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Daily Newsletter, Thursday, 10/18/2001

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PremierInvestor.net Newsletter               Thursday 10-18-2001
                                                  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
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In section one:

Market Wrap: Microsoft beats estimates, but guides lower
Market Sentiment: Investor Lack of Focus
Play-of-the-Day: Bearish Breakdown in Progress


-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
       10-18-2001           High     Low     Volume Advance/Decline
DJIA     9163.22 - 69.75  9233.94  9134.30  1.2 bln   1106/1994
NASDAQ   1652.72 +  6.38  1668.00  1634.72  1.8 bln   1505/2076
S&P 100   551.01 -  3.66   555.69   548.58   Totals   2611/4070
S&P 500  1068.61 -  8.48  1077.94  1064.54
RUS 2000  421.06 -  3.43   424.86   420.55
DJ TRANS 2204.70 - 23.00  2229.04  2194.19
VIX        37.36 +   .13    38.48    36.67
VXN        70.69 +  3.58    72.06    67.58
TRIN        1.39
Put/Call Ratio       .93
-----------------------------------------------------------------

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

Microsoft beats estimates, but guides lower

After the market closed for normal trading, software giant 
Microsoft (NASDAQ:MSFT) reported earnings of 43 cents a share 
(before charges), which beat the average earnings estimate of 
analysts looking for 39 cents a share.  Including charges, the 
worlds #1 maker of software earned 23 cents a diluted share.  
Revenues in the latest quarter came in at $6.13 billion (in line 
with consensus of $6.1 billion) vs. year earlier revenues of 
$5.77 billion.

Microsoft (MSFT) finished the regular session with a 1.37% gain 
at $56.80 and trading has been brisk in after-hours trading at 
the $57 level.

Microsoft Chart - last nine months




Microsoft's share price remains just below our downward trend 
that was challenged for the first time yesterday morning near the 
$59 level and has been hovering around 50% retracement of $57.60.  
Tomorrow we'll have "earnings anxiety" out of the way and a 
better opportunity to assess things going forward.  Support looks 
to be firming at the $54 level, but the current market 
environment would have most likely had many staying on the 
sidelines ahead of today's earnings.

Going forward, Microsoft executives did guide lower on revenues 
and earnings.  Q4 guidance on revenues is $28.4-$29.1 billion, 
which wasn't to far from consensus of $28.8 billion (First Call).  
However, Microsoft's guidance for FY02 EPS was for the company to 
earn $1.61-$1.66 vs. analysts' estimates of $1.88.  There is some 
question as to whether or not the lowered guidance of $1.61-$1.66 
includes a 20-cent charge recorded this quarter, which would then 
have Microsoft's lowered guidance of $1.61 bumping higher to 
$1.81 and getting back near analysts FY02 EPS.  Time will tell, 
but after-hours trading seems to indicate there are not too many 
surprises in Microsoft's earnings.

List of earnings....

The list of companies reporting earnings after the close of 
trading is as long as the night is black.

Some of the more widely followed had PeopleSoft (NASDAQ:PSFT) 
reporting earnings of 15 cents, which beat estimates by 2 cents.  
The stock finished the session with a 4.7% gain at $24.30 and was 
trading higher in post-market action near $26.

Sun Microsystems (NASDAQ:SUNW) reported a loss of 5 cents a 
share, which was slightly less than the average estimate of 
analysts looking for a 6 cent a share loss.

Sun Microsystems Chart - last 6 months




One of the things I love about trading is that I don't have to 
trade every stock in the market.  Sun Microsystems (NASDAQ:SUNW) 
is one of those stocks I've been avoiding commenting on as I just 
can't get a grasp on what the heck is taking place here, other 
than the stock is out of favor and looks like the MARKET just 
isn't interested in the stock.  I've reached into my "magic hat" 
and tried about every technique I know of to get a feel for what 
types of levels are being traded and am not comfortable with any 
type of opinion on the stock.  The chart of SUNW was very sloppy 
at the 61.8% and 50% retracement, but has started to correlate a 
little better recently.  Whenever I come across a chart like 
SUNW's and can't get a feel for it, I avoid it.  There are too 
many other charts where levels are more clearly defined.

E-tailer eBay Inc. (NASDAQ:EBAY) reported earnings excluding 
charges of 12 cents a share ($34.9 million), which was a penny 
better than analyst's estimates.  Including items, the on-line 
auctioneer earned 7 cents a share ($18.8 million).  Top line 
revenue jumped 71% to $194 million vs. year-ago quarterly revenue 
of $113.38 million. The stock finished the regular session at 
$59.06 (+3.45%), but traded just below the $56 level in after-
hours action.  

Going forward, eBay executives gave guidance for Q4 revenues 
between $200-$210 million, or about $5 million higher than 
previous guidance.  Current estimates for Q4 revenues among 
analysts have been for revenues of $208 million.  

Tom Underwood, an analyst at Legg Mason kept his rating on the 
shares as "hold" purely based on valuation.  Mr. Underwood stated 
"eBay is going to earn $132 million in earnings this year and it 
has a $17 billion market cap.  I wouldn't recommend buying it at 
this point because the stock would have to grow earnings at north 
of 50% for several years to justify the capitalization."

Genesis blows out earnings

Today's biggest upside earnings surprise comes from Genesis 
Microchip (NASDAQ:GNSS) when the company reported earnings of 29 
cents a share, which blew out analysts' estimates of 18 cents a 
share.  Revenues in the latest quarter grew from $1.5 million to 
$6.6 million and the company guided higher for its Q3 revenues 
from $25 million to more than $36 million.

Genesis Microchip Chart - $0.50 and $1 box




Genesis Microchip (NASDAQ:GNSS) posted earnings well above 
analysts' estimates, as demand for its semiconductors used in 
flat-panel monitors was "robust."  The sell-off in September and 
spread-triple bottom sell signal at $24 was alarming, but came 
during a period of extreme market turmoil.  It's interesting how 
the stock stopped dead in its tracks at the $20 level on 
September 18th, right at bullish support and just below its 200-
day moving average.  Somebody (most likely institutions bullish 
the stock) had his or her eye on the stock.  

Perhaps today's blowout numbers will keep institutions supporting 
the stock going forward (we'll be monitoring it, no pun 
intended).  With some recent weakness in the Semiconductor group, 
look for negative group action to perhaps offer a buying 
opportunity should the stock pull back near the $27-$28 level.  
First sign of real trouble would be a break below $24.

Retracement... I've done some work with a retracement bracket 
that correlates rather nicely with the above point and figure 
chart.  Will begin working off of retracement from $19.88 to 
$41.48 to begin giving us some levels to monitor.  This puts 
80.9% retracement at $24, 61.8% at $28.12, 50% at $30.67, 38.2% 
at $33.22 (pretty close to today's close of $33.40), 19.1% at 
$37.35 and 0% at $41.48.

Jeff Bailey
Senior Market Technician


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

Investor Lack of Focus
by Russ Moore

Investors are having a hard time focusing on the markets while a 
continuous stream of Anthrax fears is flooding the airwaves.

It is very difficult for the investing public to make a 
commitment in either direction when faced with heightened 
uncertainty fueled by on-air news commentators. This is supposed 
to be the time when corporate earnings are the driving force 
behind market direction, instead, investors are turning their 
ears and eyes to the latest Anthrax updates. By no means am I 
making light of this potentially serious outbreak, however, the 
reality of the situation is being blown out of proportion and 
creating a serious market distraction.

The DOW spent most of the day in negative territory ending with a 
loss of -0.7 percent. The NASDAQ finished on the plus side with a 
gain of +0.4 percent and the NDX added +1.2 percent. Volume 
slipped to 1.25 billion shares on the big board and 1.78 billion 
shares on the NASDAQ. Market breadth saw losers stealing the show 
by 20/11 margin on the NYSE and 21/15 on the tech index.

Software was the only tech area to see green arrows while biotech 
and transports were headed north on the broader markets.

Initial jobless claims rose +6,000 to 490,000, the highest level 
in 18 years. The Federal Reserve manufacturing diffusion index 
came in at -27.4 for October, down from the -7.3 in September.

After the bell we had Microsoft beating analysts estimates and 
Sun Microsystems losing less than expected. Applied Micro 
Circuits added to the upbeat news stating its business was 
stabilizing. All stocks were trading up following the news.

Given the after the bell tech news I would expect to see upside 
pressure at the bell. The challenge, of course, is what happens 
after that. I still believe that investor sentiment is leaning 
towards the positive, however, every rally attempt is being 
thwarted by another piece of non-market news. Provided we get a 
couple of days without further distractions, I believe we are 
setting up for a short-term rally.



VIX 
Thursday 10/18 close: 37.15


VXN
Thursday 10/18 close: 66.24


30-yr Bonds
Thursday 10/18 close: 5.37


Total Put/Call Ratio: .93


Equity Option Put/Call Ratio: .79


Index Option Put/Call Ratio:  1.39


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 33.33

Volume/Open Interest
Maximum calls: 30/85,063
Maximum puts : 33/66,740

Moving Averages
 10 DMA 33
 20 DMA 31
 50 DMA 34
200 DMA 44

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: 551.01

Volume/Open Interest
Maximum calls: 600/8,931
Maximum puts : 500/8,304

Moving Averages
 10 DMA  554
 20 DMA  540
 50 DMA  566
200 DMA  625

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: 1068.61

Volume / Open Interest
Maximum calls: 1100/17,686
Maximum puts : 1050/21,415

Moving Averages
 10 DMA 1079
 20 DMA 1053
 50 DMA 1107
200 DMA 1212

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:  9,163.22

Volume / Open Interest
Maximum Calls: 100/27,519
Maximum Puts   100/38,801

Moving Averages:
 10 DMA  9,236
 20 DMA  8,996
 50 DMA  9,603
200 DMA 10,329

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: 489.79

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

Moving Averages
 10 DMA 482
 20 DMA 463
 50 DMA 489
200 DMA 540

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: 417.75

Volume / Open Interest
Maximum Calls: 490/2,232
Maximum Puts:  390/2,132

Moving Averages
 10 DMA 437
 20 DMA 408
 50 DMA 495
200 DMA 588

Fibanocci Retracements
Relative High: 710.78 (05/22/01)
Relative Low:  343.93 (09/27/01)
38% 484.50
50% 527.18
62% 570.57

==

Pharmaceutical Index (DRG)
52-Week High:  455.28
52-Week Low:   339.49
Current close: 395.50

Volume / Open Interest
Maximum Calls: 400/605
Maximum Puts:  360/878

Moving Averages
 10 DMA 395
 20 DMA 387
 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 (Bearish)
=========================

Suntrust Banks - STI - close: 58.10 change: -1.28 stop: 61.50 *new*

Company Description:
SunTrust Banks, Inc., headquartered in Atlanta, Georgia, is the 
nation's ninth-largest commercial banking organization. As of 
June 30, 2001, SunTrust had total assets of $100.8 billion and 
total deposits of $63.3 billion. The company operates through an 
extensive distribution network in Alabama, Florida, Georgia, 
Maryland, Tennessee, Virginia and the District of Columbia and 
also serves customers in selected markets nationally. Its primary 
businesses include deposit, credit, trust and investment 
services. Through various subsidiaries the company provides 
credit cards, mortgage banking, insurance, brokerage and capital 
markets services. (source: company press release)

- Most Recent Comments on October 18th, 2001 -

We are cautiously optimistic for this bearish play on STI.  As
initially discussed the $60 level has been strongly contested
between the bulls and the bears for many months.  In the past
the stock has slipped below support only to have victory stolen
from the bears in a couple of sessions.  This time the stock
has been unable to rebound with its normal quickness and share-
holders may decide to do some selling as shorts start to apply
more pressure.  This is obviously a very negative combination.
Technically, the long-term moving averages have flat-lined and
the shorter-term averages have all rolled over.  The MACD is
hitting new lows despite a flattening of the histogram.  Looking
at the price action in today's trading shows an exceptionally
negative day with a steady decline.  The intraday low back on
Monday was 58.21.  Today set a lower low of 58.10 with the stock
closing two cents from the bottom.  In our initial write up we
discussed how the point-and-figure chart projected a bearish
price objective of $51.  Today's move helped confirm the bearish
breakdown on the p-n-f chart but due to the stock's history we
would only initiate new short positions if the stock trades
under $58.00.  We're going to lower our stop to 61.50 which is
just over Tuesday and Wednesday's high of 61.40.  New plays
may want to consider something tighter (just north of $60 may
be a good spot).  Even though a failed rally back to $60 might
offer a good entry our confidence in the strength of the down
trend would be weakened.  We reiterate our comments: don't start 
new plays until the stock reconfirms the new direction by trading 
under $58!  

Picked on October 12th at $59.85
Gain since picked:         +1.75
Earnings Date              10/10 (confirmed)








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

PremierInvestor.net Newsletter                  Thursday 10-18-2001
                                                     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/8220_2.asp
=================================================================

In section two:

! Look for new bullish and bearish plays in Friday's newsletter!


Split Trader
  Play Updates: THC

Stock Bottom / Active Trader
  Bullish Play Updates: AXP and BMET
  Bearish Play Updates: SYY, STI, and WPI 
  Closed Bullish Plays: MO and SZA

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

  ----------------------
  Split Candidate Update
  ----------------------

Tenet Healthcare - THC - close: 60.89 change: -0.56 stop: 57.60 *new*

On the trading front, THC slipped with the rest of the market
this morning only to rebound again in late afternoon trading.
This put another bounce at new support of $59.00, which has
been holding up for the last ten days.  The news front for
THC had press concerning THC's attempt to purchase two Daniel
Freeman hospitals in California.  We feel that most of the stock
movement has been related to the markets and the struggling 
Healthcare sector.  It's almost like investors aren't willing 
to recommit to "safe haven" stocks like healthcare but they
are not ready to start the next leg up for tech stocks either.
The HCX index slipped 5 points and it resting right at its 200-dma.
Scanning the market shows a few healthcare companies have been
real laggards and are weighing down the index's performance.
Investors looking to go long should be patient and wait to see
how the market will react to the ongoing anthrax scare.  THC
should be okay as long as it maintains above the $58/$59 level
but we would rather see it back above $61 on strong volume.
On a technical basis the pullback and bounce today on low volume
looks like an entry point but the broader market uncertainty 
would suggest that we sit on the sidelines.  The MACD is slowly
rolling over which should also be a caution flag.  We've raised
our stop marginally to $57.60 which is just below the September
28th low.  Trading is a game of patience and timing.  Be patient.

Picked on October 4th @ $ 60.22
Gain since picked:       + 0.67
Earnings Date:            10/03 (confirmed)






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

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

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

American Express - AXP - close: 30.09 change: +0.04 stop: 28.60

As one might expect, MasterCard has appealed the recent ruling
that would remove the ban on MC and Visa member banks from 
issuing competitive credit cards like American Express and
Discover.  Industry experts seem to think the appeal will be
denied but the court case continues.  Shares of AXP have been
moving in our favor the last few days but Wednesday saw shares
traded up to $32 before all the way back to $30 again.  The
$30 level should be strong support and today showed the stock
holding this level on light volume.  If you missed the first
entry when we picked the stock at 29.99, today's close represents
a similar opportunity with a stop at 28.60.  However, we would
prefer to see the markets begin to tick higher and that may not
occur until Monday as traders may be loathe to hold some positions
over the weekend.  Another reason to wait, if you are risk averse,
is AXP's expected earnings report on Monday.  We don't know 
whether it is before the bell or after the close but we would
anticipate the numbers to be low due to the Sept. 11th attacks.
Obviously, the markets will be expected a poor result so the
real influence will be the conference call and management's
comments about the coming quarters.  In summary, new traders
who are not afraid to hold over earnings could look for new
positions here at $30.  The rest of us who would rather not
risk the stock gapping negatively on us should probably wait
until after the earnings report before considering a position.

Picked on October 12th at $29.99
Gain since picked:         +0.10
Earnings Date              10/22 (not confirmed)




---

Biomet Inc - BMET - close: 30.79 change: +0.11 stop: 29.50 

Believe it or not we still feel positive about BMET's potential
upside gains but recent market action and several indicators
have us very cautious.  The healthcare sector has been unable
to get the next bull leg started after its technical breakthrough
a couple of days ago.  It appears that investors are not looking
to move back into "safe haven" stocks like healthcare just yet.
Considering the broader market technicals and strong comments
that this is just a technical pause in the markets should make
one stop and pause when evaluating new plays.  Shares of BMET
still qualify as a potential bullish play with yet another 
bounce at support of $30.  Unfortunately, some of the technicals
for the stock are issuing yellow flags and bulls should be
cautious.  The stock is beginning to look tired and the MACD
is about to produce a bearish crossover.  The MACD's histogram
has been slowly eroding as BMET was unable to pursue the next
leg up with the sector trading sideways.  If you absolutely must
consider a new long play then a stop at 29.50 should reduce
your potential risk.  We would not initiate new plays at this
time and look for shares to close back above 31.50 or higher.
Confirm stock and sector direction before starting new plays.

Picked on October 2nd at $30.35
Gain since picked:        +0.44
Earnings Date             09/20 (confirmed)





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


Sysco Corp - SYY - close: 24.37 change: +0.24 stop: 25.00 *new*

SYY reported its 3Q earnings on Wednesday morning before the
open.  The results of 24 cents/share were inline with estimates
and the company's guidance from last August.  SYY's CEO did
state that the attacks had reduced demand from many of
SYY's customers in the hotel and resort business.  Surprisingly,
overall sales still climbed 9% pushing earnings up 14%.
Despite the good report the stock gapped down on Wednesday
and proceeded to trade higher before giving most of it back
by the close.  Today wasn't much better as shares traded higher
to 24.89, filling the gap from Wednesday, before slipping again
in the afternoon.  This is the second day in a row that shares
have hit support at $24 and the lower high confirms the bearish
trend.  Looking at a 60 minute chart, one can see how the 
50-hour MA has acted as overhead resistance for the last 
several days which was confirmed today.  Currently the newsletter
is showing a drop of almost 6.7% in SYY's share price but we
would probably wait to initiate new short plays.  The next
potential trigger to go short should be a close under support
of $24.  We are lowering our stop to $25.00.


Picked on October 5th at $26.12
Gain since picked:        +1.75
Earnings Date             10/17 (confirmed)




---

Suntrust Banks - STI - close: 58.10 change: -1.28 stop: 61.50 *new*

We are cautiously optimistic for this bearish play on STI.  As
initially discussed the $60 level has been strongly contested
between the bulls and the bears for many months.  In the past
the stock has slipped below support only to have victory stolen
from the bears in a couple of sessions.  This time the stock
has been unable to rebound with its normal quickness and share-
holders may decide to do some selling as shorts start to apply
more pressure.  This is obviously a very negative combination.
Technically, the long-term moving averages have flat-lined and
the shorter-term averages have all rolled over.  The MACD is
hitting new lows despite a flattening of the histogram.  Looking
at the price action in today's trading shows an exceptionally
negative day with a steady decline.  The intraday low back on
Monday was 58.21.  Today set a lower low of 58.10 with the stock
closing two cents from the bottom.  In our initial write up we
discussed how the point-and-figure chart projected a bearish
price objective of $51.  Today's move helped confirm the bearish
breakdown on the p-n-f chart but due to the stock's history we
would only initiate new short positions if the stock trades
under $58.00.  We're going to lower our stop to 61.50 which is
just over Tuesday and Wednesday's high of 61.40.  New plays
may want to consider something tighter (just north of $60 may
be a good spot).  Even though a failed rally back to $60 might
offer a good entry our confidence in the strength of the down
trend would be weakened.  We reiterate our comments: don't start 
new plays until the stock reconfirms the new direction by trading 
under $58!  

Picked on October 12th at $59.85
Gain since picked:         +1.75
Earnings Date              10/10 (confirmed)





---

Watson Pharm. - WPI - close: 48.50 change: -0.80 stop: 50.25 *new*

Watson Pharmaceuticals is one bearish play that has proceeded
as planned.  With yesterday's dip to 48.15 and today's low of
49.40 we are close to realizing our short-term target of $48.00,
or a move of 8%.  Traders need to be careful about their next
move.  The stock bounced twice at $48 back in mid-September.
We suspected this may be a tough hurdle for the shorts to overcome
and the stock has already bounce at $48 once during the play.
Fortunately, today's failed rally at $50 should confirm the move
for bears.  However, we would be very cautious about initiating
new shorts at this level.  Current shorts may want to consider
taking some money off the table and wait for the stock to close
under $48 before starting new plays.  Once shares slip under $48
we can look for the next level of support at $46 and then our
bearish price objective of $43.  Aggressive shorts can consider
another failed rally at $50 as a potential entry but the rest
of us should wait for the next breakdown.  We're going to lower
our stop to $50.25 which is just above the descending resistance
line from the middle of October.

Picked on October 12th at $52.60
Gain since picked:         +4.10
Earnings Date              08/14 (confirmed)






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

  -------------------
  Closed Bullish Play
  -------------------

Phillip Morris - MO - close: 49.30 change: -0.71 stop: 49.70 

MO announced its earnings on Wednesday with EPS coming in right
at consensus estimates of $1.07/share.  This put earnings up 
over 8% from the same period last year with operating revenues
up 12%.  MO reiterated their target of 9% earnings growth for
the year.  Even though U.S. cigarette volume fell 2.8% to a
mere 52.5 billion cigarettes the company still posted a 5% gain
in 3Q profits.  It would appear that the stock is suffering from
a little "sell the news" now that earnings are out.  Yet bullish
investors are probably not going to let the stock fall too far
before they step in to buy the dip.  Using a retracement tool
from the mid-September low to the October 11th high we see
that shares have fallen to the 38.2% level near 49.25 and could
likely slip to $49.00 or $48.50 (the 50% retracement).  It is
unfortunately that a play that was up over 7% at one time has
now been closed at a 24 cent loss.  If markets eventually show
that the bear market still has a several months left to play
out MO could be the "safe haven" stock to watch due to its 
high dividend and defensive product line.  

Picked on August 30th at $47.94
Gain since picked:        -0.24
Earnings Date             10/17 (confirmed)




---

Suiza Foods - SZA - close: 58.60 change: +0.19 stop: 57.90 

Suiza Foods has been another defensive play that has really 
been a disappointment.  Normally, with the markets subject to
so much uncertainty, stocks like SZA should have seen more
buying interest.  It possible that the onslaught of 3Q earnings
has distracted investors and left us open to today's intraday
dip.  Yes, the stock fell through its 50-dma and what appeared
to be strong price support at 58.40 to hit an intraday low of
57.75 before bouncing higher.  We still believe that SZA will
be a stock to watch in the coming weeks and the potential
trigger may be a close back over $60 or $61.  We end the play
with a small loss of 2.5% from the picked price. 

Picked on October 12th at $59.43
Gain since picked:         -1.53
Earnings Date              11/07 (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 

UBS     Ubs Ag                     45.97     +0.59
AZR     Aztar Corp                 14.71     +0.70
AHMH    American Home Mtg          18.13     +1.33
MPR     Met-Pro Corp               11.75     +0.55

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

STE     Steris Corp                19.08     +1.81
OLN     Olin Corp                  14.60     +1.88
JAKK    Jakks Pacific Inc          18.30     +2.20
NOVT    Novoste Corp               11.35     +1.40
OSIS    Osi Systems                14.30     +1.10

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

FTE     France Telecom             34.50     +1.50
UNP     Union Pacific Corp         49.61     +2.01
SYK     Stryker Corp               56.77     +1.39
JNPR    Juniper Networks           23.00     +1.87
INFY    Infosys Technologies       48.43     +1.06

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

TXN     Texas Instruments          28.00     -1.91
WM      Washington Mutual          31.00     -2.01
PCS     Sprint Corp                24.45     -2.00
BAX     Baxter Intl                49.53     -1.90
ADI     Analog Devices Inc         35.80     -3.96

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

MRK     Merck & Co                 66.30     -2.75
MDT     Medtronic Inc              43.09     -0.79
UTX     United Technologies        50.40     -1.60
HIT     Hitachi Ltd                71.77     -3.08
LEH     Lehman Brothers            59.51     -1.29




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