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Daily Newsletter, Tuesday, 10/09/2001

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PremierInvestor.net Newsletter                Tuesday 10-09-2001
                                                  section 1 of 2
Copyright  2001, All rights reserved.
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In section one:

Market Wrap: Having trouble at retracement
Market Sentiment: Standing room only.
Play-of-the-Day: SYSCO Corporation - SYY (Bearish)

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
       10-2-2001           High     Low     Volume Advance/Decline
DJIA     9052.44 - 15.50  9086.97  9004.14  1.1 bln   1488/1595
NASDAQ   1570.19 - 35.76  1607.20  1565.97  1.5 bln   1422/2094
S&P 100   541.84 -  3.04   545.44   540.30   Totals   2910/3688
S&P 500  1056.75 -  5.69  1063.37  1053.83
RUS 2000  408.68 -  3.50   412.27   407.87
DJ TRANS 2128.67 - 54.57  2185.91  2128.67
VIX        36.06 +   .15    36.62    35.57
VXN        66.26 +   .13    67.20    65.86
TRIN        1.18
Put/Call Ratio       .97
-----------------------------------------------------------------

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

Having trouble at retracement
by Jeff Bailey

Many of the broader market averages are having trouble getting 
above some retracement levels that we have pointed out in past 
sessions and it sure looks like the market needs some type of 
good news to bring enough bulls to the table to create a 
stampede.  Here's a look at some of the major near-term levels of 
resistance.  Until they're broken, bullish traders should be 
trading cautiously as we'd expect bearish traders to begin 
getting some confidence behind recently established trades that 
begin to work in their favor.

Dow Industrials Chart - last nine months





The Dow Industrials plays an important role in investor 
psychology.  While today's 15 point decline (-0.17% decline) is 
not a heartbreaker for bulls, it can create some weight on a 
bulls mind.  On Friday I thought the Dow Industrials components 
were showing some signs of "lack of leadership" as shares of SBC 
Communications (NYSE:SBC) had drifted back after showing early 
leadership after the terrorist attacks.  Yesterday, shares of SBC 
met our challenge to show some leadership with a $0.97 gain 
(+2.16%) and then had some follow through today as it added 
another $0.84 cents (+1.83%) to close at $46.69.  As of today's 
close, there are now seven stocks in our "hypothetical Dow 
portfolio" showing gains from their September 10th close (WMT, T, 
SBC, MO, MRK, IBM and C).  In the current economic/political 
environment we're in, this is still the group where I think we 
should find the greatest amount of strength and lesser amount of 
weakness near-term.  Today's big gainers in the Dow Industrials 
were Aloca Inc. (NYSE:AA) "aluminum" and American Express 
(NYSE:AXP) "financial" as both gained over 5%.

Psychology is important

Those subscribers listening to the evening news have possibly 
heard some military specialists talking about U.S. troop 
psychology.  The input there has been that troop psychology might 
dip should they run out of targets to be bombing in Afghanistan.  
While this seems somewhat gruesome, I think it does make sense.  
The same could be thought of as it relates to certain resistance 
levels or bullish targets for bullish traders.  Once a bullish 
trader has achieved what might be a bullish target and doesn't 
get any follow through, then psychology could sour.

S&P 500 Index Chart - last nine months





The S&P 500 (SPX.X) was a little quicker to see selling from a 
"key" retracement level.  Note that our 61.8% retracement level 
at 1,082 correlates very nicely with the relative low found back 
on March 22nd.  There are undoubtedly many market participants 
"expecting" some type of pullback from the 1,082 level and are 
now waiting to be proven wrong on a move back above the 1,082 
level when they can get back on board.  Those that have locked in 
some gains on the move from 1,011 to 1,082 have some dry powder 
and may offer support should we find a pullback to the 1,011 
level.

NASDAQ Composite Index - last nine months





The NASDAQ Composite (COMPX) is trading very similar to that of 
the S&P 500.  By simply anchoring our retracement bracket from 
the relative highs found in early Spring and then again in early 
summer and then "fitting" that retracement to the April lows we 
get the feeling that the break below 1,782 (38.2% retracement) 
had market makers playing defense to the 1,618 level (50% 
retracement).  When that level was "gapped" lower market makers 
then had to play defense in their inventory to 1,454 (61.8% 
retracement).  We saw some violation of that level on September 
21st and then again on September 27th.  The recent rally to 1,570 
has perhaps found market makers once again on the "sell side" as 
they must be ready to provide liquidity to the market should it 
wish to sell once again at 1,454.  Those traders that like to 
trade like a market maker are undoubtedly shorting some stocks 
with four letters in their stock symbols, but will flip to a "buy 
side" bias on a close above 1,618.  Something the NASDAQ has not 
been able to do since September 10th's close of 1,695.

Looking for news

Various pieces of economic data will be coming out later this 
week.  Some of the more closely watched economic data that could 
provide some type of catalyst for a move is Jobless Claims for 
the week ending October 6th (due 10/11 at 08:30 am EST) with 
economists looking for a number near 521,000, which would be 
slightly less than a previous 528,000.  Any type of number below 
the 500,000 level then sets up what could be a bullish surprise 
(surprise as it is not expected) in retail sales.

The jobless numbers will then be followed on Friday, October 
12th, with September Retail Sales and expectations for a decline 
of 0.7%, vs. an August Retail Sales number showing a gain of 
0.3%.  As you can see here, were looking for a bit of a lagging 
indicator to jobless rates to actually show a dip.  These 
expectations may help explain why some of the major indices are 
having trouble with our retracement levels acting like 
resistance.  The "fly in the ointment" for an upward move in 
stocks will most likely have to begin with the jobless data.

The Producer Price Index (PPI) is also due out on Friday and here 
economists are looking for modest gains of inflation.  Market 
consensus is at 0.1% with the core rate (excluding food and 
energy) also at 0.1%.  Many investors are not worried about any 
type of inflation at this point and we'd expect little surprise 
or market catalyst coming from this number.

And finally we get the University of Michigan Consumer Sentiment 
Survey for September.  Previous data showed a reading of 81.8%, 
but consensus this time around is for a drop to 75.7%.  Many 
believe the consumer is what continues to prop up the U.S. 
economy and the lower expectations also lends to some of the 
resistance problems we've been seeing in the broader indices.

Traders/investors perhaps short/put shares of Fannie Mae 
(NYSE:FNM) will be watching tomorrow's MBA Mortgage Applications 
Survey due out at 07:30 am EST.  This is not as widely followed 
of a number, but it is due out nonetheless.  Last reading was 
771.1 and any type of deviation from that level could affect 
interest sensitive mortgage stocks.

Jeff 


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

Standing room only.
by Russ Moore

Standing room only.

The Wall Street bleachers were full, as investors continued to 
sit on the sidelines during these uncertain times.

The major indices moved within a very tight trading range 
throughout the day, and, without a positive catalyst, the limited 
action favored the sell, rather than buy side.

The DOW ended with a fractional loss of +0.2 percent while the 
NASDAQ gave back –2.2 percent and the NDX dropped –2.7 percent. 
Volume was light with the NYSE trading 1.10 billion shares and 
the NASDAQ moving 1.50 billion shares. Losers outpaced winners by 
a 16/15 margin on the big board and a 21/14 difference on the 
NASDAQ.

Brokerage, oil, oil service, biotech, paper and chemical sectors 
closed in positive territory.

Microsoft shares were hit hard after news of the Supreme Court 
decision not to hear the Microsoft appeal was released. The stock 
shed 6.0 percent on the day and put downside pressure on both the 
DOW, and NASDAQ.

The incentive to buy continues to be the missing link. Nervous 
investors do not make for sustained rally makers and therein lies 
the primary challenge to any upside market move.

We already know what that the third quarter earnings numbers are 
going to be weak, coupled with visibility shrouded in a thick 
fog. With all this negativity you might think it’s a perfect time 
for the bears to rise up, however, sentiment is currently leaning 
to the bullish side and any morsel of good news would likely see 
those horned beasts trample the bears. The result is a standoff, 
with markets moving in a narrow range, poised to breakout one way 
or the other.
 


VIX 
Tuesday 10/09 close: 36.06


VXN
Tuesday 10/09 close: 66.26

30-yr Bonds
Tuesday 10/09 close: 5.36

Total Put/Call Ratio: .97


Equity Option Put/Call Ratio: .97


Index Option Put/Call Ratio:  .97


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 31.09

Volume/Open Interest
Maximum calls: 30/88,606
Maximum puts : 30/72,779

Moving Averages
 10 DMA 30
 20 DMA 30
 50 DMA 35
200 DMA 45

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: 541.84

Volume/Open Interest
Maximum calls: 600/6,774
Maximum puts : 500/8,036

Moving Averages
 10 DMA  537
 20 DMA  532
 50 DMA  575
200 DMA  629

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: 1056.75

Volume / Open Interest
Maximum calls: 1050/21,132
Maximum puts : 1050/24,335

Moving Averages
 10 DMA 1048
 20 DMA 1041
 50 DMA 1124
200 DMA 1219

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:  9,056.44

Volume / Open Interest
Maximum Calls: 100/26,613
Maximum Puts   100/38,720

Moving Averages:
 10 DMA  8,930
 20 DMA  8,940
 50 DMA  9,765
200 DMA 10,374

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: 455.83

Volume / Open Interest
Maximum Calls: 520/ 318
Maximum Puts:  440/2002

Moving Averages
 10 DMA 454
 20 DMA 455
 50 DMA 494
200 DMA 545

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: 401.52

Volume / Open Interest
Maximum Calls: 490/2,924
Maximum Puts:  390/2,122

Moving Averages
 10 DMA 385
 20 DMA 414
 50 DMA 517
200 DMA 592

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: 389.50

Volume / Open Interest
Maximum Calls: 400/705
Maximum Puts:  360/628

Moving Averages
 10 DMA 390
 20 DMA 381
 50 DMA 388
200 DMA 396

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 (Bearish)
=========================

SYSCO Corporation - SYY - close: $25.21 change:-0.34 stop:$27.75

Original Comments when selected on October 5th:

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.

Updated Comments:

This bearish play is playing out much as we expected.  A little 
slow, but the direction is correct.  A nice little pop from 
Monday's 1.71 million shares traded to 1.88 million on Tuesday may 
be a harbinger that the rising selling pressure will pick up the 
pace.  Still time for new entrants, we see a move to the $22- $23 
range with an outside shot at $19 to $20.

Picked on October 05th at $26.12
Gains since picked:       + 0.91
Earnings Date              10/18 (Not Confirmed)






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Do not duplicate or redistribute in any form.


PremierInvestor.net Newsletter                 Tuesday 10-09-2001
                                                   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/1612_2.asp
=================================================================

In section two:

Split Trader
  New Plays: none
  Play Updates: Chevron Corp. - CHV, Tenet Healthcare - THC
  Closed Plays:

Net Bulls
  New Plays: eBay Inc. - EBAY (Bearish)
  Bullish Play Updates: Engineered Support Sys. - EASI
  Bearish Play Updates: none
  Closed Plays: QUALCOMM - QCOM 

Stock Bottom / Active Trader
  New Plays: Lincare Holdings  - LNCR (Bearish)
  Bullish Play Updates: BMET, LMT, MO
  Bearish Play Updates: SYSCO Corporation - SYY
  Closed Plays: none

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

===================
Split Announcements
===================

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

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

Chevron Corp. - CHV - close: 90.89 change: +1.94 stop: 87.75 *new*

It's approved.  The $39.5 billion acquisition of Texaco was 
voted and approved by shareholders today.  Texaco, the No. 3 oil
company in the U.S. will be joining with Chevron, the No. 2 oil
company in the U.S. and together they'll be the fifth biggest
oil company in the world.  Analysts applaud the deal as debt ratios
come down and cost savings reach into the billions.  TX had to
sell $3.8 billion worth of assets to rivals in order to clear
FTC guidelines.  The new company will be named ChevronTexaco Corp.
Shares of both companies were up today.  Actually, shares of CHV
have been very strong.  The stock has almost completely erased
its losses since the Sept. 11th attack and the rally has almost
been non-stop.  Where we could have seen significant resistance
at $89 and $90, CHV merely touched the $90 yesterday, came back,
and plowed through it today.  Volume was very heavy today adding
emphasis to today's bullish breakout.  Is the stock overbought?
On the short-term scale, yes, but looking at the MACD one might
think there is still plenty of room to run.  The stock should find
new support at previous resistance and thus dips should find
buying at $89 and $90.  Looking at the price of sweet crude, the
December contract remains near the $22.89 level.  It's interesting
that the price has been forming a pennant or to better explain it 
the price is showing higher lows and lower highs.  This means as
the price per barrel coils tighter and tighter we're closer to
a breakout one way or the other.  By the looks of it, the move
could be soon.  We are moving our stop up to 87.75 which is just
under the Monday low.  The move up is encouraging but we would
enter new positions cautiously.  Technically, this is a positive
breakout and should be traded accordingly.  However, initiate only 
with a close stop.

Picked on September 27th @ $ 84.75
Gain since picked:          + 6.14
Earnings Date:               10/25 (not confirmed)




---

Tenet Healthcare - THC - close: 59.88 change: -0.77 stop: 57.00

Is anyone out there betting that THC will announce a split 
tomorrow morning?  You'd better not be.  We warned you about 
gambling on an announcement.  For those who have not been 
following the play, there are several clues that would lead
some stock split players to believe THC could, I repeat the 
word "could", announce a split tomorrow at their annual 
shareholders meeting.  The stock price is above historical norms
for previous announcements and they have enough authorized shares
to announce up to a 2:1.  Now, on a trading level, we would prefer
to focus on the dip in THC that was largely due to the dip in
the broader markets.  This could be a buying opportunity but
we would wait to see if any further weakness might bring THC
back down to $59 or $58 which would be a better entry point.
Be sure to confirm the stock is bouncing at these levels before
initiating a new play and absolutely play with a stop.  Buying
on the dip with a stop at $57.00 should reduce your potential
risk.  

Picked on October 4th @ $ 60.22
Gain since picked:       - 0.34
Earnings Date:            10/03 (confirmed)






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

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

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

eBay Inc. - EBAY - close:$54.39 change:-1.03 stop:$57.00

Company Description:
Pierre Omidyar created an Internet flea market called Auction Web 
in 1995 because he was inspired by his future wife's interest in 
collecting Pez dispensers.  His site allowed sellers to list items 
for sale and buyers to bid on items of interest.  In 1997 he renamed
the site eBay and was soon hosting 800,000 auctions a day.  Now the 
company has over 3 million items listed for sale in more than 4,500 
categories and is expanding its presence internationally.  It created 
eBay Japan in 2000 and moved into Europe through its acquisition of  
French auction house iBazar.  It also has launched Canadian and 
Austrian sites and purchased an interest in car seller 
Autotrader.com.  The company earns money through advertising and by 
charging a small fee for every item sold.  These small fees have 
added up into a healthy and growing bottom line.   

Fundamentals: 
Last year the company earned 21-cents per share.  For 2001, analysts 
expect earnings to increase 114-percent over 2000 to 45-cents per 
share and revenue to grow 57-percent to $681 million.  They see this 
hyper-growth continuing in 2002 with a consensus estimate of an 
additional 68-percent jump in earnings to 72-cents a share on a 39-
percent rise in revenue to $970 million.  

eBay is not a cheap stock.  Investors have rewarded their growth by 
giving its shares a current P/E of 259 and a forward 2001 one of 120.

Why We Like It: 
eBAY has been one of the miracle Internet stocks, able to float above 
the tech carnage with a growth business model that seemed unfazed by 
economic conditions.  However, for the first time there may be cracks 
forming in the bullish juggernaut.  eBay reported that growth in 
total auction listings are beginning to slow.  The second quarter of 
2001 saw a 10-precent jump in auction from the first quarter.  In 
2000, the comparable period saw a 17-percent increase.  In addition, 
a survey of eBay auctions in the first five months of the year by 
TIAS.com, shows that collectable prices have decreased an average of 
40-percent to $50 from $84.  Since eBay earns a fee based on the sale 
price of the items and is responsible for 4 to 8-percent of total US 
collectable trading this is a worrisome trend.  In addition, the 
attacks on September 11th have clearly accelerated the decline of the 
US economy, increasing the likelihood that Internet companies will be 
reducing guidance in the upcoming earnings season.  Taken as a whole, 
traders are beginning to question whether the eBay can maintain its 
stellar growth rate.  And if it can't maintain its growth, it can't 
maintain its astronomical valuation. 

The technical picture strongly suggests that eBay shares are running 
out of gas after a sharp run up from a low of $40.48 on September 
27th.  As the share price has risen so has the trading volume 
declined.  Over the last five trading sessions the volume has fallen 
from 13.7 million to Tuesday's 4.9 million  (an average day is 7.4 
million).  This is an indication that longs are losing enthusiasm as 
they are starting to view the stock as overvalued.  Although 
Tuesday's $1.03 per share loss was on low volume, we think the 
selling pressure will increase as profitable longs begin to sell to 
protect gains.  This pace will accelerate if a parade of Internet 
companies begins to report poor earnings and eBay longs and shorts 
begin to sense reduced guidance when eBay reports on the 18th. 

Impeding a downside move will be support at the $50.99 200-day moving 
average.  Our point and figure analysis produced a $46 price target 
with a possibility of a move to $43.00.  We will start this play with 
a $57.00 stop, which is just above the $55.59 50-day moving average 
and right at longer-term bearish price resistance.. 

Picked on October 18th at $54.39
Earnings Date              10/18 (Not Confirmed)





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

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

Engineered Support Sys. - EASI - cls: 52.93 chg: +1.03 stop: 48.25

As expected, the launch of America's attack on Taliban and 
terrorists targets helped push buying interest in many defense
stocks on Monday.  EASI opened higher on Monday and traded to
$58.00 before falling throughout the day and bouncing at the
50.60 level.  Tuesday's session also saw another dip to the 50.60
level before the bulls did some late morning buying.  EASI traded
sideways the rest of the afternoon.  This may be the dip we've
been looking for as we discussed a possible dip back to the $50
level on Sunday.  The constant coverage by the media of America's
new war could keep investor interest on the defense stocks for
the time being.  Confirm stock and market direction before starting
any new positions.

Picked on October 4th @ $53.50
Gain since picked:      - 0.57
Earnings Date:             N/A 





===============
NB Closed Plays
===============

  --------------------
  Closed Bearish Plays
  --------------------

QUALCOMM - QCOM - close: 40.85 change: -0.37 stop: 42.00

Our $42 stop was barely able withstand a surprising one-day $2.76 
gain on Monday.  There was no news to account for the jump; this 
was just bargain hunting on a very volatile play.  The bargain 
hunters ran out of gas Tuesday morning and the shares returned to 
their bearish trend, but not before our $42,00 stop was clipped.  
The tech picture on this stock is still plug ugly, but a stop is a 
stop, so we're out. 

Picked on October 5th at $38.46
Gain since picked        - 3.54
Earnings Date:            11/06  (not confirmed)





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

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

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

Lincare Holdings  - LNCR - close: $23.65 change: -0.32 stop: $25.00

Company Description:
Lincare is one of the US's largest providers of oxygen and other 
respiratory therapy services to in-home patients.  Lincare's 
liquid oxygen systems and other respiratory equipment, used by 
people suffering from chronic pulmonary diseases and other 
respiratory ailments, account for nearly 90% of its sales. The 
company also offers infusion therapy (including nutrition therapy, 
chemotherapy, and other treatments) and rental of such medical 
equipment as beds and wheelchairs. The firm has over 500 offices 
in 44 states.

Fundamentals: 
Last year the company earned $1.08 on sales of $703 million.  
This years analysts project the firm will earn $1.31 on sales of 
$834 million.  The company has a forward 1001 P/E of 18, slightly 
lower than the industry average of 22.

Why We Like It: 
Lincare shares have dropped steadily since hitting a $34.39 52-
week high last July.  This weakness became more pronounced over 
the last week as investors became concerned that proposed 
reimbursement reductions for Medicare would hurt profit margins.  
The House Committee on Energy and Commerce is considering such 
reductions.  This followed a General Accounting Office report 
that said health-care providers were purchasing drugs at rates 
far below the average wholesale price upon which Medicare 
reimbursement rates are based.  Some analysts have defended the 
shares saying the sell off was overdone considering that 
reductions would only effect about 10-percent of total sales.
Traders were not paying attention to the defense as a point and 
figure chart for Lincare shares is now sporting a very bearish 
triple bottom breakdown.  This breakdown shatters a base of 
consolidation the shares have been in since January.  Absent a 
reversal, we these shares testing falling to test support levels 
at $21.50, $20 and possibly $18.  We will start this play with a 
stop at $25.

Picked on October 22nd at $23.65
Earnings Date              10/18 (Not Confirmed)





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

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

Biomet Inc - BMET - close: 30.48 change: -0.15 stop: 29.00 NEW

Biomet shares are starting to look tired.  Four days in a row the 
stock has failed to break through resistance at $31.00.  Although 
Tuesday's decline was slight at 15-cents, both the close and the 
$29.90 session low represented respective lows for the past four 
trading sessions.  Yet there are some bullish signs.  Tuesday's 
volume at 2 million was low in comparison to the 2.2 million daily 
average and the shares rebounded sharply off of the session low.  
This suggests that if there is a dip it ought not to be severe, as 
it will mostly represent profit taking by longs that have been 
riding it up from since the shares hit $24.33 on September 21st.  
The fundamental long-term picture of the stock remains solidly in 
the bull camp.  With some hesitation we will are going to tighten 
our stop to $29.00, but short-term traders may consider selling 
into strength with a view to reentering this play on a dip.

Picked on October 2nd at $30.35
Gain since picked:       + 0.13
Earnings Date             09/20 (confirmed)




---

Lockheed Martin - LMT - close: 47.55 change: -1.56 stop: 46.50 

No change in our outlook.  LMT shares and those of most companies 
in the defense sector saw some profit taking after an extended run 
up.  We don’t see a serious correction, perhaps only to the next 
area of support at $46 and look for traders to use any dip as a 
possible entry point. .  Many traders are still playing the long 
side hoping for a contract win on the $500 billion Joint Strike 
Fighter.  The big decision is due October 26th.  

Picked on September 27th at $43.30
Gain since picked:          + 4.25
Earnings Date                10/25 (Not Confirmed)




---

Phillip Morris - MO - close: 50.97 change: +0.33 stop: 49.25

No change in our outlook from last Friday.  But please note that 
we raised our stop on Monday.  If you missed our pervious comments, 
here is a reprint:

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

Picked on August 30th at $47.94
Gain since picked:        +2.22
Earnings Date             10/17 (unconfirmed)





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

SYSCO Corporation - SYY - close: $25.21 change:-0.34 stop:$27.75

This bearish play is playing out much as we expected.  A little 
slow, but the direction is correct.  A nice little pop from 
Monday's 1.71 million shares traded to 1.88 million on Tuesday may 
be a harbinger that the rising selling pressure will pick up the 
pace.  Still time for new entrants, we see a move to the $22- $23 
range with an outside shot at $19 to $20.

Picked on October 05th at $26.12
Gains since picked:       + 0.91
Earnings Date              10/18 (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 

MARY    Saint Mary Land & Explor   18.35     +0.57
BTU     Peabody Energy             29.31     +2.23
FCS     Fairchild Semiconductor    18.35     +0.57
TMX     Telefonos De Mexico        33.71     +0.66

--------------------------------------- 
Breakout to Upside (Stocks $5 to $20) 
--------------------------------------- 
Ticker  Company Name               Close     Change 

TASR    Taser Intl                 11.19     +2.34
VISG    Viisage Tech               15.97     +2.87
KROL    Kroll Inc                  14.27     +2.97
ACLA    Aclara Biosciences          6.90     +1.32
RGR     Sturm Ruger & Co           11.60     +1.09

--------------------------------------- 
Breakout to Upside (Stocks over $20) 
--------------------------------------- 
Ticker  Company Name               Close     Change 

AHMH    American Home Mtg          20.92     +1.31
HRH     Hilb Rogal & Hamilton      52.75     +2.25
MYGN    Myriad Genetics            38.95     +4.17
SGR     The Shaw Group             35.50     +1.63
EDMC    Education Management       36.37     +1.32

----------------------------------------- 
Breakout to Downside (Stocks over $20) 
------------------------------------------- 
Ticker  Company Name               Close     Change 

GKSRA   G&K Services               24.20     -1.05
IPCR    Ipc Holdings Ltd           25.80     -1.20
PDX     Pediatrix Medical          29.30     -4.41
GMT     Gatx Corp                  26.40     -1.59
PIXR    Pixar                      40.30     -1.95

------------------------------------------------------------ 
Recently Overbought With Bearish Signals (Stocks over $20) 
------------------------------------------------------------- 
Ticker  Company Name               Close     Change 


BN      Banta Corp                 26.80     -0.77
DP      Diagnostic Products        44.00     -2.85
NDC     National Data Corp         35.05     -0.77
TGH     Trigon Healthcare          64.73     -1.34
LOW     Lowe's Companies           30.40     -1.09



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