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Daily Newsletter, Wednesday, 01/30/2002

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PremierInvestor.net Newsletter              Wednesday 01-30-2002
                                                  section 1 of 2
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In section one:

Market Wrap:      Fed keeps short-term rates at 1.75%
Watch List:       NKE, GDW, LEN, BLL and more!
Market Sentiment: Half down, half up.
Play-of-the-Day:  Going Against The Grain

-----------------------------------------------------------------
U.S. Market Numbers
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MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
      01-30-2002          High     Low     Volume Advance/Decline
DJIA     9762.86 +144.62  9775.59  9529.46 1.99 bln   1890/1207	
NASDAQ   1913.44 + 20.45  1913.66  1851.49 2.04 bln   1947/1621
S&P 100   564.38 +  7.10   564.66   546.13   Totals   3837/2828
S&P 500  1113.57 + 12.93  1113.79  1081.66             
RUS 2000  479.72 +  5.74   479.78   468.38
DJ TRANS 2762.11 + 23.46  2769.01  2712.46
VIX        24.94 -  1.32    29.92    24.77 
VXN        44.67 -  1.23    48.28    44.55
TRIN        1.16 
Put/Call    0.72
-----------------------------------------------------------------

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

Fed keeps short-term rates at 1.75%

The Federal Open Market Committee (FOMC) policymakers decided to 
keep its target for the federal funds rate unchanged at 1.75% 
sighting that weakness in demand is abating and economic activity 
looks to be firming.

Comments of caution were issued in regards to, "degrees of 
strength in business capital and household spending is still 
uncertain."  Therefore, the FOMC continues to believe that, the 
committee's long-run goals of price stability and sustainable 
economic growth and the information currently available, have the 
risks still weighted mainly toward conditions that may generate 
economic weakness in the foreseeable future.

Stocks sputtered then rallied

Economic bulls that had been scratching their heads for the past 
couple of days as stocks fell despite some economic data that had 
been hinting of a stabilizing economy traded sideways for about 
45-minutes after the FOMC decision was announce.  Then, as if a 
revelation hit the market that the Fed wasn't cutting rates as it 
also felt signs of economic stability we're being seen, stocks 
caught some bids (found buying) and headed higher into the close.

Retail stocks as depicted by the S&P Retail Index (RLX.X) traded 
in positive territory for the bulk of today's session as shares 
of Dow component and sector bellwether Wal-Mart (NYSE:WMT) 
challenged a just recently set 52-week high of $59.95.  That 
$59.95 matching high today isn't a coincidence.  There's a seller 
sitting just below the $60 level (a trick I learned a long time 
ago) where a seller is just under the round number of $60.  Is it 
a bull selling and taking some profits, or is it an "economic 
bear" shorting a 52-week high?  If it's the latter, I think 
he/she is trying to pick up some dimes in front of a bulldozer.

Wal-Mart Chart - Daily Interval




I don't think a trader or investor has to own or be short a stock 
to learn something from it.  Right now, the trading in Wal-Mart 
is and has been bullish.  The pullbacks to its 50-day moving 
average have obviously been points where buyers overcome sellers 
and new relative highs have then been achieved.  Just yesterday, 
support was found right near our retracement level at $58.07.

Undoubtedly, I think there may be a few speculative bears trying 
to short the stock on the thinking that the economy is weak and 
that the stock will fall, but that type of thinking in a stock 
that's in a bullish trend and relative strength is gaining versus 
the broader market has the odds of success stacked against a 
bearish trade.  I'd "rank" shares of WMT as a high probability 
win for a bullish trader on a break above $60 and look for the 
stock to make a move to the $62-$63 range.

S&P Retail Index Chart - $5 box




I believe the recent economic data shows signs of economic 
recovery.  I also believe there are some market participants that 
believe the worst is not yet behind us.  However, the retailers 
have traded strong despite the recent broader market weakness and 
that sets up a near-term "squeeze" in the retail sector.  The $5 
box chart of the RLX.X shows that there are sellers leaning on 
the RLX.X at the $935 level, but a trade could turn the tide 
higher and get some bears in the sector second guessing things 
and bring on some near-term capitulation in the group.

Fuzzy accounting wasn't enough by itself

Wasn't it the Presidential election of 2000 when the term, "fuzzy 
accounting" was thrown around by both candidates regarding their 
thoughts on each other's budgets?  The "fuzzy accounting" term 
has been in play in recent sessions and has had a drastic impact 
on investor's psychology recently.

I can't find one "surprise" in today's FOMC report that the 
market didn't know about.  Perhaps the biggest "surprise" today 
was the stronger than expected GDP number that came out before 
the stock market opened for trading.

I don't think the FOMC's decision to not cut interest rates was 
what moved the markets higher, I think that some of the concerns 
on accounting policies had played themselves out near-term.  No, 
the concerns aren't going to just "go away," but some of the 
rumors or even statement of fact about some other companies using 
the off balance sheet accounting methods already had some stocks 
trading down sharply and eventually some of those stocks had to 
rebound.

Yesterday, my e-mail was inundated with subscriber's e-mail from 
the OptionInvestor.com site, as traders that had bought puts on 
the stock were wondering where support for Tyco International 
(NYSE:TYC) might be found as the stock was breaking to new 52-
week lows.  My crystal ball was broken, so I used the "rolling 
down" retracement technique to try and identify some level where 
bears would look to lock in gains.  After all, most traders don't 
just pick numbers out of the air.  They try and trade levels.  
Here's a look at what we did yesterday.  I think its important 
because it will play into how I think we should be looking to 
trade in the next couple of sessions.

Tyco International Chart - 01/29/02 11:00 AM EST




I liked the way a "rolled down" retracement fitted/correlated to 
the wild trading in shares of Tyco (TYC).  When a stock is 
breaking to new 52-week lows, it is so tough to know when enough 
is enough and time to take some profits.  Like I said, the 
crystal ball was broken, but best guess was that bears in the 
stock would be looking to lock in some gains in the $34-$28 range 
based on retracement.  I also felt that resistance would be at 
the $40 level.  What happened today is simply amazing, yet not 
all that surprising.

Tyco Intl. Chart - Up to today's close




I ask myself, "Did today's FOMC decision to hold interest rates 
at 1.75% have shares of TYC reversing from their session low of 
$27.48 (-18.35%) to eventually finish up 3.56% by session's end?"  
NO WAY!

What is taking place in the trading of TYC rivals the best plot 
of any daytime soap opera.  This morning the stock gapped down at 
the opening of trading to $29.60 after an article in the New York 
Times saying that the company's CEO Dennis Kozlowski and CFO Mark 
Swartz disposed of $100 million of TYC stock during the company's 
latest fiscal year.  That news had many lapsing into what is 
quickly being called "Enron-itis," where insiders dumped 
million's of dollars of stock before Enron (ENRNQ) cratered into 
bankruptcy.

Then during market hours today, Tyco (TYC) reported that 
Kozlowski and Swartz would each buy 500,000 shares of the stock 
as a sign of commitment that there isn't anything underhanded 
going on at Tyco.  Based on today's close, that comes to roughly 
$35 million total.  That's still about $65 million shy of what 
they sold, but its not pocket change either.

Reasons why....

I'm going to argue a point I've mentioned in recent sessions.  I 
think the "bulk" of the downside the broader market averages have 
seen in recent sessions is two-fold.  One has been that stocks 
simply got a little too far ahead of themselves based on the 
thought of economic recovery and the recent slew of earnings just 
wasn't showing bottom lines that justified the valuations.  The 
bullish percent data we've been showing may also have played into 
the thought/belief that things were just a little too bullish.  
The second "reason" for the recent declines is the broader fear 
of just who might be the next victim of "fuzzy accounting."

Fear is an emotion and when the evening news headline is talking 
about the debacle at Enron due to accounting policies and how 
investors got duped, then any inkling of "accounting issues" 
leads to speculation that others may also be using the same type 
of accounting practices that Enron used.  In essence, we are 
getting a chain reaction of accounting fears that becomes far-
reaching.

It's just like the soap operas.  In Enron's case, it sure looks 
like company officials were not forthright with the details.  For 
months the company stated that there were no accounting 
irregularities.

In Tyco's case, the CEO is saying that everything is upfront and 
I'm not about to call Mr. Kozlowski a liar.  I don't know the man 
and he's never done anything to me where I question his 
credibility.  At the same time, I'm not willing to bet my money 
on the long side (there may be others that feel the same way).  
Evidently Mr. Kozlowski and Mr. Swartz aren't willing to bet the 
entire $100 million that was taken out of the stock last year 
either.

With that thought...

I think there are some stocks that have been beaten down in 
recent weeks that offer some fairly decent risk/reward trades for 
the disciplined trader.

In tonight's "High Risk/Reward" section, we're going to take a 
shot at shares of Qualcomm (NASDAQ:QCOM) $44.69 +3.49%.  

The play here is simply what we feel has the stock at a decision 
points for bears that have made some money on the downside since 
December and the stock has been consolidating for the past six 
sessions.  While the NASDAQ-100 and NASDAQ Composite have been 
getting "whacked" to the downside, QCOM has been firming at 
retracement.  If the "fuzzy accounting" fear has played itself 
out near-term (I stress near-term, it's not going away overnight) 
then I think shares of Qualcomm (QCOM) can tack on an 11% gain in 
the next couple of sessions.

Qualcomm Chart - Daily Interval




I think we could see a decent trading rally for bulls near-term.  
The economic data has been just strong enough to have even the 
bearish of bears looking to book some gains and shares of QCOM 
did not break yesterday's lows, which hints the stock may be 
"sold out" near-term.  Analysts have had little good to day about 
the "wireless" group in recent weeks and shares of QCOM are 
building a nice little pennant of consolidation near the $44.55 
level which may be the lower range of retracement where market 
makers are looking to get a "buy side" bias.

Make no mistake about today's 01:00 Update and the bullish 
percent charts being defensive.  I'm looking for a tradable 
rally, and I'm looking for trades in some stocks like Qualcomm 
(QCOM) where I can control my downside risk, but there's enough 
upside to resistance where a bear will look to cover as he/she 
doesn't want to see a rally wipe out recent gains.

We've done the same thing in our trades

I'm also looking at our recently profiled bearish trade in the 
SPDRS (AMEX:SPY) that was dropped today when the AMEX:SPY traded 
our stopping point at $110.60.  It took roughly 14 sessions for 
that broader market average type of trade to play itself out.  
Our thinking was that the recent "accounting fears" may have 
found enough selling that risk/reward for further bearish trades 
near-term was beginning to run out.

I'm also monitoring a recent successful short in Altera 
(NASDAQ:ALTR) that had been profiled in the "High Risk/Return" 
section that bearish traders made some money on (4.9%) if they 
closed the trade per our stop on January 23rd.  ALTR now trades 
$25.48 and has edged ever so slightly above its 200-day moving 
average.  If we were looking to lock in some gains on ALTR at 
what now looks to have been a good idea, the perhaps there are 
some bears in QCOM and other stocks with good trade setups that 
offer similar trades.

Not shooting for the stars

Trading rallies and the NASDAQ-100 bullish percent.  When you 
look at our current play list 
http://www.PremierInvestor.net/Strategies/currentplaylist/current.asp
you're not going to find a bunch of "exciting" stocks.  I'm 
noting that 7 stocks are "bullish plays" and after today's drop 
of the AMEX:SPY, we're carrying just 2 bearish plays.  By my 
count, 7 are up (the bullish plays) and 2 are down (the bearish 
plays).  

With the NASDAQ-100 bullish percent ($BPNDX) now reading 38%, a 
lot of risk has been removed from the NASDAQ-100 compared to the 
December readings of 78%.  There enough bullish economic data 
that has been coming into the markets to create a near-term buy 
side bias I think for a trading rally.

It will not surprise me in the least if we were to get a nice two 
or three day rally and all of a sudden we get some rumblings from 
the bears regarding accounting issues.

I do think it is a "risk" that there will be continued commentary 
regarding accounting policies and this will be what market bears 
will bring to the table to make their case for lower stock 
prices.  

A trader doesn't really care about those rumors.  A trader only 
looks to play the hand that is dealt and will quickly adjust.  
He/she is using the bullish percent data to understand market 
risk and use that to then understand what kind of risk/reward is 
acceptable for their accounts.

A "trader" in Qualcomm is only willing to risk $1 or $2 and looks 
for a reward of $4 or $5.  I think that is possible with a 
NASDAQ-100 bullish percent of 38%.

An "investor" that is looking at a NASDAQ-100 bullish % of 38% 
most likely doesn't see a "bottom" or low risk market at this 
point.  An "investor" in Qualcom most likely would be looking at 
risk to the October lows of $38 (risking $6 from here) and to get 
a $1/$3 risk/reward, they've got to be able to see $18 upside to 
$62 and that would have to put the stock back at the 
November/December highs.

With the S&P 500 bullish percent ($BPSPX) and NASDAQ-Composite 
bullish percent ($BPCOMPQ) just recently reversing into a more 
defensive posture, I just don't think a stock like QCOM is meets 
the risk/reward profile at this stage of the game.

Jeff Bailey
Senior Market Technician


==========
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.

----------

Nike Inc - NKE - close: 61.00 change: +3.20

WHAT TO WATCH: Shares of NKE surged more than 5.5% today after 
its rival, Reebok (RBK), announced its Q4 earnings numbers.  On 
the surface, it would appear that RBK's net income fell 18%.  RBK 
also announced that they are expecting 2002 growth to fall 
between 10% to 15%, which is below their long-term goals of 15% 
annually.  So why then did both RBK and NKE trade higher today?  
We'll leave that to interested investors, but NKE's move today 
was a very strong breakout over six-week old resistance between 
$58.50 and $59.00 (as well as potential round-number resistance 
at $60.00).  NKE isn't expected to announce earnings again until 
Feb. 10th, which is around the same time the next model of their 
$200-a-pair Air Jordans is supposed to hit the stores.




---

Golden West Financial - GDW - close: 64.30 change: +1.80

WHAT TO WATCH: When the banking sectors were sinking fast on 
Tuesday, shares of GDW actually held up relatively well.  The 
stock pulled back toward its 15-dma and managed a strong bounce 
off this level again today.  It is GDW's strength that makes it 
such an attractive stock to watch.  Shares are terribly 
overbought but if buyers are willing to support it amid wide-
spread selling then we think it might be a play for those looking 
for a banking play.  We see price resistance at $66.50, $69 and 
$70.  If you choose to play it, be sure to use a stop!




---

Lennar Corp - LEN - close: 56.26 change: +1.76

WHAT TO WATCH: Homebuilders have been a very hot group lately and 
they might be able to keep the heat on if Wall Street thinks they 
may be a round of consolidations and takeovers.  In the news 
today, Beazer Homes' announced it will buy Crossman Communities 
(symbols are BZH and CROS).  We are very impressed with the rally 
in LEN but would not chase it at these levels.  A pull back to 
the $50 level would be very tempting but given the current 
attention to homebuilders LEN may not dip back that far.  
Therefore, we would watch LEN for a pull back to the $52.50 level 
and look for support to show up there.  It's 10-dma is currently 
near $51.90.  Another home builder/construction play you might 
want to watch is RYL.  RYL should have support at $75 on a pull 
back.




---

Ball Corp - BLL - close: 77.38 change: +1.82

WHAT TO WATCH: Another stock we would not chase after but wait 
for a pull back on is Ball Corp.  Shares have really made a 
comeback after some profit taking in mid-January.  Company 
recently announced earnings on Jan. 24th and investors are now 
looking ahead to a 2:1 stock split on Feb. 22nd.  We would watch 
for BLL to pull back to the $74 area as a potential entry point.  
But given the current strength of the rally it might trade to $80 
first.  There is plenty of time ahead of the split so don't get 
impatient.  






==============
STILL WATCHING
==============

There are several stocks from the weekend watch list that have
made some interesting turns and still bear watching.  We've
grabbed a few to keep the spotlight on them.

--------------


Borg Warner Inc - BWA - close: 55.02 change: +0.69

UPDATE: The stock held up well during the recent market weakness 
and shares are poised for a breakout above current resistance at 
$55.  However, the company just confirmed that its earnings will 
come out on Monday, Feb. 4th, 2002.  

-Original Highlight, Weekend Newsletter, Jan. 25th, 2002-

WHAT TO WATCH: BWA is another player in the automotive-parts 
group.  We really like the bullish trend and the recent retest of 
support at the $50 level but shares have rallied right to 
resistance of $55.  We would look for a breakout over $55 or a 
pull back to $50 as a short-term trade.  Watch for earnings near 
Feb. 5th, 2002 (unconfirmed).




---

Bindview Development Corp. - BVEW - close: 2.66 change: -0.02

UPDATE: Shares of BVEW pulled back to support at $2.50 ahead of 
their earnings report tonight.  The news must be positive as the 
stock is trading near $3.25 in after-hours.  Only the most nimble 
and most aggressive traders will want to trade any momentum 
tomorrow but it may be worth watching for an entry point in the 
next few sessions (still a high risk play).

-Original Highlight, Weekend Newsletter, Jan. 25th, 2002-

WHAT TO WATCH: Security software companies have gotten a lot of 
press over the last few months and this stock has seen a huge 
reversal from its October lows.  We really like the recent 
rebound off its 200-dma near $1.85 and the trend this last week 
was very strong.  We probably would have considered this for a 
high-risk play but earnings are expected on Jan. 30th.  Plus the 
stock is right up against resistance at $3.00.  We would prefer 
to see a pull back to the $2.50 level but a breakout over $3.00 
might be playable if you're an aggressive and nimble trader.  
Stop losses will be a challenge as small dollar moves mean big 
percentage changes.  




---

Ciber Inc - CBR - close: 10.81 change: +0.26

UPDATE: The bullish wedge is still coiling on this play and we're 
still looking for the breakout over resistance.

-Original Highlight, Weekend Newsletter, Jan. 25th, 2002-

WHAT TO WATCH: Another software player that active traders may 
want to watch is CBR.  The company just announced that their 
earnings will be released on Feb. 7th, 2002.  The last few weeks 
has shown the stock to be building a wide bullish wedge against 
overhead resistance at $11.  Shares might be ready to breakout 
above this level as evidenced by the Thursday/Friday move but we 
wouldn't be surprised to see a few more days of consolidation 
either.




---

Eaton Vance Corp - EV - close: 38.50 change: +0.58

UPDATE: The stock has pulled back to the bottom of its ascending 
channel.  Aggressive traders might make a play for it here but 
realize EV might only trade to $40 or $42 before rolling over 
again.  Today's low was a bounce off its 30-dma.

-Original Highlight, Weekend Newsletter, Jan. 25th, 2002-

...another great trend.  This one has been in a rising channel
for three months.  Currently near the top of its channel.
we would look for a pull back to $38 but it may not come.






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

Half down, half up.
by Russ Moore

If you like roller-coasters, you must have loved today’s session. 
Early action had the major indices extending yesterday’s losses 
despite a rather strong GDP number (+0.2 percent). The bulls were 
ravenous by lunchtime and that led to a strong afternoon rally.

The DOW ended with a +1.5 percent gain while the NASDAQ added 
+1.1 percent and the NDX +1.3 percent. Volume was solid with 1.97 
billion shares moving on the big board and 2.02 billion trading 
on the NASDAQ. Market breadth was positive as winners outpaced 
losers by a 19/12 margin on the NYSE and 19/16 on the tech index.

The turnaround was partially fueled by a recovery in TYCO. The 
company’s CEO, Dennis Kozlowski, and CFO, Mark Swartz, announced 
that they would be buying 500,000 shares of the company stock on 
the open market. The stock moved from a low of 27.48 to 34.89.

The FOMC meeting did not really factor in to the market’s 
performance. The Fed held the line on rate cuts while trying to 
portray a more bullish outlook, “signs that weakness in demand is 
abating and economic activity is beginning to firm have become 
more prevalent”.

I hope you had a chance to pull up the volatility (fear) charts 
last night. You’ll remember that on Monday the VIX hit a low of 
21.69, warning of a potential market reversal. The warning proved 
accurate as the markets took a sizeable drop. Yesterday, the Vix 
moved up to 26.68 while pushing the upper Bollinger Band, another 
alert for investors that a market turn could be at hand. Today’s 
action saw the VIX spiking at 29.92, right around noon hour. For 
investors that were sitting with short plays, this was a five-
star warning that it might be time to unload your positions. 

I have to admit that it doesn’t always work that way. Often 
times, we’ll have to wait a couple of days before VIX levels 
release nevertheless, the volatility indices remain an extremely 
valuable filter in an investor’s arsenal.

We still have a lot of unresolved issues on the table right now 
and that means more choppy action ahead. Accounting concerns 
remain on the front burner and until we see some type of 
regulatory action take place, we’re not likely to see the masses 
come forth. 



VIX
Wednesday 01/30 close: 24.94


VXN
Wednesday 01/30 close: 44.67


30-yr Bonds
Wednesday 01/30 close: 5.41


Total Put/Call Ratio: 1.05


Equity Option Put/Call Ratio: .92


Index Option Put/Call Ratio: 1.90


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 38.27

Volume/Open Interest
Maximum calls: 40/52,423
Maximum puts : 38/96,522

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: 564.38

Volume/Open Interest
Maximum calls: 580/6,384
Maximum puts : 520/9,067

Moving Averages
 10 DMA  572
 20 DMA  581
 50 DMA  584
200 DMA  599

Fibanocci Retracements
Relative High: 680.03 (05/22/01)
Relative Low:  480.07 (09/21/01)
38% 556.14
50% 579.65
62% 603.55

===

S&P 500 (SPX)
52-Week High:  1530.01
52-Week Low:    965.80
Current close: 1113.57

Volume / Open Interest
Maximum calls: 1150/26,707
Maximum puts : 1100/28,468
Moving Averages
 10 DMA 1125
 20 DMA 1140
 50 DMA 1142
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:  9,762.86

Volume / Open Interest
Maximum Calls:  98/12,659
Maximum Puts    90/17,153

Moving Averages:
 10 DMA  9,766
 20 DMA  9,923
 50 DMA  9,937
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: 500.54

Volume / Open Interest
Maximum Calls: 520/301
Maximum Puts:  560/575

Moving Averages
 10 DMA 521
 20 DMA 539
 50 DMA 569
200 DMA 546

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: 534.88

Volume / Open Interest
Maximum Calls: 570/976
Maximum Puts:  540/492

Moving Averages
 10 DMA 530
 20 DMA 552
 50 DMA 543
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: 373.27

Volume / Open Interest
Maximum Calls: 390/ 675
Maximum Puts:  380/1075

Moving Averages
 10 DMA 376
 20 DMA 377
 50 DMA 384
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)
=========================

QUALCOMM - QCOM - close: 44.69 change: +1.51 stop: 42.49

Company Description:
QUALCOMM Incorporated is a leader in developing and delivering 
innovative digital wireless communications products and services 
based on the Company's CDMA digital technology. The Company's 
business areas include CDMA chipsets and system software; 
technology licensing; the Binary Runtime Environment for Wireless
(TM) (BREW(TM)) applications platform; QChat push-to-talk 
technology; Eudora® e-mail software; digital cinema systems; and 
satellite-based systems including portions of the Globalstar(TM) 
system and wireless fleet management systems, OmniTRACS® and 
OmniExpress®. QUALCOMM owns patents that are essential to all of 
the CDMA wireless telecommunications standards that have been 
adopted or proposed for adoption by standards-setting bodies 
worldwide. QUALCOMM has licensed its essential CDMA patent 
portfolio to more than 100 telecommunications equipment 
manufacturers worldwide. (source: company press release)

Why We Like It:
For weeks we have been reading and writing about the bearish and 
negative outlook (guess that's sort of redundant) on the wireless 
and telecom sectors.  Multiple brokers have downgraded the sector 
and internally we have been bearish on QCOM since it broke its 
200-dma in mid-December.  The company did announce earnings last 
week and shares traded higher the following day but Wall Street 
is not happy with the lack of new growth for the industry.  The 
recent rally efforts failed at the 15-dma, which has been 
pressuring the stock for weeks.  However, we feel an upset coming 
along.  This is a complete contrarian-technical kind of play.  We 
don't see any fundamental reason to own QCOM over the short-term 
but a multi-session oversold bounce may be in the works.  The 
last few trading days are building higher lows and the stock is 
coiling tighter under the 15-dma and price resistance at $45.  
The MACD has flattened out and starting to curl higher.  We want 
to stress that this is a high-risk/high reward play for the 
newsletter.  We're going to start the play with a stop at $42.49 
while targeting an official exit price of $49.95.  More 
conservative traders, if there are conservative high-risk 
traders, may want to wait for shares to trade back above the $45 
level or its 15-dma (between $45.25 and $45.35) as confirmation.

Picked on January 30th at $44.69 
Change since picked:       +0.00
Earnings Date           01/24/02 (confirmed)






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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.



PremierInvestor.net Newsletter               Wednesday 01-30-2002
                                                   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/4229_2.asp
=================================================================

In section two:

Stock Bottom / Active Trader
  Closed Bearish Plays: SPY     
  
High Risk/Reward
  New Bullish Play:     QCOM

Split Trader
  split announcement:   GILD, 2-for-1

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

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

  --------------------
  Closed Bearish Plays
  --------------------

SPDRS S&P 500 - SPY - cls: 111.87 chg: +1.59 stop: 110.60 

Order a fresh bottle of windex.  Our crystal ball offered some 
surprising clarity last night but we just missed the placements 
of our stops and new exit points.  In other words, we were darn 
lucky on guessing where the SPY might have traded today but it 
was for naught as the play was stopped out early this morning at 
$110.60, which we did predict would happen.  This still allows 
for a close in the play with a move of $4.97.  Those traders that 
watched the SPY trade to a low near the $108.50 level had an 
opportunity to squeeze just a bit more out of this bearish play 
before the afternoon rebound.  

Picked on January 9th at $115.57
Gain since picked:         +4.97
Earnings Date                n/a 





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

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

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

QUALCOMM - QCOM - close: 44.69 change: +1.51 stop: 42.49

Company Description:
QUALCOMM Incorporated is a leader in developing and delivering 
innovative digital wireless communications products and services 
based on the Company's CDMA digital technology. The Company's 
business areas include CDMA chipsets and system software; 
technology licensing; the Binary Runtime Environment for Wireless
(TM) (BREW(TM)) applications platform; QChat push-to-talk 
technology; Eudora® e-mail software; digital cinema systems; and 
satellite-based systems including portions of the Globalstar(TM) 
system and wireless fleet management systems, OmniTRACS® and 
OmniExpress®. QUALCOMM owns patents that are essential to all of 
the CDMA wireless telecommunications standards that have been 
adopted or proposed for adoption by standards-setting bodies 
worldwide. QUALCOMM has licensed its essential CDMA patent 
portfolio to more than 100 telecommunications equipment 
manufacturers worldwide. (source: company press release)

Why We Like It:
For weeks we have been reading and writing about the bearish and 
negative outlook (guess that's sort of redundant) on the wireless 
and telecom sectors.  Multiple brokers have downgraded the sector 
and internally we have been bearish on QCOM since it broke its 
200-dma in mid-December.  The company did announce earnings last 
week and shares traded higher the following day but Wall Street 
is not happy with the lack of new growth for the industry.  The 
recent rally efforts failed at the 15-dma, which has been 
pressuring the stock for weeks.  However, we feel an upset coming 
along.  This is a complete contrarian-technical kind of play.  We 
don't see any fundamental reason to own QCOM over the short-term 
but a multi-session oversold bounce may be in the works.  The 
last few trading days are building higher lows and the stock is 
coiling tighter under the 15-dma and price resistance at $45.  
The MACD has flattened out and starting to curl higher.  We want 
to stress that this is a high-risk/high reward play for the 
newsletter.  We're going to start the play with a stop at $42.49 
while targeting an official exit price of $49.95.  More 
conservative traders, if there are conservative high-risk 
traders, may want to wait for shares to trade back above the $45 
level or its 15-dma (between $45.25 and $45.35) as confirmation.

Picked on January 30th at $44.69 
Change since picked:       +0.00
Earnings Date           01/24/02 (confirmed)





==================================================================
Split Trader - Stock Split (ST) section
==================================================================

=============
Announcements
=============

Another 2-for-1 at Gilead Sciences

Gilead Sciences (NASDAQ:GILD), the California-based bio-tech 
company, announced today after the market close that their Board 
of Directors had approved a 2-for-1 stock split.

This is the second stock split in two years for GILD and post-
split the company will have approximately 193.3 million shares 
outstanding.  The shareholder record date is February 15th, 2002.  

The payable date for the split is March 7th, 2002 with GILD 
expected to trade at its new post-split price on Friday, March 
8th.  

It is a bit peculiar that the company chose to announce a stock 
split one day before their earnings report.  It makes us wonder if 
management is trying to accomplish something by timing their press 
releases but this is pure speculation on our part.

Shares have produced a nice return for shareholders over 2001 with 
the stock moving from the $30 level to its current price near $70. 

GILD will announce its Q4 and year-end 2001 financials after the 
market close tomorrow, Thursday, January 31st, 2002.

The stock closed at $67.00 on Wednesday.  For a current quote,
click here:
http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=GILD


About the company
Gilead Sciences is a biopharmaceutical company that discovers, 
develops and commercializes therapeutics to advance the care of 
patients suffering from life-threatening diseases worldwide. The 
company has five marketed products and focuses its research and 
clinical programs on anti-infectives, including antivirals, 
antifungals and antibacterials. Headquartered in Foster City, CA, 
Gilead has operations in the United States, Europe and Australia. 
(source: company press release)





==================
  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 

PFB     Pff Bancorp Inc            28.50     +0.85
MTH     Meritage Corp              56.50     +1.00
STW     Standard Commerical        18.50     +1.00

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

EFDS    Efunds Corp                16.97     +1.97
DDIC    DDi Corp                   10.47     +1.43
HPLA    HPL Technologies           15.99     +3.49
SKO     Shopko Stores Inc          11.77     +1.05
FIMG    Fischer Imaging Corp       10.49     +1.49

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

ITW     Illinois Tool Works Inc    69.99     +1.29
RTN     Raytheon Co                37.16     +1.78
SLM     USA Education Inc          91.05     +3.55
NKE     Nike Inc                   61.00     +3.20
WWY     William Wrigley Jr Co      54.10     +1.58
GDW     Golden West Financial      64.30     +1.80

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

CVX     ChevronTexaco Corp         83.10     -2.07
AIG     American Intl. Group       71.29     -1.55
CCU     Clear Channel Comm.        44.35     -1.14
CA      Computer Associates        33.30     -1.57
IDPH    IDEC Pharmaceuticals       57.85     -1.66
DJ      Dow Jones & Co Inc         51.35     -1.09

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

MRVL    Marvell Technology Group   40.65     -1.86
BC      Brunswick Corp             23.80     -0.61
SRNA    Serena Software Inc        25.26     -1.08



=================================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to Contact Support
=================================================================
DISCLAIMER
=================================================================

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

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

*****************************************************************
ADVERTISING INFORMATION

For more information on advertising in PremierInvestor.net
Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

*****************************************************************


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




DISCLAIMER

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