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Daily Newsletter, Monday, 12/10/2001

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PremierInvestor.net Newsletter                 Monday 12-10-2001
                                                  section 1 of 2
Copyright  2001, All rights reserved.
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In section one:

Market Wrap:      Sleepy Session Ahead of the Fed
Market Sentiment: Rally on hold
Play-of-the-Day:  XMSR
Watch List:       AVID, EMIS, RYN, PFGI, ASGN, CSGS

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U.S. Market Numbers
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MARKET WRAP  (view in courier font for table alignment)
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      12-10-2001          High     Low     Volume Advance/Decline
DJIA     9921.45 -128.01 10075.61  9921.45 1.19 bln    965/2152
NASDAQ   1992.12 - 29.14  2036.54  1989.68 1.65 bln   1336/2311
S&P 100   581.24 - 10.54   591.94   581.22   Totals   2301/4463
S&P 500  1139.93 - 18.38  1158.31  1139.66             
RUS 2000  474.18 -  7.03   481.21   473.50
DJ TRANS 2599.10 - 29.16  2645.54  2590.92
VIX        26.00 +  1.11    26.65    25.22 
VXN        52.12 +  1.94    52.15    50.54
TRIN        1.56 
Put/Call    0.57
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===========
Market Wrap
===========

Sleepy Session Ahead of the Fed

The major averages attempted to rally early Monday morning, but
failed to follow-through above overhead congestion.  The triple
digit loss in the Dow Jones Industrial Average (INDU) and nearly
1.5 percent dip in the Nasdaq (COMPX) might have you think that
Monday was a wild session.  But it wasn't.  Following the early
morning rally attempt, stocks drifted lower throughout the
session, ultimately closing near their day lows.  The drifty
action of the tape was indicative of traders stepping to the
sidelines ahead of the FOMC's announcement on interest rates
Tuesday afternoon.  Volume totals reflected the non-commitment
on the part of traders.  Only 1.2 billion shares traded on the
NYSE, while 1.65 billion exchanged on the Nasdaq market.  The
totals are well below the recent daily volumes.

The Federal Reserve will announce its decision on rates at 2:15
p.m. EST.  The market is expecting another 25 basis point
reduction in short-term interest rates Tuesday afternoon.  In
addition, the market will be listening for guidance from the Fed.
While nothing short of vague, traders will nevertheless turn to
the release accompanying the decision on rates for insight into
being Alan Greenspan.  Tomorrow's announcement, more than any
other this year, will be read into by Wall Street very carefully.
There's a growing consensus that the economy may be over stimulated
from monetary and fiscal stimuli.  While Main Street continues
suffering through loss of jobs and a lousy economy, Wall Street
is growing worried about the prospects of inflation.  That's why
traders will scour the Fed's release tomorrow afternoon, searching
for indications of what the Fed's opinion is of the U.S. economy
and when they may begin to raise rates in an attempt to fend
off inflation.  The Fed Fund Futures contract is currently
anticipating a hawkish monetary policy by next summer.

Despite the prospects of another rate cut, bonds were modestly
higher Monday, evidenced by lower yields in the longer-dated
securities.  The short-end of the yield curve, however, was
slightly lower.  The 13-week Bill Yield (IRX) finished at 1.68%.
The shorter-dated securities had been aggressively bought last
week.  Today's action in the IRX was most likely a product of
profit taking and rotation into longer-dated securities.

Without any economic news Monday morning, stocks were left to
their own devices and earnings guidance.  The biggest of
companies, General Electric (NYSE:GE), reaffirmed its financial
goals for fiscal 2001.  The company said it would hit its revenue
target and EPS goals for the year and would achieve double-digit
growth for fiscal 2002.  The company hosts its analyst meeting
next week, when more details about the current quarter and
forecasts for next year may become available.  Despite the
reaffirming of its financial targets, shares of GE finished
lower by almost 1 percent.

JDS Uniphase (NASDAQ:JDSU), the beleaguered optical networking
equipment maker, said Monday morning that its sales would
continue to slump until its fiscal third-quarter, which ends in
March.  The company reported that it expects another 10 to 15
percent drop in revenues in the meantime.  But that March
quarter will represent the bottom in sales for the current
slowdown in spending.  The attempt to call the bottom didn't
appease traders.  JDSU finished 5.5 percent lower on relatively
active volume.  The stock added pressure to an already weak
Networking Index (NWX), which lost more than 3 percent on the
day.

The most recent victim in the energy sector was Calpine
(NYSE:CPN).  An article in the New York Times over the weekend
suggested that similarities existed between Calpine and Enron,
which should give investors reason to worry.  Investors in the
energy sector, already nervous after the Enron debacle and
Haliburton (NYSE:HAL) issues, took the Times' warning to heart
and knocked shares of Calpine down to the tune of nearly 17
percent.  The stock finished Monday at a two year low.  Calpine
hosted a conference call after the bell in an attempt to soothe
and reassure investors that it is not like Enron.  Poor Enron.
The words of Calpine's CEO seemed to help as the stock gained
about 35 cents in the evening session.

The Packard Foundation voted against the proposed
Hewlett-Packard (NYSE:HWP) - Compaq (NYSE:CPQ) merger.  Both
stocks were lower on the news.  HWP seemed to track the weak
tech sector Monday, but CPQ's 14 percent drop was more than
market-related.  The drop in CPQ seemed to reflect a growing
consensus that the merger will never be.  

In the Biotechnology (BTK) space, Protein Design Labs
(NASDAQ:PDLI) dropped by nearly 19 percent.  The company
reported the full results of its Phase II cancer drug, Remitogen.
Of the 25 test patients, only one showed a positive response to
the treatment.  The poor showing of PDLI's Remitogen followed the
release of poor data for its leukemia drug last Friday.  The
stock was the target of several analyst downgrades and weighed on
the BTK as PDLI is one of the components of the index.  The BTK
finished lower by 4.26 percent.

Away from individual company news weighing on the market, Banc
of America's "market guru" reduced his weighting of stocks in
his recommended portfolio to 55 percent from 60 percent.  Tom
McManus suggested to take the five percent from stocks and to
put it into bonds, which is interesting noting the recent
weakness in Treasuries.  Noting the recent retreat in bonds,
McManus said that higher long-term rates could pose a challenge
to the consumer, the group that has been busy refinancing homes
and spending.  McManus added that the sell-off in bonds puts
into question stock valuations.

With the exception of GE's two bits, the news flow was fairly
negative Monday.  It's no wonder stocks finished lower.  It's
a wonder that they didn't fare worse.  The selling Monday was
very contained and routine, the boring type.  Stocks drifted
lower throughout the day on relatively light volume.  There
weren't any major earnings warnings (JDSU isn't major), just
a bit of bearishness here and there.  Moreover, the trends in
the major averages are intact, which means we could be nearing
another entry point, possibly ahead or shortly after the Fed's
announcement tomorrow.

The Dow finished about 20 points away from its ascending trend
line that has been in place since September 21.  Another bounce
from the line at 9900 be the entry point that buyers have been
waiting for.  A breakdown below 9900, however, could send up a
red flag and have the bears ready to pounce.  Weakness below the
9800 level could negate the Dow's trend and cause the bulls to
re-think their strategy.




The COMPX is in a similar position.  The tech-heavy index is
about 40 points away from the ascending trend line of its
regression channel.  A bounce from the 1950 area could be the
entry point into tech stocks.  But a breakdown below that level,
confirmed by a decline below 1900, could give the bears incentive
to short tech stocks.




With the Dow and COMPX approaching key support levels, the bulls
better be ready to step in.  That could happen before or after the
Fed's official announcement on rates tomorrow afternoon, which may
have been partially to blame for the weakness Monday.  Whatever the
reason was, stocks pulled back in a normal, routine, profit taking
fashion today.  The light volume on negative news didn't reveal
conviction on the part of sellers.  Rather, the bulls took the day
off, opting to wait for the Fed's decision on rates.

The contained selling pressured the major averages closer to key
support levels, where the bulls may return tomorrow.  The beauty
of entering BULLISH plays near key support levels is that risk is
relatively easy to manage with tight stops just below the support
levels.  That way, risk isn't a four-letter word.


Eric Utley
Premier Investor


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

Rally on Hold
Russ Moore


Wall Street was draped in yellow as investors chose to play a 
cautious hand ahead of tomorrow’s FOMC interest rate decision. 
The major indices struggled throughout the day with the DOW 
closing –1.3 percent lower, and the NASADAQ dropping –1.4 
percent. Big cap tech stocks faired no better, giving the NDX a 
loss of –1.7 percent. 

Volume was light with only 1.17 billion shares moving on the big 
board and 1.67 billion shares trading on the tech index. Market 
breadth favored losers by a 22/10 margin on the NYSE and a 23/13 
difference on the NASDAQ. 

Today’s action failed to produce a single sector in positive 
territory. Biotech, forest and paper, biotech and networking 
sectors took the hardest hit.

Trim Tabs news was mixed. On the hand you had U.S. equity inflows 
of 4.2 billion for the three days ending December 6. On the other 
hand we had corporate investors giving off bearish signals by 
their lack of buying. Last week offered nothing in the way of 
cash takeovers coupled with falling buyback announcements.

Tomorrow’s FOMC meeting is expected to produce a quarter point 
rate cut. Should the Fed decide to hold the line on easing, look 
out below. If Mr. G. and company go the other way a raise rates 
by a half-point we should see the return of the bulls.



VIX 
Monday 12/10 close: 26.00


VXN
Monday 12/10 close: 52.12


30-yr Bonds
Monday 12/10 close: 5.58


Total Put/Call Ratio: .62


Equity Option Put/Call Ratio: .57


Index Option Put/Call Ratio:  1.00


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 41.00

Volume/Open Interest
Maximum calls: 40/143,890
Maximum puts : 40/132,058

Moving Averages
 10 DMA 40
 20 DMA 40
 50 DMA 36
200 DMA 40

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: 581.24

Volume/Open Interest
Maximum calls: 640/5,553
Maximum puts : 500/8,038
Moving Averages
 10 DMA  587
 20 DMA  588
 50 DMA  569
200 DMA  603

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: 1139.93

Volume / Open Interest
Maximum calls: 1150/51,158
Maximum puts : 1050/41,659

Moving Averages
 10 DMA 1146
 20 DMA 1144
 50 DMA 1107
200 DMA 1174

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:  9,921.45

Volume / Open Interest
Maximum Calls: 98/25,661
Maximum Puts   90/47,842

Moving Averages:
 10 DMA  9,910
 20 DMA  9,881
 50 DMA  9,521
200 DMA 10,131

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: 575.45

Volume / Open Interest
Maximum Calls: 620/  548
Maximum Puts:  540/1,151

Moving Averages
 10 DMA 599
 20 DMA 593
 50 DMA 547
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: 559.37

Volume / Open Interest
Maximum Calls: 520/ 577
Maximum Puts:  470/1250

Moving Averages
 10 DMA 545
 20 DMA 534
 50 DMA 483
200 DMA 559

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: 390.56

Volume / Open Interest
Maximum Calls: 420/400
Maximum Puts:  360/320

Moving Averages
 10 DMA 396
 20 DMA 395
 50 DMA 394
200 DMA 391

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, 12/07. 
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 
11/20/01     369,784   415,822   (46,038)   13.6%
11/27/01     371,336   421,405   (50,069)    8.7%
12/04/01     360,315   420,919   (60,604)   21.0%

Most bearish reading of the year: (111,956) - 3/6/01
Most bullish reading of the year: (41,144)  - 5/1/01

Small Traders   Long      Short      Net      %Change
11/20/01       140,507    86,861    53,646     9.8%
11/27/01       151,317    92,807    58,510     9.1%
12/04/01       159,336    86,534    72,802    24.4%

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 
11/20/01      38,042    46,446    (8,404)  (20.0%)
11/27/01      37,259    48,315   (11,056)   31.5%
12/04/01      42,191    51,426    (9,235)  (16.5%)

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
11/20/01       12,933     8,230    4,703      (7.1%)
11/27/01       12,540     8,359    4,181     (11.1%)
12/04/01       11,808     8,311    3,497     (16.4%)

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 
11/20/01      25,033    11,525   13,508     (3.1%)
11/27/01      24,243    11,496   12,747     (5.6%)
12/04/01      22,703    10,739   10,739    (15.7%)

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
11/20/01       3,609    10,565    (6,956)    (13.3%)
11/27/01       4,228    10,630    (6,402)     (8.0%)
12/04/01       3,677     9,799    (6,122)     (4.4%)
 
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        +72,336     +58,510        -60,604     -50,069

Total Open
Interest %       (+29.61%)  (+23.97%)      (-7.76%)   (-6.32%)
                 net-long   net-long       net-short  net-short


                     Small Specs             Commercials
DJIA futures     (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value          -6,122     -4,228          +11,964    12,747
Total Open
interest %       (-45.43%)    (-43.09%)      (+35.78%)  (+35.67)
                 net-short   net-short     net-long    net-long


                     Small Spec              Commercials
NASDAQ 100      (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value         +3,497      +4,181         -9,235    -11,056

Total Open
Interest %        (+17.38%)   (+20.01%)     (-9.86%) (-12.92%)
                 net-long   net-long      net-short net-short


What COT Data Tells Us
----------------------
Indices:.It appears the Commercial players are not ready to join 
the bull’s party just yet. For the third consecutive week we’ve 
seen the Commercials add to their net-short positions (bearish). 
More importantly, the Small Specs gobbled up more long contracts 
thereby increasing the divergence between Commercial and Small 
Spec players.

Gold: Commercials engaged in a modest reversal as they flipped 
from net-long to net-short. Current holdings do not indicate a 
directional bias.

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
12/04  2,534 contracts net-short

Data compiled as of Tuesday 12/04 by the CFTC.


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


XM Satellite Radio - XMSR - close: 12.95 chg: +0.01 stop: 11.49

Company Description:
XM will transform radio, an industry that has seen little 
technological change since FM, almost 40 years ago. XM is 
offering its 100 channels of digital-quality, coast-to-coast 
sound for $9.99 a month. Leading manufacturers including Sony, 
Alpine and Pioneer are offering a broad array of XM radios 
including universal models that will easily enable any existing 
car stereo system to receive XM service (Sony Plug-n-Play, 
Pioneer Universal Receiver), and new AM/FM/XM systems offering 
many other great features. In addition, factory-installed Delphi-
Delco systems will be available in Cadillac DeVille and Seville 
models beginning in November 2001 expanding to more than 20 GM 
models next year.  XM's strategic investors include America's 
leading car, radio and satellite TV companies -- General Motors, 
American Honda Motor Co. Inc., Clear Channel Communications and 
DIRECTV. XM has a distribution agreement with General Motors to 
integrate XM radios into its vehicles commencing in 2001. 
(sources: company press release)

- ORIGINAL WRITE UP: Dec. 7th, 2001 -

Why We Like It:
You've probably seen their commercials and didn't know it.  Or 
maybe you have noticed their ads but didn't know where to get 
one.  XM Satellite Radio just launched their service this 
Thursday, Dec. 6th, 2001.  With 100 channels of digital quality 
music they probably have a product people will buy.  If the 
awards XMSR has received for their product is any indication then 
they should benefit from a booming business.  According to XMSR, 
their XM radio and service was named an "Invention of the Year" 
by Time, won Popular Sciences "Best of What's New" for 2001 in 
addition to several other accolades.  What I think has got 
analysts applauding is XMSR's launch that beat out the company's 
only rival, Sirius Satellite Radio (NASDAQ:SIRI).  XMSR claims 
they will have over 100,000 XM radios on the shelves for this 
Christmas season.  One analyst from DB Alex Brown recently 
started the company with a "buy" and estimates that XMSR will 
sign up more then 375K subscribers for their $9.99 a month 
service.  

What draws us to the stock is the strong bullish wedge forming 
under resistance at $13.00 and the huge increase in volume both 
before and after the launch of their service.  There are a couple 
of ways traders can play this one.  More aggressive traders could 
jump in now or look for a possible dip back to $12.50 or $12.00, 
which is certainly a possibility.  However, we feel that a 
breakout is imminent but instead of guessing when it will occur 
we're going to use a trigger point to tell us when to go long.  
On Wednesday, XMSR traded to $13.05 but closed at $12.78.  We're 
going to set our trigger to go long at $13.06, only twelve cents 
away.  Once we are triggered we'll start the play with a stop at 
$11.49.  More conservative traders may be able to get away with 
stops closer to 11.90 but you'll need to make that judgment call 
based on the current market environment.  By waiting for the 
stock to trade at our trigger point we can avoid any stress if 
shares of XMSR continue to wander under the $13.00 level for a 
few more days.  A bullish wedge has an upside bias for a breakout 
but they are not guaranteed.  We would consider targets between 
$14.65 and $15.00 (12% to 15%) but we're willing to wait and see 
what happens after shares trade through resistance.  Ultimate 
resistance lies near $17.00, more than 30% away.

- Play-of-the-Day Update, Dec. 10th, 2001 -

The good news for bullish investors is that XMSR started out of 
the gates very strong this morning, quickly trading to its high 
for the day at $13.68.  This triggered our entry price at $13.06 
and put us hypothetically "long" the stock.  The bad news is the 
early morning gains evaporated under a two pronged attack.  First 
of all, XMSR closed on another 11.5M shares in a secondary 
offering, which brought in $129 million in new financing.  Now 
this is probably good news for the company and will provide more 
operating capital but investors never like to hear that the 
company is taking on new debt and that their own shares may 
become more diluted.  However, probably the greatest culprit was 
another day of profit taking for the Nasdaq that brought the 
index back below the 2000 level.  We like XMSR and feel that 
traders may want to watch for new entry points if shares dip back 
to the $12.50 - $12.25 level or wait for the stock to trade back 
above the $13 mark.  It will be important for XMSR to show 
strength at the $12 support level as a breakdown there would 
violate its bullish trend.  

Picked on December 10th at $13.06
Gain since picked:          -0.11
Earnings Date                 N/A  






==========
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.

-----------



Avid Tech. - AVID - close: 12.89 change: +0.99

WHAT TO WATCH: AVID hasn’t seen its 200-dma in over six months, 
until today.  Serious volume thrust the stock through resistance 
at 12.24 and, though we tried to find any news to explain the 
move, none was forthcoming.  The company is engaged in the 
development, marketing, selling, and support of a wide variety of 
software and systems related to digital content.  We have to 
wonder what is in the works when significant levels of resistance 
are surpassed, particularly when the move is without news and on 
nearly 10 times the average number of shares.




---

Emisphere Tech. – EMIS - close: 30.60 change: +1.51

WHAT TO WATCH: Deutsche Banc Alex Brown upgraded shares of EMIS 
to a buy this morning and shares responded by breaching upward 
resistance at 30.00 but not enough to tackle the current double 
(now triple) top near $31.50.  There were more block trades today 
than the average total number of trades over the last 65 days.  
Are the big players getting in or did they sell into today’s 
rally?  Though EMIS traded at a 52-week high an hour after the 
market opened, shares saw some profit taking later in the 
session.  If trading tomorrow reaffirms today’s low of 29.26, it 
might be time to take a closer look at this one.




---

Rayonier – RYN – close: 46.70 change: +0.90

WHAT TO WATCH: A positive article in the online version of 
Barron’s over the weekend helped push shares of wood products 
giant RYN to the brink of a 52 week high today.  The article 
cited the bottoming in the price of pulp, consolidation in the 
industry, as well as potential benefits associated with an IRS 
ruling.  With the 52 week high looming only 1.00 away, a push 
through resistance at this level could be indicative of further 
gains in the coming weeks.




---

Provident Financial – PFGI – close: 24.33 change: +0.31

WHAT TO WATCH: No, not Providian Financial!  PFGI is engaged 
primarily in commercial, retail, and mortgage banking instead of 
providing credit cards for the high-risk market.  As such, and in 
light of both the long series of interest rate cuts and the 
rebounding economy, PFGI looks poised for a nice rebound in share 
price.  Four of the last five days have finished to the upside 
and today’s close marks the intersection of the 10 and 50-dma.  
Resistance looms at 25.00, but tomorrow’s Fed announcement could 
provide the impetus to break through that level.  We shall see.




---

On Assignment Inc. – ASGN – close: 21.71 change: +0.41

WHAT TO WATCH: ASGN broke above long-term resistance at the 200-
dma on December 5th and has continued higher every day since, 
filling a sizeable gap that occurred back in the middle of June.  
Last week’s employment news was not particularly encouraging 
overall but if the market anticipates a rebound in employment, it 
will likely voice its opinion in this particular industry 
segment.  With the gap back in June having been filled and strong 
support now evident at the 200-dma, we like ASGN’s chances for 
further moves in the coming weeks as well but currently the 
stock does look overbought in the short-term and we would look 
for a pull back before committing new capital.  A bounce at 
$20.50 or $20.00 may be the ideal entry point.




---

CSG Systems – CSGS – close: 35.36 change: 0.75

WHAT TO WATCH: We’re putting CSGS on the watch list for a few 
reasons.  First, shares have bounced back nicely after reaching a 
low at the end of November.  Second, today’s close was right at 
short-term upward resistance.  And third, shares have retraced 
half of the sizeable gap down that took place back on October 
30th.  A move above the 50-dma (35.89) would represent the first 
time the stock eclipsed such a level in over five months and 
could provide the needed support for further advances.  Traders 
will also want to watch price resistance at $36.25 which has 
stopped the bulls twice in the last month.







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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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Do not duplicate or redistribute in any form.



PremierInvestor.net Newsletter                  Monday 12-10-2001
                                                   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
  Closed Bullish Plays:  EXEL, NXTL
  Closed Bearish Plays:  WWCA

High Risk/High Reward
  New Bullish Play:      LSTR
  Closed Bullish Play:   T

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 Closed Plays
===============

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

Exelixis Inc. - EXEL - cls: 15.40 chg: -0.36 stop: 15.24

The +4% loss in the BTK.X biotech index has confirmed a reversal 
in the bullish trend that has lasted over two months for the 
sector.  As per our comments on the weekend, with the BTK under 
580 we are now very cautious as the sector looks like it could 
fall to the 550 level.  In response to the profit taking that 
affected the sector, shares of EXEL slipped to support at $15.00 
before bouncing off its lows.  The MACD is starting to rollover 
and shares could consolidate back to price support near $14 or its 
200-dma at 13.80.  We were stopped out of the play at 15.24 for 61 
cent loss.  Traders should be very cautious about new long 
positions while the BTK.X is falling.

Picked on December 1st at  15.85
Change since picked:       -0.61
Earnings Date              11/13




---

Nextel Comm. - NXTL - cls: 11.20 chg: -0.76 stop: 11.38

Today’s activity in NXTL was particularly disappointing given the 
fact that shares appeared to find support near 11.80 last week.  
We were a little nervous that there would be some profit taking in 
the Nasdaq today, especially if the average gave the 2,000 level 
back.  There was no specific news to explain the -6.35% decline in 
NXTL.  Odds are today's move was profit taking in the stock after 
last week's advance.  It will be important for the bulls that NXTL 
maintain support at the $11 level.  Below $11, the stock violates 
its bullish trend and shares will likely consolidate back to the 
$10 - $9.50 level.

Picked on December 4th at $11.88
Change since picked:       -0.50
Earnings Date              01/23





  --------------------
  Closed Bearish Play
  --------------------

Western Wireless - WWCA - cls: 25.56 chg: +1.88 stop: 24.51

A month long downward spiral in WWCA finally came to an end today 
with shares finishing almost 8% higher on the session and stopping 
us out at 24.51.  The move came on the heels of Friday’s advance 
and pushed the stock back above its 10-dma for the first time in 
over one month.  Today’s gains erased much of our profit on the 
short, however, tightening the stop along the way down helped 
guarantee that we walked away with a profit of over 7% on the 
play.  Does this mean that a bottom in the stock has in fact been 
reached?  We’ll probably need another day or so before we receive 
confirmation of the bottom, but if volume continues to improve and 
the stock continues to close to the upside, WWCA could provide a 
compelling argument for a short-term long play to catch the bounce 
higher.  Look for resistance at $27.50 and its 50-dma near 28.57.

Picked on November 10th at 26.40
Gain since picked:         +1.89
Earnings Date              11/07






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

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

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

Landstar System - LSTR - close: 73.26 chg: +0.99 stop: 69.50

Company Description:
Landstar System, Inc. is headquartered in Jacksonville, Florida. 
The Landstar carrier group, comprised of Landstar Gemini, Inc., 
Landstar Inway, Inc., Landstar Ligon, Inc., and Landstar Ranger, 
Inc., delivers excellence in complete over-the-road transportation 
services. The Landstar multimodal group, comprised of Landstar 
Express America, Inc. and Landstar Logistics, Inc., delivers 
excellence in expedited, contract logistics and intermodal 
transportation services. (source: Company Press Release)

Why We Like It:
With the price at the pump under $1.00 per gallon in many areas of 
the country, the cost of operations in the transportation sector 
has fallen dramatically compared to just six months ago.  As a 
result, our attention to the sector has begun to mount and we 
think we may have found a stock that has some room to run.  With a 
bullish price objective over $80 and strong support just under 
70.00, LSTR poses a compelling argument in terms of risk versus 
reward if the bulls can execute.  Consider that late last week 
shares dipped down to successfully test the 200-dma.  Now that 
support has been established at this level and an economic turn 
around appears to be in the offing, LSTR could be poised for a 
nice run higher.

We would have preferred to enter the trade closer to the 70.00 
mark but with Stochastics still in a comfortable trading range, 
shares are far from overbought at current levels.  We also like 
the looks of its MACD starting to reverse course and we could see 
a bullish crossover soon.  The MACD's histogram is certainly 
indicating a new leg higher may be in the works.  We also like the 
recent bullish crossover in the 50-dma over LSTR's 200-dma.  
Another positive indicator that bulls can look to was Monday's 
bullish "engulfing" candlestick pattern.  We are placing LSTR on 
the high risk/reward section of the website due to its low average 
volume of just 52K a day.  Normally, we prefer to play stocks with 
at least 100K a day in average volume.  Active traders may want to 
look for a pull back to the $72 level or even a dip to its 50-dma 
(70.50), but hopefully, given all the positive indicators shares 
will trade up from here.  We are going to start the play with a 
stop at $69.50, which is just under price support of $70 and its 
200-dma.  If you think the lows of the last few days might hold, 
more conservative traders might tray placing their stop under the 
71.50 level.  We anticipate resistance at several levels including 
76.00, the high in mid-November, 78.00, the highs in August, and 
80.00, notice the intraday highs in July.

Picked on December 10th at $73.26
Gain since picked:          +0.00
Earnings Date               01/10 (unconfirmed)





===============
HR Closed Plays
===============

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

AT&T - T - close: 16.90 change: -0.78 stop: 16.95

With the big buildup going into the weekend and news that the 
Board of AT&T would be mulling over its prospects, Wall Street was 
looking for news that T had agreed to sell its broadband unit.  
When that news failed to appear it was no surprise that the stock 
sold off as a result.  In fact, shares gapped down in light of the 
announcement, breaking multiple levels of support including the 
10, 50, and 200-dma on the way down.  There is no question that 
investors had banked on some positive news this morning and, when 
it did not arrive, many chose to bail out.  Our stop of 16.95 was 
triggered relatively early on in the session, as shares dove out 
of their recent bullish trend.  The close at 16.90 brought shares 
back to the previous levels of consolidation that were seen in 
late November.  Evidently, someone at T said that there was "no 
guarantee" that a deal would be reached and the company may decide 
to keep the broadband unit themselves.  For traders looking for a 
"buyout bid" to prop up the stock price this was exactly what the 
did not want to hear.  In addition to the lack of news on a new 
owner for the unit, the Wall Street Journal ran an article 
claiming that AT&T has lowered their forecasts for the broadband 
unit which would have further weakened any investors confidence in 
the stock price.  

Picked on November 29th at 17.62
Loss since picked:         -0.67
Earnings Date              10/23






==================
  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.

12/10/01

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

WW      Watson Wyatt & Co          21.00     +0.53
MBRS    Memberworks Inc            12.73     +1.33
CRFT    Craftmade Intl             14.82     +1.57

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

TOM     Tommy Hilfiger Corp        14.52     +1.02
SBYN    Seebyond Technology         7.09     +1.39
KROL    Kroll Inc                  16.49     +1.67
IDNX    Identix Inc                10.35     +1.30
VSNX    Visionics Corp             18.08     +5.39

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

SWK     The Stanley Works          45.70     +2.17
MHK     Mohawk Industries          53.40     +3.13
WWCA    Western Wireless Corp      25.56     +1.88
ITG     Investment Technology      41.22     +2.15
ASF     Administaff Inc            34.55     +1.25

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

PFE     Pfizer Inc                 41.34     -1.76
AOL     AOL Time Warner            31.00     -1.98
KR      Kroger Co                  23.30     -1.30
AFL     Aflac Inc                  25.10     -1.05
IDPH    Idec Pharmaceuticals       64.81     -3.94

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

SBR     Sabine Royalty             21.00     -0.51
FISB    First Indiana Corp         24.02     -0.95
SCL     Stepan Co                  23.45     -0.80




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




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