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Daily Newsletter, Monday, 10/22/2001

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PremierInvestor.net Newsletter                 Monday 10-22-2001
                                                  section 1 of 2
Copyright  2001, All rights reserved.
Redistribution in any form is strictly prohibited.

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In section one:

Market Wrap: Biotech's lead NASDAQ higher
Market Sentiment: Am I the only one scratching my head?
Play-of-the-Day: Next Bullish Leg Up
Watch List: GILD, IDPH, IMNX, BMY, ABT

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U.S. Market Numbers
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MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
        10-22-2001        High      Low     Volume Advance/Decline
DJIA     9377.03 +172.92  9392.81  9167.45 1.09 bln   1836/1266	
NASDAQ   1708.08 + 36.77  1708.09  1660.22 1.51 bln   2090/1482
S&P 100   562.52 +  8.72   562.99   551.82   totals   3926/2748
S&P 500  1089.90 + 16.42  1090.57  1070.32
RUS 2000  430.50 +  4.80   430.50   424.95
DJ TRANS 2203.58 + 29.30  2208.69  2170.63
VIX        33.11 -  2.73    36.49    32.85
Put/Call Ratio      0.59
-----------------------------------------------------------------

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

Biotech's lead NASDAQ higher

Perhaps a controversial headline, but make no mistake about it.  
The biotechs are what's leading the NASDAQ higher and we've got 
proof!  Yes, the Semiconductors had a good day and the 5.4% gain 
for the Semiconductor Index (SOX.X) outpaced today's 3.8% gain in 
the Biotechnology Index (BTK.X), but our relative strength charts 
are evidence enough that biotech stocks are providing the 
leadership in the NASDAQ.

Relative Strength of Biotech vs. Semiconductor




In late August (just before red 9 on chart) the Biotechnology 
Index gave a relative strength "buy signal" vs. the Semiconductor 
Index (SOX.X) and has yet to give a relative strength "sell 
signal" since that time.  There have been pullbacks in relative 
strength (columns of O's are downward movement), but this looks 
to be the group that has remained in favor among institutions.

If I like the biotechs, then I've got to like....

If I like the strength I'm seeing and have been seeing since late 
August, then I want to be looking for some potential leaders in 
the sector.  How about we look for some stocks that are biotech 
related, and are outperforming the sector!  Here's a stock I 
think might be ready for a major move to the upside.  Let's start 
with the relative strength chart of Protein Design Labs 
(NASDAQ:PDLI) and see if the stock truly is showing some 
favorable relative strength characteristics.

RS Chart of PDLI vs. BTK.X




Yes, PDLI recently gave a RS "buy signal" on our point and figure 
chart.  When we review this RS chart, we see that PDLI gave three 
RS "buy signals" starting back in April (just after red 4), then 
again in May (after red 5) and then another RS "buy signal" back 
in June (after red 6).  Eventually in July (after red 7) PDLI 
began outperforming the BTK.X to the DOWNSIDE and it was time to 
say, "bye, bye PDLI."

With the recent "buy signal" given for relative strength, we 
might now be saying, "is it time for PDLI to fly?"  I think so 
and here's how we set up the trade.

PDLI and BTK.X bar chart comparisons




You have to look close at each charts header to understand what 
chart you're looking at.  Which is which?  It's comparisons like 
that above (PDLI chart on top, BTK.X on bottom) that will make a 
believer our of trader's that there's something to the 
sector/stock theory.  Note how nicely the retracement brackets 
line up.  Yes, there's some skew, but it's easy to understand why 
PDLI has been having trouble at 50% retracement.  You see, market 
makers are trading the 50% retracement bracket as resistance 
right now (at least I would be) as the BTK.X has yet to move me 
off that level.  However, if I were a market maker and the BTK.X 
broke above its 50% retracement bracket of $528, I'm not going to 
be as eager to sell PDLI from any of my firms inventory (unless I 
know of bad news coming from the company).  

Since I (Jeff Bailey) know of no "bad news" coming from Protein 
Design Labs (PDLI) I want to be ready to trade the stock bullish 
tomorrow morning.  Especially if the BTK.X breaks above its 50% 
retracement.  Bullish targets from retracement on PDLI are easily 
identifiable.  First bullish target is $34.30, and next target 
longer-term would be near $39.88.  I would also be using the 
BTK.X to help correlate future trading.  

For example.... lets imagine that I buy some PDLI tomorrow 
morning on $30.90.  Then 5-days later, shares of PDLI are trading 
at 19.1% retracement of $39.88, but the BTK.X is lagging behind 
at 38.2% retracement of $562.  What would I do with my PDLI at 
$39.88?  I'd sell it as the group was not confirming the move 
higher in PDLI and in the recent market environment I want to 
book my profit and get the heck out!

Make note of relative strength!

Did you study the RS chart of PDLI vs. the BTK.X and take note of 
the RS "sell signal" back in July?  That was a classic example of 
how trading in a "relatively" strong stock in the Biotechnology 
Index (BTK.X) would have saved a bullish trader's skin just 
before a major decline.  Trader's will note that the BTK.X broke 
below its 19.1% retracement back in June (June 11th to be exact) 
and just barely got back above that level on June 21st at 624.  
However, shares of PDLI traded above its 19.1% retracement level 
two times, giving the bullish trader time to exit the stock when 
supportive strength from the index was not being found!  I've 
said many times that strong stocks are the first to lead an 
advancement and most often are the last to fall when a decline is 
underway.  PDLI has been proof of that and I'll stick with PDLI 
until it deviates from pattern.

Domino Theory makes it easy!

Still not convinced?  Take a look at the play list and shares of 
Biomet, Inc. (NASDAQ:BMET).  This stock was picked as bullish on 
10/02/01 at $30.35 and now trades $31.99.  Stock's been a slow 
mover right?  Check out the retracement bracket on this one as I 
think it gives hint of what institutions are doing in some of the 
biotech stocks.

Biomet, Inc. - 





I've marked the above chart with the "Profiled" date on Biomet 
(BMET).  The data in the black box is representative of where 
BMET was trading on 10/02/01.  Notice how this little bugger has 
been holding our 38.2% retracement.  Here's another RS leader and 
sector leader.  One reason I think BMET has taken "so long" to be 
a good performer is that it is trading in the higher bands of 
retracement.  The rest of the group is trying to play catch up.  

Was it wrong to profile BMET as bullish on 10/02/01?  No way!  We 
want to trade bullish in the "leaders" early.  Why?  As depicted 
in the PDLI vs. BTK.X RS chart we would have most likely gotten a 
"heads up" on a decline in BMET from the RS chart or lack of 
group action to the upside.  

If you're long BMET from our profiled date of 10/02/01 then hang 
in there.  As you can see, the "safest" time to have bought some 
BMET was on the confirming break above 50% retracement at $29, 
but we missed that entry point, but took the 38.2% retracement 
entry point at $30.27.

Now here is where we begin to understand that BMET is near the 
upper end of its retracement so we want to see continued strength 
in the stock from here on out.  There's nothing that say's BMET 
can't get above our 0% retracement of $34.36.  If it does, we'll 
simply "roll up" our retracement, but we need to get above $32.31 
and then $34.36 before we start rolling up retracement.  One step 
at a time.

Still not a believer?

Let's keep following the dominos, keep using the same retracement 
techniques and keep using relative strength.  Follow the leaders!  
Take a look at the chart of Gilead Sciences (NASDAQ:GILD).  That 
biotech stock hit a new 52-week high today and blow well above my 
0% retracement level.  Will have to "roll up" retracement on that 
one.  For whatever reason, the MARKET is buying this group of 
stocks and buying many of them with some abandon.  All we're 
trying to do is play the domino theory that looks to be going on.

I really like what I've seen from this group in recent weeks and 
offers bullish traders some good opportunities.  As always, don't 
load the boat in just one stock or even one group for that 
matter, but I think some exposure will serve a bullish trader 
well.

Jeff Bailey
Senior Market Technician


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

Am I the only one scratching my head?
by Russ Moore


Okay, I know that the markets don’t always operate in a logical 
fashion but come on, where did today’s rally come from? The major 
indices moved into positive territory following a brief stint on 
the negative side. Action moved within a very narrow range until 
a mid-lunch rally had the DOW move +50 points in twenty minutes. 
Following the lunch break, markets eased up a bit and when news 
broke about another death caused by Anthrax, it looked like the 
markets would do an about face. After all, previous Anthrax 
scares have sent the bulls running for cover, but not this one.


Just past 2:00pm the bulls lowered their heads, pounded their 
hooves, and set forth on a full-out charge that carried the DOW 
to a +1.9 percent gain. The chip sector carried the NASDAQ and 
NDX on its’ back, leading the tech indexes to gains of +2.2 and 
+2.6 percent respectively.

Volume was on the light side with 1.09 billion shares trading on 
the NYSE and 1.52 billion on the NASDAQ. Winners came out on top 
by a 19/13 margin on the big board and a 21/15 margin on the tech 
index.

Even weak economic news couldn’t discourage the bulls on this 
day. The September Leading economic indicator index fell -0.5 
percent, its’ largest decline since January 1996. Ken Goldstein, 
chief economist at the Conference board said, “economic demand 
has slowed sharply”, and, that “the two-month decline in the 
index suggests that the already weak economy is likely to remain 
weak into next year”.

Most areas were showing green arrows with biotech, financial, and 
drug sectors enjoying substantial gains on the broader markets. 
The chip sector, with a gain of +5.45 percent, was the big tech 
winner although all tech sectors were positive on the session.

Today’s gains in the face of negative news, is a good indication 
of current sentiment. That sentiment may be put to the test this 
week with a slew of S&P 500 stocks and another eight DOW stocks 
set to report.


VIX 
Monday 10/22 close: 33.11


VXN
Monday 10/22 close: 67.36


30-yr Bonds
Monday 10/22 close: 5.37


Total Put/Call Ratio: .50


Equity Option Put/Call Ratio: .42


Index Option Put/Call Ratio:  1.33


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 34.45

Volume/Open Interest
Maximum calls: 34/41,471
Maximum puts : 32/48,112

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: 562.52

Volume/Open Interest
Maximum calls: 560/4,448
Maximum puts : 480/6,914

Moving Averages
 10 DMA  554
 20 DMA  543
 50 DMA  565
200 DMA  624

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: 1089.90

Volume / Open Interest
Maximum calls: 1100/16,240
Maximum puts :  950/22,415

Moving Averages
 10 DMA 1082
 20 DMA 1063
 50 DMA 1102
200 DMA 1209

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:  9,377.03

Volume / Open Interest
Maximum Calls: 94/22,236
Maximum Puts   92/21,854

Moving Averages:
 10 DMA  9,275
 20 DMA  9,083
 50 DMA  9,556
200 DMA 10,314

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: 520.37

Volume / Open Interest
Maximum Calls: 520/  152
Maximum Puts:  460/1,607 

Moving Averages
 10 DMA 493
 20 DMA 472
 50 DMA 488
200 DMA 539

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: 446.91

Volume / Open Interest
Maximum Calls: 450/ 355
Maximum Puts:  400/ 427

Moving Averages
 10 DMA 441
 20 DMA 413
 50 DMA 487
200 DMA 586

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: 402.73

Volume / Open Interest
Maximum Calls: 380/ 100
Maximum Puts:  400/1002

Moving Averages
 10 DMA 396
 20 DMA 391
 50 DMA 389
200 DMA 394

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 10/19
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 
10/02/01     365,200   408,567   (43,367)   (11.7%)
10/09/01     369,049   407,804   (38,755)   (10.6%)
10/16/01     378,866   415,289   (36,423)   ( 6.0%
 
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
10/02/01       124,249    73,882    50,367    (1.1%)
10/09/01       122,292    74,539    47,753    (5.2%)
10/16/01       124,568    73,779    50,789     6.3%
  
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 
10/02/01      26,703    37,699   (10,996)    9.4%
10/09/01      24,662    38,020   (13,358)   21.5%
10/16/01      27,398    40,397   (12,999)   (2.7%)

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
10/02/01       10,918     6,804    4,114      (0.1%)
10/09/01       11,948     7,012    4,936      20.0%
10/16/01       12,901     6,893    6,008      21.7%

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 
10/02/01      22,755    10,124   12,631      3.5%
10/09/01      24,873    10,194   14,679     16.2%
10/19/01      25,402    10,267   15,135      3.1%

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
10/02/01       4,731    11,868    (7,137)    (12.1%)
10/09/01       3,517    12,294    (8,777)     23.0%
10/16/01       4,514    12,104    (7,590)    (13.5%)
 
Most bearish reading of the year:  (7,572) - 5/08/01
Most bullish reading of the year:   1,909  - 1/16/01


                    Small Specs               Commercials
S&P 500         (Current)  (Previous)     (Current) (Previous)
Open Interest
Net Value        +50,789     +47,753        -36,423     -38,755

Total Open
Interest %       (+25.61%)  (+24.26%)     (-4.59%)   (-4.99%)
                 net-long   net-long      net-short  net-short


                     Small Specs             Commercials
DJIA futures     (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value          -7,590     -8,777          +15,135    14,679
Total Open
interest %       (-45.67%)    (-55.51%)      (+42.43%)  (+41.86%)
                 net-short   net-short     net-long    net-long


                     Small Spec              Commercials
NASDAQ 100      (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value         +6008      +4936         -12,999    -13,358

Total Open
Interest %        (+30.35%)   (+26.03%)     (-19.17%) (-21.31%)
                 net-long   net-long      net-short net-short


What COT Data Tells Us
----------------------
Indices:.Action was virtually flat across all major indices with 
no significant position shift taking place.

Gold:.Commercials remain on the short-side with a modest 
reduction in their net-short position.

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
10/16 51,816 contracts net-short

Data compiled as of Tuesday 10/16 by the CFTC.


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

Protein Design Labs - PDLI - close: 30.75 change: +0.75 stop: 26.50

Company Description:
Protein Design Labs, Inc. is a leader in the development of 
humanized antibodies to prevent or treat various disease 
conditions. PDL currently has antibodies under development for 
autoimmune and inflammatory conditions, asthma and cancer. PDL 
holds fundamental patents in the United States, Europe and Japan 
for its antibody humanization technology. 
(source: company press release)

Why We Like It:
If you've read the wrap this evening (10/22/01) then you know 
that the biotech sector appears to be leading the tech stocks and 
is poised to tackle its old high back in August.  With the 
leading biotech stocks in varying stages of a developing rally 
we're selecting PDLI as one with strong relative strength but a 
stock that still has room to play catch up to the leaders.  Plus, 
unlike some of the other biotech stocks we could be playing, PDLI 
has broken through price resistance ($30) and technical 
resistance (200-dma, 29.71).  With the current bullish set up our 
short-term target is $35.  However, if the biotech sector can 
fuel a prolonged rally then we could foresee even higher targets 
for PDLI.  The potential challenge with this play is the 
volatility that affects biotech equities.  We would prefer to 
play with a tight stop just under $29 but it doesn't seem prudent 
and odds of being prematurely stopped out are high.  Instead 
we're going to start the play with a wide stop of 26.50 but only 
due to our lofty expectations of a +$35 share price (higher risk 
for higher reward).  Conservative traders should note that PDLI 
did encounter some resistance at $31 back in late August and the 
lid still exists as evidenced by today's high.  A close over this 
level may be your entry point but it could eat into any short-
term profits.  Traders looking to buy the dip can potentially 
look for a bounce near the $29 level if shares fall below $30 
again.  Earnings are not expected until sometime in the first 
week of November (unconfirmed).

Picked on October 22nd at $30.75
Gain since picked:         +0.00
Earnings Date              11/05 (not 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.

-----------

Comments: With our focus on the biotech sector in the wrap
tonight we thought we would highlight a few biotech stocks and a
couple of drug stocks.  It wouldn't hurt traders to do a little
searching of your own now that the DRG.X and the HCX.X have both
broken out to the upside nicely today.

-----------

Gilead Sciences Inc - GILD - close: 67.64 change: +2.60

WHAT TO WATCH:  There was some discussion today in the office
about whether GILD should or should not be a formal play.  We
like it because the stock has been range-bound between the
low 60s to the high 40s since mid-May.  Then mid-October occurs
and the stock breaks over $60 and manages to hold the gains
trying to build a new base of support between $60 and $65.
The point-and-figure chart is very bullish for GILD and Monday's
session represents a new 52-week high and a breakout over 
resistance at $65.  We decided to not add it as a play at this
time and leave it to the more aggressive traders.  Unconfirmed
earnings are October 25th, 2001.




---

IDEC Pharmaceuticals Corp - IDPH - close: 57.23 change: +2.23

WHAT TO WATCH:  With earnings out of the way for IDEC (they were
October 18th), investors need not fear the unknown and can trade
the trends.  This is a stock that has also confirmed a technical
breakout above it 200-dma (54.73) as well as breaking through
price resistance at $55 which has been the top for the last three
weeks.  The daily chart may not look like much but the point-and-
figure shows the breakout to the upside more clearly.  We think
the stock should be able to make it to the $62 area without much
resistance.  Beyond that probably depends on the sector.




---

Immunex Corp - IMNX - close: 23.84 change: +1.30

WHAT TO WATCH:  IMNX is no stranger to our watch list as the stock
has been making a strong bullish move after basing for the last
several months above and below the $15 level.  On Oct. 10th the
stock breakout above its 200-dma, confirmed it the next day, 
but then traded sideways before falling back to profit taking.
Now the stock has retraced its gains to bounce at its 200-dma
(no surprise there as previous resistance normally becomes new
support).  The company reported earnings last week and a breakout
above the $24 level looks buyable.  




---

Bristol Myers Squibb - BMY - close: 59.70 change: +1.47

WHAT TO WATCH:  There will be a lot of eyes on shares of BMY 
tomorrow as the company announces its 3Q earnings.  With the 
recent number of drug and biotech companies announcing decent
results BMY should do the same.  Bears will be looking for a 
breakdown below $58 but the bulls, and there could be a lot of
them, will be watching for a breakthrough of $60.  The $60
level has been huge resistance for months and the stock has been
stuck below it since March.  A technically positive note for
the bulls was the stock has conquered its 200-dma (for the moment)
and a breakout could have shorts running for cover and inspire
bulls to pull the trigger at the same time.  




---

Abbott Laboratories - ABT - close: 54.58 change: +1.53

WHAT TO WATCH:  ABT has already reported earnings this month and
the stock has been enjoying some strength as the sector(s) related
to its industry rally higher.  We like it because Monday saw the
stock breakout above major resistance at $54 while closing at its
high for the day.  Again, we debated on whether or not to add
the stock to the play list and felt that for the time being we'll
leave it to more nimble traders (but it does look tempting).







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



PremierInvestor.net Newsletter                 Monday 10-22-2001
                                                   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/2223_2.asp
=================================================================

In section two:

Net Bulls
  New Bullish Play: Protein Design Labs - PDLI

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 New Plays
===============

  --------------------
  New Bullish Plays
  --------------------

Protein Design Labs - PDLI - close: 30.75 change: +0.75 stop: 26.50

Company Description:
Protein Design Labs, Inc. is a leader in the development of 
humanized antibodies to prevent or treat various disease 
conditions. PDL currently has antibodies under development for 
autoimmune and inflammatory conditions, asthma and cancer. PDL 
holds fundamental patents in the United States, Europe and Japan 
for its antibody humanization technology. 
(source: company press release)

Why We Like It:
If you've read the wrap this evening (10/22/01) then you know 
that the biotech sector appears to be leading the tech stocks and 
is poised to tackle its old high back in August.  With the 
leading biotech stocks in varying stages of a developing rally 
we're selecting PDLI as one with strong relative strength but a 
stock that still has room to play catch up to the leaders.  Plus, 
unlike some of the other biotech stocks we could be playing, PDLI 
has broken through price resistance ($30) and technical 
resistance (200-dma, 29.71).  With the current bullish set up our 
short-term target is $35.  However, if the biotech sector can 
fuel a prolonged rally then we could foresee even higher targets 
for PDLI.  The potential challenge with this play is the 
volatility that affects biotech equities.  We would prefer to 
play with a tight stop just under $29 but it doesn't seem prudent 
and odds of being prematurely stopped out are high.  Instead 
we're going to start the play with a wide stop of 26.50 but only 
due to our lofty expectations of a +$35 share price (higher risk 
for higher reward).  Conservative traders should note that PDLI 
did encounter some resistance at $31 back in late August and the 
lid still exists as evidenced by today's high.  A close over this 
level may be your entry point but it could eat into any short-
term profits.  Traders looking to buy the dip can potentially 
look for a bounce near the $29 level if shares fall below $30 
again.  Earnings are not expected until sometime in the first 
week of November (unconfirmed).

Picked on October 22nd at $30.75
Gain since picked:         +0.00
Earnings Date              11/05 (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 

ASBC    Associated Banc-Corp       35.01     +0.88
BRP     Brasil Telecom             29.44     +1.94
NSI     National Service           18.95     +0.53
AMFI    Amcore Financial Inc       22.29     +0.89
PVA     Penn Virginia Corp         36.30     +1.08

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

FMKT    Freemarkets Inc            18.46     +1.75
TERN    Terayon Comm               10.51     +1.29
GCOR    Genencor Intl              12.15     +1.79
TUNE    Microtune Inc              16.11     +1.11
ALGN    Align Tech Inc              5.59     +1.04

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

MMM     Minnesota Mining & MFg     107.39     +5.22
PX      Praxair Inc                 48.19     +3.27
DOV     Dover Corp                  34.27     +1.24
DGX     Quest Diagnostics Inc       68.30     +4.95
CERN    Cerner Corp                 59.30     +3.28

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

SBC     Sbc Comm.                  41.40     -2.24
ENE     Enron Corp                 20.65     -5.40
LXK     Lexmark Intl               44.77     -5.58
HRB     H&R Block                  35.70     -1.19
CTXS    Citrix Systems             21.08     -4.14

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

RL      Polo Ralph Lauren Corp     21.40     -0.53
AMWD    American Woodmark          37.19     -1.06




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