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Daily Newsletter, Wednesday, 10/24/2001

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PremierInvestor.net Newsletter              Wednesday 10-24-2001
                                                  section 1 of 2
Copyright  2001, All rights reserved.
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In section one:

Market Wrap: House passes economic stimulus package
Market Sentiment: Techs remain hot.
Play-of-the-Day: We Are Ready to Rotate
Watch List: CSCO, MSFT, QLGC, GE, NOK

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U.S. Market Numbers
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MARKET WRAP  (view in courier font for table alignment)
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      10-24-2001          High     Low     Volume Advance/Decline
DJIA     9345.62 +  5.54  9388.86  9278.70 1.34 bln   1359/1733
NASDAQ   1731.54 + 27.10  1763.17  1697.69 1.86 bln   1931/1646
S&P 100   558.69 -  0.36   561.94   556.55   Totals   3290/3379
S&P 500  1085.20 +  0.42  1090.26  1079.98             
RUS 2000  427.65 +  0.28   428.00   426.33
DJ TRANS 2221.01 - 40.98  2281.85  2216.04
VIX        32.87 -  0.32    34.49    32.31 
VXN        61.91 -  1.82    64.90    61.91
TRIN        1.01 
Put/Call    0.49
-----------------------------------------------------------------

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

House passes economic stimulus package

President Bush and House Republicans achieved a narrow victory 
late this afternoon, passing a $100 billion economic stimulus 
bill weighted toward rebates and tax cuts for businesses and 
individuals.  The final showdown for passage will have to come 
from the Senate, where the Democrats who hold the majority have 
called for fewer tax cuts and more spending on unemployment, 
health benefits and infrastructure projects.  

If subscribers thought they witnessed a good battle between the 
bulls and bears today regarding the S&P 500 trading around the 
1,084 level, you haven't seen anything until you witness 
Republicans arguing for tax cuts vs. Democrats arguing for social 
programs!

S&P 500 Index Chart - 10-minute interval




Sometimes it amazes me just how closely the market will actually 
key on a level.  While our techniques of "fitting retracement" 
are unconventional to some subscribers, it sure looks like the 
bulk of market participants are keying on our 1,082 level of 
retracement.  The 10-minute interval really has us feeling good 
about our analysis that the MARKET is definitely "neutral" and 
very range-bound between the 1,090 and 1,080 levels.  The longer 
we stay bound within this range, then pressure and tensions will 
build in anticipation of a break (up or down).  

I like to make some bets on both the bullish and bearish side of 
things, that way, when the break comes, I'm on board and ready to 
ride the wave that pushes things in one direction or the other.  
In a range bound market like we're in right now, it becomes 
important to be monitoring relative strength and trying to 
identify key action points.

It's pretty difficult to add new plays in the evening in this 
market environment as you never know what is going to happen 
overnight, let alone the next day. 

Last night I talked about how we needed to add to new bearish 
plays to our Current Play List on PremierInvestor.net as we 
wanted to get our tracked portfolio back to a more "neutral" 
stance as it relates to bullish and bearish plays.

Today we lost two more bearish plays, even though we just added 
two new bearish plays last night.  One that we lost in Altera 
Corporation (NASDAQ:ALTR) "semiconductor" was one of those added 
today.  We had a tight stop set on the position at $21, but 
that's all the amount we wanted to risk on the stock as it 
relates to our portfolio management.

Altera Corporation Chart - 




ALTR and the S&P 500 for that matter didn't cooperate for a 
bearish trader today.  However, we'll keep an eye on this one in 
coming sessions.  Volume was anemic today, with just 5.8 million 
shares traded.  If the stock continue to rally to our 61.8% 
retracement level on light volume then we think bears will be 
back and looking to try and duplicate the most recent decline 
from the $23.24 level and that nasty looking downward trending 
50-day MA.  Relative to the S&P 500, this one is weak and $23 
seems to have been a selling point in past sessions.  Today's 
trade was set up with the thought that a weaker S&P 500 and an 
ALTR break below retracement near $20 would have the stock 
falling rather sharply as market participants assessed risk to 
$16.40.  Unfortunately, that scenario did not come to fruition.

Bristol Myers Squibb - 




We had a much better trade setup in today's Play of the Day in 
shares of Bristol Myers Squibb (NYSE:BMY) "drugs" than we may 
have had in ALTR.  It's pretty evident from the above chart that 
there just hasn't been enough buyers to outstrip sellers at the 
$60 level.  Tomorrow a trader holding BMY short/put would love to 
see a break below the $56.67 level on BIG volume.  A similar 
setup was recently experience on September 19th, when BMY opened 
for trading at $56 and fell to a session low of $52.72.  While 
we're pretty sure that the decline in BMY from September 19th - 
September 24th was due to the broader market reaction to the 
terrorist attacks, this stock looks to have some downside once 
again.

Interesting, yet concerning

I like to make observations based on sectors and try to 
understand just what the market may be telling us in regards to 
today's market action.

Today we saw technology stocks put in some good performance to 
the upside.  That usually doesn't happen in a "defensive" market 
environment.  The drug/pharmaceutical stocks like Bristol Myers 
(BMY) are considered more "defensive" in nature and today's 1.8% 
decline in BMY sure doesn't look like a defensive market posture.  
One might say today's downside action looks more like a market 
getting aggressive than it does defensive.

Why is this concerning?  Two of our bullish plays in the play 
list are "healthcare" related and I consider them more 
"defensive" stocks based on their sector association.  

In a range bound market, we need to be cognizant of potential 
sector rotation.  Today's 3.3% decline in Tenet Healthcare 
(NYSE:THC) "healthcare" was somewhat offset by the addition of 
our bearish play in shares of BMY.  However, our bullish play in 
Biomet (NASDAQ:BMET) "healthcare" managed to rally back 2.28% and 
finish right at our 19.1% retracement bracket of $32.31.  Make 
sure you check tonight's BMET play update as we're raising our 
stop to try and help assure subscribers a profit.  If the stock 
wants to continue higher to 0% retracement of $34.36, then we'll 
give it a chance!  You can view recent comments regarding the 
technicals for BMET in Monday's wrap.

Jeff Bailey
Senior Market Technician


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

Techs remain hot.
by Russ Moore

Techs remain hot. The DOW struggled for much of the session 
thanks to a less than rosy picture painted by ATT, and a warning 
by Eastman Kodak. The blue chip index closed with a minimal gain 
of +0.1 percent. The NASDAQ was a different story however, 
spending a mere 30 minutes in the red before reversing course and 
heading for a gain of +1.6 percent. The NDX was very strong, 
gaining +2.9 percent on the day.

The upside move on the tech index was powered by solid gains in 
the networking, software, and chip sectors. The semiconductor 
advance was most surprising, given the latest release from SEMI 
(Semiconductor Equipment and Materials International). The report 
showed orders for chip equipment in North America had slipped 11 
percent in September due to weakness in corporate and consumer 
spending. It appears the tech bulls are wearing earplugs.

Volume was steady with 1.32 billion shares trading on the big 
board and 1.86 billion moving on the NASDAQ. Market breadth was 
mixed, with losers upstaging winners by a 17/14 count on the 
NYSE, and winners outperforming losers on the tech side by a 
margin of 19/16.

Broader markets saw bank, biotech, drug, forest and paper, 
insurance and gold sectors in the green. 

The Fed’s Beige book turned out to be a non-event. The report on 
economic conditions concluded that the long-term impact of 9/11 
events is difficult to assess.

Tomorrow’s data includes initial jobless claims, durable goods 
and existing home sales. 

The markets appear to be setting up for a bust out move that will 
undoubtedly come on the next major news bite. Whether that news 
comes from our overseas battle or economic/corporate news on the 
home-front remains to be seen. 


VIX 
Wednesday 10/24 close: 32.87


VXN
Wednesday 10/24 close: 61.91


30-yr Bonds
Wednesday 10/24 close: 5.34


Total Put/Call Ratio: .55


Equity Option Put/Call Ratio: .48


Index Option Put/Call Ratio:  1.60


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 35.38

Volume/Open Interest
Maximum calls: 35/49,000
Maximum puts : 33/63,889

Moving Averages
 10 DMA 34
 20 DMA 32
 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: 558.69

Volume/Open Interest
Maximum calls: 560/5,001
Maximum puts : 480/7,257

Moving Averages
 10 DMA  558
 20 DMA  550
 50 DMA  562
200 DMA  622

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: 1085.20

Volume / Open Interest
Maximum calls: 1100/15,983
Maximum puts :  950/21,963

Moving Averages
 10 DMA 1085
 20 DMA 1070
 50 DMA 1097
200 DMA 1207

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:  9,345.62

Volume / Open Interest
Maximum Calls: 94/22,230
Maximum Puts   92/23,795

Moving Averages:
 10 DMA  9,314
 20 DMA  9,156
 50 DMA  9,515
200 DMA 10,299

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: 528.88

Volume / Open Interest
Maximum Calls: 520/  242
Maximum Puts:  460/1,609 

Moving Averages
 10 DMA 505
 20 DMA 482
 50 DMA 489
200 DMA 538

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: 460.85

Volume / Open Interest
Maximum Calls: 570/ 503
Maximum Puts:  460/ 626

Moving Averages
 10 DMA 448
 20 DMA 419
 50 DMA 481
200 DMA 584

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: 396.12

Volume / Open Interest
Maximum Calls: 400/ 224
Maximum Puts:  400/1002

Moving Averages
 10 DMA 396
 20 DMA 394
 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 (Bearish)
=========================

Calpine Corp - CPN - close: 23.65 change: -1.98 stop: 25.15

Company Description
Calpine Corporation, based in San Jose, Calif., is dedicated to 
providing customers with reliable and competitively priced 
electricity. Calpine is focused on clean, efficient, natural gas-
fired generation and is the world's largest producer of renewable 
geothermal energy. Calpine has launched the largest power 
development program in North America. To date, the company has 
approximately 34,900 megawatts of base load capacity and 7,600 
megawatts of peaking capacity in operation, under construction, 
pending acquisitions and in announced development in 29 states, 
the United Kingdom and Canada. (source: company press release)

Why We Like It:
If you believe that the markets are going to continue to maintain 
a bullish posture for the immediate future then it makes sense 
that money will rotate out of defensive sectors like healthcare, 
drugs, consumables and energy.  Doing our own research we have 
noticed that a lot of second tier (or lower) healthcare companies 
have been getting hammered lately.  So have several energy 
companies.  If the money is going to be leaving the energy sector 
then we're going to try and capitalize on it with a short play.  
Why are we choosing Calpine?  Technically speaking the stock has 
been in a long-term downtrend ever since it broke under support 
of $50 back in late May.  Using regression channel analysis chart 
readers can see that the stock has been consolidating sideways 
the last few weeks only so long as it took for the shares to 
trader near the top of its descending channel.  The recent 
overhead resistance has been bolstered by the 50-dma.  Today's 
drop in price put the stock below mild support at $25 and below 
what should have been stronger price support at $24.  A glance at 
the point-and-figure chart shows today's move produced another 
sell signal as well.  On top of it all a fellow energy stock, 
Enron (NYSE: ENE),an oil and electricity company, has been 
getting flattened and the worst of it could be summed up in 
"questionable" activities by management.  Now is completely 
unfair to paint CPN with the same stroke investors are using on 
ENE but all the negative press doesn't help.  

How do we trade CPN?  First and foremost you need to wait and see 
what the company says on its earnings announcement expected 
tomorrow.  Analyst estimates are for 87 cents a share.  The good 
news is the report is due out before the bell.  We would listen 
to any pre-market comments about where the stock is trading and 
move from there.  Obviously, if the stock is trading much higher 
we would wait and not initiate any short positions until the down 
trend appeared to return.  We're going to start the play with a 
stop at 25.15.  Keeping this in mind, any failed rally up to $25 
may be a good entry point to go short and limit your exposure.  
If you'd rather see confirmation of the move then look to see the 
stock trade under today's low of 23.40.  Our short-term target is 
$20, which would produce a 15% move.  Longer-term the bottom of 
the regression channel is closer to $15 but at this time we feel 
that is too optimistic or pessimistic depending on your 
perspective.  

Picked on October 24th at $23.65
Gain since picked:         +0.00
Earnings Date              10/25 (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.

---

Cisco Systems - CSCO - close: 17.23 change: +0.82

WHAT TO WATCH:  The networking sector was one of the leaders in
Wednesday's tech rally.  Shares of CSCO gained almost five percent
and closed right at overhead resistance.  We've mentioned the price
resistance at $17.50 before but some of you may also recognize that
Tuesday's and Wednesday's highs are dangerously close to the 
descending bearish resistance line.  How do we know that?  Draw
a trendline from May's intraday high near $24 to touch with August's
intraday high near $21 and you'll see that an extension of that
trendline passes right through the $17.50 area.  A breakthrough of
this level will inspire the bulls to commit more money while scaring
bears to cover shorts.  




---

Microsoft - MSFT - close: 61.32 change: +0.89

WHAT TO WATCH:  Everyone knows that were MSFT goes, so goes the 
software sector.  As a large component of the Nasdaq composite as
well as component of the Dow Jones, the fate of the software behemoth
also affects the rest of the market.  The stock had been range bound
between $55 and $59 for much of October but recently traded above
this level to flirt with its 200-dma (still overhead).  The press
will be gushing over the launch of Windows XP tomorrow and while we
feel that the market tends to discount such events in advance a
little positive press couldn't hurt.  The question remains whether
MSFT's new operating system will help lift a beleaguered tech sector
and how much, if any, will it increase IT spending in corporate 
America.




---

QLogic Corp - QLGC - close: 41.75 change: +5.67

WHAT TO WATCH:  QLGC has been one stock we've been following for 
awhile.  Shares have been range bound between $35 and $40 for
days.  Today's earnings report helped the stock breakout of this
channel to post a +15% gain and close above price resistance at $40.
We think the stock can trade to $45 (its 200-dma) but a pull back
to $40 wouldn't be out of the question.




---

General Electric - GE - close: 37.08 change: -0.19

WHAT TO WATCH:  We're not recommending any trades on GE but for years
investors have used it as a proxy for the market as a whole.  Usually,
it this trick tends to work out well.  The bad news is the stock has
not bee participating in any market rally the last couple of weeks.
The stock is actually producing a bearish formation on the chart with
new lower highs sort of forming a bearish wedge.  The 50-dma has been
overhead resistance which turned back the bulls several times mid-
month.  A breakdown in GE would be a very bad sign.  Always one to 
watch.




---

Nokia Corp - NOK - close: 22.09 change: +1.09

WHAT TO WATCH:  As we scan the markets we've noticed a lot of 
overseas telecom companies have been trading higher.  While NOK
is more of a wireless and mobile phone play they are definitely
affected by the telecom woes.  The stock has been making an impressive
move higher but is quickly approaching strong resistance at $22.50.
The stock saw a lot of congestion in this area in late June and was
turned back at this level in early August.  Investors can look for
a breakout at this level or a pullback to $20 if the stock sees
profit-taking.  Short-term traders may want to jump in at a dip to
$20 and ride the move back up if it tries to retest $22.50.






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

Please read our disclaimer at:
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Copyright  2001  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.



PremierInvestor.net Newsletter               Wednesday 10-24-2001
                                                   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/6118_2.asp
=================================================================

In section two:

Net Bulls
  New Bullish Plays: Veritas - VRTS
  Closed Bearish Plays: Altera - ALTR

Stock Bottom / Active Trader
  New Bearish Plays: Calpine - CPN
  Bullish Play Updates: Biomet - BMET
  Closed Bearish Play: SunTrust Banks - STI


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

VERITAS Software - VRTS - close: 31.52 change: +2.02 stop: 28.50

Company Description:
VERITAS Software Corporation provides essential storage software 
solutions that enable customers to protect and access their 
business-critical data. The company, which was added to the 
Nasdaq-100 Index in January 1999 and to the S&P 500 Index in 
March 2000, has more than 5,500 employees in 103 offices 
worldwide, and is ranked among the world's top 10 software 
companies based on revenue and market capitalization. 
(source: company press release)

Why We Like It:
With the software index slowly making gains and today closing at 
a new relative high we thought it was time to look for another 
winner in the sector that should help lead the tech sector into 
holiday cheer.  If we look at the bigger picture the software 
group is suffering much like the chip sector.  Analysts don't see 
any significant improvement until late 2002 and many market 
pundits are surprised to see buyers stepping in with such a chasm 
of disappointing earnings growth in front of us.  No one ever 
said the markets were logical.  If the investing public and 
investing professionals are willing to look that far ahead then 
it makes sense to look for a software stock that actually has 
strong growth ahead of it.  VRTS recently announced their 
earnings (10/16) and management said revenues were up 7% for the 
quarter over last year.  Not bad in a time of such economic 
turmoil.  The disclosed that VRTS isn't bulletproof and customers 
have postponed or downsized orders.  Despite these setbacks 
management is comfortable with the 4Q estimates and still 
believes they have a shot of reaching 25% to 35% year over year 
growth.  

Short-term we like the stock because it saw a run up into its 
earnings announcement, sold off on the news the next day and has 
returned to post a new relative high.  It's possible that with 
MSFT's big XP launch tomorrow the software sector may get a 
boost.  Unfortunately, this is a double-edged sword.  If MSFT 
suffers its own "sell on the news" event it will affect the rest 
of the sector and VRTS could see a pullback.  The market usually 
discounts a lot of events like MSFT's launch in advance so we're 
not too concerned but it's a factor.  We're encouraged by the 
strong close over the $30 level and a glance at the point-and-
figure charts shows the stock on a strong up swing.  If it closes 
above $32 tomorrow the p-n-f chart would produce another buy 
signal.  Long-term the bullish price objective is north of $40 
but our short-term goal is only $35.  We're going to start the 
play with a stop at $28.50 which is below Tuesday's low.

Picked on October 22nd at $31.52
Gain since picked:         +0.00
Earnings Date              10/16 (confirmed)






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

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

Altera Corp - ALTR - close: 21.09 change: +0.89 stop: 21.00

It obviously didn't pay to be contrarian in the chip sector on 
Wednesday.  Buyers returned to the tech sector and the SOX added 
four percent today closing back above the 450 level.  Investors 
pretended not to notice that the orders for chips in N. America 
fell 11 percent in the month of September due to weak demand and 
lower corporate spending.  Industry experts commented that recent 
events have only "exacerbated" an already dismal outlook and IT 
spending will probably not recover as fast as expected.  While we 
may be frustrated about a 3.9% loss in ALTR (or 80 cents) we are 
encouraged that buyers have stepped back into the chip sector.  
If stocks can continue to rise on bad news then our optimistic 
outlook on the markets can grow stronger.  

Picked on October 23rd at $20.20
Gain since picked:         -0.80
Earnings Date              10/22 (confirmed)






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

===============
AT New Plays 
===============

  --------------------
  New Bearish Play 
  --------------------

Calpine Corp - CPN - close: 23.65 change: -1.98 stop: 25.15

Company Description
Calpine Corporation, based in San Jose, Calif., is dedicated to 
providing customers with reliable and competitively priced 
electricity. Calpine is focused on clean, efficient, natural gas-
fired generation and is the world's largest producer of renewable 
geothermal energy. Calpine has launched the largest power 
development program in North America. To date, the company has 
approximately 34,900 megawatts of base load capacity and 7,600 
megawatts of peaking capacity in operation, under construction, 
pending acquisitions and in announced development in 29 states, 
the United Kingdom and Canada. (source: company press release)

Why We Like It:
If you believe that the markets are going to continue to maintain 
a bullish posture for the immediate future then it makes sense 
that money will rotate out of defensive sectors like healthcare, 
drugs, consumables and energy.  Doing our own research we have 
noticed that a lot of second tier (or lower) healthcare companies 
have been getting hammered lately.  So have several energy 
companies.  If the money is going to be leaving the energy sector 
then we're going to try and capitalize on it with a short play.  
Why are we choosing Calpine?  Technically speaking the stock has 
been in a long-term downtrend ever since it broke under support 
of $50 back in late May.  Using regression channel analysis chart 
readers can see that the stock has been consolidating sideways 
the last few weeks only so long as it took for the shares to 
trader near the top of its descending channel.  The recent 
overhead resistance has been bolstered by the 50-dma.  Today's 
drop in price put the stock below mild support at $25 and below 
what should have been stronger price support at $24.  A glance at 
the point-and-figure chart shows today's move produced another 
sell signal as well.  On top of it all a fellow energy stock, 
Enron (NYSE: ENE),an oil and electricity company, has been 
getting flattened and the worst of it could be summed up in 
"questionable" activities by management.  Now is completely 
unfair to paint CPN with the same stroke investors are using on 
ENE but all the negative press doesn't help.  

How do we trade CPN?  First and foremost you need to wait and see 
what the company says on its earnings announcement expected 
tomorrow.  Analyst estimates are for 87 cents a share.  The good 
news is the report is due out before the bell.  We would listen 
to any pre-market comments about where the stock is trading and 
move from there.  Obviously, if the stock is trading much higher 
we would wait and not initiate any short positions until the down 
trend appeared to return.  We're going to start the play with a 
stop at 25.15.  Keeping this in mind, any failed rally up to $25 
may be a good entry point to go short and limit your exposure.  
If you'd rather see confirmation of the move then look to see the 
stock trade under today's low of 23.40.  Our short-term target is 
$20, which would produce a 15% move.  Longer-term the bottom of 
the regression channel is closer to $15 but at this time we feel 
that is too optimistic or pessimistic depending on your 
perspective.  

Picked on October 24th at $23.65
Gain since picked:         +0.00
Earnings Date              10/25 (confirmed)






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

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

Biomet Inc - BMET - close: 32.27 change: +0.72 stop: 31.87 *new*

The next scheduled update for our BMET play isn't due until 
Thursday night but we felt it necessary to explain why we are 
moving our stop up so high after having left it below the $30 
support level for the better part of a month.  Regular readers 
know how we have bemoaned the healthcare sector's inability to 
get a rally going.  Every time the bulls make headway they give 
it back the next day, etc...  Over the course of the last couple 
of weeks we've noticed several second tier (or lower) healthcare 
stocks really start to get pounded.  We've been fortunate because 
BMET has been a real leader in the sector's relative strength and 
held up very well over the market's volatility.  We're concerned 
that if the sector's internals continue to erode that eventually 
the stock will succumb to negative pressure.  What the newsletter 
has elected to do since the play was a short-term selection is 
raise our stop to help ensure a 5 percent gain.  The new stop 
will be 31.87.  As far as we're concerned this is as good as 
closing the play as we would expect shares to trade through this 
level on an intraday basis tomorrow.  However, by moving our stop 
up instead of actually closing the position we allow for the 
stock to surprise us to the upside of Lady Luck so inclines.  
Longer-term traders should consider how much risk they are 
willing to take and stick to their game plan. 

Picked on October 2nd at $30.35
Gain since picked:        +1.92
Earnings Date             09/20 (confirmed)






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

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

Suntrust Banks - STI - close: 61.16 change: +1.44 stop: 60.25 

We predicted yesterday that Wednesday's session could be a 
turning point for shares of STI.  The stock posted a strong gain 
of 2.4% and broke above resistance at the $60 level.  The last 
year has proven a tough battle for bears trying to short the 
stock on breakdowns below this level and the last two weeks only 
produced a longer fight with the same result.  The bulls have won 
(the day at least).  There is still significant overhead 
resistance between $61 and $62 but STI shareholders should be 
encouraged by the MACD actually producing a bullish crossover 
(it's very faint but it's there).  We started this play knowing 
it would be a tough battle for the bears and in the end we posted 
a loss of 40 cents.

Picked on October 12th at $59.85
Gain since picked:         -0.40
Earnings Date              10/10 (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 

DT      Deutsche Telekom           17.00     +0.74
SI      Siemens Aktkien            49.25     +2.75
FTE     France Telecom             39.42     +2.41
TMX     Telefonos De Mexico        35.30     +1.12
LEA     Lear Corp                  31.75     +0.87

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

LSI     Lsi Logic                  18.68     +1.07
NXTL    Nextel Comm                 8.69     +1.29
NTAP    Network Appliance          12.78     +1.29
ICST    Integrated Circuit Sys     17.29     +1.79
INHL    Inhale Therapeutic         18.90     +1.85

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

GENZ    Genzyme Corp               53.21     +2.62
JNPR    Juniper Networks           27.01     +3.12
CMA     Comerica Inc               47.71     +1.70
BRCM    Broadcom Corp              35.79     +4.34
CVG     Convergys Corp             28.00     +1.80

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

EPG     El Paso Corp               47.83     -2.84
DUK     Duke Energy Corp           37.12     -1.79
HCA     Hca Inc                    38.74     -2.36
WMB     Williams Companies         25.90     -2.15
COF     Capital One                45.85     -1.75

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

UCU     Utilicorp United           29.75     -1.53
PLB     American Italian Pasta     43.98     -1.46
EMIS    Emisphere Technologies     22.21     -1.39



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