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Daily Newsletter, Wednesday, 10/03/2001

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PremierInvestor.net Newsletter              Wednesday 10-03-2001
                                                  section 1 of 2
Copyright  2001, All rights reserved.
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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.





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

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Copyright  2001  PremierInvestor.net. and
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Do not duplicate or redistribute in any form.


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

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

*****************************************************************
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Copyright  2001  PremierInvestor.net. and
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Do not duplicate or redistribute in any form.




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