PremierInvestor.net Newsletter Monday 10-15-2001 section 1 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/3563_1.asp ================================================================= 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 ----------------------------------------------------------------- U.S. Market Numbers ----------------------------------------------------------------- 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. ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. 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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 ================================================================= To view this email newsletter in HTML format with imbedded charts and graphs, click here: http://www.PremierInvestor.net/htmlemail/3563_2.asp ================================================================= 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 ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. 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