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Daily Newsletter, Wednesday, 11/21/2001

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PremierInvestor.net Newsletter              Wednesday 11-21-2001
                                                  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:    Sepsis makes its mark in biotech and drug sectors
Play-of-the-Day:  Would You Sell?
Watch List:       TSM, CELG, LLY, AGN, ROAD, BRL, TEVA, OSIP, 
                  ATK, PHTN, CACI, EMN
Market Sentiment: Good news is bad news again

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
      11-21-2001          High     Low     Volume Advance/Decline
DJIA     9834.68 - 66.70  9894.19  9796.41 1.02 bln   1260/1813
NASDAQ   1875.05 -  5.46  1884.49  1853.67 1.54 bln   1717/1772
S&P 100   586.36 -  3.67   590.03   581.93   Totals   2977/3585
S&P 500  1137.03 -  5.63  1142.66  1129.78             
RUS 2000  452.31 -  1.59   453.90   449.95
DJ TRANS 2485.60 -  3.80  2491.34  2468.90
VIX        25.32 -  0.81    26.75    24.77 
VXN        52.68 +  1.27    54.33    52.51
TRIN        1.38 
Put/Call    0.60
-----------------------------------------------------------------

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

Sepsis makes its mark in biotech and drug sectors

I've never heard of it before, but it sure seems to have an 
impact on stock prices.  Today's news regarding sepsis "a 
bacterial infection in the bloodstream or body tissues" had its 
impact on two stocks.  One was good, the other not so good.

Earlier today, shares of Chiron (NASDAQ:CHIR) traded lower after 
the company announced that results of its Phase III trial for the 
evaluation of tifacogin in severe sepsis; wasn't viewed all that 
positive by the trial.  Results from the trial indicated that 
tifacogin did not meet the primary endpoint of reducing 28-day 
all-cause mortality.

Chiron Chart - $1 box




The technicals have turned bearish for the point/figure chart of 
Biotech Index (BTK.X) component Chiron (CHIR).  In October (red 
A) the stock gave a double top buy signal at $45 and then 
completed a move to $47 before consolidation occurred.  That set 
up a bullish vertical count indicating a bullish price objective 
of $60.  The powerful triple top buy signal was too much to 
resist for bullish traders and the stock ran wild to the $58 
level, without so much as a 3-box reversal.  It's interesting to 
note that the major move higher from the $48 level came just 
after the company reported earnings on October 24th, where 
earnings beat estimates of 24 cents by 6 cents a share.  The 
company also guided earning higher for 2002, but it is difficult 
to know at this time, if potential sales for its sepsis treatment 
that was in Phase III trial was part of that earning's forecast.

I will also note that CSFB turned cautious on the stock just this 
past Monday (November 19th) when they stated the company 
"appeared reserved" about Phase III results for their sepsis 
drug.  CSFB thought the stock had 10%-20% downside if results 
were negative.  At the time, the stock was trading around $50.  
Today's close at $45.59 looks to have 9% downside now factored 
into things.

But negative news on the sepsis front turned into good news later 
this afternoon, when drug maker Eli Lilly (NYSE:LLY) announced it 
had won approval from the FDA for its sepsis drug "Xigris."  
Analysts expect sales could top $1 billion within a few years of 
its introduction.

Eli Lilly Chart - $1 box




The supply/demand picture for Pharmaceutical Index (DRG.X) 
component Eli Lilly (LLY) are quite bullish.  Yesterday, the 
stock triggered a "bullish triangle" with the trade at $81 after 
a two-month phase of higher lows and lower highs.  With a current 
longer-term bullish price objective of $103 today's FDA approval 
for Xigris may make a bulls case.  We would make note that 
preliminary estimates are that sales for Xigris could top $1 
billion within a few years and Eli Lilly's trailing 12-months 
sales were $11.7 billion.

Tough to get a feel for things

Trading sessions before a holiday are tough.  Not everyone's mind 
is in the game and not all market participants are at their 
trading desks and casting their votes.  To me, this makes for a 
more difficult market to try and sort out.

Today's 1.8% gain in the Semiconductor Index (SOX.X) was the 
first gain for the group after a 5 session losing streak that 
began on November 14th (last Thursday).  That decline was rather 
slow until yesterday's 5.7% decline and today's action in the 
group hinted of some shorter-term bears looking to get their 
account flat and take Friday off, then reassess things on Monday 
when everyone is back from their turkey dinners.

That doesn't sound like a bad idea to me.  In fact, this morning 
when Intel (NASDAQ:INTC) gapped lower to open at $29.54, I 
thought things might get interesting for our bearish play in the 
"High Risk/High Reward" section of the site, but when the stock 
turned green at $29.96, I got the distinct feeling that sellers 
in the stock were calling it quits before the holiday.  I have a 
feeling they'll be back next week though.

I don't expect a lot of fireworks on Friday.  The bond market 
will be closed, but stocks will open as they normally do at 09:30 
AM EST.  The trading session will be short and close at 01:00 PM 
EST.  Most stock traders don't like to make big bets when the 
bond market is closed.

I expect the University of Colorado vs. Nebraska Cornhuskers game 
on Friday will draw more interest from the general public than 
the stock markets will.  Even those living on the east coast like 
a good conference rivalry where passion runs deep.  At least 
that's my early prediction.  Anything can happen, as there are a 
lot of things going on in the world that could impact things.

Thanksgivings past

I remember Thanksgivings from my younger years.  Going over to 
Grandma and Grandpa's house for the big turkey dinner.  I'd see 
some relatives that I hadn't seen since the last Thanksgiving 
dinner.  At the time, there was not a second thought to them not 
being there next year.

Now here I am, some umpteen years later.  The grandfathers are 
both gone, but not forgotten.  No longer do we draw numbers from 
a hat in hopes that they would match the totaling score of the 
big football game played that day.  It used to be so painful to 
be within a field goal of actually winning the pot, only to have 
one of the teams decide to sprinkle a little "Thanksgiving mercy" 
on the opponent and not kick the field goal.  That might have 
been considered "running up the score."

Ten years from now (assuming I'm still alive) I'll look back at 
this Thanksgiving and undoubtedly have fond memories.  We should 
all make the most of it.

Yes, there have been some tough times this year.  There are times 
we are perhaps not so "thankful" for.  That one trade that just 
didn't work out like we thought it would and still eats at us.

If we look back on what took place September 11th, and how that 
date has impacted so many, there are many things and many friends 
that we still have to be thankful for.  Some of our "problems" 
become quite small.

Tomorrow, I look to put the "market" away for just one day.  I 
just know that somebody at the dinner table is going to ask me 
something about the stock market.  

I think my response will be.... "it all depend on how the market 
reacts to Wednesday's news regarding the FDA's approval of LLY's 
Xigris for treatment of sepsis and the resulting bullish triangle 
in the point and figure chart coupled with the bullish vertical 
count."

Hopefully the next thing I hear is mom saying..."Jeff...would you 
please pass the turkey and quit talking with your mouth full?"

Have a happy Thanksgiving!

Jeff Bailey
Senior Market Technician



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

ESS Technology - ESST - close: 15.44 change: -0.46 stop: 16.05

Company Description
ESS Technology, Inc., is a leading supplier of high-performance 
feature-rich products for the rapidly growing DVD and digital 
entertainment markets. The company is also a leading provider of 
products that enable the emergence of digital home systems 
delivering and managing entertainment and information in the 
home. (source: company press release)

Why We Like It:
If you have walked into any movie rental store lately then you 
know that DVD is the wave of the future.  Given that fact we're 
not so sure that ESST can hold on to a 200% move in its share 
price in just eight weeks time.  The September low was near $6.00 
and it just recently topped out above $18.  Technically, analysts 
may classify this company in the semiconductor sector.  If so, 
then the recent high last week corresponded well to the high in 
the SOX.  Traders may want to keep one eye on the SOX while 
trading ESST.  Bulls had probably hoped the greater than 10% 
profit taking from $18 to support at $16 would have been enough 
to satisfy momentum players and bears alike.  Evidently, 
investors are looking to take a little more money off the table.  
A quick glance at an intraday chart of Wednesday shows a lot of 
selling pressure at the $15.80 level (try a 5 minute interval 
chart).  We're going to look for a pull back to the $12.50 area 
near its 50-dma.  This should equate closely to a 50% pull back 
of the big run up.  The stock could see some support near $14 and 
bears may decide to cover and take profits, which would still be 
a decent gain from here.  We're going to start the play with a 
stop at $16.05.  If by chance ESST does drop to $12.50 intraday 
we'll close the play for a profit.

Picked on November 21st at $15.44 
Gain since picked:          +0.00
Earnings Date               10/24 (confirmed)






==========
Watch List
==========

The PremierInvestor.net watch list is not designed to be read
as full fledged stock picks.  Rather we would prefer to offer
it as an extra tool in today's investor toolbox.  Think of it
as a radar screen with your own radar operator pointing out
interesting developments, technical patterns or potential plays
that you may or may not have seen on your own.  Due to time
constraints we do glance at the news but rarely do we have 
time to fully read pertinent news stories, due background 
research and other necessary screens that investors should do
before making a decision.  A common exercise is to read the
entry, glance at the sector and other stocks in that industry
and then compare what's happening in the stock to what's 
happening in the broader market indices.  We hope you enjoy
the Watch List and that it proves to be a useful tool for your
own trading success.

----------

Taiwan Semiconductor - TSM - close: 15.85 change: +0.63

WHAT TO WATCH:  Everyone seems to be watching the chip sector
and rightly so.  They helped lead the market up and they could
lead the tech sector lower.  One stock that has really been a
winner for investors is TSM.  The stock has been in a very tight
trading channel that has broken through almost every level of
overhead resistance.  Tuesday saw shares gap down to the bottom
edge of its channel.  Wednesday's +4% performance looks like 
buyers stepping in to buy the dip.  As long as the stock is
holding its 10-dma (currently 15.34) the bulls are probably okay.
If you like the stock but want more confirmation then look for
TSM to trade over $16 again.  However, keep in mind the narrow
trading channel.  The top edge is currently near $17.50 to $18.
If shares breakdown below its 10-dma there could be some fast 
and furious profit taking and short selling.  Be prepared.




---

Celgene Corp - CELG - close: 36.85 change: -0.87

WHAT TO WATCH:  Another stock at the bottom of its ascending
channel is CELG.  This one is not as vertically inclined as TSM's
above but it's a strong bullish trend nonetheless.  Keep an eye
on the 15-dma as the bottom edge of the channel.  Actually, 
traders could be more conservative use a tighter stop (like
$36.25).  However, some of us prefer to see confirmation that
the trend is still intact.  If that's the case, then look for
CELG to trade or close above $38.50, which has been resistance
since the 14th of November.  The top of the channel should
be near $43.00.  




---

Eli Lilly Co - LLY - close: 83.33 change: +2.19

WHAT TO WATCH:  If you read the wrap then you already know 
Mr. Bailey's thoughts on LLY.  I agree that the news today is
very positive for the company and thus for the stock price.
However, the $84 level looks like it could be tough resistance
and I'd hate to buy it here only to have it retest support at
$80 in a day or two.  The volume on today's move looks good
and the MACD is turning positive again but I'm just more 
cautious on the entry point.  Look for the breakout over $84
or a retest (bounce) at $80.00 (or $82).  Your approach to
this possible bullish trade depends on your tolerance for risk.




---

Allergan Inc - AGN - close: 76.08 change: +1.81

WHAT TO WATCH:  AGN is another drug stock that has been enjoying
the strong moves in the drug sector as evidenced by the breakout 
in the DRG.X.  The close above $75 is positive for AGN but
shares closed right underneath its 200-dma (currently near 76.25).
The point-and-figure chart is positive and shows AGN on a fresh
breakout above its descending bearish resistance line.  Look 
for AGN to build new support at $75 or a close over its 200-dma.




---

Roadway Corp - ROAD - close: 30.70 change: +0.45

WHAT TO WATCH:  Formerly known as Roadway Express, this trucking
company is probably enjoying the drastically decreased oil prices
and its affect on the price of fuel.  On a short-term basis the
breakout over $30 looks like a potential play and the recent
profit taking has been on decreasing volume.  Short-term traders
may want to look for the $30 to hold as support and consider
entry points there, with a tight stop underneath.  Longer-term
traders should take note of the stock's price history.  Shares
of ROAD fluctuate wildly on a two to three month basis and the
best entry point to go long would appear to be near the $22 or
$24 area.  Aggressive traders could try and short the stock on
a break down below $30 but bears (and bulls) will need to keep
an eye or ear out for news on the price of oil.  




---

Barr Labs Inc - BRL - close: 69.70 change: +0.47

WHAT TO WATCH:  I almost forgot a couple of more drug stocks
that Premier readers may want to take note of.  BRL has made
a very impressive rebound bolstered by the moves in the drug
sector.  Shares managed to close over its 200-dma today and
look poised to breakout over price resistance at $70.  If BRL
does trade $70 (say $70.05) we would consider a long play with
a stop under Wednesday's low (67.75).  The breakout could allow
for a move to $75 and potentially $80 again.  Check out the MACD.




---

Teva Pharmaceutical - TEVA - close: 57.35 change: -0.16

WHAT TO WATCH:  TEVA continues to show up on my list as a 
possible short play.  Shares have a wonderfully bearish trend
with a steady stream of lower highs.  The stock has shown 
no participation in the multi-day surge in the drug sector 
(DRG.X).  We would consider a bearish play here with a relatively
tight stop ($58.30 or $58.05) or wait for a breakdown under $57.
Our first target would be $53.50, the low in September but the
point-and-figure chart says the bearish price objective should
be near $45.  I would suspect that the $50 level would put up
some resistance for the bears.




---

OSI Pharmaceuticals - OSIP - close: 49.24 change: +0.71

WHAT TO WATCH:  Yet another drug stock that you may want to put
on your personal radar screen.  OSIP has been trying to break
through the $50 resistance level for days.  The recent strength
in the DRG.X, if it keeps up, may be the push OSIP needs to get
going.  This is one play were we would consider using a trigger
to go long.  If OSPI trades to $50.05 or $50.10 then we would
evaluate a bullish position.  There is obvious resistance at
$52.50 and $55.00 but those should be good for a 5% and 10%
move respectively.  Don't forget your stop.




---

Alliant Tech Sys. - ATK - close: 81.54 change: -1.72

WHAT TO WATCH:  It appears the bloom may be off the rose for 
defense stocks like ATK.  Yes, companies like ATK should do well
with the multi-billion defense bill signed since 9-11 but the
stock could need more time to digest these gains (that means
more profit taking).  Last week ATK broke down below its 50-dma
to fall and find support near $75.  The stock has rallied back
to its 50-dma and begun to rollover.  The challenge here is
ATK could go either way.  Shares remain above $80, which could
provide support and any new terrorist attack in the U.S. could
immediately power these stocks higher.  However, the new trend
looks like bears are about to lean on it back to the $75 level.
We would consider a stop just above today's or Tuesday's high.




---

Photon Dynamics - PHTN - close: 33.95 change: -0.30

WHAT TO WATCH:  PHTN is another graphics/video chip company
specializing in flat panel displays.  Shares seem to be coiling
higher but are waiting for the breakout above $35.  If the 
breakout occurs PHTN might be able to run to $40 without too
much resistance.  If PHTN gives into more profit taking (maybe
the SOX continues to slip) then look for stronger support at
$30.




---

CACI International - CACI - close: 65.27 change: -0.84

WHAT TO WATCH:  What is a stock trader to do?  CACI has come to
hover right at the $65 level with clearly defined resistance at
$70 and clearly defined support at $60.  A $5.00 move seems 
almost guaranteed.  We've not looked at the premiums, but option
traders could choose to try a straddle at the $65 strike price.
As for stock traders, the safer move will be to wait for a
breakout one way or the other (above $70 or below $65).





==============
STILL WATCHING
==============

Eastman Chemical Co. - EMN - close: 38.74 change: -0.53

UPDATE:  Traders interested in following the chemical sector
may want to keep an eye on EMN.  The $38 level should hold as
support if the stock continues to pull back.  Target shooting
an entry near $38 may be a strategy to try with a tight stop.
Otherwise we're still looking for the close over $40.

- Original Highlight on Nov. 19th, 2001 -

WHAT TO WATCH:  After months of wasting away in a slow, painful
downtrend from $55 to $37.50 shares of EMN fell drastically
during the post- 9-11 market sell-off.  Since then EMN has been
trying to make a comeback and has actually broken out of the
long-term downtrend.  Unfortunately for the bulls the $40 level
could be tough support.  Unfortunately for the bears the stock
recently broke through tough resistance between $38 and $39.
The move from here could be forecasting direction for the next
couple of weeks.  Another factor to consider is the Dow's 
approach to overhead resistance between 10K and 10.2K.  Any 
strong selling in the DJIA could weigh heavily on EMN.






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

Good news is bad news again
by Russ Moore

Good news is bad news again. This stuff is starting to get 
confusing. Positive economic data came in the form of a falling 
initial claims number down -15,000 to 427,000, and a rising 
Michigan Sentiment number at 83.9. Why then, did the DOW drop -
0.7 percent, the NASDAQ -0.3 percent, and the NDX +0.1 percent?

In a word, BONDS. The thought of an economic recovery sparked a 
sell-off in treasuries with yields moving north. Bond markets 
realize that positive economic data will likely lead to a halt in 
further rate cuts and that’s not the kind of news that bond 
rallies are built on. Stock investors also realize that with 
trouble in bond land comes rising mortgage rates, and that would 
have a detrimental impact on the all-important housing market. 
Furthermore, investors have become spoiled with the ongoing 
series of rate reductions and with the prospect that stocks may 
have to fend for themselves i.e. earnings growth, a little profit 
taking seemed sensible.

Today’s action was on the light side with 1.01 billion shares 
moving on the big board and 1.56 billion shares trading on the 
NASDAQ. Losers edged winners by an 18/13 count on the NYSE and an 
18/17 difference on the tech index.

Drug, biotech, and healthcare ended up on the day while the chip 
sector was the only winner on the tech side.

Friday we’ll see only a half-day of trading and will probably be 
a non-event unless something happens on the “Osama front”. If you 
absolutely must trade, I would urge you to do so with a limited 
amount of capital.

Let me take this opportunity to wish all of you a Happy 
Thanksgiving. 


VIX 
Wednesday 11/21 close: 25.32


VXN
Wednesday 11/21 close: 52.68


30-yr Bonds
Wednesday 11/21 close: 5.31


Total Put/Call Ratio: .77


Equity Option Put/Call Ratio: .65


Index Option Put/Call Ratio:  1.80


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 38.64

Volume/Open Interest
Maximum calls: 40/154,585
Maximum puts : 40/ 82,025

Moving Averages
 10 DMA 38
 20 DMA 37
 50 DMA 33
200 DMA 41

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: 586.36

Volume/Open Interest
Maximum calls: 580/3,946
Maximum puts : 500/6,333
Moving Averages
 10 DMA  585
 20 DMA  573
 50 DMA  554
200 DMA  610

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: 1137.03

Volume / Open Interest
Maximum calls: 1150/34,448
Maximum puts : 1050/44,028

Moving Averages
 10 DMA 1134
 20 DMA 1113
 50 DMA 1078
200 DMA 1184

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:  9,834.68

Volume / Open Interest
Maximum Calls: 98/25,246
Maximum Puts   90/50,404

Moving Averages:
 10 DMA  9,777
 20 DMA  9,571
 50 DMA  9,255
200 DMA 10,194

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: 585.16

Volume / Open Interest
Maximum Calls: 580/  777
Maximum Puts:  540/1,149

Moving Averages
 10 DMA 578
 20 DMA 570
 50 DMA 510
200 DMA 536

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: 503.47

Volume / Open Interest
Maximum Calls: 640/366
Maximum Puts:  600/610

Moving Averages
 10 DMA 519
 20 DMA 499
 50 DMA 453
200 DMA 566

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: 401.85

Volume / Open Interest
Maximum Calls: 420/406
Maximum Puts:  360/320

Moving Averages
 10 DMA 393
 20 DMA 392
 50 DMA 389
200 DMA 392

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 11/16
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 
10/30/01     377,468   413,729   (36,261)   (0.06%)
11/06/01     376,807   416,063   (39,256)    8.2%
11/13/01     381,539   421,284   (39,745)    1.2%

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
10/30/01       123,546    71,225    52,321    (6.2%)
11/06/01       132,106    81,208    50,898    (2.7%)
11/13/01       136,047    87,645    48,402    (4.9%)

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 
10/30/01      32,055    45,574   (13,519)   29.5%
11/06/01      39,410    47,890    (8,480)  (37.0%)
11/13/01      38,751    49,257   (10,506)   23.9%

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
10/30/01       12,725     6,475    6,250      34.9%
11/06/01       11,406     8,143    3,263     (47.7%)
11/13/01       11,568     6,505    5,063      55.1%

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 
10/30/01      25,872    12,556   13,316     (3.1%)
11/06/01      25,977    11,951   14,026      5.4%
11/13/01      24,145    10,204   13,941     (0.6%)

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
10/30/01       4,261    11,220    (6,959)      0.0%
11/06/01       3,569    12,281    (8,712)     25.2%
11/13/01       4,094    12,121    (8,027)     (7.8%)

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        +48,402     +50,898        -39,745     -39,256

Total Open
Interest %       (+21.64%)  (+23.86%)     (-4.95%)   (-4.95%)
                 net-long   net-long      net-short  net-short


                     Small Specs             Commercials
DJIA futures     (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value          -8,027     -8,712          +13,941    14,026
Total Open
interest %       (-49.50%)    (-54.97%)      (+40.59%)  (+36.98%)
                 net-short   net-short     net-long    net-long


                     Small Spec              Commercials
NASDAQ 100      (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value         +5,063      +3,263         -10,506    -8,480

Total Open
Interest %        (+28.01%)   (+16.69%)     (-11.94%) (-9.71%)
                 net-long   net-long      net-short net-short


What COT Data Tells Us
----------------------
Indices:.Commercial players have apparently gone on an extended 
vacation. The Commercial net-short positions on the S&P 500 have 
been stuck around the 4.95 percent range for five weeks. Other 
than the usual gyrations of the Small Specs on the NASDAQ 100, 
significant moves have been absent.

Gold: Only a slight reduction in net-short Commercial positions .

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
11/13 23,637 contracts net-short

Data compiled as of Tuesday 11/13 by the CFTC.



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

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

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Do not duplicate or redistribute in any form.



PremierInvestor.net Newsletter               Wednesday 11-21-2001
                                                   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
=================================================================
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In section two:

Net Bulls
  New Bullish Play:      NOK - well, it's kind of new.
  New Bearish Play:      ESST
  Closed Bullish Plays:  GMST, JNPR, LGTO

StockBottom/Active Trader
  Closed Bullish Plays: IKN

High Risk/Reward
  New Bullish Play:     TMPW

Trading Ideas
  Value Plays With Bullish Signals
  Breakout to Upside (Stocks $5 to $20)
  Breakout to Upside (Stocks over $20)
  Breakout to Downside (Stocks over $20)
  Recently Overbought With Bearish Signals (Stocks over $20)


=================================================================
Net Bulls (NB) section
==================================================================

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

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

Nokia Corp - NOK - close: $23.42 change: -1.20 stop: 22.75 *new* 

Company Description:
Nokia is the world leader in mobile communications. Backed by its 
experience, innovation, user-friendliness and secure solutions, 
the company has become the leading supplier of mobile phones and 
a leading supplier of mobile, fixed and IP networks. By adding 
mobility to the Internet Nokia creates new opportunities for 
companies and further enriches the daily lives of people. 
(source: company press release)

Why We Like It:
Of the four tech stocks we listed as potential plays with 
specific entry ranges to watch on Wednesday, only Nokia was 
triggered.  The stock dipped to $22.93 in its consolidation near 
the $23 level and support at the 15-dma.  Our new long play, that 
began with a stop at $22.40, turned in a nice bounce higher 
towards the close.  Traders should be able to see that we 
targeted the bottom edge of its ascending channel and was 
fortunate to have the stock slip to our entry range before 
bouncing.  We are going to raise our stop to $22.75 and really 
limit our potential risk.  The issue to be aware of is NOK is an 
ADR with the true equity traded overseas so the stock traded on 
the NYSE is prone to gaps up and down at the open.  The top of 
the channel should be near $26.50 to $27.00, which will act as 
our initial target.  More conservative traders may want to look 
for the stock to trade over the $24 level before considering a 
new long position.  

- Original Write Up, Nov. 20th, 2001 -

Currently poised at its 200-dma, we like NOK's new bullish trend 
and the stock has not violated its 15-dma in weeks.  We are 
looking for a pull back to $23.00 to $22.50 as our range.  If we 
do get the bounce we're looking for we'll start the play with a 
stop at $22.40.  Remember to look for the bounce to begin.  Look 
for support near $22.80 to $22.75.

Picked on November 21st at $23.00 
Gain since picked:          +0.65
Earnings Date               10/19 (confirmed)





  --------------------
  New Bearish Plays
  --------------------

ESS Technology - ESST - close: 15.44 change: -0.46 stop: 16.05

Company Description
ESS Technology, Inc., is a leading supplier of high-performance 
feature-rich products for the rapidly growing DVD and digital 
entertainment markets. The company is also a leading provider of 
products that enable the emergence of digital home systems 
delivering and managing entertainment and information in the 
home. (source: company press release)

Why We Like It:
If you have walked into any movie rental store lately then you 
know that DVD is the wave of the future.  Given that fact we're 
not so sure that ESST can hold on to a 200% move in its share 
price in just eight weeks time.  The September low was near $6.00 
and it just recently topped out above $18.  Technically, analysts 
may classify this company in the semiconductor sector.  If so, 
then the recent high last week corresponded well to the high in 
the SOX.  Traders may want to keep one eye on the SOX while 
trading ESST.  Bulls had probably hoped the greater than 10% 
profit taking from $18 to support at $16 would have been enough 
to satisfy momentum players and bears alike.  Evidently, 
investors are looking to take a little more money off the table.  
A quick glance at an intraday chart of Wednesday shows a lot of 
selling pressure at the $15.80 level (try a 5 minute interval 
chart).  We're going to look for a pull back to the $12.50 area 
near its 50-dma.  This should equate closely to a 50% pull back 
of the big run up.  The stock could see some support near $14 and 
bears may decide to cover and take profits, which would still be 
a decent gain from here.  We're going to start the play with a 
stop at $16.05.  If by chance ESST does drop to $12.50 intraday 
we'll close the play for a profit.

Picked on November 21st at $15.44 
Gain since picked:          +0.00
Earnings Date               10/24 (confirmed)





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

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

Gemstar-TV Guide - GMST - close: 25.33 change: -0.96 stop: 24.99

Quick, someone hit the rewind button on that remote control.  
Shares of GMST attempted to rally early this morning but it 
didn't last long.  GMST quickly fell to the $24.00 level and 
bounced from there. Unfortunately this descent stopped us out at 
$24.99 for a 55-cent loss.  We knew that the $24 level was 
stronger support, thus our original stop at $23.99, but the 
recent rally and pull back looked strong enough to hold the stock 
at $25.  Traders should keep an eye on the $24 level as support 
and $27.50 to $27.75 as resistance.

Picked on November 16th at $25.54 
Gain since picked:          -0.55
Earnings Date               11/14 (confirmed)




---

Juniper Networks - JNPR - close: 25.24 change: +0.22 stop: 24.49

Both CSCO, the sector leader, and the NWX.X, the Networking 
index, dipped today in another day of profit taking.  Shares of 
JNPR did too but managed a nice bounce in afternoon trading.  We 
were correct in our analysis of $24.50 as support for the stock 
but shares slipped through midday to stop us out when JNPR hit an 
intraday low of 24.47.  We would keep an eye on the stock for 
another rebound if the market permits but the $27 level continues 
to be serious resistance.  

Picked on November 16th at $25.60 
Gain since picked:          -1.11
Earnings Date               10/11 (confirmed)




---

Legato Systems - LGTO - close: 10.05 change: -0.72 stop: 9.98 

The strength we saw in LGTO on Monday quickly evaporated as if 
trades suddenly realized there was one stock they had forgotten 
to take profits in before the holiday weekend.  Shares fell 
straight to support near $10 and its 15-dma but we were stopped 
out at 9.98 midday.  If LGTO can hold the $10 level it may be 
worth keeping an eye on the stock but at this moment we'd like to 
see it above $11 and then we'll probably look for the 200-dma to 
be conquered.  

Picked on November 8th at $10.47 
Gain since picked:         -0.49
Earnings Date              10/23 (confirmed)






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

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

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

Ikon Office Solutions - IKN - cls: 9.92 chg: +0.17 stop: 9.70 

We were not surprised when IKN continued its consolidation back 
to stronger support at $9.50.  Once shares hit that level of 
support, buyers stepped in to buy the dip and fueled the bounce 
back towards $10.  We will keep an eye on IKN as more of a 
longer-term play but we'd like to see it back above its 15-dma.  
Both $10 and $10.50 should act as overhead resistance.  Keep an 
eye on the MACD as it is still negative. 

Picked on November 12th at $10.20
Gain since picked:          -0.50
Earnings Date               10/25 (confirmed)






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

===============
HR New Plays
===============

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

TMP Worldwide - TMPW - close: 39.64 change: -0.06 stop: 37.69

Company Description
Founded in 1967, TMP Worldwide Inc., with more than 10,500 
employees in 33 countries, is the online recruitment leader, the 
world's largest Recruitment Advertising agency network, and one 
of the world's largest Executive Search & Executive Selection 
agencies. TMP Worldwide, headquartered in New York, is also the 
world's largest Yellow Pages advertising agency and a provider of 
direct marketing services. The Company's clients include more 
than 90 of the Fortune 100 and more than 480 of the Fortune 500 
companies. In June 2001, TMP Worldwide was added to the S&P 500 
Index.  (source: company press release)

Why We Like It:
We're adding TMPW as a long play to the high risk / reward 
section of the play list because its association as an 
"Internet" stock can cause volatility.  As you can see above in 
the business summary, TMPW has multiple business divisions.  
However, the one we most commonly attribute to the stock is its 
Monster.com job-employment website.  Surprisingly, this dot.com 
has not been subject to the same profit taking that has hit the 
Internet sector the last couple of days.  On the contrary, shares 
of TMPW continue to edge higher after their earnings report on 
the 15th of November.  The stock has broken out above tough 
resistance between $36.00 and $36.50 and it currently coiling 
under round number price resistance at $40.  The point-and-figure 
chart also shows the stock in breakout mode above its bearish 
line of resistance.  Currently, the bullish price objective is 
pointing to $59.00.  That's quite a move and we're not going to 
be aiming that high.  We do think the stock can make it to the 
44.50 - 45.00 area and possibly to the 49.00 - 50.00 level.  As 
of today we're going to set an exit point or target of $49.00 but 
don't let a gain to $44.50 stop you from taking profits.  We're 
going to initiate the play with a stop at 37.69.  This is just a 
few cents below the afternoon dip on Monday and today's low.  
More conservative traders may want to wait for shares to actually 
close over $40.  

Picked on November 21st at $39.64 
Gain since picked:          +0.00
Earnings Date               11/15 (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 

WTSLA   Wet Seal Inc.              22.15     +1.46

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

SKS     Saks Holdings Inc           9.42     +1.31
DLP     Delta & Pine Land Co       19.24     +1.04
SLMC    Select Medical Corp        16.10     +1.10
GYMB    Gymboree Corp              11.68     +1.18
ARQL    Arqule Inc                 10.10     +1.49

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

MDT     Medtronic Inc              43.90     +1.65
AMGN    Amgen Inc                  61.98     +4.07
GDT     Guidant Corp               50.30     +3.48
STJ     Saint Jude Medical Inc     74.00     +4.90
NUE     Nucor Corp                 46.68     +1.08
 

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

WMB     Williams Companies Inc     27.75     -1.51
DYN     Dynegy Inc                 39.76     -1.94
CHIR    Chiron Corp                45.59     -4.50
TECD    Tech Data Corp             38.00     -2.62
ATVI    Activision Inc             22.75     -1.42

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

MFC     Manulife Financial Corp     26.35     -0.91
CAKE    Cheesecake Factory Inc      30.01     -1.64
JEF     Jefferies Group Inc         35.70     -0.35
BTH     Blyth Inc                   20.20     -0.45
RVDP    Riverdeep Group             23.15     -1.01



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

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

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