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Daily Newsletter, Thursday, 11/08/2001

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PremierInvestor.net Newsletter               Thursday 11-08-2001
                                                  section 1 of 2
Copyright  2001, All rights reserved.
Redistribution in any form is strictly prohibited.

The entire newsletter is best viewed in COURIER 10 for alignment
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In section one:

Market Wrap: Stocks give back gains in final hours
Market Sentiment: Logic overcoming greed
Play-of-the-Day:  Take My Stock, Please!

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
       11-8-2001            High     Low    Volume Advance/Decline
DJIA     9587.52 + 33.15  9721.75  9558.39  1.5 bln   1681/1421
NASDAQ   1827.77 -  9.75  1888.39  1816.56  2.2 bln   1824/1789
S&P 100   576.62 +  2.98   584.49   573.64   Totals   3505/3210
S&P 500  1118.54 +  2.74  1135.75  1115.42
RUS 2000  439.06 -  1.74   446.11   438.49
DJ TRANS 2320.98 + 13.48  2335.20  2304.04
VIX        29.91 -  0.56    30.39    28.20
VXN        58.75 +  1.55    59.57    55.27
TRIN        1.09
Put/Call Ratio       .73
-----------------------------------------------------------------

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

Stocks give back gains in final hours

Stocks ended the session flat to lower by session's end, but some 
things we talked about in last night's wrap played out pretty 
close to how we thought they might today.

Dow component General Electric (NYSE:GE) gained 2.5% to close at 
$40.35.  The move above the $40 level was what I felt equity 
bulls wanted to see for a move higher in the Dow Industrials and 
the ability to close above the $40 level is a good sign near-
term.  Volume was not that impressive at 23.5 million shares, I 
would have liked to have seen something closer to the 30 million 
share level to hint of true conviction by bulls and some 
capitulation by bears.  Tomorrow's a new day and we will want to 
monitor things closely here.

We're also playing shares of Dow component Honeywell Inc. 
(NYSE:HON) in the "Non-Tech / Active Trader" section of our 
portfolio.  Shares of HON rose 2% to $31.75.  This had the stock 
edging up 1 slot to the #24 position.  I'd consider this more of 
a "bottom feeder" play in relation to the Dow stocks.

At one point during the session, the Dow traded higher by 167 
points and closed up 33 points at 9,587.  The high of the session 
came at 9,721, which was just 8 points shy of a retracement level 
we've had in place for months near 9,729.  I do think there were 
some profits being taken off the table and selling into strength.

I will make note that our Dow Industrials portfolio, benchmarked 
back to the September 10th close, shows 15 stocks (IBM, WMT, C, 
DD, MSFT, MMM, INTC, JNJ, JPM, PG, HD, HWP, GE, AA, CAT) now 
showing a gain.  GE moved up 2 slots to the #13 slot.

In last night's wrap we mentioned that is was difficult to assess 
risk/reward in shares of Dow component Intel (NASDAQ:INTC) at 
$28.29.  This stock finished down 1 penny at $28.28 after trading 
as high as $29.52.  We'll note a retracement level right at the 
$29.40 level (fitted retracement from $32.49-$16.32 has 19.1% at 
$29.40 and 38.2% at $26.31).  Any bullish trade at $29.40 would 
have trader assessing reward to $32.49 and risk to $26.31.

One commentator on CNBC was interviewing a floor trader and asked 
the question "why can't stocks hold up today?"  The floor trader 
responded that there just weren't enough buyers to push stock 
higher and profit takers were just too plentiful.  The 
commentator then seemed to feel that that explanation wasn't 
sufficient and babbled something like... "Oh yeah, that 
again, sellers outnumbering buyers" in a sarcastic tone.  

Well folks, I agree with the floor trader on his assessment 
there.  I'd also note that the S&P 500 traded right up to a 
retracement level of 1,126 that we've talked about as a level 
that was most likely a bullish target for that index.  While the 
S&P 500 Index (SPX.X) traded a high of 1,135, the close at 1,118, 
back below the brief piercing of 1,126 hints of profit taking at 
a bullish target.

S&P 500 Index Chart - 




There were some decisions that undoubtedly were made today around 
the 1,126 level.  The biggest one was most likely the question of 
current risk/reward based on the levels being traded.  For us, a 
new bullish trade in the S&P 500 at 1,126 would have a bullish 
trader targeting 1,170 and assessing risk to 1,082.  That would 
equate to $44 reward for $44 risk, or 50/50.  Those aren't the 
"best of odds" given pattern recognition dating back to April of 
this year.  

In April (very similar market environment to today) the SPX broke 
above its 50-day MA, ran to a retracement level, then pulled 
right back into the declining 50-day MA.  I've circled that area 
in pink on the above chart and it wouldn't surprise me if we saw 
some profit taking back to the 1,082 level.  After all, somebody 
bought the lows near $940 and I don't think it is unfair to think 
that some profits were taken at 1,082 and 1,126.

I'm also going to write down a note to myself that is a rather 
blunt but obvious observation.  If the market is beginning to 
factor in an economic recovery near-term, then the SPX should not 
trade much below the 1,050 level anytime soon.  After the sharp 
move higher off the September lows, the consolidation that 
occurred did not see a break below the 1,052 level.

Getting some new ideas

We all have our "system" for locating potential trading or 
investing ideas.  I have confessed in the past that I lean more 
toward the technical side of things than I do the fundamental.

Yes, I used to believe ONLY in fundamental analysis.  When I 
first started a career in the investment field, I put together a 
spreadsheet in my computer and began entering numbers.  Revenue, 
gross margins, expenses, research and development, and earnings 
and a multitude of other income and balance sheet information.  
Then I took all of those numbers and began measuring them quarter 
versus quarter, year after year and running comparables.

What ended up happening was that I was only able to focus on a 
very narrow part of the market as it took quite a bit of time to 
poor through all that financial information.  What was perhaps 
most frustrating was buying a stock that looked to have excellent 
past fundamental data and earnings estimates from analysts that 
hinted the trend would continue only to see the stock fall 30% 
before the "bad news" was disclosed by the company in an 
"earnings warning" or latest quarterly earnings announcement.

I ended up surmising that the MARKET was just smarter than any 
type of fundamental model I could put together and was about to 
call it quits.  There was just no way to win.

Then a couple of fellow brokers in the office, "Ben" and "Bob" 
turned me onto something called technical analysis.  As I look 
back, their teachings were very simplistic from what I do today, 
but nonetheless, their teachings turned on a light bulb in my 
head that still shines today.  Well... at least I think it does.

The technicals they followed were very simple.  Where is the 
stock trading versus the 50-day and 200-day moving average?  A 
stock trading above both was strong; a stock trading below both 
was weak.  If the stock was too high above both, then the stock 
was "overextended" and susceptible to a pullback from profit 
taking.  A stock that was well below both was overextended to the 
downside and susceptible to a rally as shorts locked in gains.

We also had those stocks that were trading in between their 200-
day and 50-day moving averages and those were the stocks where we 
should begin monitoring new candidates from.  Those that were 
trading below their longer-term 200-day moving averages, but 
above their 50-day moving averages were considered short 
candidates and we would get more conviction toward our 
bearishness should the stock break below its 50-day moving 
average.  Stocks that traded above their 200-day moving averages 
were considered longer-term bullish and depending on where the 
50-day moving average was in relation to current trading levels, 
we would tip the scale of bullishness accordingly.

As I "got into" technical analysis more and more, I began 
learning about volume.  Then one day, I became aware of something 
called supply and demand charting (point and figure charting) and 
the rest is history.

Now I can look at hundreds of charts every day.  Well, maybe I 
can't as I seem to be typing too much to actually look at 
hundreds of charts, but if somebody would pay me to just look at 
charts all day and put together a list of stock to buy or sell, 
I'd be a very, very happy camper.  Don't get me wrong... I love 
trying to teach, write and trade.  It would just be if I could 
talk on a phone and broadcast all my observations and thoughts as 
fast as I talk.

So what does this have to do with anything?  Well, I was looking 
around at our web site at PremierInvestor.net and imagined I 
didn't know much about technical analysis.  I went to the 
"Trading Ideas" section of the newsletter and started punching up 
some stock charts of the stocks listed there.  

I try and teach subscribers how to assess stocks based on their 
technicals.  I don't have a lot of time to be running fundamental 
models so I was interested in the "Value Plays" section of the 
newsletter.  Does the MARKET think these are values?  What kind 
of bullish signal is the stock giving?  Heck, I don't know!  So 
lets put one of the stock up against a simple test of 
supply/demand to see if it is giving any type of bullish signal.

Journal Register (JRC) - $1 and $0.50 box




Stocks that are listed in the "Trading Ideas" section of the 
newsletter are based off of some "scan" from a software program.  
A test against simple supply/demand gives us an action point for 
a break-out at $18.50, but recent breakouts have had mixed 
results.  I'd only risk 1/2 position long on the break above 
$18.50.  If the stock surges higher, then I've got a piece of the 
action.  Should the stock only trade $18.50 and I buy, then pull 
back to support at $15.50 I could then reassess things (market 
and sector) to make a decision on the remaining 1/2 position long 
and reduce my cost basis.  I'd "rate" this stock more appropriate 
for investors than for traders.  Getting two years worth of data 
on the point/figure chart tells us the stock isn't very volatile 
and more appropriate to swing trading or longer-term investing.

Jeff Bailey
Senior Market Technician


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

Logic overcoming greed
by Russ Moore

Logic overcoming greed. An early morning pop fizzled out, as 
investors decided it was time to take some profits off the table.

Overseas rate cuts by the BOE and ECB, coupled with a better than 
expected jobless claims number sent the DOW higher by +163 points 
in pre-lunch action. The blue chip index began a steady slide 
thereafter, hanging on to a gain of +0.3 percent. The NASDAQ, 
which has been the real leader over the last week, closed in the 
red with a loss of -0.5 percent. The big cap tech index (NDX) 
slipped -0.9 percent.

Volume was strong with 1.49 billion shares trading on the big 
board and 2.28 billions shares moving on the NASDAQ. Market 
breadth was positive on the NYSE with winners outpacing losers by 
a 17/14 margin. Winners and losers ended in a draw on the NASDAQ.

The tech arena was down across the board with hardware, software 
and chip sectors leading the way. Oil service, utility, and 
natural gas sectors were strong on the broader markets while 
biotech, and gold, suffered.

Jobless claims fell 46,000 to 450,000, much better than the 
501,000 forecast. That positive news was tempered by the fact 
that individuals collecting benefits rose to its highest level 
since 83’.

Tomorrow’s data will include the Producer Price Index, expected 
to come in at -0.1, and Michigan consumer sentiment, forecast at 
78.4. A significant rise, or fall, in the Michigan number (due 
out at 10:00am EST.) would have a significant impact on market 
direction.


VIX 
Thursday 11/08 close: 29.91


VXN
Thursday 11/08 close: 58.75


30-yr Bonds
Thursday 11/08 close: 4.87


Total Put/Call Ratio: .73


Equity Option Put/Call Ratio: .59


Index Option Put/Call Ratio:  1.63


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 37.75

Volume/Open Interest
Maximum calls: 35/ 61,536
Maximum puts : 33/101,829

Moving Averages
 10 DMA 35
 20 DMA 35
 50 DMA 33
200 DMA 43

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: 576.62

Volume/Open Interest
Maximum calls: 560/5,469
Maximum puts : 500/9,407

Moving Averages
 10 DMA  562
 20 DMA  560
 50 DMA  553
200 DMA  615

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: 1118.54

Volume / Open Interest
Maximum calls: 1100/18,485
Maximum puts :  950/21,889

Moving Averages
 10 DMA 1092
 20 DMA 1089
 50 DMA 1079
200 DMA 1194

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:  9,587.52

Volume / Open Interest
Maximum Calls: 94/23,783
Maximum Puts   92/19,622

Moving Averages:
 10 DMA  9,377
 20 DMA  9,348
 50 DMA  9,309
200 DMA 10,231

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: 565.52

Volume / Open Interest
Maximum Calls: 580/  525
Maximum Puts:  420/1,576

Moving Averages
 10 DMA 563
 20 DMA 537
 50 DMA 502
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: 507.45

Volume / Open Interest
Maximum Calls: 570/ 515
Maximum Puts:  420/ 774

Moving Averages
 10 DMA 482
 20 DMA 465
 50 DMA 461
200 DMA 574

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: 392.61

Volume / Open Interest
Maximum Calls: 420/ 282
Maximum Puts:  400/1000

Moving Averages
 10 DMA 391
 20 DMA 394
 50 DMA 388
200 DMA 393

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 11/02
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 
10/16/01     378,866   415,289   (36,423)   ( 6.0%)
10/23/01     377,177   413,658   (36,481)     0.1%
10/30/01     377,468   413,729   (36,261)   (0.06%)

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
10/16/01       124,568    73,779    50,789     6.3%
10/23/01       127,016    71,212    55,804     9.9%
10/30/01       123,546    71,225    52,321    (6.2%)
  
Most bearish reading of the year:  36,513 - 5/01/01
Most bullish reading of the year:  91,122 - 3/06/01

NASDAQ-100
Commercials   Long      Short      Net     %Change 
10/16/01      27,398    40,397   (12,999)   (2.7%)
10/23/01      29,920    40,358   (10,438)  (19.7%)
10/30/01      32,055    45,574   (13,519)   29.5%

Most bearish reading of the year: (15,521) - 3/13/01
Most bullish reading of the year:  (1,825) - 1/02/01

Small Traders  Long      Short      Net      %Change
10/16/01       12,901     6,893    6,008      21.7%
10/23/01       11,567     6,934    4,633     (22.9%)
10/30/01       12,725     6,475    6,250      34.9%

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 
10/16/01      25,402    10,267   15,135      3.1%
10/23/01      25,568    11,832   13,736     (9.2%)
10/30/01      25,872    12,556   13,316     (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
10/16/01       4,514    12,104    (7,590)    (13.5%)
10/23/01       4,902    11,900    (6,998)     (7.8%)
10/30/01       4,261    11,220    (6,959)      0.0%
 
Most bearish reading of the year:  (7,572) - 5/08/01
Most bullish reading of the year:   1,909  - 1/16/01


                    Small Specs               Commercials
S&P 500         (Current)  (Previous)     (Current) (Previous)
Open Interest
Net Value        +52,321     +55,804        -36,261     -36,481

Total Open
Interest %       (+26.86%)  (+28.15%)     (-4.58%)   (-4.61%)
                 net-long   net-long      net-short  net-short


                     Small Specs             Commercials
DJIA futures     (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value          -6,959     -6,998          +13,316    13,736
Total Open
interest %       (-44.95%)    (-41.65%)      (+34.65%)  (+36.73%)
                 net-short   net-short     net-long    net-long


                     Small Spec              Commercials
NASDAQ 100      (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value         +6,250      +4,633         -13,519    -10,438

Total Open
Interest %        (+32.55%)   (+25.04%)     (-17.41%) (-14.85%)
                 net-long   net-long      net-short net-short


What COT Data Tells Us
----------------------
Indices:.For the third week in a row, Commercials have shown 
little change in their net-short positions on the S&P 500. We did 
see the Small Specs and Commercials move in opposite directions 
on the NASDAQ 100 with the Small Specs adding to their net-longs 
and the Commercials increasing their net-shorts.

Gold: No significant changes on Commercial positions.

10/02 67,122 contracts net-short
10/09 64,729 contracts net-short
10/16 51,816 contracts net-short
10/23 25,191 contracts net-short
10/30 33,199 contracts net-short

Data compiled as of Tuesday 10/30 by the CFTC.



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

Barr Labs Inc - BRL - close: 66.68 change: -3.87 stop: 71.00

Company Description
Barr Laboratories, Inc. is a specialty pharmaceutical company 
engaged in the development, manufacture and marketing of generic 
and proprietary pharmaceuticals.  (source: company press release)

Why We Like It:
UGLY!  Whether you consider BRL a drug stock or a biotech stock 
shares of this company have ignored any strength in both sectors 
for the last three weeks.  We've been watching the stock for a 
few days as it had been consolidating at price support of $70 and 
its 200-dma.  In the past few months, BRL had developed a pattern 
of a very strong bounce after two days of consolidation at its 
200-dma.  After BRL failed to begin its next leg up the bears 
grabbed a hold of the stock and appear to have a tight grip on 
it.  The intraday chart for today looks hideous.  The very 
negative down trend indicates heavy selling pressure.  The 
technical breakdown below its 200-dma (and $70) probably 
triggered a lot of stops and the stock will have to redefine 
support again.  The point-and-figure chart looks equally 
appalling with a bearish price target of $49.00.  The stock 
produced a small three-box pullback before beginning its next leg 
down.  Our initial target is the $60 to $62 area.  We're going to 
start the play with a stop at $71.00, just over today's high.  
Once the stock confirms the move down we'll adjust the stop 
tighter.  If shares produce a bounce tomorrow we would look for 
the stock to roll over under the 200-dma.

Picked on November 8th at $66.68
Gain since picked:         +0.00
Earnings Date              10/23 (confirmed)





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

PremierInvestor.net Newsletter                  Thursday 11-08-2001
                                                     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/1980_2.asp
=================================================================

In section two:

Net Bulls
  Bullish Play Updates: ADPT, ALGX, LRCX, LGTO, NMTC

Stock Bottom / Active Trader
  New Bearish Play:     BRL, SBC
  Bullish Play Updates: BMS, CLX, GE, HON
  Bearish Play Updates: AHC, HCR, PPDI

High Risk / High Reward
  Bullish Play Updates: AOL, HM

Split Trader
  - none -

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) / Tech Stock section
==================================================================


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

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

Adaptec Inc - ADPT - close: 13.59 change: -0.64 stop: 13.50

Getting close only counts in horseshoes and shuffleboard but at 
today's high of $14.75 for ADPT we were within a quarter of 
reaching our target.  Unfortunately, a much-needed pullback in 
several tech sectors including the semiconductors happened after 
a strong morning session.  The SOX slipped almost 12 points or 
2.29% while the DDX closed the day with a fractional gain.  But 
speaking of close calls, the low for ADPT was 13.52 or two cents 
above our stop.  Odds are very good we'll get stopped out 
tomorrow morning at 13.50 unless the futures are trading 
significantly higher.  Those traders looking for a new entry 
point to go long for the next leg up (should it occur) can watch 
the $13.00 level.  The stock should find price support there as 
well as the 10-dma, which has been strong trading support for the 
last few weeks.  Remember, if ADPT surprises us and trades to 
$15.00 tomorrow we'll close the play if we're not stopped out 
first.

Picked on November 2nd at $12.86
Gain since picked:         +0.73
Earnings Date              10/18 (confirmed)




---

Allegiance Telecom - ALGX - close: 8.88 chg: +0.26 stop: 7.90

Our new play from Wednesday night was off to a strong start this 
morning with the technology stocks trading higher.  The high for 
the day of $9.67 represented a 12% gain in the stock before the 
afternoon sell-off brought shares back to current levels.  If 
ALGX can trade strongly bulls might get lucky and hold support at 
the $8.75 level tomorrow.  If investors decide to close some 
positions ahead of the weekend ALGX could pullback to stronger 
support at $8.00.  We're going to leave our stop at $7.90 for now 
since we're expecting a possible dip in the morning.  Investors 
with a longer time horizon may want to wait for a dip back to 
$7.00.  Let's just hope it doesn't happen before we can close the 
play for a profit at $10.00.  According to our initial play write 
up on Wednesday, if ALGX trades to $10 intraday we're out for a 
gain.  

Picked on November 7th at $ 8.62
Gain since picked:         +0.26
Earnings Date              10/23 (confirmed)




---

Lam Research - LRCX - close: 21.40 change: -0.89 stop: 20.50 

LRCX is another chip stock that was trading higher in the morning 
but gave it all back and more when bears grabbed a hold of the 
market in the afternoon session.  The selling pressure was very 
strong for LRCX in the last two hours of trading on Thursday with 
shares beating a steady retreat.  Some profit taking is not out 
of line but we had been encouraged by Wednesday's strength with 
shares of LRCX through the top of its recent trading channel.  To 
repeat part of Tuesday's update, if LRCX trades below 21.25 we 
would be concerned that the stock might head for the bottom of 
its trading channel near $18.50.  If stopped out at 20.50 we 
would post a 3.9% loss on the trade.  More conservative traders 
may want to raise their stops.  Keep an eye on the SOX for 
leadership up or down.

Picked on November 2nd at $21.34
Gain since picked:         +0.06
Earnings Date              10/09 (confirmed)




---

Legato Systems - LGTO - close: 9.84 change: -0.05 stop: 8.99

Uh oh!  We had set a trigger to go long LGTO at $10.10 last night 
and the stock opened very strong and traded to 10.99 before 
giving into the bears late afternoon sell-off.  The problem lies 
in LGTO's opening price at $10.47.  We're going to have to use 
that as our entry price putting us at a disadvantage.  The 
pullback in the software sector (GSO.X) stopped a couple of 
points above what should be support at 160.  We're still bullish 
on LGTO but we need to see the stock find a bottom again.  We 
would look for shares to bounce at $9.50.  Depending on your risk 
profile waiting for the bounce at 9.50 or waiting for shares to 
trade back over 10.00 may be the play.  We would not recommend 
new positions under 9.50.  We're going to leave our stop at 8.99 
because we're optimistic the stock can turnaround before trading 
that low.  Readers should adjust stops to their own comfort 
level.

Picked on November 8th at $10.47 
Gain since picked:         -0.63
Earnings Date              10/23 (confirmed)




---

Numerical Tech. - NMTC - close: 26.71 change:+0.03 stop: 24.25 

Believe it or not NMTC actually proved to be stronger than both 
the SOX and the GSO in Thursday's session.  Both sector indices 
traded lower while NMTC managed to maintain a razor thin gain.  
While this should be encouraging to shareholders if the markets 
sees a pullback on Friday due to traders closing positions ahead 
of the weekend we would look for targeted dips in NMTC to open 
new positions.  The stock might offer attractive entry points at 
$26, $25.50 or even $25.25 (Tuesday's low).  Confirm stock and 
market direction before committing new capital.  Currently the 
newsletter is up about $1.27 or 4.99%.

Picked on November 2nd at $25.44
Gain since picked:         +1.27
Earnings Date              10/10 (confirmed)






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

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

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

Barr Labs Inc - BRL - close: 66.68 change: -3.87 stop: 71.00

Company Description
Barr Laboratories, Inc. is a specialty pharmaceutical company 
engaged in the development, manufacture and marketing of generic 
and proprietary pharmaceuticals.  (source: company press release)

Why We Like It:
UGLY!  Whether you consider BRL a drug stock or a biotech stock 
shares of this company have ignored any strength in both sectors 
for the last three weeks.  We've been watching the stock for a 
few days as it had been consolidating at price support of $70 and 
its 200-dma.  In the past few months, BRL had developed a pattern 
of a very strong bounce after two days of consolidation at its 
200-dma.  After BRL failed to begin its next leg up the bears 
grabbed a hold of the stock and appear to have a tight grip on 
it.  The intraday chart for today looks hideous.  The very 
negative down trend indicates heavy selling pressure.  The 
technical breakdown below its 200-dma (and $70) probably 
triggered a lot of stops and the stock will have to redefine 
support again.  The point-and-figure chart looks equally 
appalling with a bearish price target of $49.00.  The stock 
produced a small three-box pullback before beginning its next leg 
down.  Our initial target is the $60 to $62 area.  We're going to 
start the play with a stop at $71.00, just over today's high.  
Once the stock confirms the move down we'll adjust the stop 
tighter.  If shares produce a bounce tomorrow we would look for 
the stock to roll over under the 200-dma.

Picked on November 8th at $66.68
Gain since picked:         +0.00
Earnings Date              10/23 (confirmed)




---


SBC Communications - SBC - close: 37.99 change: -0.05 stop: 38.38

Company Description
SBC Communications Inc. is a global communications leader. 
Through its subsidiaries' trusted brands - SBC Southwestern Bell, 
SBC Ameritech, SBC Pacific Bell, SBC Nevada Bell, SBC SNET and 
Sterling Commerce - and world-class network, SBC companies 
provide a full range of voice, data, networking and e-business 
services, including local and long-distance, high-speed Internet 
access and data transport, network integration, software and 
process integration, Web site and application hosting, e-
marketplace development, paging and messaging, as well as 
directory advertising and publishing. America's leading provider 
of high-speed DSL Internet service, SBC companies currently have 
more than 60 million access lines nationwide. SBC has a 60 
percent equity interest in Cingular Wireless, its joint venture 
with BellSouth.  (source: company press release)

Why We Like It:
To be short and to the point, we like SBC as a short play because 
the bearish wedge forming on this stock is just screaming "short 
me".  The stock dove in mid-October and has been unable to break 
back above resistance at $40.  The month of November has shown a 
consecutive string of lower highs (until today).  This stock is 
coiling for a breakout and the bias is down.  However, before you 
think we're too enthusiastic take note of our concerns.  Number 
one, as a component of the Dow, SBC may be artificially buoyed if 
the index can keep the up trend going.  While it has had little 
affect the last couple of weeks it can always surprise us.  
Number two, the MACD has flattened out for the last few days and 
its fast and slow moving averages are converging.  We need a 
breakout one way or the other soon.  Because the stock has been 
going nowhere after the big drop in October the MACD histogram is 
showing a bullish divergence but we think this will reverse if 
shares breakdown under support at $37.75.  Number three, and just 
who is buying this stock anyway?  It could be the company.  
Recently SBC announced they would begin a second stock buy back 
program.  On Nov. 5th, they announced they would buy back 100 
million shares in addition to their previous buy back of 97 
million shares.  The announcement didn't do anything for the 
stock price but we thought you should know.  The stock has coiled 
so tight that the move appears almost imminent.  We're going to 
set an entry trigger on this play.  If SBC trades to $37.70 we're 
going to go short.  To begin the play we'll start with a stop at 
38.38 or one cent above today's high.  Our biggest risk is the 
stock dips to 37.70 and then reverses to stop us out intraday for 
a 1.8% loss.  Our initial target is 10%.  The stock does have 
support at $35 but it may not be able to hold.  Beyond $35 the 
next level of support is $30.  

Picked on November Xth at $37.70 -- waiting to be triggered
Gain since picked:         +0.00
Earnings Date              10/22 (confirmed)





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

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

Bemis Co. - BMS - close: 48.51 change: +1.54 stop: 44.99 *new*

We did see a pullback on Wednesday but buyers were quick to step 
in and shares bounced at the $46.50 level twice before closing 
near $47.  BMS has really confirmed the breakout over the $45 
level and the point-and-figure chart has extended its bullish 
price objective to $76.00, which is great news for investors with 
a long-term time horizon.  We, on the other hand, are short-term 
traders and plan to close the play for a profit if BMS trades to 
$49.95.  This could happen intraday but will allow us to 
capitalize on the recent surge.  I know a few investors are 
speculating that the strength and volume of the breakout could be 
forecasting a bullish trend that could last several weeks to 
months.  This may be so but if we can selectively grab 10% here 
and 10% there we'll have the freedom to pick and choose our entry 
points.  Currently the newsletter is up about 7.8%.  I know some 
traders like to cement a gain of 5% whenever they have the 
chance.  We consider moving our stop to 47.25 to do just that but 
have chosen to raise our stop to cost (44.99) instead and give 
the stock room to run up to $50 even if we see a strong dip 
tomorrow.  

Picked on October 26th at $44.99
Gain since picked:         +3.52
Earnings Date              10/23 (confirmed)




---

Clorox Co. - CLX - close: 38.78 change: +0.06 stop: 36.85 

Our consumables play has managed to hold on to its gains despite 
encountering resistance at $39.00.  If traders look at a 5 minute 
chart of CLX they can notice how shares have been trying to build 
support at the $38.50 level (yes, it dipped to 38.33 in the late 
morning session).  The last hour or two on Thursday saw a lot of 
volume come in and it looks like it was buyers as the stock moved 
up off its lows.  Speaking of volume, today's 2 million shares 
was pretty big compared to the norm.  Investors looking to 
establish new positions may want to look for a breakout above 
$39.00 (or $39.50) or a dip a back to $38.00.  Under $38.00 we 
would be concerned the stock may have farther to fall and would 
wait for the bounce to occur.  Even though we are leaving our 
stop at 36.85 more conservative traders can consider stops under 
the $38 level.  In the news today, CLX announced it was looking 
for a buyer for its institutional and industrial trash can liner 
unit.  Management says they want to focus on their core-consumer 
businesses and analysts may approve the move.  

Picked on November 1st at $37.48
Gain since picked:         +1.30
Earnings Date              11/01 (confirmed)




---

General Electric - GE - close: 40.35 change: +1.00 stop: 37.75

The positive move in the Dow Industrials this morning was 
bolstered by a bullish breakout in shares of GE.  However, while 
the Dow gave most of its gains back to profit taking, GE spent 
the rest of the day in a tight trading range between $40.50 and 
what should be new support at $40.00.  The newsletter's trigger 
to go long on GE at $40.10 occurred near 10:40 AM this morning.  
This puts our initial stop at 37.75 but more conservative traders 
can consider stops near 38.40, the lows on Monday and Tuesday or 
even a stop under 39.00 but a strong dip in the Dow could bring 
GE back to the $39 area.  The fact that GE stayed above the $40 
level is very encouraging and hopefully GE can offer some 
leadership if the other Dow components start to falter.  

Picked on November 8th at $40.10
Gain since picked:         +0.25
Earnings Date              10/24 (confirmed)




---

Honeywell Intl - HON - close: 31.75 change: +0.63 stop: 29.00

Our other big-cap blue chip stock, HON, has been consolidating 
under price resistance at $32 after breaking out above its 50-dma 
five days ago.  The dip on Wednesday saw shares of HON trade back 
to the 50-dma but buyers stepped in and the stock closed off its 
lows.  Thursday showed the stock slowly trading higher and it 
looks like bulls will try to tackle the $32 area if the broader 
markets can provide a cooperative environment.  The MACD fast and 
slow moving averages have both crossed the zero line and remain 
in a strong up trend.  We will leave our stop at $29 for now but 
traders might be able to get away with a tighter stop just under 
$30.

Picked on November 2nd at $31.15
Gain since picked:         +0.60
Earnings Date              10/24 (confirmed)





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


Amerada Hess - AHC - close: 59.15 change: +0.86 stop: 60.05 

Right on target.  We expected the $60 level to be resistance for 
AHC which proved true with the high today at 59.89.  Like the 
rest of the market, shares of AHC fell back in the afternoon 
leaving us to wonder if this is a failed rally in the making and 
should we consider new short positions.  One development that 
would favor the bulls was the strong move in the price of oil.  
At Tuesday's close, light sweet crude was $20.09 a barrel.  
Wednesday saw shares move strongly higher and today's trading saw 
yet another gain to put the December oil contract at $21.30.  
This move in oil probably helped fuel the bounce in the Oil 
sector (OIX.X) which has posted its second positive day in a row.  
We do find it interesting that the OIX found a lot of resistance 
at the 296 level today.  Using a retracement tool from the 
September lows to the mid-October highs put the 38.2% retracement 
just under 297.  This technical resistance was strengthened by 
the 5-dma, which was short-term resistance today, as well as on 
the 1st of November.  All of these observations seem to be 
setting up for another leg down in the oil group which will help 
push AHC to new lows.  Our one concern is the proximity of our 
stop to the current share price.  A morning spike could stop us 
out before bears apply pressure to the stock.  Yet this will have 
to be an acceptable risk as the stop is supposed to save us from 
a breakout to the upside.

Picked on November 2nd at $58.36
Gain since picked:         -0.79
Earnings Date              10/23 (confirmed)




---

Manor Care - HCR - close: 21.00 change: +0.45 stop: 21.75 

The S&P Healthcare sector (HCX) drifted lower today but failed to 
give bears enough fuel to take HCR to the next level.  We're not 
complaining.  HCR has fallen nine days in a row and was due for a 
bounce.  We are a little surprised at the volume of 2.1 million 
shares in Thursday's trading but are content to let ourselves be 
stopped out at 21.75 for a 10% move.  Traders may want to watch 
the 21.30 level, which could prove to be a very short-term pivot 
point.  If HCR trades above 21.30 we would plan on being stopped 
out (even though 21.70 could be resistance).  If HCR stays under 
21.30 then we have a chance to be closed out for a profit if the 
stock trades to $20.05 intraday.  

Picked on October 26th at $24.23
Gain since picked:         +3.23
Earnings Date              10/26 (confirmed)




---

Pharmaceutical Product Development Inc. - PPDI -
close: 24.94 change: +0.85 stop: 26.00 

PPDI is another healthcare/drug stock that was in need of an 
oversold bounce.  The stock had been in a steady down trend for 
seven days straight and today's bounce could just be a speed bump 
on the way down.  The stock found selling pressure at its 5-dma 
and failed to close over round number price resistance at $25.  
Both developments are positive signs for bears.  We're also 
encouraged that the DRG.X and the HCX.X are both back under their 
200-dma's.  Traders should confirm the move down in HCR before 
initiating new plays.  Conservative traders may want to wait for 
the stock to breakdown below the $24.00 level.  Remember, if HCR 
trades to $20.00 on an intraday basis we'll close the play for a 
profit.

Picked on November 2nd at $26.00
Gain since picked:         +1.06
Earnings Date              10/16 (confirmed)





==================================================================
High Risk / High Reward (HR) section
==================================================================

===============
HR Play Updates
===============

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


AOL Time Warner - AOL - close: 36.45 change: +1.95 stop: 32.25

Our Harry Potter, breakout over the 50-dma, high-risk play from 
Tuesday is off to a good start.  Shares of AOL dipped a little in 
Wednesday's trading but traders merely saw that as an entry point 
to jump in.  The stock soared 5.65% on decent volume today.  With 
America breathlessly waiting for "the magic to begin" on Nov. 
16th, we're expecting traders to continue to bid up shares of AOL 
until the opening weekend numbers can be uncovered.  The stock 
just barely closed below the intraday high set back on Oct. 4th 
but the strength of Thursday's move looks good for tomorrow.  If 
AOL does see a pullback traders can look for new entries on 
bounces at $35 or $34.50.  We'll re-evaluate our stop after 
Friday's session.  More conservative traders may want to consider 
using Tuesday's low.

Picked on November 6th at $35.15 
Gain since picked:         +1.20
Earnings Date              10/17 (confirmed)




---

Homestake Mining Co. - HM - close: 8.06 change: -0.34 stop: 7.95

Gold bullion and gold stocks appear to be at a critical turning 
point.  Some are speculating this is a bear trap and the price of 
this cherished metal is about to soar.  To my eyes this gold 
stock is about to collapse as it dropped 4% and narrowly 
maintained the illusion of support at the $8.00 level.  Okay, I'm 
being melodramatic but bullish investors might be encouraged by 
the MACD producing a bullish crossover recently.  Odds of being 
stopped out tomorrow on an intraday spike look high but investors 
interested in following this sector should watch the 8.50 level 
for a bullish breakout and of course the 8.00 level for a bearish 
breakdown.

Picked on November 2nd at $ 8.37
Gain since picked:         -0.31
Earnings Date              10/31 (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 

FTE     France Telecom             42.41     +1.11
ING     Ing Groep                  28.06     +1.01
CVC     Cablevision Systems        36.70     +0.75
HPT     Hospitality Prop Trust     25.92     +0.52
URI     United Rentals Inc         20.54     +0.87

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

WIND    Wind River Systems         16.20     +1.10
EMBT    Embarcadero Technologies   17.30     +1.40
KWK     Quicksilver Resources      17.19     +1.43
IONA    Iona Technologies          14.99     +2.41
URBN    Urban Outfitters Inc       15.15     +1.07

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

CCU     Clear Channel Comm.        42.19     +1.10
MU      Micron Technologies        26.91     +1.01
UVN     Univision Communications   30.30     +1.57
MIKE    Michaels Stores Inc        55.35     +2.57
KOSP    Kos Pharmaceuticals Inc    34.42     +2.05

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

MO      Philip Morris              46.32     -1.48
BTY     British Telecom            47.82     -2.23
THC     Tenet Healthcare           54.10     -1.82
ABC     AmerisourceBergen Corp     58.50     -5.35
WPI     Watson Pharmaceuticals     45.95     -1.56

----------------------------------------- 
Recently Overbought With Bearish Signals (Stocks over $20)	
------------------------------------------- 

ATK     Alliant Techsystems        85.30     -3.57
MLHR    Herman Miller Inc          21.50     -0.31
ATVI    Activision Inc             36.74     -1.85
GNSS    Genesis Microchip Inc      43.47     -7.14
SEAC    Seachange Intl             25.84     -1.30





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