Option Investor
Newsletter

Daily Newsletter, Monday, 02/11/2002

HAVING TROUBLE PRINTING?
Printer friendly version
PremierInvestor.net Newsletter                 Monday 02-11-2002
                                                  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/7136_1.asp
=================================================================

In section one:

Market Wrap:      A Bullish Start For The Week.
Market Sentiment: Accounting panic subsides.
Play-of-the-Day:  Street Light Has Turned Green.

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
      02-11-2002          High     Low     Volume Advance/Decline
DJIA     9884.78 +140.54  9892.80  9710.68 1.14 bln   2106/1001
NASDAQ   1846.66 + 27.78  1946.93  1815.38 1.55 bln   2003/1548
S&P 100   565.08 +  7.80   565.20   555.88   Totals   2109/1549
S&P 500  1111.94 + 15.72  1112.01  1094.68             
RUS 2000  471.32 +  4.65   472.14   466.45
DJ TRANS 2723.66 + 63.72  2724.53  2656.00
VIX        23.27 -  2.20    25.71    23.27
VXN        46.41 -  2.87    49.30    46.41
TRIN        0.49 
PUT/CALL    0.78
-----------------------------------------------------------------

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

A Bullish Start For The Week

Stocks traded measurably higher in Monday's session, continuing
the bullish run that began last Friday.  The major equity averages
steadily worked higher through the session, ending near the day's
highs.  Bonds finished modestly lower, signaled by a rise in
yields across the gamut of Treasuries.

Broad Market

The Dow Jones Industrial Average ($INDU) finished the day at
9884.78, higher by 140.54 points, or 1.44 percent.  The broader
S&P 500 (SPX.X) settled at 1111.94, better by 15.72 points, or
1.43 percent.  The tech heavy Nasdaq-100 (NDX.X) closed at
1477.64, higher by 25.47 points, or 1.75 percent.  The Dow
Jones Transportation Average ($TRAN) was the best performing
broad market average with its 2.39 percent gain.  The $TRAN
finished at 2723.66, better by 63.72 points.

In the bond market, the 13-week Yield (IRX.X) finished at 1.7%,
higher by 1.79 percent on the day.  The benchmark 10-year Yield
finished at 4.899%, higher by 0.40 percent.

There wasn't any economic news to spur the sell-off in
Treasuries.  In fact, the calendar is empty until Wednesday's
retail sales report.  Instead of economic data, the catalyst
for the sell-off in bonds was likely a reaction to last week's
flight to quality rally, which sent bonds higher while stocks
were weak.  The inverse occurred in Monday's session, when
strong stocks attracted capital away from the bond market.

The internals of the market were decidedly positive in Monday's
session.  On the NYSE, advancers outpaced decliners by a 2-to-1
margin.  On the Nasdaq, advancers beat declines by a 4-to-3
margin.  Volume was relatively light on both exchanges.  A mere
1.15 billion shares were exchanged on the NYSE, while 1.54
billion traded on the Nasdaq.  New highs beat new lows on the
NYSE 118 to 31.  There were 84 new highs on the Nasdaq and 52
new lows.

Sector Check

The top performing sector of the day was the Fiber Optic (FOP.X)
group.  The FOP.X gained 5.25 percent on the day.  Ciena
(NASDAQ:CIEN) and Cisco (NASDAQ:CSCO), both components of the
FOP.X, announced Monday morning that they would both supply
AT&T (NYSE:T) with equipment for its optical network.  The exact
terms of the deal were not disclosed, but both companies said
that it was a multiyear deal worth tens of millions.  Shares of
Ciena finished 10.78 percent higher and shares of Cisco finished
5.54 percent higher.

The Oil Service Index (OSX.X) finished 3.80 percent higher after
rising tensions in the Middle East sent the price of crude oil
above $21 a barrel.  Reports of an Israeli air strike sent the
price of crude as high as $21.50 Monday.  Gainers in the Oil
Service sector included Haliburton (NYSE:HAL), which ended 7.74
percent higher, Cooper Cameron (NYSE:CAM), which finished 4.60
percent higher, and Rowan Companies (NYSE:RDC), which ended 4.49
percent higher.

Monday's worst performing sector was the Gold and Silver (XAU.X)
group.  The XAU.X shed 5.36 percent after Prudential Securities
downgraded shares of Newmont Mining (NYSE:NEM).  The Prudential
analysts downgraded shares of Newmont to a sell rating based
upon concerns over the company's reserve levels and the
valuation after the recent rally.  In addition, the price of
spot gold dropped by $3.60 after the big run-up last week.
After topping $300 an ounce, traders foresaw a pullback in the
price of gold, which came to fruition in Monday's session.

Technical Take

Late last week, two of the major market averages reached key 
technical levels, which may help to explain the reversal in
the last two sessions.  For its part, the S&P 500 (SPX.X) traded
down to and rebounded from the 1085 area, which also happens to
be the site of its 38.2 percent retracement bracket.

The retracement bracket I'm working with on the chart below is
anchored at last September's low and early January's high.  The
bracket, in essence, slices up the SPX's rally last fall through
early January.  The first level of support, provided by the
bracket, was overhead at the 1129 area.  On the way down in
late January, the SPX bounced around the 1129 level before
breaking down late in the month.  Progressing down the bracket,
the SPX traded down to its 38.2 percent retracement level last
week at 1085.  In other words, through last Thursday's session,
the SPX had retraced about 38 percent of its rally from last
fall through early January.  The 38 percent level is often a
natural place for prices to find support on the way back down.
It just so happens that selling was exhausted late last week
and we can determine that much through employing a rudimentary
oscillator such as daily Stochastics readings.  Given its
oversold nature and at perceived support at the retracement
level, the SPX rebounded and continued through Monday's
session.

SPX.X - Daily




If the trend that has been in place since early January
continues, the SPX.X should encounter resistance on the way
back up at the 19.1 retracement level at 1129.  That's where
the SPX briefly found support in late January, and it's also
where sellers could eagerly await to get back at break-even
in long positions that have been underwater.  Or, the SPX
could encounter resistance at 1129 this week.  If the index
breaks through that perceived resistance level, then the
remaining shorts will likely cover and carry stocks higher.

The set-up late last week in the Nasdaq-100 (NDX.X) was
similar to that of the SPX.  The biggest difference is that
the NDX traded down to and rebounded from its 50 percent
retracement level.

The bracket I've used for the NDX is similar to the SPX in
that I've anchored at last September's low and the recent
relative high, which in the case of the NDX came in early
December.  For its part, the NDX, through last Thursday,
had given back 50 percent of its rally from last fall,
compared to the SPX's loss of 38.2 percent of its gains.
From that alone, traders can discern that the NDX is
relatively weaker.

To digress, the NDX, too, was short-term oversold last
Thursday judging by its daily Stochastics reading.  The
exhaustion of selling and the perception that the NDX was at
support induced a short covering rally, where buyers carried
NDX issues higher through Monday's close.

NDX.X - Daily




Like the SPX, the NDX faces overhead resistance at the
next level of risk.  In the case of the NDX, that level
comes at 1488, or its 38.2 percent retracement level.  And
if the buyers push the NDX through the 1488 level, then
further short covering may following, carrying stocks higher
still.

After Hours

Late Monday, Nortel (NYSE:NT) announced that its CFO had
resigned.  The company said that the CFO broke internal rules
concerning transfers in his retirement plan.  Nortel officials
said that the officer's actions had no impact on the
company's operations or financial position in any way.

In earnings news, Wellpoint Health Networks (NYSE:WLP)
reported fourth-quarter profits that exceeded expectations.
The company reported $1.65 in earnings per share, while
estimates had called for $1.59 per share in profits.  The
company attributed its strong earnings performance to
exceptional membership growth.  In addition, the company
happily pointed out its $1.2 billion increase in cash and
short-term investments on its balance sheet.  Shares of
Wellpoint finished the regular session at $127.29, $1.30
higher on the day.

Tech Heavy Earnings Week

This week's earnings calendar is filled with four big, high
profile tech firms.  The world's largest chip equipment
maker, Applied Materials (NASDAQ:AMAT), reports after the
bell Tuesday.  The current consensus calls for the company
to lose one penny per share, on revenues of $1.0 billion.

Data storage supplier Brocade (NASDAQ:BRCD) reports after the
bell Wednesday.  The company is expected to earn 0.05 cents
per share on sales of $119 million. 

Graphics chip maker and recent high flyer NVIDIA (NASDAQ:NVDA)
is expected to show a 21 percent quarter-over-quarter increase
in its bottom-line when it reports earnings after the bell
Thursday.  The company is expected to record 0.34 cents per
share in profits on sales of $452 million.

Finally, the world's largest maker of personal computers (PCs),
Dell (NASDAQ:DELL), is slated to report after the bell
Thursday.  The company is expected to have grown its earnings
by about 6 percent from the last quarter.  However, the 0.17
estimate is about 10.5 percent lower than the year-ago
period.  The consensus estimate for revenues is pegged at $7.9
billion.

Eric Utley
Premier Investor


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

Accounting panic subsides.
by Russ Moore

With accounting issues on the back burner, investors were out 
looking for bargains. The lack of negative news allowed the major 
indices to pad Friday’s gains.

The blue chip DOW added +1.5 percent. The NASDAQ gained +1.5 
percent and the NDX +1.8 percent. Volume was light, a concern for 
the bulls, with 1.14 billion shares trading on the NYSE and only 
1.55 billion on the NASDAQ. Winners defeated losers by a margin 
of 21/10 on the big board and 20/15 on the tech index.

With the exception of gold, all sector action was in the green.

Volatility levels have fallen off the table over the last couple 
of days. The VIX reached a high of 28.66 last week and is now 
sitting at 23.27. The VXN has retreated from a high of 51.61 to 
its current 46.41. These readings are indicative of complacency 
amongst the bulls and that lack of concern could prove 
troublesome down the road.

Fund flow tracker, Trim Tabs, believes that at least in the short 
term (next week or so), we could see a market rally. The company 
said “corporate liquidity could be neutral if the new offerings 
continue to wilt. Neutral corporate liquidity would allow for a 
market rally”. Over the moderate and long term the company 
remains bearish.

A short-term rally could be underway however; volume levels will 
have to rise substantially in order for the non-believers to get 
on board.

As I’m completing this article breaking news that the CFO of 
Nortel Networks has resigned is hitting the airwaves. Apparently, 
this is more of a personal, rather than corporate issue. 
Investigators are looking at personal transactions involving Mr. 
Hungle’s 2001 U.S. 401K plan. Given the nature of this 
investigation, the impact on markets should be minimal.


VIX
Monday 02/11 close: 25.50


VXN
Monday 02/11 close: 49.28


30-yr Bonds
Monday 02/11 close: 5.38


Total Put/Call Ratio: .78


Equity Option Put/Call Ratio: .65


Index Option Put/Call Ratio: 1.29


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 36.63

Volume/Open Interest
Maximum calls: 39/56,732
Maximum puts : 35/65,329

Moving Averages
 10 DMA 37
 20 DMA 38
 50 DMA 39
200 DMA 39

Fibanocci Retracements
Relative High: 43.24 (12/06/01)
Relative Low:  27.20 (09/21/01)
38% 37.22
50% 35.31
62% 33.37

===

S&P 100 Index (OEX)
52-Week High:  834.93
52-Week Low:   491.70
Current close: 565.08

Volume/Open Interest
Maximum calls: 580/8,059
Maximum puts : 520/9,549

Moving Averages
 10 DMA  559
 20 DMA  567
 50 DMA  579
200 DMA  596

Fibanocci Retracements
Relative High: 600.80 (01/04/02)
Relative Low:  480.07 (09/21/01)
38% 554.05
50% 539.83
62% 525.37

===

S&P 500 (SPX)
52-Week High:  1530.01
52-Week Low:    965.80
Current close: 1111.94

Volume / Open Interest
Maximum calls: 1150/23,102
Maximum puts : 1100/23,147
Moving Averages
 10 DMA 1102
 20 DMA 1117
 50 DMA 1136
200 DMA 1162

Fibanocci Retracements
Relative High: 1176.97 (01/07/02)
Relative Low:   944.75 (09/21/01)
38% 1087.63
50% 1060.54
62% 1032.99

==

DJIA (INDU)
52-Week High:  11,518.83
52-Week Low:    8,235.81
Current close:  9,884.78

Volume / Open Interest
Maximum Calls:  96/12,129
Maximum Puts    90/20,506

Moving Averages:
 10 DMA  9,749
 20 DMA  9,779
 50 DMA  9,917
200 DMA 10,083

Fibanocci Retracements
Relative High: 10,300.15 (01/07/02)
Relative Low    8,062.34 (09/21/01)
38%  9,445.31
50%  9,181.25
62%  8,912.71

==

Biotech Index (BTK)
52-Week High:  811.61
52-Week Low:   383.28
Current close: 499.98

Volume / Open Interest
Maximum Calls: 460/682
Maximum Puts:  520/606

Moving Averages
 10 DMA 489
 20 DMA 509
 50 DMA 552
200 DMA 545

Fibanocci Retracements
Relative High: 625.15 (12/06/01)
Relative Low:  410.54 (09/21/01)
38% 543.17
50% 517.85
62% 494.09

==

Semiconductor Index (SOX)
52-Week High: 1280.84
52-Week Low:   362.00
Current close: 551.75

Volume / Open Interest
Maximum Calls: 580/1,020
Maximum Puts:  500/1,320

Moving Averages
 10 DMA 542
 20 DMA 538
 50 DMA 546
200 DMA 552

Fibanocci Retracements
Relative High: 606.88 (01/09/02)
Relative Low:  343.93 (09/27/01)
38% 506.43
50% 475.40
62% 443.85

==

Pharmaceutical Index (DRG)
52-Week High:  455.28
52-Week Low:   339.49
Current close: 375.94

Volume / Open Interest
Maximum Calls: 390/690
Maximum Puts:  380/825

Moving Averages
 10 DMA 372
 20 DMA 375
 50 DMA 380
200 DMA 390

Fibanocci Retracements
Relative High: 407.83 (11/26/01)
Relative Low:  353.67 (09/21/01)
38% 384.78
50% 378.88
62% 372.87

*****

CBOT Commitment Of Traders Report: Friday, 02/08. 
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 
01/22/02     342,841   394,041   (51,700)   (9.3%)
01/29/02     345,583   401,923   (56,340)    9.0%
02/05/02     347,583   401,569   (53,986)   (4.3%)

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
01/22/02       125,451    65,423    60,028    (8.6%)
01/29/02       128,826    63,127    63,127     5.1%
02/05/02       128,235    64,404    63,831     1.1%

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 
01/22/02      30,671    34,103    (3,432)     23.0%
01/29/02      31,577    33,651    (2,974)    (13.3%)
02/05/02      32,357    35,405    (3,048)       2.5%

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
01/22/02       11,885     8,787    3,098  
01/29/02        9,709     8,293    1,416    (54.2%)
02/05/02       10,416     8,173    2,243     58.2%

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 
01/22/02      18,152    11,013    7,139      6.6%
01/29/02      19,956    12,171    7,785      9.0%
02/05/02      21,868    12,068    9,800     25.9%

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
01/22/02       5,424     8,969    (3,545)     (5.9%)
01/29/02       5,872     9,709    (3,837)     11.1%
02/05/02       5,764    10,528    (4,764)     24.2%
 
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        +63,831     +65,699        -53,986    -56,340

Total Open
Interest %       (+33.13%)  (+34.23%)      (-7.21%)   (-7.54%)
                 net-long   net-long       net-short  net-short


                     Small Specs             Commercials
DJIA futures     (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value          -4,764     -3,837          +9,800   +7,785
Total Open
interest %       (-29.24%)    (-24.63%)      (+28.88%)  (+24.48)
                 net-short   net-short       net-long    net-long


                     Small Spec              Commercials
NASDAQ 100      (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value         +2,243      +1,416         -3,048    -2,074

Total Open
Interest %        (+12.07%)   (+7.86%)     (-4.50%) (-3.18%)
                 net-long   net-long      net-short  net-short


What COT Data Tells Us
----------------------
Indices:.Very little change in Commercial activity. Keep in mind 
that we are looking for an increase in diversion between 
Commercials and Small Specs. 

Gold: Commercials were busy adding to their net-short positions 
this week while gold continued to move higher. The precious metal 
seems to be attracting a lot of attention these days perhaps as a 
result of the growing weakness in the Japanese markets. 

01/08 24,042 contracts net-short
01/15 53,938 contracts net-short
01/22 50,959 contracts net-short
01/29 31,515 contracts net-short
02/05 58,180 contracts net-short

Data compiled as of Tuesday 02/05 by the CFTC.



=========================
Play-of-the-Day (Bearish)
=========================
(( new active trader/non-tech play ))

Phelps Dodge - PD - close: 36.07 change: +1.17 stop: 33.99

Company Description:
Phelps Dodge Corporation is the world's second largest producer 
of copper. The company also is the world's largest producer of 
continuous-cast copper rod and molybdenum, and is among the 
largest producers of carbon black and magnet wire. Phelps Dodge 
has operations and investments in mines and manufacturing 
facilities in 27 countries. (source: company press release)

Why We Like It:
Our Senior Market Technician, Mr. Bailey, outlined his play idea 
for a move in Phelps Dodge in the weekend market wrap.  His 
trigger price was a move over $35.43.  Almost on queue this 
morning, shares of PD rallied higher and immediately broke above 
our retracement level we were watching.  Shares then began to 
consolidate sideways above the $35.60 area before bouncing higher 
again towards the close.  The close over $36 should be very 
encouraging for the bulls but watch out for the copper futures.  
If you'll notice, the copper futures (hg02h) traded relatively 
lower today but remained above the $0.72 level, which should be 
support.  A breakdown below 72 cents for copper would probably 
turn me off or make us very cautious on our PD play.  Likewise, 
interested bulls in this PD play need to develop some faith in 
this rally higher as I personally have a hard time committing 
capital with the 200-dma looming overhead at $36.65.  However, 
another positive clue for bulls is the rising volume on the last 
two days of gains.  This is somewhat a case of conflicting 
signals but we're placing our bet that the bulls will be able to 
power ahead to the $38 to $40 level.  Only short-term traders 
should apply and you may want to only consider half positions.  
We will start the play with a stop at $33.99.

Picked on February 11th at $36.07
Change since picked:        +0.00
Earnings Date            01/30/02 (confirmed)






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

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

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

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

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

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


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



PremierInvestor.net Newsletter                  Monday 02-11-2002
                                                   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/7136_2.asp
=================================================================

In section two:

NetBulls Tech Stocks
  Stop/Notes adjustments:  COGN

StockBottom Non-tech Stocks
  Stop/Notes adjustments:  CHS, ABF   
  New Bullish Play:        PD
  Closed Bullish Play:     PHSY

High Risk/High Reward
  Closed Bearish Play:     QCOM

Split Trader
  Announcements:           GG - 2-for-1 announcement

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)

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

===================
NB Stop/Notes Adjustments
===================

Bullish Plays
-------------

Cognos Inc. - COGN - close: 28.45 change: +1.46 stop: 26.37

Positive news and analyst comments on Cognos' field of software 
helped boost shares over five percent today.  One report claimed 
that increasing demand for analytical software could mean that 
this sector could see revenue growth between 30 to 35 percent 
over the next two to three years.  We're encouraged by the 
stock's performance and its close over the $28 level of 
resistance.  We will officially make our exit price $29.50 even 
though we think the stock will be able to trade higher than this.


=================================================================
AT Active Trader/Non-tech plays
=================================================================

===================
AT Stop Adjustments
===================

Bullish Plays
-------------

Airborne Inc - ABF - close: 15.81 change: +0.49 stop: 14.95

Strong comments from FDX when they reaffirm their earnings and 
revenue guidance helped boost the group of freight carriers like 
ABF and UPS.  This pushed ABF and over the $16 level and through 
our trigger point at $16.05 (our new entry price).  This means we 
have started the play with a stop at $14.95.  While this is great 
news for the industry group traders will want to reconfirm stock 
direction on Tuesday as shares of FDX have rallied right to 
overhead resistance and stopped.  ABF also fell back to the $16 
area late in the day.

---

Chico's F A S Inc - CHS - cls: 33.50 chg: +1.46 stop: 30.55 *new*

A strong day for the retail sector (RLX.X) helped push shares of 
CHS higher again.  This time the stock rallied right to the $34 
level before pulling back into the close.  We are raising our 
stop to $30.55 while reiterating our exit price of $34.75.


===========
AT New Play
===========

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


Phelps Dodge - PD - close: 36.07 change: +1.17 stop: 33.99

Company Description:
Phelps Dodge Corporation is the world's second largest producer 
of copper. The company also is the world's largest producer of 
continuous-cast copper rod and molybdenum, and is among the 
largest producers of carbon black and magnet wire. Phelps Dodge 
has operations and investments in mines and manufacturing 
facilities in 27 countries. (source: company press release)

Why We Like It:
Our Senior Market Technician, Mr. Bailey, outlined his play idea 
for a move in Phelps Dodge in the weekend market wrap.  His 
trigger price was a move over $35.43.  Almost on queue this 
morning, shares of PD rallied higher and immediately broke above 
our retracement level we were watching.  Shares then began to 
consolidate sideways above the $35.60 area before bouncing higher 
again towards the close.  The close over $36 should be very 
encouraging for the bulls but watch out for the copper futures.  
If you'll notice, the copper futures (hg02h) traded relatively 
lower today but remained above the $0.72 level, which should be 
support.  A breakdown below 72 cents for copper would probably 
turn me off or make us very cautious on our PD play.  Likewise, 
interested bulls in this PD play need to develop some faith in 
this rally higher as I personally have a hard time committing 
capital with the 200-dma looming overhead at $36.65.  However, 
another positive clue for bulls is the rising volume on the last 
two days of gains.  This is somewhat a case of conflicting 
signals but we're placing our bet that the bulls will be able to 
power ahead to the $38 to $40 level.  Only short-term traders 
should apply and you may want to only consider half positions.  
We will start the play with a stop at $33.99.

Picked on February 11th at $36.07
Change since picked:        +0.00
Earnings Date            01/30/02 (confirmed)





===============
AT Closed Play
===============

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

PacifiCare Health - PHSY - cls: 18.98 chg: -2.26 stop: 19.75

If you left for a late lunch today with a long play in PHSY you 
probably thought the stock was moving along fine.  Shares had 
drifted back to the $20.50 area and were starting to gain ground 
again during the afternoon.  Then suddenly shares fell into a 
black hole from $21.25 to $17.50 in less than 30 minutes.  Volume 
was very strong as investors poured out of the stock.  The 
reaction was to a lawsuit filed by the Texas Attorney General 
over healthcare payment violations.  The company has come out to 
defend themselves with a press release after the bell but the 
damage is done and we have been stopped out of the play.  Wall 
Street still expects PHSY to announce earnings on Wednesday.

Picked on February 6th at $20.25  
Change since picked:       -0.50
Earnings Date           02/13/02 (confirmed)






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

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

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

QUALCOMM - QCOM - close: 41.28 change: +3.82 stop: 38.46 

Should we be surprised that most of Wall Street came out to 
defend QCOM on Monday after hitting new lows on Friday?  Traders 
who had exit strategies in place on Friday were rewarded.  A 
number of brokers came out to defend the stock this morning and 
QCOM gapped up to $38.81 at the open.  This was above our stop of 
$38.46.  Therefore we have closed the play at the opening price 
for a move of +3.65.  The question for investors now is whether 
or not QCOM can sustain any type of meaningful rally or will 
bears merely try to reassert themselves in a couple of days after 
the excitement wears off.

Picked on February 1st at $42.46 
Gain since picked:         +3.65
Earnings Date           01/24/02 (confirmed)






=================================================================
Split Trader / Stock Splits (ST) section
==================================================================

-------------------
Split Announcements
-------------------

Goldcorp Offers Vote on 2-for-1 Split.

With the Gold and Silver index (XAU.X) making quite a rally in the 
past few weeks it is no surprise to read about gold stocks in the 
news.  Once such company is Goldcorp Inc. (NYSE:GG) who's shares 
have broken out of a sideways trading pattern and risen from the 
$12 level to the $16 level in the last six weeks.

Goldcorp just recently announced their earnings last week and 
management has now decided to offer a 2-for-1 stock split upon 
shareholder approval.

All shareholders on record as of Feb. 19th, 2002 will be entitled 
to vote at a Special Meeting on March 21st to approve the split.  
The company has not given a payable or ex-date but it could be 
soon after the shareholder meeting.  Post-split the company will 
have 165 million shares outstanding.

The stock closed at $15.72 on Monday.  For a current quote,
click here:
http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=GG


About the company
Goldcorp is a North American based gold producer. By market 
capitalization, we are in the top ten of gold producers globally. 
Gold production comes from our rich, high grade mine in Red Lake, 
Northwestern Ontario, Canada and our Wharf Mine in the historic 
Lead Mining area in the Black Hills of South Dakota, USA. The Red 
Lake Mine is one of the richest gold mines in the world. In 
addition we own an industrial minerals operation in Saskatchewan, 
Canada. All of our operations are 100% owned. Goldcorp is listed 
on the New York and Toronto Stock Exchanges under the trading 
symbols of GG and G, respectively. The company is in excellent 
financial condition, with no debt and positive free cash flow and 
earnings. Goldcorp's production is unhedged, which allows its 
shareholders to participate fully in a rising gold price 
environment. (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 

TOT     Total Fina                 72.05     +0.71
BA      Boening Co                 43.00     +1.30
UNP     Union Pacific Corp         61.65     +1.65
CNI     Canadian Natl Railway      50.58     +1.36
GDW     Golden West Financial      64.25     +1.70
ELUX    Electrolux                 33.90     +0.90

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

CTB     Cooper Tire & Rubber Co    17.00     +1.20
HPC     Hercules Inc               10.55     +1.17
MDR     McDermott Intl. Inc        14.20     +1.84
HAND    Handspring Inc              5.90     +1.49
TASR    Taser International        18.80     +1.72

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

SGP     Schering-Plough Corp       34.10     +1.83
FTE     France Telecom             30.08     +1.18
QCOM    QUALCOMM                   41.28     +3.82
V       Vivendi Universal          42.91     +1.51
DD      Dupont                     44.56     +1.84
GCI     Gannett Co Inc             73.31     +2.36
WY      Weyerhaeuser Co            62.32     +3.42

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

MAR     Marriott Intl. Inc         37.49     -1.04
ADRX    Andrx Corp                 45.03     -3.97
ROOM    Hotel Reservations Ntwrk   43.25     -2.14
WFMI    Whole Foods Market Inc     39.55     -1.38

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

MDTH    Medcath Corp               21.35     -0.89



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

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

To ensure you continue to receive email from Option Investor please add "support@optioninvestor.com"

Option Investor Inc
PO Box 630350
Littleton, CO 80163

E-Mail Format Newsletter Archives