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Daily Newsletter, Thursday, 01/17/2002

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PremierInvestor.net Newsletter               Thursday 01-17-2002
                                                  section 1 of 2
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In section one:

Market Wrap:      Big tech reports earnings, but cautious on future
Market Sentiment: Searching for consistency.
Play-of-the-Day:  No Reason to Buy

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
       1-17-2002           High     Low     Volume Advance/Decline
DJIA     9850.04 +137.77  9857.79  9712.21  1.3 bln   1958/1179
NASDAQ   1985.82 + 41.38  1985.83  1954.06  1.8 bln   2167/1414
S&P 100   581.63 +  6.64   581.97   574.99   Totals   4125/2593
S&P 500  1138.88 + 11.31  1139.27  1127.57
RUS 2000  482.39 +  5.97   482.40   475.71
DJ TRANS 2674.89 + 38.55  2674.89  2627.68
VIX        23.74 -  1.52    25.21    23.72
VXN        47.03 -  2.40    50.23    46.92
TRIN        1.18
Put/Call Ratio       .79
-----------------------------------------------------------------

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

Big tech reports earnings, but cautious on future

Widely anticipated and closely watched earnings from computer 
giant International Business Machines (NYSE:IBM) and software 
behemoth Microsoft (NASDAQ:MSFT) reported earnings after the 
close of trading.  It's not what they did in the past, but what 
they said about the future that has after-hours trading seeing 
lower prices.

Dow Component and tech heavyweight International Business 
Machines (IBM) finished the regular trading session at $119.90 
(+2.26%), but is trading near the $115 level in after-hours 
trading on the heels of earnings.  Big blue said it earned $2.3 
billion, or $1.33 a share, which barely beat estimates of 
analysts looking for earnings of $1.32.  Sales for the quarter 
were $22.8 billion, slightly lower than the $23.8 billion 
analysts had expected.  The pulse of this evening's conference 
call was cautious with the company saying, "The forward business 
environment continues to be challenging."

Microsoft (NASDAQ:MSFT), another Dow component, reported net 
income of $2.28 billion, or $0.41 a share.  Excluding lawsuit-
related charges, the company would have reported earnings of 
$0.49 a share.  This makes it unclear if MSFT beat or missed 
estimates as some analysts factored in the charge and others left 
it out.  Estimates as polled by Zacks were for earnings of $0.45 
a share.  Microsoft said revenue was $7.74 billion, up from year-
ago revenues of $6.6 billion, and higher than estimates of $7.26 
billion.  Shares of Microsoft finished today's regular session at 
$69.86, but fell 3.8% in after-hours trading to $67.15.

Programmable chipmaker Xilinx (NASDAQ:XLNX) gained 4.3% to $43.06 
ahead of tonight's earnings, when the company reported net income 
of $9.7 million, or 3 cents a share, on revenue of $228.1 
million.  Pro-forma (before charges) XLNX said it earned $23.5 
million, or 7 cents a share, beating analyst's estimate for 
earnings of 4 cents and revenue consensus of $212.5 million.  
Shares of XLNX slipped $1 to $42.06 in after-hours action.

Traders that took our "High Risk/Return" bearish play in shares 
of Altera (NASDAQ:ALTR) will note tonight's earnings from rival 
Xilinx (XLNX) and monitor tomorrow's action closely.  Shares of 
Altera (ALTR) are trading lower in "sympathy" with Xilinx at 
$23.86 (see tonight's play update).

Altera Corporation Chart - Daily Interval




It's probably no coincidence that analyst's are expecting Altera 
(ALTR) to earn 3-cent a share when they are scheduled to report 
earnings next Tuesday (that's what XLNX reported tonight).  Both 
companies are rivals in the programmable chip market and their 
business track almost identical.  However, the MARKET seems to 
feel that XLNX is a better stock to own, which has us thinking 
the MARKET doesn't like ALTR as much.  There were some reasons we 
picked Altera (ALTR) as a short over rival XLNX and it was all 
based on technicals.  Xilinx trades above its 200-day MA, while 
ALTR trades below its 200-day MA.  Altera recent failed a test of 
downward trend, which is longer that the current upward trend, 
which bears are wanting to see a test of near the $22 level.  
What may make this trade even more interesting now is that the 
"cat" may be out of the proverbial bag after tonight Xilinx 
earnings announcement.  It's my thinking that both companies' 
business tracks will track identical and Altera's earnings report 
will be similar and get the same response as that found in 
Xilinx.  If there have been a bunch of bulls buying Altera's 
stock ahead of earnings, they may try and exit tomorrow now that 
they've seen Xilinx's hand.

Another reason we decided to play Altera short instead of Xilinx 
is that Altera's stock performance has been lagging that of 
Xilinx since August.  Look at the point and figure method of 
measuring relative strength.

Relative Strength of Altera vs. Xilinx - 1-point box




When given the choice we prefer to try and select weak stocks to 
short.  We could have selected XLNX as a short candidate, but a 
relative strength comparison between the two showed ALTR was a 
weaker stock.  I chose August 1st as a hypothetical investment 
point for a $1,000 investment in ALTR and XLNX based on their 
closing values that day.  You can see that ALTR's RS vs. Xilinx 
has given 4 sell signals and has not given a buy signal, thus our 
feeling that ALTR is truly a weaker stock.  The MARKET seems to 
prefer XLNX over ALTR, thus our more bearish outlook on ALTR.

Try using the relative strength charts in selecting stocks (long 
or short) that you may be following or trading on your own.  You 
can "test" a stock's relative strength against a broader market 
index to look for strength/weakness.  You can also test for RS 
against other "like stocks" in the group.  Try and stack as many 
odds in your favor as possible.  Relative strength is one 
important measure to monitor and test against.  You can get free 
relative strength charts at www.stockcharts.com in the point and 
figure format or the line graph format.

Bad news is "good news" for our ADRX play!

Tonight I was busy posting earnings for OptionInvestor.com and I 
saw an interesting news flash come across the wires.... "Andrx 
Group (ADRX) loses court case to Biovail (BVF)."  I have yet to 
find any further news other than that headline, but shares of 
Andrx (NASDAQ:ADRX) were trading down about $3 at $59 in after-
hours trading and that should have traders that took this play 
from January 5th at $64.14 sitting pretty  (see tonight play 
update).

More after-hours earnings

Here are some of the more widely followed earnings from tonight's 
after hours action.  I've made a few comments to each and how 
they were trading at the time of observation.

Nortel (NT) $7.74 +6.75% ... reports loss of $0.16, inline with 
estimates of loss of $0.16.  Stock trading $7.40 after-hours.

Powerwave (PWAV) $17.95 +13% ... reports earnings loss of $0.06, 
matching estimates for loss of $0.06.  Revenue fell 30.4% year-
over-year to $84.4 million, but above consensus of $73.2 million.  
Stock trading lower at $17.39 in after-hours.

Scientific Atlanta (SFA) $23.80 -0.75% ... reports earnings of 
$0.25 a share, 3-cents better than estimates for $0.22.  Sales 
fell 34% to $418.2 million (estimates were for $394.2).  
Excluding items, earnings would have been $0.26.  Stock trading 
higher at $25.

TranSwitch (TXCC) $4.40 +8.9% ... reports loss of $0.11, penny 
better than consensus for loss of $0.12.  Revenues were $4.5 
million vs. estimates for $4.4 million.

Callaway Golf (ELY) $17.37 +0.46% ... reports loss of $0.14, 8-
cents lower than estimates for loss of $0.06 by Multex (only 2 
analysts coverage).  Revenues fell 25.9% year-over-year to $105.3 
million vs. the $104.7 million consensus.

Harley Davidson (HDI) $54.30 +1.68% ... reports earnings of 
$0.39, 2-cent better than estimates of $0.37.  Revenues rose 
18.3% to $894.4, bettern than estimates of $875.17.  Company 
saying quarter good enough to increase production target of 
motorcycles for 2002.  Stock trading up at $55.00

Network Associates (NETA) $26.71 +5% ... reports earnings of 
$0.23 (excluding McAfee.com) which is much better than estimates 
of $0.08. Revenue for quarter was $241 million (consensus of 
$207.7).  Guidance for Q1 is earnings of $0.04-$0.06 on revenues 
of $190-$200 (consensus $0.06 and $192.7).  NETA raising full-
year guidance to EPS of $0.42-$0.47 on rev of $860-$890 
(consensus $0.38, $826.5).  Company saying higher earnings due to 
reduction in tax rate from 25% to 20%.  Stock trading $26.04 in 
after-hours.

All in all, tonight after hours trading looked lower.  The ten 
heaviest weighted stocks in the NASDAQ-100 Trust (QQQ) were 
trading lower.  The top ten most heavily weighted in QQQ are as 
follows.  After hours price and (04:00 EST closing prices in 
parenthesis)... MSFT trading $67.15($69.86), INTC $33.70 
($34.53), CSCO $19.00 ($19.48), QCOM $46.64 ($47.27), ORCL $16.80 
($17.22), DELL $27.60 ($28.95), AMGN $55.27 ($55.80, MXIM $56.75 
($56.75), IMNX $27.60 ($27.79), AMAT $40.27 ($41.60).  In 
essence, the top ten weighted QQQ stocks are trading lower from 
their close, so investors are most likely looking at lower open 
tomorrow morning in technology.

Most fundamental analysts are saying it will be very difficult to 
draw any conclusions from this quarter's earnings.  Many still 
don't expect a meaningful turn higher in profits until later this 
year.  We're now just three days into the earnings reporting 
period and there's a long way to go.  For those keeping track, 
we've had one positive response to earnings (today) and one 
negative response to earnings (Wednesday).  Tomorrow's looking 
like a down day, but as I've said before, the after-hours doesn't 
have all market participants casting their votes.

Today's surprise!

As mentioned in today's 01:00 EST update, the Philly Fed number 
really got a reaction out of the bond market, but stocks stood 
still for the most part since that release.  

I want to take a moment here to try and expound on just what the 
Philly Fed report is.  It's a measure of business activity in the 
mid-Atlantic region (more industrial part of the nation) that 
attempts to measure business activity.  

Economists expected a reading of -2.4, but today's +14.7 really 
seemed to catch some bond market traders/investors by surprise as 
this indicator hasn't been this high since August 2000.  Hey!  
That was 17 months ago!  Historical studies point to bear markets 
(usually tied to an economic downturn) lasting 12-18 months.

While the Philly Fed number can be volatile, today's number will 
have some economic bull's hoofing the ground.

Surveys on new orders rose to 12.6 from negative 6.2 and 
shipments rose to 14.4 from negative 12.1.  Both show a marked 
improvement.  Every other indicator except delivery times and 
inventories improved during the month.

I (Jeff Bailey) do think today's Philly Fed number is a plus for 
the bulls.  Yes, it's a volatile number, and will most likely 
bounce around for the next couple of months, but it is perhaps 
one of the biggest "economic number" or survey that really raises 
an eyebrow toward economic recovery.  

I think the "economic recovery" question is slowly being pushed 
toward a back burner right now.  At least the economic data is 
showing signs of a decline bottoming out, but the newer question 
will be, "what type of growth, if any, is their going to be?"  It 
is one thing for the economic decline to level out, but will 
there be consistent growth?

As I look at earnings, I do have to wonder just how long some 
companies can continue to report losses before they just can't 
pay the bills anymore.  Company's like IBM and Microsoft are 
earning money, but their stock prices have done very well in 
recent months.  It's great for them to be posting billions of 
dollars in earnings each quarter, but at current valuations, the 
bears are saying the stocks are just too richly valued for the 
lack of growth, especially if the economy just stagnates and 
doesn't grow.

I still feel we need to keep a very close eye on the bond market 
for part of the answer to where things go from here.  We did see 
a good round of selling in the bond market, so we know some cash 
was raised.  

The bullish percent data we review so often is looking very 
similar to what we found in May, June and July of last year.  
We're starting to see more and more supply/demand sell signals on 
the charts and that is/has been taking place with the recent 
buying we have witnessed in Treasuries.

I think equity bulls may have breathed a collective sigh of 
relief today when that Philly Fed number hit and the bond market 
found selling, but one day does not make a trend.  We saw a brief 
spat of selling in Treasuries from June 26th to July 5th last 
year, only to see money pour right back into bonds.  The current 
technicals at play in the Treasury market look very similar to 
this summer so bullish traders still need to be very cautious.

I still feel that bulls and bears need to be rather quick at the 
trigger right now.  James deserves a lot of credit on lowering 
the stop in our bearish play on shares of Nextel (NXTL) and that 
helped subscribers capture a nice gain in the stock and not let 
them erode.  The stock reached a level of potential support (52-
week lows), but that's where buyers were lurking.  We would have 
been perfectly happy if the stock had broken to a new 52-week 
low, but with some economic numbers showing some stabilization, 
bears just aren't being greedy with profits.  If other bears in 
the market aren't being greedy, then we can't be either.

Tomorrow's events

Tomorrow is option expiration for stocks and we might get a few 
wild swings as stocks whip around on any positions that 
institutions may be unwinding.  

The earnings calendar is light tomorrow.  Before the bell we'll 
have earnings from Sun Microsystems (NASDAQ:SUNW) and Johnson 
Controls (NYSE:JCI).  Analysts are looking for SUNW to report a 
loss of 4-cents a share, while JCI is expected to show a profit 
of $1.06 a share.

The ever-important Consumer sentiment numbers for January are due 
out and economists expect a reading of 89.9, which is just higher 
than the previous reading of 88.8.  This number or surprise from 
the estimate of 89.9 could be a market moving number.  It's due 
for release at 10:00 AM EST.

Jeff Bailey
Senior Market Technician


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

Searching for consistency.
by Russ Moore

Better than expected economic reports and positive earnings 
reports from two bellwether stocks restored calm to the markets, 
helping the major indices recoup most of yesterday’s losses.

The DOW added +1.4 percent while the NASDAQ gained +2.1 percent 
and the NDX +2.8 percent. Volume was moderate with 1.36 billion 
shares trading on the NYSE and 1.87 billion on the tech index. 
Winners were back on top, edging losers by a 19/12 count on the 
big board and 22/14 on the NASDAQ.

All tech sectors were in the green with hardware, software and 
Internet leading the way. Broader markets saw brokerages 
attracting solid interest while airline, biotech, drug, gold, 
utility and natural gas sectors faced selling pressure.

After yesterday’s decline, investors were treated to more 
positive news beginning with initial jobless claims falling -
14,000 to 384,000 versus expectations of 441,000.

J.P. Morgan Chase had cast a cloud over the financial sector but 
Citigroup broke through the clouds, providing the sunshine with 
“beat the street” numbers. General Electric followed suit with 
“match the street” numbers and a reiteration of its’ forward 
guidance.

The final upside catalyst came from the Philly Fed Index. The 
monthly index was expected to show another negative reading (-
2.4). Instead, the data came in at +14.7, the first positive 
reading in a year and the highest since August 2000.

Trim Tabs reported outflows to all equity funds of -4.7 billion 
for the first two weeks of 2002. This is the first time since the 
company began tracking funds that a year has started with two 
weeks of outflows.

After hours we see IBM beating the street by a penny but coming 
up a little short on revenue. The company said business 
conditions remain difficult. Microsoft’s numbers are creating 
some confusion due to the method of accounting being used. The 
company exceeded expectations if you exclude legal charges. Mr. 
Softy said fiscal 2002 profits should come in at 1.57 to 1.60 a 
share. Analysts were expecting 1.83 per share. The stock is down 
in after hours trading.

The last two days has provided us with all the clarity we need. 
No, not to figure out where we’re headed but rather, where we’ve 
been over the last two months. Since November, we’ve been stuck 
in a sideways market, why? Simple answer is confusion. A mountain 
of contradictory data that continues to fall short in the answer 
department has barraged investors. Yesterday we had Intel and 
J.P. Morgan Chase, and today we get Citigroup and Philly Fed 
Index. Consistency is what’s needed in order for new money to be 
put on the table. The current earnings season is unlikely to 
provide us with that consistency, and therefore, we can expect to 
see the sideways shuffle continue.


Thursday 01/17 close: 23.74


VXN
Thursday 01/17 close: 47.03


30-yr Bonds
Thursday 01/17 close: 5.41


Total Put/Call Ratio: .79


Equity Option Put/Call Ratio: .68


Index Option Put/Call Ratio: 1.30


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 39.65

Volume/Open Interest
Maximum calls: 40/141,434
Maximum puts : 40/104,716

Moving Averages
 10 DMA 40
 20 DMA 40
 50 DMA 40
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: 581.63

Volume/Open Interest
Maximum calls: 590/7,348
Maximum puts : 580/9,032

Moving Averages
 10 DMA  587
 20 DMA  587
 50 DMA  585
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: 1138.90

Volume / Open Interest
Maximum calls: 1150/36,008
Maximum puts : 1150/30,792
Moving Averages
 10 DMA 1150
 20 DMA 1151
 50 DMA 1143
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:  9,850.04

Volume / Open Interest
Maximum Calls: 100/13,897
Maximum Puts   100/19,893

Moving Averages:
 10 DMA 10,013
 20 DMA 10,044
 50 DMA  9,922
200 DMA 10,105

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: 529.93

Volume / Open Interest
Maximum Calls: 660/354
Maximum Puts:  500/822

Moving Averages
 10 DMA 551
 20 DMA 566
 50 DMA 578
200 DMA 543

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: 539.55

Volume / Open Interest
Maximum Calls: 440/1,097
Maximum Puts:  470/2,079

Moving Averages
 10 DMA 567
 20 DMA 550
 50 DMA 542
200 DMA 553

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: 375.98

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)
=========================
(high risk/high reward play)

Altera Corp. - ALTR - close: 24.35 change: +1.22 stop: 24.76

Company Description:
Altera Corporation is the world's pioneer of system-on-a-
programmable-chip (SOPC) solutions. Combining programmable logic 
technology with software tools, intellectual property, and 
technical services, Altera provides high-value programmable 
solutions to approximately 14,000 customers worldwide. 
(source: company press release)

- ORIGINAL WRITE UP: January 11th, 2002 -

Why We Like It:
On Tuesday, Altera offered positive comments that the bottom for 
the chip sector may have been found but the good news and all the 
hype wasn't enough to keep shares over its 200-dma.  
Additionally, the SOX.X chip index has had trouble with the 600 
level and may be looking for another pull back of its own.  There 
is a lot of congestion for ALTR between $20 and $26 so it's hard 
to pick a target but short-term traders might want to aim for 
$22.  If you have more conviction about a pull back in the 
semiconductor group then aim for support at $20, which is support 
both on the daily chart and the point-and-figure chart.  We are 
going to start the play with a stop at Friday's high ($25.56).  
Part of the risk with this short play is Intel's earnings 
announcement this coming Tuesday.  If INTC produces some really 
positive results or really talks up the conference call then ALTR 
might rally with it on Wednesday.  

- Most Recent Update, Thursday, Jan. 17th, 2002 -

We will be the first ones to say that ALTR's performance has been 
nothing but disappointing for our bearish play.  We did get a 
move down on Wednesday after Intel's comments about cutting 
capital spending but support at the $23 level held all too well.  
Then we have to endure the 5% rally in ALTR on Thursday as the 
markets swell from positive economic and earnings news this 
morning.  This put ALTR dangerously back over the $24 level and 
looking like it just signaled a potential bullish reversal.  
Fortunately for the bears, the Xilinx (XLNX) earnings report came 
out after the close today.  XLNX is ALTR's main competitor and at 
first glance it looks like the report was positive.  The bad news 
for the bulls is investors seem to be selling the news.  With the 
XLNX news out, there would not appear to be any reason to hold or 
buy more shares of ALTR in hopes of an upside surprise.  As if to 
confirm this sentiment, both XLNX and ALTR were trading lower 
after hours with ALTR trading back under $24 again.  Also in the 
news was confirmation from ALTR that they would announce earnings 
on Tuesday.  Considering that there was no big surprise from XLNX 
we're going to hold over the earnings report from ALTR.  
Normally, we avoid such situations as an earnings surprise or an 
overly enthusiastic conference call could make short positions 
very painful the following day.  Traders not willing to take such 
a risk should consider exiting the play ahead of the weekend.  We 
are going to lower our stop to $24.76 with the expectation that 
we'll lower it again on Friday if the play moves in our 
direction.  For additional comments about ALTR check tonight's 
wrap.

- Play of the Day comments, Thursday, Jan. 17th, 2002 -

We're highlighting ALTR as the play of the day for Friday based
on the after hours reaction to the XLNX earnings report.  Even 
though we expect ALTR to open lower we are not expecting it to 
gap down so far that it would not make sense to consider new 
short positions.  This is a High Risk/High Reward play so may not 
be suitable for all traders.  Wait to see the initial market 
reaction on Friday morning.  Don't forget about ALTR's own 
earnings report on Tuesday (the markets are closed on Monday).  

Picked on January 11th at $24.20
Gain since picked:         -0.15
Earnings Date           01/22/02 (confirmed)






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This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

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Copyright  2001  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.

PremierInvestor.net Newsletter                  Thursday 01-17-2002
                                                     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
=================================================================
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charts and graphs, click here:
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In section two:

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

High Risk / High Reward
  Bullish Play Updates: PVN
  Bearish Play Updates: ALTR
  Closed Bullish Plays: LUV, LPX

Net Bulls
  - none -

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)


==================================================================
Stock Bottom / Active Trader (AT) Non-tech stock section
==================================================================

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

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

Ikon Office Solutions - IKN - cls: 12.37 chg: +0.10 stop: 11.69

Wednesday marked the third day in the previous four sessions that 
shares of IKN had dipped to the $12 area before rebounding back 
in the afternoon.  Traders can continue to target shoot possible 
entries near the $12.05 level or wait for IKN to break through 
the $12.50 level.  The stock's 15-dma, which has been strong 
trading support on its recent ascent, is also near $12.  As long 
as the bullish trend holds up, longs should do okay.  A potential 
concern is how the market reacts to all the earnings news this 
week and the next.  If Wall Street turns back to tech stocks then 
IKN could suffer due to lack of attention.  Yet on the other 
hand, if the economic news out today means the economy is 
rebounding then IKN should benefit and keep climbing.

Picked on January 11th at $12.31 
Change since picked:       +0.06
Earnings Date           01/25/02 (unconfirmed)




---

Trigon Healthcare - TGH - close: 70.85 change: -0.94 stop: 68.49

Trigon hit some selling pressure early in the day and fell to 
price support at $70 before bulls chose to buy the dip and lift 
it off its lows.  We mentioned on Tuesday that a dip to $70 could 
be a nice entry to go long.  Today's move was a clean pull back 
to the stock's 15-dma.  We were under the impression that there 
may have been some bad news in the healthcare group today but 
really didn't find anything.  Doing some research we did notice 
that Manor Healthcare (HCR) was hammered today for a 16% drop.  
How this would affect TGH is unclear.  HCR is a healthcare 
facility while TGH is more of a healthcare services/insurance 
type of company.  It would make more sense that investors took 
some profits and moved into some select tech stocks after all the 
high-profile earnings announcements.  Look for TGH to move higher 
from here.  Conservative traders could tighten their stop if they 
felt inclined.

Picked on January 11th at $71.42 
Change since picked:       -0.57
Earnings Date           02/08/02 (unconfirmed)




---

UnitedHealth Group - UNH - close: 72.34 change: -0.66 stop: 68.49

Posting a similar performance to TGH above, shares of UNH slipped 
less than one percent as it fell back to the $72 level.  Bullish 
investors would like to see $72 hold as new support but we 
wouldn't be surprised if UNH fell a bit lower towards the $71 or 
$70 level.  A bounce above $70 could be a great place to evaluate 
a new long position.  As noted above in the TGH write up, we 
didn't see anything negative that might affect UNH's stock price 
but the action in HCR is negative for the broad-based healthcare 
sector as a whole.  We look at today's move in UNH as just a 
normal pull back.  We did notice that a few websites have updated 
the UNH earnings date for Jan. 24th, 2002.  We will probably 
close the play before the announcement.

Picked on January 11th at $71.75 
Change since picked:       +0.59
Earnings Date           01/24/02 (unconfirmed)





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

Andrx Group - ADRX - close: 62.03 change: -0.93 stop: 65.01 *new* 

Bears finally get a breakdown in ADRX under the $62 level but a 
late day surge sends it higher again.  It did appear that the 
stock's 10-dma was putting pressure on it these last two days but 
new developments may make it a moot observation.  Rumor has it 
that ADRX lost a court battle against Biovail today and word has 
spread to the after-hours markets.  We couldn't find any thing to 
substantiate the litigation news but ADRX was trading below $60 
in after hours.  We have been looking for a breakdown below the 
$60 support level but if shares are going to gap down tomorrow 
then only aggressive traders should consider chasing it for a new 
position.  We would not recommend this sort of strategy.  There 
is potential support at $58 but we are going to look for a move 
to $55 or lower.  Don't get greedy and adjust your stop once 
you're profitable.  We are going to lower our stop to $65.01 and 
we'll probably lower it again tomorrow if shares fall 
substantially.  

Picked on January 4th at $64.14 
Change since picked:      +2.11
Earnings Date          10/25/01 (confirmed)




---

SPDRS on the S&P 500 - SPY - cls: 113.67 chg: +0.85 stop: 118.25

Bears got a nice drop on Wednesday in the SPY but a lot of those 
"gains" were erased by the market's reaction to the positive 
economic reports and the positive earnings announcements by UTX 
and GE.  The question investors will be asking now is how will 
Wall Street react to tonight's earnings reports.  Will money 
managers buy on the expectation that things will be improving?  
Or will they continue to see weakness as many companies may be 
meeting numbers but not due to top line revenue growth.  Short-
term traders might want to consider looking for an exit near the 
$112 level, which acted as support in mid-December.  Our original 
target was $110 and we're going to hang on to that goal for the 
time being.  We would expect the 115 level and the 50-dma just 
overhead to act as resistance.  Currently, the futures appear to 
be trading lower for tomorrow's open but this could easily change 
by Friday morning.

Picked on January 9th at $115.57
Change since picked:       -1.90
Earnings Date                n/a 





===============
AT Closed Plays
===============

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

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

A positive market rally helped push PRX higher after encouraging 
economic reports lifted investors' spirits.  The stock opened at 
$29.10 and ran to price resistance at $30 before slipping back.  
This move places the share price back above its 10 & 200-dma.  We 
would have been stopped out at $29.51.  Still no news on its 4Q 
earnings report date.

Picked on January 11th at $27.30
Change since picked:       -2.21
Earnings Date           10/25/01 (confirmed)




---

Vector Group - VGR - close: 27.49 change: +0.73 stop: 28.80

Recent market weakness, with today as the exception, may have 
finally started to steer investors towards a more defensive 
position.  Negative earnings reports one day seem to be replaced 
by positive reports the next and vice versa.  Market sentiment 
seems to still be cautious and a rebound in the tobacco stocks 
took place on Thursday.  This time shares of VGR joined the 
group.  Tuesday's update discussed looking for a breakdown under 
the $26.75 level, which actually occurred early this morning, but 
the stock quickly reversed higher and spent the rest of the 
afternoon trading sideways.  Then towards the close buyers were 
able to spur a last hour rally higher for VGR.  This has us 
concerned for two reasons.  The short-term bearish wedge appears 
to have been broken to the upside.  Not a good sign for shorts.  
Secondly, the daily chart produced a bullish engulfing 
candlestick pattern, which is another major caution signal for 
bears (and a potential buy signal for the bulls).  Volume was 
pretty light, which does not express much conviction from buyers 
but the safe play is to close the trade.  One alternative would 
be to keep the play open with a scalpel thin stop (like $27.51).  
This might work as shares were trading near $27.30 in after hours 
but the risk is a gap up above your stop.  We're going to close 
the play and look for new opportunities elsewhere.  

Picked on January 9th at $28.80
Gain since picked:        +1.31
Earnings Date          11/14/01 (confirmed)






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

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

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

Providian Financial - PVN - close: 4.59 change: +0.26 stop: 3.99

Thursday was not a bad start to our new high risk/reward play.  
Shares of PVN ended the session up six percent and back above the 
$4.50 level.  Some traders may feel our stop is too wide and for 
them they may be correct.  This is more of a lottery ticket play 
were we are looking for big moves and willing to take a bit more 
risk.  It may be prudent to raise your stop if you're looking to 
enter above the $4.50 level.  For more info on the play, check 
the original write up from Wednesday.

Picked on January 16th at $ 4.33 
Change since picked:       +0.26
Earnings Date           10/18/01 (confirmed)





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

Altera Corp. - ALTR - close: 24.35 change: +1.22 stop: 24.76 *new*

We will be the first ones to say that ALTR's performance has been 
nothing but disappointing for our bearish play.  We did get a 
move down on Wednesday after Intel's comments about cutting 
capital spending but support at the $23 level held all too well.  
Then we have to endure the 5% rally in ALTR on Thursday as the 
markets swell from positive economic and earnings news this 
morning.  This put ALTR dangerously back over the $24 level and 
looking like it just signaled a potential bullish reversal.  
Fortunately for the bears, the Xilinx (XLNX) earnings report came 
out after the close today.  XLNX is ALTR's main competitor and at 
first glance it looks like the report was positive.  The bad news 
for the bulls is investors seem to be selling the news.  With the 
XLNX news out, there would not appear to be any reason to hold or 
buy more shares of ALTR in hopes of an upside surprise.  As if to 
confirm this sentiment, both XLNX and ALTR were trading lower 
after hours with ALTR trading back under $24 again.  Also in the 
news was confirmation from ALTR that they would announce earnings 
on Tuesday.  Considering that there was no big surprise from XLNX 
we're going to hold over the earnings report from ALTR.  
Normally, we avoid such situations as an earnings surprise or an 
overly enthusiastic conference call could make short positions 
very painful the following day.  Traders not willing to take such 
a risk should consider exiting the play ahead of the weekend.  We 
are going to lower our stop to $24.76 with the expectation that 
we'll lower it again on Friday if the play moves in our 
direction.  For additional comments about ALTR check tonight's 
wrap.

Picked on January 11th at $24.20
Gain since picked:         -0.15
Earnings Date           01/22/02 (confirmed)





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

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

Southwest Airlines - LUV - close: 17.90 change: +0.39 

We did post an update in the Wednesday night newsletter but we 
wanted to make a note in the regularly scheduled play updates 
that the LUV long play discussed on Tuesday night was never 
opened.  The game plan was to go long if LUV opened between 
$18.00 and $18.50 on Wednesday.  This did not occur, as the stock 
opened at $17.96 and eventually traded lower by the close.  
Interested investors should take note that LUV did announce 
earnings today and Wall Street may respond positively come 
tomorrow but we'd still want to see shares back over $18.

Picked on January 16th at $ never opened.
Change since picked:       +0.00
Earnings Date           01/17/02 (confirmed)




---

Louisiana Pacific - LPX - close: 7.83 change: +0.33 stop: 7.35

Well game fans, we had our pure technical bounce play strategy 
correct but the execution was a bit too conservative. LPX opened 
at $7.60, our new picked price, but traded down to $7.33 before 
posting a nice rally in the last two hours of the day.  The 
intraday low would have been enough to stop us out at $7.35 for a 
25-cent loss.  High-risk traders with a wider stop could have 
reaped the 4.4% move higher by the close.  We will wave good bye 
to LPX but the bounce back to $9 may still take affect.  

Picked on January 16th at $ 7.50 
Gain since picked:         -0.25 
Earnings Date           01/29/02 (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 

MOV     Movado Group Inc           19.00     +1.49
SHOO    Steven Madden Ltd          17.05     +1.78

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

MSO     Martha Stewart Living      16.90     +1.70
KROL    Kroll Inc                  18.91     +1.45
PSTI    Per-Se Technologies        11.14     +1.08
SPCT    Spectrian Corp             15.01     +1.19
BMHC    Building Materials         13.25     +1.85
OVRL    Overland Data Inc          14.25     +1.25

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

S       Sears Roebuck & Co         52.70     +1.23
MCK     McKesson Corp              37.05     +1.50
SNV     Synovus Financial Corp     26.57     +1.07
GILD    Gilead Sciences Inc        70.22     +1.11
AAPL    Apple Computer Inc         22.48     +1.70
TSG     Sabre Holdings Corp        40.50     +1.97
SYMC    Symantec Corp              75.35     +8.40

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

GSK     Glaxosmithkline            47.50     -1.01
DNA     Genentech Inc              48.60     -2.18
DUK     Duke Energy Corp           36.00     -2.00
GENZ    Genzyme Corp               48.69     -2.38
TER     Teradyne Inc               27.00     -1.75
CVG     Convergys Corp             31.78     -1.13

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

SKIL    Skillsoft Corp             27.12     -1.18



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DISCLAIMER
=================================================================

This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

*****************************************************************
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Copyright  2001  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.


DISCLAIMER

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