls now want to see selling in bonds and a 
stable US$.  What I think this type of action would then present 
is the buying of stocks.  Yes, this may seem like simple logic, 
but we're just trying to isolate some variables and follow the 
money.

Jeff 


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

Fed Cuts- Markets Confused
by Russ Moore

The markets had trouble picking a direction following the latest 
FOMC rate cut. The anticipated half-point cut saw the major 
indices move higher on the announcement but then quickly reverse 
course. The next forty-five minutes was spent moving between the 
plus/minus column until buying programs kicked in, sparking a 
triple digit gain on the DOW.

The blue chip index ended the session with a gain of +1.3 
percent. The NASDAQ added +0.8 percent and the NDX gained +0.7 
percent. Volume was moderate, but much improved over yesterday’s 
showing with the NYSE seeing 1.27 billion shares change hands and 
the NASDAQ moving +1.75 billion shares. Market breadth was 
positive with winners topping losers by a 21/11 count on the big 
board and 20/16 on the tech side.

Semiconductor and networking sectors ended the day in the red. 
Drug and financial sectors continued to show strength with both 
the DRG.X and BIX.X closing above their 9/10 levels.

The FOMC said the terror attacks had “significantly heightened 
uncertainty in an economy that was already weak”. They also 
believe the risks to the economy remain weighted toward economic 
weakness. 

Although volatility indices continue to fall, investor sentiment 
remains very bearish. With a parade of earnings warnings, weak 
economic data, and the war on terrorism hanging over Wall Street, 
it will be a tough hill to climb in the coming months.




VIX 
Tuesday 10/02 close: 34.07


VXN
Tuesday 10/02 close: 63.84

30-yr Bonds
Tuesday 10/02 close:  5.33


Total Put/Call Ratio: .72


Equity Option Put/Call Ratio: .65


Index Option Put/Call Ratio: 1.16


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 28.82

Volume/Open Interest
Maximum calls: 30/103,655
Maximum puts : 27/ 54,331

Moving Averages
 10 DMA 29
 20 DMA 31
 50 DMA 36
200 DMA 46

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: 539.57

Volume/Open Interest
Maximum calls: 600/6,466
Maximum puts : 500/6,644

Moving Averages
 10 DMA  518
 20 DMA  540
 50 DMA  582
200 DMA  633

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: 1051.33

Volume / Open Interest
Maximum calls: 1050/19,247
Maximum puts : 1050/21,301

Moving Averages
 10 DMA 1013
 20 DMA 1058
 50 DMA 1137
200 DMA 1227

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:  8,950.59

Volume / Open Interest
Maximum Calls: 100/26,413
Maximum Puts   100/41,733

Moving Averages:
 10 DMA  8,651
 20 DMA  9,169
 50 DMA  9,905
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: 464.33

Volume / Open Interest
Maximum Calls: 520/ 300
Maximum Puts:  440/2000

Moving Averages
 10 DMA 437
 20 DMA 473
 50 DMA 499
200 DMA 550

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: 354.63

Volume / Open Interest
Maximum Calls: 430/ 612
Maximum Puts:  390/2,120

Moving Averages
 10 DMA 382
 20 DMA 451
 50 DMA 533
200 DMA 597

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: 396.65

Volume / Open Interest
Maximum Calls: 400/501
Maximum Puts:  360/503

Moving Averages
 10 DMA 376
 20 DMA 380
 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)
=========================

Chevron Corp. - CHV - close: close: 85.50 change: +1.80 stop: 81.50

Original Comments When Selected on September 27th:

Company Description:
The third largest US integrated oil company (behind Exxon Mobil and 
Texaco) runs more than 8,100 gas stations and has proved reserves of
5 billion barrels of oil and 9.5 trillion cu. ft. of natural gas.  
It will expand even further by buying Texaco, and the new 
ChevronTexaco will be the world's fourth-largest integrated oil 
company, behind Exxon Mobil, Royal Dutch/Shell, and BP.  Overseas,
Chevron is pursuing an exploration and production strategy in such 
lucrative areas as Kazakhstan and Angola, and it holds a 50-percent 
stake in Caltex, a global refiner and marketer jointly owned by 
Texaco. Chevron has also combined its chemicals operations with 
those of Phillips Petroleum.

Fundamentals: 
Analysts forecast the company will earn $7.72 per share in 2001 and 
$6.00 in 2002.  Last year, the company earned $8.13 per share.  The 
company has a forward 2001 P/E of 10.9.  This is in line with the 
industry average of 11.24.  In the last 90-days, seven of 18 covering 
brokerages have lowered earnings estimates for the firm, one of whom 
did so in the last 30 days. 

Why We Like It: 
How low is too low?  When the markets reopened on the 17th, the 
December futures for light, sweet crude closed at $29.13 a barrel 
(up $1.24) and Chevron shares at $90.22 (down $1.48).  Since then, 
both assets have been on a slide with oil bottoming at $20.75 on the 
26th and Chevron reaching $78.60 a day later.  Both have rebounded, 
with oil closing at $23.68 on Friday and Chevron ending the same 
trading day at $84.75.  This improvement is impressive given that 
on Wednesday, OPEC decided not to reduce the production, saying 
that a barrel price between $22 and $28 is ok.  Several factors 
are contributing to the rise; one was their greatly oversold 
condition, and the other a sense that some semblance of stability 
is returning to the middle-eastern oil producing areas.  For this 
we can thank the reduced threat of imminent military action and 
supportive actions by area nations.  With tensions easing and 
reasonable valuations, the oil sector is starting to look like a 
safer place to go swimming.  As one of the best names in the 
industry with shares so near a significant bottom, Chevron is 
attracting its share of bargain hunting value investors.  The 
shares have enough current momentum to put in a test of the 
$88.96 200-day moving average.  We will start this play with a stop 
at $81.50.

Updated Comments:
As the stock with the biggest weighting in the CBOE OIX oil index
you shouldn't be surprised to see such a close similarity between
a chart of the OIX and CHV.  The index saw a very painful drop in
September due to the tragedy on our East coast and the potential
unrest in the middle east.  We have since seen a nice bounce with
290 acting as resistance and Monday putting in a bounce at 280 on
the OIX.  Today's move produced a 2.3% gain in the sector and a 
close above the 290 level.  Unfortunately, 295 could be strong 
resistance for the group which could act as both price resistance
and the 50% retracement level from the big September drop.  Shares
of CHV have produced a similar pattern.  We saw resistance at $85
on Friday, a double bounce near $82 Monday and this morning and
now a nice move up with the stock trading above $85.  Definitely
a bullish move for CHV and the close above $85, which was definite
price resistance (see the lows on early April and again in mid-
July), could provide leadership for the rest of the sector.  There
were some positive comments about OPEC's "decision" to keep oil
near the $25 a barrel level.  If this is true then a lot of oil
stocks should find a bottom after last week's big drip to $20/bbl.
The last two days have seen the December contract for light sweet
crude drop and it closed at $22.65 on Tuesday.  Let's hope OPEC
follows through on their decision.  New longs looking for an
entry point should consider any new dips to $82, $83 or $84 or
even here above the $85 mark but we would use a higher stop than
the $81.50 for the newsletter.  Strong overhead price resistance
remains at $90 but the 200-dma could prove a challenge at 89.00.

Picked on September 27th @ $ 84.75
Gain since picked:          + 0.75
Earnings Date:                N/A  (not confirmed)





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PremierInvestor.net Newsletter                 Tuesday 10-02-2001
                                                   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/3176_2.asp
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In section two:

Split Trader
  New Plays: none
  Play Updates: Chevron Corp. - CHV, Jacobs Eng. - JEC
  Closed Plays: none

Net Bulls
  New Plays: KLA-Tencor - KLAC (Bearish)
  Bullish Play Updates: Genentech - DNA
  Bearish Play Updates: GILD, MOLX, SDS
  Closed Plays: none

Stock Bottom / Active Trader
  New Plays: Biomet, Inc. - BMET (Bullish)
  Bullish Play Updates: LMT, MO, RMCI
  Bearish Play Updates: T. Rowe Price Group - TROW
  Closed Plays: Kinder Morgan - KMI

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

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

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

Chevron Corp. - CHV - close: 85.50 change: +1.80 stop: 81.50

As the stock with the biggest weighting in the CBOE OIX oil index
you shouldn't be surprised to see such a close similarity between
a chart of the OIX and CHV.  The index saw a very painful drop in
September due to the tragedy on our East coast and the potential
unrest in the middle east.  We have since seen a nice bounce with
290 acting as resistance and Monday putting in a bounce at 280 on
the OIX.  Today's move produced a 2.3% gain in the sector and a
close above the 290 level.  Unfortunately, 295 could be strong
resistance for the group which could act as both price resistance
and the 50% retracement level from the big September drop.  Shares
of CHV have produced a similar pattern.  We saw resistance at $85
on Friday, a double bounce near $82 Monday and this morning and
now a nice move up with the stock trading above $85.  Definitely
a bullish move for CHV and the close above $85, which was definite
price resistance (see the lows on early April and again in mid-
July), could provide leadership for the rest of the sector.  There
were some positive comments about OPEC's "decision" to keep oil
near the $25 a barrel level.  If this is true then a lot of oil
stocks should find a bottom after last week's big drip to $20/bbl.
The last two days have seen the December contract for light sweet
crude drop and it closed at $22.65 on Tuesday.  Let's hope OPEC
follows through on their decision.  New longs looking for an
entry point should consider any new dips to $82, $83 or $84 or
even here above the $85 mark but we would use a higher stop than
the $81.50 for the newsletter.  Strong overhead price resistance
remains at $90 but the 200-dma could prove a challenge at 89.00.

Picked on September 27th @ $ 84.75
Gain since picked:          + 0.75
Earnings Date:                N/A  (not confirmed)




---

Jacobs Eng. - JEC - close: 63.00 change: +1.23 stop: 59.75

The bulls should be happy to see that volume was a little better
than yesterday's low volume dip.  JEC produced an early morning
rally but sold off midday only to find new buying pressure late
in the afternoon.  We are definitely seeing a slow climb for
JEC with higher lows as shares approach resistance at $65.
Considering that JEC isn't a big mover it's possible that we
might get some selling at its 100-dma currently near 64.25 but
we wouldn't expect too much unless the overall market is down.
Since we're only looking at a couple of more points before JEC
has to prove its new bullish trend by breaking through $65,
more cautious investors may want to wait until we get see that
positive close.

Picked on September 25th @ $ 61.21
Gain since picked:          + 1.79
Earnings Date:               11/01 (not confirmed)





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

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

  ------------------------
  New Bearish (Short) Play
  ------------------------

KLA-Tencor - KLAC - close:$29.31 change:-1.59 Stop:$33.25

Company Description:
KLA-Tencor makes tools that identify semiconductor defects during
manufacturing. The company's s yield management equipment and
software monitor and analyze silicon wafers at various stages of
chip production, inspecting reticles (which make circuit patterns)
and measuring crucial microscopic layers; the systems' feedback
allows flaws to be corrected before they ruin the costly wafers.
The firm receives about two-thirds of sales from outside the US,
and continues to expand through small, complementary acquisitions.

Fundamentals:
In the fiscal year ended June 2001, the firm earned 34-cents per
share on sales of $2.1 billion.  For the current fiscal year, the
consensus analysts' estimate is for earnings of $1.16 per share on
sales of $1.7 billion.

Why We Like It:
Economic insecurity continues to pound the semiconductor sector,
making it one of the weakest in the stock market - and a fruitful
place to surf for short opportunities.  The semiconductor equipment
manufacturers had been counting on orders for next generation
technologies to spur a recovery, but it appears the capital
spending cavalry is nowhere to be seen.

KLAC shares caught our eye on Tuesday, when the shares busted
through important downside support at $30.  This level has not
been violated since December 2000.  Given the above average volume,
it appears the $25.50 52-week low set in October 2000 is in peril.
If this last level does not hold we have to go back to the June
1999 low of $21.19 to find another possible stopping point.  We
would prefer a stop closer than $33.25, but don't want to be lower
than Mondays $33.10 intraday high.


Picked on October 02nd at $29.31
Earnings Date              10/18 (Not Confirmed)





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

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

Genentech - DNA - close: 45.26 change: +0.26 stop: 41.50

Did you take advantage of the dip on Monday?  Shares of DNA
dropped to just over $43.50 in the first hour of trading on
October 1st but they quickly recovered to close near $45.
Tuesday saw the up trend continue but as the markets held
their breath on the imminent Fed rate decision DNA share price
traded right up to resistance at $46.50 and sold off.  There
was some volatility after the rate cut but the stock still
managed a small gain.  The Biotech index (BTK) actually
outperformed DNA today with a gain of 1.94%.  It still looks
like the biotechs could get another 15-20 points or another
3.5 to 4% before encountering price resistance.  Keep an eye
on DNA as we might get another dip before its next attempt
to reach $48.

Picked on September 20th @ $41.20
Gain since picked:         + 4.06
Earnings Date:              10/10 (confirmed)





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

Gilead Sciences - GILD - close (Oct 1st): 56.62  stop: 58.00 *new*

We are urging a strong caution on our bearish play for GILD and
do not recommend any new plays at this time.  Not only has the
stock been selected to replace bankrupt EXDS in the Nasdaq-100
but the stock was halted before a big review of their new HIV
drug by the FDA.  News reports say the review was very positive
and the committee is recommending that the FDA give the new drug
its full approval.  What makes GILD's new drug, Viread, significant
was its effectiveness on patients who did not respond to other
HIV treatments.  One analyst believes that sales could reach
$80 million by 2002 and eventually peak at $500 million a year.
It's possible that we might see a "sell on the news" affect now
that the report is out on Viread but we don't want to risk a new
multi-day run up in the stock.  We're lowering our stop to $58.00
which will still give GILD a chance to fall.  Our risk is the
stock gaps up on Wednesday above our stop price.

Picked on September 28th @ $56.17
Gain since picked:         - 0.45
Earnings Date:              10/18 (not confirmed)




---

Molex Inc - MOLX - close: 27.26 change: +0.43 stop: 28.75 *new*

Shares of Molex continued to build on its bearish pattern as
it stair steps down lower and lower.  Monday saw a strong drop
near the open with a bottom near 26.60.  Tuesday saw a climb
but shares quickly sold off again after the Fed cut to an
intraday low of 26.46 before a late afternoon bounce.  Monday's
drop was on very strong volume of 1.2 million shares.  The
trend is still intact and we're approaching a downside breakout.
Shorts should be tightening their stops and we will tighten
ours to 28.75 which is just over Friday's high.  More cautious
bears might want to wait for shares to actually close under
the $26 mark.

Picked on September 26th @ $28.08
Gain since picked:         + 0.82
Earnings Date:              10/18 (not confirmed)




---

SunGuard Data Sys - SDS - close: 21.00 change: +0.47 stop: 22.50

We have yet to reach the support levels we discussed on Monday of
$18 to $19 and instead shares of SDS have appeared to find a bottom
at the $20 level.  Several times shares have traded down to $20 but
there appears to be some strong buying support there.  After the
Tuesday morning dip the stock spent most of the day sideways with
a small spike up beginning towards the close.  As you know, SDS
warned on Monday that revenues would be down due to lower license
fees, professional services and trading activity which were all
suspended after the attack on New York.  SDS management is taking
a very strong defensive approach to protecting their stock price
with a hasty approval Monday night to buy back $100 million of
SDS stock between now and October 12th, 2001 on the open market.
At $20 this would equate to 5 million shares which is less than
three days at their average daily volume.  However, this may be
enough support to prevent any significant breakdown and we suggest
that bears wait to see the stock trade under the $20 level before
considering any new positions.

Picked on October 1st @ $20.53
Gain since picked:      - 0.47
Earnings Date:           10/18 (not confirmed)





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

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

  ------------------------
  New Bullish (Long) Plays
  ------------------------

Biomet, Inc. - BMET - close:$30.35 change:+0.63 stop:$28.00

Company Description:
An aging population means business is booming for this maker of
artificial knees, hips, shoulders, fixation devices (bone screws
and pins), orthopedic support devices, dental implants, and operating-
room supplies.  Through its EBI subsidiary, the firm also sells
electrical bone-growth stimulators and external devices, which are
attached to bone and protrude from the skin.  Subsidiary Walter Lorenz
Surgical markets craniofacial implants and bone substitute material
for craniomaxillofacial surgery.  Reconstructive devices account for
some 60-percent of sales, and the US is its largest market (about 70-
percent) of sales).

Fundamentals:
For the fiscal year ended in May 2001, the company earned
80-cents per share on sales of $1.0 billion.  In the current year,
analysts expect the company to earn 92-cents per share on $1.2 billion
and $1.06 per share in 2003.  This gives them a forward 2001 P/E of 33.
The industry average P/E is 29.

Why We Like It:
There are several reasons to like Biomet, it is one of the better
revenue and earnings producers in the medical device industry, it
is taking market share (particularly in the knee implant and spinal
segments) and margins are widening.  Simply put, the economic
slowdown and the terrorist attacks are having no impact on medical
device makers, most of whom are expected to report strong third
quarters.  Othorpedic device makers such as Biomet are expected to
be particularly solid as they have been able to increase their
reimbursements from insurance companies.  All this good news has
not gone unnoticed by analysts, BMET shares are benefiting from a
number of rating upgrades.

On Tuesday, the bulls flexed their muscles and pushed BMET shares
through important resistance at $30.  This also produced a bullish
breakthrough on the longer trending point and figure chart.  The
momentum was confirmed by above average volume and strong relative
strength in the S&P Health Care Index ($HCX).  In the short-term,
the shares appear ready to put in a test of the $34.36 52-week high
set back in July.  On a longer-term basis we have a $40 6-month
price target.  We will initiate this play with a $28 stop, which
is just below the $28.76 50-day moving average.  Long-term investors
can consider a stop at $24, which is just below the $25 long-term
bullish trend line that has not been violated since April 2000.

Picked on October 02nd at $30.35
Earnings Date               N/A (Not Confirmed)





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

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

Lockheed Martin - LMT - close: 45.00 change: +1.39 stop: 42.00 *new*

With a vote of 99-0, the Senate passed a huge $345 billion
defense-spending bill.  Combine this news with positive news
from Boeing and the whole defense sector rose today.  Shares
of LMT gapped up at the open and spent most of the day sideways.
LMT appears to have some resistance at 45.25 and again at 46.00.
We've decided to move our stop up to $42.00, which is half a point
below the intraday low on Monday.  New longs should probably
wait to see if the stock can breakthrough resistance at $46
or if you prefer consider a dip back to $43 but we'd wait for
the bounce.

Picked on September 27th at $43.30
Gain since picked:           +1.70
Earnings Date                10/25 (unconfirmed)




---

Phillip Morris - MO - close: 49.40 change: +0.03 stop: 45.00

Finally!  After days and weeks of watching and waiting MO was
able to close above the $49 level with a strong move on Monday.
The territory between $49 and $50 has been a tough battle
between the bulls and the bears struggling for direction with
MO.  It appears the shorts and longs have merely moved the
line in the sand to 49.50.  We were encouraged by the intraday
dip and bounce at 48.56 and still think that MO has the
fundamentals to be a strong bullish play.  We just need the
market to confirm it!  We suggest that more conservative traders
wait for shares to close over the $50 mark as confirmation.
It is tempting to move our stop up 46.50 or even 47.50 but we
are choosing to keep it at 45.00.  Don't let that stop you from
placing your own stop where you feel the most comfortable.

Picked on August 30th at $47.94
Gain since picked:        +1.46
Earnings Date            10/17/01 (unconfirmed)




---

Right Mgmt - RMCI - close: 29.85 change: -0.55 stop: 29.25

To be honest we are simply amazed at RMCI's performance.
Considering the 40% run up in the stock over the last several
sessions it seemed like a sure thing that profit taking would
close the play come Monday morning.  Quite the opposite, RMCI
gapped up and traded to 33.51 Monday morning before coming
back to find support at 29.50, which had been strong resistance.
We note that today's low was also at 29.50.  It is very possible
that RMCI could trade sideways from here, digesting its gains,
before moving higher.  Despite this fortunate development
we would probably not recommend new plays unless one felt
comfortable with a very tight stop.  See Sunday's update for
more details.

Picked on September 20th at $24.70
Gain since picked:           +5.15
Earnings Date                  N/A





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

T. Rowe Price Group - TROW - close: 28.98 change: +0.50 stop: 30.50

TROW shares have shown some recent strength uncharacteristic of the
company's worsening fundamentals.  Still, the move up appears to be
stalling out short of $30 upside resistance and our $30.50 stop.  We
would not recommend entering this as a new position, but we are
comfortable with our existing stop and are adopting a wait-and-see
attitude.

Picked on September 20th @ $27.57
Gain since picked:         - 1.41
Earnings Date:                N/A  (not confirmed)





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

  -------------------
  Closed Bearish Play
  -------------------

Kinder Morgan - KMI - close: 49.40 change: +0.47 stop: 51.00

There are comments that that OPEC is prepared to maintain the price
of oil at $25 a barrel.  If so, it explains the sudden reversal in
the fortunes of energy plays.  No longer confident in our bearish
outlook for this battered sector, we are closing out KMI shares at
the $49.40 closing price and walking off with a small 60-cent per
share gain.

Picked on September 25th @ $50.00
Gain since picked:         + 0.60
Earnings Date:              10/17 (not confirmed)





==================
  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
RNR       Renaissance Holdings      94.70   +0.70
TLGD      Tollgrade Commun          22.40   +2.40
VLO       Valero Energy             37.08   +1.49
IPCR      IPC Holdings              65.09   +1.84
AMRN      Amarin Corp Plc           24.78   +3.48

  ---------------------------------------
   Breakout to Upside (Stocks $5 to $20)
  ---------------------------------------

Ticker    Company Name              Close  Change
MCAF      Mcafee.Com Corp           15.75  +2.00
ISSX      Internet Security System  13.55  +1.47
SBAC      Sba Communications        15.50  +2.31
CDT       Cable Design Tech         12.93  +1.38
BEAV      Be Aerospace              11.73  +3.08

  ---------------------------------------
   Breakout to Upside (Stocks over $20)
  ---------------------------------------

Ticker    Company Name              Close  Change
CAJ       Canon Inc Adr             30.62   +1.92
WMI       Waste Management          27.87   +1.38
CPN       Calpine Corp              24.75   +3.05
NOC       Northrop Grumman         105.20   +3.75
JCI       Johnson Controls Inc      67.45   +1.95

  -----------------------------------------
   Breakout to Downside (Stocks over $20)
 -------------------------------------------

Ticker    Company Name              Close  Change
MHP       Mcgraw-Hill               50.50   -6.40
BSYS      Bisys Group               48.24   -3.98
FIC       Fair Isaac & Co           40.41   -5.82
PRHC      Province Healthcare Co    34.95   -1.40
SWBT      Southwest Bancorp         28.30   -1.57

  ------------------------------------------------------------
   Recently Overbought With Bearish Signals (Stocks over $20)
  -------------------------------------------------------------

Ticker    Company Name              Close  Change
none

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