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Daily Newsletter, Tuesday, 12/18/2001

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PremierInvestor.net Newsletter                Tuesday 12-18-2001
                                                  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
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In section one:

Market Wrap:      I Wanted To Be a Truck Driver
Market Sentiment: Three in a row
Play-of-the-Day:  The Monster Is Back

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
       12-18-2001           High     Low    Volume Advance/Decline
DJIA     9998.39 +106.42 10015.34  9892.59  1.3 bln   1975/1152
NASDAQ   2004.76 + 17.31  2010.91  1989.81  1.8 bln   2123/1589
S&P 100   583.38 +  4.41   585.07   578.97   Totals   4098/2741
S&P 500  1142.92 +  8.56  1145.10  1134.36
RUS 2000  485.49 +  5.55   485.49   479.94
DJ TRANS 2657.27 + 38.21  2658.87  2613.02
VIX        24.13 -  1.30    25.06    24.02
VXN        49.02 -  2.05    51.02    48.93
TRIN        1.00
Put/Call Ratio       .62
-----------------------------------------------------------------

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

I wanted to be truck driver!

When I was in high school, I wanted to be a truck driver when I 
grew up.  I was under the impression that I would be able to 
drive my 18-wheeler across the country and take in the sights.  
If I saw a pheasant fly across the highway into a weedy patch, 
I'd get out and go hunting.  If I saw fish rising on the river, 
I'd pull over and go fishing.  I also enjoyed talking on the CB 
Radio when I was a kid and being a truck driver would allow me to 
talk to a lot of people and meet knew friends.  I also liked neon 
signs and eating at truck stop diners.  Ah, what could be more 
American than driving truck!

How about investing/trading some trucking stocks!  You knew I was 
leading you somewhere didn't you!  Truth be told, I did want to 
be a truck drive at one point in my life, but when dad told me I 
couldn't just stop and hunt or fish whenever I wanted, then I had 
to reconsider my career path.  In last night's wrap, I thought 
"trucking" shares of CNF Inc. (NYSE:CNF) might be poised for a 
move higher today and boy did they.

CNF Inc. Chart - 




No "inside day" or "triple-top" buy signal on this one.  Just 
some good old sector bullishness with an upgrade in the sector 
and a good looking technical setup for a bullish traded based on 
volume spikes and a little pullback near support.  It's too soon 
to be celebrating though.  In the past, shares of CNF have found 
sellers near the $32.90 level so I'd want to see a good follow 
through day tomorrow.  Our "catalyst" for the move higher was 
based on yesterday's jump in fellow "trucking stock" J.B. Hunt 
(NASDAQ:JBHT) so it's important to see how that stock did to get 
a feel for continued momentum in the group.

Trucking Stocks - Sorted by volume




While we didn't pick today's trucking biggest gainer, a 6% gain 
isn't bad for CNF.  It's encouraging that our "catalyst" stock in 
J.B. Hunt (JBHT) continued to lead.  Going forward a 
trader/investor wants to monitor that stock too.  They won't go 
up day after day, but you get a feeling some of these trucking 
stocks are trying to build some momentum.  Unfortunately, shares 
of CNF didn't make it to our play list last night, I thought for 
sure it would.  For a swing-trader/investor, I'd simply follow 
the stock with a stop just below $30 for right now.  A more 
short-term trader should raise his/her stop to break-even (I 
don't think a 6% gains should turn into a loss for an active 
trader).  Should CNF progress higher to the next level of 
retracement then I'd raise my stop to help assure some type of 
gain from the investment.  If a subscriber gets a gain they're 
happy with, then take it and don't give it a second thought.  
Perhaps one of the other stocks in the group have some of the 
same characteristics beginning to show up in its chart that makes 
for a good risk/reward trade.  Try to stick with those that trade 
some higher volume.  Those are most likely the stocks that will 
attract institutional money.  Institutions like to buy stocks 
where they've got some liquidity and can buy/sell size.

One last note... A trade at $33 on CNF would be a spread-triple 
top buy signal on its point/figure chart.  In essence, there's 
been some significant resistance near current levels in the past, 
but $33 is a good level to be monitoring near-term.

So close!

Tensions are heating up between bulls and bears.  The bulls were 
able to press the Dow Industrials (INDU) above the 10,000 level 
late in the session, but I got the distinct feeling that bears 
came in late to put pressure on this widely followed index and 
get things back below the 10,000 level.  By session's end, the 
Dow Industrials close at 9,998.39.  Some may think its a stretch 
to think that bears would purposely push for a close below 
10,000, but I think this type of action happens regularly, 
especially in individual stocks.

There are some fascinating technicals in play at the longer-term 
200-day moving averages.  We've talked in depth about the Dow 
Industrials 200-day moving average currently at $10,111.  This 
200-day ma came into play back on December 5th and 6th.  The Dow 
Industrials have yet to close above this moving average for since 
finish above this moving average July 19th.

In today's 01:00 EST Update, we noted that the GSTI Software 
Index (GSO.X) was trading back above its 200-day MA at $189.92 
and thought a move above the $192 level could get things moving 
further to the upside.  From the 01:00 update, the GSO.X traded a 
high of $191.30 and closed at $191.11.  You can begin to see some 
of the pieces of the bullish puzzle being assembled here.  
Remember, Microsoft (NASDAQ:MSFT) is a Dow Component and GSTI 
Software Index (GSO.X) component.  

Microsoft Chart - 




Microsoft (NASDAQ:MSFT) is a component of many major indexes and 
averages.  The chart of MSFT is longer-term bullish and could be 
poised to pull some of the broader market averages higher.  In 
the past I've talked about volume spikes that we look for on a 
break above or below the 200-day moving average as those volume 
spikes can hint of conviction toward the stock.  The Microsoft 
chart shows the stock just kind of "drifted" above its 200-day MA 
back on November 2nd.  We did see a volume spike on November 1st, 
just prior to the break back above the 200-day, but not on the 
move above the 200-day.  Isn't it interesting how the stock 
trended right up to our retracement at $67.46, then pulled right 
back to the 200-day, almost as a test of confidence to see if the 
MARKET really was bullish.  The recent rebound and current 
breaking to new relative highs is BULLISH.  This is an excellent 
stock to at least be monitoring.  If you're currently in our 
"tech long" play in Rational Software (NASDAQ:RATL) from $21.11, 
you like what your seeing from Microsoft (MSFT) and want to see 
it continue.  You also want to see the GSO.X break free of its 
200-day moving average in convincing fashion.  

Dow Transportation Average Chart - 




Many economists say that transportation stocks are the first 
sector of the stock market to reflect a strengthening economy.  
The technical analysts can test that thought with the technicals 
that are now at hand in the Dow Transportation Average (TRAN).  
If you're a bullish trader that bought some shares of CNF Inc. 
(NYSE:CNF) today, I hope you weren't expecting a leisurely ride, 
hoping to see a pheasant fly across the road and be able to pull 
the rig over and get out and go hunting.  Tomorrow's action might 
be wild and furious in the transportation sector.  As you can 
see, the TRAN has some serious momentum building from its run 
from $2,000.  That 200-day moving average is still trending 
lower.  Who's going to give in?  Will the bulls be able to push 
things higher?  You can study the above chart and really get a 
feel for what's going on here.  The guy driving the Mac Truck has 
horns and the guy tending the roadblock at the 200-day moving 
average has fuzzy ears, a black nose and claws.  Right now, I'm 
in the truck, holding the steering wheel tight and got the pedal 
to the metal!  My stop is my seatbelt just in case a tire blows 
out!  Honk Honk!


Jeff Bailey
Senior Market Technician


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

Three in a row
by Russ Moore


Positive comments from General Electric and a solid housing 
starts number gave investors a reason to buy, and the major 
indices their third consecutive session in the plus column.

The DOW took a couple of runs at 10,000 but failed to stick, 
ending just shy of that psychological mark with a gain of +1.1 
percent. The NASDAQ managed to conquer the 2000 level and end 
with a gain of +0.9 percent while the big-cap NDX added +1.1 
percent.

Volume was moderate with 1.32 billion shares changing hands on 
the big board and 1.85 billion shares moving on the tech index. 
Winners outpaced losers by a 20/12 margin on the NYSE and a 21/16 
difference on the NASDAQ.

General Electric told investors that it was comfortable with 
fourth quarter and year-end earnings targets. More importantly, 
the company said it could meet these targets even if the global 
economy showed no improvement. Corporate news was not all 
positive however, as electronics manufacturer, Solectron (SLR), 
issued a second quarter profit warning, putting downward pressure 
on hardware stocks and making it the only sector unable to post a 
green arrow. Most sectors enjoyed modest gains with gold and 
chemicals leading the pack.

We noted in the weekend Market Sentiment that the COT report 
showed Commercial players had reversed direction and gone net-
long on gold contracts. Looking at the XAU (gold and silver 
index) we see that the index was trading around 52.00 on 12/11 
(the day the COT data is compiled), and is now sitting at 56.78, 
a gain of +9.2 percent for the week. 

Today featured another dose of mixed economic data. Housing 
starts showed tremendous strength with an increase of +8.2 
percent for November. Building permits were also strong, rising 
+4.6 percent. Redbook Research provided the flip side of the coin 
announcing retail sales had slipped –4.6 percent for the first 
two weeks of December versus November.

Investors have been dealing with the two-headed economic monster 
for a while now, making it very difficult to gauge market 
direction. Although the economic numbers will continue to play a 
role in future action, look for early January and the true start 
of pre-announcement season to kick things up a notch.




Tuesday 12/18 close: 24.13


VXN
Tuesday 12/18 close: 49.02


30-yr Bonds
Tuesday 12/18 close: 5.53


Total Put/Call Ratio: .62


Equity Option Put/Call Ratio: .53


Index Option Put/Call Ratio: 1.06


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 41.35

Volume/Open Interest
Maximum calls: 40/172,754
Maximum puts : 40/142,890

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: 583.43

Volume/Open Interest
Maximum calls: 600/6,179
Maximum puts : 520/8,744
Moving Averages
 10 DMA  583
 20 DMA  585
 50 DMA  573
200 DMA  601

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: 1142.98

Volume / Open Interest
Maximum calls: 1150/52,332
Maximum puts : 1150/55,882
Moving Averages
 10 DMA 1142
 20 DMA 1142
 50 DMA 1116
200 DMA 1170

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:  9,998.39

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

Moving Averages:
 10 DMA  9,943
 20 DMA  9,901
 50 DMA  9,623
200 DMA 10,111

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: 591.77

Volume / Open Interest
Maximum Calls: 620/  603
Maximum Puts:  540/1,167

Moving Averages
 10 DMA 584
 20 DMA 591
 50 DMA 561
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: 567.09

Volume / Open Interest
Maximum Calls: 600/2746
Maximum Puts:  470/1250

Moving Averages
 10 DMA 565
 20 DMA 542
 50 DMA 503
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: 379.89

Volume / Open Interest
Maximum Calls: 380/205
Maximum Puts:  360/325

Moving Averages
 10 DMA 384
 20 DMA 391
 50 DMA 392
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)
=========================

TMP Worldwide - TMPW - close: 43.91 chg: +1.11 stop: 42.25

Company Description:
Founded in 1967, TMP Worldwide Inc., with more than 10,500 
employees in 33 countries, is the online recruitment leader, the 
world's largest Recruitment Advertising agency network, and one of 
the world's largest Executive Search and Executive Selection 
agencies. TMP Worldwide, headquartered in New York, is also the 
world's largest Yellow Pages advertising agency and a provider of 
direct marketing services.  TMPW is also known for its Monster.com 
website. Monster.com, headquartered in Maynard, Mass., is the 
leading global careers website, recording over 30.2 million unique 
visits during the month of October 2001.
(source: Company Press Release)

Why We Like It:
GE and PFE reaffirmed guidance today, helping send the Dow to a 
close just under 10,000 and pushing the NASDAQ to regain 2,000 in 
today's session.  With a rebound in corporate profits forecasted 
for 2003 by two of the most influential companies in the U.S., can 
an improving job market be much further behind?  Initial jobless 
claims for the week ending December 8th came in lower than 
expected, though November's annualized unemployment rate at 5.7% 
was the highest level seen in several years.  Initial jobless 
claims for the week ending December 15th prior to the market open 
on Thursday and are forecasted at 440,000.  Will the figures come 
in better than expected for a second consecutive week?

TMPW announced earnings on November 5th that beat the street by 1 
cent despite a 5% decline in year over year revenue, resulting in 
a gap up in the stock and new support being forged at 32.00.  
Since then shares ran up to a high of 48.13 on December 6th.  
Investors promptly took profits and shares retreated 20% to fall 
back to new support just above the 100-dma at 40.00.

We like TMPW for both fundamental and technical reasons.  The 
recent retracement off the highs of December 6th has taken the 
stock out of overbought territory and the move over the course of 
the last two days has translated into the forging of a positive 
correlation with respect to relative strength.  With relative 
strength turning positive compared to the S&P today, downside risk 
could be mitigated up to the 50% retracement off the highs from 
back in June.  Resistance exists at this 50% retracement level at 
44.51- just shy of today's high.  A move through this level could 
see shares test the next level of retracement at 49.05.  
Coincidentally, a higher close tomorrow will likely see the 10-dma 
intersect the 200-dma right at the 50% retracement level.

Traders are going to want to confirm stock direction before 
committing any capital.  Conservative traders may want to wait for 
shares to trade or close back above the $44.51 level (the 50% 
retracement) or back above the $45.00 level, which would put TMPW 
back above its 10 & 200-dmas.  We do have one concern and that is 
the volume.  Volume has been dropping the last two days, which is 
not what bulls want to see on a rally attempt.  Thus we are going 
to start the play with a conservative stop at $42.25, only 30 
cents under today's low.  If shares trip our stop they will likely 
retest the $40 level.  We repeat, confirm stock direction and 
choose your entry point.  

Picked on December 18th at $43.91
Change since picked:        +0.00
Earnings Date               02/04 (unconfirmed)









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Do not duplicate or redistribute in any form.



PremierInvestor.net Newsletter                 Tuesday 12-18-2001
                                                   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/1213_2.asp
=================================================================

In section two:

Net Bulls
  New Bullish Play:     TMPW
  Bullish Play Updates: ACRT, RATL, XMSR
  Closed Bearish Plays: CMVT

Stock Bottom / Active Trader
  Bullish Play Updates: JCP, SEIC

High Risk / High Reward
  Bullish Play Updates: LSTR, MCTR, TDSC

Split Trader
   - none -

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


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


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

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

TMP Worldwide - TMPW - close: 43.91 chg: +1.11 stop: 42.25

Company Description:
Founded in 1967, TMP Worldwide Inc., with more than 10,500 
employees in 33 countries, is the online recruitment leader, the 
world's largest Recruitment Advertising agency network, and one of 
the world's largest Executive Search and Executive Selection 
agencies. TMP Worldwide, headquartered in New York, is also the 
world's largest Yellow Pages advertising agency and a provider of 
direct marketing services.  TMPW is also known for its Monster.com 
website. Monster.com, headquartered in Maynard, Mass., is the 
leading global careers website, recording over 30.2 million unique 
visits during the month of October 2001.
(source: Company Press Release)

Why We Like It:
GE and PFE reaffirmed guidance today, helping send the Dow to a 
close just under 10,000 and pushing the NASDAQ to regain 2,000 in 
today's session.  With a rebound in corporate profits forecasted 
for 2003 by two of the most influential companies in the U.S., can 
an improving job market be much further behind?  Initial jobless 
claims for the week ending December 8th came in lower than 
expected, though November's annualized unemployment rate at 5.7% 
was the highest level seen in several years.  Initial jobless 
claims for the week ending December 15th prior to the market open 
on Thursday and are forecasted at 440,000.  Will the figures come 
in better than expected for a second consecutive week?

TMPW announced earnings on November 5th that beat the street by 1 
cent despite a 5% decline in year over year revenue, resulting in 
a gap up in the stock and new support being forged at 32.00.  
Since then shares ran up to a high of 48.13 on December 6th.  
Investors promptly took profits and shares retreated 20% to fall 
back to new support just above the 100-dma at 40.00.

We like TMPW for both fundamental and technical reasons.  The 
recent retracement off the highs of December 6th has taken the 
stock out of overbought territory and the move over the course of 
the last two days has translated into the forging of a positive 
correlation with respect to relative strength.  With relative 
strength turning positive compared to the S&P today, downside risk 
could be mitigated up to the 50% retracement off the highs from 
back in June.  Resistance exists at this 50% retracement level at 
44.51- just shy of today's high.  A move through this level could 
see shares test the next level of retracement at 49.05.  
Coincidentally, a higher close tomorrow will likely see the 10-dma 
intersect the 200-dma right at the 50% retracement level.

Traders are going to want to confirm stock direction before 
committing any capital.  Conservative traders may want to wait for 
shares to trade or close back above the $44.51 level (the 50% 
retracement) or back above the $45.00 level, which would put TMPW 
back above its 10 & 200-dmas.  We do have one concern and that is 
the volume.  Volume has been dropping the last two days, which is 
not what bulls want to see on a rally attempt.  Thus we are going 
to start the play with a conservative stop at $42.25, only 30 
cents under today's low.  If shares trip our stop they will likely 
retest the $40 level.  We repeat, confirm stock direction and 
choose your entry point.  

Picked on December 18th at $43.91
Change since picked:        +0.00
Earnings Date               02/04 (unconfirmed)





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

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

Actrade Fincl. Tech - ACRT - close: 32.00 change: -0.15 stop: 29.45

Shares of ACRT opened higher this morning but resistance at 32.50 
proved, once again, to be an important barrier as selling pressure 
commenced.  Buyers returned in the last hour to take the stock off 
its lows, but the consolidation phase continued on as it has for 
the last 5 trading days.  ACRT is still in the midst of a bullish 
trend, but the anticipated move to 35.00 is taking longer than we 
had hoped.  The solid support at 30.00 and the week of 
consolidation that has followed the strong gains just two weeks 
ago are indicative of a move higher in the coming days, so we'll 
refrain from modifying our current stop of 29.45 for now.

Picked on December 9th at $30.96
Change since picked:       +1.04
Earnings Date              10/25 (confirmed)




---

Rational Software - RATL - close: 22.10 change: +0.53 stop: 19.98

A two-day rally in the software sector (GSO.X) has keep the 
rebound going for RATL.  The stock began to bounce off its late 
Friday afternoon low and has not stopped.  It helps to have the 
GSO.X close over the 190 level or resistance; Nasdaq close over 
2000 and MSFT post two days of gains as well.  The next level of 
resistance for RATL is likely to be the $23 level (last 
Wednesday's close).  We are still aiming for a target near $25.

Picked on December 11th at 21.11
Change since picked:       +0.99
Earnings Date              01/09




---

XM Satellite Radio - XMSR - close: 17.05 change: +0.33 stop: 15.99

The moves just keep on coming for XMSR.  Now that investors have 
seen the excitement generated by XMSR's launch of its XM Satellite 
radio product they are turning to its competitors stock Sirius 
(SIRI).  SIRI has been up three days in a row.  XMSR has the edge 
in this rivalry now that they enjoy the "first to market" status 
and analysts expect XMSR to sign up significantly more customers.  
Evidently, SIRI was trading at a rather low multiple to XMSR and 
investors are trying to get SIRI to play catch up with XMSR.  
Shares of XMSR continue to see very strong volume and Monday's 
session saw volume of 8.5M shares.  The stock gapped up and traded 
to a high of 18.48 before profit taking brought it back to close 
at 16.72.  The stock gapped up again on Tuesday but profit taking 
pulled the shares back down to $16.30, which was just enough to 
fill the gap from Friday's high.  As soon as buyers saw this occur 
they began to pile back into XMSR during the afternoon session.  
New support is technically at $16.30 but we don't see the need to 
adjust our stop just yet.  Continue to look for resistance between 
$17.50 and $18.00.  Due to XMSR's volatile rise we would not be 
looking at new long positions at this time.

Picked on December 10th at 13.06
Change since picked:       +3.99
Earnings Date               N/A





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

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

Comverse Technology - CMVT - close: 20.77 chg: +0.34 stop: 20.71

Shares of CMVT gapped higher for the second consecutive day, 
taking the stock to a close back above its 50-dma and stopping out 
our short play.  Though the average volume in CMVT is better than 
6 million shares for the past 65 days, the last two positive 
finishes have come on about half that amount.  This lack of 
conviction makes the recent two-day rally look like an oversold 
bounce.  However, the initial catalyst was news that CMVT had 
signed a deal with Verizon Wireless to provide voicemail solutions 
for Verizon.  Verizon Wireless is the largest wireless 
communications provider in the U.S. with almost 28 million 
customers.  This rally from Monday was provided more fuel today 
with a close above 2,000 on the NASDAQ and a resurgent software 
sector (GSO.X) that finished above its 200-dma today. 

Picked on December 11th at $19.14
Change since picked:        -1.57
Earnings Date               12/11





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


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

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

JC Penney - JCP - close: 24.55 change: -0.19 stop: 22.25

JCP shares closed slightly lower today as investors digested the 
strong gains from Friday and Monday.  While we are a little 
concerned that the stock closed just above the lows of the day, 
the fact that shares held support at the 50 and 100-dma, while 
volume tapered off from the previous day, suggests that today's 
declines were not a result of any real conviction.  MACD is about 
to produce a bullish crossover near the zero line.  If shares 
pullback to bounce at $24.00, we would consider adding to 
positions or entering new ones.

Picked on December 13th at $23.08
Change since picked:        +1.47
Earnings Date               02/12 (unconfirmed)




---

SEI Investments - SEIC - close: 44.03 change: +0.28 stop: 41.49

In Friday's newsletter we had suspected that the consolidation on 
SEIC may have been coming to a close.  The two days of gains for 
the stock this week attest to our suspicions but we were looking 
for a little more strength in the rally attempts than what SEIC 
has produced.  Monday's session illustrated that SEIC had to 
overcome selling pressure at $43.70 before it could move higher 
(you can see it clearly on a 5-minute chart).  Once this obstacle 
was overcome SEIC began to trade higher towards the close.  This 
very short-term bullishness continued on Tuesday and the stock 
traded to the $45 level but closed well off its highs.  Volume was 
above average on the day and we are slightly apprehensive with the 
doji candlestick pattern created today.  The close above $44 is a 
positive sign but we would confirm stock direction before 
considering new positions.  If the stock pulls back we would look 
for a bounce between $43.20 and $43.75.

Picked on December 15th at $43.41
Change since picked:        +0.62
Earnings Date               10/16 (unconfirmed)





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


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

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

Landstar System- LSTR - close: 74.94 change: +0.24 stop: 70.90

Strong moves in the Dow Jones Transport index has awakened new 
interest in shares of LSTR.  The stock has seen two positive days 
with both coming on double the average volume.  The two closes 
over $74 is encouraging and the stock is approaching resistance 
near $76.  The price of oil hasn't changed much from its big move 
on Friday but we would continue to keep an eye on it.  The 
technicals for LSTR are improving and its MACD produced a bullish 
crossover on Monday.  If shares pull back we might look for a 
bounce between $73 and $74.  We'll look for a close over $75 
before we adjust our stop higher.  More conservative traders might 
want to consider adjust theirs to just under the 50-dma.

Picked on December 9th at $73.26
Change since picked:       +1.68
Earnings Date              01/10 (unconfirmed)




---

Mercator Software - MCTR - close: 8.08 change: -0.12 stop: 7.45

Two days of strength for the software sector should have 
translated into strong gains for MCTR.  Shares of the stock did do 
well on Monday and Tuesday morning but it could not hold on to 
these gains.  MCTR encountered the same resistance today as it did 
last Wednesday - the $8.50 level.  We would also like to see the 
$8.00 level hold as support but if shares dip, look for a bounce 
near $7.75.  In the news MCTR announced that they were chosen by 
M&G, one of the biggest retail unit trust managers in the UK, as 
the integration standard.  New entries are still possible but we 
would confirm stock direction first and make sure you play with 
stops.

Picked on December 11th at $7.68
Change since picked:       +0.40
Earnings Date              10/30




---

3D Systems - TDSC - close: 11.40 change: +0.00 stop: 10.74

Our bullish play in 3D Systems continues to be stuck in limbo.  
The stock produced that one breakout buy signal and has traded 
sideways ever since.  To make matters worse, shares continue to 
feel bearish pressure by its descending 50-dma.  The only positive 
for the stock has been its support at $11.00.  It is imperative 
that TDSC maintain a close above its 50-dma and we would not 
suggest any new plays until this occurs.  

Picked on December 7th at $11.52
Change since picked:       -0.12
Earnings Date              10/17






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

NCC     National City Corp         29.10     +0.53
MTG     Mgic Investments           57.38     +0.77
OHP     Oxford Health Plans        31.27     +0.89
N       Inco Ltd                   16.86     +0.57
TFX     Teleflex Inc               45.20     +0.94

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

FLWS    1-800-Flowers.com          15.66     +1.22
DQE     Dqe Inc                    18.04     +1.16
AMSY    American Mgmt Sys          17.72     +1.10
DCTM    Documentum Inc             19.33     +2.33
VRTY    Verity Inc                 17.94     +1.68

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

GE      General Electric           39.72     +1.42
DOW     Dow Chemical               36.99     +2.09
USAI    Usa Networks               26.86     +1.84
FDX     Fedex Corp                 50.80     +1.84
BBY     Best Buy Co Inc            72.55     +3.55

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

BRCD    Brocade Communications     33.78     -1.25
IMCL    Imclone Systems Inc        65.75     -2.86
MCDTA   McData Cl A                24.14     -3.11
VECO    Veeco Instruments          30.82     -2.16
ESIO    Electro Scientific         29.65     -4.04

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

SMTF    Smartforce                 23.01     -0.80
INVN    Invision Technologies      30.28     -7.22
PFSB    Pennfed Financial Svcs     20.82     -0.61
FHR     Fairmont Hotels            22.75     -0.40





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