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Daily Newsletter, Thursday, 02/14/2002

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PremierInvestor.net Newsletter               Thursday 02-14-2002
                                                  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
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In section one:

Market Wrap:      Robbing Peter to pay Paul?
Market Sentiment: Treading water.
Play-of-the-Day:  2 Failed Rallies + 1 Breakdown

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
      02-14-2002           High     Low     Volume Advance/Decline
DJIA    10001.99 + 12.32 10052.29  9959.23 1.26 bln   1468/1624
NASDAQ   1843.37 - 15.79  1877.74  1840.78 1.66 bln   1367/2121
S&P 100   567.13 -  0.66   571.40   564.76   Totals   2835/3745
S&P 500  1116.48 -  2.03  1124.72  1112.30             
RUS 2000  470.75 -  5.58   477.36   470.75
DJ TRANS 2686.67 - 25.02  2721.71  2681.34
VIX        22.89 +  0.47    23.66    22.47
VXN        42.14 -  2.33    45.04    42.14
TRIN        1.27 
PUT/CALL    0.91
-----------------------------------------------------------------

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

Robbing Peter to pay Paul?

Shares of Denver based telecom services provider Qwest 
Communications (NYSE:Q) fell 12.8% to a new 52-week low of $7.49 
after the once high flying baby bell said it would have to access 
a $4 billion line of credit, which was four times the amount Wall 
Street had expected, in order to pay off $3.2 billion in short-
term debt.  The move came after the company was unable to find 
buyers for its short-term debt commonly known as commercial 
paper.  

The tapping of credit lines often suggests that a company is 
having trouble borrowing money, and that raises speculation that 
a company may run out of cash to pay its debts or fund its 
operation.

Qwest Communications Chart - Daily Interval




Shares of Qwest (Q) look like they are in serious trouble as the 
stock breaks to a new 52-week low.  I can't speak for the bank 
that has provided the $4 billion credit facility, but if it were 
me loaning the $4 billion, then I'd want some type of leverage to 
help secure that loan.  One way to provide that hedge would be to 
short some of the common stock, just in case the company isn't 
able to repay the loan.  

The recent bankruptcy filing by fellow telecom members Global 
Crossing (GBLXQ) and McLeodUSA (MCLDQ) have rocked the sector as 
demand for voice and data services has slowed and pricing has 
become very competitive.  Qwest has roughly $3.2 billion in 
commercial paper and $1.2 billion in long-term debt coming due in 
2002.  According to Lehman Bothers, Qwest is the No. 12 U.S. 
corporate bond issuer, with about $19 billion outstanding as of 
January 31st.  The beleaguered telecom carrier said it might 
raise cash by selling assets such as some telephone access lines 
or its cash generating DEX directory publishing business. 

To make matters worse, S&P cut Qwest's debt rating to BBB from 
BBB+ and assigned its outlook as negative.

In an attempt to further cut spending and preserve capital, Qwest 
announced on Thursday further cuts in it capital spending budget 
to $3.7 billion from $4 billion.  Last year, Qwest was expected 
to have a capital spending budget of $7.5 billion for 2002.  Its 
capital spending budget was $8.54 billion in 2001.

Other telecom/communications under pressure

With Qwest announcing it would have to access its bank credit 
facilities, sellers showed up in other telecom and networking 
related stocks on worries that there may be other players in the 
sector with similar problems looming on the horizon.  The 
Wireless Telecom Index (YLS.X) fell 2.87%, Fiber Optic Index 
(FOP.X) declines 4.7%, Combined Telecom (IXTCX) dropped 3.18%, 
North American Telecom (XTC.X) slid 2.75% and the Networking 
Index (NWX.X) fell 3.13%.

Subscribers that took our telecom-related bearish play in shares 
of Time Warner Telecom (NASDAQ:TWTC) saw this stock shed 12.83% 
of its value today (a nice gain for those short/put) as the stock 
dropped to $8.15.

Time Warner Telecom Chart - Daily Interval




Qwest (Q) is based in Denver, CO, and Time Warner Telecom (TWTC) 
is based about 4 miles south in suburbia Littleton, CO.  Both are 
telecom related and both stocks got hammered to the downside 
today.  All we're going to do is follow the trade lower with a 
trailing stop.  How low will she go?  We're not sure, but all a 
trader/investor wants to do at this point is protect their 
bearish gains.  The bearish vertical count from the point and 
figure chart is $7.50 and that's just about the middle of our 
"Zone of Accumulation" from retracement.  Don't worry, the only 
accumulation we think should be done near-term is by buying of 
stock by bears that want to lock in some handsome gains.

SEC inquiry hits NVIDIA

Shares of NVIDIA Corporation (NASDAQ:NVDA) $62.16 +1.23% are 
under selling pressure in evening trading at $55.00 (-11.55% from 
close) after the company reported 4th-quarter pro-forma earnings 
of $0.43 a share, which was 9-cents better than consensus 
estimates.  Revenues for the graphic software maker grew 129% to 
$499.9 million, which also beat revenue estimates of $444.56 
million.

The "good news" on earnings was offset by the company announcing 
that it would conduct an internal review of the recording of 
certain reserves and the timing of recording certain expenses in 
its financial statements, per an inquiry by the Securities 
Exchange Commission (SEC).  

In accordance with the SEC inquiry dating back to January, NVIDIA 
(NVDA) will launch its own internal fact finding mission to 
answer SEC specific questions regarding 1) the recording of 
reserves in Q4 of fiscal 2000 and Q1 of fiscal 2001; and 2) the 
possibility that certain product costs of up to $3.6 million 
should have been recorded in Q1 of fiscal 2001, but were recorded 
in Q2 and Q3 of the same year.  The SEC inquiry followed a review 
of information provided by the company in connection with the 
SEC's previously announced investigation of alleged insider 
trading by certain non-executive employees.

NVIDIA Corporation Chart - Daily Interval




There are two times that I see the $55 level having come into 
play in recent past for shares of NVIDIA.  I wondered why the 
stock would trade the $55 level in after-hours trading once the 
SEC news found seller in the stock in after-hours trading.  The 
recent pullback where I have place upward trend came right near 
the $55 level, but most likely the $55 level should be tied back 
to November 29th when 44 million shares traded (red spike in 
volume) as the stock was added to the S&P 500.  The reason the 
spike in volume records as red (sell volume) is most likely due 
to institutions using the liquidity of mutual funds that track 
the S&P 500 to sell into.

While the $55 level has some technical significance, so does the 
$50 level or our 38.2% retracement level.  I actually place 
retracement on the above chart by anchoring the retracement 
bracket to the 12/21/00 low and then "fitting" the 38.2% 
retracement level right at the June highs, which really looks 
like it served as a pivot, or where the stock was able to 
eventually break through that level in November, pullback and 
test that level and then launch to the upper end of retracement.

It is always a tough decision for what type of trade if any to 
put on at this point.  The SEC inquiry is just that.  An inquiry.  
There has been no admittance of wrongdoing, but in the current 
market environment, that by itself will most likely way on the 
stock.  If the company is reporting earnings accurately and 
within generally accepted accounting rules, then the stock has 
had strong fundamental growth.  After reporting earnings tonight, 
the company actually increased guidance significantly higher.  
Guidance for fiscal 2003 (ending January) should have revenue of 
$2.3-$2.5 billion and EPS of $1.70-$1.75.  Prior to this 
guidance, analysts were looking for revenues of $1.98 billion and 
EPS of $1.42.  

A trader measuring risk/reward from after hours trading at $55 is 
looking at the 19.1% retracement level and seeing $5 upside and 
retracement at the 38.2% level as $5 downside.  If you believe 
like I do that market makers use the retracement brackets to 
understand risk/reward levels in their inventory, we may better 
understand why the stock is trading $55 in after-hours.  Bears 
looking for a shorting opportunity will look for any rally near 
the $60 level as an entry point and targeting the $50 near-term.  
This way a trader/investor can control their risk with a stop 
just above at $64.

As I've said in the past... anytime there is "speculation" in a 
stock, it is usually best to stay away from that stock (bullish 
or bearish).  If you end up on the wrong side of the speculation, 
you can end up in big trouble.  The best way I know to play the 
speculation is to do it in the options market where the purchase 
of the option is the most you can lose.  One key to options 
trading is to no over leverage.

Negative Psychology

"Not again" is going to be the psychology of investors tomorrow.  
With Qwest (Q) pulling down bank credit because they aren't able 
to float some short-term notes in the bond market and SEC 
concerns on a tech bull's favorite in NVIDIA (NVDA), a bulls 
psychology will be shaky at best.

I'm not a psychiatrist, but even I have trouble right now telling 
an investor with a time horizon of more than 24-hours to step in 
and buy a stock right now and tell them "it won't happen with 
this stock."  We're going to remain very aggressive with our 
stops in all positions bullish and bearish.  Yes, we may get 
stopped out of a trade like we did yesterday in shares of 
Citigroup (NYSE:C).  If you didn't notice, we got stopped out 
that the pinnacle of yesterday's high at $46.15.  Subscribers may 
have walked away with a tiny gain, but that also raised cash in 
their account and in an uncertain market environment that isn't 
all that bad. 

Bulls locked in a nice gain in shares of Chico's FAS (NYSE:CHS) 
at our exit price of $34.75 for a 17% gain.  It took a couple of 
weeks to get it, but that may well beat a year's return for the 
S&P 500 (up or down).

Jeff Bailey
Senior Market Technician


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

Treading water.
Russ Moore

Enron hearings took the lead role on Wall Street today, leaving 
the markets with another narrow range, light volume session.

The DOW was able to climb just over the breakeven mark with a 
gain of +0.1 percent. Both the NASDAQ and NDX ended with 
fractional losses of -0.8 percent. The NYSE saw 1.25 billion 
shares change hands while the NASDAQ moved 1.66 billion. On the 
NYSE it was losers slipping past winners by a margin of 16/15 and 
21/14 on the NASDAQ.

Oil service, gold, financial and natural gas posted green arrows 
on the broad markets. Tech action was weak across the board.

The lack of volume is becoming a major concern for many Wall 
Street participants and analysts. The S&P investment policy 
committee noted in its daily research note, “While a short-term 
low may be close at hand, for a rally to have any staying power 
there must be a major improvement in up/down volume figures on 
both the NYSE and NASDAQ. Both volume measures are still in 
bearish configurations and for these indicators to turn bullish, 
there must be a 10-day period of accumulation by institutions. 
Until we see a change on both price and volume trends, the upside 
potential is limited”.

Following commercial activity as shown below, we’ve seen little 
change in position over the last couple of months. In fact, the 
commercial/small spec spread has been close to current levels for 
the last six months. We follow the COT activity closely and when 
a move (accumulation) by the big boys/girls gets underway, you’ll 
be the first to know. 


VIX
Thursday 02/14 close: 22.89


VXN
Thursday 02/14 close: 42.14


30-yr Bonds
Thursday 02/14 close: 5.42


Total Put/Call Ratio: .91


Equity Option Put/Call Ratio: .67


Index Option Put/Call Ratio: 1.78


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 36.88

Volume/Open Interest
Maximum calls: 40/57,223
Maximum puts : 35/58,572

Moving Averages
 10 DMA 36
 20 DMA 37
 50 DMA 39
200 DMA 39

Fibanocci Retracements
Relative High: 43.24 (12/06/01)
Relative Low:  34.97 (02/08/02)
38% 38.13
50% 39.11
62% 40.10

===

S&P 100 Index (OEX)
52-Week High:  834.93
52-Week Low:   491.70
Current close: 567.13

Volume/Open Interest
Maximum calls: 575/7,392
Maximum puts : 500/9,315

Moving Averages
 10 DMA  559
 20 DMA  565
 50 DMA  578
200 DMA  595

Fibanocci Retracements
Relative High: 600.80 (01/04/02)
Relative Low:  546.13 (01/30/02)
38% 567.00
50% 573.44
62% 579.99

===

S&P 500 (SPX)
52-Week High:  1530.01
52-Week Low:    965.80
Current close: 1116.48

Volume / Open Interest
Maximum calls: 1150/23,048
Maximum puts : 1100/23,958
Moving Averages
 10 DMA 1102
 20 DMA 1113
 50 DMA 1134
200 DMA 1160

Fibanocci Retracements
Relative High: 1176.97 (01/07/02)
Relative Low:  1077.78 (02/06/02)
38% 1115.67
50% 1127.37
62% 1139.27

==

DJIA (INDU)
52-Week High:  11,518.83
52-Week Low:    8,235.81
Current close: 10,001.99

Volume / Open Interest
Maximum Calls:  96/11,983
Maximum Puts    90/20,342

Moving Averages:
 10 DMA  9,804
 20 DMA  9,795
 50 DMA  9,925
200 DMA 10,074

Fibanocci Retracements
Relative High: 10,300.15 (01/07/02)
Relative Low    9,529.46 (01/30/02)
38%  9,823.86
50%  9,914.80
62% 10,007.28

==

Biotech Index (BTK)
52-Week High:  811.61
52-Week Low:   383.28
Current close: 503.09

Volume / Open Interest
Maximum Calls: 520/604
Maximum Puts:  520/760

Moving Averages
 10 DMA 493
 20 DMA 505
 50 DMA 547
200 DMA 545

Fibanocci Retracements
Relative High: 625.15 (12/06/01)
Relative Low:  450.20 (02/07/02)
38% 517.03
50% 537.67
62% 558.66

==

Semiconductor Index (SOX)
52-Week High: 1280.84
52-Week Low:   362.00
Current close: 564.95

Volume / Open Interest
Maximum Calls: 580/1,366
Maximum Puts:  540/  740

Moving Averages
 10 DMA 546
 20 DMA 539
 50 DMA 549
200 DMA 551

Fibanocci Retracements
Relative High: 606.88 (01/09/02)
Relative Low:  499.09 (01/22/02)
38% 540.26
50% 552.98
62% 565.91

==

Pharmaceutical Index (DRG)
52-Week High:  455.28
52-Week Low:   339.49
Current close: 379.49

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

Moving Averages
 10 DMA 374
 20 DMA 375
 50 DMA 379
200 DMA 390

Fibanocci Retracements
Relative High: 403.83 (11/26/01)
Relative Low:  365.22 (02/08/02)
38% 379.93
50% 384.51
62% 389.17

*****

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)
=========================

Cabot Microelectronics - CCMP - cls: 59.29 chg: -2.82 stop: 63.01

Company Description:
Cabot Microelectronics Corp., headquartered in Aurora, Ill., is 
the leading supplier of CMP slurries for polishing various 
materials used in semiconductor manufacturing processes. These 
products enable IC manufacturers to make smaller, faster and more 
complex devices and improve their production processes. 
(source: company press release)

Why We Like It:
We like CCMP as a short play mainly due to its technical 
breakdown in Thursday's session.  Shares fell through support at 
$70 in late January after they announced disappointing earnings 
and lower revenues.  Shares have not responded lately to the new 
interest in the semiconductor sector and have moved the opposite 
direction.  The point-and-figure chart shows big investors 
selling the stock and a move to $59.00 would indicate a new 
double bottom breakout to the downside.  Actually bears should be 
pretty enthusiastic about CCMP as recent chart history shows a 
real lack of buyers.  The fallout from the earnings report on 
Jan. 24th took the stock to $60.  Shares tried twice to rebound 
through its 200-dma between $66 and $67 but failed.  Today's 
breakdown comes on big volume of two million shares versus the 
average of just one million.  Traders should confirm the stock 
direction tomorrow but we are going to start with a stop at 
$63.01, which is one cent over today's high.  Our initial target 
is $55 but CCMP might fall to $50 if given enough time.  We're 
going to take a wait and see approach before setting an exit 
price but short-term traders looking for a quick move should 
consider an exit near $55.

Picked on February 14th at $59.29 
Change since picked:        +0.00
Earnings Date            01/24/02 (confirmed)





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

PremierInvestor.net Newsletter                  Thursday 02-14-2002
                                                     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/7541_2.asp
=================================================================

In section two:

Net Bulls
  New Bearish Play:      CCMP
  Bearish Play Updates:  CLS, TWTC

Stock Bottom / Active Trader
  Bullish Play Updates:  ABF, HRB, PD, UNH
  Closed Bullish Play:   CHS

High Risk / High Reward
  Bullish Play Updates:  GMST

Split Trader
  announcement:          GNWR

Trading Ideas
  Value Plays With Bullish Signals
  Breakout to Upside (Stocks $5 to $20)
  Breakout to Upside (Stocks over $20)
  Breakout to Downside (Stocks over $20)
  Recently Overbought With Bearish Signals (Stocks over $20)


==================================================================
Net Bulls (NB) / Tech Stock section
==================================================================

============
NB New Plays
============

  -----------
  New Bearish
  -----------

Cabot Microelectronics - CCMP - cls: 59.29 chg: -2.82 stop: 63.01

Company Description:
Cabot Microelectronics Corp., headquartered in Aurora, Ill., is 
the leading supplier of CMP slurries for polishing various 
materials used in semiconductor manufacturing processes. These 
products enable IC manufacturers to make smaller, faster and more 
complex devices and improve their production processes. 
(source: company press release)

Why We Like It:
We like CCMP as a short play mainly due to its technical 
breakdown in Thursday's session.  Shares fell through support at 
$70 in late January after they announced disappointing earnings 
and lower revenues.  Shares have not responded lately to the new 
interest in the semiconductor sector and have moved the opposite 
direction.  The point-and-figure chart shows big investors 
selling the stock and a move to $59.00 would indicate a new 
double bottom breakout to the downside.  Actually bears should be 
pretty enthusiastic about CCMP as recent chart history shows a 
real lack of buyers.  The fallout from the earnings report on 
Jan. 24th took the stock to $60.  Shares tried twice to rebound 
through its 200-dma between $66 and $67 but failed.  Today's 
breakdown comes on big volume of two million shares versus the 
average of just one million.  Traders should confirm the stock 
direction tomorrow but we are going to start with a stop at 
$63.01, which is one cent over today's high.  Our initial target 
is $55 but CCMP might fall to $50 if given enough time.  We're 
going to take a wait and see approach before setting an exit 
price but short-term traders looking for a quick move should 
consider an exit near $55.

Picked on February 14th at $59.29 
Change since picked:        +0.00
Earnings Date            01/24/02 (confirmed)





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

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

Celestica - CLS - close: 39.00 change: +0.09 stop: 42.05 

As our readers know, CLS happens to be a big OEM supplier to a 
lot of the larger hardware companies on Wall Street.  Two of 
these big clients are HWP and DELL.  HWP recently announced 
positive earnings, which could have been translated into positive 
news for CLS.  If business is good for HWP then it should filter 
to CLS.  That did not appear to happen as evidenced by the CLS 
stock price.  The second big client above is DELL who announced 
earnings after the bell today.  DELL said that PC sales were 
still lagging (that's bad) but they took marketshare from their 
rivals and made up for lost income to businesses by focusing on 
retail/personal consumers (that's good).  However, that's only 
good for DELL as overall lagging PC sales are bad news for CLS.  
How Wall Street will react to DELL's numbers is unknown.  
Currently, the stock is trading up about 50-cents in after-hours 
but that doesn't mean that investors will still be buying two 
days from now.  Of course we're interested in how this translates 
to CLS and we feel it will continue to be a negative for the 
company.  The lack of strength in the Nasdaq today is a broad 
market sign that investors are not willing to re-invest in tech 
right now.  Shares of CLS rallied to their 10-dma today before 
pulling back and the stock remains range bounce between $38 and 
$40.  Conservative traders may want to consider creating new 
short positions near $40 with a very tight stop or wait for a 
breakdown under $38.  We are waiting for that breakdown under $38 
before adjusting our stop from above the 200-dma.

Picked on February 5th at $39.40
Gain since picked:         +0.40
Earnings Date           01/31/02 (confirmed)




---

Time Warner Telecom - TWTC - cls: 8.15 chg: -1.20 stop: 8.54 *new*

It has not been a good week for telecom stocks.  Earlier in the 
week the group was pounded by negative news from Nortel Networks 
(NT) and today the sector was hit hard by Qwest (Q).  News came 
out today saying that Q would use all of its $4 billion credit 
line when earlier reports had only stated they would use $1 
billion.  Q has been forced to turn to its credit line at the 
banks because Wall Street isn't interested in their short-term 
notes (no one is buying).  This means they'll likely be paying a 
higher interest rate for these loans at the bank, which will hurt 
earnings.  In response shares of Q dropped 12.8%.  However, on 
top of this news, the group was also feeling pressure from more 
negative news on the optical/networking side of the equation.  
Reports that CSCO had been taking marketshare from JNPR pushed 
shares of JNPR to a 16% decline and a share price under $11.  
Nortel also fell an additional 6.3% today and selling hit our 
bearish play TWTC as well.  TWTC broke through the $9 level and 
closed at its low for the day with a 12.8% loss.  Today's close 
for Time Warner Telecom is below the previous lows from late 
October where shares found support at the $8.35 level.  It now 
appears that bears are targeting the early October lows near 
$6.00.  We still feel that short-term traders may want to target 
an exit near $7.50 and those willing to take a 14% gain should 
consider closing the play now at $8.15.  The stock is very 
oversold but there doesn't appear to be any relief in sight at 
the moment.  Therefore we are going to drop our stop to $8.54, 
which should protect a 10% gain in the play.  We are also going 
to add an exit price of $6.00 on the slight chance that shares 
spike down during some further undisclosed bit of bad news in the 
industry.  

Picked on February 12th at $ 9.49 
Change since picked:        +1.34
Earnings Date            02/05/02 (confirmed)






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

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

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

Airborne Inc - ABF - close: 15.98 change: +0.04 stop: 14.95

I was discussing our play list with Jeff Bailey, our Senior 
Market Technician, and he reminded me that UPS' negotiations with 
the Teamster union may become a factor in our play on ABF.  
Here's what he told me but don't hold me to the details it is the 
general idea that matters.  Currently, the Teamster's contract 
runs through July at UPS.  Evidently, the union leadership is 
planning on a big fight for higher wages, Medicare costs, etc.  
I'm sure these negotiations are ongoing but consider this...if 
the Wall Street is starting to suspect a fight and a possible 
strike by Teamsters at UPS where would you, the local packing 
coordinator for corporate America start looking for a back up.  
Let's put it another way.  If I'm looking ahead to the summer 
months I don't want any interruptions in my own business because 
UPS is dealing with a possible strike so I might start looking 
elsewhere like FDX, ABF and the U.S. Postal Service.  We fully 
realize at this point it is pure speculation and doesn't have a 
lot of affect on our short-term play for ABF but longer-term 
investors in the stock may want to think about it (and check to 
see what ABF's relationship with the Teamsters are at and when 
the contract expires).  In the mean time, shares of ABF continue 
to edge higher despite weakness in the Dow Transports today.  
Currently our target for this play is the $18 area.

Picked on February 11th at $16.05 
Change since picked:        -0.07
Earnings Date            02/01/02 (confirmed)




---

H R Block - HRB - close: 46.73 chg: -0.56 stop: 44.75 *new*

There were a couple of press releases for HRB today but nothing 
that would affect the stock price.  Instead, shares appeared to 
drift lower before spiking down under the $47 level near the end 
of the day.  This move helped produced a bearish crossover in the 
MACD, which should have conservative traders on the defensive.  
The week-long resistance near $48 has been too tough for the 
stock but volume has been very light lately as well.  We are 
expecting shares to pull back tomorrow but if HRB closes under 
$46 we'd become even more cautious and shy away from new 
positions.  As a matter of fact, we're going to raise our stop to 
$44.75 as we believe the $45 level should act as strong support.  
Earnings for HRB should be come up in about two weeks.

Picked on February 5th at $47.01 
Gain since picked:         -0.28
Earnings Date           02/27/02 (unconfirmed)




---

Phelps Dodge - PD - close: 38.65 change: +0.57 stop: 34.75

We updated our PD play on Wednesday after the hg02h Copper 
futures rallied to the $0.75 level, which fueled a big move in 
shares of PD.  We had been looking for a move to 74 cents for 
copper but the metal broke out to 75 cents and PD hurdled above 
its 200-dma and didn't look back.  The copper futures pulled back 
some today but traders continue to pile into PD and shares added 
another 1.49%.  Volume has been very strong the last two sessions 
supporting the rally and adding conviction to the move.  Last 
night we created an exit price of $39.85 and if PD trades at or 
above it we'll close the play.  We also raised our stop to 
$34.75, which remains below the trend line of higher lows from 
late January.  However, more conservative traders can probably 
get away with a much tighter stop.  If you feel the need, then 
consider stops at just under the 10-dma near $35.35, just under 
$36, which was previous resistance, or just under $37, which was 
resistance in early December.  At this point shares of PD are 
very overbought short-term and could pull back soon.  If they do 
we would look for new support or a bounce at $37.50 or $36.50.

Picked on February 11th at $36.07
Change since picked:        +2.58
Earnings Date            01/30/02 (confirmed)




---

UnitedHealth Group - UNH - cls: 74.53 chg: -0.67 stop: 73.45 

We're starting to worry again about our bullish play on UNH.  
Shares have slipped yet again to their rising 15-dma, which has 
been an area of support in the past.   The new concern stems from 
the MACD, which just produced a bearish crossover today.  If you 
were looking to buy at support then an entry here with a stop 
just under $74 might make sense but we'd prefer to see shares 
tackle the $76 level as a confirmation that investors are still 
buying healthcare.  On a positive note, the company announced 
that its Board of Directors had approved both a dividend and a 
share buyback program.  The dividend will be 3 cents per share to 
be paid on April 17th for shareholders on record of April 1st, 
2002.  The buyback program will be for a repurchase of up to 30 
million shares which is almost 10% of UNH's outstanding common 
stock (which totals about 309 million shares).  

Picked on January 11th at $71.75 
Gain since picked:         +2.78
Earnings Date           01/24/02 (confirmed)






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

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

Chico's F A S Inc - CHS - cls: 32.40 chg: -0.83 stop: 32.49 

Chico's turned in a very interesting performance in Thursday's 
session.  We were unable to discern what lead to the gap up at 
the open but shares started at $34.90 and traded down from there.  
We glanced at the news as well as the news headlines for other 
major retailers and clothing stores and did not see anything that 
may have lead to the move higher.  The RLX.X still looks bullish 
and has been able to maintain its recent breakout over the 940 
level but the index looks a lot like a chart of WMT, it's biggest 
component (and about to become the biggest company in the world 
based on sales).  Focusing back on CHS, the stock fell through 
out most of the day and actually pierced its 10-dma and price 
support at $32.00 before bouncing back by the close.  Volume we 
high at just over 1 million shares.  The candlestick pattern 
created today is negative as many investors might interpret it as 
a bearish engulfing pattern.  We would have been stopped out at 
the $32.49 level had it not been for the gap up at the open.   
This allowed us to exit at our target price of $34.75 for a +
$5.20 gain or +17.59% since we picked it on January 25th.  
Depending on how your good-til-canceled order was created you 
might have been able to get the $34.90 price as your exit.


Picked on January 25th at $29.55 
Gain since picked:         +5.20
Earnings Date           03/05/02 (unconfirmed)






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

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

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

Gemstar-TV Guide Intl. - GMST - cls: 19.22 chg: +1.30 stop: 16.49

In a welcome move for GMST shareholders, the stock gapped higher 
today on a number of positive developments and comments 
concerning its patent-dispute legal battle.  Currently GMST has 
lawsuits filed against EchoStar (DISH), Scientific-Atlanta (SFA), 
Pioneer, and SCI Systems, a unit of Sanima-SCI Corp (SANM).  The 
judge, one Paul Luckern with the U.S. International Trade 
Commision, stated he would issue a ruling by March 21st.  What 
boosted shares today was news that the judge would drop or not 
hear closing arguments for the case.  One analyst believes that 
this means the judge has already made up his mind.  A number of 
positive comments from other analysts that felt the ruling would 
be in favor of GMST felt that the recent sell-off was overdone 
and represented an attractive buying opportunity for investors.  
Hey, we happen to agree with them.  As we mentioned in earlier 
updates, GMST had dropped from early January due to negative 
comments from an ITC lawyer who felt that GMST would not win.  
We're encouraged with today's action as it confirms for us that 
GMST can trade to $20 or higher.  The intraday high today was 
$20.27 or just above its 30-dma.  Shares did fall back towards 
the close but still managed a 7.25% gain.  We continue to see 
this as a high-risk play due to the opportunity for negative 
comments to surface about the lawsuit before the ruling is heard 
on March 21st.  Only the most aggressive traders should 
considering holding over the decision date in case GMST does lose 
the case.  Very short-term traders may want to consider putting 
the $20 level as their exit price in hopes of catching another 
spike up.  More aggressive traders may want to consider our new 
strategy.  We're going to create an exit or target price of 
$21.90 since we see $22 as potential resistance.  If GMST 
continues to rally on the expectation that they will win the 
case, then great!  If positive comments do surface and shares 
spike higher again we want to be ready to exit with our sell 
order in place.  However, be aware that GMST could take time to 
fill the gap created today and that means traders may want to 
wait for the stock to dip back to $18.  We are going to raise our 
stop to $16.95 since the recent low three days ago was only 
17.14.

Picked on February 8th at $18.11 
Gain since picked:         +1.11
Earnings Date              03/02 (unconfirmed)






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

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

Train Co. Unloads Earnings & 3-for-2 Split

This morning before the market open, Genesee & Wymoning Inc 
(NASDAQ:GNWR) released their Q4 and fiscal year end numbers ending 
Dec. 31st, 2001.  Included in their earnings announcement was a
3-for-2 split announcement.

The company's Board of Directors approved a 3:2 split of the 
common stock as a 50% stock dividend.  The shareholder record date 
will be Feb. 28th, 2002 and will have a payable date of March 
14th, 2002.


The stock closed at $31.75 on Wednesday.  For a current quote,
click here:
http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=GNWR


About the company
GWI is a leading operator of short line and regional freight 
railroads in the United States, Canada, Mexico, Australia and 
Bolivia, and provides freight car switching and related services 
to industrial companies that have extensive railroad facilities 
within their complexes. The Company operates in five countries on 
three continents over 7,700 miles of owned and leased track. It 
also operates over an additional 2,700 miles under track access 
arrangements. (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 

KTC     Korea Telecom Corp         19.22     +0.52
KYO     Kyocera Corp               58.91     +1.81
UB      Unionbancal Corp           37.50     +0.55
TLM     Talisman Energy Inc        36.78     +0.98
DVN     Devon Energy Corp          40.18     +1.00
RDN     Radian Group               47.46     +0.84

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

GMST    Gemstar-TV Guide Intl      19.22     +1.30
AW      Allied Waste Industries    11.42     +1.47
PWR     Quanta Services Inc        14.84     +1.40
HPLA    HPL Technologies           16.49     +1.12
BONZ    Interpore Intl             11.40     +1.25

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

K       Kellogg Co                 33.13     +1.12
BSX     Boston Scientific Corp     24.75     +1.05
PKX     Pohang Iron & Steel        26.38     +1.60
WFT     Weatherford Intl Inc       42.35     +2.25
LLL     L-3 Communications        107.11     +1.50
BBI     Blockbuster Inc            21.98     +1.20

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

THC     Tenet Healthcare Corp      62.05     -1.69
COX     Cox Communications         34.00     -1.55
MCO     Moody's Corp               36.65     -1.37
CVC     Cablevision Systems        36.00     -3.06
PLCM    Polycom Inc                26.31     -3.83

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

HE      Hawaiian Electric          42.10     -0.48
CHH     Choice Hotels Intl.        20.64     -0.73




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