PremierInvestor.net Newsletter Monday 01-14-2002 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/8128_1.asp ================================================================= In section one: Market Wrap: Valuations leave little room for error Market Sentiment: "Show me the money". Play-of-the-Day: Looking For A Dip Watch List: DSL, ACRT, EYE, EMLX, RCII ----------------------------------------------------------------- U.S. Market Numbers ----------------------------------------------------------------- MARKET WRAP (view in courier font for table alignment) ----------------------------------------------------------------- 01-14-2002 High Low Volume Advance/Decline DJIA 9891.42 - 96.11 9985.38 9889.27 1.26 bln 1250/1904 NASDAQ 1990.74 - 31.72 2018.42 1979.94 1.79 bln 1215/2456 S&P 100 580.86 - 3.34 584.55 580.58 Totals 2465/4360 S&P 500 1138.41 - 7.19 1145.60 1138.15 RUS 2000 483.01 - 6.93 489.94 482.28 DJ TRANS 2662.43 - 44.34 2705.21 2650.55 VIX 25.02 + 1.04 25.39 24.49 VXN 49.51 + 1.14 51.44 48.94 TRIN 1.79 Put/Call 0.66 ----------------------------------------------------------------- =========== Market Wrap =========== Valuations leave little room for error Earning's season kicks in this week and the broader market rally has many stocks at valuation levels, which many feel gives little room for error. Not only will many market participants be looking at recent quarterly results, but as is often the case, what the company says about the future will most likely drive near-term price action. Today's broader market stock action was to the downside after Merrill Lynch recommended an asset allocation shift away from stocks and toward bonds. Today's call from Merrill sure looks like it was made more than a couple of days ago as recent action in the bond market sure depicted a move toward bonds as YIELD's fell rather sharply. Today's call from Merrill seemed to have more of an impact on stocks than it did bonds. By session's end, stocks were broadly lower with the Dow Industrials closing down 96 points at 9,891, the S&P 500 fell 7 points to 1,138 and the NASDAQ Composite dropped 31 points at 1,990. Treasuries saw the bulk of the buying action take place in the shorter-term maturities as the 13-week YIELD ($IRX.X) dropped to a new 52-week low of 1.54%. Many banks money market and shorter- term savings account interest rates are benchmarked to the 13- week YIELD and action here indicates that some money is moving to the sidelines in the short-end. Not necessarily looking for any type of return on capital, but simply looking for some near-term safety. As we step out in maturity, we actually saw some fractional selling. By session's end, the 5-year YIELD ($FVX.X) actually rose to 4.082%, the 10-year YIELD ($TNX.X) rose to 4.868% and the 30-year YIELD ($TYX.X) rose 5.377%. Once again, the action taking place in the bond market sure hints that the market understands there will most likely be some near-term bumps on the road to economic recovery (buying of shorter-term Treasuries), but the longer-term is shaping up (not seeing as aggressive of buying in longer-term at this point). Earnings on the horizon One thing I like to do is monitor some of the market's reactions to stocks that are reporting earnings right now. After the close of trading tonight, online broker E*Trade (NYSE:ET) $12.20 (- 0.89) reported earnings of $0.07 a shares, which was well above estimates of $0.04 a share. In after-hours trading, we're seeing a bit of a muted response, but the stock is trading higher by 50- cents at $12.70. E*Trade Group Chart - Daily Interval It's not just earnings that grew in the latest quarter for the online broker E*Trade (ET). Top-line growth was there too as revenues came in at $345.4 million versus estimates of $324.8 million. The company followed with future bullish guidance for fiscal year 2002, saying earnings should grow to the $0.45-$0.55 per share range, well ahead of estimates of $0.38 per share. As of December 10th, shares of E*Trade were rather heavily shorted with roughly 27.4 million shares shorted. That equates to a short-ratio of roughly 10.7 days to cover, as average daily volume is 2.65 million shares. Support should be firming near $10. The longer-term bullish price objective from our point and figure chart is bullish to $29.25. If E*Trade (ET) can continue this recent earnings and revenue growth (year ago earnings were $0.02 a share), the stock may indeed fetch a loftier multiple. One earning's multiplier often used by fundamental analysts is to take earning growth rates (in the case of E*TRADE) 250% quarter- over quarter ($0.07 current vs. year ago $0.02) and multiply be quarterly earnings. This would give us a "fair value" of roughly $17.50 (250% time $0.07). For the year just ended 2001 (including today's results), E*Trade reported annual earning of $0.12. Considering the company's guidance for $0.45 (lower end of guidance), this would represent roughly 275% growth and "fair value" might have the stock at $12.37 on year-over-year growth rates. Today's close is pretty close to this valuation model of fundamental analysis. Tomorrow's earnings On a quick count, I see approximately 30 companies scheduled to report earnings tomorrow. List of earnings are under the "Market Watch" section of the site. PLEASE NOTE, these are not ALL the companies announcing tomorrow or this week, just many of the largest corporations. http://www.PremierInvestor.net/indexes/marketwatch.asp Before the opening bell we'll get .... Financial stocks may be impacted on earnings from banking stocks AmSouth (NYSE:ASO), Wells Fargo (NYSE:WFC) and broker Charles Schwab (NYSE:SCH). Both ASO and WFC are expected to show modest gains year-over-year on the earnings front, while Charles Schwab is expected to earn $0.08 a share, 3-cents less than year-ago earnings of $0.11. This year's pharmaceutical standout, Forest Labs (NYSE:FRX) is slated to report earning's before the opening of trading of $0.44 cents a share. While earning's are important, drug stocks move on what they have slated in their pipeline. Since shares of FRX have bucked the broader Drug Index (DRG.X) index, look for any news out of Forest Labs to be stock specific and not necessarily impact the sector. The point and figure chart currently carries a longer-term bullish vertical count of $110, and first sign of trouble would be a trade at $77. Then during trading .... Two more financial-related stocks report as Mellon Bank (NYSE:MEL) is slated to report earnings of $0.38, well below year-ago earnings of $0.52. US Bancorp (NYSE:USB) is also looking for relatively flat yea-over-year earnings of $0.40 vs. year-ago $0.41. Then after the close .... Technology investors are going to get a strong dose of earnings that could set the stage for Wednesday's action. DoubleClick (DCLK), Handspring (HAND), Intel (INTC), Juniper (JNPR), Linear Tech (LLTC), MIPS Tech (MIPS), RF Micro Device (RFMD) to name a few are scheduled to report. Most are expected to report earnings well below year-ago-levels, but what they say about the future will most likely drive stock price action on Wednesday. Internet retailer eBay (EBAY) is also scheduled to report earnings tomorrow afternoon. This is a stock bears love to hate, but have had a tough time getting the stock to crater. In early December, shares of EBAY traded a new 52-week high of $72.74, but were not able to sustain that move. Today's 1.1% decline to $63.16 came after some analysts told investors to take some profits ahead of tomorrow's earnings. U.S. Bancorp Piper Jaffray analyst Safa Rashtchy is predicting that eBay investors who have grown accustomed to robust double digit growth could be spooked by even a modest downturn. "At some point, it is pretty obvious that we will see some kind of disappointment," said Rashtchy. eBay Chart - $1 box Shares of eBay still trade above their bullish support trend, so bearish traders need to be careful if short or looking to short the stock ahead of earning's tomorrow afternoon. We do see similar technicals presenting themselves like that found back in August (red 8) when eBay traded down to bullish support and a downward trending channel line. Until the bullish support rend is violated and subsequent sell signal given, I consider this stock bullish. I've drawn some "bearish channels" where a trader may expect this stock to channel going forward. I do feel the break below the bearish channel back in September was due to the "market event" of the terrorist attacks. As you can see, once the stock broke back above the "bearish channel" it began finding support at that channel on the pullback. Eventually, demand took control of the stock, driving price to a new 52-week high. Current risk/reward is too tough to figure out at this point, so I'm staying on the sidelines. Current bearish count is $57 and any shorting should be followed with a stop at $70. Most likely, we've seen some profit taking come out of these names in recent sessions as investors book some handsome gains ahead of what could be a couple of volatile trading sessions. Many of these stocks have rallied well off their September lows and the MARKET response to earnings will most likely give us some heads up on how other stocks will respond in coming weeks. Jeff Bailey Premier Investor ================ Market Sentiment ================ "Show me the money". by Russ Moore Investors snubbed the official launch of "earnings season", choosing instead, to wait and see what corporate America had to say before stepping on to the playing field. The major indices were under pressure from the get-go thanks to a bearish shift by Merrill Lynch. Merrill’s chief U.S. strategist, Richard Bernstein, lowered his equity portion from 60 to 50 percent in a model portfolio. Bonds moved from 20 to 30 percent while cash remained the same at 20 percent. Mr. Bernstein cited "extreme" valuations as the primary reason for the shift. The DOW ended the session with a loss of -1.0 percent while the NASDAQ dropped -1.6 percent and the NDX -1.9 percent. Volume was on the light side with 1.25 billion shares trading on the NYSE and 1.78 billion on the NASDAQ. Losers came out on top by a 19/12 margin on the big board and 25/12 on the tech index. Utilities and gold were the only sectors in positive territory. Airline, biotech and oil service were the weakest areas on the broader markets while hardware, Internet and networkers took the biggest hits on the tech side. Investor sentiment is going to be tested severely over the coming weeks. Earnings, for the most part, will probably meet or exceed estimates but so what, I can high-jump over a 1-foot bar too. No, it’s not going to be earnings that put bullish sentiment to the test, it will be the three most important things in the current market environment: Guidance, Guidance, and Guidance. Words such as "limited", "cloudy", and "guarded", will simply not cut it for investors this time around. Investors are looking for a significant increase in visibility i.e. something beyond next week, failure to do so will probably see the southbound train picking up steam. Monday 01/14 close: 25.02 VXN Monday 01/14 close: 49.51 30-yr Bonds Monday 01/14 close: 5.38 Total Put/Call Ratio: .88 Equity Option Put/Call Ratio: .77 Index Option Put/Call Ratio: 1.66 === NASDAQ 100 Index (NDX/QQQ) 52-Week High: 103.51 52-Week Low: 28.19 Current close: 39.96 Volume/Open Interest Maximum calls: 40/126,400 Maximum puts : 40/113,234 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: 580.86 Volume/Open Interest Maximum calls: 590/6,094 Maximum puts : 580/8,603 Moving Averages 10 DMA 589 20 DMA 587 50 DMA 584 200 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: 1138.41 Volume / Open Interest Maximum calls: 1150/39,302 Maximum puts : 1150/36,556 Moving Averages 10 DMA 1156 20 DMA 1150 50 DMA 1140 200 DMA 1167 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: 9,891.42 Volume / Open Interest Maximum Calls: 100/13,814 Maximum Puts 100/29,373 Moving Averages: 10 DMA 10,091 20 DMA 10,054 50 DMA 9,892 200 DMA 10,104 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: 541.75 Volume / Open Interest Maximum Calls: 660/354 Maximum Puts: 540/979 Moving Averages 10 DMA 562 20 DMA 573 50 DMA 580 200 DMA 542 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: 564.41 Volume / Open Interest Maximum Calls: 440/ 847 Maximum Puts: 470/2,084 Moving Averages 10 DMA 570 20 DMA 552 50 DMA 538 200 DMA 554 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: 379.51 Volume / Open Interest Maximum Calls: 400/ 525 Maximum Puts: 360/1035 Moving Averages 10 DMA 378 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, 02/11. 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 12/25/01 412,581 471,239 (58,658) (9.7%) 01/01/02 338,288 407,107 (68,729) 17.1% 01/08/02 333,742 398,283 (64,541) (6.1%) 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 12/05/01 152,521 79,444 73,077 (6.1%) 01/01/02 127,419 55,576 71,843 (1.6%) 01/08/02 130,335 60,780 69,555 (3.1%) Most bearish reading of the year: 36,513 - 5/01/01 Most bullish reading of the year: 91,122 - 3/06/01 NASDAQ-100 Commercials Long Short Net %Change 12/25/01 55,250 47,476 7,774 01/01/02 29,801 37,497 (7,696) 01/08/02 30,786 37,457 (6,671) (13.3%) 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 12/25/01 15,810 25,687 (9,877) 01/01/02 10,649 5,913 4,736 01/08/02 10,073 6,404 3,669 (22.5%) 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 12/25/01 15,492 7,335 8,157 .6% 01/01/02 15,820 7,553 8,267 1.3% 01/08/02 15,921 7,981 7,940 (3.9%) 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 12/25/01 4,293 9,086 (4,793) 15.4% 01/01/02 3,368 8,668 (5,300) 10.6% 01/08/02 4,380 9,188 (4,808) (9.3%) 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 +69,555 +71,843 -64,541 -68,729 Total Open Interest % (+36.39%) (+39.26%) (-8.82%) (-9.22%) net-long net-long net-short net-short Small Specs Commercials DJIA futures (Current) (Previous) (Current) (Previous) Open Interest Net Value -4,808 -5,300 +7,940 8,267 Total Open interest % (-35.44%) (-44.03%) (+33.22%) (+35.37) net-short net-short net-long net-long Small Spec Commercials NASDAQ 100 (Current) (Previous) (Current) (Previous) Open Interest Net Value +3,669 +4,736 -6,671 -7,696 Total Open Interest % (+22.27%) (+28.60%) (-9.78%) (-11.44%) net-short net-long net-short net-short What COT Data Tells Us ---------------------- Indices:.No significant changes this week as Commercials continue to sit net-short on the SPX with little change over last week’s numbers. Gold: Despite a red-hot week for the gold market, Commercial players were busy adding to their net-short positions. This may be an early signal that the bullish run is coming to an end. 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 01/08 24,042 contracts net-short Data compiled as of Tuesday 01/08 by the CFTC. ========================= Play-of-the-Day (Bullish) ========================= Trigon Healthcare - TGH - close: 71.00 change: -0.42 stop: 68.49 Company Description: Trigon is Virginia's largest managed health care company, providing a broad range of health, wellness and health care financing programs and services to 2 million members. (source: company press release) - ORIGINAL WRITE UP: January 11th, 2002 - Why We Like It: One group that seems unfazed by the recent market weakness are healthcare stocks. Historically, the drug and healthcare sectors are industries that attract investor money during times of weakness or worry as they tend to have pretty steady earnings. This doesn't always happen at every bearish market move but it is common enough that many investors remember its occurrence. This is also another relative strength play as TGH has really been out performing the market. Shares had recently been consolidating under long-time resistance at $70 and Wednesday of this week lead the breakout over it. The technical upside breakout was also confirmed on the point-and-figure chart so the stock doesn't have any near-term overhead resistance. Dips to $70 should be buyable but we're going to play with a relatively tight stop of less than five percent at $68.49. TGH has earnings in early February. - Play of the Day comments, Monday, Jan. 14th, 2002 - With the markets in retreat the healthcare sector "should" continue to stand out for bullish traders. We like TGH's recent strength these last few days and believe a dip to $70 may be an entry point. Confirm the bounce. Picked on January 11th at $71.42 Change since picked: -0.42 Earnings Date 02/08/02 (unconfirmed) ========== 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. ----------- Downey Financial Corp - DSL - close: 44.30 change: +0.83 WHAT TO WATCH: This bank stock has produced an incredible run up for traders. Last week the stock met with resistance at its 200- dma near $44 and today's move pushed shares through it. Very short-term traders may want to watch it for potential moves in the next couple of days but the rest of us, who move a bit slower, should wait for the earnings report on Thursday. Unless earnings are extremely good, the stock could see a sell-the-news sort of effect as investors take profits from the two-month run up. --- Actrade Financial Tech. - ACRT - close: 33.99 change: +1.75 WHAT TO WATCH: Another winner today, despite the down markets, was ACRT. Shares had been battling with strong resistance at $32.50 and $33 during the last several weeks and today's 5.4% move shot through it. The close today looks very bullish for the short-term trend. Bullish investors may want to keep an eye on it. The company is expected to announce earnings on Jan. 24th. --- Visx Inc - EYE - close: 14.35 change: +1.18 WHAT TO WATCH: I found it pretty interesting this morning to hear about the VISX when we had just been looking at it over the weekend. The stock had been languishing between $12.50 and $14.00 for weeks. Today's upgrade to a "buy" from Bank of America helped power the stock through resistance on volume of 1 million shares. Average volume is only 200K. If the stock confirms the new move EYE may be able to trade up to its 200-dma near $16. Yet look for resistance at $15, or the lows from July. A dip back to $14 might be an entry point if you have a good stop. --- Emulex Corp - EMLX - close: 42.60 change: -3.00 WHAT TO WATCH: Could it be trouble for the rebound darling of investors? EMLX has had one of the strongest trends in the market from its Sept/October lows. The move from $9 to north of $45 is just screaming for a big pull back but each time shares start to consolidate they trade sideways as demand eats up supply. It may be that demand is slowing down or supply just can't help taking some profits off the table. Traders should keep an eye on it because shares rest near its 15-dma which has been bullish support for the last few weeks. A move down from here could be the beginning of a short-term sell-off. However, be very careful if you are bearish. It has obviously been a painful move up for shorts who haven't been willing to cover or covered too late. The company just announced that earnings would be Jan. 22nd, 2002 after the market's close. Who's betting that EMLX might see a sell-the-news after they announce? --- Rent-A-Center Inc. - RCII - close: 30.99 change: -1.81 WHAT TO WATCH: This is an interesting development. Shares of the stock have produced a nice rebound from the fall lows but the stock appears to have run out of steam in late December near the $34 area. The 200-dma is overhead and starting to rollover. The last couple of weeks have shown RCII to slowly drift lower. Suddenly, today, the stock sees a lot of selling pressure, loses 5.5% and closes just above its 50-dma. Then after the bell, RCII announces same store sales were up 9.7% and they expect to beat current estimates by a wide margin. Do investors buy the news and send shares rallying higher? Or do they sell it knowing there isn't any reason left, now that the news is out, to wait for earnings on Feb. 11th, 2002? There are a few ways to play it. Active bulls could try and trade any rally from here to $35, its 200-dma. Bears could try and short a failed rally at $35 or a breakdown under $30. Longer-term bulls can wait for the stock to conquer its 200-dma. ================================================================= 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.
PremierInvestor.net Newsletter Monday 01-14-2002 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/8128_2.asp ================================================================= In section two: NetBulls (Tech Stocks) Bearish Play Updates: NXTL StockBottom (Non-Tech) Closed Bullish Plays: BGP, NCOG High Risk/High Reward Closed Bullish Plays: ADCT 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 Play Updates =================== ------------------- Bearish Play Update ------------------- Nextel Comm. - NXTL - close: 8.36 change: -1.64 stop: 9.41 Ouch! We knew that the outlook for wireless stocks was disappointing but Lehman Brothers has joined Merrill Lynch's Jan. 8th announcement with a blanket downgrade of the whole sector. Lehman actually yanked the carpet out from under NXTL with a downgrade from "market perform" to the rarely seen "sell". To pour salt on the wound, Lehman lowered their price target on NXTL from $14 to $4. We're certainly not complaining about the news or the reaction but the stock opened at $9.00 - a far cry from our expected entry at $9.79. This puts our entry price at $9.00, which isn't so bad if NXTL actually drops to $4.00. Based on the news and the market's reaction we're going to adjust our stop and our target exit price. Our new stop will be $9.41, just a few cents above today's high. Our new exit, whereas if the stock trades there we'll close the play for a profit, will be $7.50. Picked on January 14th at $ 9.00 Change since picked: +0.64 Earnings Date 01/28/02 (unconfirmed) ================================================================== Stock Bottom / Active Trader (AT) section ================================================================== =============== AT Closed Plays =============== -------------------- Closed Bullish Plays -------------------- Borders Group Inc - BGP - cls: 21.62 chg: +0.60 stop: 20.99 Sometimes it pays to be play it "safe" and other times, well, you just have to grin and say next time. An early morning dip to $20.87 in BGP stopped us out at $20.99, which closes the play with a +4.6% move. Traders who were a bit more aggressive with their stops should be encouraged by the 2.85% gain today in BGP but beware possible resistance at $22. Hopefully, the positive announcement by online book sales rival Books-A-Million (BAMM) after the close today might spur more positive reactions for BGP. Fortunately, for investors, BGP is a bricks and mortar chain (both its Borders and its Waldensbooks line) with a Borders.com online presence in partnership with Amazon.com. Picked on December 27th at $20.05 Change since picked: +0.94 Earnings Date 01/31/02 (confirmed) --- NCO Group, Inc. - NCOG - cls: 23.05 change: -1.20 stop: 23.75 Traders hit the sell button as both the Dow Jones and the Nasdaq fell to the bear's claw today. Shares of NCOG joined the crowd and slipped almost 5% to close exactly on its 200-dma. If the stock loses the $22 level, active traders might want to try and short it to $20 (near its 50-dma) for a quick move. Otherwise, bullish investors can step back and wait for a new entry point to emerge. Unfortunately, recent action in the stock price looks pretty negative. We were stopped out at $23.75 for a 42-cent loss. Picked on January 3rd at $24.17 Change since picked: -0.42 Earnings Date 11/06/01 (confirmed) ================================================================= High Risk / High Reward (HR) section ================================================================== =================== HR Closed Plays =================== ------------------- Closed Bullish Play ------------------- ADC Telecommunications - ADCT - cls: 5.07 chg: -0.08 stop: 5.06 Still no surprises here with ADCT. We had actually expected to stop out on Friday. More negative reactions from the telecom sector, like our new short NXTL (-16%) for example, had traders still worried about the group. Believe it or not, bulls shouldn't turn their backs too long on ADCT. The intraday bounce today may be a sign of strength. We're not willing to go long again but more aggressive traders may want to keep tabs on it. Don't be surprised if ADCT trades to $4.50 (more bearish) or $4.75 (still keeping the bullish trend of higher lows alive). We close the play at breakeven. Picked on January 3rd at $ 5.06 Change since picked: +0.00 Earnings Date 02/19/02 (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 DSL Downey Financial Corp 44.30 +0.83 PP Prentiss Properties 28.80 +0.87 NHP Nationwide Health 19.85 +0.70 ACRT Actrade Financial Tech. 33.99 +1.75 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- Ticker Company Name Close Change CRWN Crown Media Holdings 12.67 +1.62 EYE Visx Inc 14.35 +1.18 FALC Falconstor Software 11.97 +1.48 HOLX Hologic Inc 13.29 +1.13 OSIS Osi Systems Inc 19.84 +2.94 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- Ticker Company Name Close Change HCA HCA Inc 41.50 +1.23 BOBJ Business Objects 39.38 +1.17 LPNT Lifepoint Hospitals 31.73 +1.31 JEF Jefferies Group Inc 45.00 +1.80 AXL American Axle & Mfg 21.50 +1.07 JDAS JDA Software Group 26.60 +1.35 ----------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change NOK Nokia Corp 21.49 -1.32 IBM Intl. Business Machines 118.05 -2.26 WM Washington Mutual Inc 33.16 -1.48 UTX United Technologies Corp 62.24 -1.60 FTE France Telecom 37.02 -1.63 DOW Dow Chemical 27.05 -3.20 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change MER Merrill Lynch 55.59 -1.65 AXP American Express 36.25 -1.17 BRCD Brocade Communications 36.60 -2.67 SPW Spx Corp 139.68 -1.62 ================================================================= 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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