PremierInvestor.net Newsletter Weekend Edition 10-05-2001 section 1 of 3 Copyright © 2001, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= To view this email newsletter in HTML format with imbedded charts and graphs, click here: http://www.PremierInvestor.net/htmlemail/100501_1.asp ================================================================= In section one: Market Wrap: Financial weak, but broader market end positive Market Sentiment: Tax relief talk turns the markets around Play-of-the-Day: Tenet Healthcare - THC (Bullish) Watch List: MSFT, PAYX, SUNW, CSCO and others ------------------------------------------------------------------ U.S. Market Numbers ------------------------------------------------------------------ MARKET WRAP (view in courier font for table alignment) ------------------------------------------------------------------ WE 10-7 WE 9-28 WE 9-21 WE 9-14 DOW 9119.77 +272.56 8847.21 +611.40 8235.81 -1369.7 - .34 Nasdaq 1605.30 +106.50 1498.80 + 75.61 1423.19 -272.18 + 7.67 S&P-100 549.38 + 16.28 533.10 + 41.40 491.70 - 66.88 + 4.69 S&P-500 1071.38 + 30.44 1040.94 + 75.14 965.80 -126.74 + 6.76 W5000 9837.11 +274.18 9562.93 +662.48 8900.45 -1203.9 + 37.95 RUT 414.97 + 10.10 404.87 + 25.98 378.89 - 61.84 - 4.46 TRAN 2209.42 + 15.43 2193.99 +139.15 2054.84 -621.65 - 36.65 VIX 34.66 - .53 35.19 - 13.08 48.27 + 13.67 + .24 VXN 63.35 - 1.84 65.19 - 12.54 77.73 + 13.89 - 1.61 TRIN 1.14 .73 .60 .68 TICK +290 +995 +21 +100 Put/Call .96 .61 1.27 1.01 ---------------------------------------------------------------- =========== Market Wrap =========== Financial weak, but broader market end positive by Jeff Bailey Many of the broader market indexes finished today's trading with gains, despite some weakness in the financials. Banks got hit pretty hard today as the S&P Banks Index (BIX.X) fell 5.15%. This followed a suspicious decline of 3% that we picked up on yesterday from the 619.99 level during intra-day comment on OptionInvestor.com. It was the "619.99" number that had us thinking there might have been some type of sell program coming into effect on the sector. Today's further decline gives hint that maybe we were right. This also had us looking at bond YIELDS a little closer and what the market might be thinking in regards to current low levels of interest rates being "the bottom." For the week, the NYSE Composite (NYA.X) finished up 2% at 554. This is perhaps what many institutional investors consider "the market." The Dow Industrials gained 3.08% on the week with a close back above the 9,000 level at 9,120. We start getting more exposure to four-lettered stocks when we look at the S&P 500 Index. This week, the S&P 500 gained 2.98% to close at 1,071. The 1,082 looks to be the level of resistance that needs to be cleared on a closing basis to get things looking further bullishness. We may have well seen a close above that level today had it not been for the underperformance of the financial, which make up about 14% of the S&P 500. The narrower S&P 100 (OEX.X) finished up 3% for the week at 549. When we just look at four-lettered stocks in the NASDAQ Composite (COMPX) we saw a nice gain this week of 7.14%. There were some positive comments this week from Cisco Systems (NASDAQ:CSCO) and Dell Computer (NASDAQ:DELL), which helped bring in some short- covering and the "good news" helped offset some bad news from others. Some of the larger cap technology stocks as represented in the NASDAQ-100 (NDX.X) showed a weekly gain of 8.82% with a close above 1,271. The smaller capitalized stocks in the Russell-2000 (RUT.X) didn't do quite as well as some would expect. Here we saw a weekly gain of 2.72% and closing value of 415. Dow Industrials Hypothetical Portfolio from Sept. 10 close There were some interesting things we can pull from today's comparison in our hypothetical Dow Industrial Portfolio when we compare to last Thursday's market wrap. Last Thursday, the portfolio (non-weighted) was showing a 10.27 LOSS and about 1/2 that loss was erased in the past 6 sessions. As we'll discuss below, the bulk of the gains looks to be from short covering and not necessarily from raging bull market action. I'll discuss the reasons for this thought process below. When we look at leadership we see that Wal-Mart (NYSE:WMT) "discount retailer" added to gains and now is up 13.34% since September 10th. Last Thursday the stock was up 6.83% since Sept. 10th. This type of action is "leadership" as we see nice gains on top of nice gain. However, not long ago we noted that AT&T (NYSE:T) had shown some impressive gains and we didn't expect that to continue week after week. I'd expect WMT to show some type of consolidation or pullback next week. If WMT can simply hold near the $50 level or above, this would be a good sign as this stock is a very good pulse on the markets perception of the consumer. From there we see that SBC Communications (NYSE:SBC) and AT&T (NYSE:T) look to be "stalling out" near-term. AT&T did manage to add some gains (up from +5.94%), but SBC pulled back from a prior reading of +6.49%. What I pull from this is that "leadership" in the Dow Industrials is very narrow right now. In a very strong market environment we should be seeing continued leadership from those stocks that made the first strong move off the bottom. Right now, Wal-Mart (NYSE:WMT) is the only stock that really added some gains. Next week, equity bulls will want to see SBC start to show some type of comeback as a hint that early bulls are adding money to their favorites. The amount of gain we see in our portfolio must be coming from somewhere, so lets see where that is coming from. Once again I sorted the portfolio by % gain from Sept. 10th close. The blue, red and pink numbers are where each of the stocks actually traded in the pecking order on Thursday, September 27th. What I'm looking for is some significant moves up/down in the past week. The one upward move that stands out most noticeably is Microsoft (NASDAQ:MSFT) "software." Last Thursday, MSFT was showing a LOSS of 13.26% at $49.94 and today's close at $57.74 is an impressive move (+15.6% in six sessions). What we want to do now is look for what "made" this stock do this (find the common denominator) and look for other stocks that have the same characteristics (maybe sector similarity, or chart technicals). All we want to do is look to reproduce results, not try and come up with something new. Microsoft Chart - What would have worked It's very easy to go back and look for "what should have been done." The trade set-up for MSFT would have been... Look for big volume on first test of a retracement level, then look for some type of re-test of that level on light volume (stock sold out). Once we have re-test, the next day we look to buy on break above prior day's high (09/27 high was $50.68 so buy at $50.69-$50.75) and follow with a stop just under the retracement low (if stock didn't break below that retracement level on BIG volume day, then stock should not violate that low if I'm trading bullish, if it does, then I'm wrong and will stop out). Our bullish targets for this trade would be $57.59 or $61.39. Anytime we hit a bullish target, we move our stop up to break-even. As you can see.... this type of systematic trading would have us at a profit. Even if we used a break below the previous day's low as a short-term traders stop, we would have left with a profit this morning at $56.16 (open of trading was violation of yesterday's low of $56.21). Relative Strength The more odds we can stack in our favor the better. What was the RS chart of MSFT looking like? Is there something there we can use also? Relative strength chart of MSFT vs. S&P 500 There's a lot of information on the relative strength chart and it plays out interesting. MSFT outperformed the SPX like a champ from early January (lower left corner of chart). In April (red 4) stock give RS buy signal and its off to the races. The rest is history when in early August (red 8) the stock gives RS sell signal and stock begins outperforming SPX, but this time to downside (get it out of my portfolio screams the fund manager). We've said before that relative strength does NOT necessarily tell us about price direction. The "red 9" and "red A" are proof of that. Even though relative strength was not really deteriorating for MSFT, the stock still fell roughly $7. Why? Because the S&P 500 (market) was getting drilled also! Now think of this as it relates to your "trade set-up" from the bar chart, but instead of thinking like a bull, put yourself in a bearish trader's shoes. Let's imagine that you shorted MSFT at $64 and have been holding. On Thursday evening, September 27th you're looking for the big washout on a break below $47.64. That type of "wash out" might also have your RS chart giving another sell signal! However, that day you also have a "contingency plan" in place should things not unfold to the downside. That contingency plan calls for "cover short on break above Thursday's high of $50.68." Hey... that's the same set-up for the bullish trade! That move from $50.69 was most likely brought on by extensive short-covering. Look where we are now! Stock is setting right on 50% retracement and RS could give a buy signal! Something big is about to happen is my feeling. Which way is it going to go? Stock's already up 15%, is it going to pull back, or are shorts going to get squeeeeeezed? Sounds like a straddle/strangle trade to me. Lots of uncertainty and major disagreement. Especially at 50% retracement. Strangle Since MSFT is sitting right between strike prices of $60 and $55, lets set up a "strangle" (buy out of money call and out of money put.) In early April, the stock unwound to $67 in just 7-days from the $57.50 level. Hey! In April... MSFT also have a RS buy signal and it might do that again! If that doesn't happen and we get another round of selling, those that bought at $48-$50 might just let the stock go and lock in a nice profit. That could have the stock falling back to the $50 level! In essence, there's some room on either side, up or down and that's a good set-up for a strangle. October strangle - Oct $60 calls (MSQJL) offered $1.20 and Oct $55 puts (MSQVK) offered $1.30. (Cost for 1 contract each excluding commission assuming $57.75 open is $250). November strangle - Nov $60 calls (MSQKL) offered $2.70 and Nov $55 puts (MSQWK) offered $2.60. (Cost for 1 contract each excluding commission assuming $57.75 open is $530). Personally, I like to buy as much time as I can afford. This gives more time for the trade to work. For instance, lets imagine that MSFT wants to trade higher to a target of $65, but it takes three weeks to get there considering market conditions. If I buy October expiration (October 19th) stock might only be at $61 as it fights with our 38.2% retracement level. Hey, if she wants to run to $65 then OCT/NOV call will be winner, but I've got the time. Then lets imagine that a BIG round of profit taking comes in and we get a bunch of "end of year tax selling" begin to happen in early November and stock pulls back to $53.79 and 61.8% retracement. I've still got those Nov $55 puts and can get some money back there. Of course, just the opposite can happen, but try and plan ahead. One more thing! I've said before that MSFT is a "key stock" in the NASDAQ-100. Don't discount how much MSFT also moves the S&P 500. Remember how we've been noticing the S&P 500 having some trouble at the 1,082 level (61.8%) retracement? I firmly believe there are some MAJOR buy/sell programs at current levels. We just don't know which direction a stock like MSFT could break. If we get a move above the 1,082 level and some major buy programs come in, what effect will that have on MSFT as index funds have to buy the stock to properly weight for the S&P 500 or NASDAQ-100? If there are MAJOR sell programs right in here on the SPX at 1,082 and we get the pullback to 1,011 (80.9% retracement) MSFT will most likely participate in that downward move. As it was in the WebEx Communications (NASDAQ:WEBX) straddle/strangle trade, we didn't have to know direction in order to profit. We just had to have the right strategy at the right time. OK... I missed the move to the upside in MSFT from $50.69, but that doesn't mean I can get positioned for the next round of volatility. I think we're at a good level. Also... don't forget to look at the new plays in the play list. I think there are some "honeys" there too. Some of the short plays are stocks that look like they could see some profit taking and they're starting to look tired. Have a great weekend! I will be out of town on Monday, but you will be in the very capable hands of Eric Utley. Jeff ================ Market Sentiment ================ Tax relief talk turns the markets around by Russ Moore At a mid-afternoon meeting in the rose garden, President Bush remarked that the economic stimulus package should consist solely of tax cuts rather than more spending, sparking a buying spree on Wall Street. The DOW moved about 60 points in less than ten minutes on its way to a gain of +0.6 percent. The NASDAQ closed, up +0.5 percent and the NDX added +0.9 percent. Volume was decent with 1.30 billion shares traded on the NYSE and 1.80 billion moving on the NASDAQ. Despite the positive showing, market breadth was even on the big board, and negative on the NASDAQ, with losers outperforming winners by a 19/16 margin. Weak sectors included the bank, airline, insurance, oil service, brokerage, internet and telecommunications. The unemployment rate came in unchanged at 4.9 percent, however, non-farm payrolls declined by 199,000, the biggest drop since February 91’. In addition, Sun Microsystems, Gateway, and Advanced Micro Devices delivered more bad news on the earnings front. Sun, and Gateway, still managed to post gains. Yesterday, I mentioned that investors would need to see a major downside surprise on the employment front in order to affect market direction. One might think that a drop of 199,000 non-farm payrolls would be enough to trigger a major sell-off, but remember, sentiment has undergone a shift to the bullish side and, the employment rate didn’t budge. Investors have been deluged with earnings warnings and are now at a point where the negative news goes in one ear and out the other. One piece of news that won’t go ignored is a growing unemployment figure, and that is almost certainly in the cards over the coming months. VIX Friday 10/05 close: 34.66 VXN Friday 10/05 close: 63.43 30-yr Bonds Friday 10/05 close: 5.31 Total Put/Call Ratio: .96 Equity Option Put/Call Ratio: .79 Index Option Put/Call Ratio: 2.34 === NASDAQ 100 Index (NDX/QQQ) 52-Week High: 103.51 52-Week Low: 28.19 Current close: 31.77 Volume/Open Interest Maximum calls: 30/88,580 Maximum puts : 27/58,429 Moving Averages 10 DMA 29 20 DMA 30 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: 549.38 Volume/Open Interest Maximum calls: 600/6,624 Maximum puts : 500/7,310 Moving Averages 10 DMA 532 20 DMA 536 50 DMA 578 200 DMA 631 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: 1071.38 Volume / Open Interest Maximum calls: 1050/21,660 Maximum puts : 1050/22,861 Moving Averages 10 DMA 1038 20 DMA 1048 50 DMA 1139 200 DMA 1222 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: 9,119.77 Volume / Open Interest Maximum Calls: 100/26,578 Maximum Puts 100/39,776 Moving Averages: 10 DMA 8,845 20 DMA 9,036 50 DMA 9,816 200 DMA 10,389 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: 459.75 Volume / Open Interest Maximum Calls: 520/ 300 Maximum Puts: 440/2002 Moving Averages 10 DMA 447 20 DMA 462 50 DMA 496 200 DMA 547 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: 406.10 Volume / Open Interest Maximum Calls: 450/1,025 Maximum Puts: 390/2,118 Moving Averages 10 DMA 382 20 DMA 426 50 DMA 523 200 DMA 594 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: 395.93 Volume / Open Interest Maximum Calls: 400/505 Maximum Puts: 360/628 Moving Averages 10 DMA 384 20 DMA 381 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 10/05 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 9/18/01 406,387 471,823 (65,436) (20.8%) 9/25/01 357,873 407,036 (49,163) (24.9%) 10/02/01 365,200 408,567 (43,367) (11.7%) 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 9/18/01 172,988 100,531 72,457 (5.6%) 9/25/01 122,613 71,721 50,892 (29.7%) 10/02/01 124,249 73,882 50,367 (1.1%) 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 9/18/01 35,497 45,731 (10,234) (8.0%) 9/25/01 26,761 36,812 (10,051) (1.8%) 10/02/01 26,703 37,699 (10,996) 9.4% 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 9/18/01 22,876 21,702 1,174 (56.6%) 9/25/01 10,699 6,580 4,119 251.0%) 10/02/01 10,918 6,804 4,114 (0.1%) 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 9/18/01 28,425 15,077 13,348 7.5% 9/25/01 20,013 7,806 12,207 (8.5%) 10/02/01 22,755 10,124 12,631 3.5% 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 9/18/01 7,335 15,044 (7,709) 46.1% 9/25/01 4,530 12,621 (8,091) 4.9% 10/02/01 4,731 11,868 (7,137) (12.1%) 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 +50,367 +50,892 -43,367 -49,163 Total Open Interest % (+25.42%) (+26.19%) (-5.60%) (-6.43%) net-long net-long net-short net-short Small Specs Commercials DJIA futures (Current) (Previous) (Current) (Previous) Open Interest Net Value -7137 -8091 +12631 +12207 Total Open interest % (-43.00%) (-64.11%) (+38.42%) (+43.88%) net-short net-short net-long net-long Small Spec Commercials NASDAQ 100 (Current) (Previous) (Current) (Previous) Open Interest Net Value +4114 +4119 -10,996 -10,051 Total Open Interest % (+23.21%) (+23.84%) (-17.07%) (-15.81%) net-long net-long net-short net-short What COT Data Tells Us ---------------------- Indices:.No significant changes this week although we did see the Commercial players continue to reduce their net-short contracts on the S&P 500. We will wait until the Commercials have moved into net-long positions before we raise the bullish flag.. . Gold:.Another wild reversal took place this week as the Commercials are once again net-short. We have seen gold level off over the last week and it will be interesting to see if this bearish stance by the Commercials, pays off. 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 10/02 67,122 contracts net-short Data compiled as of Tuesday 10/02 by the CFTC. ========================= Play-of-the-Day (Bullish) ========================= Tenet Healthcare - THC - close: 61.00 change: +0.78 stop: 57.00 Original Comments When Selected On October 4th: Company Description: This is one of the largest hospital chains in the US. Tenet owns or operates about 110 hospitals in 17 states, as well as one in Barcelona, Spain. In addition, subsidiaries own or operate clinics, HMOs, a PPO, home health care programs, a managed care insurance company, outpatient surgery centers, and rehabilitation and specialty hospitals. In response to decreased Medicare funding (more than 30% of Tenet's revenues), the company is closing its medical practice management business and is divesting facilities to cut costs. Tenet has formed a joint venture with Ventro to sell medical supplies to health care providers on the Internet Fundamentals: Analysts forecast the company will earn $2.84 per share in the current fiscal year ending May 2002 and $3.34 in 2003. They project revenue of $13 billion for 2002. In the fiscal year ended May 2001 the company earned $2.30 on sales of $12.1 billion. The shares have a forward 2001 P/E of 21. These are inline with the industry average P/E of 22. On October 3rd, at its fiscal first quarter earnings report the company easily beat analysts 64-cents per share earnings estimates by 3-cents per share. In addition to the quarterly earnings of 67-cents per share, the company reported a 14-percent jump in quarterly revenue to $2.89 billion as compared to the year-ago quarter. Other first quarter metrics were equally positive from the year ago quarter, gross margins increased from 17 to 19-percent, cash flow from operations increased 80-percent, admissions were up 5.9-percent. The company also raised earnings guidance citing "accelerating demand" for hospital services, as the baby boomer generation gets older. The firm sees the year's earnings from operations growing by at least 25 percent. In July, the company forecast "high-teens" profit growth for fiscal 2002. The company also reaffirmed it long-term growth rate in the mid-to-high teens. Why We Like It: What's not to like about these shares. Particularly in light of the stream of companies painting dour business pictures, for Tenet business couldn't be better, and an aging population says business will continue on an upswing for a long time. What have also been going up for a long time are THC shares. A monthly chart shows these shares have risen unabated since kissing $15.37 in August 1999. On Thursday, the sparkling earnings report pushed the shares through $60 resistance on above average volume. In the short-term we have a $66.00 price target. Short-term traders can use a stop at $57.00; investors in for the long-term can consider a $52 stop. Updated Comments: Well it's about time! S&P upgraded THC's debt rating from junk status to investment-grade. Not many companies will be reporting a 45% jump in their latest quarter operating profits which THC just did on the 3rd of October. To quote from a Reuters news article, "S&P said Tenet, whose 114 hospitals make it the No. 2 U.S. acute care hospital owner and operator, should be able to sustain recent operating improvements, improve its cash flow, and significantly cut debt. Its rating outlook is stable." Sounds good to us. The move on Friday just confirmed our outlook that the stock was poised to start a new bullish run. Plus, we believe there is the possibility of a split announcement. THC's last split was a 2:1 back in 1991 when the stock was trading above $50. As you can see the stock is now above $60. Management is authorized to issue up to 700 million shares and there are only 329 million currently outstanding. That's enough for another 2:1 split. What makes this announcement a possibility is the THC annual shareholder meeting that is expected on Wednesday morning, October 10th, 2001. Yup, that's just a few days from now. We would not make any bets that there will be an announcement and would prefer to trade on the stock's current technical and fundamental outlook. Picked on October 4th @ $ 60.22 Gain since picked: + 0.78 Earnings Date: 10/03 (confirmed) ========== Watch List ========== Microsoft - MSFT - close: 57.74 change: +1.30 WHAT TO WATCH: It's hard to have a rebound in the software sector without Microsoft. The stock has recovered nicely from its sub-$50 days in late September. What drew our attention tonight was the nice intraday bounce at $55.00. Traders should be watching for a follow through up to $60 (it's 50-dma) or a failed rally and then back to $55 or below. FYI, its 200-dma is 61.30 and earnings are October 18th. --- Paychex Inc. - PAYX - close: 31.91 change: +0.16 WHAT TO WATCH: Earnings were on Sept. 20th and the results were positive but PAYX cut guidance going forward. Not to worry, we're sure that's going to be a popular practice this month. The last three weeks appear to have built a nice bottom for shares of PAYX with the last few days showing higher lows. If you're looking for a short-term trade we'd watch for the stock to close over current resistance at $32. Once triggered we might capture the move up to $35 or $36. --- Sun Microsystems - SUNW - close: 9.85 change: +0.56 WHAT TO WATCH: Announce bad news and get rewarded with a 6% gain. Interesting market we live in, of course it always has been. Actually, SUNW says they are trying to cut cost to put them on the road to profitability. Some analysts believe this may not be the last of the layoffs but we'll have to wait and see. In the mean time the stock has built a nice base at $8.00. The dip today put a low at 8.70 and it's just under resistance at $10. If the stock can breakout above $10 traders might be able to capture the 20% move up to $12. Earnings are also on October 18th. --- Cisco Systems - CSCO - close: 14.94 change: +0.52 WHAT TO WATCH: No stranger to our watch list, CSCO is one of the first stocks that come to everyone's mind when you think tech stock rebound. This week has proven just how fast that can occur. The stock is already up 30% from Wednesday's close. That's right. Most of us missed a 30% move in CSCO, of course a few of us still own it when we said it wouldn't trade below $50. We have to live and learn and that means adapt. Anything up 30% in three days is begging for profit taking but the stock has been so oversold for so long it could go another 30% before stopping to look around. When the market's went south this morning, CSCO traded down to 13.74 before making a strong rally towards the close. Our trigger, should we choose to accept it, is to wait for CSCO to get above $15.00. Once there, our mission is to ride the stock up to $16, $17 or $18 (take your pick, any would be a nice short-term gain). $16 and $18 are the most defined levels of overhead resistance but again - the stock could easily make it to $18 before it remembers it needs to retrace these gains. It could also go back to $12 so don't play without a stop. Earnings are November 5th, 2001. --- MORE STOCKS TO WATCH --- AAPL - nice base at $15, finally closed above $16 again. Possible long play here. LNCR - high volume breakdown through support at $24. Looks bad. First line of defense is $22 but beyond that we're looking at $20. VRTS - another fast moving software company which means your stop may have to be more than 10%. Hovering at $25, this stock could go either way. Upside target would be 27.50 then $30. Downside target is back to $20 or worse. Earnings are October 16th. PSFT - yet another software company that moves fast and furious. Again, it's hovering near $25. Bulls should be positive about its close over $25 from the low of 23.59. Topside target would be $30, downside target back to $20 or worse. BBY - closed right under resistance at $50. Seven days ago the stock traded to an intraday low near $40 so it has seen a nice rebound. Overhead is its 200-dma at 50.77. If the media starts talking up the retail sales report on Friday, BBY might get some buying interest. First upside target would be $55. If analysts start talking down the retail sales report (very possible) then BBY could be looking at $45 or $42.50 again. LTD - another retail stock that made a nice bounce at support on Friday at $10. Overhead resistance at $11. Initial target would be $12 on the upside with potential for $13. Read the BBY update above for comments on the upcoming retail sales report. --- STILL WATCHING --- A few stocks from our Wednesday, October 3rd Watch List still look like potential trades in development. ---------------------- Homestake Mining Co. - HM - close: 9.11 change: +0.12 UPDATE: Gold and gold stocks continue to be in the news. HM appears to be holding on to support near $9.00. This might be an entry point for those looking to play the gold bug. Short- term target would probably be 9.50 to 9.75 with it eventually hitting $10. A better entry would be 8.75 and the best would be at the 50-dma or 8.50 but a dip this low would concern us. Play with a tight stop. -- original write up, Wednesday -- 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. --- Guidant Corp. - GDT - close: 38.62 change: -0.26 UPDATE: If you've been reading the newsletter then you know that many industry experts and analysts feel that medical device makers should be protected from a down turn in the economy. Shares of GDT have been on a nice rebound and the dip to support at $38 might be an entry point to go long. Please read the write up below but use a tight stop. -- original write up, Wednesday -- 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: 58.49 change: -0.36 UPDATE: Wednesday we discussed a potential entry point at 57.50. The market dip on Friday helped bring BLL down to 57.25, just below its 10-dma, before it bounced midday and closed back over $58. The bounce has us on the lookout for a gain on Monday but we need to confirm market direction first. -- original write up, Wednesday -- 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: 49.77 change: +0.06 UPDATE: TXU is another stock that has been relatively strong lately. Shares saw an early dip today down to the $49 level before trading right back to resistance under $50. The trigger is a close over $50 for the bulls or a breakdown for the bears. Take your pick for support, one could argue $49, $47 or $46 as price support for the stock. -- original write up, Wednesday -- 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. --- Boston Scientific - BSX - close: 21.35 change: +0.36 UPDATE: Highlighted on Wednesday at 21.35, the stock has now made two more days of gains. This is another of the medical device makers that is seeing buying interest. By the looks of the intraday chart this stock would have kept climbing had the closing bell not wrung. Does it look good now? Yes, but it would look a bit better with another pull back to 21.50 or even 21.00. Trade it according to your ability and risk tolerance. Don't forget that earnings are expected on October 22nd. -- original write up, Wednesday -- 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. ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. PremierInvestor.net staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control. Please read our disclaimer at: http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html ***************************************************************** ADVERTISING INFORMATION For more information on advertising in PremierInvestor.net Newsletter, or any Premier Investor Network newsletter please contact Contact Support. ***************************************************************** Copyright © 2001 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter Weekend Edition 10-05-2001 section 2 of 3 Copyright © 2001, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= To view this email newsletter in HTML format with imbedded charts and graphs, click here: http://www.PremierInvestor.net/htmlemail/100501_2.asp ================================================================= In section two: Split Trader New Plays: none Play Updates: CHV, JEC, THC Closed Plays: none Net Bulls New Plays: QUALCOMM - QCOM (Bearish) Long Term Play: Homestore.com - HOMS (Bullish) Bullish Play Updates: Engineered Support Sys. - EASI Bearish Play Updates: none active at this time Closed Bullish Plays: none Closed Bearish Plays: none Stock Bottom / Active Trader New Plays: SYSCO Corporation - SYY (Bearish) Bullish Play Updates: BMET, LMT, MO, Bearish Play Updates: none active at this time Closed Bullish Plays: none Closed Bearish Play: none ================================================================= Split Trader (ST) section ================================================================== =============== ST Play Updates =============== ----------------------- SPLIT CANDIDATE Updates ----------------------- Chevron Corp. - CHV - close: 88.44 change: +1.33 stop: 84.75 To be honest we feel like we said everything yesterday in Thursday's update for Chevron. Oil futures dipped a little today after Thursday's gain but remain above the critical $22 a barrel. The Oil Services Index (OSX) closed with a fractional loss but the Oil Index (OIX), of which CHV is the biggest component, gained another 1% today. CHV gained 1.5% after trading above Thursday's hurdle of $88. To quickly recap Thursday's comments, analyst and industry watchers feel that OPEC could be close to cutting production to keep the price of oil between its $22 to $28 price band. One of OPEC's ministers was quoted as saying they would do anything necessary to stabilize the world's oil supply. We are encouraged by today's trading but still expect both $89 and the $90 level to be obstacles to CHV's progress. The 200-dma and the 50-dma converge near $89 and $90 is significant price resistance. Considering that the OIX index has regained or retraced 61.8% of its mid-September slide from 320 to 270 in such rapid fashion there are a lot of investors and traders that are looking at nice gains. Stocks move in cycles and this group needs to see some profit taking to provide an entry point for the next leg up. On a more positive note, the OIX has managed to trade above resistance at 295 (the 50% retracement level) and 300 (price resistance). We were tempted to move the stop to just under Friday's low at 86.50 but felt that may be too close. Don't let our decision sway you from placing your stop where you feel the most comfortable. We are going to leave ours at 84.75 in hopes that it will allow enough room for CHV to regroup for its ascent past the $90 level. Remember, some analyst have longer-term price objectives of over $100 for CHV. First it will have to tackle heavy resistance at $93 and $98. Picked on September 27th @ $ 84.75 Gain since picked: + 3.69 Earnings Date: 10/25 (not confirmed) --- Jacobs Eng. - JEC - close: 65.17 change: -0.98 stop: 64.25 JEC is trading to our expectations. The stock continued to do some profit taking on Friday with a pull back to $65. Actually, we saw a dip to 64.64 but shares closed over $65. Thursday we had discussed that new positions could be considered on a pullback to the $65 area. With a stop at 64.25 we have severely limited our potential downside so this would propose a nice risk/reward scenario for new trades. With the late day bounce in the Dow, traders should be confirming stock and market direction on Monday before initiating any new trades. At this point JEC looks poised for a bounce and our short-term target would be $70. Earnings are early November. Picked on September 25th @ $ 61.21 Gain since picked: + 3.96 Earnings Date: 11/01 (not confirmed) --- Tenet Healthcare - THC - close: 61.00 change: +0.78 stop: 57.00 Well it's about time! S&P upgraded THC's debt rating from junk status to investment-grade. Not many companies will be reporting a 45% jump in their latest quarter operating profits which THC just did on the 3rd of October. To quote from a Reuters news article, "S&P said Tenet, whose 114 hospitals make it the No. 2 U.S. acute care hospital owner and operator, should be able to sustain recent operating improvements, improve its cash flow, and significantly cut debt. Its rating outlook is stable." Sounds good to us. The move on Friday just confirmed our outlook that the stock was poised to start a new bullish run. Plus, we believe there is the possibility of a split announcement. THC's last split was a 2:1 back in 1991 when the stock was trading above $50. As you can see the stock is now above $60. Management is authorized to issue up to 700 million shares and there are only 329 million currently outstanding. That's enough for another 2:1 split. What makes this announcement a possibility is the THC annual shareholder meeting that is expected on Wednesday morning, October 10th, 2001. Yup, that's just a few days from now. We would not make any bets that there will be an announcement and would prefer to trade on the stock's current technical and fundamental outlook. Picked on October 4th @ $ 60.22 Gain since picked: + 0.78 Earnings Date: 10/03 (confirmed) ================================================================== Net Bulls (NB) section ================================================================== ============ NB New Plays ============ ---------------- New Bearish Play ---------------- QUALCOMM - QCOM - close: 38.46 change: -3.54 stop: 42.00 Company Description: Qualcomm created the code-division multiple access (CDMA) standard for wireless networks. CDMA-based networks account for 12-percent of the worlds' mobile subscribers. Qualcomm collects royalties for CDMA use and makes CDMA-based products such as chipsets and software. Although, the US is a Qualcomm stronghold, it is working hard to expand in Asia, in particular China, off of its dominance in South Korea. This effort got a big boost when China Unicom, China's second largest wireless operator, awarded $1.46 billion in contracts for equipment to build a cdma-based network. The Chinese adoption of cdma is seen as crucial for Qualcomm, because as it is also critical for the adoption of cdma throughout Asia. Unfortunately, on the heels of the good news was an announcement that Verizon Wireless was switching from cdma to a rival technology based on wCDMA. Fundamentals: Analysts project the company, which earned $1.05 in the fiscal year ended September 2000, will earn $1.04 in 2001 and $1.27 in 2002. This gives the company a forward P/E of 37. Why We Like It: Rueters reported that two analysts cut earnings estimates and we find their logic both reasonable and compelling. U.S. Bancorp Piper Jaffrey analyst Sam May sliced his fiscal 2002 earnings per share estimate to $1.19 from $1.23 for the fiscal year ending in October 2002. He cited concerns about delayed rollouts of Qualcom's CDMA-based networks in the US and Japan and drops in interest rates. He said about 23-percent of the company's earnings for the quarter ending in June came from investing their hefty $2.1 billion bank account in CD's, debt and treasuries. May maintained his long-term "buy" rating but feels the shares will be under short-term pressure. SG Cowen chimed in cutting its fiscal 20001 earnings forecast from $1.05 to $1.04 and from $1.24 to $1.20 for 2002. On Friday, the shares blasted through important support at $42 to freefall down to $38.46 by the close. This support was critical as the next levels are a long way off in the $22 to $30 range last seen in May of 1999. If these levels do not hold, then a visit to the $10 to $15 range from April 1999 is the next identifiable area of support. Although we find it hard to believe the shares are going to drop this far, it is clear the bears are in firm control of the helm. Our point and figure analysis produced a bearish price target of $29. We will start this volatile bearish play with loose stop at $42. Picked on October 5th at $38.46 Earnings Date: 11/06 (not confirmed) ================= NB Long Term Play ================= Homestore.com - HOMS - October 5th close:$5.65 change:-0.03 Company Description: In February 2001 8.4 million people visited the Homestore.com family of real estate web sites. These sites include Realtor.com where over 1.4 million homes are listed for sale, Homebuilder.com that offers 120,000 new homes and lots, Commercial.com for commercial real estate and Rent.net which displays 45,000 homes for the rental market. In all these sites have a 90-percent market share for Internet home listings. Last January the company secured its position by acquiring rivals Homebid.com and Move.com. Homestore is also able to protect its dominance through strategic alliances with the National Association of Realtors (NAR), the National Association of Home Builders (NAHB), the largest Multiple Listing Services (MLSs), the NAHB Remodelers Council, the National Association of the Remodeling Industry (NARI), the American Institute of Architects (AIA), the Manufactured Housing Institute (MHI), real estate franchises, brokers, builders, agents and AOL-Time Warner. Agents post pictures and descriptions of properties and virtual tours of homes on Realtor.com. Approximately 61-percent of sales are from subscription fees from real estate professionals and the other 39- percent from Web advertisers. Fundamentals: Last year, the company lost 97-cents per share on sales of $230 million. The analysts' consensus estimate for the current fiscal year is for earnings of 47-cents per share on revenue of $500 million and 84-cents on $653 million in 2002. Last Wednesday, the company warned that it expects to post a pro forma loss in the third quarter due to continued deterioration in the advertising market and the cancellation of sales calls following the attacks on the World Trade Center and Pentagon. The company forecasts a third quarter pro forma loss excluding nonrecurring items of 1 to 6-cents per share on revenue of $114 to $118 million. In response Morgan Stanley lowered 2001 profit estimates from 55-cents per share to 12-cents and from 95-cents to 16-cents for 2002. Why We Like It: The softening real estate market, capped off by Homestore's warnings has put this firm's shares in an ugly decline into Friday's $5.65 close. Still one very important fact should make the stock attractive to the very patient investor - as Microsoft's Windows operating system has a monopoly over the personal computer - so does Homestore.com have a virtual monopoly over the real estate market on the Internet. And although they may be hammered by the ugly economy, neither real estate nor the Internet, nor Homestore.com will be going away. This means whenever the long- awaited recovery makes its appearance, investors who stashed some sub-$6.00 Homestore stock away will be feeling pretty good about their investment. Despite the recent warning, Homestore and analysts expects 2001 to be their first profitable year. Even if the recession continues into 2002, Homestore strong balance sheet means they have the ability to survive. As of the quarter ending in June the company had $175 million in cash and no short or long-term debt. Less than a month ago a new management team took over, they are reorganizing the company with an emphasis on "balance sheet reconciliation, eliminating overlapping functions, facilities and personnel and creating cohesion in a snake's nest of unintegrated business acquisitions" according to CEO B.J. Rone. In economic downturns, companies with dominant market positions become more dominate as weaker rivals fold. Homestore's leading position in real estate over the Internet suggests they will not remain a sub-$6.00 stock when the recovery is in place. Earnings Date N/A (Not Confirmed) =============== NB Play Updates =============== Engineered Support Sys. - EASI - close: 54.21 chg: +0.71 stop: 48.25 EASI was a new long play initiated on Thursday and we're off to a good start so far. As one of the leading manufacturers of military support and electronic equipment for the U.S. armed forces, odds are very good that EASI will grab a nice slice from the $345 billion defense bill that the Senate approved last Monday. The stock is showing a lot of strength with today's gain but we expected it to stall at the $55 mark. We need to see shares pull back with a little profit taking while new positions can be taken on the bounce. We'd like to see the stock come back to $51 or $52 based on the high from Sept. 24th. Yet we would not be surprised to see the stock actually dip to $50 before trading higher. Any of these levels could prove to be profitable entry points to go long. Picked on October 4th @ $53.50 Gain since picked: + 0.71 Earnings Date: N/A ================================================================== Stock Bottom / Active Trader (AT) section ================================================================== ============ AT New Plays ============ -------------- New Bearish Plays -------------- SYSCO Corporation - SYY - close:$26.12 change:-0.27 Stop:$27.75 Company Description: This Houston, Texas-based firm is the largest food distributor in North America. SYSCO provides frozen foods, canned and dry goods, fresh meat and produce, medical supplies, and cleaning supplies (approximately 275,000 different products) to roughly 365,000 customers including restaurants (two-thirds of sales), schools, health care facilities and schools. The company has 115 distribution centers in the US and Canada. Fundamentals: In the fiscal year ended June 2001, the firm earned 90-cents per share on sales of $21.8 billion. The analysts' consensus forecast for this year is for earnings of $1.10 per share on sales of $24 billion and $1.13 per share in 2003. The company has a current P/E of 29 and forward 2002 one of 26. The industry average P/E is 18. Why We Like It: Since the terrorist attacks on September 11th, there has been no waiting in American restaurants. Some estimates predict that business has been off from 15 to 25-percent. This makes SYY shares rise from $21.75 on September 21st to the $26.80 close on October 3rd a bull run without legs. The catalyst was optimistic bargain- hunters betting that the sharp drop from $27.79 in the wake of the disasters was a temporary event. Unfortunately for the restaurant business, the problems existed before the attacks. A slew of warnings from companies such as Applebee's (APPB), California Kitchen (CPKI) Cheesecake Factory (CAKE) and even the low-cost burger chain Jack in the Box (JBX) indicates a longer standing drop in sales for the industry. And if restaurants are serving fewer customers, it stands to reason that they are not ordering as much food from distributors like SYSCO. Profitable longs who bought below $24 must be getting nervous now that the shares have stalled short of resistance at the $27.38 200-day moving average. Two consecutive days with small losses must have them thinking that it's time to consider taking profits. A weak sector, nervous longs and nearby upside resistance add up to an attractive bearish play. We see a move to the $22- $23 range with an outside shot at $19 to $20. We will take advantage of the 200-dma and place a $27.75 stop just above it. Picked on October 02nd at $29.31 Earnings Date 10/18 (Not Confirmed) =============== AT Play Updates =============== ----------------- Bullish Play Updates ----------------- Biomet Inc - BMET - close: 30.91 change: +0.14 stop: 28.00 Thursday we discussed potential entry points to go long if BMET dipped back to $30. Friday, we got that chance as BMET traded towards $30 early morning before climbing again. The good news was the S&P Healthcare index (HCX) which provided a decent bounce after two days of profit taking. We still need to see the HCX over its 200-dma at 824. Above this level the group has more resistance at 834. Now that BMET has reaffirmed the $30 support level we'd like to see it close above $31. Confirm stock, sector and market direction before initiating any new plays. Picked on October 2nd at $30.35 Gain since picked: +0.56 Earnings Date 09/20 (confirmed) --- Lockheed Martin - LMT - close: 47.73 change: +2.13 stop: 44.25 *new* Like high-octane jet fuel, word that the Pentagon is close to a decision on the Joint Strike Fighter project has shares of LMT soaring. Today's gain of 4.67% is certainly a move in the right direction putting the stock above resistance at $46. Hopefully, the maxim that previous resistance becomes support will remain true for LMT. By the looks of Friday's close the stock could keep climbing come Monday morning but eventually we'll see some profit taking. Bullish traders will be looking for that dip to jump on board. Pentagon said they are on track to make the decision on who will be awarded the $500 Billion Joint Strike Fighter contracts by October 26th, 2001. Currently, Boeing (BA) and Lockheed Martin (LMT) are both bidding on the project. This is probably consider the Holy Grail for these builders as the project is worth more than five times the combined market cap of BOTH companies. Investors should be aware that the loser will likely gap down the next day even though both companies will be beneficiaries of America's new war terrorism. We would look for a pull back before starting any new long positions. In the mean time we're going to raise our stop. Currently, the newsletter is up over 10% on this play and we want to protect some of these gains. Feel free to raise or lower your own stop to where you feel the most comfortable. We're raising ours to 44.25. The last few sessions have seen intraday lows of 44.50 and we don't want to be stopped out prematurely. Picked on September 27th at $43.30 Gain since picked: + 2.30 Earnings Date 10/25 (Not Confirmed) --- Phillip Morris - MO - close: 50.16 change: +0.31 stop: 47.75 Hey, did you hear that Phillip Morris is replacing Global Crossing (GX) in the S&P 100 index? No? It appears neither did anyone else. This stock is just creeping along and it's driving the trader in us nuts. Don't get us wrong, we don't mind stocks with a slow and steady climb but MO has been focused on the slow since we picked it. If you get impatient keep repeating our mantra...MO is a defensive stock for any recession and their yield makes them an attractive investment in a low interest rate environment. We've been eagerly anticipating MO to breakout above resistance at $49 and $50 and now that it has we'd like to see at least a little more momentum. Looking ahead we see resistance at $52 and $54. Fortunately, the company is expected to announce earnings in a week and a half. Maybe we'll get some excitement then. New positions could be considered now that MO is over $50 but we would probably look for a tighter stop at just under 49.00. This would be tighter than ours at 47.75. Picked on August 30th at $47.94 Gain since picked: +2.22 Earnings Date 10/17 (unconfirmed) ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. PremierInvestor.net staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control. Please read our disclaimer at: http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html ***************************************************************** ADVERTISING INFORMATION For more information on advertising in PremierInvestor.net Newsletter, or any Premier Investor Network newsletter please contact Contact Support. ***************************************************************** Copyright © 2001 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter Weekend Edition 10-05-2001 Section 3 of 3 Copyright © 2001, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= To view this email newsletter in HTML format with imbedded charts and graphs, click here: http://www.PremierInvestor.net/htmlemail/100501_3.asp ================================================================= In section three: Market Watch for Week of October 08th: - Major Earnings - Stock Splits - Economic Reports Trading Ideas Value Plays With Bullish Signals Breakout to Upside (Stocks $5 to $20) Breakout to Upside (Stocks over $20) Breakout to Downside (Stocks over $20) Recently Overbought With Bearish Signals (Stocks over $20 ================================================================= ================================================== Market Watch for the week of October 08th ================================================== ------------------------ Major Earnings This Week ------------------------ Symbol Company Date Comment EPS Est AMB AMB Property Mon, Oct 08 After the Bell 0.63 BRE BRE Properties Mon, Oct 08 After the Bell 0.70 FDC First Data Mon, Oct 08 After the Bell 0.66 SGR The Shaw Group Mon, Oct 08 ------N/A----- 0.44 APOL Apollo Group Tue, Oct 09 Before the Bell 0.25 FVB First Virg. Banks Tue, Oct 09 ------N/A----- 0.78 HDI Harley-Davidson Tue, Oct 09 Before the Bell 0.25 INFY Infosys Tech Limited Tue, Oct 09 After the Bell 0.31 ISCA International Spdwy Tue, Oct 09 Before the Bell 0.39 LRCX Lam Research Tue, Oct 09 After the Bell 0.16 MOT Motorola Tue, Oct 09 ------N/A----- -0.07 PBG Pepsi Bottling Group Tue, Oct 09 Before the Bell 0.95 BPOP Popular, Inc. Tue, Oct 09 After the Bell 0.58 RATL Rational Software Tue, Oct 09 After the Bell 0.06 TRMK Trustmark Corp Tue, Oct 09 ------N/A----- 0.42 ABT Abbott Laboratories Wed, Oct 10 ------N/A----- 0.44 ACF AmeriCredit Wed, Oct 10 After the Bell 0.88 ARA Aracruz Celulose S.A. Wed, Oct 10 ------N/A----- 0.05 AVX AVX Corporation Wed, Oct 10 After the Bell 0.02 BRO Brown & Brown Wed, Oct 10 After the Bell 0.38 ET E*Trade Wed, Oct 10 After the Bell 0.00 SSP E.W. Scripps Wed, Oct 10 ------N/A----- 0.33 FAST Fastenal Wed, Oct 10 ------N/A----- 0.47 DNA Genentech Wed, Oct 10 After the Bell 0.19 DA Groupe Danone Wed, Oct 10 ------N/A----- N/A IYCOY Ito-Yokado Wed, Oct 10 After the Bell N/A MTB M&T Bank Wed, Oct 10 Before the Bell 0.98 MI Marshall & Ilsley Wed, Oct 10 Before the Bell 0.93 MTG MGIC Investment Corp. Wed, Oct 10 Before the Bell 1.46 STI SunTrust Wed, Oct 10 Before the Bell 1.20 WLL Willamette Industries Wed, Oct 10 ------N/A----- 0.52 WIN Winn-Dixie Stores Wed, Oct 10 After the Bell 0.16 YHOO Yahoo! Wed, Oct 10 After the Bell 0.01 ACN Accenture Ltd Thu, Oct 11 Before the Bell 0.11 BBT BB&T Thu, Oct 11 Before the Bell 0.62 CMH Clayton Homes Thu, Oct 11 ------N/A----- 0.19 COST Costco Cos Thu, Oct 11 Before the Bell 0.40 CREE Cree Thu, Oct 11 After the Bell 0.10 CUM Cummins Inc. Thu, Oct 11 Before the Bell 0.07 DJ Dow Jones Thu, Oct 11 Before the Bell 0.18 HCBK Hudson City Bancorp Thu, Oct 11 ------N/A----- 0.32 IFIN Investors Fncl. Srv. Thu, Oct 11 ------N/A----- 0.39 NCF Nat. Comm Fncl Corp Thu, Oct 11 Before the Bell 0.29 NETA Network Associates Thu, Oct 11 After the Bell 0.00 NVS Novartis AG Thu, Oct 11 ------N/A----- N/A NRG NRG Energy Fri, Oct 12 Before the Bell 0.07 ------------------------------- Upcoming Stock Splits This Week ------------------------------- Symbol Company Name Ratio Payable Executable PDLI Protein Design Labs 2:1 10/09 10/10 EQR Equity Residential 2:1 10/11 10/12 -------------------------- Economic Reports This Week -------------------------- Most U.S. Economic reports will probably take a backseat to the beginning of corporate America's 3Q earnings season. While this is sure to be a dismal earnings season most analysts will probably be listening for the conference call if numbers are even mildly close to where they should be. Above it all, both the economic reports and the earnings reports will be overshadowed by any military actions taken by the U.S. and our new coalition on terrorism. The reports to watch are all on Friday with the PPI, the Retail sales and the Sentiment report. =============================================================== Monday, 10/08/01 -- None -- Tuesday, 10/09/01 BTM Schroders 10/4 Forecast: N/A Previous: 0.2% LJR Redbook 10/4 Forecast: N/A Previous: 2.3% API Oil Stocks 10/5 Forecast: N/A Previous: 3.42M Wednesday, 10/10/01 Wholesale Inventories Aug Forecast: -0.2% Previous: -0.7% Thursday, 10/11/01 Jobless Claims 10/5 Forecast: N/A Previous: 528K Export Prices ex. ag. Sep Forecast: N/A Previous: -0.3% Import Prices ex. oil Sep Forecast: N/A Previous: -0.4% Money Supply (M2) 10/1 Forecast: N/A Previous:-$66.9B Friday, 10/12/01 Producer Price Index Sep Forecast: 0.1% Previous: 0.4% PPI ex. food & energy Sep Forecast: 0.1% Previous: -0.1% Retail Sales Sep Forecast: -0.8% Previous: 0.3% Retail Sales ex. Auto Sep Forecast: -0.6% Previous: -0.5% Michigan Sentiment Oct Forecast: 72.0 Previous: 81.8 ================== 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 ARMHY Arm Holdings Plc 12.75 +0.67 PC Perez Companc Sa 9.97 +0.59 PPP Pogo Producing Co 26.04 +1.03 TMBR Tom Brown 23.27 +0.66 IPCR Ipc Holdings 28.25 +0.55 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- Ticker Company Name Close Change SBUX Starbucks 16.96 +1.89 JNPR Juniper Networks 15.08 +1.81 NXTP Nextel 8.14 +1.67 EMLX Emulex Corp 16.40 +1.71 MUSE Micromuse Inc 8.93 +1.50 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- Ticker Company Name Close Change AEG Aegon Nv 26.53 +1.10 ETN Eaton Corp 65.69 +1.59 QLGC Qlogic 27.50 +1.91 PPP Pogo Producing Co 26.04 +1.03 EDMC Education Management Corp 34.13 +1.49 ----------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change QCOM Qualcomm 38.46 -3.54 WFC Wells Fargo 43.05 -1.20 BAC Banc of America 56.13 -2.76 ONE Bank One Corp 29.55 -2.01 FBF Fleetboston Financial 33.65 -1.42 ------------------------------------------------------------ Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------------------------- Ticker Company Name Close Change TEF Telefonica Sa 32.09 -0.56 WFC Wells Fargo 43.05 -1.20 STI Suntrust Banks 63.77 -2.21 WB Wachovia Corp 28.65 -2.17 SNV Synovus Financial 25.92 -1.14 ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. 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