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Daily Newsletter, Monday, 10/15/2001

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PremierInvestor.net Newsletter                 Monday 10-15-2001
                                                  section 1 of 2
Copyright  2001, All rights reserved.
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In section one:

Market Wrap: Inside Day in the Markets
Market Sentiment: Earnings Floodgates
Play-of-the-Day: Healthcare Finally Breaks Out!
Watch List: MSCI, CELG, TSCO, ADVP, MIKE, ISSX, SANG, COF, CVC

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U.S. Market Numbers
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MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
      10-15-2001          High     Low     Volume Advance/Decline
DJIA     9347.62 +  3.46  9352.05  9238.78 1.03 bln   1517/1531
NASDAQ   1696.31 -  7.09  1698.24  1663.78 1.56 bln   1853/1746
S&P 100   560.43 -  0.35   560.78   553.62   Totals   3370/3277
S&P 500  1089.98 -  1.67  1091.65  1078.19             
RUS 2000  430.09 +  1.50   430.09   424.49
DJ TRANS 2263.26 + 28.53  2265.49  2224.13
VIX        37.15 +  0.70    38.54    36.76 
VXN        66.24 +  0.26    69.44    66.12
TRIN        1.25 
Put/Call    0.73
-----------------------------------------------------------------

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

Inside Day

The major market averages, as a whole, ended Monday with a
slight negative bias.  But I got the feeling that the day's
trading was one filled with hesitation, or more of a
wait-and-see attitude.  That's because of the light volume on
the NYSE and Nasdaq markets as well as the tight trading ranges
across the averages.

The two Mondays prior to today saw relatively light trading
activity, so the light volume isn't as peculiar by itself.
But the accompanying price action today made me believe that
a lot of market participants lacked the necessary conviction to
move the market in one direction or another.  Also, I think the
closing figures of the averages reflect that hesitancy.

The news of anthrax surfacing across the country may have been
a small part of traders' reluctance to commit to positions
Monday, but I think the majority of market participants were on
hold ahead of this week's numerous earnings reports.

Although, there were a few significant reports before the bell.
Bank of America (NYSE:BAC) reported a solid quarter Monday
morning.  The stock led a rebound in the Bank Sector Index (BKX.X)
Monday afternoon, which carried the S&P 500 (SPX.X) higher into
the close.  In fact, the broader financial complex finished
strongly Monday afternoon, as measured by the BKX.X, Insurance
Sector Index (IUX.X), and the Securities Broker/Dealer Index
(XBD.X).  The financial complex, as a whole, is the largest
industry group within the S&P 500.  And, though preliminary, its
strength Monday bodes well for further upside in the S&P 500 over
the short-term.  

Away from financials, the energy sector weakened in the wake of
Global Marine's (NYSE:GLM) guidance.  The company - an off-shore
oil drilling outfit - suggested that the rebound in drilling
activity would be pushed "further into the future" due to the
weakening economy.  The energy sector, like the banks, is a
metric that offers insight into the broader economy.  Demand for
energy is correlated with economic activity in many ways.  And
Global Marine's guidance suggested that demand for energy has
not yet rebounded.  The drillers were especially hard hit in the
wake of Global Marine's guidance as measured by the 3 percent
drop in the Oil Service Index (OSX.X), of which Global Marine is
a component.

With the mixed messages from Bank of America and Global Marine,
there was all the more reason for traders to wait for further
guidance from corporate America.  The hesitation I previously
alluded to was evident by the inside days traced by the Dow
Jones Industrial Average ($INDU), S&P, and Nasdaq-100 (NDX.X).
To recall, an inside day is one in which a stock/market trades
within its previous day's range.  (I've expanded the three
charts below to better depict what an inside day looks like.) 

The INDU is churning around a retracement level at the 9300
level.  If it can breakout above its very short-term trading
range, as measured by an advance past the 9450 level, then it
could have upside potential to the 9650 to 9700 area.
Conversely, if the INDU breaks below its very short-term
trading range, as measured by a breakdown below 9150, then
it could have downside potential to 9000.


Dow Jones (daily)




The SPX, too, is churning around one of its retracement levels
around the 1085 level.  The SPX's set-up is pretty similar to
the INDU's in that a retracement level lies above current
levels as a possible upside target, while a psychological and
technical support level lies below current levels as a possible
downside target.  In the case of the SPX, a breakout above 1100
could carry the index up to 1125, while a breakdown below 1072
could carry it down to 1050.  In either case, we're talking
about the potential for 25 points, which is a big move for the
SPX.  Of course I'm arguing that much on a short-term basis.

S&P 500 (daily)




While the NDX, like the SPX and INDU, traced an inside day
Monday, its current technical set-up is a bit different than
that of the SPX and INDU, but that's usually the case.  The
NDX is coiling around the upper-end of its partially-filled
post-attack gap around 1365.  If the NDX breaks out above the
1400 level, then I could foresee an advance up to 1450 to 1475.
But to the downside, the NDX has several potential support
areas.  First, there's a two-day double-bottom in place at
1333; I don't know what's special about that level, but buyers
stepped up at 1333 last Thursday and Friday.  Second, the
lower-end of the NDX's gap sits around 1310, which is another
potential support level.  Still lower is a retracement level at
1270, which could potentially serve as a downside target for
shorter-term trades.  But, unlike the INDU and SPX, there are
several potential support levels, so the downside potential
from current levels isn't as clearly defined.

Nasdaq-100 (daily)




An earnings report after the bell Monday should impact trading
in the Semiconductor Sector (SOX.X) Tuesday morning, which will
in turn impact trading in the NDX.  Novellus (NASDAQ:NVLS), a
component of the NDX and SOX, reported third-quarter numbers
that me expectations, but the company said, in essence, that it
has yet to see a pick-up in demand for its chip-making equipment.
The stock shed about $1.50 in the after hours sessions and
dragged most SOX components lower.

Apropos to Lehman Brothers downgrading about a dozen chip
equipment stocks Monday morning, which was the source of most
of the NDX's weakness Monday.  Good call.

I don't know if Novellus' report will be enough to breakdown
the NDX.  There are plenty of earnings reports from big tech
companies over the next few days that could either exacerbate
Novellus' news or negate it.  What I do sense, however, is that
the major market averages are once again at a pivot point, from
which I think they'll make a big move.  I had the same feeling
last Tuesday, just before the averages made their most recent
push higher.  But, like last Tuesday, I don't have any insight
into which direction the markets will break.  

I can argue a pretty strong bullish case because of the
current bullish percent conditions of the INDU and NDX -- both
indexes are in Bull Confirmed mode, which is the strongest of
short-term buy signals.  I think that the current Bull Confirmed
mode of the INDU and NDX is helping to lend the bid that we
continue to see materialize following any pullback in the
averages.  They bought 'em on the dip again Monday.  Because of
that rebound, I tend to continue to lean to the bullish side.

On the other side, I keep thinking about how overbought the
averages are as measured by Stochastics.  All three averages are
grossly overbought and have come a long, long way, baby, in a
short amount of time.  If the INDU, SPX, and NDX spent a little
more time trading sideways, then I'd grow more bullish.  In the
meantime, they're all overbought insofar as a certain
oscillator is concerned.

Finally, there are several variables to contend with this week
that have the possibility to push the averages either way, yet
these unknowns are difficult to predict.  First and foremost is
earnings.  But, it's also expiration week.  There are a lot of
mysterious happenings in the market around options expiration.
And, yes, she (the market) does move in mysterious ways.

Eric Utley



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

Earnings Floodgates
Russ Moore

With the “earnings floodgates” about to open, investors took the 
high road, leaving Wall Street with a “no conviction” day.

After being underwater for most of the session, the DOW staged a 
late day comeback, and finished with a fractional gain of +0.03 
percent. The NASDAQ, although unable to match its blue chip 
counterpart, did manage to cut its losses, falling -0.4 percent. 
The NDX dropped -1.1 percent.

Volume was on the light side with 1.01 billion shares trading on 
the NYSE and 158 billion on the NASDAQ. Market breadth ended in a 
draw on the big board while winners nosed out losers by a 19/18 
margin on the NASDAQ.

Sectors moving north included bank, biotech, drug, forest and 
paper, healthcare, insurance, transportation, broker/dealer and 
internet.

Economic news saw August business inventories fall -0.1 percent. 
Tomorrow’s data will include September industrial production. 
Expectations are for a decline of -0.8 percent, and, capacity 
utilization, with a target of 75.4 percent.

Worth noting is a report from Trim Tabs which shows the company 
moving from a “cautiously bearish”, to a “fully bearish” stance. 
Trim Tabs cited a weakening in corporate liquidity as the reason 
for the change. Cash takeovers and stock buybacks combined, 
totaled less than 1 billion dollars while new offerings rose to 
3.9 billion. These numbers would seem to indicate that perhaps 
corporate America believes there may be more downside risk to the 
economy.



VIX 
Monday 10/15 close: 37.15


VXN
Monday 10/15 close: 66.24

30-yr Bonds
Monday 10/15 close: 5.37

Total Put/Call Ratio: .88


Equity Option Put/Call Ratio: .71


Index Option Put/Call Ratio:  1.94


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 34.40

Volume/Open Interest
Maximum calls: 30/86,954
Maximum puts : 33/80,340

Moving Averages
 10 DMA 32
 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: 560.43

Volume/Open Interest
Maximum calls: 600/7,514
Maximum puts : 500/8,109

Moving Averages
 10 DMA  551
 20 DMA  534
 50 DMA  570
200 DMA  627

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: 1089.98

Volume / Open Interest
Maximum calls: 1050/17,614
Maximum puts : 1050/24,529

Moving Averages
 10 DMA 1074
 20 DMA 1043
 50 DMA 1115
200 DMA 1215

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:  9,347.62

Volume / Open Interest
Maximum Calls: 100/27,519
Maximum Puts   100/38,714

Moving Averages:
 10 DMA  9,171
 20 DMA  8,909
 50 DMA  9,679
200 DMA 10,351

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: 505.53

Volume / Open Interest
Maximum Calls: 520/ 308
Maximum Puts:  440/2003

Moving Averages
 10 DMA 474
 20 DMA 455
 50 DMA 491
200 DMA 542

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: 451.73

Volume / Open Interest
Maximum Calls: 450/2,846
Maximum Puts:  390/3,129

Moving Averages
 10 DMA 421
 20 DMA 405
 50 DMA 507
200 DMA 590

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: 397.60

Volume / Open Interest
Maximum Calls: 400/605
Maximum Puts:  360/628

Moving Averages
 10 DMA 393
 20 DMA 384
 50 DMA 389
200 DMA 395

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 10/12
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 
9/25/01      357,873   407,036   (49,163)   (24.9%)
10/02/01     365,200   408,567   (43,367)   (11.7%)
10/09/01     369,049   407,804   (38,755)   (10.6%)

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
9/25/01        122,613    71,721    50,892     (29.7%)
10/02/01       124,249    73,882    50,367      (1.1%)
10/09/01       122,292    74,539    47,753      (5.2%)

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 
9/25/01       26,761    36,812   (10,051)   (1.8%)
10/02/01      26,703    37,699   (10,996)    9.4%
10/09/01      24,662    38,020   (13,358)   21.5%

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
9/25/01        10,699     6,580    4,119     251.0%)
10/02/01       10,918     6,804    4,114      (0.1%)
10/09/01       11,948     7,012    4,936      20.0%

Most bearish reading of the year:  (1,028) - 1/02/01
Most bullish reading of the year:   8,460  - 3/13/01

DOW JONES INDUSTRIAL
Commercials   Long      Short      Net     %Change 
9/25/01       20,013     7,806   12,207     (8.5%)
10/02/01      22,755    10,124   12,631      3.5%
10/09/01      24,873    10,194   14,679     16.2%

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
9/25/01        4,530    12,621    (8,091)      4.9%
10/02/01       4,731    11,868    (7,137)    (12.1%)
10/09/01       3,517    12,294    (8,777)     23.0%
 
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        +47,753     +50,367        -38,755     -43,367

Total Open
Interest %       (+24.26%)  (+25.42%)     (-4.99%)   (-5.60%)
                 net-long   net-long      net-short  net-short


                     Small Specs             Commercials
DJIA futures     (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value          -8,777     -7,137          +14,679    12,631
Total Open
interest %       (-55.51%)    (-43.00%)      (+41.86%)  (+38.42%)
                 net-short   net-short     net-long    net-long


                     Small Spec              Commercials
NASDAQ 100      (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value         +4936      +4114         -13,358    -10,996

Total Open
Interest %        (+26.03%)   (+23.21%)     (-21.31%) (-17.07%)
                 net-long   net-long      net-short net-short


What COT Data Tells Us
----------------------
Indices:.Commercials have once again reduced their net-short 
positions, albeit by a small percentage. Are they moving to a 
net-long accumulation position? Only time will tell.

Gold:.Commercials continue to hold a significant number of net-
short contracts, and up until today, we did see the gold index 
fall a substantial amount. Today’s Anthrax scare had investors 
running for cover and the safety of gold once again, and the 
index enjoyed a nice gain.  .

9/18  49,456 contracts net-short
9/25  36,638 contracts net-long
10/02 67,122 contracts net-short
10/09 64,729 contracts net-short

Data compiled as of Tuesday 10/09 by the CFTC.



=========================
Play-of-the-Day (Bullish)
=========================

Biomet Inc - BMET - close: 31.49 change: +0.61 stop: 29.00

Company Description:
An aging population means business is booming for this maker of 
artificial knees, hips, shoulders, fixation devices (bone screws 
and pins), orthopedic support devices, dental implants, and 
operating-room supplies. Through its EBI subsidiary, the firm 
also sells electrical bone-growth stimulators and external 
devices, which are attached to bone and protrude from the skin. 
Subsidiary Walter Lorenz Surgical markets craniofacial implants 
and bone substitute material for craniomaxillofacial surgery. 
Reconstructive devices account for some 60-percent of sales, and 
the US is its largest market (about 70-percent) of sales).

Fundamentals: 
For the fiscal year ended in May 2001, the company earned 
80-cents per share on sales of $1.0 billion. In the current year, 
analysts expect the company to earn 92-cents per share on $1.2 
billion and $1.06 per share in 2003. This gives them a forward 
2001 P/E of 33. The industry average P/E is 29. 

- Most Recent Comments on October 12th, 2001 -

Why We Like It: 
This morning showed healthcare stocks weak ahead of the weekend 
and BMET was again trading along support near $30. The anthrax 
scare in New York, which sent the Dow plunging midday, also sent 
shares of BMET below support to its intraday low of 29.62. 
Fortunately, this was the stock's 100-dma and when the market and 
sector started to recover BMET saw strong afternoon buying again. 
BMET's most recent 10-Q was released today and we stole a few 
notes from the SEC filing. For the three-month period ending 
August 31, 2001, net sales increased 18% to $272 million. The 
company's U.S.-based revenue increased 26%. The 10-Q went on to 
outline how some of their different product lines performed with 
most up in sales over the same period last year. Overall net 
income was up 16% for the three months vs. the last year. If the 
market returns to an overcautious environment we may see a flight 
to safety stocks like BMET which have steady revenues and were 
not affected by the Sept. 11 attacks. The dip today concerned us 
and some of the indicators show the stock is beginning to look 
tired. However, with a stop at $29.00 we feel our risk is pretty 
limited. Readers may want to wait and see the stock close over 
31.50 before initiating any new long positions.

Monday's Update:
This may be the entry point some of us have been waiting for.
The entire month of October has forced the healthcare bulls to
sit and wait for the sector to breakout above overhead resistance.
After two weeks of trading sideways we were beginning to worry 
that the up trend was looking too tired and might be ready to
rollover (we're not talking dog tricks here).  Fortunately, for
the S&P Healthcare index (HCX) Monday's trading was bullish and
the index finally closed over its 200-dma with a convincing close.
We do see some price resistance for the group at 834 which was
set in August but if the sector can rally past this it should be
able to make it to stronger resistance at 850 set in June.  Shares
of BMET were up almost 2% today with an intraday high of 31.66
before a small end of day dip.  The intraday trend for BMET
looks strong even though we would have preferred to see stronger
volume on the move.  Readers know that we have been waiting for
BMET to close over the 31.50 level for the more patient investors
looking for confirmation.  At 31.49 we're pretty close and believe
tomorrow could be the day if you've not already entered the play
at a dip to $30.  BMET isn't a very fast mover so very aggressive
players may get bored with it.  The rest of us can probably 
appreciate the mild-mannered moves.

Picked on October 2nd @ $30.35 
Gain since picked:       +1.14 
Earnings Date:           09/20 (confirmed) 





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

The PremierInvestor.net watch list is not designed to be read
as full fledged stock picks.  Rather we would prefer to offer
it as an extra tool in today's investor toolbox.  Think of it
as a radar screen with your own radar operator pointing out
interesting developments, technical patterns or potential plays
that you may or may not have seen on your own.  Due to time
constraints we do glance at the news but rarely do we have 
time to fully read pertinent news stories, due background 
research and other necessary screens that investors should do
before making a decision.  A common exercise is to read the
entry, glance at the sector and other stocks in that industry
and then compare what's happening in the stock to what's 
happening in the broader market indices.  We hope you enjoy
the Watch List and that it proves to be a useful tool for your
own trading success.

---

MCSi Inc - MSCI - close: 17.89 change: +1.44
 
WHAT TO WATCH:  We're watching the technical breakout in Monday's
trading.  Shares of MSCI have been stuck under resistance at
$17 for three weeks.  Today saw shares edging higher with intraday
higher lows until the stock finally broke out.  Once this occurred
it appears shorts began to cover and the stock closed up 8.75%.
We do see resistance at $19 and $20 but a short squeeze could 
push the stock there fast.  Volume could have been higher for our
liking but we'll forgive it since the price action was so bullish.
Only momentum traders should consider chasing it as we'd rather
see a pullback.  It is common for stocks to retrace to the previous
resistance level (in this case $17) before moving higher but some-
thing tells us this may not be the case with MSCI.  Tomorrow's 
market action will influence the magnitude of any move.




---

Celgene Corp - CELG - close: 30.78 change: +2.85

WHAT TO WATCH:  Another big mover today, up over 10%, CELG produced
a very strong breakout pattern busting through $28, $29 and $30
(all potential hurdles) stronger than average volume.  We do know
that the Wall Street Transcript published an in-depth interview
with the company's CEO today but we'll leave it to interested 
investors to do their own research on this potential play.  The
company is in the biotech sector but probably benefited from the
strong move in the healthcare sector which broke out on its own
(the BTK was mildly positive).  Closing over $30 for CELG could
promote more active short covering tomorrow but we wouldn't be
surprised to see a pullback to $29.50 or $30 either.  Earnings
are expected on October 25th (unconfirmed).




---

Tractor Supply Co. - TSCO - close: 26.55 change: +0.95

WHAT TO WATCH:  Did you hear?  Chic hick is in vogue for this
fall fashion season.  Okay, we're picking on Nashville-based
Tractor Supply, a retail chain store of farm and ranch supplies,
but who knew that boots, Wranglers, and plaid shirts would make 
such a comeback?  The company recently reaffirmed both 3Q and
year end estimates claiming sales would surpass Wall Street's
current numbers.  We feel the stock looks very overbought despite
the breakout over resistance at $24 three days ago.  In defense
of the bulls, the volume today was off the charts at 349K 
(Average volume is less than 50K which means PremierInvestor 
would normally not play it).  Trade very carefully and be fore-
warned that earnings are expected on October 22nd.




---

AdvancePCS - ADVP - close: 79.82 change: +5.71

WHAT TO WATCH:  Unsure as to what prompted the very strong rally
in shares of ADVP, the stock soared over 7.5% and managed to 
close near its highs for the day just under round number resistance
at $80.  The stock had been trading sideways through much of
October like the healthcare sector.  Today's move coincides with
the upside breakout in healthcare and shorts may be too nervous
to sit and wait.  ADVP is a pharmacy benefit management company
that recently received an upgrade DB Alex Brown and many investors
are watching it for a potential split run.  The stock has a 2:1
split occurring at the end of October.  Any dip to a low of $76
may be an entry point to go long.  Don't forget your stop.




---

Michaels Stores Inc - MIKE - close: 47.43 change: +1.04

WHAT TO WATCH:  One retailer out performing its peers is Michaels.
Last Thursday the company announced that same stores sales were
up 10% which would boost earnings past estimates.  The stock 
gapped up and hasn't looked back.  The $45 level had been very
serious resistance and the breakout above was bolstered by 
strong volume.  We would consider any dip to $46.50 (maybe even
$45) as a potential entry point.  Consider a stop at just under $45.




---

Internet Security Sys - ISSX - close: 20.15 change: +1.14

WHAT TO WATCH:  With earnings expected only two days from now 
(Oct. 17th) you may not want to play ISSX so close to the report.
Without doing a lot of research into ISSX's forte in Internet
security, we know there has been renewed interest network and
systems security after the Nimba virus attacks.  A quick glance
at a chart of ISSX will show that the stock has been a recent
tech winner with a +100% move from its late September lows.  We
did see the stock pause between $15 and $17 as it battled the
50-dma but once it closed over it the stock has moved quickly 
again.  Both the $19 and $20 level were possible resistance and
the stock has closed above both today.  If the rally (and probable
short covering) continues the stock could be looking at 22.50 
and eventually 25.00.  The future direction will be influenced
by the earnings guidance going forward (if we get any).  We
would consider this a high risk play.  Be careful.




---

SangStat Medical Corp - SANG - close: 22.61 change: +1.23

WHAT TO WATCH:  SANG is another biotech stock that has been on
the move.  Since its breakout over resistance at $17 the stock
has been trading higher with bursts of big volume days.  Monday's
trading almost looks like an engulfing candlestick pattern which
is normally bullish.  Our concern is the stock is so overbought
already that any profit-taking could be very painful.  Earnings
are expected on October 22nd and we would not hold over the
report.  If you like the looks of this stock consider a very 
tight stop at 20.75 to limit your risk.  Yes, you could easily
be stopped out on an intraday dip but better that than seeing
SANG fall back to $18.  




---

Capital One - COF - close: 42.50 change: -2.30

WHAT TO WATCH:  COF took a blow on Friday after rival credit
card issuer Providian announced that earnings would be affected
by their amount of high risk loans.  Investors were probably 
correct in assuming that if PVN has troubles in this area COF
might as well.  We considered playing COF as a short but the
strong late day rally on Friday scared us off.  Today the
new bearish trend is reasserting itself.  The stock will probably
find some support at $40 but the intraday low in September
was 36.40 or almost 15% from current levels.  Bears can enter 
according to their risk tolerance.  We would probably wait to
hear the company's earnings announcement tomorrow before 
initiating a short play.




---

Cablevision Sys - CVC - close: 31.32 change: -1.67

WHAT TO WATCH:  Warning.  Looking at a chart of CVC could lead
to depression for bulls.  Last January the stock was trading 
as high as $90.  The entire year has been one long descent
and the long-term moving averages are finally rolling over.
Shareholders had probably hoped that the $38-$40 level may
be a bottom and the stock could begin to build a base again.
Unfortunately, they probably had similar hopes for the $55 level 
throughout this summer.  This last Friday the company cut its
earnings estimates for 2001 which sent shares falling.  Current
investors may be throwing in the towel which prompted the technical
breakdown in today's trading.  Volume was big and this may be
an entry point to go short.  Earnings are in November.







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only. The information provided herein is not to be construed
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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
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factors beyond our control.

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Do not duplicate or redistribute in any form.



PremierInvestor.net Newsletter                 Monday 10-15-2001
                                                   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
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In section two:

Net Bulls
  Closed Plays: Harmonic Inc - HLIT

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)

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

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

  --------------------
  Closed Bullish Plays
  --------------------


Harmonic Inc. - HLIT - close: 11.18 change: -0.89 stop: 11.70 

As we expected shares of HLIT pulled back in Monday's trading.
Opening at $11.95, HLIT traded down to 10.82 around 12:40 in 
the afternoon.  Bullish traders who are still interested in 
playing HLIT should be encouraged by the stock's close above
$11.  A lot of traders are probably looking for a new entry
to go long and a low volume pullback like today may be the
ticket (volume was half the size of Friday's).  We would continue
to watch the 50-dma as overhead resistance near 12.45 but
the intermediate-term objective should be able to reach $13 or 
more.  With the newsletter stopped out at 11.70 we close the
play with a 1.52 point gain or +15%.  Remember that earnings are 
expected on October 24th. 

Picked on October 11th at $10.18
Gain since picked:         +1.52
Earnings Date              10/24 (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 

NRG     Nrg Energy Inc             20.00     +0.95
PVA     Penn Virginia Corp         32.92     +1.17
TSCO    Tractor Supply Co          26.55     +0.95

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

RMBS    Rambus Inc                 11.62     +2.13
AGEN    Antigenics Inc             16.76     +1.47
ACTI    Activecard                 10.52     +1.27
RGR     Sturm Ruger & Co           13.29     +1.29
MOSY    Monolithic                 11.95     +1.19

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

BAC     Bank of America            55.55     +2.54
GCI     Gannett Co Inc             65.00     +1.80
TBH     Telecom Brazil             26.20     +1.60
STJ     Saint Jude Medical         70.90     +1.02
UPC     Union Planters Corp        40.28     +2.21

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

DB      Deutsche Bank              55.50     -2.55
COF     Capital One                42.50     -2.30
PBG     Pepsi Bottling Group       45.65     -1.09
CVC     Cablevision Systems        37.32     -1.67
MYL     Mylan Laboratories         31.86     -3.11

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

ING     Ing Groep                  24.46     -3.80
FTE     France Telecom             31.45     -1.25
CTL     Centurytel Inc             33.25     -0.65
TER     Teradyne Inc               22.92     -1.63
CBE     Cooper Industries          41.80     -2.36



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=================================================================
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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
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Do not duplicate or redistribute in any form.




DISCLAIMER

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