PremierInvestor.net Newsletter Wednesday 10-03-2001 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/9207_1.asp ================================================================= In section one: Market Wrap: I don't believe it! Market Sentiment: Triple play sends the markets on a bullish ride! Play-of-the-Day: Jacobs Engineering Group - JEC (Bullish) Watch List:.HM, PEP, GDT, BLL, TXU, HRB, SLM, DLX, CCU, BSX, RTN ----------------------------------------------------------------- U.S. Market Numbers ----------------------------------------------------------------- MARKET WRAP (view in courier font for table alignment) ----------------------------------------------------------------- 10-03-2001 High Low Volume Advance/Decline DJIA 9123.78 +173.19 9148.35 8860.84 1.53 bln 1493/1648 NASDAQ 1580.81 + 88.48 1595.48 1473.22 1.73 bln 1380/2243 S&P 100 550.60 + 11.03 552.51 533.64 Totals 2873/3891 S&P 500 1072.28 + 20.95 1075.38 1041.48 RUS 2000 413.22 + 11.43 413.85 399.64 DJ TRANS 2222.86 + 52.42 2232.20 2166.20 VIX 33.13 - 0.92 35.00 32.46 VXN 62.17 - 1.67 64.84 60.85 TRIN 0.61 Put/Call 0.47 ----------------------------------------------------------------- =========== Market Wrap =========== I don't believe it! by Jeff Bailey I have a hard time swallowing the "Cisco induced rally" theory after today's impressive 5.9% gain by the NASDAQ Composite. Had the NASDAQ lost 5.9%, Nortel Networks (NYSE:NT) would most likely have been blamed for the decline. I don't think Cisco's CEO Tom Chambers hurt things when he said he felt comfortable with first quarter guidance, but to try and say that a these comments caused a bullish stampede on Wall Street would be stretching the truth. After all, shares of Cisco Systems were trading as low as $11.15 at one point during this morning's trading session and getting close to another 52-week low recently achieved at $11.04. President Bush told business leaders in New York that the White House and Congress are close to an agreement to inject $60-$70 billion in additional stimulus into the economy. The package is a combination of rebates, tax breaks as well as investment- related tax measures and additional relief for workers that may have been laid off in the wake of the recent terrorist attacks. I'm not trying to be a pessimist in the least. It's time the bulls had their day and time for bears to be on the other end of things for at least a day, but I'm just not going to buy the Cisco rally, forget everything that's happened, and throw caution to the wind. There's a lot of work yet to be done and we'll start with the S&P 500 Index to try and look for levels of resistance. By identifying some levels of resistance, only then can we begin monitoring a broader market index for strength and assessing risk/reward. S&P 500 Index (SPX.X) - 10 point box When we look at a point and figure chart of the SPX we get the feeling the S&P 500 has had one heck of a rally off the lows of 950, but we've yet to surpass any type of resistance at this point. The first test most likely comes at the 1,080 level, which is near the lows found earlier this spring. Those that understand the point and figure charting system know we would only reverse into a column of O's on a 3-box reversal, understand that a decline of 30 points is needed to 1,040 in order for a reversal. From an institutional perspective a 30-point pullback from 1,070 is equivalent to a hair on a frogs back. The three key levels of resistance that a bullish trader/investor should be monitoring from the above chart are 1,080, 1,160 and 1,200. The risk for a bull and first sign of trouble would be a break below the 950 level. That's some major risk/reward to be taking, but that's what we need to make everyone aware of. If you've been showing some discipline and taking some bullish trades in the past week (limiting your downside risk with a tight stop) you've undoubtedly been stopped out of a few trades, but your probably holding some nice gains too. S&P 500 Index Chart - last nine months I think the above fitted retracement on the SPX gives us very good correlation. Not only with some levels that look to have been traded in the past, but also correlate with our point and figure chart. One hurdle on the retracement bracket has been jumped at 1,011 and now we'll have to see if 1,082 can be cleared. For a bullish trader, he/she can assess risk to the 1,011 level, but for any further bullish trades to be initiated (as it relates to the SPX) the bullish trader had better be targeting the 1,126 level to have a bullish trade make sense. The bar chart of the SPX now gives us a fairly decent idea of how to trade things near-term. A move above the 1,082 level could bring further short-covering into the market as risk for a bearish trader then becomes 1,126. Weakness at the opening of trading may have some short-term bulls looking to lock in some profits and trying to raise some cash. This might have traders thinking a pullback to the 1,011 level is possible. With this type of mindset, we want to have some stocks on our watch list with similar technicals where we can monitor them against the SPX. K Mart (KM) - last nine months K Mart (NYSE:KM) might be a stock that a bullish trader can find some correlation with as it relates to levels we're monitoring in the SPX. The past couple of weeks, we've seen Wal-Mart (NYSE:WMT) marching higher and we did note the "theme" of discount retailer. Since Wal-Mart (WMT) is up 14% from its September 10th close, perhaps K Mart (KM) has some catching up to do. Today's 9% gain in KM vs. WMT's 1.4% gain is sign that K Mart bears are cashing in their "blue-light specials" and locking in gains. If the SPX were to break above the 1,082 level tomorrow and K Mart makes a move above $8, then we might see a move to the $8.96 or $9.50 level in the coming sessions. At the same time, if we see selling at the open of trading and the SPX pulls back to the 1,011 any time soon, then we might expect shares of KM to pull back near $7. Some traders that normally trade 1,000 shares of an $8 stock might not like to "take the heat" back to $7. This is when a trading strategy of 1/2 position or 1/4 position then becomes appropriate. IBM short didn't work Yesterday's 01:30 EST Update and trade set up for a short/put play in International Business Machines (NYSE:IBM) didn't work in the direction I had set up. Quick review there is that relative strength was still in a column of X's and we'll look for that type of "warning" in the future when identifying potential short candidates. When the stock broke above the $95.50 level (my highlighted stopping point) the NYSE Composite (NYA.X) was breaking above its 61.8% retracement level at 550 (retracement from 677 to 472). When IBM broke above our stop and the NYSE Composite broke above its retracement, traders had a tough time holding onto the trade and any losses should have been kept to a minimum. Filing down my horns Call me a "worry wart," but I'm just not seeing the horns grow out the top of my head at this point. What's stunting their growth? The bond market. We did see some selling in the 30-year Treasury ($TYX.X) with about 2-hours left to go in bond market trading (remember, the Treasury market opens 1 hour before stocks and closes 1 hour before stocks), but not nearly enough to explain today's bullish action in stocks. Since we can't track money flows from savings account during the trading session, I can't assume that today's buying was simply a huge flow of cash from bulls. I'm left with short-covering at this point. I think we need to see some selling in bonds soon to further fuel today's rally. Without that cash coming from the bond market, I just don't think investor confidence is bullish enough to chase a rally. I think the best thing for bullish traders to be doing is looking for stocks in stronger sectors and perhaps stick with some "stodgy" names like K Mart (KM) until we see a good round of selling in the bond market (with currency markets staying calm). Yes, K Mart had a nice day today and posted a 9% gain, but profits there are now far less than today's 21.5% gain in Cisco (NASDAQ:CSCO). On September 10th, CSCO closed at $14.47, today the stock finished at $13.94 with a session high of $14.42. On September 10th, KM finished at $9.13 and closed today at $7.85. In a final note, K Marts relative strength chart reversed into a column of X's today and gave a relative strength buy signal vs. the S&P 500. Jeff ================ Market Sentiment ================ Triple play sends the markets on a bullish ride! by Russ Moore First up was a surprisingly strong NAPM non-manufacturing index number of 50.2 percent. Economists had been expecting to see the index fall to 43.3, down from the previous months 45.5. President Bush delivered the second wave of bullish news when he said the Federal Government was ready to do all it could in an effort to boost the economy. Mr. Bush spoke of an economic stimmulas package of $60 - $75 billion dollars. The triple play was completed when Cisco CEO, John Chambers, stated he was comfortable with Cisco’s fiscal-first quarter earnings estimates. The stock skyrocketed 21.42 percent on the news. The DOW moved through the 9,000 mark ending with an impressive gain of +1.9 percent. The NASDAQ rode the tech wave to a +5.9 percent increase and the NDX, thanks to solid gains by tech heavyweights Cisco (+21.4 percent), Microsoft (+6.0 percent), and Intel (+8.6 percent), was up +7.7 percent. Volume was heavy with 1.65 billion shares moving on the NYSE and a whopping 2.65 billion shares trading on the NASDAQ. Market breath saw winners whoop the losers by a 21/10 margin on the big board and a 24/12 difference on the tech index. The only sectors failing to move north were gold, drug, healthcare and oil. Have we turned the corner? Is this the beginning of a long-term rally? Anything is possible but I believe today’s action, along with the last few days of gains is nothing more than a bear market rally. Markets were extremely oversold and itching to make a move and when the beloved Cisco started rising, short covering moved into full throttle. There can be no doubt that investor sentiment has improved as evidenced by the put/call ratios however, we are still in a period of tremendous uncertainty and that usually means a choppy ride down Wall Street. VIX Wednesday 10/03 close: 33.13 VXN Wednesday 10/03 close: 62.17 30-yr Bonds Wednesday 10/03 close: 5.30 Total Put/Call Ratio: .56 Equity Option Put/Call Ratio: .47 Index Option Put/Call Ratio: 1.44 === NASDAQ 100 Index (NDX/QQQ) 52-Week High: 103.51 52-Week Low: 28.19 Current close: 31.00 Volume/Open Interest Maximum calls: 30/104,325 Maximum puts : 27/ 57,425 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: 550.60 Volume/Open Interest Maximum calls: 600/6,462 Maximum puts : 500/6,759 Moving Averages 10 DMA 521 20 DMA 539 50 DMA 581 200 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: 1072.27 Volume / Open Interest Maximum calls: 1050/21,239 Maximum puts : 1050/22,943 Moving Averages 10 DMA 1019 20 DMA 1054 50 DMA 1134 200 DMA 1225 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: 9,123.78 Volume / Open Interest Maximum Calls: 100/26,636 Maximum Puts 100/41,733 Moving Averages: 10 DMA 8,688 20 DMA 9,120 50 DMA 9,876 200 DMA 10,406 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: 475.21 Volume / Open Interest Maximum Calls: 520/ 300 Maximum Puts: 440/2002 Moving Averages 10 DMA 441 20 DMA 470 50 DMA 498 200 DMA 549 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: 388.67 Volume / Open Interest Maximum Calls: 520/ 710 Maximum Puts: 390/2,117 Moving Averages 10 DMA 379 20 DMA 442 50 DMA 530 200 DMA 596 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: 393.03 Volume / Open Interest Maximum Calls: 400/501 Maximum Puts: 360/753 Moving Averages 10 DMA 378 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) ========================= Jacobs Engineering Group - JEC - close:$67.97 change:+4.97 Stop:$64.25 *new* Original Comments When Selected On September 25th: Company Description: Jacobs Engineering is one of the big boys of global construction along with rivals Bechtel and Flour. Over 40-percent of company sales are generated by engineering and construction projects for the chemical, petroleum, and pharmaceutical and biotech industries. Public contracts contribute another 35-percent with the US government contracts alone, particularly aerospace and defense, consisting of 18-percent. Projects include buildings, process plants, manufacturing facilities, paper and pulp plants, highways and bridges. Jacobs also provides consulting and plant maintenance and operation. The firm is 13-percent owned by founder and chairman Joseph Jacobs. Fundamentals: In the fiscal year ending September 2001, the company earned $2.82 per share on sales of $3.4 billion. This year, analysts project the company will earn $3.21 per share and $3.70 in 2002. Earnings projections have been stable. In the last 90-days, the consensus analyst earnings estimate has risen 1-cent. The company has a projected September 2001 P/E of 19. The industry average P/E is 22.43. The company has minimal long-term debt with a cash flow of $4.68 per share (industry average is $1.69). Why We Like It: We like this play for both fundamental and technical reasons. On a fundamental basis, the share are inexpensive in relation to its peers with per share cash flow almost three times the industry average, yet with a below average P/E. On technical basis, the shares simultaneously bounced off their long-term up trend and $57.80 200-day moving average on Monday and then built on that rebound with a $2.06 pop on Tuesday. The bullish momentum is confirmed with a rising volume trend. Tuesday's 342k-share volume was above the 318k daily average and Monday's 277k traded. Another piece of bullish evidence was a late-day rally that pushed through the $60.44 50-day moving average. The shares seem ready to test significant resistance at $65.50. If they can push through that level, the next area of upside resistance should be encountered near $70.00. Our point and figure analysis produced a 6-12 month price target of $80. We will initiate this bullish play by sliding a $57.50 stop underneath the 200-dma.. Updated Comments: Our original bullish outlook remains unscathed. But even we were surprised by the strength of Wednesday's move. We still see $70 as the next area of resistance, but it looks as if a test of $75 is in the cards. We recommend this play as a hold for those already in it, new entrants may want to wait for a dip to $65-$66 before jumping in. With a $6.76 per share gain to date on this selection, we are tightening our stop to $64.25. The company confirmed that it would be holding its fourth-quarter earnings conference call at 11:00am EST on November 1st. Picked on September 25th at $61.21 Gain Since Picked: + 6.76 Earnings Date 11/01 (Confirmed) ========== Watch List ========== Homestake Mining Co. - HM - close: 9.05 change: -0.42 WHAT TO WATCH: HM is one of the largest North American-based gold mining companies. Every year they produce over 2 million ounces of gold. Due to the market's bearish trend these last several months and the attacks on Sept. 11th, gold has been in the news and on the minds of investors looking for a hedge or some form of safety. Whether buying shares in a gold stock is a true hedge or not is up for discussion and our own Jeff Bailey actually shared a few comments about the issue but it is beyond the scope of this watch list. We would rather highlight HM's long-term up trend that appeared to begin back in late February. It has certainly been a rocky road as shares took a big dip near the 1st of April but overall shareholders have been very rewarded with a climb from the $5 level to over $9. I've chosen to highlight it on the watch list because the trend has been rather strong and allowed patient investors opportunities to enter at the bottom of its trading channel which has been close to its 50-dma. Hopefully you will notice that the share price is no where close to the 50-dma (@ 8.43). This means that interested traders should keep this on their own watch list to see if the trend continues or if another trade develops. Levels traders should be watching are a breakout above overhead resistance at $9.50, a potential bounce at what could be price support at $9.00, or the above outlined scenario - a dip back to the 50-dma that will probably have moved up to the 8.50 area by the time they connect (if they connect soon). Don't forget to plan your traders around the October 29th earnings announcement which we have been unable to confirm. --- Pepisco Inc - PEP - close: 49.08 change: -0.27 WHAT TO WATCH: Here is a widely held stock that has benefited over the last few weeks as its appearance as a defensive play in a recessionary environment. It has certainly out performed its rival Coke (NYSE:KO) the last couple of weeks and is within a point or two of setting new 52-week highs. Actually, upon further investigation, PEP is close to setting new all time highs! This is not to say that it will and we need to be patient. Back in December of 2000 the stock hit resistance at the $50 level. We saw a repeat performance in the middle of September before a sharp drop took the stock back down to $46. Now that shares have climbed back to the $49 level the bulls need to wait for a close over resistance. It's possible the stock could see some interest as we approach its earnings report near the 10th or 11th of October. We would not hold a position over the report but if they warn or if the earnings come out tasting flat then the bears will maul the stock again. This may be one to watch for a few days or until its earnings. --- Guidant Corp. - GDT - close: 39.15 change: -0.55 WHAT TO WATCH: Medical device maker, Guidant saw a lot of bad press in mid-July when an FDA advisory panel voted 6-2 against their Contak CD heart monitor device. To pour salt in the wound, the panel voted unanimously to approve rival Medtronic's heart device instead. GDT's stock was hammered over the next two days before finding a bottom under $27. Since then the stock has regrouped, built a base at $30 and begun a new ascent back to pre-July levels. The stock ran up to $39 in late August on a strong rally only to give most of it back before finding support at its 50-dma in early September. Since then the stock has been very strong and resistant to the violent swings in the broader indices. Analysts believe that the medical device market should be recession-proof and thus less risky as we proceed into the 4Q. Right now shares of GDT are butting up against overhead resistance at $40. We feel that both bullish and bearish traders should be watching GDT for the next move. Bullish investors should be watching for a close over $40. However, to be safe, we would wait for the stock to close over $41 or its 200-dma. Bearish traders will be looking for just the opposite. Even though the stock looks strong it has seen two weeks of steady gains. The MACD is still positive but the next day or two could show a bearish divergence in the MACD histogram. Shorts could also wait for the more obvious rollover in share price or a failed rally at $41 or $40. Be aware that GDT is due to announce earnings on October 18th. --- Ball Corp - BLL - close: 60.55 change: +1.90 WHAT TO WATCH: No stranger to the watch list, we're highlighting Ball again. BLL has been a big winner for the 3Q and doesn't show any signs of slowing down. Briefly, BLL makes most of its money with its packaging business (tin cans) but is also know for its Ball Aerospace division. This appears to be a winning recipe as the stock has appreciated over 20% in the last couple of months. For the more conservative group this stock may appear rather overextended. If you fall into this category then you would do best to look for a pullback to the $57.50 range or even a dip back to $55. However, it's possible the stock may not return to $55 in the near future. The more aggressive bunch can also look for the dip to 57.50 but the second close over the $60 mark is very encouraging for the bulls. Depending on your risk tolerance a play could be argued here as long as one uses a stop. BLL is expected to announce earnings on Oct. 25th. --- TXU Corp - TXU - close: 49.88 change: +0.64 WHAT TO WATCH: TXU is a Dallas, Texas-based electricity company that services customers in the U.S., Europe and Australia. The stock has seen an incredible rebound from its low just five days ago. Selling pressure took the stock down to bounce intraday at 43.25 on Sept. 27th before closing at 44.41. At the time, the 200-dma was 43.73. Since then the stock has been a non-stop rocket straight up to five month resistance at $50. This will make the third attempt for buyers to push beyond this level. A triple top breakout or breakdown can be a powerful technical signal for traders. Both bullish and bearish investors should be watching to see which influence will win out for this stock in the short-term. TXU is expected to announce earnings near the 25th of October. Exact date is unconfirmed. --- H R Block - HRB - close: 41.10 change: +0.04 WHAT TO WATCH: HRB is another popular stock for the Watch List. Looking at the chart is like looking at the quintessential up trend. We barely saw a hiccup in the trend until the volatile September markets. Despite this deviation of slipping below its rock solid support at the 50-dma, HRB quickly rebounded in a few short sessions and has returned to breakout over resistance at the $40 level. Anxious investors who had feared the stock had "gotten away" from them probably jumped at the chance to buy on the dip. It is tough for us to recommend the stock while it's at the top if its channel but it would appear the bulls might try and make $40 a new level of support. Odds are good that there is a host of traders just waiting to buy on the next dip down to $37 or $38. We suggest picking your entry based on your own risk tolerance. Earnings are not expected until late November 2001. --- -- MORE TO WATCH -- Due to time constraints we were not able to highlight all the stocks we wanted to for tonight's Watch List. Below you'll see a short list of symbols and a brief explanation of what is happening or what we might be looking for in a potential entry point. Always consider the status of the sector and the overall markets before making a trade. ------------------ USA Education - SLM - close: 86.51 change: +0.61 NOTE: SLM is looking very strong. Almost too strong and could use a pullback. However, today's trading built on yesterday's breakout over $85. Hard to argue with the chart. --- Deluxe Corp. - DLX - close: 35.88 change: +0.78 NOTE: DLX also looking very strong. Would like to see it pullback to $34 as an entry point. --- Clear Channel - CCU - close: 40.12 change: +1.79 NOTE: CCU was in a free fall before the Attack on America and when the markets reopened shares gapped down under $40. Since then the stock has been consolidating under resistance at $40. While today's close was 40.12 we want to see confirmation that bulls have control with another positive day. Overhead resistance at $44 (top of the gap). --- Boston Scientific - BSX - close: 21.35 change: +0.36 NOTE: BSX produced a nice technical breakout today over resistance at $21. The stock is not a big mover and has been in a steady climb since mid-July. We did see lower prices and volatile moves from Sept. 7th-20th but shares quickly resumed their previous trend. Like our GDT entry above, some analyst believe that the medical device industry should be recession proof. This could be an entry point for bullish traders. Look for confirmation and play with a stop. --- Raytheon Co. - RTN - close: 35.10 change: +0.32 NOTE: Everyone is interested in defense stocks these days and RTN has seen a strong move up. After retracing some of its early gains after the gap up on the 17th of September, the bulls have slowly been building a pattern of higher lows and the stock is looking bullish on the chart. While the company is sure to benefit from the $345 billion defense bill just passed by the Senate this has been a very large percentage move in the stock. Wait for the positive close over resistance at $36 and absolutely play with a 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. 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PremierInvestor.net Newsletter Wednesday 10-03-2001 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/9207_2.asp ================================================================= In section two: Split Trader New Plays: none Play Updates: See Play of the Day Jacobs Engineering -JEC Closed Plays: none Net Bulls New Plays: none Bullish Play Updates: Stop updated Bearish Play Updates: none Closed Plays: Molex Inc - MOLX (Bearish) Stock Bottom / Active Trader New Plays: none Bullish Play Updates: Stop updated Bearish Play Updates: none active Closed Plays: T. Rowe Price Group - TROW 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 ----------------------- : See Play of the Day Jacobs Engineering -JEC in section 1 ================================================================== Net Bulls (NB) section ================================================================== =============== NB Play Updates =============== ----------------------- NB Bullish Play Updates ----------------------- Stop changed for Genentech - DNA to $43.25 from $42.75 =============== NB Closed Plays =============== -------------------- Closed Bearish Plays -------------------- Molex Inc - MOLX - close: 30.17 change: +2.91 stop: 28.75 Cisco CEO John Chambers was driving the truck that hit MOLX shorts. Chambers said that he is comfortable with analysts' first quarter estimates. And in spite of Chambers dismal record for earnings predictions this year, the news was enough to light a fire under the market and the networking equipment sector. Fortunately, we had tightened up our stop to $28.75, so we walked with only a small 63-cent loss. It will be interesting to see if late-Wednesday's earnings warning from fiber-optic cable maker Corning (GLW) causes this sector to reverse course on Thursday and restore MOLX shares to their bearish way. Picked on September 26th @ $28.08 Gain since picked: - 0.63 Earnings Date: 10/18 (Confirmed) ================================================================== Stock Bottom / Active Trader (AT) section ================================================================== =============== AT Play Updates =============== ----------------- Bullish Play Updates ----------------- Stop updated for Right Management Cons - RMCI from $29.25 to $31.75 =============== AT Closed Plays =============== ------------------- Closed Bearish Play ------------------- T. Rowe Price Group - TROW - close: 30.67 change: +1.69 stop: 30.50 Call it short covering or a long overdue bullish reaction to an extremely oversold market, but this was one strong market rally that carried even the dogs higher. The mutual fund industry is not likely to have anything good to say for some time and T. Rowe did not issue any kind of market moving news. Therefore, we must assume that short-covering was the catalyst for much of TROW's recent gains. These means these shares will be worth watching as a possible short-play when this rally runs out of gas. Our $30.50 stop forces us out of this play - for now. Picked on September 20th @ $27.57 Gain since picked: - 2.93 Earnings Date: N/A (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 LEH Lehman Bros Holding 59.92 +2.31 KBH KB Home 30.45 +2.10 BZH Beaser Homes 51.63 +3.73 BA Boeing 36.59 +2.34 RJR Rj Reynolds Tobbaco 58.90 +1.00 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- Ticker Company Name Close Change CSCO Cisco Systems 13.95 +2.57 ORCL Oracle Corp 13.66 +1.06 IFX Infineon Tech 12.70 +1.19 ALTR Altera Corp 17.94 +2.56 SEBL Siebel Systems 17.61 +2.55 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- Ticker Company Name Close Change TXN Texas Instruments 25.26 +2.12 HBC Hsbc Holdings 54.59 +2.05 GSK Glaxosmithkline Plc 56.75 +1.15 DELL Dell Computer Corp 20.64 +2.10 STM Stmicroelectronics 23.65 +1.79 ----------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change BLS Bellsouth Corp 41.15 -1.17 BAX Baxter International 52.05 -1.45 MHP Mcgraw-Hill Comp 49.30 -1.20 EQR Equity Redident Property 54.71 -1.57 ZION Zion Bancorporation 49.62 -2.93 ------------------------------------------------------------ Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------------------------- Ticker Company Name Close Change BAX Baxter International 52.05 -1.45 MCO Moody's Corp 33.95 -1.00 ================================================================= 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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