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Daily Newsletter, Thursday, 10/25/2001

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PremierInvestor.net Newsletter               Thursday 10-25-2001
                                                  section 1 of 2
Copyright  2001, All rights reserved.
Redistribution in any form is strictly prohibited.

The entire newsletter is best viewed in COURIER 10 for alignment
=================================================================
To view this email newsletter in HTML format with imbedded
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In section one:

Market Wrap: Yeah, baby yeah!
Market Sentiment: All Aboard!
Play-of-the-Day: Playing the Breakout


-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
       10-25-2001           High     Low     Volume Advance/Decline
DJIA     9462.90 +117.30  9462.90  9177.90  1.3 bln   1902/1189
NASDAQ   1775.47 + 43.93  1775.51  1683.61  2.3 bln   2155/1403
S&P 100   565.62 +  6.93   565.62   548.02   Totals   4057/2592
S&P 500  1100.09 + 14.89  1100.09  1065.64
RUS 2000  435.96 +  8.31   435.97   422.20
DJ TRANS 2239.99 + 18.98  2241.35  2175.10
VIX        31.36 -  1.51    35.08    31.18
VXN        56.93 -  4.98    64.20    56.93
TRIN        0.82
Put/Call Ratio       .93
-----------------------------------------------------------------

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

Yeah, baby yeah!

That's what PremierInvestor.net subscribers are saying after 
today's action.  What looked like a dismally bearish day early on 
was reversed into bullish.  It never ceases to amaze me on just 
how quickly things can change.  At the same time, I'm also amazed 
(yet not that surprised) of what unfolded to get us where we are 
today.

Did the biotech's lead the advance?  Yes indeed.  How did 
Tuesday's bullish profile of Protein Design Labs (NASDAQ:PDLI) 
do?

Protein Design Labs Chart - 




Austin Powers liked to flash a big toothy grin and say "Yeah, 
baby yeah" when he saw something he liked.  It's amazing how 
close today rally came to our 38.2% retracement level of $34.30.  
I get the distinct feeling that when the Biotech Index (BTK.X) 
broke above its 200-day moving average at 538 they simply backed 
off their offers in many biotech stocks and watched them rally.  
Hey!  Whey sell PDLI at $31 if I'm assessing risk to $34 from the 
sell side?  From the bullish traders perspective, we now want to 
assess what our risk in the stock is.  Our original risk was to 
$26.50 as outlined in the trade, which is right near the rounding 
50-day moving average.  We want to remove some of the risk at 
this point and move up our stop!  Different subscribers have 
different wants/needs and desires for profit, but a trader that 
simply looks to book short-term gains when he/she gets them is 
welcome to it.  I would never criticize a trader/investor for 
selling a stock and taking a profit.  (see tonight play update 
for raised stop.)

One of our "associated" stocks we wanted to keep an eye on was 
shares of Gilead Sciences (NASDAQ:GILD).  Our original thinking 
was that GILD was a leader in the biotechs and we wanted to 
monitor its progress from Tuesday's close of $66.10 to see if 
there is continued strength in that stock and to get a pulse on 
how aggressive the market might be in the biotechs.  Our thinking 
was, "the more bullish GILD, the more bullish PDLI could get, but 
PDLI offered more upside near-term."  We wanted the leader to 
continue to lead and pull a strengthening stock like PDLI along 
for the ride!  We've gotten the PDLI part, but need to monitor 
the other portion of the equation.

Gilead Sciences Chart - 




I like the bullish close on Gilead (NASDAQ:GILD) and it shouldn't 
surprise us that PDLI has shown a much greater gain than GILD 
since Tuesday's close.  Bears had their chance to cover this one 
today and tomorrow I would love to see BIG volume and a gap 
higher in GILD at the open of trading.  I think that would bode 
well for our bullish trade in PDLI.  If however, we see shares of 
GILD just sitting around the $69 level, then a short-term trader 
in PDLI that is happy with their profit might lock in their gains 
and move onto another trade.

Veritas!

If subscriber's felt that PDLI had a nice move higher today, then 
our "jump" to a technology play in the software sector for shares 
of Veritas Software (NASDAQ:VRTS) undoubtedly got their 
attention!  

Veritas Software Chart - 





The Veritas Software (VRTS) trade is a tricky one from here.  The 
trade was set-up more from a "lack of selling" and good near-term 
support from retracement than anything.  I tried and tried 
finding consistent levels that we could tie to, but just haven't 
been able to.  However, what we found was a stock that seemed to 
have so many levels of support nearby and levels of resistance 
far away that the trade simply looked very good as risk/reward 
was so favorable.  Relative strength for the stock and the group 
was improving relative to the S&P 500 and the upside to past 
resistance of $35.70 was worth the risk, especially considering 
the performance we were getting out of fellow software stocks 
Symantec (NASDAQ:SYMC).

If you think we're using "domino" theory for VRTS and SYMC like 
we were on PDLI and GILD you're onto us!  So far this "domino 
theory" looks to be working and we're going to try and continue 
playing it until it fails us.

What we notice today is that we're getting a pretty good gain 
going in SYMC and now we've got one in VRTS.  VRTS is in what I 
consider a very early recovery stage, but is dependent on the 
broader market continuing to rally.  Symantec (SYMC) was up just 
2.6% and you can see how shorts in VRTS are probably very eager 
to lock in gains, or those that just shorted are eager to cut a 
loss small.  Heck, shorts are in the same boat you and I are when 
trying to determine where the upside resistance is at.  Is 
resistance at $35.70 or at $40.30?

A bullish trader doesn't much care as he has a profit and can 
snug up his/her stop.  However, a bearish trader is uncertain and 
now "hopes" that the market weakens from here.  But you know what 
Jesse Livermore said in regards to hope and trading.  "When I 
have to depend on hope in a trade, I get out of it."  Today, when 
VRTS broke above yesterday's high, smart bears ran for cover as 
their risk to the upside was hard to determine.  All we did was 
take advantage of a bear's uncertainty and it worked in our 
favor!

Big day tomorrow!

If you get a chance, go back and look at some other charts of 
stocks we've talked about in recent sessions.  Look where they 
closed in relation to some of the retracement levels we've been 
talking about.  You'll find quite a few where they settled at or 
near many of those retracement levels.

We've talked about resistance on the S&P 500 and how we felt a 
"bullish" stance could be taken on a break above the 50-day 
moving average of 1,100.  Today's close on the S&P 500 was?   You 
guessed it.  1,099.48!  Pretty darned close to 1,100.

We lost a couple more trades from our PremierInvestor.net 
"hypothetical" portfolio today.  Both of our "healthcare" stocks 
went poof!  Locked in a nice 5% gain on the Biomet (NASDAQ:BMET) 
trade.  We had set a stop purely based on a 5% gain from entry 
level and did not use technical analysis to really set the stop.  
Last nights observations had us leaning toward the "market might 
not be so defensive" and healthcare was a more defensive sector.  
Biomet (BMET) got stopped out in the early part of the session 
based on broader market weakness, then turn higher and closed 
strong.  However, willing to just watch this one for a while and 
use it to get a feel for sector.  It's definitely a strong stock 
in the sector and worth keeping an eye on.

By day's end, those stock still profiled as "bullish" in the play 
list are really starting to distance themselves from the 
"bearish" list and this is not surprising.  

PremierInvestor.net "hypothetical" portfolio





Subscribers that have remained disciplined in the past couple of 
weeks should be seeing some fruits for their labor.  Yes, we've 
had some losses, but we've tried hard to keep them to a minimum.  
As you can see, the "bullish" trades still running that haven't 
been stopped out (stop listed above are from Wednesday night's 
play updates) are beginning to distance themselves from our 
"bearish" list.

This isn't surprising.  "A rising tide often times floats all 
boats."  

Isn't it interesting that today's action had us stopping out of 
two "healthcare" stocks, while our only "winner" for today on the 
bearish side was a "drug" stock in Bristol Myers Squibb 
(NYSE:BMY).  We've mentioned before how both of those groups are 
more "defensive" and the market is telling us something here.  
Yes, it is entirely possible that there will be some stocks in 
those group that do well, even thought their sectors lag.

Check tonight's "play updates" to see where we're adjusting 
stops.  Trade the plan and plan the trade.  The MARKET will take 
care of the rest.

Jeff Bailey
Senior Market Technician


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

All Aboard!
by Russ Moore

All aboard! Fear is starting to creep back into the market, but 
not the kind we’ve become accustomed too. I’m talking about the 
fear of missing the “bullish train” which has apparently left the 
station. 

Faced with a mountain of dismal economic news, the bulls were 
pushed back into a corner for the early part of the day. 
Fortified by a healthy lunch, the bulls came out charging, 
pushing the indices to solid gains across the board. The DOW 
posted a +1.3 percent gain while the NASDAQ and NDX enjoyed +2.5 
and +3.8 percent increases respectively.

Volume was also on the rise with the NYSE seeing 1.35 billion 
shares trade hands and the NASDAQ moving 2.25 billion shares. 
Winners destroyed losers by a 19/12 margin on the big board and a 
22/14 difference on the tech index.

Except for chemicals and drugs, all sectors participated in the 
upside move.

Initial jobless claims reached a ten-year high, rising 8,000 to 
504,000. September durable goods orders were expected to decline 
by -1.1 percent, instead, the data showed a drop of -8.5 percent. 
Existing home sales plunged -11.7 percent. Finally, the 
employment cost index rose +1.0 percent.

Friday will feature new home sales and Michigan Sentiment, and 
could make for another wild ride on Wall Street.

Doesn’t severe economic weakness, plus earnings season, plus 
October, equal a major drop on the markets? You might think so, 
but, we forgot to add bullish sentiment into the equation. 
Remember folks, a train takes a long time to stop once it gets 
rolling. Today’s rally saw the bullish train run right through 
the economic stop sign on its way to an as yet unknown 
destination.



VIX 
Thursday 10/25 close: 31.36


VXN
Thursday 10/25 close: 56.93


30-yr Bonds
Thursday 10/25 close: 5.29


Total Put/Call Ratio: .65


Equity Option Put/Call Ratio: .53


Index Option Put/Call Ratio:  1.75


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 36.80

Volume/Open Interest
Maximum calls: 35/52,344
Maximum puts : 33/64,324

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: 565.60

Volume/Open Interest
Maximum calls: 560/5,195
Maximum puts : 480/7,407

Moving Averages
 10 DMA  559
 20 DMA  552
 50 DMA  561
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: 1100.07

Volume / Open Interest
Maximum calls: 1100/15,979
Maximum puts :  950/21,637

Moving Averages
 10 DMA 1085
 20 DMA 1075
 50 DMA 1096
200 DMA 1206

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:  9,462.90

Volume / Open Interest
Maximum Calls: 94/22,240
Maximum Puts   92/24,300

Moving Averages:
 10 DMA  9,320
 20 DMA  9,195
 50 DMA  9,498
200 DMA 10,292

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: 559.15

Volume / Open Interest
Maximum Calls: 620/  307
Maximum Puts:  420/1,571 

Moving Averages
 10 DMA 511
 20 DMA 487
 50 DMA 490
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: 485.10

Volume / Open Interest
Maximum Calls: 570/ 503
Maximum Puts:  400/ 518

Moving Averages
 10 DMA 449
 20 DMA 425
 50 DMA 479
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: 395.92

Volume / Open Interest
Maximum Calls: 400/ 284
Maximum Puts:  400/1002

Moving Averages
 10 DMA 396
 20 DMA 395
 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)
=========================

Cisco Systems - CSCO - close: 17.74 change: +0.51 stop: 16.75

Company Description:
Cisco Systems is engaged in networking for the Internet Cisco 
Internet Protocol (IP)-based networking solutions are installed 
at corporations, public institutions and telecommunications 
companies, and are found in a growing number of medium-sized 
commercial enterprises.

Why We Like It:
With investors in a tech-buying mood we're choosing to add a 
networking stock now that the Networking sector has broken out to 
the upside above resistance near 280.  If you're going to play a 
networking stock then the first company that comes to mind is the 
king of networkers, CSCO.  We highlighted CSCO yesterday on the 
Watch List because it had traded higher and looked poised to 
breakout above the top of its bullish wedge at 17.50.  This level 
has been resistance since the 11th of October and now that its 
broken we should expect it to act as support.  What made 
Thursday's move in CSCO even more exciting is it broke out above 
the descending bearish trendline (also discussed in yesterday's 
watch list).  Recently there were rumors that CSCO had already 
made their 3Q numbers a few weeks ago and while we doubt their 
authenticity the stock could see a strong run up into its 
earnings announcement on Nov. 5th (which is a Monday).  Our 
trading strategy for CSCO would be to buy it above 17.50 but a 
dip to $17 is not out of the question (obviously a preferred 
entry point).  Thus we're going to start the play with a stop at 
16.75.  Technically we see overhead resistance at $19 but due to 
expected momentum we're going to set our short-term target at 
$20.

Picked on October 25th at $17.74
Gain since picked:         +0.00
Earnings Date              11/05 (not confirmed)







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DISCLAIMER
=================================================================

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

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

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

PremierInvestor.net Newsletter                  Thursday 10-25-2001
                                                     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/6254_2.asp
=================================================================

In section two:

Split Trader
  Closed Bullish Play: Tenet Healthcare - THC

Net Bulls
  New Bullish Play: Cisco Systems - CSCO
  Bullish Play Updates: PDLI, SYMC, VRTS

Stock Bottom / Active Trader
  Bullish Play Updates: CBRL
  Bearish Play Updates: BMY, CPN, FNM
  Closed Bullish Plays: BMET


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: 58.50 change: -0.29 stop: 57.60 

With all the major averages trading lower this morning it was no 
surprise to see the S&P Healthcare index (HCX) also trading 
lower.  It may be good news for longer-term bulls that the sector 
rebounded midday (with the rest of the market) to close back 
above its 200-dma.  Unfortunately, this intraday dip was enough 
to send shares of THC below our stop of 57.60.  Looking closer at 
THC's chart investors can see that the bounce was near the 
stock's 50-dma and near the low set on September 28th.  It could 
be a buying opportunity if you like healthcare stocks but if the 
HCX index slips below the 800 level it could pull THC back to 
$55.  

Picked on October 4th @ $ 60.22
Gain since picked:       - 2.62
Earnings Date:            10/03 (confirmed)





==================================================================
Net Bulls (NB) / Tech Stock section
==================================================================

===============
NB New Plays
===============

  --------------------
  New Bullish Play
  --------------------

Cisco Systems - CSCO - close: 17.74 change: +0.51 stop: 16.75

Company Description:
Cisco Systems is engaged in networking for the Internet Cisco 
Internet Protocol (IP)-based networking solutions are installed 
at corporations, public institutions and telecommunications 
companies, and are found in a growing number of medium-sized 
commercial enterprises.

Why We Like It:
With investors in a tech-buying mood we're choosing to add a 
networking stock now that the Networking sector has broken out to 
the upside above resistance near 280.  If you're going to play a 
networking stock then the first company that comes to mind is the 
king of networkers, CSCO.  We highlighted CSCO yesterday on the 
Watch List because it had traded higher and looked poised to 
breakout above the top of its bullish wedge at 17.50.  This level 
has been resistance since the 11th of October and now that its 
broken we should expect it to act as support.  What made 
Thursday's move in CSCO even more exciting is it broke out above 
the descending bearish trendline (also discussed in yesterday's 
watch list).  Recently there were rumors that CSCO had already 
made their 3Q numbers a few weeks ago and while we doubt their 
authenticity the stock could see a strong run up into its 
earnings announcement on Nov. 5th (which is a Monday).  Our 
trading strategy for CSCO would be to buy it above 17.50 but a 
dip to $17 is not out of the question (obviously a preferred 
entry point).  Thus we're going to start the play with a stop at 
16.75.  Technically we see overhead resistance at $19 but due to 
expected momentum we're going to set our short-term target at 
$20.

Picked on October 25th at $17.74
Gain since picked:         +0.00
Earnings Date              11/05 (not confirmed)





===============
NB Play Updates
===============

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

Protein Design Labs - PDLI - cls: 34.17 chg: +3.05 stop: 30.75 *new*

Regular readers know that we had suspected the biotechs would be 
leaders in the market and today really proved it.  Even when the 
Dow and the Nasdaq opened lower this morning the Biotech index 
(BTK) showed very little weakness and traded higher most of the 
day.  By the close the BTK had set a new three-month high and 
bested the 550-resistance level set back in August.  The sector 
also managed to close above its 200-dma at 538.  You can imagine 
that the 5.7% gain in the sector probably boosted a lot of 
individual biotech stocks.  PDLI enjoyed a 9.8% gain today but 
still allowed traders to buy the intraday dip towards $30 before 
it took off.  Odds are good that today's big move was fueled with 
short covering and the question is whether there will be enough 
short covering tomorrow to outweigh any profit taking.  Our 
original write up on Monday said our first short-term target was 
$35.  Our Tuesday update suggested that traders buy the dip at 
$29 and target the top PDLI's trading channel at 33.50.  We've 
almost achieved our first target and exceeded the second update's 
target.  Actually, those traders that did buy near the 29.21 
close almost have a 17% gain.  The newsletter is only up 3.42 
points or just over 11%.  At this level jumping into PDLI is a 
tough call.  Traders who are already in should consider taking 
some profits off the table.  It's entirely possible that the 
stock trades back to the bottom of its channel, which would put 
it back near $30.  We're not expecting this to occur but shares 
stopped right at a key retracement level and we still have 
potential price resistance at $35.  If shares pull back tomorrow 
we would hope there might be more buying interest at 32.50 or 
even 31.50.  Either might be a potential entry point for new long 
plays but we'd look for a bounce first.  An alternative move 
would be for aggressive traders to play the momentum with a close 
over $35.  We're looking at the next level of serious overhead 
resistance between $38.50 and $40.00.  Take note that we're only 
moving our stop up to 30.75, which is our cost.  We believe that 
the biotechs will continue to lead the tech rally but want to 
allow for volatility.  In the news today PDLI management 
announced their earnings date for November 1st, 2001, which is a 
week from today.  We suspect the report will come after the bell 
but we don't know at this time.

Picked on October 22nd at $30.75
Gain since picked:         +3.42
Earnings Date              11/01 (confirmed)




---

Symantec Corp. - SYMC - close: 59.25 change: +1.54 stop: 58.95 *new*

Thursday's session made it six positive days in a row for SYMC.  
The stock has been a real leader in the software group and the 
newsletter is currently up 5.37 points or 9.9% since the 11th of 
October.  The launch of MSFT's XP platform probably brought some 
attention to the sector and the broad tech lead rally in the 
markets also helped buying momentum in the group.  Bulls should 
be encouraged that software giant MSFT closed above its 200-dma 
today.  Yet tomorrow will be key to see if MSFT can hold on to 
this new position above resistance.  We are highlighting MSFT 
because of its tremendous weight in the software industry and a 
good or bad day can affect investors in SYMC.  Another positive 
note for SYMC bulls was a new rating from Salomon Smith Barney.  
The broker felt that SYMC should continue to move based on strong 
growth of its anti-virus franchise.  Their analyst put a $65 
price target on the stock.  We think they are being rather 
conservative but the stock has seen a tremendous move from its 
September 27th low of 31.54.  Traders should take note that we 
have raised our stop to an extremely tight 58.95.  Why so tight?  
We're concerned that SYMC looks overextended and needs to pull 
back some and digest these gains.  I know that sounds like 
blasphemy but shares have been climbing almost non-stop for about 
a month.  We would not consider new positions at this time.  
However, aggressive traders can look for a break above the $60 
level as the next hurdle.  If the stock did pullback we might 
look for support at $55 or near $53.00 to $52.50 (its 10-dma is 
$53.00).  Why not close the play out right instead of using such 
a tight stop?  We want to give SYMC the benefit of the doubt and 
if it chooses to surprise us by trading higher on Friday then 
we'll take it.  Our other software play, VRTS, while up big 
today, is less extended than SYMC.

Picked on October 11th at $53.88
Gain since picked:         +5.37
Earnings Date              10/17 (confirmed)




---

VERITAS Software - VRTS - close: 34.85 change: +3.33 stop: 30.00 *new*

Wow!  We knew VRTS looked promising but we didn't expect to 
achieve our short-term target in one day.  Actually, we didn't 
reach our target of $35.  The intraday high was only $34.90 but 
by the close of trading shares of VRTS were still up over 10%.  
If you read the SYMC update you know that MSFT helped power the 
move in the markets and the software index.  Traders need to keep 
an eye on MSFT since it is one of the biggest components in both 
the Nasdaq and the GSO.X.  With such a powerful move in VRTS 
we've obviously seen some short covering.  Much like our comments 
in PDLI, the question is will tomorrow's short covering be enough 
to overpower any profit taking from the one-day gain?  Thursday's 
move is a huge technical breakout and once shares conquer the $35 
level we would not expect serious resistance until $40 to $41.  
The good news is that VRTS produced a small gap down this morning 
and traded to $29.25 before buyers stepped in and bought the dip.  
If shares dip tomorrow we would be looking for support near 
$32.50.  A bounce there may be an entry point if you missed the 
dip today.  Please note we've raised our stop to $30.00 but 
profitable traders should consider taking profits off the table 
with a 10% move.

Picked on October 22nd at $31.52
Gain since picked:         +3.33
Earnings Date              10/16 (confirmed)






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

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

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

CBRL Group Inc - CBRL - close: 25.58 change: +0.38 stop: 24.60 *new*

After the strong breakout last Friday and Monday we had expected 
shares of CBRL to suffer a little profit taking and allowing new 
buyers to jump in on a dip.  The stock has dipped a little from 
its Monday close but someone is buying it above $24.60.  Today's 
positive move in the markets helped CBRL set a new 52-week high.  
If this is how the bulls and bears are going to play the game in 
CBRL then new longs can look for positions on dips between 25.20 
and 24.70.  We've moved our stop up to 24.60 to protect capital 
and ensure a small profit.  With this new stop a dip makes an 
attractive opportunity for a relatively low risk trade.  
Currently we are up $1.22 or about five percent.

Picked on October 12th at $24.36
Gain since picked:         +1.22
Earnings Date              11/21 (not confirmed)





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

Bristol Myers Squibb - BMY - close: 56.52 change: -0.42 stop: 60.25

As the war at home wages on against bioterrorism and Anthrax the 
U.S. government has been talking to top drug companies about 
antibiotics, flu vaccinations and research.  BMY is one of the 
companies the U.S. is talking to.  News today shed light on some 
patriotic efforts from BMY and its willingness to help fight this 
new war at home.  BMY said it would offer anyone with a confirmed 
case of anthrax or exposure to anthrax no-cost supplies of Tequin 
if the gov't asked.  BMY also said that should demand for Tequin 
exceed its supply it would consider sharing its license on the 
drug's manufacture.  BMY also offered up to two dozen scientists 
to do anti-bacterial research.  With all of these noble efforts 
on the part of the company it almost seems a shame the markets 
continue to sell the stock.  The drug index appeared to be hit 
hard by the market drop this morning.  The DRG.X fell to its 
October support level of 388 before bouncing back to close 
relatively even on the day.  BMY faired a little worse dropping 
3/4 of a percent after finding support at $56.  We continue to 
believe that the drug sector will under perform the market if the 
investors feel less of a need to own defensive stocks.  Traders 
looking for a new entry can watch for a failed rally back at $58 
or a drop under $56.

Picked on October 23rd at $58.02
Gain since picked:         +1.50
Earnings Date              10/23 (confirmed)




---

Calpine Corp - CPN - close: 23.80 change: +0.15 stop: 25.15

Shares of CPN started the day with a rather volatile swing with a 
drop to 22.66 followed by an immediate jump to 24.50.  After 
setting the intraday low and high the stock drifted lower to 
$23.00 before bouncing with broader markets.  The volatility was 
due to the company's earnings report that came out before the 
bell.  CPN bested estimates by a penny and announced that 
earnings had almost doubled from the year before.  The company 
has been rapidly expanding its stable of power plants but saw its 
stock price suffer when wholesale electricity prices plunged.  We 
are encouraged by CPN's performance or rather under performance 
on a day where both the Dow Jones and the Nasdaq post significant 
gains, especially after CPN's positive earnings announcement.  
Our trading strategy remains the same with a failed rally at $25 
or the stock under 23.40 as potential entries to go short.  We do 
urge caution if the stock trades higher as there may be renewed 
interest after the earnings report but if Thursday's trading was 
any indication the bears are probably going to do okay.

Picked on October 24th at $23.65
Gain since picked:         -0.15
Earnings Date              10/25 (confirmed)




---

Fannie Mae - FNM - close: 80.35 change: +0.80 stop: 83.50

We are seeing an interesting development as 30-year bond yields 
have slipped the last couple of days so has FNM.  Wednesday the 
stock had closed below its 200-dma and we thought for sure bears 
would lean on it harder come Thursday.  The stock did go negative 
this morning but someone was buying it at 78.80 as the intraday 
low was hit several times.  It looks like the 200 point rally in 
the Dow Jones in the last couple of hours of the day helped 
propel FNM higher and back over the $80 level (and its 200-dma 
again but just barely).  We are turning more cautious on this 
short play even though the stock is still producing lower lows 
and lower highs since the 17th of October.  Confirm stock 
direction before taking any new positions.

Picked on October 19th at $80.99
Gain since picked:         +0.64
Earnings Date              10/15 (confirmed)





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

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

Biomet Inc - BMET - close: 33.15 change: +0.88 stop: 31.87 

In a cruel twist of fate we have been outsmarted by BMET's own 
leadership.  Yesterday we wrote a special update because we felt 
the healthcare sector was slowly deteriorating and BMET would 
eventually succumb to a weakening sector.  We still feel the 
healthcare sector will likely under perform if the markets 
continue to mount an extended rally but BMET displayed its 
leadership with an intraday high of 33.74 on Thursday.  This 
would have been a high of 3.39 points or 11% for our bullish 
play.  Unfortunately, with the broader markets opening lower, 
BMET was no standout and traded lower to 31.66 thereby stopping 
us out at 31.87.  We shouldn't be complaining.  After holding the 
play for the better part of a month we netted a 5% move.  Long-
term bulls should keep their eye on BMET but expect resistance at 
$34 (notice the high today?).  If the stock continues to lead it 
might see a pullback to $32.35 to $32.50 as new support.

Picked on October 2nd at $30.35
Gain since picked:        +1.52
Earnings Date             09/20 (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 

UTX     United Technologies        54.47     +1.19
APC     Anadarko Petroleum         57.77     +1.68
UPC     Union Planters Corp        42.08     +0.66
ZION    Zions Banc                 47.61     +1.36
GR      Goodrich Corp              22.08     +1.42

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

SANM    Sanmina Corp               17.05     +2.21
NTAP    Network Appliance          13.79     +1.01
AMCC    Applied Micro Circuits     13.76     +1.78
PMCS    Pmc-Sierra Inc             18.69     +1.71
PRGN    Peregrine Systems          16.49     +1.83

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

DNA     Genentech Inc              53.69     +4.49
EDS     Electronic Data Sys        64.99     +2.99
XLNX    Xilinx Inc                 33.30     +4.15
CHIR    Chiron Corp                52.30     +5.30
VRSN    Verisign                   53.34     +3.89

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

NFS     Nationwide Fncl Srvc       34.66     -2.61
LAF     Lafarge North America      34.54     -2.10
CBT     Cabot Corp                 33.92     -7.48
OSI     Outback Steakhouse         26.95     -1.05
SGR     Shaw Group Inc             27.19     -2.80

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

DD      DuPont                     40.30     -0.99
HDI     Harley-Davidson            47.00     -1.10
PTMK    Parthmark Stores           24.05     -0.45
DRD     Duane Reade Inc            28.82     -1.99



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