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Daily Newsletter, Monday, 12/17/2001

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PremierInvestor.net Newsletter                 Monday 12-17-2001
                                                  section 1 of 2
Copyright  2001, All rights reserved.
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In section one:

Market Wrap:      Stocks move higher as Treasuries see selling
Market Sentiment: Merger Mania Sparks Gains
Play-of-the-Day:  It's Not Too Late
Watch List:       KOPN, ABGX, SWFT, CHKP, GT

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
        12-17-2001        High      Low     Volume Advance/Decline
DJIA     9892.00 + 80.90  9930.90  9798.80 1.24 bln   1783/1368	
NASDAQ   1987.40 + 34.30  1994.48  1951.45 1.80 bln   2077/1594
S&P 100   578.97 +  6.59   580.69   571.86   totals   3850/3962
S&P 500  1134.36 + 11.29  1137.36  1122.34           
RUS 2000  479.94 +  8.65   479.94   470.73
DJ TRANS 2619.06 + 41.96  2619.88  2576.37
VIX        25.43 -  0.54    26.45    24.83
Put/Call Ratio      0.56
-----------------------------------------------------------------

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

Stocks move higher as Treasuries see selling

Stocks experienced a bullish session today and that bullishness 
came at the continued expense of Treasury bonds as the YIELD on 
the 10-year ($TNX.X) shot higher to an intra-session high of 
5.385%, before settling back to close with a YIELD of 5.274%.  
Today's action in the 10-year saw this YIELD jump to levels not 
seen since earlier this spring.

Merger Monday!

It was a "merger Monday" as the world's largest biotechnology 
company Amgen (NASDAQ:AMGN) solidified its offer to buy Immunex 
(NASDAQ:IMNX) for $16 billion in stock and cash.  Both stocks 
trade higher on the session with Amgen (AMGN) gaining 6.17% to 
$59.49, while Immunex surged 13% to $29.06.  Terms of the deal 
call for Immunex (IMNX) shareholders to receive 85% of the 
exchange in Amgen (AMGN) stock and 15% in cash (roughly $4.50 per 
share held).  News of the deal sent other biotechs higher as the 
Biotechnology Index (BTK.X) lead sector gainers with a 4% gain to 
$587.

French media giant Vivendi Universal (NYSE:V) said it was buying 
USA Networks (NASDAQ:USAI) film and television assets in a cash-
and-stock deal worth $10.3 billion.  Shares of Vivendi (V) jumped 
6.4% to close at $52.10, while shares of USA Networks gained 5% 
on the session to close at $25.02.  Today's news from Vivendi (V) 
follows last week's announcement that the company was investing 
roughly $1.5 billion in Littleton, Colorado based EchoStar 
Communications (NASDAQ:DISH) in a cash for stock-swap, in which 
Vivendi (V) looks to benefit from a major distribution 
opportunity to provide content through satellite technology in 
the United States.

Shares of P&O Princess (NYSE:POC) closed at a post-terrorist 
attack high of $22.23 (+5.65%) after Carnival Corporation 
(NYSE:CCL) made a hostile outbid attempt of $4.5 billion for P&O 
Princess.  Over the weekend, P&O (PO) rejected the offer with 
CCL, saying it prefers "love at sea" with previous suitor Royal 
Caribbean Cruises (NYSE:RCL) as it feels there are more synergies 
between the two.  While shares of P&O traded higher, both Royal 
Caribbean (RCL) and Carnival Corp. (CCL) traded lower by 11.69% 
and 1.72% as investors in those two stocks feared the bidders may 
begin playing "leap frog" to win over those shareholders of P&O.  
If it were a game of poker, Carnival has "called and raised the 
pot," and it may now be Royal Caribbean's turn to sweeten the 
pot.

Tomorrow's economic data

Look for tomorrow's Housing Starts number due out at 06:30 AM EST 
to have an impact on trading.  Current estimates are for 1.54 
million new starts, which is just shy of October's 1.55 million.  
If some of the "housing stocks" are any indication that a strong 
number is expected, we see that shares of KB Home (NYSE:KBH) 
traded a 52-week high today at $39.72, after recently trading a 
powerful "quadruple-top" buy signal at $35.

KB Home Chart - $0.50 and $1 box




Here's one of those "doesn't make sense" type of stock charts we 
are finding in the market.  The supply/demand chart looks quite 
bullish.  What does make sense is the jump higher from the late 
September lows as mortgage rates fell to multi-year lows.  This 
created a lower cost of borrowing for new homebuyers.  At that 
time however, only those consumers that felt secure in their 
employment may have upgraded their housing to a new home, or quit 
renting an apartment and opted for a new purchase.  Since 
October, we've seen mortgage interest rates rise along with 
Treasury bond YIELDS in the 10 and 30-year Treasury, which many 
mortgage interest rates are tied.  The bullishness found in 
shares of KBH and other homebuilding stocks sure looks as if the 
MARKET is counting on some type of economic recovery.  The 
economic recovery scenario may build confidence at the consumer 
level should consumers feel their jobs are now "safe."  That type 
of confidence could move some consumers to make the leap to a new 
more expensive home.

Keep an eye on KBH and other homebuilding stocks going forward.  
Here's another sector to help traders/investors get a feel for 
the MARKET's perception of how the economy is doing.  Right now, 
many of these stocks look to have factored in some type of "good 
news" coming.  Look for entry points in KBH back near the $35 
level as a better risk/reward entry point for a bull.  

Watch tomorrow's housing starts numbers.  If we get a strong 
number above the 1.6 million level and a pullback in some of the 
housing stocks to some good support levels, I'd look to be a 
buyer on the dips.  If you're patient and can wait for an inside 
day setup, then that's even better.

Transportation upgrade

Shares of transportation/logistics firm J.B Hunt (NASDAQ:JBHT) 
surged 14.9% today to $22.29 after a major "reversal" in its 
rating to "BUY" from "SELL" by Credit Suisse First Boston (CSFB).  
The firm had rated the stock a "sell" back in February, but 
analyst Gary Yablon said he upgraded the stock based on his 
belief that the company is in the midst of a turnaround driven by 
consistent improvements in its core truck and Dedicated Contract 
Services unit, which provides dedicated logistics services.

J.B. Hunt Transportation Services Chart - 




Last Friday (December 7th) I was thinking the Dow Jones 
Transportation Average (TRAN) might be poised for a move higher.  
That move higher may have now found a catalyst with today's 
upgrade of J.B. Hunt and comments from Credit Suisse First 
Boston.  This stock looks bullish to the $25 level near-term.  I 
will point out that the current bullish price objective from the 
supply/demand chart was/is bullish to $24.50.  That price 
objective can always be exceeded, but something to think about 
near-term.  

Here's a "transportation" stock in the same category that might 
offer a bullish trader a more favorable risk/reward trade near-
term.

CNF Inc. Chart - 




Looking to play the "non-air transportation" theme, I find the 
trade setup in shares of CNF Inc. (NYSE:CNF) compelling.  I like 
the "gapping higher" two sessions in a row on BIG volume back to 
back.  That to me hints that some institutions were scrambling to 
get a position in the stock.  The recent consolidation near our 
50% retracement bracket hints that the specialist trading the 
stock feels some "buy side bias."  With a recent upgrade in the 
sector, I like a bullish trade in shares of CNF, with a stop just 
under the $30 level at $29.75.  The current vertical count and 
longer-term bullish price objective from the point/figure chart 
hints of $50.  I'll start out with some bullish targets from 
retracement at $36.21 and $39.87 to begin with, then cross the 
$50 bridge should the trade unfold in a bull's favor.  With our 
MACD indicator well above zero, I think it would be prudent to 
perhaps initiate just 1/2 position long.  A trader/investor that 
will do that can actually give the stock a little more room with 
a stop at $28.  Then look to add to the position on a break above 
$32.60.

I'm willing to bet there are some bears that are looking at the 
extended MACD indicator, betting the stock pulls back like it did 
in late July.  We've talked about the impact that the current 
selling in Treasuries is somewhat different that what we saw back 
in June and July.  If some shorts are on this one just because 
MACD is a little overextended and we continue to see selling in 
bonds and some of that cash gets rotated here, we might well see 
shares of CNF trading $36 soon.

Trucking Stocks - Sorted by volume




Here's a quick list of "trucking" stocks from q-charts.  I've 
sorted them by volume traded today.  As you can see, there were 
some "good buddy" gains found in the sector.  Will tomorrow's 
winner be CNF Inc. (NYSE:CNF)?  The point/figure chart hints of a 
longer-term winner and the recent gapping higher above the 200-
day moving average is also bullish.


Jeff Bailey
Senior Market Strategist


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

Merger mania sparks gains 
Russ Moore

The largest biotech merger in history, coupled with a major media 
marriage created an upbeat mood on Wall Street and had the major 
indices adding to Friday’s gains.

A potential biotech powerhouse emerged with the joining of Amgen 
and Immunex. The merger sparked a nice rally on the biotech index 
(BTK) +4.03 percent, making it the star performer among all 
sectors. The other significant merger involved media giants 
Vivendi Universal and USA Networks.

Retail, bank, drug and cyclical sectors enjoyed decent gains 
while gold, utility, airline and natural gas sectors were weak. 
Tech action saw chips, Internet and software sectors leading the 
way.

The blue chip DOW tacked on +0.8 percent while the NASDAQ added 
+1.8 percent and the NDX +2.2 percent. Volume was moderate with 
1.23 billion shares changing hands on the big board and 1.79 
billion shares trading on the tech index. Winners edged losers by 
an 18/14 margin on the NYSE and 21/16 on the NASDAQ.

Trim Tabs reported outflows from U.S equity funds of 1 billion 
dollars for the five days ending December 13. The fund flow 
tracker said it remains bearish despite new offerings of 17.6 
billion dollars in the first two weeks of December, a record for 
the month. The company said it will hold on to its’ bearish 
sentiment until corporate investors show more bullishness by 
increasing buyback activity and new cash takeovers.

End of year re-balancing, triple witching, and lighter volume 
could make for a volatile-trading week. Traders will have to be 
quick on the draw for entry/exit, and should be using high-risk 
capital only. 


Monday 12/17 close: 25.43


VXN
Monday 12/17 close: 51.05


30-yr Bonds
Monday 12/17 close: 5.66


Total Put/Call Ratio: .62


Equity Option Put/Call Ratio: .54


Index Option Put/Call Ratio: 1.04


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 40.80

Volume/Open Interest
Maximum calls: 40/182,367
Maximum puts : 40/134,134

Moving Averages
 10 DMA 41
 20 DMA 40
 50 DMA 37
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: 578.97

Volume/Open Interest
Maximum calls: 600/6,999
Maximum puts : 500/8,469
Moving Averages
 10 DMA  583
 20 DMA  585
 50 DMA  572
200 DMA  602

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: 1136.36

Volume / Open Interest
Maximum calls: 1150/51,894
Maximum puts : 1150/56,168
Moving Averages
 10 DMA 1143
 20 DMA 1142
 50 DMA 1114
200 DMA 1171

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:  9,891.97

Volume / Open Interest
Maximum Calls: 98/26,253
Maximum Puts   90/47,514

Moving Averages:
 10 DMA  9,933
 20 DMA  9,900
 50 DMA  9,604
200 DMA 10,113

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: 587.13

Volume / Open Interest
Maximum Calls: 560/  611
Maximum Puts:  540/1,151

Moving Averages
 10 DMA 584
 20 DMA 591
 50 DMA 558
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: 563.87

Volume / Open Interest
Maximum Calls: 600/ 649
Maximum Puts:  470/1250

Moving Averages
 10 DMA 563
 20 DMA 540
 50 DMA 500
200 DMA 558

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: 377.95

Volume / Open Interest
Maximum Calls: 420/306
Maximum Puts:  360/325

Moving Averages
 10 DMA 386
 20 DMA 392
 50 DMA 393
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, 12/14. 
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 
11/27/01     371,336   421,405   (50,069)    8.7%
12/04/01     360,315   420,919   (60,604)   21.0%
12/11/01     367,397   429,640   (62,243)    2.6%

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
11/27/01       151,317    92,807    58,510     9.1%
12/04/01       159,336    86,534    72,802    24.4%
12/11/01       158,490    86,717    71,773    (1.4%)

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 
11/27/01      37,259    48,315   (11,056)   31.5%
12/04/01      42,191    51,426    (9,235)  (16.5%)
12/11/01      45,468    51,392    (5,924)  (35.9%)

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
11/27/01       12,540     8,359    4,181     (11.1%)
12/04/01       11,808     8,311    3,497     (16.4%)
12/11/01       12,425    11,754      671     (81.0%)

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 
11/27/01      24,243    11,496   12,747     (5.6%)
12/04/01      22,703    10,739   10,739    (15.7%)
12/11/01      23,135    12,576   10,559     (1.7%)

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
11/27/01       4,228    10,630    (6,402)     (8.0%)
12/04/01       3,677     9,799    (6,122)     (4.4%)
12/11/01       3,469     9,065    (5,596)     (8.6%)
 
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        +71,773     +72,336        -62,243     -60,604

Total Open
Interest %       (+29.27%)  (+29.61%)      (-7.81%)   (-7.76%)
                 net-long   net-long       net-short  net-short


                     Small Specs             Commercials
DJIA futures     (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value          -5,596     -6,122          +10,559    11,964
Total Open
interest %       (-44.65%)    (-45.43%)      (+29.57%)  (+35.78)
                 net-short   net-short     net-long    net-long


                     Small Spec              Commercials
NASDAQ 100      (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value         +671      +3,497         -5,924    -9,235

Total Open
Interest %        (+2.78%)   (+17.38%)     (-6.12%) (-9.86%)
                 net-long   net-long      net-short net-short


What COT Data Tells Us
----------------------
Indices:.No significant changes this week.

Gold: Commercials reversed course and went net-long this week. 
Interesting to note the performance of the XAU (gold and silver 
index) over the last few days. The index has enjoyed a nice run 
since Tuesday.

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
12/11 13,626 contracts net-long

Data compiled as of Tuesday 12/11 by the CFTC.



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

Mercator Software - MCTR - cls: 8.20 chg: +0.20 stop: 7.45 

Company Description:
Mercator Software's intelligent business integration solutions 
unify any internal operations and connect them with partners and 
customers while leveraging current technology investments. Over 
7,000 businesses, including more than 1,100 enterprise customers 
in financial services, healthcare, utilities, manufacturing, 
retail, and distribution, use Mercator software to maximize their 
performance. (source: Company Press Release)

- ORIGINAL WRITE UP: Dec. 11th, 2001 -

Why We Like It:
MCTR is a turnaround success story for the fall 2001.  Shares 
languished for months between $1.50 and $3.00 over most of the 
summer.  When the market crashed in September, the selling 
brought MCTR to a low near $1.00.  However, when the market 
turnaround began in October, shares of MCTR joined the run and  
have not looked back.  The company announced earnings on October 
30th, 2001 and the numbers were positive.  Revenue of $35M was a 
20% improvement over the previous quarter.  The company's net 
loss narrowed from $6.1M (previous quarter) to only $1.2M.  Any 
CEO is always willing to share positive remarks about their 
company but investors were happy to hear MCTR's CEO announce that 
the company had significantly reduced their cash burn and 
increased their cash balances by the end of the third quarter.  
It was only a couple of days later that shares of MCTR closed 
over its 200-dma.  Many readers used the 10-dma as a guide for 
short-term support or resistance.  This indicator has worked well 
for MCTR over the last two months but twice the stock has fallen 
through it.  It has not fallen through its 15-dma since it 
crossed over the indicator in early October.  Buyers were waiting 
again when MCTR fell to its 15-dma on Monday.  Our biggest 
concern, and the concern of any trader would be MCTR's status of 
being so overbought.  Fortunately, we feel the drop from $9 to $7 
from Wednesday last week to Monday this week represents a 22% 
round of profit taking.  This may be enough of a pull back to 
allow for the next leg up in the stock price.  Shares bounced off 
its 15-dma today helping reconfirm it as support.  We are going 
to add the stock today at 7.68 and start the play with a stop at 
6.84, which is a few cents under Monday's low.  Our goal is to 
exit the play near $10.  More conservative traders may want to 
wait for shares to close over the $8.00 level as confirmation of 
the new trend.  We did glance at the point-and-figure chart and 
long-term investors should aim for a bullish price target north 
of $20 but don't let that prevent you from applying stops to 
protect your capital.


- Most Recent Update, Friday, December 14th, 2001 -

Our bullish high risk/reward play in MCTR has certainly displayed 
some volatility.  Plus 8% one day, down nearly 9% the next and 
now its back up over 5% gain.  We are certainly encouraged by 
Friday's move and the close near $8.00.  It looks like the stock 
is building a pennant or triangular pattern with lower highs and 
higher lows.  These sort of technical patterns portend a future 
breakout the closer the stock coils into the apex of the 
triangle.  Unfortunately, this sort of development has a neutral 
bias as to the coming breakout.  Bulls will hope the prevailing 
upward trend will reassert itself and continue on.  Bears will be 
betting that the breakout is down due to the stock's extended and 
overbought share price.  The support at the stock's 15-dma has 
continued to hold up but we need to see some help from the 
software sector.  The GSO.X software index dipped lower (-1.87) 
and is trying to show strength at the price support level of 180.  
If the index breaks down under 180, MCTR may feel too much 
bearish pressure and follow suit.  We chosen to raise our stop 
again as the 15-dma climbs higher.  This time we are putting it 
six cents below the moving average to $7.45.  If the play turns 
against us we should be able to limit our exposure to 23 cents.


- Play-of-the-Day Comments, Monday, Dec. 17th, 2001 -

The positive moves in the GSO.X software index and MSFT were 
encouraging signs for software traders and MCTR rallied off its 
Monday low of $7.75.  We feel that this is still a decent entry 
point to try and catch MCTR's next attempt at the $10 level.  Our 
current stop at $7.45 is a few cents below Thursday's low of 
$7.52.  More conservative traders might be able to tighten their 
stop by placing it a couple of cents below the 15-dma near 7.65.
MCTR is in our high risk/high reward section of the play list and 
may not be appropriate for all traders.  

Picked on December 11th at $ 7.68
Gain since picked:          +0.52
Earnings Date               10/30 (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.

-----------

Kopin Corp. - KOPN - close: 15.23 change: +0.41

WHAT TO WATCH: While not overly enthusiastic about KOPN, the 
stock has caught our attention.  As part of the chip industry, 
shares of the stock have seen a powerful rally through October 
and November.  The stock topped out near $19 and investors 
decided to do some profit taking.  This is natural and buyers 
have decided to step in again near the $15 level and just above 
its 50-dma.  Part of our curiosity is based on the 2.8M shares in 
volume today versus the average of just 1.36M shares.  It is 
possible that KOPN's upgrade to a "buy" may have had something to 
do with it.  We would be tempted to consider a bullish play on 
the stock with a stop under today's or Friday's low and a target 
near $19 (the highs two weeks ago).  KOPN will likely see 
resistance near $16.75.  You'll definitely want to confirm stock 
direction.  Bears might want to look for the stock to close under 
its 50-dma.  If this occurs, shares might fall to its 200-dma 
near $11.




---

Abgenix – ABGX - close: 32.28 change: +1.50

WHAT TO WATCH: Shares of biotech company ABGX have followed 
closely with the rise of the index BTK.X.  When the index began 
to see profit taking, so did ABGX.  Now that the group is 
rebounding, in part to the positive reception of AMGN's bid for 
IMNX, shares of ABGX are also beginning to make a comeback.  The 
stock has reconfirmed price support near $30, which is 
underpinned by both its 50 & 200-dma.  Bullish traders might want 
to look for potential entries with the stock above $32 or dips 
back to $31.  Bulls will probably target the $37 - $38 area.  
Bears will be watching to see if the rally in biotechs fail.  If 
this occurs, watch for ABGX to lose its 200-dma and close below 
$30.




---

Swift Transportation – SWFT – close: 21.97 change: +0.67

WHAT TO WATCH: An upgrade of trucking company JBHT by CS First 
Boston today reflected well on the entire transport sector 
including shares of SWFT.  The Dow Jones TRAN index has just 
crossed over its 10-dma and might be ready for its next short-
term rally higher.  Likewise, SWFT has regained its own 10-dma 
and bounced higher on very strong volume.  We suspect there was 
stronger institutional buying today and if shares get over the 
$22 mark we might consider a bullish position.  The stock appears 
to have some tough resistance near $23 but a volume-fueled rally 
might be able to break through it.




---

Check Point Software – CHKP – close: 43.30 change: +2.49

WHAT TO WATCH: Shares of CHKP were very active today on word that 
the Israeli company would strengthen its current relationship 
with cell phone-maker Nokia.  CHKP has been slowly fighting its 
way higher after hitting its recent low near $36.50.  The stock's 
bounce at $40 on Friday may have solidified that area as support 
and bulls could be ready to buy the next dip but the bigger 
challenge is CHKP's 200-dma creeping closer at $44.95.  
Aggressive traders can look for the dip towards $40, more 
conservative traders may want to wait for the stock to close over 
its 200-dma (or the $45 mark).




---

Goodyear Tire and Rubber – GT – close: 24.55 change: +0.51

WHAT TO WATCH: We have had our eye on shares of GT for some time 
but it appeared the stock was about to breakdown below support of 
$21.60 in late November/early December and fall back to the $20 
level which would have been a preferable entry point.  This 
changed when the company and almost the whole industry announced 
price increases for their products.  On the 11th of December, GT 
said it would raise its prices on Jan. 1st by as much as 5% for 
many consumer tires and 3% on many of its medium commercial truck 
tires.  This price increase should boost earnings significantly 
and consumers will see the increase in GT's Goodyear, Dunlop, 
Kelly and Steelmark brand names.  Most other large tire makers 
have announced similar increases.  Analysts cheer the move and 
one recently upgraded the stock from "market perform" to "strong 
buy".  The stock has now traded above price resistance near 
$23.65 only to run right into its 200-dma.  Closing one cent 
above the 200-dma doesn't qualify as a huge technical breakout in 
my book but it is encouraging.  The volume for the last two days 
has been strong so we'll keep our eyes on this stock for future 
bullish entry points.






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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
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factors beyond our control.

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Do not duplicate or redistribute in any form.



PremierInvestor.net Newsletter                  Monday 12-17-2001
                                                   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:

Active Trader
  Closed Bullish Play: TBL
  Closed Bearish Play: CTIC

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)

=================================================================
Active Trader (AT) section
==================================================================

================
AT Dropped Plays
================

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

Timberland - TBL - close: 35.69 chg: -1.01 stop: 34.85

TBL succumbed to profit taking today after the company was added 
to the S&P 400 Midcap Index after the close on Friday.  Our stop 
proved to be too tight - by a mere 5 cents, as shares dipped lower 
in early trading.  Considering that the stock closed well off its 
lows for the day, we're more than a little disappointed that the 
position was closed out.  Two days of gains in the RLX.X has 
reinforced our belief that a rebound in the sector may be upon us 
despite negative retail sales numbers.  We would still watch 
shares of TBL for a potential bullish play.  Looking at the stock 
in the short-term, a bounce near $35.00 could provide a nice entry 
point as bulls target the 200-dma just under $40.

Picked on December 15th at $36.70
Change since picked:        -1.85
Earnings Date               01/17 (unconfirmed)





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

Cell Therapeutics - CTIC - close: 25.76 chg: +0.56 stop: 26.16

On Friday we said that Monday could be a pivotal day for the 
biotech index and our bearish play for CTIC.  Shares of CTIC 
closed higher as biotech rebounded to finish the session just off 
the best levels of the day.  The BTK.X gained over 22 points to 
close at 587, which is over the previous support level of 580.  
Though CTIC closed off its best levels, shares saw strong buying 
volume early in the session, effectively wiping out our short 
position as the stock traded to $26.40.  Interestingly, the last 
two days of higher closes in CTIC have come on falling daily 
volume, causing us to wonder if this might be a bull trap.  
Today's close is only a few cents above the 200-dma so we're still 
not convinced that the stock is ready for a new leg up.  As 
traders, we might be tempted to look for a potential long position 
if shares are truly reversing but with so much price congestion 
between $26 and $31 it could be a tough climb.  We are a little 
skeptical in this rally for the Biotechs and wonder how much of it 
might just be temporary excitement over the AMGN/IMNX deal.

Picked on December 11th at  24.54
Change since picked:        -1.62
Earnings Date               10/22 (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 

CVS     CVS Corp                   29.06     +1.79
PII     Polaris Industries         56.70     +0.70
WTNY    Whitney Holding Corp       45.90     +2.75
AME     Ametek Inc                 31.58     +0.68
CHZ     Chittenden Corp            27.75     +1.35
MTW     Manitowoc Co Inc           30.85     +0.65

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

Q       Qwest Communications       13.44     +1.11
JDEC    J.D.Edwards & Co           15.20     +1.19
ACXM    Acxiom Corp                17.14     +1.51
ASIA    Asiainfo Holdings Inc      19.52     +1.06
SUPG    Supergen Inc               14.50     +1.18

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

IMNX    Immunex Corp               29.06     +3.44
FRX     Forest Laboratories        79.20     +3.00
APD     Air Products & Chemicals   46.55     +1.67
ACS     Affiliated Computer Svc   100.51     +1.81
IGT     Intl. Game Technology      66.70     +1.85
ORLY    O'reilly Automotive        37.62     +2.17

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

GSK     Glaxosmithkline            49.35     -1.30
NKE     Nike Inc                   52.31     -1.54
KTC     Korea Telecom Corp         20.49     -1.02
PBI     Pitney Bowes Inc           38.07     -1.66
DYN     Dynegy Inc                 21.70     -3.24

----------------------------------------- 
Recently Overbought With Bearish Signals (Stocks over $20)
------------------------------------------- 
Ticker  Company Name               Close     Change 

BRCD    Brocade Communications     35.03     -1.78
TXI     Texas Industries Inc       35.83     -1.10





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

*****************************************************************
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Copyright  2001  PremierInvestor.net. and
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Do not duplicate or redistribute in any form.




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