Option Investor
Newsletter

Daily Newsletter, Monday, 12/03/2001

HAVING TROUBLE PRINTING?
Printer friendly version
PremierInvestor.net Newsletter                 Monday 12-03-2001
                                                  section 1 of 2
Copyright © 2001, All rights reserved.
Redistribution in any form is strictly prohibited.

The entire newsletter is best viewed in COURIER 10 for alignment
=================================================================
To view this email newsletter in HTML format with imbedded
charts and graphs, click here:
http://www.PremierInvestor.net/htmlemail/6075_1.asp
=================================================================

In section one:

Market Wrap:      The Fuse Is Burning...
Market Sentiment: Economics on the back burner
Play-of-the-Day:  We'll Try It Again
Watch List:       MLNM, RTRSY, LIN, UTX, C

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
        12-03-2001        High      Low     Volume Advance/Decline
DJIA     9764.00 - 87.60  9848.90  9703.90 1.20 bln   1272/1870	
NASDAQ   1904.90 - 25.60  1925.35  1898.98 1.48 bln   1324/2282
S&P 100   578.66 -  6.14   584.80   576.77   totals   2596/4152
S&P 500  1129.90 -  9.55  1139.45  1125.78           
RUS 2000  457.03 -  3.75   460.79   455.51
DJ TRANS 2483.06 - 28.72  2512.68  2471.24
VIX        26.00 -  0.14    27.04    25.82
Put/Call Ratio      0.62
-----------------------------------------------------------------

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

The Fuse Is Burning...

Jeff Bailey came up with a good metaphor to explain the current
market dynamic.  I'm going to borrow it for today's Market Wrap.
From Jeff Bailey's Market Wrap last Friday:

Maybe [Friday's] market was like a firecracker.  The "fuse" has
been lit and perhaps it's now burning.  The question remains...
"Will the fuse stay lit and what type of powder chart is at the
end of the fuse?"

The fuse burned brighter in today's market.  The 5-year Treasury
YIELD (FVX) broke and closed below the 40.00 (4.00%) level in
today's trading.  The FVX closed on its day low in yield, which
means price closed at its high.  If price closed at its high, that
means "they" were buying 5-year Treasury notes.  The liquidity
concerns that Mr. Bailey alluded to last week are as follows: if
money is going into the 5-year note then it has to come from
somewhere else, possibly stocks.  The 5-year finished 1.40 percent
lower in yield.

What was interesting in today's market is that the shorter-dated
13-week Treasury bill (IRX) finished lower in price and higher in yield.
Of the four primary Treasury benchmarks (IRX, FVX, 10-year (TNX), and
30-year (TYX)) only the 13-week finished higher in yield and lower in
price.  The 10-year finished 0.86 percent lower in yield, while the
30-year finished 0.20 percent lower in yield.  The 13-week finished
0.57 percent higher in yield, which means the market was selling
shorter-dated Treasuries in favor of longer maturities.

Because of its shorter maturity, the 13-week is the safest of the
aforementioned Treasuries.  But because of its relative safety,
the 13-week yields the lowest.  Its yield closed today at 17.40, or
1.74 percent.

The domino effect Jeff wrote about played out today exactly as he
scripted last Friday.  The 13-week was sold because of its low
yield and some of the proceeds of that sale moved into the 5-year.
Remember, the 5-year yield dropped the most percentage points today,
which means it was the most heavily bought among the longer-dated
Treasuries.  While bond market participants still appear to be
shunning the risks associated with the 10- and 30-year Treasuries,
they're willing to accept more risk by moving out of the 13-week
and into the 5-year.  But any way you slice it, the bond market
action was further evidence of the burning fuse, which could
pressure stocks lower over the short-term.

Stocks moving lower today included banking issues.  The KBW Bank
Sector Index (BKX) dropped for the second consecutive session.
The realization of Enron's (NYSE:ENE) bankruptcy over the weekend,
increasing tensions in the Middle East, and continued fears over
Argentina all contributed to the weakness in the BKX today.  The
sector finished 1.50 percent lower, but off of its session lows.
The BKX bounced from an interesting level Monday at 815.  It's
an interesting level because it's the site from which the BKX
rebounded on November 11.  This double-bottom may very well hold
and the BKX may subsequently rebound and trade higher from here.
Conversely, a breakdown below the 815 level, as measured by a
"print" at 810 would shorten the fuse for stocks.

Chart of the Banking Sector.

Chart=


In technology, the fuse has been burning brightly in the
Networking Sector Index (NWX).  The Networking Index, which
includes notables such as Cisco Systems (NASDAQ:CSCO), Juniper
Networks (NASDAQ:JNPR), Ciena (NASDAQ:CIEN), and Riverstone
Networks (NASDAQ:RSTN), has been stair-stepping lower since
November 20.  The NWX broke below another key support level in
Monday's session at 320.  It was one of the worst performing
sectors of the market today with its 3.58 percent loss.

The heavyweight of the group, Cisco, is scheduled to report its
fiscal first-quarter results after the bell Wednesday.  The
company reaffirmed guidance about two months ago.  That event
carried shares of Cisco from the low teens all the way up to $20
recently.  But the stock was unable to advance past the $20
level.  I would think that the rally from early October from the
$11 area up to $20 discounted the good news that Cisco is about
to report in two days.  But the question remains just how good
is the news that Cisco is about to report?  The NWX may hold the
answer.  Cisco may indeed report a better-than-expected number.
Current estimates call for 5 cents per share in earnings and about
$4.5 billion in revenues.  If the company exceeds its estimates
by a wide margin then the NWX will probably rebound.  But the
poor trading in the group recently may portend of a Cisco report
that is better-than-expected, but not necessarily a reason to
rally the Networkers.  Of course there's a lot of subjectivity
on my part in reaching that conclusion.  But the NWX has been
weak in the last several sessions and gave up more relative
strength in today's session.  If smart money knew that Cisco
was going to blow away its estimates, then I think they'd be
bidding the NWX higher.

Chart of the Biotech sector

Chart=


Among the better performing sectors today included the
Pharmaceutical Index (DRG).  Was that a reason for concern as
it relates to stocks?  The DRG is defensive in nature because
drug companies aren't as levered to the economy as banks and
networking companies.  If a mutual fund manager needs to buy
stocks for his/her fund but isn't confident about the prospects
of the U.S. economy, then he/she might seek equity exposure in
the drugs for their relative safety.

The Biotechnology Sector Index (BTK) finished lower in today's
session, while the DRG finished fractionally higher.  The
biotechs aren't as levered to the economy as the banks and
networkers, but are more aggressive than the drug companies.
The divergence between the BTK and DRG tells me that the buying
wasn't unique to drug-related companies in general, only those
with established product lines and pipelines.  Or, in other
words, less risky drug companies.  The deliberate buying of
the DRG components "felt" like defensive posturing.

Merck (NYSE:MRK), a component of the DRG, tacked on 75 cents
today.  It was among the sector's best performing stocks
today, the others were: King (NYSE:KG), American Home
Products (NYSE:AHP), Eli Lilly (NYSE:LLY), and Schering
Plough (NYSE:SGP).

Shares of Merck edged higher, towards their long-standing
descending trend line.  The bearish resistance line I'm
referring to can readily be seen on the stock's point and
figure chart.  A breakout above $69 and subsequent advance
above $70 may indicate an extended rally in shares of Merck.
The stock acts as if it's under institutional accumulation
and where the "elephants" are playing is generally a good
place to be.  Have you ever tried stopping an elephant in
its tracks?  Take my word, it's difficult.  It's better to
follow an elephant through the jungle.

Chart of Merck

Chart=


Is what is good for Merck bad for the rest of the market?
Not necessarily.  But the current accumulation of Merck
smells like something is burning.  It's another metric that
reveals a defensive market posture.  Let's just step back
and look at it this way: Where did money move Monday?  It
moved into bonds, healthcare minus biotechs, the defense
industry, gold, and energy.  With the exception of energy,
each of the aforementioned sectors are defensive in nature
and not as closely tied to the business cycle.  What's more,
the move in the energy sector was related to the weekend
events in the Middle East and a possible production cut in
Russia; the move was news-related.

The major averages closed at or near recent historical
support zones.  The Dow Jones Industrial Average (INDU)
rebounded by about 60 points from its support level at 9700,
which was the site of its day low.  It finished lower by
0.88 percent.

The S&P 500 (SPX) shed 0.83 percent.  It too finished above
its day low, but closed between the 1125 and 1130 support
zone.

The Nasdaq-100 (NDX) closed slightly below its 1575 support
level.  I wouldn't label the NDX close a complete breakdown,
but follow-through to the downside in Tuesday's session would
add credence to the breakdown argument. 

The fuse is lit in the bond market, several sectors of the
stock market, as well as the major averages.  A confluence of
breakdowns in sectors such as the BKX and NWX in conjunction
with failures of support in the major averages could lead to
an explosion.  But the fuse hasn't reached the powder yet.
The bulls still have time to snuff out the flames.

Mr. Bailey is back in action Tuesday.  Until then, have a
nice evening.

Eric Utley
Premier Investor


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

Economics on the back burner
by Russ Moore

Economics on the back burner. Under normal circumstances, today’s 
stronger then expected economic numbers would have sparked at 
least a modest rally. However, today’s data took a back seat to 
Middle East tensions, Enron troubles and Argentine woes. 

The DOW closed with a loss of -0.9 percent while the NASDAQ 
dropped -1.3 percent and the NDX -1.8 percent. Volume was weak 
with 1.19 billion shares trading on the big board and 1.49 
billion shares moving on the NASDAQ. Losers hammered winners by a 
19/13 margin on the NYSE and 23/13 on the tech index.

Northbound sectors included gold, drug, healthcare, oil, oil 
service and natural gas. Brokerage, biotech, airline, Internet 
and networking sectors experienced the heaviest losses.

Economic data saw personal income remaining flat, while personal 
spending rose +2.9 percent versus the +2.4 percent expected. 
Construction spending was positive, posting an increase of +1.9 
percent. The National Association of Purchasing Managers index 
came in at 44.5, a significant increase over last month’s 38.8, 
and stronger than the 41.6 forecast. The most positive portion of 
the report was a rise in new orders, moving to 48.8 percent from 
38.3 percent.

We could be in for a few more days of choppy action as all eyes 
will be on the employment numbers due out of Friday. A positive 
surprise, coupled with today’s data could lead to a solid move to 
the upside assuming Middle East concerns are improving and the 
Enron debacle drops off the front pages.


VIX 
Monday 12/03 close: 26.00


VXN
Monday 12/03 close: 49.74


30-yr Bonds
Monday 12/03 close: 5.25


Total Put/Call Ratio: .72


Equity Option Put/Call Ratio: .60


Index Option Put/Call Ratio:  1.52


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 38.97

Volume/Open Interest
Maximum calls: 40/135,658
Maximum puts : 40/112,308

Moving Averages
 10 DMA 39
 20 DMA 38
 50 DMA 35
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: 578.66

Volume/Open Interest
Maximum calls: 640/5,348
Maximum puts : 500/7,381
Moving Averages
 10 DMA  587
 20 DMA  584
 50 DMA  562
200 DMA  606

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: 1129.90

Volume / Open Interest
Maximum calls: 1150/42,371
Maximum puts : 1100/43,456

Moving Averages
 10 DMA 1142
 20 DMA 1134
 50 DMA 1093
200 DMA 1177

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:  9,763.96

Volume / Open Interest
Maximum Calls: 98/26,104
Maximum Puts   90/48,196

Moving Averages:
 10 DMA  9,868
 20 DMA  9,766
 50 DMA  9,387
200 DMA 10,151

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: 585.33

Volume / Open Interest
Maximum Calls: 620/  751
Maximum Puts:  540/1,155

Moving Averages
 10 DMA 599
 20 DMA 587
 50 DMA 530
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: 511.00

Volume / Open Interest
Maximum Calls: 520/ 754
Maximum Puts:  470/1272

Moving Averages
 10 DMA 517
 20 DMA 519
 50 DMA 464
200 DMA 561

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: 398.79

Volume / Open Interest
Maximum Calls: 420/406
Maximum Puts:  360/330

Moving Averages
 10 DMA 398
 20 DMA 395
 50 DMA 392
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, 11/30. 
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 
11/13/01     381,539   421,284   (39,745)    1.2%
11/20/01     369,784   415,822   (46,038)   13.6%
11/27/01     371,336   421,405   (50,069)    8.7%

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
11/13/01       136,047    87,645    48,402    (4.9%)
11/20/01       140,507    86,861    53,646     9.8%
11/27/01       151,317    92,807    58,510     9.1%

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 
11/13/01      38,751    49,257   (10,506)   23.9%
11/20/01      38,042    46,446    (8,404)  (20.0%)
11/27/01      37,259    48,315   (11,056)   31.5%

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
11/13/01       11,568     6,505    5,063      55.1%
11/20/01       12,933     8,230    4,703      (7.1%)
11/27/01       12,540     8,359    4,181     (11.1%)

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 
11/13/01      24,145    10,204   13,941     (0.6%)
11/20/01      25,033    11,525   13,508     (3.1%)
11/27/01      24,243    11,496   12,747     (5.6%)

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
11/13/01       4,094    12,121    (8,027)     (7.8%)
11/20/01       3,609    10,565    (6,956)    (13.3%)
11/27/01       4,228    10,630    (6,402)     (8.0%)
 
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        +58,510     +53,646        -50,069     -46,038

Total Open
Interest %       (+23.97%)  (+23.59%)      (-6.32%)   (-5.86%)
                 net-long   net-long       net-short  net-short


                     Small Specs             Commercials
DJIA futures     (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value          -4,228     -6,956          +12,747    13,508
Total Open
interest %       (-43.09%)    (-49.07%)      (+35.67%)  (+36.94)
                 net-short   net-short     net-long    net-long


                     Small Spec              Commercials
NASDAQ 100      (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value         +4,181      +4,703         -11,056    -8,404

Total Open
Interest %        (+20.01%)   (+22.22%)     (-12.92%) (-9.95%)
                 net-long   net-long      net-short net-short


What COT Data Tells Us
----------------------
Indices:.We’ve seen the Commercials add to their net-short 
positions for the second week in a row after being stationary for 
a month. Is this a bearish sign? Too early to tell, but as we 
said last week, a failure to go net-long (bullish) is an 
indication of caution, and one that must be respected by longer-
term players.

Gold: Last week we highlighted the fact that Commercials reducing 
their net-short positions by a wide margin could indicate a 
bounce is around the corner. Looking at the XAU (gold and silver 
index) this week we see that the index has enjoyed a 5 percent 
gain. Nothing to get too excited about, however, with the 
Commercials going net-long (bullish) this week, it’s worth 
monitoring.

10/30 33,199 contracts net-short
11/06 35,435 contracts net-short
11/13 23,637 contracts net-short
11/20  2,489 contracts net-short
11/27  1,738 contracts net-long

Data compiled as of Tuesday 11/20 by the CFTC.



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

QUALCOMM - QCOM - close: 57.28 change: -1.44 stop: 60.61

Company Description
QUALCOMM Incorporated is a leader in developing and delivering 
innovative digital wireless communications products and services 
based on the Company's CDMA digital technology. The Company's 
business areas include CDMA chipsets and system software; 
technology licensing; the Binary Runtime Environment for 
Wireless(TM) (BREW(TM)) applications platform; Eudora® e-mail 
software; digital cinema systems; and satellite-based systems 
including portions of the Globalstar(TM) system and wireless 
fleet management systems, OmniTRACS® and OmniExpress®. QUALCOMM 
owns patents that are essential to all of the CDMA wireless 
telecommunications standards that have been adopted or proposed 
for adoption by standards-setting bodies worldwide. QUALCOMM has 
licensed its essential CDMA patent portfolio to more than 100 
telecommunications equipment manufacturers worldwide. 
(source: company press release)

- ORIGINAL WRITE UP: Nov. 28th, 2001 -

Why We Like It:
We like QCOM as a short-term bearish play due to its technical 
breakdown of support at $60 this week and its 200-dma that 
occurred on Wednesday.  This is more of a technical play than any 
fundamental reason to short the stock.  Shares produced a nice 
run up from $49.00 to $62.50 in November and a 50% retracement 
would only put the bearish target near $55 - $56.  However, 
QCOM's legendary volatility could bring the stock back to its 50-
dma which is currently resting near $51.  Thus our target for the 
stock is $51.00.  The MACD just produced a bearish crossover 
today and the point-and-figure chart shows QCOM on a fresh column 
of O's.  Be prepared for some support at $55.  We are going to 
start the play with a stop just over today's high at $60.61.  If 
QCOM shows weakness early on and trades down from there then more 
conservative traders may be able to put a stop just over $58.55.  
Adjust your stop accordingly.

- Monday Update, Dec. 3rd, 2001 -

This could be it.  We originally picked QCOM on the breakdown
below its 200-dma.  Shares have since re-tested the $60 level and 
its 10-dma as overhead resistance.  Monday's performance put it
back below the 200-dma and Tuesday could bring the move we've
been looking for.  Confirm stock direction before committing
new capital.


Picked on November 28th at $57.29 
Gain since picked:          +0.01
Earnings Date               11/06 (confirmed)

Chart =




==========
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.

-----------

Millennium Pharmaceuticals - MLNM - close: 32.10 change: -1.99

WHAT TO WATCH: The Biotech sector dipped beneath short-term 
support at the 10 DMA today and we think that the chances of 
continued profit taking are relatively high.  MLNM closed just 
under its short-term support for the first time in over a month 
and, while today’s volume lacks the conviction associated with 
significant profit taking, tomorrow could provide the requisite 
insight to determine the direction of the stock in the coming 
days.  The breach of short-term support suggests that MLNM could 
retrace recent gains as far down as just under 29.00.  However, 
if volume returns tomorrow and short-term support is re-
established, MLNM could return to its ascending trend and offer a 
10% upside.  At current levels we would expect MLNM to find 
support at the $30 area.  This level is bolstered by its 200-dma
and the 15-dma.  This is not the first time shares have dipped
below its 10-dma o the current bullish trend and buyers may see
this as an entry point.  Tomorrow could be the pivotal day.

Chart =


---

Reuters Group PLC - RTRSY - close: 59.26 change: +1.46

WHAT TO WATCH:  Friday’s close saw RTRSY shares fall under the 
50-DMA of 58.80 but buyers stepped up to the plate today, pushing 
the stock back above the long-term average.  Significant support 
exists around the 58.00 area and a move higher tomorrow should 
tell us whether a new bullish trend is at the onset.  Conversely, 
a dip back under the 50-DMA accompanied by conviction could force 
a retest of support at 53.00.  Keep in mind that RTRSY trades on 
the London exchange and the charts will show gaps in opening 
prices.  For those traders that believe they can pick reversals
this could be one in the making.  Or it could be a speed bump
on the way down.  Over $60, we'd consider a bullish play with 
a tight stop.  Under $57.75, we'd consider a bearish play with
a tight stop.  Right now the trend is obviously bearish and 
readers should consider positions cautiously.

Chart =


---

Linens N Things - LIN - close: 23.20 change: -0.80

WHAT TO WATCH:  Retail stocks soared in November and LIN was no 
exception.  Profit taking today, however, pushed shares beneath 
short-term support for the first time in one month and could 
portend continued selling pressure.  As long as shares remain 
under the 10-dma, currently at $23.50, we would consider a 
short (bearish) play.  LIN could fall to $21.40, a 50%
retracement of the November run, or to $20, near its 50-dma.
Keep an eye on the retail index (RLX.X) which has been stuck
in a trading range and looks tired.

Chart =


---

United Technology - UTX - close: 58.91 change: -1.29

WHAT TO WATCH:  UTX has traded in a similar trend with the Dow 
for the last two months and today provided additional proof of 
that correlation.  Though the stock is reasonably priced at 
current levels, yesterday’s failed rally at the 100-dma, and 
today’s reinforcing decline and drop below its 10-dma, suggest 
that a further drop could be in order.  The stock looks 
overbought and could be overdue for some profit taking.  The MACD 
is really looking tired and is about to produce a bearish 
crossover.  A 50% retracement from the September low to the 
November high would put UTX near $50.  We suspect the 50-dma near 
$54 might offer support and a few weeks ago UTX bounced off its 
30-dma.  Traders will want to see confirmation of the breakdown.

Chart =


---

Citigroup - C - close: 46.91 change: -0.99

WHAT TO WATCH:  Financials have headed south four of the last 
five trading sessions and with C confirming its breakdown below 
the 200-dma the bullish run could be over.  Some traders may be 
betting that the 50-dma at 46.16 will offer support but the MACD 
is negative and getting worse and the short-term 5-dma has 
produced a bearish crossover of its 15-dma.  Fortunately, for the 
bulls, even if the stock does fall further there will like be 
some price support near $45.00 and $44.75 (see the end of 
October).  The question is will the 50-dma or $45 be enough to 
hold up the stock price?  A 50% pull back of the Sept-Nov. rally 
would put C near $43.  Using a retracement tool, traders can see 
that the $45 level is also supported by the 38.2% retracement 
level.

Chart =




=================================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to remove@PremierInvestor.net
=================================================================
DISCLAIMER
=================================================================

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

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

*****************************************************************
ADVERTISING INFORMATION

For more information on advertising in PremierInvestor.net
Newsletter, or any Premier Investor Network newsletter please
contact advertising@PremierInvestor.net.

*****************************************************************


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



PremierInvestor.net Newsletter                  Monday 12-03-2001
                                                   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/6075_2.asp
=================================================================

In section two:

Net Bulls
  Bullish Play Note:  EXEL
  Bearish Stop Adjustments:  WWCA


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
==================================================================

Play Note!

EXEL - in the weekend newsletter we published EXEL as a bullish
new play for Premier.  However, on the website it was incorrectly
labeled as a bearish (short) play.  The play write up described
a bullish strategy but we wanted to clear up any confusion.



===================
NB Stop Adjustments
===================

Bearish Plays
-------------

WWCA - close: 23.79 change: -0.78 stop: 25.01 *new*

WWCA is again moving in our favor and this time it closed below
the $24.00 level.  Traders interested in collecting a 10% move
should be looking to take profits now.  We are moving our stop
down to $25.01, which should help ensure a move of 5% should we
get stopped out.  A slightly more conservative approach would be
to use today's high as a stop.  

Chart =




==================
  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 

CVC     Cablevision Systems        43.40     +1.36
GLH     Gallaher Group             25.92     +0.76
MTH     Meritage Corp              45.75     +1.06
TKCI    Keith Companies Inc        10.20     +1.66

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

LBRT    Liberate Technologies      10.48     +1.33
ARRS    Arris Group Inc             9.62     +1.52
MROI    Mro Software Inc           19.30     +2.30
FALC    Falconstor Software Inc     9.22     +1.52
CCBL    C-Cor.Net Corp             10.88     +1.24

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

CVG     Convergys Corp             34.87     +1.64
MBT     Mobile Telesys             38.00     +2.41
MUR     Murphy Oil Corp            74.61     +2.70
RMD     Resmed Inc                 61.75     +3.25
ESST    Ess Technology Inc         20.51     +1.71

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

GE      General Electric           36.92     -1.58
HI      Household Intl             56.29     -2.70
STT     State Street Corp          50.90     -1.44
TJX     Tjx Companies              35.95     -1.74
MEDI    Medimmune Inc              38.83     -5.27



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

AIG     American Intl Group          81.75     -0.65
HIG     Hartford Fncl. Srvcs         58.43     -0.77
AOC     Aon Corp                     35.00     -0.83
NFB     North Fork Bancorp           29.74     -0.55
RDN     Radian Group                 37.78     -0.52



=================================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to remove@PremierInvestor.net
=================================================================
DISCLAIMER
=================================================================

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

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

*****************************************************************
ADVERTISING INFORMATION

For more information on advertising in PremierInvestor.net
Newsletter, or any Premier Investor Network newsletter please
contact advertising@PremierInvestor.net.

*****************************************************************


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




DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

To ensure you continue to receive email from Option Investor please add "support@optioninvestor.com"

Option Investor Inc
PO Box 630350
Littleton, CO 80163

E-Mail Format Newsletter Archives