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Daily Newsletter, Wednesday, 10/10/2001

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

Market Wrap: Bull jumps and Fannie May Buyers Flee.
Market Sentiment: Bust out day.
Play-of-the-Day: Tenet Healthcare - THC
Watch List: QQQ, NVDA, DD, XLNX, EMLX, IMNX, NSIT, ODP, MTG,
CSCO, FLEX, ERICY, NOK

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
      10-10-2001          High     Low     Volume Advance/Decline
DJIA     3204.86 +188.42  9252.90  9000.14 1.30 bln   2239/ 871	
NASDAQ   1626.26 + 56.07  1626.99  1558.81 1.83 bln   2385/1214
S&P 100   554.76 + 12.92   555.42   539.80   Totals   4624/2085
S&P 500  1080.99 + 24.24  1081.62  1052.70             
RUS 2000  421.66 + 12.98   421.66   408.68
DJ TRANS 2228.61 + 99.94  2228.80  2126.97
VIX        33.46 -  2.53    36.64    33.25 
VXN        66.19 -  0.07    69.14    66.19
TRIN        0.53 
Put/Call    0.64
-----------------------------------------------------------------

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


Bull jumps and Fannie May Buyers Flee.

In last nights market wrap we thought the Dow Industrials needed 
to make a meaningful move above the 9,105 level for market 
psychology to improve and it didn't take long for bulls to get 
off the couch and begin thinking they've found "the cure."  
What's impressive near-term about the move higher is that we 
didn't necessarily get any bullish market moving news.  

Yes, there were "rumors" that some major institutional accounts 
were going through some asset allocation away from Treasury bonds 
and into stocks, but other than that there wasn't that much good 
news to provide today's catalyst.  

Dow Industrials Chart - last nine months



This morning's low came in the first hour of trading, but we're 
noting the trade near 9,000 at 9,000.14.  I'd argue that 
psychology plays a very important role in how markets 
trade/perform and it wouldn't surprise me in the least that 9,000 
now becomes important psychological support, with 9,105 becoming 
technical support.

Now... Sigmund Freud would never exclaim, "The patient is cured" 
after his patient's first visit, nor a second visit.  A patient 
is only cured after he/she achieves certain levels of progress or 
is able to gather himself after a set back.  We want to continue 
to challenge the indexes, and monitor their progress.  Those that 
have seen the movie "What about Bob" will understand the term 
"baby steps."

Why did the Dow Industrials find a session high at 9,252.90?  Who 
in their right mind would sell any Dow stocks when the index was 
breaking what looks to have been a key resistance level break to 
the upside?  This is where it is sometimes helpful to look at 
different time frames.  On August 7th, 14th and 27th, the Dow 
Industrials had a tough time making any type of meaningful move 
above its 200-pd moving average on the 60-minute interval chart.  
This now becomes our next hurdle to be monitoring for further 
signs of strength.

Dow Industrials - 60-minute chart



The above chart of the Dow Industrials is plotted on a 60-minute 
interval.  We continue to show the 50-pd MA (thin blue) and 200-
pd MA (thin red) with retracement overlaid.  Note how an 
institutional trader trading on this time frame may be using the 
50-pd and 200-pd MA's to his advantage.  If the 200-pd MA was 
"resistance" back in August, we need to monitor this seemingly 
important moving average near-term.  We can also look back (upper 
left hand part of chart) and understand that we need more than a 
25 point move above the 200-pd MA at 9,255 for bulls to be 
getting euphoric.  At the same time, think about bears that have 
yet to cover on the move above 8,481, then above the 50-pd MA at 
8,541 and now on the break above 9,105.  Perhaps that type of 
thinking helps explain this morning's first hour push higher from 
9,000.14 (at 50-pd MA) to 9,158 in just 60-minutes!

Hogwash!

There's no way the market is trading off the 60-minute time 
interval!

NASDAQ Composite Chart - 60-minute interval




There's too much correlation with the 50-pd and 200-pd on the 60-
minute interval to be a mere coincidence.  Note some of the 
similarities found here in the NASDAQ Composite (COMPX) on the 
60-minute interval that we're seeing in the Dow Industrials.  
Traders are traders and they monitor levels and moving averages.  
With MACD turning higher above the zero level and crossing over, 
I'm leaning toward a bullish day for the NASDAQ tomorrow.  

PeopleSoft - 60-minute interval




I like the way that the 60-minute chart for PeopleSoft 
(NASDAQ:PSFT) correlates with the NASDAQ Composite (COMPX) and 
the two together makes for some confident trading.  A break above 
the 200-pd MA at $25.70 sets in motion the potential to achieve 
the $30 level (perhaps $30.37 but not trying to squeeze every 
last cent from the trade) and a $4.30 gain on a $25.70 investment 
would represent a nice percentage move of 16%.  A trailing stop 
just under the $23.60 level gives some room for the trade to play 
out.  Should the NASDAQ Composite want to get overly bullish in 
the coming sessions, then all the better.  

Finally.... "Fannie gets spanked."

Yes, there was a pun intended, but we're going to use the lower 
price action in shares of Fannie Mae (NYSE:FNM) to indicate some 
bullishness going forward.  In Friday's market wrap "Fannie Mae, 
now in play," we thought shares of FNM might see some downside 
should we also see a higher YIELD in the 10-year.  We also 
mentioned PeopleSoft (NASDAQ:PSFT) in that wrap.  Today's action 
in FNM to the downside looks to be boding well on a very narrow 
perspective for the possibility of a further move higher in bond 
YIELDS.

It is often said that in a bull market, all stocks will trade 
higher.  While this may be "true" (we know it's not) the best 
test for a scenario is to also have some stocks you think will 
trade lower in a new bull market, just to provide a test and 
continue monitoring your scenario.

Fannie Mae Chart - 



Today's divergence in Fannie Mae (FNM) plays into our scenario 
for the potential of higher YIELDS in the bond market.  There's 
still a lot of work to be done before bearish traders in FNM 
start celebrating, but today's loss of 3% when the Dow gained 2% 
and the S&P 500 gained 2% gives hint that some market 
participants may be thinking what we were on October 5th.  What 
bearish traders want to see near term is a break back below the 
200-day moving average like they witnessed on August 24th.  The 
heavier the volume the better, to give indication that bulls are 
once again starting to loosen their grip on the stock.

What I find most interesting about today's action in FNM is what 
took place in the last hour of trading.  For the most part, the 
stock tracked the bond market very closely during the entire 
session.  However, the bond market closes at 03:00 pm EST and 
stocks continue to trade until 04:00 pm EST.  In the last hour of 
trading (without the bond market to guide traders in FNM) shares 
of FNM fell from $81.40 to a session low of $80.30 before closing 
at $80.45.  My thinking going into tomorrow's open is that market 
participants may have wanted out of the stock in the event that 
bond YIELDS were higher in the morning.

If that's the case, then we may want to have a technology stock 
like PeopleSoft (PSFT) on our list for a potential bullish trade 
and be correlating against many of the technicals outlined in the 
Dow Industrials, S&P 500 and NASDAQ Composite.

Jeff Bailey
Senior Market Technician


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

Bust out day.
by Russ Moore

After several days of tight range trading, the markets made a 
break to the upside led by a major buy program from Goldman 
Sachs. The DOW ended the session with a +2.1 percent gain while 
the NASDAQ added +3.6 percent and the NDX +4.8 percent.

Volume picked up with the NYSE doing 1.29 billion shares and the 
NASDAQ trading 1.85 billion shares. Winners took it to the losers 
with a 22/9 victory on the big board and a 24/12 margin on the 
tech side.

Plenty of green across all sectors with gold and utilities the 
only weak areas.

August wholesale inventories came in with a decline of -0.1 
percent, in line with estimates. Wholesale sales were up +0.6 
percent.
 
Yesterday I wrote that the markets were moving in a narrow range, 
poised to break out one way or the other. Today’s action was 
indeed a major breakout, but based on what? I did hear talk of 
some promising earnings numbers, and a another month of declining 
inventories as possible reasons for the jump, but that doesn’t 
wash. The real reason was the reallocation of stocks from bonds 
as highlighted by Austin in today’s Market Pulse. 

Whatever the reason, investors have to be careful of jumping on 
the bullish bandwagon prematurely. We are operating under a 
tenuous cloud, and with conditions currently sitting on the 
overbought side, it would take very little to topple the indices.



VIX 
Wednesday 10/10 close: 33.46


VXN
Wednesday 10/10 close: 66.19

30-yr Bonds
Wednesday 10/10 close: 5.36

Total Put/Call Ratio: .73


Equity Option Put/Call Ratio: .65


Index Option Put/Call Ratio:  1.22


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 32.50

Volume/Open Interest
Maximum calls: 30/88,562
Maximum puts : 30/71,335

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: 554.76

Volume/Open Interest
Maximum calls: 600/7,465
Maximum puts : 500/8,114

Moving Averages
 10 DMA  541
 20 DMA  532
 50 DMA  574
200 DMA  628

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: 1080.99

Volume / Open Interest
Maximum calls: 1050/18,168
Maximum puts : 1050/25,477

Moving Averages
 10 DMA 1056
 20 DMA 1040
 50 DMA 1122
200 DMA 1218

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:  9,240.86

Volume / Open Interest
Maximum Calls: 100/26,616
Maximum Puts   100/38,720

Moving Averages:
 10 DMA  8,998
 20 DMA  8,910
 50 DMA  9,742
200 DMA 10,367

Fibanocci Retracements
Relative High: 11,350.05 (05/22/01)
Relative Low    8,062.34 (05/21/01)
38%  9,308.92
50%  9,693.99
62% 10,085.60

==

Biotech Index (BTK)
52-Week High:  811.61
52-Week Low:   383.28
Current close: 475.43

Volume / Open Interest
Maximum Calls: 460/ 326
Maximum Puts:  440/2002

Moving Averages
 10 DMA 459
 20 DMA 453
 50 DMA 493
200 DMA 544

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: 428.59

Volume / Open Interest
Maximum Calls: 490/2,871
Maximum Puts:  390/2,129

Moving Averages
 10 DMA 390
 20 DMA 410
 50 DMA 515
200 DMA 591

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: 397.28

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

Moving Averages
 10 DMA 392
 20 DMA 382
 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 (Bullish)
=========================

Tenet Healthcare - THC - close: 61.25 change: +1.37 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. 

Update:
Shares of THC are building on what should be new technical 
support at $60.  This level hasn't been tested enough for us
to feel comfortable in moving up our stop so we'll leave the
stop at 57.00.  However, we're selecting THC as the play of
the day because the S&P Healthcare index (HCX) broke through
its 200-dma (at 824) which had been overhead resistance for
the sector for the last few days.  This could provide a 
catalyst for the bulls and should be the bears on the defensive
if not in a route.  We would look for the HCX to trade up to 
835 before encountering serious resistance again.  THC is in
blue sky territory.

Picked on October 4th @ $ 60.22 
Gain since picked:        +1.03 
Earnings Date:            10/03 (confirmed) 





==========
Watch List
==========

Nasdaq-100 Tracking Stock - QQQ - close: 32.50 change: +1.41

WHAT TO WATCH:  It's not everyday we see a 4.5% rally in the QQQ.
The Nasdaq composite gained 3.5% or 56 points but this set the
stage for the NDX, Nasdaq 100 index, which the QQQ is based on,
to trade up 60 points to close over the 1300 level.  If you're
feeling bullish about the tech sector or want to try and trade
the Nasdaq's move up, keep an eye on the QQQ and the NDX.  The
Q's are still below last April's lows of 33.60, which equate to
the NDX lows of 1348 on the same day.  The Q's also have price
resistance at $33 while the NDX has resistance at 1350.  Both
are just below their 30-dma's but the engulfing candlestick
pattern that appeared by the close of Wednesday's trading is
bullish for the short-term future.  Look for confirmation of
the move up with a close over the 30-dma or price resistance.
The QQQ will have to deal with its 50-dma currently at 35.80.




---

NVIDIA - NVDA - close: 34.25 change: +2.07

WHAT TO WATCH:  One of the several stocks that has been unduly
beaten up by the market is NVDA.  The stock has great fundamentals
and incredible upside in their revenue picture over the next few
years and yet the market brought them down to 22.50 just days ago.
Since then savvy investors have jumped in to buy the artificially
induced dip and the stock has rocketed back above the $30 level.
Yes, we know there have been some negative press about MSFT's
XBox release data but who doesn't believe that the Xbox will sell
like hotcakes for the next few years?  The company announced more
positive news today with a new deal between NVDA and IBM.  IBM
will be using NVDA cards for the new IBM workstations.  Sounds
like they are broadening their revenue stream to more big customers.
We elected to put NVDA on the watch list because the stock has been
unable to breakthrough overhead resistance at the $35 level which
is bolstered by the 200-dma at 34.67.  A close over $35 could be
a good entry point to go long.  Our short-term upside target would
be $40 after a potential pullback at 37.50.  If you choose to play,
use a stop.  NVDA is expected to announce earnings on Nov. 8th.




---

Du Pont - DD - close: 39.51 change: +1.47

WHAT TO WATCH:  This Dow Jones component normally isn't that 
volatile of an issue but today saw the stock move almost 4%.
We are highlighting DD merely due to its technical breakout
pattern.  The stock closed at 38.39 on Sept. 10th.  Today is
the first day since the attacks it has closed over this level
despite several attempts in the last few days.  Bulls will also
notice the very strong volume helping propel shares higher in
Wednesday's session.  Trader's should be watching the 200-dma
at 39.70 and overhead resistance at $40.  A close over $40 could
be an entry to go long.  Or if you'd rather play a dip, look for
a potential pullback to 38.00 - 38.50.  DD is expected to announce
earnings on October 24th.




---

Xilinx - XLNX - close: 29.35 change: +2.85

WHAT TO WATCH:  10.75% is a mighty big move for a stock that has 
already seen a strong rebound from its lows of $20 on Sept. 27th.
We like the bullish pattern XLNX is displaying but are cautious
about its commitment to hold these gains without a confirmation
in volume.  The chip sector enjoyed a strong move up today which
fueled rallies in several chip stocks.  XLNX positive move today
produced an engulfing candlestick pattern that is normally a 
bullish forecast for the short-term future.  Optimistically
cautious, we would look for a dip back to 27.50 or a close over
price resistance at $30.  If buyers can get the stock over $30
it might have a chance to run to $35.  Be careful.  XLNX is 
expected to announce earnings on October 18th.




---

Emulex Corp. - EMLX - close: 17.13 change: +0.79

WHAT TO WATCH:  Yet another tech stock that has seen huge gains
since its lows in the first few days of October.  One might
imagine the risk of profit taking after seeing that EMLX traded
between 8.50 and 9.00 for almost a week and now its bouncing
at $16.00.  The last three days show that shares of EMLX have
been unable to conquer its 50-dma.  Bulls can cautiously look 
for long plays above the 50-dma (17.54) or over $18 but our
first short-term target is only $20, which would be an 11% move
from $18.  Bears should be looking for the stock to fail at
its 50-dma again and/or close under $16.00.  Both shorts and
longs should be aware that EMLX is expected to announce earnings
on October 18th which is one week away.




---

Immunex Corp. - IMNX - close: 22.06 change: +1.27

WHAT TO WATCH:  The year 2001 has not been kind to Immunex.
Starting a dismal decline in the month of March that ended with
a gap down to its 52-week low under $11, the stock has been
trading sideways for the last several months.  Finally, 
shareholders have seen some improvement with the recent rally in
the biotech sector.  Today could prove to be a new catalyst for
IMNX.  Positive press about a new deal with Danish biotech company
Genmab coupled with a +4% move it the BTK helped aid IMNX through
its 200-dma.  The new trend up has most moving averages edging
higher and the 200-dma was the last obvious hurdle between the
stock and a prolonged bullish run up to 27.50 - 30.00.  Our 
concern with this breakout play on IMNX is the BTK.X.  The
biotech sector has seen great gains since late September and the 
late last week saw natural profit taking allowing it to back up and 
digest the new move up.  Today's trading brought the BTK back to 
overhead resistance near 480 which it was unable to successfully
penetrate last week.  A confirmation in the BTK would add confidence
to this potential long in IMNX.  We would be looking for a short-term
trade between now and its earnings report on October 17th.  A 
pullback to 21.50 or its 200-dma at 21.25 might be a good entry
point as well. 





--- Additional Stocks to Watch --

Recent market action has us seeing a lot of potential trades develop.
Many of them look like long plays but bears can scan for failed 
rallies or breakdowns through support.  Below are several stocks with
just some brief comments without looking at the news.

----------------------------------


Insight Enterprises - NSIT 

NOTE: Up big today with a 12.68% gain, the stock had been making a
nice bottoming pattern with the top edge of the recent trading range
at $16.00 and the bottom edge at $13.00.  A close over $16 might
be a trade but we'd expect a few more days of consolidation with 
higher lows.  Earnings near 10/25/01

---

Office Depot - ODP 

NOTE: Up trend is still intact.  Appears to have found support
near 13.50.  Overhead resistance is $15.00.  Earnings are expected
on 10/17/01.  Potential short-term bullish trade.

---

M G I C Invest - MTG

NOTE: MTG has been hammered recently.  The company announced earnings
today and they didn't look that bad.  We have not done any in-depth
research but stock is definitely oversold.  Potential dead cat bounce
here.  Look to January lows as eventual support if 52.50 doesn't hold.

---

Cisco Systems - CSCO

NOTE: The tech stock that appears on almost everyone's list is CSCO.
The stock is still looking bullish with higher lows as it coils for
a breakout above 15.25.  Yes, there is some resistance at 16.00 and
the 50-dma is 15.97 but beyond that traders could see a move to 18.00.
Earnings are expected on 11/05/01.

---

Flextronic - FLEX 

NOTE: After building a new base of support at $19.00 for the last
few days, shares of FLEX took off today with an 11.5% gain.  The
50-dma is the level to watch at 21.35.  The stock closed at 21.40
but we don't know yet whether it will hold.  We see a potential
move from $22 to $25.  Earnings unknown.

---

LM Ericsson Telephone Co. - ERICY 

NOTE: After spending a month trading below the $4 level shares, or
more correctly, the ADRs have mounted a new rally to try and
take this level.  Shares closed at 4.01 but we want to see 
confirmation.  This is a low dollar play for traders and the trigger
is simple.  $4 has been a very important level and a second day
above this mark could be a good entry point to go long.  Shares
should be able to reach the 50-dma at 4.50 and beyond that a 
potential move to $5, a 10% and 20% gain respectively.  

---

Nokia Corp. - NOK 

NOTE: Not to be outdone by rival ERICY, NOK also made a big move 
today rallying past its own 50-dma and overhead price resistance
at 17.50.  Volume was strong and this could be the breakout technical
players are looking for.  More cautious investors might want to
look for a dip.

---

More stocks to watch that are setting up for bullish moves or
have broken through overhead resistance include the following:

Lucent - LU
Sprint - PCS
AT&T Wireless - AWE
Home Depot - HD
Altera - ALTR





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This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

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Copyright  2001  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.

PremierInvestor.net Newsletter                 Wednesday 10-10-2001
                                                     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/1554_2.asp
=================================================================

In section two:

Split Trader
  New Plays: none
  Play Updates: 
  Closed Plays: ChevronTexaco - CVX

Net Bulls
  New Plays: none
  Bullish Play Updates: new stop for EASI
  Bearish Play Updates: none
  Closed Plays: eBay Corp. - EBAY

Stock Bottom / Active Trader
  New Plays: none
  Bullish Play Updates: 
  Bearish Play Updates: new stop for SYY
  Closed Plays: Lincare - LNCR

Trading Ideas
  Value Plays With Bullish Signals
  Breakout to Upside (Stocks $5 to $20)
  Breakout to Upside (Stocks over $20)
  Breakout to Downside (Stocks over $20)
  Recently Overbought With Bearish Signals (Stocks over $20)

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

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

  ----------------------
  Closed Split Candidate 
  ----------------------

ChevronTexaco - CVX - close: 93.45 change: +2.56 stop: 87.75

The price of sweet crude oil spent yet another day curling
ever tighter.  A breakout one way or the other would seem to
be expected tomorrow based on the pattern but we can't claim
that oil has ever been that predictable.  Another equity that
has been unpredictable is CHV.  We've honestly been expecting
the stock to have pulled back at resistance near $89 or $90.
Instead the stock has plowed right through it.  The merger
with TX appears to have shareholders and analysts enthusiastic
about the future of the two companies.  We apologize for not
publishing the new symbol, CVX, last night.  The stock has
traded right to overhead resistance at 93.50 to 94.00.  This
time we're not taking any chances and are closing the play 
with a result of 8.7 points or greater than a 10% move.
Investors interested in keeping CVX in their portfolio could
look for a dip to $92 or even $90 as natural profit taking
and potential new entries to go long.  There is very strong
resistance at $98.  Keep an eye on oil and the Mid-East conflict.

Picked on September 27th @ $ 84.75
Gain since picked:          + 8.70
Earnings Date:               10/25 (not confirmed)






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

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

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

Stop changed for EASI from 48.25 to 49.50.
 looks like momentum is slowing down.


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

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

eBay Corp. - EBAY - close: 56.88 change: +2.49 stop: 57.00

We had expected shares of EBAY to succumb to resistance at the
$55 level while the 50-dma continued to drift down providing
some measure of "protection" for shorts near 55.50.  Unfortunately,
excitement over the upcoming YHOO earnings release and a very
positive market with the NASDAQ up over 3.5% proved too much
for the bears and the bulls ruled the day.  We almost held on
to the short but late in the day EBAY hit 57.06 triggering
our stop at 57.00.  Bears looking for another entry should watch
for a failed rally attempt at resistance of $60.

Picked on October 8th @ $54.39
Gain since picked:      - 2.61
Earnings Date:           10/18 (not confirmed)





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

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

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

Stop changed for SYY from 27.75 to 26.50.
 strong bounce at $25.00, need to protect capital.
 30-dma is 26.35.


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

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

Lincare - LNCR - close: 24.79 change: +1.14 stop: 25.00

The market rally today was not kind to the shorts.  It's hard
to trade bearish when the Dow gains 188 points and the Nasdaq
gains 56.  LNCR appeared to have broke through major support
at $24 three days ago.  The next day it attempted a rally to
regain this level but failed.  Yesterday's mediocre slip looked
like a good entry for a bearish move.  Unfortunately, the S&P
Healthcare Index (HCX) traded up through its own 200-dma which
had been major overhead resistance.  This was a definite factor
as bulls suddenly found themselves looking at a technical 
breakout for the sector.  Whether it can last is another story
and one might expect LNCR to rollover again at $26 or $27.
We will take a wait and see approach.  The HCX could trade to 
834 before its next level of resistance and until then healthcare
bulls could have free reign.

Picked on October 9th at $23.65
Gain since picked:        -1.35
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 

TOT     Total Fina Elf             72.60     +2.60
MWD     Morgan Stanley Dean Witter 50.60     +1.34
MER     Merrill Lynch              42.67     +0.93
SPC     Saint Paul Companies       47.03     +1.36
KMG     Kerr-Mcgee                 55.67     +1.68


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

Ticker  Company Name               Close     Change 

ALA     Alcatel                    12.84     +1.42
IFX     Infineon Tech              14.25     +1.01
SSCC    Smurfit-Stone Container    13.19     +1.04
RATL    Rational Software          14.05     +2.62
EMKR    Emcore Corp                 9.83     +1.87


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

Ticker  Company Name               Close     Change 

QCOM    Qualcomm                   44.90     +4.05
FDC     First Data Corp            65.98     +3.54
ITW     Illinois Tool Works        56.00     +2.01
HDI     Harley Davidson            47.67     +5.08
TXT     Textron Inc                35.84     +1.70


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

Ticker  Company Name               Close     Change 

RTN     Raytheon Co                33.80     -1.41
MBI     Mbia Inc                   47.88     -1.61
WPI     Watson Pharmaceuticals     52.94     -3.17
USM     U.S. Cellular              45.70     -1.30
FAST    Fastenal Co.               55.69     -2.40


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

Ticker  Company Name               Close     Change 

TXU     Txu Corp                   45.64     -1.05
SPI     Scottish Power             23.20     -0.25
WBST    Webster Financial          31.96     -0.41
NBY     Nbc Capital Corp           31.48     -0.42




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=================================================================
DISCLAIMER
=================================================================

This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

*****************************************************************
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Copyright  2001  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.


DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

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