PremierInvestor.net Newsletter Thursday 01-10-2002 section 1 of 2 Copyright © 2001, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= To view this email newsletter in HTML format with imbedded charts and graphs, click here: http://www.PremierInvestor.net/htmlemail/1583_1.asp ================================================================= In section one: Market Wrap: Mixed session ahead of tomorrow's PPI data Market Sentiment: Investors play the waiting game Play-of-the-Day: none today, see notes below ----------------------------------------------------------------- U.S. Market Numbers ----------------------------------------------------------------- MARKET WRAP (view in courier font for table alignment) ----------------------------------------------------------------- 1-10-2002 High Low Volume Advance/Decline DJIA 10067.86 - 26.23 10101.77 10032.23 1.2 bln 1559/1589 NASDAQ 2047.24 + 2.35 2055.89 2026.05 1.7 bln 1834/1826 S&P 100 590.56 + .94 592.58 587.01 Totals 3393/3415 S&P 500 1156.55 + 1.41 1159.93 1150.85 RUS 2000 495.31 + 0.57 495.51 493.45 DJ TRANS 2764.78 - 10.37 2782.70 2750.71 VIX 23.13 - 0.22 24.42 22.98 VXN 48.66 + 0.31 50.17 48.29 TRIN 1.30 Put/Call Ratio .58 ----------------------------------------------------------------- =========== Market Wrap =========== Mixed session ahead of tomorrow's PPI data Today's divergence in gold and bonds didn't have the impact I thought it might. In the end, the broader market averages ended mixed as the Dow Industrials fell 26 points, while the S&P 500 and NASDAQ composite edged fractionally higher. Tomorrow's economic data will be interesting. At 08:30 AM EST, market participants will get a reading on inflation, or lack thereof, from the Producer Price Index (PPI) number. Economists are looking for a decline of 0.2% with a core rate that factors out food and energy showing a slight up-tick of 0.1%. In essence, very little sign of inflation. So what gives with the recent move higher in gold futures? What's that all about? As we discussed last night, a higher price in gold could be a signal from the market that there might be some worry on the inflation front. But wait! If that's the case, then today's round of buying in the bond market doesn't make much sense. If inflation is running low, then the Fed may be more apt to cut interest rates further if it feels the economy needs further stimulus. Has the recent move in the gold futures market simply been a "short-squeeze" as eluded to in Tuesday's market wrap? We may get some further news on the topic of inflation in tomorrow morning's PPI data. Gold stocks were mixed today as the Gold/Silver Index (XAU.X) gained 0.84% to close at $58.56. An active trader in our bullish play in Placer Dome (NYSE:PDG) $11.82 (-2.07%) will want to keep a close eye on things tomorrow morning. Placer Dome Chart - Daily Interval Tomorrow will most likely be a key day for traders in our Placer Dome (NYSE:PDG) trade. The only thing any of us know for sure is that the PPI data is due out tomorrow morning. While the technicals are bullish for PDG and I think traders are positioned right, I do think its going to take a higher than expected PPI number to get this stock above that $12.21 level and to our target near $13. We put this stock in the "active trader" portion of the play list for a reason. We're not looking to be investors in gold right now. I'd look to sell any move near the $13 level for a nice gain. If the PPI comes in as expected and gold stocks open lower, a short-term trader should be open to exiting the trade if they've got a profit, break-even or small loss. Retracement support should come in near the $11 level. Expanding "borders?" Book retailer Borders Group (NYSE:BGP) issued an UPSIDE earnings warning after today's close of trading. The company said it sees Q4 earnings in the range of $1.31-$1.34 per share versus current consensus estimates of $1.25. The stock was trading as high as $21.86 in after-hours trading. Borders Group Chart - Daily Interval If tonight's after-hours trading at $21.86 is an indication of how shares of Borders Group (BG) open for trading, then active traders are going to have a nice gain going for them at the open of trading. At the least, I'd raise my stop just under retracement of $21.64, but look to sell strength near $22.50 (for active traders). Earnings estimates for next quarter (ending in April) are for profits of 1 penny and may dampen enthusiasm. Can healthcare stocks make a move higher? The last couple of sessions I've started to see some bullish things taking place in some healthcare stocks. I'd argue that his group might not be as economically sensitive than some other sectors and some bullish news out of Oxford Health (NYSE:OHP) yesterday when the company said enrollment in its commercial health plans should be up 2% this year. Oxford Health Plans Chart - Daily Interval I've seen charts like this before when a stock "breaks out" of a longer-term base on BIG volume. Often times it is a "sudden realization" that longer-term bullishness is still to come. On April 18th, Oxford Health switch to the NYSE from the NASDAQ. Not sure if this stock will cooperate, but I'd like to see a pullback near the $32-$33 level for a bullish trade. If you're a longer-term investor, I like this stock as a bullish play. The current vertical count from the point and figure chart is building and currently has a vertical count of $65. Oxford Health Plans Chart - historical back to April 2000 gap Like I said. I've seen quite a few stocks do well that have gapped above a longer-term base on BIG volume and the outcome is often times quite bullish. What I think happens is that the "good news" near the end of a base is a major turning point for a stock and sudden realization by the MARKET of what lies ahead. Bears that are short the stock and haven't been making any headway quickly run for the door and cover their positions. At the same time, you get some institutional bulls in the stock. That's what creates the gap higher and BIG volume spike. Then as time passes, institutions continue to accumulate and begin building a longer-term position. Oxford Health Chart - Historical look at year 2000 Not only did Oxford Health gap higher on BIG volume in April of 2000, but the point and figure chart gave a sextuple top buy signal. That's what I call "breaking out of a base!" I think one way to play the current move in shares of Oxford Health (NYSE:OHP) is to look at a longer-term call option. I'm not sure if the stock will pull back or not, it may keep running. An investor can help limit their risk of a near-term downside move and look at the August $35 calls (OHPHG) (1 contract gives the investor control of 100 shares of stock until August). At the close of trading today, the OHPGH cost $4.30 or $430. An investor that were to buy 100 shares of stock will tie up $3,536 and a near-term pullback to $32 might make an investor nervous and perhaps taking "too much heat." The call option allows the investor exposure to 100 shares until August and the most an investor would lose is $430 (plus commission on 1 contract). In the year 2000, it took shares of Oxford Health seven months from April (April, red 4 to October red A) to achieve its bullish vertical count. Another healthcare stock that looks bullish are shares of UnitedHealth Group Inc. (NYSE:UNH). This stock's point and figure chart currently has a bullish vertical count of $91. First sign of trouble would be a trade at $67. Bullish support is at $66. Shares of UNH also gave a spread triple top buy signal at $70 on November 20th. Today, shares of UNH looked to have started a move higher after trading right into a still trending higher 50-day moving average. I like UNH as a bullish trade, stop $67 and longer-term target of $89. Jeff Bailey Senior Market Technician ================ Market Sentiment ================ Investors play the waiting game. by Russ Moore Better than expected retail sales numbers and improving jobless claims data wasn’t enough to overcome investor anxiety. Rumors that IBM may fall short on sales/earnings targets triggered some downside pressure on blue-chip index, leaving the DOW with a loss of -0.3 percent. The NASDAQ managed a +0.1 percent gain while the NDX added +0.2 percent with Microsoft and Cisco saving the day. Volume was moderate with 1.28 billion shares trading on the NYSE and 1.75 billion the NASDAQ. Market breadth was virtually flat. Apparently, consumers turned it on in the home stretch giving retailers a much needed Christmas boost and better than expected numbers. The RLX (S&P retail index) was up +0.85 percent on the news. Other winners included bank, utility, drug, biotech and gold. Cyclical, oil service, natural gas, airline and brokerage sectors were all down. Tech action saw the Internet sector with the only green arrow. Jobless claims fell 56,000 to 395,000, much better than expected. The seemingly positive data was viewed some skepticism however. Seasonal adjustments may produce false signals on the overall trend. In addition, the labor department said that some California residents might have elected to wait until January 6, when a benefit increase comes into affect. Mr. Greenspan’s upcoming speech was another factor in today’s cautious trading. Investors will be listening closely to the Fed chief’s words and their possible impact on market direction. Will the Fed be moving to a neutral position at the next FOMC meeting, or will the easing policy remain intact? Rest assured, the CNBC crew will be analyzing every tidbit, to death. Over extended stock prices, earnings announcements and a healthy rumor mill are likely to keep bullish sentiment in check for now. Thursday 01/10 close: 23.13 VXN Thursday 01/10 close: 48.66 30-yr Bonds Thursday 01/10 close: 5.41 Total Put/Call Ratio: .58 Equity Option Put/Call Ratio: .50 Index Option Put/Call Ratio: 1.42 === NASDAQ 100 Index (NDX/QQQ) 52-Week High: 103.51 52-Week Low: 28.19 Current close: 41.38 Volume/Open Interest Maximum calls: 40/125,302 Maximum puts : 40/103,838 Moving Averages 10 DMA 40 20 DMA 40 50 DMA 39 200 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: 590.56 Volume/Open Interest Maximum calls: 590/5,155 Maximum puts : 550/5,235 Moving Averages 10 DMA 591 20 DMA 586 50 DMA 583 200 DMA 599 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: 1156.55 Volume / Open Interest Maximum calls: 1150/40,218 Maximum puts : 1150/36,713 Moving Averages 10 DMA 1159 20 DMA 1149 50 DMA 1137 200 DMA 1166 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: 10,067.86 Volume / Open Interest Maximum Calls: 100/13,808 Maximum Puts 100/30,465 Moving Averages: 10 DMA 10,130 20 DMA 10,044 50 DMA 9,859 200 DMA 10,099 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: 561.82 Volume / Open Interest Maximum Calls: 660/ 354 Maximum Puts: 580/1,150 Moving Averages 10 DMA 571 20 DMA 574 50 DMA 580 200 DMA 541 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: 574.57 Volume / Open Interest Maximum Calls: 440/ 847 Maximum Puts: 470/2,084 Moving Averages 10 DMA 564 20 DMA 551 50 DMA 533 200 DMA 555 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: 380.00 Volume / Open Interest Maximum Calls: 400/ 525 Maximum Puts: 360/1035 Moving Averages 10 DMA 379 20 DMA 380 50 DMA 388 200 DMA 390 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, 02/04. 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 12/18/01 391,995 456,968 (64,973) 4.3% 12/25/01 412,581 471,239 (58,658) (9.7%) 01/01/02 338,288 407,107 (68,729) 17.1% 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 12/18/01 158,300 80,507 77,793 8.4% 12/05/01 152,521 79,444 73,077 (6.1%) 01/01/02 127,419 55,576 71,843 (1.6%) 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 12/18/01 55,276 58,433 (3,157) (46.7%) 12/25/01 55,250 47,476 7,774 01/01/02 29,801 37,497 (7,696) 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 12/18/01 17,649 18,626 (977) 12/25/01 15,810 25,687 (9,877) 01/01/02 10,649 5,913 4,736 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 12/18/01 21,919 13,810 8,109 (23.2%) 12/25/01 15,492 7,335 8,157 .6% 01/01/02 15,820 7,553 8,267 1.3% 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 12/18/01 6,790 10,943 (4,153) (25.8%) 12/25/01 4,293 9,086 (4,793) 15.4% 01/01/02 3,368 8,668 (5,300) 10.6% 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 +71,843 +73,077 -68,729 -58,658 Total Open Interest % (+39.26%) (+31.50%) (-9.22%) (-6.64%) net-long net-long net-short net-short Small Specs Commercials DJIA futures (Current) (Previous) (Current) (Previous) Open Interest Net Value -5,300 -4,793 +8,267 8,157 Total Open interest % (-44.03%) (-35.82%) (+35.37%) (+35.73) net-short net-short net-long net-long Small Spec Commercials NASDAQ 100 (Current) (Previous) (Current) (Previous) Open Interest Net Value +4,736 -9877 -7,696 +7,774 Total Open Interest % (+28.60%) (-23.80%) (-11.44%) (+7.49%) net-short net-short net-short net-long What COT Data Tells Us ---------------------- Indices:.Interesting changes this week as the Commercials increased their net-shorts on the S&P 500 (bearish) while the Small Specs added to their net-long percentage. Increasing divergence is what we’re looking for and we’ll be watching this one closely over the coming weeks. Elsewhere, Commercials did a flip-flop on the NASDAQ 100 with a change to net-short contracts. Once again we see increasing divergence between the Commercials and the Small Specs as the Small Specs went net-long on the tech index. Gold: No significant changes this week. 12/04 2,534 contracts net-short 12/11 13,626 contracts net-long 12/18 15,198 contracts net-short 12/25 11,976 contracts net-short 01/01 14,555 contracts net-short Data compiled as of Tuesday 01/01 by the CFTC. ========================= Play-of-the-Day () ========================= No Play of the Day tonight as we wait for the PPI numbers and the market's reaction. ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= 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. 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PremierInvestor.net Newsletter Thursday 01-10-2002 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/1583_2.asp ================================================================= In section two: Net Bulls Bullish Play Updates: SFA Bearish Play Updates: MTON Stock Bottom / Active Trader Bullish Play Updates: APA, BGP, LAB, NCOG, PDG, UVN Bearish Play Updates: ADRX, SPY, VGR High Risk / High Reward Bullish Play Updates: ADCT, APCC 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) / Tech Stock section ================================================================== =============== NB Play Updates =============== -------------------- Bullish Play Updates -------------------- Scientific Atlanta - SFA - cls: 26.75 chg: +0.04 stop: 24.73 The broader market weakness that appeared late in yesterday's session and again this morning weighed heavily on shares of SFA. The stock sold off late afternoon Wednesday and gapped down to $26.01 today before staging a session long comeback from the lows. Our Tuesday update mentioned a dip to $26 and this was as close as you could get. Bullish traders should confirm stock direction before committing new capital and we would be very cautious if the broader market is weak. No change to our stop but more conservative traders could use today's low as a guideline if they want to adjust theirs higher. Our exit price of $29.00 still stands. Don't forget that SFA should announce earnings next Thursday, Jan. 17th. Picked on December 28th at $24.73 Change since picked: +2.02 Earnings Date 01/17/02 (confirmed) -------------------- Bearish Play Updates -------------------- Metro One Telecom. - MTON - cls: 29.50 chg: +2.75 stop: 30.21 Ouch! A no news reversal of ten percent was a bit puzzling today. MTON isn't a pure wireless play but we still glanced at the news for other big players and didn't see anything exciting that may have fueled the move in MTON. This leaves us with a potential oversold bounce, which the stock could have been overdue for. However, what doesn't sit well with us was the session long rally in the shares with the stock closing near its high for the day. In the Wednesday newsletter we mentioned how MTON's position on its point-and-figure chart gave us pause for concern. It makes one wonder if shorts were waiting for the stock to touch its support level before covering. Tomorrow is a key day for MTON's short-term direction. If this one-day reversal confirms with a close back over $30 then bears might want to look elsewhere. We've already tightened our stop to $30.21 and will have to see how the cards are dealt. Picked on January 8th at $28.40 Change since picked: -1.10 Earnings Date 02/07/02 (unconfirmed) ================================================================== Stock Bottom / Active Trader (AT) Non-tech stock section ================================================================== =============== AT Play Updates =============== -------------------- Bullish Play Updates -------------------- Apache Corp - APA - close: 48.13 change: -0.63 stop: 46.99 *new* The oil indices have continued to pull back the last couple of days but action in the price of oil futures lead us to believe the group may be ready for the turnaround we've been looking for. Shares of APA drifted to a low of $47.75 before buyers started nibbling at the stock price. The March crude futures look like they have bottomed near the lower end of its recent trading channel. The combination of APA's and the future's trading action has encouraged us to raise our stop. If APA doesn't trade higher from here then we probably don't want to be in it. Our new stop is $46.99. New positions could be sought if the stock confirms the up trend is still intact. Picked on January 4th at $48.54 Change since picked: -0.41 Earnings Date 10/25/01 (confirmed) --- Borders Group Inc - BGP - cls: 20.35 chg: -0.50 stop: 19.99 We were starting to worry about BGP. Positive comments from several retailers lifted several stocks in the group on Thursday. BGP managed to gap higher at the open but instead of following through on the move the stock produced a steady sell-off all day long. Shares closed at their low for the day near its 10-dma. It was enough to make us consider just calling it quits and looking elsewhere. Fortunately, after the bell, Borders came out with an earnings warning -- a positive upside earnings warning. Sales were so strong that management has raised their estimates for next year. In a press release, BGP said that sales for the last two months of 2001 rose 13.2 percent over the previous year. They also reported that Thanksgiving through Jan. 6th, their same store sales grew 5.1% and their Waldenbooks line of stores grew same store numbers 3.7%. Their international stores had an very strong quarter with total sales up 28.5% over last year. They also announced that they would report earnings on January 31st, 2002 with a conference call on February 1st. This announcement had shares of BGP trading above $21.80 in after hours. We are going to set an exit point in hopes of closing the play on any excitement tomorrow. Our exit point will be $22.50 and if shares of BGP trade there intraday we'll close the play for a gain. The only pit in this cherry pie is the possibility of a pitiful PPI report. A bad PPI could send an already wavering market much lower and BGP would likely follow the crowd despite their good news. We're not going to change our stop at this time but Bailey has some alternative strategies for stop placement on this play in his wrap tonight. We encourage you to check it out. Picked on December 27th at $20.05 Change since picked: +0.30 Earnings Date 01/31/02 (confirmed) --- Labranche & Co Inc - LAB - close: 35.36 change: -0.49 stop: 33.74 The good news for LAB bulls is that shares have been able to hold above the support level at $35 while the Dow Jones has pulled back most of the week. The bad news for LAB bulls is that shares have been stuck under resistance near $36.35 all week. Conservative investors may want to tighten their stops. Don't forget that earnings are expected next Friday, January 18th, 2002 and we'll probably close the play before they announce. Picked on January 4th at $36.11 Change since picked: -0.75 Earnings Date 01/18/02 (confirmed) --- NCO Group, Inc. - NCOG - close: 25.05 change: +0.23 stop: 22.87 There has been little change in shares of NCOG since Tuesday. We're encouraged that the stock has managed to hold above support at $24 but there appears to be some selling pressure just north of $25. All the stock may need is a positive market environment to get through this resistance as volume has been retreating. Odds are investors are waiting for the PPI report and Greenspan's comments on Friday before placing any more bets. We're going to try and reduce our exposure by raising our stop to $23.74. The challenge with this move is that any strong volatility by indecision over the PPI report tomorrow could stop us out. Hopefully, the 10-dma at $24.22 will be strong enough to resist the bears. Picked on January 3rd at $24.17 Change since picked: +0.88 Earnings Date 11/06/01 (confirmed) --- Placer Dome - PDG - close: 11.82 change: -0.25 stop: 11.64 *new* We felt encouraged on Wednesday when shares of PDG traded higher and closed above potential price resistance of $12. The move was fueled by a strong day in the XAU.X the same day. What is puzzling was Thursday's action. The XAU continued higher; as did the price of gold per ounce but PDG fell back two percent to bounce at $11.75. We suspect that bears are trying to short the move ahead of the PPI. The key will be the PPI report. If the number comes in strong, then Wall Street might worry about inflation and that should pull the price of gold higher. If the number is weaker than expected then inflation concerns should not be an issue and gold should subside. We're going to move our stop to breakeven at $11.64. This way we can let it run either direction with almost zero risk. For more comments about the gold index and our PDG play, check out tonight's wrap. Picked on January 4th at $11.64 Change since picked: +0.18 Earnings Date 10/24/01 (confirmed) --- Univision - UVN - close: 39.93 change: -0.87 stop: 38.99 We are turning cautious on this UVN long play. This morning released an interview with the CEO of Telemundo, UVN's biggest rival. The summary of the article was that 2002 should be "the best year in (U.S.) Latin television history", which is a quote from Jim McNamara in the interview with Reuters. If things are going to be so great, then why can't the bulls keep UVN above the $40 support level. Shares of UVN have been able to hold this support for the last several sessions and today's close under it is an ominous sign for Friday. We would not suggest any new positions and traders may want to snug up their stops. Picked on December 28th at $40.89 Change since picked: -0.96 Earnings Date 11/06/01 (confirmed) -------------------- Bearish Play Updates -------------------- Andrx Group - ADRX - close: 64.16 change: +0.90 stop: 66.02 *new* Is it just me or has there been a real lack of follow through on the breakdown for shares of ADRX. On Tuesday we reported about their big confession over earnings, litigation and delayed drug launches but the stock continues to hang on. The $65 level, bolstered by the 200-dma, has become new resistance for the share price but we're disappointed in the current response from investors. Traders should turn cautious on this short. Volume has dried up but that can be attributed to the big PPI report tomorrow as investors take a wait and see approach. We are going to lower our stop to $66.02 in an effort to reduce our exposure. More conservative investors can look to the $65 level as a guideline. Picked on January 4th at $64.14 Change since picked: -0.02 Earnings Date 10/25/01 (confirmed) --- SPDRS on the S&P 500 - SPY - cls: 116.08 chg: +0.51 stop: 118.25 Thursday brought us a partial success from our outline on Wednesday. We were expecting the big investors to buy bonds today and sure enough they did. Unfortunately, the SPY forgot to follow through. We think this may just be a one-day anomaly ahead of the big economic data coming out tomorrow. Everything hinges on Wall Street's reaction to the PPI numbers and any clues from Greenspan's speech on Friday. Picked on January 9th at $115.57 Change since picked: -0.51 Earnings Date n/a --- Vector Group - VGR - close: 27.80 change: -1.00 stop: 30.51 *new* So far so good. VGR produced another high volume down day losing 3.4% in Thursday's session. The stock found some support near $27 before bouncing higher in the last 30 minutes of the trading day. We're going to lower our stop a dollar to $30.51. In the mean time we're also going to enter an exit price of $25.00. If shares of VGR trade there intraday we'll close the play for a gain. Those investors who think VGR will eventually trade $19, its bearish price objective, may want to make other adjustments. Picked on January 9th at $28.80 Change since picked: +1.00 Earnings Date 11/14/01 (confirmed) ================================================================== High Risk / High Reward (HR) section ================================================================== =============== HR Play Updates =============== -------------------- Bullish Play Updates -------------------- ADC Telecommunications - ADCT - cls: 5.42 chg: -0.08 stop: 5.06 Shares of ADCT continue to drift lower as the market waits on the economic data expected out tomorrow morning before the bell. We would expect to be stopped out on bad news or to exit the play at $5.90 on good news. Picked on January 3rd at $ 5.06 Change since picked: +0.36 Earnings Date 11/28/01 (confirmed) --- American Power Conversion - APCC - cls: 15.73 chg: -0.17 stop: 15.19 The broader market weakness on Wednesday afternoon and Thursday morning was enough to pull shares of APCC back from its position north of $16. Today's early morning bounce marks the second time in four days that buyers have stepped in near the $15.35 level. Like many stocks on the exchanges, volume has dried up ahead of the PPI report tomorrow. Traders should confirm bullish momentum before considering new positions. Look for shares to trade back above the $16 level. Picked on January 8th at $16.02 Change since picked: -0.29 Earnings Date 01/31/02 (unconfirmed) ================== 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 ETR Entergy Corp 41.10 +1.17 JP Jefferson-Pilot Corp 46.95 +0.63 PMI Pmi Group Inc 68.52 +1.45 OHP Oxford Health Plans Inc 35.36 +2.61 AXL American Axle & Mfg 20.92 +0.63 BOBE Bob Evans Farms Inc 27.10 +0.88 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- Ticker Company Name Close Change GPS Gap Inc 16.35 +1.83 CRUS Cirrus Logic Inc 18.03 +2.58 CLE Claires Stores Inc 17.30 +1.88 UCR Ucar Intl. 12.00 +1.20 MIMS Mim Corp 19.21 +1.11 BELM Bell Microproducts Inc 15.55 +1.35 HOLX Hologic Inc 11.94 +1.34 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- Ticker Company Name Close Change BK Bank of New York 45.35 +1.89 S Sears 51.73 +2.28 MEDI Medimmune Inc 47.33 +1.74 LNC Lincoln National Corp 51.14 +1.31 BJ BJ's Wholesale Club 44.36 +1.23 MCAF Mcafee.com Corp 40.98 +1.06 ----------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change MMM Minnesota Mining & Mfg 113.20 -1.45 DOW Dow Chemical Co 31.06 -2.94 KYO Kyocera Corp 65.00 -2.73 TBH Telecom Brazil 37.29 -2.44 GD General Dynamics 79.27 -1.73 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change MU Micron Technology 33.75 -1.26 XLNX Xilinx Inc 44.01 -0.53 TRB Tribune Co 38.10 -0.15 MGA Magna Intl. Inc 65.65 -2.60 CMVT Comverse Technology 24.27 -2.10 CREE Cree Inc 30.65 -0.57 ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. PremierInvestor.net staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control. Please read our disclaimer at: http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html ***************************************************************** ADVERTISING INFORMATION For more information on advertising in PremierInvestor.net Newsletter, or any Premier Investor Network newsletter please contact Contact Support. ***************************************************************** Copyright © 2001 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form.
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