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Daily Newsletter, Tuesday, 11/13/2001

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PremierInvestor.net Newsletter                Tuesday 11-13-2001
                                                  section 1 of 2
Copyright  2001, All rights reserved.
Redistribution in any form is strictly prohibited.

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In section one:

Market Wrap: 16 up, 14 down....
Market Sentiment: Positive "event" gives Wall Street a lift
Play-of-the-Day: Poised to Play Catch Up

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
       11-13-2001           High     Low    Volume Advance/Decline
DJIA     9750.95 +196.60  9755.80  9551.40  1.3 bln   2220/ 930
NASDAQ   1892.11 + 51.98  1893.92  1867.27  2.1 bln   2346/1261
S&P 100   587.04 + 10.91   587.28   576.13   Totals   4566/2191
S&P 500  1138.90 + 20.76  1139.14  1118.33
RUS 2000  448.34 +  7.86   448.34   440.48
DJ TRANS 2340.94 + 69.02  2342.06  2272.07
VIX        28.63 -  2.63    30.34    28.51
VXN        55.94 -  3.05    58.43    55.91
TRIN        0.46
Put/Call Ratio       .58
-----------------------------------------------------------------

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

16 up, 14 down....

Look at a bear and you'll most likely see a frown.  Today's 
action has our hypothetical Dow Industrials portfolio benchmarked 
from the September 10th close now showing a gain, with 16 of the 
Dow components closing higher than their September 10th close.

In yesterday's "Market Wrap" on PremierInvestor.net it was a 
numbers game in the Dow Industrials where we witnessed 1, then 
three components turning green in the short-term that seemed to 
lead to a late session comeback in the Dow Industrials.  Is 
today's action with 16 of the 14 components showing green since 
the September 10th close a sign of things to come longer-term?

Dow Industrials Hypothetical Portfolio from Sept. 10 close




Today marks the first close where we now find more than 15 of the 
Dow component stocks showing gains since their September 10th 
close.  When subtotaled, we also see a fractional gain of $37.17 
or 0.12%.  

Is this a sign that the markets are turning the corner?  One way 
to help answer this question is too look at relative strength.  
What I've done above in the far right column is indicate what the 
"status" of relative strength is doing on each stock's relative 
strength chart, measured against the Dow Industrials Index 
($INDU) itself.  

There are basically four different "cycles" a stock will go 
through based on relative strength.  

Let's start with Phase 1.  This is a " somewhat bullish" cycle. A 
stock having been in the "very bearish" cycle begins building a 
bottom and relative strength improves short-term.  This would be 
characterized by a relative strength point and figure chartist 
saying "relative strength Sell signal, but now in a column of X."  
(S, X).  The next phases from here could either be Phase 2 or 
Phase 4.

Phase 2 might be described as a "very bullish" cycle where the 
stock now matures from Phase 1.  The stock has now become very 
much in favor both near-term and longer-term.  The stock has been 
outperforming and showing excellent relative strength vs. the 
comparable index (in this case, the Dow Industrials).  Relative 
strength is characterized by "relative strength on a Buy signal 
and in a column of X. (B, X).  The next phases from here are 
either Phase 1 or Phase 3.

Phase 3 is what I think of as the "somewhat bearish" phase.  This 
could be thought of as a stock that has been in favor with the 
market long-term, but is beginning to perhaps stall out, or 
undergo distribution near-term.  The point and figure chartist 
that is charting relative strength would see a RS chart that 
shows a Buy signal, but has now reversed into a column of O's.  
The next phases from here could be Phase 2, or Phase 4.

Phase 4 is the "very bearish" cycle.  In this cycle, the stock 
has lost favor not only longer-term, but has also been under 
performing the index short-term.  This stock is/ has been out of 
favor.  In point and figure lingo "relative strength is on a Sell 
signal and in a column of O. (S, O).  The next phase from here is 
Phase 1.

Just like a roller coaster, a stock will go up and down through 
the four phases described above.  Sometimes, phase 2 will evolve 
to phase 3 and then resume phase 2 once again.  For those stocks 
that fall out of favor, phase 3 turns to phase 4 and is usually 
no fun for the bull holding on.

So what does all this have to do with a turn for the better and 
the beginning of a longer-term bull market?

Just like we've been doing since September 10th and monitoring 
the Dow 30 and the various "rankings" of stocks as they shuffle 
back and forth, we now look to build on the process and try to 
understand relative strength of each stock and how they all stack 
up against each other and vs. the Dow Industrials (we could 
measure RS vs. the S&P 500 too, but RS vs. Dow keeps the concept 
simple).

In the far right column of the Dow portfolio, I've placed four 
different "abbreviations" for the relative strength chart for the 
corresponding stock RELATIVE to the Dow Industrials Average.  The 
first letter is either B (buy) or S (sell) as it relates to the 
relative strength chart showing a "buy" or "sell" signal.  This 
is the Longer-term "signal" from the relative strength chart.  
The second letter is either X (showing near-term relative 
strength) or O (showing near-term relative weakness).

In essence, Phase 1 = S, X (sell, column of X) , Phase 2 = B, X , 
(buy, column of X), Phase 3 = B, O (buy, column of O) and Phase 4 
= S, O (sell, column of O).

What I think needs to happen from here

Now we're going to try and pull this all together and begin 
building further on what I think needs to happen going forward 
for a "super bull market" or at least a longer-term turning point 
to take place.

As we go down the list of the Dow components, we can count 18 X's 
in the RS column.  This means that there are 18 stocks, currently 
showing some strength near-term vs. the Dow Industrials.  Now, it 
may be entirely possible for all 30 to show RS in a column of X's 
as it takes a 3-box reversal to get the RS chart in a column of 
O's.  But what we want to start looking for near-term is for some 
of the stocks in the LOWER part of our portfolio to begin showing 
signs of strength near-term (reverse from O to X).  What this 
should do is create a "tidal wave" and push the Dow Industrials 
along with investor psychology higher.

So far, we've seen a progression of leadership in our Dow 
portfolio where we've built a progression of 3 stocks in positive 
territory to the now 16 stocks since their September 10th close.  

The first step for a bull market to occur has.  We've gotten some 
leadership and positive breadth (number of stocks advancing) has 
improved markedly.  A market can go nowhere if there isn't some 
type of leadership.

But for a continued bull phase to continue, you need some of the 
"laggards" to start carrying their fair share of the weight.  At 
least, this is what creates a more healthy and stronger bull.  In 
essence, a bull with just two legs is less likely to run an 
extended distance than one with four.

Let's take a look at the relative strength chart of General 
Electric (NYSE:GE).  It's a stock I felt would be the "swing 
stock" for the Dow Industrials if it could break above the $40 
level.  This was prior to yesterday's plane crash in New York, 
but its also a good example of a "Phase 4" stock where its 
Relative Strength chart is on a Sell Signal and currently in a 
column of O's.  

Subscribers will remember that this stock was profiled as bullish 
ONLY due to the nice correlation in its bar chart with that of 
the Dow Industrials.  Now we look at relative strength to see 
where the stock might be able to create the "tidal wave" of 
relative strength that could push things higher for the Dow.

Due to apparent problems at www.stockcharts.com we are unable to 
access their site at this time and show a relative strength chart 
or access any charts at this time.  We'll look to follow up on 
this topic in tomorrows wrap.

Where do we go from here?

Well, I must say, our "stock picker" is doing a heck of a job.  
James Brown has turned into a thermos!  Much like a thermos, he's 
able to either keep hot things hot, or cold things cold.  How 
does he know?

Actually, it's been a process and a disciplined one at that.  
It's never simple to trade/invest an account.  Often times its 
the process or discipline that ends up having the account achieve 
success or failure.

Some may think the only reason the PremierInvestor.net portfolio 
is doing so well is that we got lucky and the market rallied.  
Others would argue that a trader/investor had to be positioned 
correctly before today's move to have benefited from it.  Yes, 
it's true that our bullish plays did well as the broader markets 
rallied today, but our bearish plays haven't done too bad 
considering some of the broader market gains.

For any trader, "paper profits" do little good.  Profits that are 
generated from a trade having been closed is what counts and pays 
the bills.

Yes, it's "nice" that F5 Networks (NASDAQ:FFIV) is up 14.7% since 
profiled on November 9th in the "High Risk / High Reward" 

F5 Networks Chart - 




There are three past events that seem to stick out in the trading 
of F5 Networks (NASDAQ:FFIV) that I think are interesting and 
subscribers should be aware of.  One is the apparent "bull trap" 
that looks to have taken place back in late June above the $17.47 
level.  Remember where the NASDAQ-100 bullish % was at that time?  
Yep, it had been "overbought" at 82% in April-May, then went 
"bear confirmed" in June.  The seeming break above the $17.47 
level now looks to have been a classic "bull trap" that sucked in 
some momentum players, but the broader market action pulled the 
stock lower, violating level after level of retracement.  Then in 
late September, the "dip" below the $9.11 level looks to have 
been a "bear trap."  Remember where the NASDAQ-100 bullish 
percent chart was in late September?  Yep, 2% and very 
"oversold."  

Now what we're looking at is large down volume on November 8th of 
3.1 million shares.  To me, this hints of a large crossing of 
shares between at least two institutions.  One was a seller, the 
other a buyer.  We never know for sure if the seller was a bear, 
or just a long that has been holding the stock from the $4-$9 
level that had accumulated in the base.  Tomorrow could be 
another bullish day for F5 Networks on a break above the November 
8th high of $22.94, but a trader is looking to lock in a profit 
at our raised stop of $20.85 (see tonight play update) or sell 
strength at their original target.

We have hint that this stock is susceptible to some 
"manipulation" and subscribers are carrying a relatively nice 
gain in the stock.  We want to be tightening up a stop to try and 
help assure subscribers a gain.  This was a "High Risk / High 
Return" trade and now its time to try and remove some of the 
risk.  Our original profit target was the $23-$25 area and we 
came close to that today at $22.88.

We can't review all of the trades in the market commentary, but I 
think F5 Networks (FFIV) is a classic example of not trying to 
shoot for the sky, but stick to your original trading plan, and 
when the trade begins working in your favor, then remove some of 
the risk in the trade by following trade direction with a 
trailing stop.

Stick with your discipline and trade strategy.  You'll book more 
consistent profits over the long run.  Yes, there will be those 
that you sell too early, but that's the only way to actually 
realize a gain.  

Something to think about

The bulk of reader e-mail pertains to "what is causing all this 
bullishness?  Is this rally for real?"  I can't answer that and I 
don't think there's a person alive that can.

Many believe that the current rally is a culmination of certain 
events that have unfolded and currently unfolded.  Analysts point 
to the aggressive Fed rate cuts and the MARKET factoring in a 
recovery.

Some think the current success by the U.S. and Northern Alliance 
in Afghanistan and progress being made toward the damaging of a 
key terrorist ring is part of the market's bullishness.

Perhaps James L. Fraser said it best.  "History shows that once 
the United States fully recognizes an economic problem and 
thereby places all its efforts on solving it, the problem is 
about to be solved by natural forces."

Jeff Bailey
Senior Market Technician


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

Positive "event" gives Wall Street a lift
by Russ Moore

Positive "event" gives Wall Street a lift. Good news from 
overseas and an increasing likelihood that yesterday’s crash was 
not terrorist related had investors opening their wallets and 
sending stocks higher.

The blue chip DOW soared +2.1 percent while the NASDAQ and NDX 
continued to power higher with gains of +3.4 percent each. Volume 
was on the rise as 1.34 billion shares traded hands on the big 
board and 2.19 billion shares were exchanged on the tech index. 
Market breadth positive with winners trouncing losers by a 22/9 
count on the NYSE and a 23/13 margin on the NASDAQ.

The broader markets saw retail, biotech, airline and financial 
sectors attracting the bulk of the buying action while chip, 
software, and networking sectors were very strong on the tech 
side. Gold was the only sector on the downside.

Retail sales figures will be released on Wednesday. This sector 
has enjoyed a nice run of late and tomorrow’s data will be 
critical to its continued success.

The Fed’s senior loan officer survey of large banks showed 
commercial and industrial lending activity hit the skids in the 
third quarter. In addition, seventy percent of banks reported 
declining demands for loans, the largest percentage in more than 
10 years.

The bulls continue to snub their snouts at the bears, completely 
ignoring the growling of "overbought" and "pullback". For now at 
least, the bulls are definitely winning the tug-of-war.


VIX 
Tuesday 11/13 close: 28.63


VXN
Tuesday 11/13 close: 55.94


30-yr Bonds
Tuesday 11/13 close: 4.91


Total Put/Call Ratio: .58


Equity Option Put/Call Ratio: .46


Index Option Put/Call Ratio:  1.12


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 39.36

Volume/Open Interest
Maximum calls: 38/ 68,874
Maximum puts : 33/101,164

Moving Averages
 10 DMA 37
 20 DMA 35
 50 DMA 33
200 DMA 42

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: 587.04

Volume/Open Interest
Maximum calls: 610/7,302
Maximum puts : 500/9,138

Moving Averages
 10 DMA  569
 20 DMA  563
 50 DMA  552
200 DMA  613

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: 1139.09

Volume / Open Interest
Maximum calls: 1100/18,298
Maximum puts :  950/22,389

Moving Averages
 10 DMA 1106
 20 DMA 1094
 50 DMA 1076
200 DMA 1191

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:  9,750.95

Volume / Open Interest
Maximum Calls: 94/23,712
Maximum Puts   92/19,115

Moving Averages:
 10 DMA  9,474
 20 DMA  9,390
 50 DMA  9,267
200 DMA 10,220

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: 584.35

Volume / Open Interest
Maximum Calls: 580/  720
Maximum Puts:  420/1,576

Moving Averages
 10 DMA 566
 20 DMA 546
 50 DMA 503
200 DMA 537

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: 541.29

Volume / Open Interest
Maximum Calls: 570/ 529
Maximum Puts:  420/ 783

Moving Averages
 10 DMA 503
 20 DMA 474
 50 DMA 456
200 DMA 572

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: 392.40

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

Moving Averages
 10 DMA 391
 20 DMA 393
 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 11/09
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 
10/23/01     377,177   413,658   (36,481)     0.1%
10/30/01     377,468   413,729   (36,261)   (0.06%)
11/06/01     376,807   416,063   (39,256)    8.2%

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
10/23/01       127,016    71,212    55,804     9.9%
10/30/01       123,546    71,225    52,321    (6.2%)
11/06/01       132,106    81,208    50,898    (2.7%)

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 
10/23/01      29,920    40,358   (10,438)  (19.7%)
10/30/01      32,055    45,574   (13,519)   29.5%
11/06/01      39,410    47,890    (8,480)  (37.0%)

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
10/23/01       11,567     6,934    4,633     (22.9%)
10/30/01       12,725     6,475    6,250      34.9%
11/06/01       11,406     8,143    3,263     (47.7%)

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 
10/23/01      25,568    11,832   13,736     (9.2%)
10/30/01      25,872    12,556   13,316     (3.1%)
11/06/01      25,977    11,951   14,026      5.4%

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
10/23/01       4,902    11,900    (6,998)     (7.8%)
10/30/01       4,261    11,220    (6,959)      0.0%
11/06/01       3,569    12,281    (8,712)     25.2%
 
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        +50,898     +52,321        -39,256     -36,261

Total Open
Interest %       (+23.86%)  (+26.86%)     (-4.95%)   (-4.58%)
                 net-long   net-long      net-short  net-short


                     Small Specs             Commercials
DJIA futures     (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value          -8,712     -6,959          +14,026    13,316
Total Open
interest %       (-54.97%)    (-44.95%)      (+36.98%)  (+34.65%)
                 net-short   net-short     net-long    net-long


                     Small Spec              Commercials
NASDAQ 100      (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value         +3,263      +6,250         -8,480    -13,519

Total Open
Interest %        (+16.69%)   (+32.55%)     (-9.71%) (-17.41%)
                 net-long   net-long      net-short net-short


What COT Data Tells Us
----------------------
Indices:.Four weeks and counting as the Commercials barely budged 
in their net-short position on the S&P 500. We did see a move 
worth noting on the NASDAQ 100 with the Commercials and Small 
Specs headed in opposite directions. The Commercials reduced 
their net-short position while the Small Specs reduced their net-
long positions. Are the Commercials moving towards a net-long 
position on the NASDAQ? We have seen considerable strength on the 
tech index this week and a move to net-long by the Commercials 
would get our attention.

Gold: No significant changes on Commercial positions.

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
11/06 35,435 contracts net-short

Data compiled as of Tuesday 11/06 by the CFTC.




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


Allegiance Telecom - ALGX - close: 9.05 chg: +0.10 stop: 7.90

Company Description:
Allegiance Telecom is a facilities-based CLEC based in Dallas, 
Texas. Allegiance Telecom offers businesses a complete package of 
telecommunications services, including local, long distance, 
international calling, high-speed data transmission and Internet 
services. Allegiance is targeting a total of 36 major 
metropolitan areas in the U.S. with its "one-stop shopping"
approach.  (source: company press release)

- ORIGINAL WRITE UP, Nov. 7th, 2001 -

Why We Like It:
ALGX is a telecom stock making a comeback.  The Monday opening 
after the September terrorist attacks was crucial for ALGX (like 
so many other stocks) but this telecom stock broke below key 
support at $10.  The down trend picked up steam with the market's 
terrible decline that week but on the 26th of September shares of 
ALGX were hammered for a 30% loss.  Management had told analysts 
that the 9-11 attack would lower revenues by 5% but they expected 
earnings to be on track.  Shares continue to get pummeled before 
finding a bottom near $3.  The company maintained their guidance 
that the 2nd half of 2002 they would be breakeven.  Since then 
ALGX has announced earnings on Oct. 23rd and the stock has been 
in a bullish climb since.  Today's close was the third 
consecutive day higher after closing above its 50-dma and the 
stock appears to be using the $8.00 level as new support.  Some 
traders will see today's close at 8.62 as important as it 
surpasses the April 2001 lows.  We're looking for a short-term 
move up to $10 while longer-term players can aim for $12 but 
there is a lot of congestion once the stock passes $10.  We're 
going to initiate the play with a tight stop at $7.85, which is 
just under today's lows.  Traders who like to move in on 
confirmation can wait for the stock to trade above the $8.80 
level (or $9.00 if you really want confirmation).  Those with a 
longer time horizon may want to widen their stop closer to $7.50 
or lower.  FYI: if ALGX trades to $10.00 intraday we will close 
it for a profit.

- TUESDAY's UPDATE -

The early morning panic on Monday sent shares of ALGX to a low of 
8.31 before the stock quickly rebounded and spent the rest of the 
day trading sideways.  Shares continued their horizontal trading 
on Tuesday despite the strong rally in the Nasdaq.  We would have 
preferred more participation from this telecom stock but it does 
appear ready for a bullish move up tomorrow.  Traders still 
looking for an entry point can look for dips to $9.00 or shares 
above $9.20.  However, we will close the play for a profit if 
ALGX can trade to $10.00 on an intraday basis.  At the moment our 
43-cent gain is worth almost 5%.  We're going to leave our stop 
at 7.90 for the moment but 8.25 looks like an attractive area to 
put a stop as well.  If you're feeling really conservative 
something under 9.00, like 8.95, might work as long as you 
confirm stock direction first.

Picked on November 7th at $ 8.62
Gain since picked:         +0.43
Earnings Date              10/23 (confirmed)







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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.

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Do not duplicate or redistribute in any form.



PremierInvestor.net Newsletter                 Tuesday 11-13-2001
                                                   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/8211_2.asp
=================================================================

In section two:

Net Bulls
  Bullish Play Updates: ALGX, CHKP, LGTO, NETA
  Bearish Play Updates: WWCA

Stock Bottom / Active Trader
  Bullish Play Updates: GE, HON, IKN
  Bearish Play Updates: BRL
  Closed Bullish Plays: BMS, CLX
  Closed Bearish Plays: HCR

High Risk / High Reward
  Bullish Play Updates: AOL, FFIV, 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) section
==================================================================

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

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

Allegiance Telecom - ALGX - close: 9.05 chg: +0.10 stop: 7.90

The early morning panic on Monday sent shares of ALGX to a low of 
8.31 before the stock quickly rebounded and spent the rest of the 
day trading sideways.  Shares continued their horizontal trading 
on Tuesday despite the strong rally in the Nasdaq.  We would have 
preferred more participation from this telecom stock but it does 
appear ready for a bullish move up tomorrow.  Traders still 
looking for an entry point can look for dips to $9.00 or shares 
above $9.20.  However, we will close the play for a profit if 
ALGX can trade to $10.00 on an intraday basis.  At the moment our 
43-cent gain is worth almost 5%.  We're going to leave our stop 
at 7.90 for the moment but 8.25 looks like an attractive area to 
put a stop as well.  If you're feeling really conservative 
something under 9.00, like 8.95, might work as long as you 
confirm stock direction first.

Picked on November 7th at $ 8.62
Gain since picked:         +0.43
Earnings Date              10/23 (confirmed)




---

Check Point Software - CHKP - cls: 41.90 chg: +3.39 stop: 39.90*new*

Wow!  We were expecting good things from CHKP but not quite this 
fast.  Unlike the rest of the market that really saw a strong dip 
on Monday morning due to the plane crash, shares of CHKP merely 
dipped to $35.  Bulls saw this pullback to support as their 
buying opportunity and they ran with it as the software index 
posted strong gains.  The rally continued on Tuesday with CHKP 
gapping up to open at $40.30 and trading to $42.17 before pulling 
back again.  What traders should find interesting was the strong 
close on Tuesday after a late day dip to $40.35.  Most of this 
can be attributed to a strong bullish Nasdaq and big moves in the 
GSO software index, which has moved from support at 160 to 
resistance at 170.  Buttressing the sector was leadership in 
MSFT, which also posted two nice days and is currently trading 
above potential resistance at $67.50.  Check Point has also 
received a couple of upgrades this week with the one today by 
influential broker JP Morgan.  JPM moved their rating from "buy" 
to "long-term buy" with a price target of $50.  Their analyst 
believes most of the risks for CHKP are behind them and increased 
spending on security by corporations should continue.  Currently, 
the newsletter is up almost 6 points and over 16.5% in this 
bullish play.  In this bullish market environment we think CHKP 
may be able to keep the momentum going.  Thus we're going to 
raise our stop to $39.90 and place an exit point of $44.50 on the 
stock.  At $39.90 we can secure a move of 3.94 points or 10.9%.  
If CHKP trades to $44.50 we can exit the play with a move of 8.54 
points or 23.7%.  Only aggressive players should consider new 
positions in the stock at this time but dips back towards the $40 
level may be an opportunity.  Our risk is the stock gaps down 
below our stop and eats into our gain.  Hopefully the extremely 
strong volume of 23.3 million shares is an indication that the 
move still has some gas left in it.

Picked on November 9th at $35.96 
Gain since picked:         +5.94
Earnings Date              10/18 (confirmed)




---

Legato Systems - LGTO - close: 10.92 change: +0.94 stop: 9.85*new*

It doesn't get any closer!  The Monday morning slide in the 
markets sent shares of LGTO to trade at $9.00.  We had our stop 
set at 8.99.  Shares quickly rebounded and closed higher on the 
day which rewarded those traders who bought the dip.  The bullish 
trend continued on Tuesday with the strongly positive tech 
sector.  LGTO rallied quickly in the morning and then 
consolidated sideways between 10.30 and 11.00 for the rest of the 
session.  The good news for the bulls was the late day surge as 
the stock appeared to make a run at overhead resistance of 
$11.00.  Another positive sign was the very strong volume of 3.8 
million shares versus the average of just 1.26 million.  We're 
still aiming to exit the play as soon as the stock trades to 
$12.00.  The newsletter will raise its stop to 9.85 but more 
conservative traders may be able to get away with a stop below 
10.30 if the broader markets are positive Wednesday morning.  Day 
traders should wait for shares to break over $11.  Readers who 
bought the dip on Monday should be doing well.

Picked on November 8th at $10.47 
Gain since picked:         +0.45
Earnings Date              10/23 (confirmed)




---

Network Associates - NETA - cls: 23.08 chg: +2.25 stop: 22.15*new*

All of that waiting and watching paid off.  If you haven't been 
following the play in NETA, our staff has been watching the stock 
for the right entry point for days.  Friday's dip and bounce 
looked like the perfect entry point.  The tragedy on Monday kept 
shares subdued but the bullish move in the markets and in the 
software sector today let NETA play catch up.  In our original 
write up we discussed how our target was $25.00 but we'd be happy 
with a rally back to $23.  NETA has achieved $23 and traders who 
began the trade with that as their target should stick to their 
plan and consider taking profits.  The high last week was $23.13 
and the high today was $23.14.  We're encouraged the stock closed 
over the $23 level (something it hasn't done in a long time) but 
there is obvious resistance directly overhead.  We've decided to 
tighten our stop to protect the majority of today's gain while 
exiting the play at a profit if NETA trades to $24.50.  PI's new 
stop will be $22.15, which is just under the late afternoon dip 
to $22.18 on Tuesday.  If you want to give the stock a little 
more room but still protect some profits a stop at 21.95 should 
help you keep over 5% of the NETA's move.

Picked on November 9th at $20.82 
Gain since picked:         +2.26
Earnings Date              10/18 (confirmed)





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

Western Wireless - WWCA - close: 26.22 change: -0.15 stop: 28.05

WWCA is performing to expectations considering the bullishness of 
the overall markets.  The stock continues to drift lower while 
the Dow and the Nasdaq add strong gains.  The stock has been 
bouncing along support at the $26 area and conservative traders 
should probably wait for the stock to close below this level.  It 
appears that WWCA could be building a bearish wedge but we need 
to see lower highs.  Traders should confirm stock direction 
before initiating any new positions.  Alternative stop placements 
could be $27.75 or $27.50.  PI is leaving its stop at 28.05.

Picked on November 9th at $26.40 
Gain since picked:         +0.18
Earnings Date              11/07 (confirmed)






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

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

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

General Electric - GE - close: 40.56 change: +1.13 stop: 39.90 *new*

As a Dow component, GE was a direct beneficiary of the 196-point 
rally in the industrial average today.  Monday saw shares of the 
giant corporation slide quickly over uncertainties surrounding 
the plane crash.  For most of the market the uncertainty centered 
around possible terrorist activities.  GE had even more to worry 
about.  American Airlines flight 587 was an Airbus plane with GE-
produced CF6 engines.  On Tuesday, the stock seemed to shrug off 
any investors concerns about potential liability over engine 
problems even though investigators were looking closely at the 
issue.  The liability concerns even if it is only perceived 
liability over the downed plane's engines is the catalyst for our 
new stop on the play.  We are raising our stop from 37.75 to 
39.90 with the expectation that the $40 level should be support 
now.  The good news for traders is GE's close over resistance of 
$40.50.  There was even more good news after the close this 
evening.  Preliminary reports show no evidence of internal 
failure in the CF6 engines.  This is great news for GE investors 
but traders need to be aware the investigation is ongoing and bad 
news reversing tonight's reports could come out at any time.  The 
caution here is don't forget to adjust your stops as necessary.  

Picked on November 8th at $40.10
Gain since picked:         +0.46
Earnings Date              10/24 (confirmed)




---

Honeywell Intl - HON - close: 31.70 change: +1.18 stop: 31.15 *new*

While not an engine maker, Honeywell seemed to be hit hard by the 
American Airlines crash on Monday.  The stock immediately dropped 
toward support near $30 and spent the first half of the day 
trading under the $30.50 level with a brief dip to $29.93.  Those 
investors looking for a dip to $30 had their chance.  The strong 
rally in the markets on Tuesday helped HON gap up at the open and 
trade higher.  However, shares continue to languish under heavy 
resistance at $32.  Traders with a slightly longer time horizon 
should note the low on Monday was near the stock's 15-dma which 
has been acting as support for the last couple of weeks.  It may 
be a good area to consider new stops.  The newsletter is going to 
turn conservative on HON.  The stock has not been able to 
breakout above the $32 level since we picked it and we're 
concerned that shares may be running out of steam.  We did 
mention that HON is more of a slow mover and the retest of 
support at $30 could have been exactly what the stock needed.  We 
just feel there are other stocks in the Dow or traded on the NYSE 
that could offer stronger opportunities.  This doesn't mean we're 
throwing in the towel on HON but we are moving our stop up to 
breakeven at $31.15.  If the Dow follows through with another big 
day tomorrow then HON might be able to finally trade through $32 
which could be seen as a new potential entry point. 

Picked on November 2nd at $31.15
Gain since picked:         +0.55
Earnings Date              10/24 (confirmed)




---

Ikon Office Solutions - IKN - close: 10.20 change: +0.00 stop: 9.45

Today could have been the premium entry point.  We highlighted 
the stock in the watch list on the weekend and Monday's breakout 
looked too good to not go long so we added it last night.  During 
the morning hours on Tuesday IKN traded higher but the stock 
started to pull back through most of the session.  We did discuss 
the possibility that IKN would retest the $10 level and the low 
today at 10.05 may suffice.  The good news is the spike up 
towards the end of the day as bulls seemed to buy the dip, which 
is what we would have done. Investors should confirm stock 
direction before starting any new positions.  We are not 
adjusting our stop as today's move does not really constitute a 
confirmation of the new leg up.  

Picked on November 12th at $10.20
Gain since picked:          +0.00
Earnings Date               10/25 (confirmed)





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

Barr Labs Inc - BRL - close: 62.49 change: -5.62 stop: 66.68 *new*

The Friday/Monday bounce in BRL was both an oversold bounce and a 
failed rally at resistance of $70.  Bears took the opportunity to 
short the stock and the bad news from Watson Pharmaceutical 
helped get things moving.  WPI, a rival generic drug producer, 
delivered quite a whammy to the generic drug sector with a 
terrible 3Q earnings report and news they planned to refocus 
their product line.  Basically WPI said that the generic drug 
market was getting too competitive and they would be focusing on 
"branded" drugs they could sell at higher margins.  WPI lost over 
$18 and fell 39% on the news.  This sparked a sell-off in BRL 
that ended with the stock near its lows for the day.  Currently 
the newsletter is up over four points in the play (over 6%).  We 
think shares have farther to fall but conservative investors 
happy with a 5% profit can consider taking profits.  BRL's volume 
today was huge at 3.6 million shares.  We're going to lower our 
stop to breakeven at 66.68 but if shares continue to fall we'll 
bring it down to secure a profitable move.  We would strongly 
consider taking profits and closing the play at $60 but the odds  
of BRL falling below this level just became an attractive 
possibility.  

Picked on November 8th at $66.68
Gain since picked:         +4.19
Earnings Date              10/23 (confirmed)






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

  --------------------
  Closed Bullish Plays
  --------------------

Bemis Co. - BMS - close: 49.20 change: +0.59 stop: 47.75 

We just can't seem to get that last five to ten cents out of 
Bemis.  The packaging player has been a nice winner for us and 
we've been trying to close the play as soon as shares reach 
$49.95.  However, Friday's rally ended with a high of 49.87, 
yesterday saw a little profit taking but maintained the bullish 
trend, and today's rally ended with a high of 49.85.  We felt we 
had two choices.  We could raise our stop and our target or just 
close the play.  We're opting for the second choice.  By closing 
the play at $49.20 we can capture the $4.21 move from the picked 
price at $44.99.  This is a 9.35% gain in the price.  Yet traders 
who bought the dip in late October are looking at even better 
gains.  If you still think BMS has enough fuel to make it to $50 
and beyond then we would consider moving the stop to just under 
Monday's low of $48.50 and see how far the stock can run.

Picked on October 26th at $44.99
Gain since picked:         +4.21
Earnings Date              10/23 (confirmed)




---

Clorox Co. - CLX - close: 39.14 change: -1.15 stop: 38.95 

The market's bullish enthusiasm today appeared to be a signal for 
traders to rotate out of stocks like CLX and into tech or 
financials.  This is unfortunate, as CLX's close over $40 on 
Monday was a very bullish development.  In Monday's newsletter we 
raised our stop in CLX to $38.95 based on the idea that $40, now 
cleared, should be support.  Plus, the $39.00 to $39.50 level 
that had been resistance should also have been support.  We had 
considered using $38.85 which was 5 cents below the late 
afternoon dip on Friday and if we had the play would still be 
open.  However, considering that we still closed the play with a 
3.9% gain we're not going to complain.  

Picked on November 1st at $37.48
Gain since picked:         +1.47
Earnings Date              11/01 (confirmed)





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

Manor Care - HCR - close: 22.20 change: +0.70 stop: 21.75 

Monday should have been a clue for traders in HCR.  The stock 
quickly rebounded from the negative slide on Friday and began to 
trade in somewhat of a bullish trend on Monday.  Shares closed 
relatively close to our stop.  The rally today was fueled by the 
market's overall bullishness and a positive healthcare sector.  
The HCX.X only closed up 4.5 points and remains under its 200-dma 
which doesn't inspire a lot of confidence in this move up for 
HCR.  Traders should notice that the high today was $22.50, the 
exact same level that proved to be support in late October.  This 
could be tough resistance for HCR.  We are closing the play today 
at the open of $21.80, or five cents above our stop.  This allows 
for a 10% gain even though there were several opportunities to 
close the short for a gain of more then 3.70 points or 15%.  

Picked on October 26th at $24.23
Gain since picked:         +2.43
Earnings Date              10/26 (confirmed)








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

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

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

AOL Time Warner - AOL - close: 38.00 change: +1.57 stop: 36.90 *new*

As tech stocks continue higher our play in AOL keeps on climbing.  
The positive news for traders is the strong close over previous 
resistance at $37.25 which the stock had trouble trading over on 
Friday and Monday.  AOL may begin to consolidate sideways again 
as the $38 level was support back in mid-August and previous 
support is commonly re-encountered as resistance.  The PI team 
has decided to move the stop up to $36.90 which will ensure a 
gain of 5% in the play if the stock pulls back too far.  
Investors with a longer time horizon may want to keep their stops 
under the $35 level or consider something under $35.75 which 
acted as support on pullbacks both Friday and Monday.

Picked on November 6th at $35.15 
Gain since picked:         +2.85
Earnings Date              10/17 (confirmed)




---

F5 Networks, Inc - FFIV - cls: 22.01 chg: +1.59 stop: 20.85*new*

It's been an exciting week for stocks in the networking sector 
and our play in FFIV is already up 14.6%.  The bullish enthusiasm 
in the tech sector helped propel the Nasdaq higher and FFIV 
gapped open to $21.05.  The stock quickly moved to overhead 
resistance at $23 but pulled back both due to some profit taking 
and to some negative comments by CSCO's CEO Chambers.  He claimed 
that the next two to eight months could see slow growth.  Way to 
rain on the parade, John.  I know he's just trying to communicate 
with CSCO shareholders but his comments did allow for a late day 
pullback in the rally.  FFIV found more buying interest at $21.50 
and bounced from there.  We are going reconfirm our target of 
$25.  Actually, if FFIV trades to $24.80 intraday we'll close the 
play out for a profit.  However, we're also raising our stop.  
The low today was $21 and we're going to place a stop at 20.85 
which should protect a gain of over 8.6%.  Aggressive traders can 
look for new entries on pullbacks to $21 or $21.50 or breakouts 
over $23.

Picked on November 9th at $19.19 
Gain since picked:         +2.82
Earnings Date              10/25 (confirmed)




---

Homestake Mining Co. - HM - close: 8.01 change: -0.19 stop: 7.95

No one's paying much attention to gold with all the excitement in 
the tech sector.  HM gapped lower and ended the day with a 
whimper at $8.01.  Day traders willing to scalp the 40 to 50 
cents in HM's trading range will be watching for a bounce 
tomorrow.  There will also be short traders looking for the stock 
to breakdown below $8.00 or $7.95.  We regret not putting an 
entry price of $8.51 on the stock which would have kept us out of 
the play until it was ready to trade higher.

Picked on November 2nd at $ 8.37
Gain since picked:         -0.36
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 

MAY     May Department Stores Co   35.63     +0.91
SFA     Scientific Atlanta Inc     23.19     +0.76
NRG     Nrg Energy Inc             19.90     +0.80
N       Inco Ltd                   15.19     +0.65
CXR     Cox Radio Inc              24.15     +1.77

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

CPQ     Compaq Computer Corp        8.80     +1.14
NXTL    Nextel Communications      10.69     +1.13
AMCC    Applied Micro Circuits     14.70     +1.61
VTSS    Vitesse Semiconductor      13.58     +1.66
RSTN    Riverstone Network         14.84     +1.83

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

MU      Micron Technology Inc      29.00     +1.85
KSS     Kohl's Corp                66.25     +3.01
AL      Alcan Inc                  34.30     +1.63
SPW     Spx Corp                  109.18     +2.75
PD      Phelps Dodge Corp          30.95     +1.64
 

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

FRX     Forest Laboratories Inc    69.85     -2.61
ELN     Elan Corp                  39.80     -2.85
WPI     Watson Pharmaceuticals     28.54     -18.61
MYL     Mylan Laboratories Inc     32.05     -2.06
CTXS    Citrix Systems Inc         21.91     -1.38

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

BSYS    Bisys Group Inc           54.09     -0.26
HU      Hudson United Bancorp     27.00     -0.13
CXP     Centex Construction       32.40     -0.28
CDN     Cadence Design Systems    23.05     -1.50





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