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Daily Newsletter, Tuesday, 01/15/2002

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PremierInvestor.net Newsletter                 Tuesday 01-15-2002
                                                   section 1 of 2
Copyright  2001, All rights reserved.
Redistribution in any form is strictly prohibited.

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In section one:

Market Wrap:      Red light, green light, red light.
Market Sentiment: Stuck in neutral.
Play-of-the-Day:  Calling Short-term Bulls.

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
       1-15-2002           High     Low     Volume Advance/Decline
DJIA     9924.15 + 32.73  9986.21  9865.61  1.3 bln   1871/1280
NASDAQ   2000.91 + 10.17  2011.25  1977.28  1.6 bln   1853/1772
S&P 100   584.85 +  3.99   586.10   579.62   Totals   3724/3052
S&P 500  1146.19 +  7.78  1148.81  1136.88
RUS 2000  485.00 +  1.99   485.21   480.53
DJ TRANS 2686.08 + 23.65  2705.11  2655.37
VIX        24.42 -  0.64    25.47    24.17
VXN        48.02 -  1.49    49.59    47.94
TRIN        1.28
Put/Call Ratio       .77
-----------------------------------------------------------------

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

Red light, green light, red light

Some of us may remember the grammar school game "red light/green 
light."  That's what today's market action was like as investors 
sold, then bought, then sold and by session's end were buying.  
The broader market averages ran the gamut and hints at just how 
uncertain stock investors are right now.

Perhaps some of the after-hours earnings from some closely 
watched earnings will set the tone for near-term trading and have 
bulls back in the red light zone tomorrow morning.  Many of the 
companies reporting earnings after the close of trading are 
seeing their shares trade lower, regardless to some earnings 
beating estimates expected by analysts.  While I never like to 
predict a market open based on after-hours trading, there were 
few buyers to be found after tonight's earnings.

After the bell earnings rundown

eBay (EBAY) $64.03 +1.37 during the regular session this internet 
retailing giant reported earnings of 14 cents a share, better 
than estimates of 13 cents.  Revenues came in at $219 million, 
which was a robust 63.7% gain above year ago revenues.  In after 
hour's trading, shares fell to $60.82.

Intel (INTC) $34.70 -0.40% reported earnings of 15 cents a share, 
well above analyst's estimates looking for 11 cents a share.  
While earnings were better than expected, the 15 cent earnings 
were almost 80% below year-ago levels.  Revenues for the latest 
quarter came in at $6.9 billion, which matched the company's 
previous guidance.  Intel executives said revenues could be flat 
or fall as low as $6.4 billion in the first quarter.  Adding some 
insult and injury to the sector was the company's announcement 
that it plans to cut its capital spending budget by 25% in 2002 
to $5.5 billion.  That "capital spending cut" announcement put 
pressure on shares of equipment maker Applied Materials 
(NASDAQ:AMAT) $45.37 +0.13% in regular session trading as the 
stock fell to $42.79 in after-hours, KLA Tencor (NASDAQ:KLAC) 
slipping to $52.06 from close of $55.31 and Novellus Systems 
(NASDAQ:NVLS) to $39.95 from $42.31 close.

Applied Materials Chart - $1 box




Today's news from Intel (INTC) on capital spending is going to 
have some semiconductor equipment stocks like Applied Materials 
(NASDAQ:AMAT) under some selling pressure.  We note that the 
stock did exceed a previous bullish vertical count of $46 with a 
trade at $48 on January 9th.  Now that the stock has some 
apparent "bad news" I want to see a sell signal in the chart of 
AMAT.  Why?  A trader wanting to get long the stock needs a "sell 
signal" to cancel out the old bullish vertical count.  If I can 
get a sell signal at $39 and get the sector bullish percent down 
at a lower risk level (risk has been high for bulls for past 
month above 70%!) then I'd like to trade the semiconductor 
equipment giant bullish.  I want to lay out my plan early.  This 
will make me follow the scenario and test to see how things play 
out.  If AMAT will trade near the $37 level in the next month and 
the sector bullish percent gets near the "oversold" level of 30% 
then sector and stock risk is reduced for a bullish trade.  
Remember that in late September, the bullish percent for the 
semiconductor sector fell to 6%, before reversing up to as high 
as 78% in mid-December.  Current reading is "bear correction" at 
70%, which continues to have us telling bulls to be very cautious 
in this group as they carry the bulk of the risk.  Perhaps 
today's news from Intel (INTC) helps solidify our analysis.

Tonight's news from Intel (INTC) should bode well for traders 
that this weekend's profiled bearish trade in Altera 
(NASDAQ:ALTR) from the "High Risk/Reward" section.  Not looking 
for a "home run" on this one, but just like Applied Materials 
(AMAT) we need to understand and monitor upward trend.

Altera Chart - $0.50 and $1 box




Trader's that took our "High Risk/Return" trade in ALTR should 
understand the "big picture" and not be looking for a home run.  
Several reasons we've been talking about for a short in ALTR has 
been the "overbought" nature of the semiconductor bullish 
percent, shares of ALTR were trading on a "sell signal" (traded 
$21 in early January) and had rallied back near a level where we 
could initiate a relatively lower risk short to a stopping point.  
The "high risk" came from tonight's Intel earnings.  What I like 
to do is "weigh" the past bullish vertical count of $39.50 
against the current bearish count of $12.  In my mind, if ALTR 
was going to $12, it sure has heck would have done it in 
September with all the bad news the market was getting.  I don't 
think a bearish trader/investor should be counting on $12.  If 
they get it, then fine, but don't count on it.  Be willing to pay 
yourself for the risk you took should the stock trade $20-$21.  
Perhaps retracement will also help guide us.

Altera Corporation - Daily Interval




As the weekend's play write-up indicated, there is a lot of 
congestion in ALTR between the $22 and $26 level.  The "wedge" we 
see forming gives hint the stock is still rather range bound.  
With downward trend, along with the 200-day MA and 50% 
retracement just above we thought a bearish bet along with the 
point/figure sell signal had 4 things saying "bearish."  
Tonight's after-hours trading has the stock at $23.54, which 
would be just below the 50-day moving average of $23.59.  
Shorter-term traders are most likely targeting the $22.61 level 
at 38.2% retracement.  I'm expecting some formidable support near 
the $20 level (bullish support from p/f chart and recent reversal 
high from bar chart).  If we can short near $24 and cover near 
$20, I don't mind taking a 16% gain.  Time will tell.  Don't get 
greedy.  Remember the similar technicals we found in a profiled 
short in Metro One (NASDAQ:MTON) as discussed in last Friday's 
wrap?  If not, then click the link below as a review and perhaps 
understand the bullish support trend and 19.1% retracement.  Just 
planning ahead and looking to trade the plan.

http://www.PremierInvestor.net/markets/marketwrap/011102_1.asp

We've only just begun.....

If you think today was a plethora and cacophony of earnings, 
we've only just begun the earnings announcement season.  Tomorrow 
before the bell we'll get earnings from several airlines stocks 
like Continental Airlines (NYSE:CAL) and AMR Corporation 
(NYSE:AMR).  The Airline Index (XAL.X) jumped a stellar 6% today 
to $93.51 and may threaten the recent post-September 11th highs 
of $100.  The Airlines Index (XAL.X) led sector gainers today.  
One stock that may have some good near-term upside are shares of 
Southwest Airlines (NYSE:LUV) $18.07 +2.32% after a past two-
session test of its 200-day moving average as support and bounce 
higher today.  LUV's post September 11th high was $20 and a move 
to that level from today's close represents a decent trade and 
potential gain of 10%.  Shares of LUV are expected to report 
earnings on Thursday, January 17th before the opening of trading.  
With the sharp moves we saw ahead of earnings today in 
Continental and AMR, LUV's day may be tomorrow.  Look for 
tomorrow's before the bell earnings from CAL and AMR to be a 
potential catalyst for a move higher.  Analysts are looking for 
quarterly losses of $4.83 per share for AMR and losses of $4.67 a 
share for CAL.  We'll have the numbers before the stocks open for 
trading and can monitor the MARKET's reaction from there to help 
with a trade in LUV.

Southwest Airlines Chart - Daily Interval




Current estimates for Southwest Airlines are for the company to 
show a loss of 1 penny a share in the latest quarter.  I would 
not be looking to play the "buy and hold" theme tomorrow, but if 
we get some upside surprises from CAL and AMR, then this may be a 
short-term trade to have in our hip pocket.

For a more complete list of earnings, you can click the "Market 
Watch" link on the front page of PremierInvestor.net.

Holding over earnings

As I said earlier, it is very tough to judge after-hours trading 
as any indication of what takes place tomorrow, but first glance 
from tonight is that it looks as if MARKET participants are 
willing to sell the earning's news (good or bad) in many 
technology stocks.  There are some exceptions, but the exceptions 
are coming from stocks that have been reporting some stronger 
earnings.

I've had the opportunity to see and trade a couple of 
semiconductor cycles.  What has happened in the past, may well be 
happening currently.  What has happened in the past is that you 
get a nice bull run like we've seen in the past three months as 
the sector moves ahead of a new bullish cycle.  There is most 
often a "hickup" that creates the pullback for the best buying 
opportunity.  I think part of the reason for this "hickup" and 
buying opportunity is that the "fundamental short" has seen a 
stock like Intel (INTC) make a move from its low near $19 to the 
recent high's of $36 and begins saying, "Thanks but no thanks and 
I'm looking to cover on weakness."  I like to monitor the BIG 
guns like Intel (INTC) as the semiconductor chip bellwether and 
Applied Materials (AMAT) as the semiconductor equipment 
bellwether.

The two together basically feed off each other, with AMAT's 
business more dependent on what Intel and other chipmakers are 
doing in their production phase.  As the need for increased 
demand grows, then equipment orders will grow.

This is perhaps very similar to what we've discussed regarding 
the Oil/Natural Gas stocks and their relationship with the Oil 
Service stocks.  It's my belief that Oil Service benefits at the 
hand of the oil producer/exploration stock.  When they see the 
demand, then the demand for the service side should pick up.

Right now, I'm thinking today's spending cutback by Intel is a 
very cautionary move, should not be ignored, but not necessarily 
a call that the bottom hasn't been found.  We could well see a 
50% retracement of the recent upward move in many of the 
semiconductor stocks, but at this point (knowing what I know and 
barring some catastrophic global event) I do think the bottom for 
the next upward cycle has been put in.

Semiconductor bulls just need to be patient.  Wait for that 
bullish percent to get back down near a lower risk level.  It may 
be sooner than you think.

Jeff Bailey
Senior Market Technician


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

Stuck in neutral.
by Russ Moore

Cautious trading ahead of tonight’s after the bell announcements 
made for a light volume session with volatile swings.

The DOW posted a gain of +0.3 percent while the NASDAQ added +0.5 
percent and the NDX +0.5. Volume came in at 1.37 billion shares 
on the big board and 1.64 billion on the NASDAQ. Winners edged 
losers by a 19/13 count on the NYSE and 19/18 on the tech index.

The tech side was weak throughout the session with Internet and 
chip sectors leading the decline. On the broader markets, 
airline, oil, oil service and bank sectors attracted some buying 
interest while drug, biotech and paper were under selling 
pressure.

The pre-market news featured a better than expected retail sales 
report. December sales showed a decline of -0.1 percent versus 
the -1.3 percent forecast.

Despite the positive retail data, investors pushed stocks in and 
out of positive territory, no doubt distracted by Intel’s 
forthcoming news. Intel beat the street in terms of earnings 
however, the company said it would cut capital spending from 7.3 
billion to 5.5 billion. That announcement will have negative 
repercussions for the capital equipment sector, and the tech 
sector in general.

You’ll recall yesterday that I talked about guidance, not 
earnings, being the important element during the current earnings 
season. Intel’s reduction in capital spending is precisely the 
kind of news that the bears were looking for, and the bulls 
hoping to avoid.


Tuesday 01/15 close: 24.42


VXN
Tuesday 01/15 close: 48.02


30-yr Bonds
Tuesday 01/15 close: 5.34


Total Put/Call Ratio: .77


Equity Option Put/Call Ratio: .67


Index Option Put/Call Ratio: 1.32


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 40.34

Volume/Open Interest
Maximum calls: 40/131,928
Maximum puts : 40/109,471

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: 584.85

Volume/Open Interest
Maximum calls: 590/6,848
Maximum puts : 580/9,537

Moving Averages
 10 DMA  Unavailable
 20 DMA  
 50 DMA  
200 DMA  

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: 1146.19

Volume / Open Interest
Maximum calls: 1150/37,443
Maximum puts : 1150/33,795
Moving Averages
 10 DMA Unavailable
 20 DMA 
 50 DMA 
200 DMA 

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:  9,924.15

Volume / Open Interest
Maximum Calls: 100/13,997
Maximum Puts   100/27,617

Moving Averages:
 10 DMA Unavailable
 20 DMA 
 50 DMA 
200 DMA 

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: 540.91

Volume / Open Interest
Maximum Calls: 660/354
Maximum Puts:  540/944

Moving Averages
 10 DMA 558
 20 DMA 572
 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: 560.54

Volume / Open Interest
Maximum Calls: 570/ 979
Maximum Puts:  470/2,084

Moving Averages
 10 DMA 574
 20 DMA 553
 50 DMA 540
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: 378.36

Volume / Open Interest
Maximum Calls: 400/ 525
Maximum Puts:  360/1035

Moving Averages
 10 DMA 377
 20 DMA 380
 50 DMA 387
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)
=========================
(( This is a new High Risk/High Reward Play ))

Southwest Airlines - LUV - close: 18.07 change: +0.41 stop: 17.49

Company Description:
Southwest Airlines, the nation's premier low-fare airline, is the 
nation's fourth largest domestic carrier in terms of Customers 
carried. The airline serves 58 cities in 30 states and operates 
more than 2,700 flights a day. (source: company press release)

Why We Like It:
With many analysts and investors believing the worst is over for 
the airlines the future direction of the group may lie in the 
post-announcement conference call guidance rather than the actual 
numbers.  Both Continental (CAL) and American (AMR) announce 
earnings tomorrow morning.  If the news is good then LUV may be 
able to produce a nice two-day move higher.  Thus, here is the 
game plan.  If CAL and AMR announce positive news, at least 
interpreted by Wall Street, then LUV should have a green light.  
Readers can look for our take on the CAL & AMR numbers in 
Wednesday morning's pre-market email.  We're going to play with a 
very specific entry point for LUV.  If shares open between $18.00 
and $18.50 we'll go long and start with a stop at $17.49.  If 
shares open above or below this range we will not open the play.  
The bullish target will be a move to $19.75 to $20.00.  Be aware 
that LUV announces its own earnings report on Thursday.  At this 
time, it would appear the release is set during the day so the 
market will be open.  This carries with it a certain amount of 
inherent risk so play appropriately.

Picked on January 16th at $xx.xx <-- see text above.
Change since picked:       +0.00
Earnings Date           01/17/02 (confirmed)






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Do not duplicate or redistribute in any form.



PremierInvestor.net Newsletter                 Tuesday 01-15-2002
                                                   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/5615_2.asp
=================================================================

In section two:

Net Bulls
  Bearish Play Updates:  NXTL
  Closed Bullish Play:   SFA

Stock Bottom / Active Trader
  Bullish Play Updates:  IKN, TGH, UNH
  Bearish Play Updates:  ADRX, PRX, SPY, VGR

High Risk / High Reward
  New Bullish Play:      LUV
  Bearish Play Updates:  ALTR
  Closed Bullish Play:   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) section
==================================================================

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

  --------------------
  Bearish Play Updates
  --------------------

Nextel Comm. - NXTL - close: 7.87 change: -0.49 stop: 7.88*new*

The pain for wireless stocks continued into Tuesday of this week 
as NXTL fell yet another 5.86%.  Both Monday and Tuesday of this 
week have seen big losses for NXTL on very big volume.  Today's 
drop was on over 30M shares.  Yesterday we noted Lehman's call or 
downgrade on the wireless sector, which came about six days after 
Merrill's downgrade of the group.  However, Lehman singled out 
NXTL and branded the stock with a "sell" rating and a price 
target of $4.00.  On this great news for our short play, we added 
an exit point of $7.50 last night.  The intraday low today came 
within a nickel of our target ($7.55).  That's awfully close so 
we're going to really tighten our stop on this trade.  We want to 
see shares trade lower from here so our new stop is $7.88.  If 
shares open higher then we'll have to take the open as our exit.  
More aggressive traders may want to consider give the stock more 
room and let the stock run, or in this case fall.  

Picked on January 14th at $ 9.00 
Change since picked:       -1.13
Earnings Date           01/28/02 (unconfirmed)





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

  --------------------
  Closed Bullish Plays
  --------------------

Scientific Atlanta - SFA - cls: 25.53 chg: -0.09 stop: 24.73

Market-wide concerns about poor earnings results had investors 
going both directions in today's session.  SFA was weathering the 
indecision well through most of the day without fear but suddenly 
in the last three hours the stock lost support and fell through 
the $25.00 level.  It may have been a big seller worried about 
earnings for SFA on Thursday but bulls quickly jumped on the dip 
with just as much volume.  As it stands now, we are stopped out 
of the play at breakeven.  The dip to $24.25 and rebound back 
above its 50-dma actually looks like a potential bullish entry 
point.  Unfortunately with earnings just two days away the risk 
of a negative result or bad conference call make a tough decision 
to hold over the announcement.  

Picked on December 28th at $24.73
Gain since picked:          +0.00
Earnings Date            01/17/02 (confirmed)






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

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

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

Ikon Office Solutions - IKN - cls: 12.49 chg: +0.29 stop: 11.69

Shares of Ikon set another new 52-week high on Tuesday after 
pulling back on Monday and giving bulls an entry point near the 
$12 level.  Shares look bullish and investors may be flocking to 
strength as they look for relatively safer places to park their 
money than some of the more volatile tech plays.  This doesn't 
mean you shouldn't pay attention to your stop placement on IKN.  
Any large scale drop in the markets will not leave the stock 
unscathed.  Despite the caution, everything looks positive for 
IKN.  Full speed ahead.

Picked on January 11th at $12.31 
Change since picked:       +0.18
Earnings Date           01/25/02 (unconfirmed)




---

Trigon Healthcare - TGH - close: 71.70 change: +0.70 stop: 68.49

Strength in TGH continues to act as a beacon for traders looking 
for stocks out performing the markets.  We would still look at 
possible dips to $70 or $71 as potential entry points to go long.  

Picked on January 11th at $71.42 
Change since picked:       +0.28
Earnings Date           02/08/02 (unconfirmed)




---

UnitedHealth Group - UNH - close: 72.65 change: +0.15 stop: 68.49

UNH was strong on Monday, trading above the $73 level before 
closing off its highs.  Today's pull back to $72 looked like an 
entry and bulls seemed to recognize it and lifted the stock off 
its highs.  There is still no news on an updated earnings date 
but the company did sell $400M in 5-year notes on Monday.  The 
technical indicators look good for UNH as the MACD is following 
through on its bullish crossover.  A close over $73 would be very 
encouraging. 

Picked on January 11th at $71.75 
Change since picked:       +0.90
Earnings Date           10/26/01 (confirmed)





  --------------------
  Bearish Play Updates
  --------------------

Andrx Group - ADRX - close: 63.18 change: +0.03 stop: 66.02 

There is little to report on our short play for ADRX.  Shares 
continue to drift sideways between $66 and $62.  Traders who are 
in the play may want to consider tightening their stop to 
Friday's high near $65.60, or if you're feeling more conservative 
look near the 200-dma near $65.00.  Investors looking for a new 
entry could try and short near overhead resistance with a tight 
stop or wait for a breakdown under $62 or $60.  We're turning 
somewhat cautious on the play and may decide to drop it if we 
don't see some movement soon.

Picked on January 4th at $64.14 
Change since picked:      +0.96
Earnings Date          10/25/01 (confirmed)




---

Pharmaceutical Res. - PRX - close: 28.65 change: -0.27 stop: 29.51

We were a bit concerned when shares of PRX rallied higher on 
Monday morning but was pleased to see that the 200-dma held as 
overhead resistance.  Before the bell on Monday, PRX held a 
conference call with analysts to discuss their recent 
announcement about acquiring ISP FineTech's chemical operations.  
Positive comments at this meeting may have been the catalyst for 
Monday's move higher but selling pressure held the stock under 
$29 again on Tuesday.  Given the placement of our stop, this 
could be a relatively low risk entry to short PRX but we would 
prefer to see some confirmation that the downtrend is still in 
effect.  For more information check Sunday's write up.

Picked on January 11th at $27.30
Change since picked:       -1.35
Earnings Date           10/25/01 (confirmed)




---

SPDRS on the S&P 500 - SPY - cls: 115.15 chg: +0.93 stop: 118.25

Tuesday marks two days in a row that the SPY has bounced near its 
50-dma at the 114 area.  The short-term trend is still down but 
bears need to see a close below this technical support level.  
It's possible the negative reaction to Intel's announcement on 
Tuesday night may be enough to pull tech stocks lower which 
should weigh on all of the S&P 500's tech components.  Keep your 
eye on the 200-dma near $117, which should act as overhead resistance.

Picked on January 9th at $115.57
Change since picked:       -0.42
Earnings Date                n/a 




---

Vector Group - VGR - close: 27.10 change: -0.15 stop: 28.80*new*

Interestingly enough, shares of VGR continue to slip lower as it 
builds a bearish wedge-type pattern with support near $26.75.  
Traditionally a bearish wedge has a downside bias for the 
breakout but there's no guarantee.  What strikes us as odd is the 
divergence between VGR and the other tobacco players.  Shares of 
MO, RJR and UST have all rallied higher in the last couple of 
days.  This would put us on the defensive for this short on VGR.  
Therefore we are moving our stop to breakeven at $28.80.  More 
conservative traders might want to try something near $28.50 or 
lower.  New short positions may want to be considered if VGR 
breaks down under $26.75 but we're still looking to exit the play 
at $25.00.  Currently the newsletter is up about 5.9% in VGR.

Picked on January 9th at $28.80
Change since picked:      +1.70
Earnings Date          11/14/01 (confirmed)






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

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

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

Southwest Airlines - LUV - close: 18.07 change: +0.41 stop: 17.49

Company Description:
Southwest Airlines, the nation's premier low-fare airline, is the 
nation's fourth largest domestic carrier in terms of Customers 
carried. The airline serves 58 cities in 30 states and operates 
more than 2,700 flights a day. (source: company press release)

Why We Like It:
With many analysts and investors believing the worst is over for 
the airlines the future direction of the group may lie in the 
post-announcement conference call guidance rather than the actual 
numbers.  Both Continental (CAL) and American (AMR) announce 
earnings tomorrow morning.  If the news is good then LUV may be 
able to produce a nice two-day move higher.  Thus, here is the 
game plan.  If CAL and AMR announce positive news, at least 
interpreted by Wall Street, then LUV should have a green light.  
Readers can look for our take on the CAL & AMR numbers in 
Wednesday morning's pre-market email.  We're going to play with a 
very specific entry point for LUV.  If shares open between $18.00 
and $18.50 we'll go long and start with a stop at $17.49.  If 
shares open above or below this range we will not open the play.  
The bullish target will be a move to $19.75 to $20.00.  Be aware 
that LUV announces its own earnings report on Thursday.  At this 
time, it would appear the release is set during the day so the 
market will be open.  This carries with it a certain amount of 
inherent risk so play appropriately.

Picked on January 16th at $xx.xx <-- see text above.
Change since picked:       +0.00
Earnings Date           01/17/02 (confirmed)





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

  --------------------
  Bearish Play Updates
  --------------------

Altera Corp. - ALTR - close: 24.20 change: +0.03 stop: 25.01 *new*

If a trader just looked at the numbers then it would be easy to 
think that this trade isn't going anywhere.  We highlighted it 
over the weekend at $24.20.  The closing numbers haven't varied 
farther than three cents the last two days.  Monday and Tuesday 
have shown ALTR to be in a tight range between $24.80 and $23.50.  
This is probably a sign of investors waiting to hear from the 
king of semiconductors, Intel.  Their wait is over as INTC 
announced earnings after the bell today and beat estimates.  The 
problem for technology and chip-stock bulls was INTC's capital 
spending cuts.  This is not an encouraging sign and many chips 
stock were moving lower in after hours trading.  Intel was down 
about a dollar in after hours and ALTR was trading near $23.50.  
As we discussed in the initial write up, short-term traders may 
want to target an exit near potential support at $22.  Longer-
term bears can probably aim for $20 as that is likely to be tough 
support.  We are not going to set an official exit point at this 
time but we will lower our stop to $25.01, just under ALTR's 200-
dma.  New short positions should be taken very cautiously as no 
one can foresee what sort of volatility ALTR might produce.  We 
do expect shares to gap down at the open tomorrow.

Picked on January 11th at $24.20
Change since picked:       +0.00
Earnings Date                n/a






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

  --------------------
  Closed Bullish Plays
  --------------------

American Power Conversion - APCC - cls: 15.36 chg: -0.36 stop: 15.19

APCC was one of the casualties that felt to intraday market 
weakness.  The stock began to lose ground just after 11:00 and 
continued to fall until it hit $15.14.  This was enough to stop 
us out of the play.  Shares did bounce back towards the close but 
interested bulls may want to keep an eye out for another dip.  
The stock's MACD is starting to rollover and APCC may need to 
consolidate some more.  Look for earnings at the end of the 
month.  The company did confirm that earnings would be Jan. 31st, 
2002 after the bell.

Picked on January 8th at $16.02
Gain since picked:        -0.83
Earnings Date          01/31/02 (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 

FNM     Fannie Mae                 82.15     +3.15
UNM     Unumprovident Corp         27.95     +0.55
POM     Potomac Electric Power     23.22     +0.58
PNM     Pnm Resources              29.61     +0.67
RMCI    Right Managment Consult.   18.15     +0.99

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

XMSR    XM Satellite Radio         16.48     +2.98
CURE    Curative Health Services   19.20     +1.12

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

WFC     Wells Fargo & Co           45.32     +2.30
AVP     Avon Products Inc          45.70     +1.59
MGM     Metro-Goldwyn-Mayer Inc    22.27     +2.39
RDN     Radian Group               45.09     +1.29
HB      Hillenbrand Industries     55.29     +1.31
LNR     LNR Property Corp          33.31     +1.92
RCII    Rent-A-Center Inc          37.46     +6.47

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

TYC     Tyco Intl. Ltd             47.95     -4.45
UTX     United Technologies        61.12     -1.12
MMM     Minnesota Mining & Mfg    109.50     -2.26
GDT     Guidant Corp               44.90     -1.02
KYO     Kyocera Corp               59.90     -2.10

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

GWW     W.W. Grainger Inc          48.46     -0.51
MNI     The McClatchy Company      47.10     -0.60



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