PremierInvestor.net Newsletter Monday 01-28-2002 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/3795_1.asp ================================================================= In section one: Market Wrap: Bulls Eke Out Gains In Dow and Nasdaq. Market Sentiment: Sluggish start to the week. Play-of-the-Day: Pull Back to New Support. Watch List: ACN, ADRX, RCL, RKN, CAL ----------------------------------------------------------------- U.S. Market Numbers ----------------------------------------------------------------- MARKET WRAP (view in courier font for table alignment) ----------------------------------------------------------------- 01-28-2002 High Low Volume Advance/Decline DJIA 9865.75 + 25.67 9994.53 9798.56 1.20 bln 1674/1472 NASDAQ 1943.91 + 6.21 1958.96 1925.43 1.50 bln 1818/1723 S&P 100 574.91 - 0.23 578.45 571.44 Totals 3492/3195 S&P 500 1133.06 - 0.22 1138.63 1126.66 RUS 2000 481.28 + 1.93 481.57 468.04 DJ TRANS 2803.97 + 24.92 2808.44 2778.95 VIX 21.78 - 0.15 22.82 21.69 VXN 43.06 - 2.61 44.66 43.05 TRIN 1.18 Put/Call 0.69 ----------------------------------------------------------------- =========== Market Wrap =========== Bulls Eke Out Gains In Dow and Nasdaq Equities finished mixed to slightly higher in Monday's session on tepid volume. Isolated analyst comments and actions combined with positive economic data lent bids to select stocks. While in the debt market, only the 30-year Bond finished higher in the session. Yields across the shorter-end of the curve were higher. For the most part, it was a quiet session ahead of the Fed meeting and the release of key economic reports later in the week. Major Market Averages The Dow Jones Industrial Average ($INDU) finished the day higher by 25 points, or 0.26 percent. Leading the $INDU high were shares of General Motors (NYSE:GM), McDonald's (NYSE:MCD), United Technologies (NYSE:UTX), and International Paper (NYSE:IP). Honeywell (NYSE:HON), J.P. Morgan Chase (NYSE:JPM), and American Express (NYSE:AXP) were the weakest $INDU components in Monday's session. The S&P 500 ($SPX) remained in a tight trading range. Its range from day low to high was only 12 points. The recent trading range of the $SPX reflects the market's hesitancy to commit to positions ahead of this week's major events. Weakness in healthcare and financial issues offset strength in technology shares, resulting in a fractionally negative close in the $SPX. The Banks ($BKX) and Brokers ($XBD) were off fractionally, while the selling was heavier in Biotechs ($BTK). Technology issues pushed the Nasdaq Composite (COMPX) higher by 0.32 percent. Leading technology sectors included Semiconductors ($SOX), Networking ($NWX), and Optical ($FOP). In specific issues, strength in big caps such as Cisco (NASDAQ:CSCO), Applied Materials (NASDAQ:AMAT), and Xilinx (NASDAQ:XLNX) helped to carry the COMPX higher. Advancers totaled 1823 on the Nasdaq market, narrowly outpacing the 1725 decliners. Volume was light at 1.45 billion shares. Sector Spotlight The Dow Jones Transportation Index ($TRAN) was higher by 25 points, or 0.88 percent, to 2804. After a pullback last week, the $TRAN is off to a bullish start in this week's trading. The recent advance in the $TRAN is bullish for the broader economy. A pick-up in economic activity will lead to an increased demand for transportation services. The stocks in the $TRAN may be portending exactly that: a pick-up in the economy. The $TRAN has been in a descending trend since early 1999. Through Monday, it's once again nearing the bearish resistance line that has been in place for the last three years. A breakout above the resistance line could help to add credence to the notion that the economy is on the mend. Moreover, an advance in the $TRAN above its descending trend could help to confirm the recent bullish moves in the cyclicals, such as the Forest and Paper Products Sector ($FPP). Dow Jones Industrial Average ($TRAN) - Weekly Within the transportation segment of the economy, shares of several airline carriers have been trading as if a better business climate lies ahead. The Airlines ($XAL) were one of the better performing sectors in Monday's session, adding 1.07 points, or 1.15 percent. The $XAL was especially hard hit following the September 11 attacks. Still well below its pre-09/11 levels, the $XAL has put in a base and continues to work higher. (The retracement bracket on the chart below is anchored at the close on September 10, the day before the attacks.) Airline Index ($XAL) - Daily The components of the $XAL include: Alaska Air (NYSE:ALK) AMR Corp. (NYSE:AMR) America West (NYSE:AWA) Continental (NYSE:CAL) Delta (NYSE:DAL) Frontier (NYSE:FRNT) KLM (NYSE:KLM) Southwest (NYSE:LUV) Northwest (NYSE:NWAC) U.S. Airways (NYSE:U) UAL Corp. (NYSE:UAL) The point and figure chart corresponds well with the $XAL's retracement levels on its bar chart. An advance above the 61.8 percent retracment could lead to a new buy signal on the point and figure chart at 95.00. Furthermore, the overhead 80.9 percent level at 105 is concurrent with the $XAL's bearish resistance line on the point and figure chart. A move over the next few weeks to the bearish resistance line between 104.00 and 106.00 would offer traders an exit point on bullish positions taken on a new buy signal. Airline Index ($XAL) - Point and Figure Earnings Texas Instruments (NYSE:TXN) reported a better-than-expected quarter after the bell Monday. The maker of chips reported a loss of 7 cents per share while the consensus estimates had been calling for a per share loss of 9 cents. The company also surprised on the sales front, reporting $1.79 billion in revenues, while analysts had expected $1.67 billion. Texas Instruments raised guidance for the coming quarter to break-even from a 6 cent loss. Shares of Texas Instruments were better than $1 higher in the evening session. However, to the detriment of the chip equipment makers, Texas Instruments said that it would spend about $800 million on equipment for fiscal '02. Previous estimates were closer to $1.2 billion for capital expenditures. Online travel company Expedia (NASDAQ:EXPE) reported quarterly earnings late Monday that easily surpassed Wall Street's estimates. The company reported earnings excluding charges of 31 cents per share. Revenues came in at $81.7 million. Analysts had expected the company to record sales of $67 million. Shares of Expedia, which finished 8 percent higher in the regular session, added about $2 in the after hours trading. The positive prognosis from Expedia bodes well for the travel industry (See: $XAL). Economics Monday morning's release of new home sales data kicked off a week full of economic reports. For December, new home sales rose to 946,000 annually, about 22,000 units better than the market had expected. Judging by the report, the housing market remains strong. Shares of homebuilders continued higher on the news, including Beazer Homes (NYSE:BZH), Pulte Homes (NYSE:PHM), and Centex (NYSE:CTX). Tuesday, durable goods orders for December are expected to have grown by 1.2 percent. And consumer confidence for January is expected to register 96.0. The biggest release of the week is Wednesday's preliminary gross domestic product (GDP) number. The consensus is calling for a 1.1 percent contraction in the economy during the fourth-quarter of last year. Thursday, personal income is expected to have risen by 0.3 percent during December while personal spending is expected to have fallen by 0.2 percent during the same month. Initial jobless claims are expected to climb to 385,000 for the week ended January 26. Friday, the non-farm payrolls number is expected to have fallen by 53,000 during January while the unemployment rate is expected to have risen to 5.9 percent. Greenspan & Co. In addition to the GDP report, investors and traders will be tuning in Wednesday afternoon to the Federal Reserve's decision on interest rates. The consensus going into the meeting is for the Fed to maintain its short-term lending at rate at 1.75 percent. The bond market has discounted no change to rates. In addition to the actual decision on rates, the market will be listening for guidance as to future Fed policy. Some have suggested that the Fed will begin raising rates later this year, judging by the expectations of the bond market. While others maintain the view that inflation remains under wraps. In any event, what Fed Chief Alan Greenspan says Wednesday afternoon may be more important than the Fed's actual decision on rates. Eric Utley Premier Investor ================ Market Sentiment ================ Sluggish start to the week. by Russ Moore Markets got off to a quiet start as investors get ready for the FOMC meeting and a bundle of earnings announcements. The DOW added +0.3 percent while the NASDAQ gained +0.3 percent and the NDX +0.4 percent. The NYSE saw 1.1 billion shares change hands and the NASDAQ only 1.46 billion. Losers slipped past winners by a 16/14 margin on the big board and 18/17 on the tech index. Broad market action had biotechs taking another beating along with oil service and natural gas. Transport, paper, and airline put in the best performances. Tech action saw chips, Internet and networkers attracting the majority of buyers. The Index of Investor Optimism, a joint venture from UBS and Gallup organization, showed a dramatic rise in January. The index moved from an 88 in December, to a reading of 115 this month. Investors surveyed pointed to pharmaceutical and biotech as their favored sectors. Taking a look at the BTK and DRG, it doesn’t seem like that optimism has reached their wallets. The rise in optimism would seem to be supported by volatility readings that continue to travel in the “no fear” zone. The other side of the street has funds flow tracker Trim Tabs, firmly planted in the bear’s camp. The company cites bearish corporate liquidity as the reason for its’ negativity. Cash takeovers are hitting new lows while new offerings are piling up. We’ve got a lot going on this week with GDP, consumer confidence, MR.G. and a bucket of earnings reports on the docket. Expectations are for generally positive economic news and a “hold the line” stance from the Fed. The wild card is the earnings data. Any surprises could lead to a shakeup in sentiment. VIX Monday 01/28 close: 21.71 VXN Monday 01/28 close: 43.06 30-yr Bonds Monday 01/28 close: 5.47 Total Put/Call Ratio: .69 Equity Option Put/Call Ratio: .58 Index Option Put/Call Ratio: 1.60 === NASDAQ 100 Index (NDX/QQQ) 52-Week High: 103.51 52-Week Low: 28.19 Current close: 39.05 Volume/Open Interest Maximum calls: 40/47,016 Maximum puts : 38/70,762 Moving Averages 10 DMA 38 20 DMA 39 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: 574.91 Volume/Open Interest Maximum calls: 580/5,191 Maximum puts : 520/8,586 Moving Averages 10 DMA 576 20 DMA 583 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: 1133.06 Volume / Open Interest Maximum calls: 1150/28,366 Maximum puts : 1150/24,427 Moving Averages 10 DMA 1132 20 DMA 1145 50 DMA 1144 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: 9,865.75 Volume / Open Interest Maximum Calls: 98/11,956 Maximum Puts 90/17,190 Moving Averages: 10 DMA 9,809 20 DMA 9,962 50 DMA 9,943 200 DMA 10,106 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: 512.12 Volume / Open Interest Maximum Calls: 520/301 Maximum Puts: 560/637 Moving Averages 10 DMA 529 20 DMA 548 50 DMA 573 200 DMA 545 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: 545.82 Volume / Open Interest Maximum Calls: 570/977 Maximum Puts: 540/484 Moving Averages 10 DMA 534 20 DMA 551 50 DMA 542 200 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: 373.80 Volume / Open Interest Maximum Calls: 390/ 500 Maximum Puts: 300/1575 Moving Averages 10 DMA 377 20 DMA 378 50 DMA 385 200 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, 02/25. 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 01/08/02 333,742 398,283 (64,541) (6.1%) 01/15/02 340,005 397,024 (57,019) (11.7%) 01/22/02 342,841 394,041 (51,700) (9.3%) 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 01/08/02 130,335 60,780 69,555 (3.1%) 01/15/02 129,987 64,311 65,676 (5.5%) 01/22/02 125,451 65,423 60,028 (8.6%) Most bearish reading of the year: 36,513 - 5/01/01 Most bullish reading of the year: 91,122 - 3/06/01 NASDAQ-100 Commercials Long Short Net %Change 01/08/02 30,786 37,457 (6,671) (13.3%) 01/15/02 32,068 34,859 (2,791) (58.1%) 01/22/02 30,671 34,103 (3,432) 23.0% 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 01/08/02 10,073 6,404 3,669 (22.5%) 01/15/02 10,230 9,782 448 (87.8%) 01/22/02 11,885 8,787 3,098 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 01/08/02 15,921 7,981 7,940 (3.9%) 01/15/02 15,866 9,175 6,691 (15.7%) 01/22/02 18,152 11,013 7,139 6.6% 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 01/08/02 4,380 9,188 (4,808) (9.3%) 01/15/02 4,979 8,747 (3,768) (21.6%) 01/22/02 5,424 8,969 (3,545) (5.9%) 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 +60,028 +65,676 -51,700 -57,019 Total Open Interest % (+31.45%) (+33.80%) (-6.95%) (-7.74%) net-long net-long net-short net-short Small Specs Commercials DJIA futures (Current) (Previous) (Current) (Previous) Open Interest Net Value -3,545 -3,768 +7,139 +6,691 Total Open interest % (-24.63%) (-27.45%) (+24.48%) (+26.72) net-short net-short net-long net-long Small Spec Commercials NASDAQ 100 (Current) (Previous) (Current) (Previous) Open Interest Net Value +3,098 +448 -3,432 -2,791 Total Open Interest % (+14.99%) (+2.24%) (-5.30%) (-4.17%) net-long net-long net-short net-short What COT Data Tells Us ---------------------- Indices:.Commercials continued their gradual reduction in net- short positions this week. Over the last couple of months we have seen the big players move as low as 4 percent net-short and then gradually increase their positions. So far, we’ve yet to see any evidence of an accumulation phase (bullish) beginning. Gold: Anyone following the behavior of gold or the XAU.X (gold and silver index), better have a whiplash collar on. The XAU hit a low of 56.85 during the week however, Friday saw the index take off and close at 59.10. Commercial activity does not seem to coincide with this type of a move but keep in mind that these figures are as of Tuesday. I’ll be interested to see what next week’s numbers show. 12/25 11,976 contracts net-short 01/01 14,555 contracts net-short 01/08 24,042 contracts net-short 01/15 53,938 contracts net-short 01/22 50,959 contracts net-short Data compiled as of Tuesday 01/22 by the CFTC. ========================= Play-of-the-Day (Bullish) ========================= Wallace Computer Svcs. - WCS - cls: 20.18 chg: -0.17 stop: 19.49 Company Description: Wallace is recognized as the leading provider of print management services to Fortune 1000 companies through its Total Print Management (TPM) program. The TPM program streamlines the processes associated with traditional, digital and electronic print items and typically generates significant cost savings. With nationwide resources across a wide range of traditional and digital capabilities, Wallace can be a large organization's single print management source. The company's print management services include e-commerce, distribution logistics, digital asset management, inventory management, and print optimization. Wallace is headquartered in Lisle, Illinois with manufacturing, distribution and sales facilities throughout the United States. (source: company press release) - ORIGINAL WRITE UP: January 25th, 2002 - Why We Like It: Our new bullish play on Wallace is just an easily identifiable breakout play in a sector that has seen a lot of strength lately. While not a direct competitor for the likes of IKN, ODP, and OMX; WCS is seen as more of an office supplies player despite their focus on print management. Shares had been building a bullish wedge under resistance at the $20 level and Wednesday saw shares breakout above it with Thursday's move as confirmation. Volume had been rising all week and the 20-cent pull back on Friday was on light volume. The $20 level should now act as support and may be a good place to look for entry points if shares pull back. Please note that WCS is not a very fast moving stock but given enough time we think it may trade to $24 or even $25. In the news, readers will find that WCS was named to the Forbes Platinum 400 list. This list recognizes large organizations for strong profitability and growth. We are going to start the play with a stop at $19.49. - Play-of-the-Day Comments: January 28th, 2002 - We think the pull back to the $20 level is a relatively low risk entry point with our stop at $19.49. We're picking WCS as the play of the day for Tuesday but traders will want to confirm stock direction before initiating any positions. Picked on January 25th at $20.35 Gain since picked: -0.17 Earnings Date 12/11/01 (confirmed) ========== 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. ----------- Accenture Ltd - ACN - close: 24.00 change: -1.20 WHAT TO WATCH: Over a year ago, Accenture lost a bitter feud with its accounting brethren to keep the coveted Arthur Andersen name. The irony of it all is not lost on Accenture's management today but as the previous consulting arm to the Arthur Andersen empire they may not be protected from public opinion. Technically, they should not have any exposure to the Enron debacle and they have said so. Shares have actually been climbing the last few months (minus January's lack luster performance). We're beginning to wonder that as Wall Street and the rest of America still looks for a scapegoat that ACN might suffer a bit of collateral damage from the Enron fall out. As it stands now, ACN has just closed below its 50-dma and shares appear to be rolling over. Intraday, the stock bounced off the $23 level but a close under $24 could portend a move to the $20 level. Earnings are expected in April. --- Andrx Corp - ADRX - close: 57.83 change: -3.24 WHAT TO WATCH: It was just a couple of weeks ago we had ADRX as a bearish play on the Premier Investor play list so it comes with a small sense of satisfaction that the stock lost over 5% today on top of Friday's drop. The catalyst for today's move was additional negative developments in ADRX's court battle with AstraZeneca and a patent dispute over Prilosec, the world's top selling drug. The close under $60 is a big technical breakdown and the point-and-figure chart supports this theory. We wouldn't be surprised to see ADRX trade to $50 in the next few weeks. The risk here is news related as any report or headline that comes across the wires as positive for ADRX could spike the price higher whether they win the case or not. --- Royal Caribbean Cruises - RCL - close: 18.85 change: +0.83 WHAT TO WATCH: The week is looking pretty optimistic for shares of RCL as the stock just added another 4.6% on top of last week's gains. Bullish investors are probably encouraged by today's move as the close puts shares of RCL above price resistance of $18 as well as the 200-dma. Volume has been strong the last two days and we think RCL might be able to trade to $21, which would close the gap from September. The positive earnings reports from ROOM and EXPE today, while not directly related to cruise sales, might also appear as positives since it boosts investor confidence that the travel industry is returning. The point-and-figure charts show the stock above its bearish resistance line. Earnings are expected tomorrow. --- Rock-Tenn Co. - RKT - close: 17.25 change: +0.74 WHAT TO WATCH: Shares of this paper-products company have been on fire the last four sessions. What is strange is the timing of this move. Earnings were very strong but came out on Friday, Jan. 18th, 2002. It wasn't until the 23rd before shares started to rally. It's almost as if fund managers didn't see the earnings news until Wednesday. Since then volume has been rising with each gain. We wouldn't chase the stock but the strength of this new trend would definitely make us look twice on a pull back. Average daily volume is very light, which would probably make us shy away from it - but this also makes the recent volume spike so incredible. --- Continental Airlines - CAL - close: 30.54 change: +0.25 WHAT TO WATCH: The transport sectors have been posting gains the last week or two and one of the groups that look tempting are the airlines. The XAL.X looks like it could trade up to the 100 level from its current position at 93. Likewise we think CAL might be able to trade to its recent highs above $33 and potentially to its 200-dma near $35. We tried playing CAL back in mid-December but our stop was too tight and we missed the late December/early January rally. CAL should have support at $28. ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. PremierInvestor.net staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control. 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PremierInvestor.net Newsletter Monday 01-28-2002 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/3795_2.asp ================================================================= In section two: StockBottom Non-Tech Plays Closed Bullish Play: IKN, LTR High Risk/High Reward Closed Bullish Play: EXPE Closed Bearish Play: SEAC 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) ================================================================= StockBottom Non-Tech/Active Trader (AT) section ================================================================== =================== AT Closed Plays =================== ------------------- Closed Bullish Play ------------------- Ikon Office Solutions - IKN - cls: 13.93 chg: +1.08 stop: 11.99 Midday news that IKON sold its Mid-Atlantic operations of IKON Business Systems Services (BSS) to DTI Integrated Business Solutions, Inc. seems to have bulls cheering. Volume was very strong at 1.7 million shares trading as IKN gained 8.4%. We had estimated that the next level of resistance was $14.00 and shares traded right to this level before the closing bell. The weekend edition of the newsletter reiterated our exit point of $13.75 so this is where we will close the play. A gain of $1.44 represents an 11.69% move in IKN's share price. Odds of profit taking seem high but the stock could consolidate sideways under the $14 level. After hours trading has not offered us any clues. Picked on January 11th at $12.31 Gain since picked: +1.44 Earnings Date 01/25/02 (confirmed) --- Loews Corp - LTR - close: 59.26 change: -2.26 stop: 58.99 There was no company specific news for LTR's 3.67% drop on Monday but negative moves in Diamond Offshore (DO) and CNA Financial (CNA) probably affected LTR's performance. LTR's drop put shares back below the 10-dma and the $60 level. This took our small gain to a small loss. LTR did pause at its 15-dma but the increased volume would have us acting very cautious if we still had long positions in the stock. The $58 level should be support as well as the 200-dma near $57. Earnings are expected on Thursday. Picked on January 18th at $60.15 Gain since picked: -1.16 Earnings Date 01/31/02 (unconfirmed) ================================================================= High Risk / High Reward (HR) section ================================================================== =================== HR Closed Plays =================== ------------------- Closed Bullish Play ------------------- Expedia, Inc. - EXPE - close: 51.02 change: +4.02 stop: 45.99 Earnings bulls enjoyed a strong day today with EXPE gapping open to $48.86 and trading above potential resistance of $50 to close at $51.02. This 8.5% gain was ahead of its post-market earnings report as investors anticipated good news on the heels of its rival ROOM's strong numbers. The Hotel Reservations Network (NASDAQ:ROOM) announced their earnings numbers this morning before the bell with a Q4 performance of 27-cents a share. This was 9 cents above estimates with revenues jumping over 40% to $141.7M. ROOM also raised their guidance for 2002 and 2003. Shares of ROOM ended the day up 18%. With earnings numbers like these everyone piled into EXPE looking for a similar surprise. They were rewarded as EXPE came out with a net income, excluding special costs, of $19 million or 31 cents a share. Estimates were only 10 cents a share. Investors were optimistic as EXPE had lost $2.6M or 6 cents a share the same quarter a year earlier. Shares of EXPE were trading significantly higher in the after hours markets with the stock near $54 at the time of this update. Unfortunately for the newsletter, we were a bit too conservative and posted an exit price of $49.50 in the weekend newsletter. Therefore we must close the play with a gain of only $5.00. Traders who held over the report will need to make their own decision on whether to sell in the morning excitement if EXPE can maintain these after hours gains or to hold on for a longer- term move. The positive earnings move of this magnitude is a major milestone for the online reservations/travel services especially considering the September 11th attacks. However, short-term profit taking would not be unexpected after the recent gains. We suggest you tighten your stops if you're still in the play. Picked on January 18th at $44.49 Gain since picked: +5.01 Earnings Date 01/28/02 (confirmed) ------------------- Closed Bearish Play ------------------- SeaChange Intl. Inc. - SEAC - cls: 29.00 chg: +1.00 stop: 29.35 For the moment, the $29 level is still acting as resistance but shares of SEAC took on a bullish tone after the beating it took last week. We had placed our initial stop just above the 10-dma, which should have held for us, but a spike up towards the end of the day took us out as SEAC traded to $29.39. The trend is still down but today's move could be the beginning of a short rebound higher. We would look to see if the $30 level will hold as resistance with $32 being the next level of trouble beyond that for SEAC bulls. Picked on January 25th at $28.00 Gain since picked: -1.35 Earnings Date 02/26/02 (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 GPC Genuine Parts Co 35.41 +0.67 AOG Alberta Energy Co Ltd 38.37 +1.38 RCL Royal Caribbean Cruises 18.85 +0.83 LIZ Liz Claiborne Inc 27.25 +0.95 ALE Allete Inc 26.38 +0.56 NVR NVR Inc 234.00 +17.06 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- Ticker Company Name Close Change XRX Xerox Corp 11.24 +1.34 AMZN Amazon.com 15.50 +1.06 TOY Toys R Us Inc 19.90 +1.15 IKN IKON Office Solutions 13.93 +1.08 CREAF Creative Technology Ltd 12.61 +1.11 RNBO Rainbow Technologies Inc 12.25 +1.65 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- Ticker Company Name Close Change USAI USA Networks Inc 27.64 +1.94 NOC Northrop Grumman Corp 108.37 +3.56 TXT Textron Inc 43.23 +1.85 LLL L-3 Communications 100.00 +3.30 JWN Nordstrom Inc 25.10 +1.04 DHI D.R. Horton Inc 36.61 +1.10 ROOM Hotel Reservations Ntwrk 52.25 +7.99 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change TYC Tyco Intl. Ltd 42.00 -3.00 EDS Electronic Data Systems 61.79 -2.16 ACN Accenture Ltd 24.00 -1.20 GDT Guidant Corp 42.80 -2.48 ELN Elan Corp 34.50 -2.35 KG King Pharmaceuticals 38.20 -2.06 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change .. none .. ================================================================= 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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