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Daily Newsletter, Tuesday, 02/19/2002

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PremierInvestor.net Newsletter                 Tuesday 02-19-2002
                                                   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:      Even gold lost its shine
Market Sentiment: Give me a reason.

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
      02-19-2002           High     Low     Volume Advance/Decline
DJIA     9745.14 -157.90  9899.38  9734.90 1.19 bln   1017/2116
NASDAQ   1750.61 - 54.59  1791.01  1745.05 1.73 bln   1051/2498
S&P 100   549.22 - 10.43   559.65   548.85   Totals   2068/4614
S&P 500  1083.34 - 20.84  1104.18  1082.24             
RUS 2000  459.98 -  9.27   469.25   459.47
DJ TRANS 2672.40 - 11.83  2694.01  2671.82
VIX        26.21 +  2.12    26.37    25.32
VXN        47.23 +  2.24    47.58    46.01
TRIN        2.35 
PUT/CALL    0.84
-----------------------------------------------------------------

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

Even gold lost its shine

Despite this morning strong housing number, bears reined supreme 
today as buyers were hard to find.  Even gold stocks as depicted 
by the Gold/Silver Index (XAU.X) which has been this year's best 
performing group were shunned by investors after Germany's Bun 
Bundesbank President Welteke, said that Germany wanted to "slowly 
sell" some of its gold reserves and move into assets that offer a 
return beyond potential capital appreciation.

April Gold Futures (gc02j) - Daily Interval




News out of Germany that Bundesbank may be selling some gold had 
the commodity under pressure today, but it is worth noting that 
the Washington Accord of 1999 limits gold sales by European 
central banks to 400 tons a year.  Given that information, bulls 
don't need to think the sky is falling on their recent party, but 
should perhaps understand just how fitted retracement on the 
April Gold futures contract may have been traded by Bundesbank as 
gold edged into the upper level of a fitted retracement bracket 
that could well have been deemed a near-term "zone of 
distribution."  If you think Bundesbank has a crystal ball 
telling them where gold prices are headed, then think again.  
Traders are traders and they'll use retracement techniques like 
we teach here.  Look for some price firming at the $290 level.

Industry analysts felt today's action was purely based on some 
"overbought" technicals, and while I'm not an industry analyst, I 
(Jeff Bailey) can't argue with the "overbought" technicals.  A 
week ago I thought traders/investors in the group should be 
snugging up some stops in the group to help assure profitability 
and would continue to do so here.  Just as 10,000 is a 
psychological level for the Dow Industrials, the $300 level is 
psychological for gold.  With MACD on the daily interval starting 
to roll in the April futures market, I'm looking for a pullback 
to the $290 level near-term.  The Gold/Silver Index lead sector 
losers today with a 5.1% decline to the $63.95 level.

Sean Darby of Hong Kong-based Nomura International issued a 
research report on Monday saying "gold's recent rally reflects 
the problems the global economy and financial markets are having 
dealing with a deflationary environment and the consequent 
undermining of credit quality."  Although Darby sees spot gold 
prices as "overbought," he did change his suggested asset 
allocation to favor holding gold over the U.S. dollar.

As of Friday, Comex gold inventories were flat at 1.29 million 
ounces.  Silver stockpiles (also deemed a hedge against inflation 
and/or currency woes) were unchanged at 101.32 million ounces.

Playing the "credit quality" game

In Friday's wrap we did mention the phrase "all is fair in love 
and war" as it related to some bearish trades we had profiled in 
shares of Qualcom (NASDAQ:QCOM) and Time Warner Telecom 
(NASDAQ:TWTC) that may have been plays on "credit concerns" that 
are plaguing the market (the technicals were also weak).  At the 
same time, I mentioned that many a bearskin rug was made from a 
complacent bear and lately; our bearish trades have just been too 
easy.  That is, too many of them are working in our favor and 
that's often when the markets can get a reversal of fortune.

Lehman Brothers (LEH) - $1 box




Shares of Lehman Bros. (NYSE:LEH) $55.43 -4.48% helped the 
Broker/Dealer Index (XBD.X) in its 4.2% decline today, but the 
trade at $56 also has shares of LEH trading at a bearish price 
objective from a vertical count dating back to January (red 1).  
While stocks can exceed their bearish vertical counts like LEH 
did back in September, just after the terrorist attacks that 
nobody predicted, we want subscribers that are short the stock to 
move down their stops (see play update).  If we were to see the 
stock trade down at the $52 level ($1 above the bottom end of our 
channel) we'd be happy to lock in some bearish gains if we 
weren't stopped out before then.

Cabot Microelectronics Chart - $1 box




Today's trade at $55 has Cabot (CCMP) trading right at the 
bearish vertical count dating back to January 11th sell signal 
and eventual vertical count.  When I start seeing some stocks 
pegging their vertical counts and hovering there, I become 
suspicious and don't want to be complacent with my bearish 
trades.  Maybe I'm just paranoid, but what keeps eating on me is 
that the economic data isn't all that bad and I still feel that 
the recent market action is due to accounting worried (warranted 
or not I just don't know).

One stock that is really eating on me is Qualcomm (NASDAQ:QCOM) 
$37.32 -0.21%.  Why in the name of Charles Dow is this stock 
still hanging around the $37 level?  I remember commenting on 
February 11th in the 01:00 update, 
http://www.PremierInvestor.net/archive/intradayupdates/021102inde
x.asp that Qualcom (NASDAQ:QCOM) had just hit the $37 level and 
for bearish traders from our "High Risk/Return" section to be 
lowering stops to that level.  With the stock still hovering near 
$37, I make the observation that this stock has seen little 
decline since that time, despite broader market weakness and 
sector weakness.  

While there is nothing in Qualcomm's (QCOM) chart that has me 
wanting to consider the stock as a long, I just want to make sure 
we're observing some of the bearish vertical counts that are in 
play and moving down our stops when targets are reached.

Other vertical counts

But not all stocks are close to achieving their bearish vertical 
counts.  Unfortunately for some tech bulls, there are two stocks 
that I consider "key" technology stocks that are nowhere close to 
achieving their bearish counts.

Shares of Microsoft (NASDAQ:MSFT) $58.83 -2.32% is still about 
20% away from achieving a bearish vertical count on its 
point/figure chart of $47.  If Microsoft (MSFT) is going to $47, 
then I've got to believe that other technology stocks still have 
some rough times ahead of them.  Not that MSFT is invincible, but 
this stock has an uncanny nature of pegging bullish and bearish 
vertical counts in recent years.  The first sign of trouble for a 
bearish trader would be a trade at $63.  It may be a coincidence, 
but MSFT's September low was $47.50.  If you're going to try and 
trade tech (long or short) keep an eye on this one.  A trade at 
$58 presents further bearishness and would represent a spread 
triple-bottom sell signal.

International Business Machines' (NYSE:IBM) $99.54 -3.25% got a 
little bearish today as this stock gave a double-bottom sell 
signal and that now puts in place a preliminary bearish vertical 
count of $88.  With the bullish support trend down at $95, this 
stock looks lower still.  It seems like yesterday that we were 
alerting traders that the stock had achieved a bullish vertical 
count of $122 and to be raising stops to assure profitability.  
First sign of trouble for the bears would be at $110, a double-
top buy signal.

Sector to watch/monitor

In September, the Biotech's were "too good" and predicting the 
then bottom and I think this will be the case again.  The group 
got hit today as the Biotech Index (BTK.X) fell 4.14% after SG 
Cowen revised earnings and revenue lower for Protein Design Labs 
(NASDAQ:PDLI) $16.99 -18.3%.  It is interesting to note though 
that the Biotech HOLDRS (AMEX:BBH) traded down "just" 2.65% to 
$116.18 as PDLI is NOT a component of the BBH.  What I'm looking 
for here is some type of intraday drop and a rally into a session 
close to signal a bullish trade for this group.  

The "key" stock to monitor is shares of Amgen (NASDAQ:AMGN) 
$56.91 -2.2% as this stock continues to find support in the $54-
%55 range.  

At this moment, the only tech group I'm vaguely interested in are 
the biotechs and this is the first place I'm looking for any 
signs of a tech rebound.

Treasury bonds

Treasury bonds remain stuck in a range and the 10-year YIELD 
finished today's session at 4.883%.  Here we see some divergence 
beginning to take place as it relates to stocks.  While the 
broader market averages for stocks are seeing selling, we're not 
seeing a rush toward the bond market.

Why is this?  So far, I think it is because the economic data 
continues to show promise of an economic bottom and potential 
recovery.  Aside from consumer confidence coming in lower than 
expected last week, the economic data hasn't been bad enough in 
my opinion to drive stock action like we've seen.

I'm willing to play the "accounting concerns" so far in our 
bearish trades, but not willing to say "short every stock in the 
market because the economy is going in the tank."  For now, I 
don't see the bond market saying "the economy is going into the 
tank."  A close in the 10-year YIELD below 4.8% will have me 
beginning to think differently, but right now I'm not seeing the 
rush back into bonds.  

So where's all the cash going?  I'm not positive, but the 
Transports (TRAN) while still showing some weakness are also 
showing some relative strength.  The Dow Transportation Average 
(TRAN) still trades just above its still rounding 200-day moving 
average (200-day at $2,649) and trades at $2,672.40 as of today's 
close.  They're still trading below that longer-term downward 
trend dating back to May 1999, so I'm still rather cautious as it 
relates to our scenario that this group gives hint of economic 
growth.  It is worth noting that we haven't seen a company in 
this group get flagged with the "accounting concerns" and its 
ability to not having been clobbered to the downside still hints 
that some bullishness is in play.  Critical near-term support 
level remains the $2,588 level.  A break above $2,840 would most 
likely raise some eyebrows from the bullish camp.

Market Internals

The bullish percent data has not changed much in the past two 
sessions.  Suffice it to say we haven't seen any strengthening in 
the internals, but we haven't seen a great deal of weakening 
either.  The move volatile NASDAQ-100 bullish % ($BPNDX) from 
www.stockcharts.com remains in "bull alert" status at 36%, while 
the broader S&P 500 bullish % ($BPSPX) is in "bull correction" 
status at 57.6% bullish.

For the S&P 500 ($SPX.X) itself, the $1,080 level looks to be a 
critical level of near-term support.  The SPX.X closed at 
$1,083.34 today and with a bullish % reading still rather high at 
57.6% bullish, there's still some downside risk that could be 
removed.  A close below the $1,080 level most likely will have 
bulls pulling the plug and trying to protect to the $1,055 level.  
We did see a rebound from current levels back on February 6th 
that then saw a rally to the $1,125 level last Thursday.  
Tomorrow could be a pivotal day for trading over the remainder of 
the week.  

Economic data tomorrow

There has been very little sign of inflation in the economic 
numbers and tomorrow we'll get economic data on two important 
pieces of inflation related data.  At 08:30 AM EST, the Consumer 
Price Index (CPI) data is expected to show a modest increase of 
0.2% and the CPI core rate (excluding food and energy) is also 
expected to rise a modest 0.2%.  Last weeks Producer Price Index 
(PPI) data showed very little increase, so most traders aren't 
looking for any surprises here.


Jeff Bailey
Senior Market Technician


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

Give me a reason.
by Russ Moore

Investors continue to sit on the sidelines, unable to find a 
reason to buy. Investors appear more interested in going to Wal-
Mart than Wall Street, to do their bargain shopping.

The major averages struggled throughout the session despite 
another solid showing in the real estate market. The DOW dropped 
-1.6 percent while the NASDAQ slid -3.1 percent and the NDX -3.5 
percent. Today’s NYSE volume of 1.18 billion shares was 10 
percent below its’ 3-month daily average. The NASDAQ recorded 
1.74 billion shares changing hands. Losers pummeled winners by a 
margin of 21/10 on the big board and 25/10 on the tech index.

The XAL (airline index) was the lone sector to post a green 
arrow. Gold, biotech, brokerages and financials were the hardest 
hit sectors on the broad markets. Tech action was very weak, a 
victim of IBM accounting concerns. Hardware and software posted 
the largest declines in the tech arena.

There’s no secret to the market’s malaise; accounting issues have 
rocked the bull’s boat, making any rally attempt an exercise in 
frustration. The corporate side has taken a hands-off approach, 
unwillingly to pick up the ball and run. With an absence of 
buyers the bias will be to the downside with only modest oversold 
rallies thrown in for good measure.

VIX
Tuesday 02/19 close: 26.21


VXN
Tuesday 02/19 close: 47.23


30-yr Bonds
Tuesday 02/19 close: 5.39


Total Put/Call Ratio:  .84


Equity Option Put/Call Ratio:  .71


Index Option Put/Call Ratio: 2.13


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 34.68

Volume/Open Interest
Maximum calls: 40/122,471
Maximum puts : 37/167,750

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: 549.11

Volume/Open Interest
Maximum calls: 580/4,846
Maximum puts : 520/5,253

Moving Averages
 10 DMA  557
 20 DMA  563
 50 DMA  576
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: 1083.21

Volume / Open Interest
Maximum calls: 1100/38,050
Maximum puts : 1100/41,432
Moving Averages
 10 DMA 1099
 20 DMA 1109
 50 DMA 1132
200 DMA 1159

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:  9,745.14

Volume / Open Interest
Maximum Calls: 100/18,051
Maximum Puts    98/41,432

Moving Averages:
 10 DMA  Unavailable
 20 DMA  
 50 DMA  
200 DMA  

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: 479.31

Volume / Open Interest
Maximum Calls: 520/922
Maximum Puts:  520/932

Moving Averages
 10 DMA 491
 20 DMA 502
 50 DMA 542
200 DMA 544

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: 534.82

Volume / Open Interest
Maximum Calls: 550/  405
Maximum Puts:  500/1,064

Moving Averages
 10 DMA 545
 20 DMA 541
 50 DMA 548
200 DMA 550

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: 376.36

Volume / Open Interest
Maximum Calls: 400/300
Maximum Puts:  380/500

Moving Averages
 10 DMA 375
 20 DMA 375
 50 DMA 379
200 DMA 389

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, 02/15. 
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 
01/29/02     345,583   401,923   (56,340)    9.0%
02/05/02     347,583   401,569   (53,986)   (4.3%)
02/12/02     355,276   412,868   (57,592)    6.6%

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
01/29/02       128,826    63,127    63,127     5.1%
02/05/02       128,235    64,404    63,831     1.1%
02/12/02       126,730    59,902    66,828     4.7%

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 
01/29/02      31,577    33,651    (2,974)    (13.3%)
02/05/02      32,357    35,405    (3,048)      2.5%
02/12/02      32,712    34,841    (2,129)    (30.1%)

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
01/29/02        9,709     8,293    1,416    (54.2%)
02/05/02       10,416     8,173    2,243     58.2%
02/12/02        9,009     7,415    1,594    (29.0%)

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 
01/29/02      19,956    12,171    7,785      9.0%
02/05/02      21,868    12,068    9,800     25.9%
02/12/02      26,811    16,488   10,323      5.3%

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
01/29/02       5,872     9,709    (3,837)     11.1%
02/05/02       5,764    10,528    (4,764)     24.2%
02/12/02       4,562    10,038    (5,476)     15.0%
 
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        +66,828     +63,831        -57,592    -53,986

Total Open
Interest %       (+35.81%)  (+33.13%)      (-7.50%)   (-7.21%)
                 net-long   net-long       net-short  net-short


                     Small Specs             Commercials
DJIA futures     (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value          -5,476     -4,764          +10,323   +9,800
Total Open
interest %       (-37.51%)    (-29.24%)      (+23.84%)  (+28.88)
                 net-short   net-short       net-long    net-long


                     Small Spec              Commercials
NASDAQ 100      (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value         +1,594      +2,243         -2,129    -3,048

Total Open
Interest %        (+9.71%)   (+12.07%)     (-3.15%) (-4.50%)
                 net-long   net-long      net-short  net-short


What COT Data Tells Us
----------------------
Indices:.We mentioned on Thursday that we’ll need to see some 
accumulation by the big players if a rally is going to get 
underway. We’re not seeing any signs yet, as the Commercial 
players held on to their net-short positions while the Small 
Specs added to their net-longs. 

Gold: Commercial activity has been a little puzzling of late. 
Gold has been enjoying a solid run over the last few weeks and 
yet, the big players have been adding to their net-short holdings 
(bearish). We’re going to dig a little deeper and see if we can 
provide an explanation for their behavior. 

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
02/12 62,223 contracts net-short

Data compiled as of Tuesday 02/12 by the CFTC.




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Do not duplicate or redistribute in any form.



PremierInvestor.net Newsletter                 Tuesday 02-19-2002
                                                   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/021902_2.asp
=================================================================

In section two:

Net Bulls
  Bearish Play Updates:  CCMP, CLS, PMCS
  Closed Bearish Play:   TWTC

Stock Bottom / Active Trader
  Bullish Play Updates:  ABF, COL, FRX, HRB, UNH
  Bearish Play Updates:  LEH
  Closed Bullish Play:   PD

High Risk / High Reward
  Bearish Play Updates:  ADLAC
  Closed Bullish Play:   GMST

Split Trader
  Announcement:          MKC: 2-for-1 split 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)


=================================================================
Net Bulls (NB) section
==================================================================

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

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

Cabot Microelectronics - CCMP - cls: 55.03 chg: -3.38 stop: 55.53*new*

Investors continue to sell stocks as accounting uneasiness has 
traders thinking better safe (or short) than sorry.  The SOX chip 
index declined again and the Nasdaq hit new relative lows not 
seen since November.  With all of this positive reinforcement, 
shares of CCMP fell almost 6% to the $55 level.  This is great 
news for bears but also a time to be cautious.  When we 
originally wrote about CCMP we noted the possible double-bottom 
breakdown in the point-and-figure chart.  This bearish signal 
came to pass on Friday's session.  We looked at the p-n-f chart 
again today and noticed that the bearish vertical count was 
pointing to a price target of $55.  It is not uncommon for stocks 
to move above (or below) their price targets but now that CCMP 
has reached its we want to be more cautious with our stops.  
Therefore, we are moving our stop to $55.53.  This gives CCMP 50 
cents of room to maneuver and if shares are going to collapse 
under $55 tomorrow then it might be enough space to do it.  
Lowering our stop should also protect a move of $3.76 or 6.3%.  
Meanwhile we are also going to set an exit price of $51.00 if 
shares do fall tomorrow and we'll be ready to exit on the move 
down before potential support at $50.  A move down is certainly 
possible given the condition of the Nasdaq and the SOX could fall 
to its previous February low near 512 or its January low near 
500.  Keep an eye on both if you're trading CCMP.  We would not 
recommend new positions at this time in CCMP.

Picked on February 14th at $59.29 
Change since picked:        +4.26
Earnings Date            01/24/02 (confirmed)




---

Celestica - CLS - close: 36.02 change: -1.88 stop: 39.40 *new*

The negativity in the tech sectors today was pretty tough to 
stomach for some investors and CLS felt it as shares tumbled 
almost 5%.  This was the true breakdown beneath the $38 level but 
more importantly it is the breakdown through its bullish support 
trendline on its point-and-figure chart.  We now expect shares to 
fall to the $34.50 to $35.00 level of support.  Short-term 
traders may want to consider covering their positions there.  We 
are going to look for a bit more of a move and we'll place our 
exit price at $31.50.  We're using a retracement tool from the 
September lows to the early December highs to identify potential 
risk/reward levels that money managers might use.  The last 
couple of sessions have been on stronger than average volume but 
there is still a chance for an oversold bounce tomorrow.  
Therefore we are going to lower our stop to cost at $39.40.  This 
may be a bit wide for some traders and more conservative players 
can probably get away with a stop just over the $38 level.

Picked on February 5th at $39.40
Gain since picked:         +3.38
Earnings Date           01/31/02 (confirmed)




---

PMC Sierra - PMCS - close: 18.92 change: -1.79 stop: 20.75 *new*

Traders recognized the breakdown of the pennant formation from 
Friday in PMCS and bears took control again come Tuesday.  Shares 
ended the day down 8.6% and closed below both the $20 and $19 
levels.  Bears are now looking at potential price support at $18 
from the mid-December low.  Remember that our initial target is 
$18, which would be a 13% move.  Short-term traders may want to 
consider covering there if PMCS continues its descent.  Longer-
term players may want to look for a potential move to the $15 
level.  Considering that this is only the second day of the 
downside breakout we're going to just let PMCS run and see how 
far the initial downward plunge will go.  We will lower our stop 
to four cents above Friday's close ($20.75).  A failed rally at 
$20 would be another attractive entry point but we don't really 
expect shares to rebound that strongly tomorrow. FYI, some point-
and-figure chart readers might interpret the recent move as a 
downside breakout of a triangle formation, which would be very 
bearish indeed.

Picked on February 15th at $20.71 
Gain since picked:          +1.79
Earnings Date            01/24/02 (confirmed)






===============
NB Closed Plays
===============

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

Time Warner Telecom - TWTC - cls: 6.60 chg: -0.22 stop: 7.08 

Initially, shares of TWTC traded lower this morning but as we 
suspected shorts began to cover and by 11:00 the stock had surged 
back above the $7.00 level.  The break higher came suddenly but 
ran out of steam at $7.42.  When bears realized that the Nasdaq 
was headed for a new relative low they just let TWTC fall with 
it.  To us, the biggest risk in TWTC now is a strong short-
covering rally but the current market environment is still 
favoring the bears.  We were stopped out at $7.08 for a move of 
$2.41 or +25.39%.  If the market continues to slip then TWTC 
should retreat to the $6.00 level.

Picked on February 12th at $ 9.49 
Change since picked:        +2.41
Earnings Date            02/05/02 (confirmed)






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

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

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

Airborne Inc - ABF - close: 15.72 change: -0.47 stop: 14.95

We saw the first sign of real weakness in ABF today during its 
four-week rally.  Shares fell from their perch above the $16 
level and closed below its 10-dma.  We don't see the 2.9% drop as 
one with conviction as volume was pretty light at 219K.  However, 
if shares fall below $15.50 tomorrow then we'll begin to worry.  
The bad news is the Dow Jones looks like it's about to confirm 
the roll over it produced today and that could really weigh 
heavily on shares of ABF.  Be sure to confirm stock direction if 
you're considering a play.  Personally, we'd prefer to sit out 
tomorrow unless ABF trades back above $16.

Picked on February 11th at $16.05 
Gain since picked:          -0.33
Earnings Date            02/01/02 (confirmed)




---

Rockwell Collins - COL - close: 21.85 change: -0.65 stop: 20.49

A 157-point pull back in the Dow Jones can deflate almost any 
rally and it certainly slowed the advance for defensive stocks 
today.  Shares of COL slipped 2.8% to close back below the $22 
level.  We see this as a normal pull back and a potentially 
better entry point than the $22.50 it closed at on Friday.  As a 
matter of fact, if shares continue to dip, we'd look for a bounce 
at $21.50 to $21.40 as an entry point (the key word there is 
bounce).  We'd obviously be concerned if shares traded under the 
$21.00 mark.  A quick glance at other defensive players shows 
that most produced similar performances today.

Picked on February 15th at $22.50 
Gain since picked:          -0.65
Earnings Date            04/17/02 (unconfirmed)




---

Forest Labs - FRX - close: 78.25 change: -4.33 stop: 77.49

Shares of FRX were hammered today for a 5.24% loss fueled by a 
news release this afternoon that a recently concluded European 
study with ML-3000 by FRX did not meet all the necessary efficacy 
requirements needed for approval by the U.S. FDA.  If I'm not 
mistaken an efficacy study is to observe and document the 
effectiveness of a certain drug during clinical trials.  This 
will likely necessitate further efficacy studies, which in turn 
will push back any potential FDA progress for this potential 
osteoarthritis treatment to 2004 (according to Forest Labs press 
release).  The stock fell to a low of $77.80 and closed just 
above its recent support level at $77.65.  Honestly speaking, we 
would expect to be stopped out tomorrow.  If shares break this 
support level then the stock would likely fall to the $75.00 
mark, which is supported by the 200-dma.

Picked on February 15th at $82.58 
Gain since picked:          -4.33
Earnings Date            04/16/02 (unconfirmed)




---

H R Block - HRB - close: 46.98 chg: +0.45 stop: 45.95 

HRB bounced today for a fractional gain while the rest of the 
markets sank.  If nothing else this is a sign of relative 
strength but we're still not enthusiastic about initiating new 
long positions at this time.  In the news today, HRB confirmed 
that they would announce their Q3 earnings report on Wednesday, 
Feb. 27, 2002, after the market close.  The company also put out 
a press release refuting a claim by an NBC affiliate that said 
the HRB TaxCut software had an error in it as to calculating the 
Rate Reduction Credit.  HRB claims there is no bug and the 
software calculates the credit correctly.  Volume today was 
pretty strong at 1.1 million shares and we still have hope that 
that there may be some buying interest ahead of the earnings 
report but if we don't see a rally attempt soon we might abandon 
ship.

Picked on February 5th at $47.01 
Gain since picked:         -0.03
Earnings Date           02/27/02 (confirmed)




---

UnitedHealth Group - UNH - cls: 73.81 chg: -0.50 stop: 73.45 

We continue to be cautious on shares of UNH.  The stock is still 
looking weak after its bullish run from early January.  Shares 
slipped another 50 cents today and continue to dance less than a 
quarter away from our stop.  The MACD has begun to roll over and 
looks bearish, which confirms the stock may be running out of 
energy to keep the rally going.  The only bullish clue we could 
find was the declining volume on these last two trading sessions 
with today's being very light at 680K.  If the market slides 
again tomorrow we'd plan on being stopped out of UNH by the end 
of the trading session.

Picked on January 11th at $71.75 
Gain since picked:         +2.06
Earnings Date           01/24/02 (confirmed)





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

Lehman Brothers - LEH - cls: 55.43 chg: -2.60 stop: 58.46 *new*

A big sell-off in the XBD broker/dealer index was lead by losses 
in most of the major brokers.  Big boys like GS fell under 
support at $80, MWD fell under support of $48, BSC fell under 
support of $55 and our bearish play LEH dropped to our initial 
target of $55 as we expected.  Normally we would suspect the $55 
level as a place of support because of its round-number 
psychological impact.  The stock had also bounced here a couple 
of times back in October on its rally higher.  However, what 
leads us to believe shares will continue to fall are a couple of 
clues.  First of all the big brokers above who fell below 
significant support levels could easily lead the XBD.X ($456) 
below any support it might have at the 450 level.  Secondly, the 
heavy volume from the past two declining sessions indicates a lot 
of conviction in the selling pressure.  If you read this 
evening's market wrap by Jeff Bailey then you'll see his analysis 
of potential support for LEH.  Therefore we are going to issue an 
exit price of $52.00 for this play.  If shares spike down 
intraday we'll be ready and prepared to close it.  However, we 
are also going to lower our stop to just over today's high at 
$58.46.  LEH is short-term oversold and the stock could rally 
back to the $58 level before moving lower again.

Picked on February 15th at $58.03 
Gain since picked:          +2.60
Earnings Date            12/20/01 (confirmed)






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

  --------------------
  Closed Bullish Plays
  --------------------

Phelps Dodge - PD - close: 36.65 change: -2.05 stop: 37.50 

The rally in PD came to an abrupt end today when the price of 
gold took a multi-point dive and drug copper prices along for the 
ride.  Copper fell to the 70 cents level, which pulled PD for a 
5.2% loss.  We were stopped out when shares traded to $37.50 and 
we managed to close the play for a +$1.43 move.  By the end of 
the day, PD was trading just above its 200-dma.  This could be a 
level of support but we'd be very cautious about considering new 
long positions.  Investors still bullish on the sector may want 
to look for the $36 level to act as support for PD before 
evaluating new plays.

Picked on February 11th at $36.07
Gain since picked:          +1.43
Earnings Date            01/30/02 (confirmed)






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

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

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

Adelphia Communications - ADLAC - cls: 19.78 chg: -0.19 stop: *note*

The Nasdaq started the week off with new relative lows not seen 
since early November.  Thus, we're not surprised that ADLAC 
traded down to the $19 level and actually hit $18.91.  We are 
surprised that the stock rebounded strongly back towards the 
close to end with a loss of less than 20 cents.  The stock's 
inability to reclaim the $20 level is probably seen 
optimistically by bears looking for a failed rally to start new 
short positions.  They may be right.  However, for the Premier 
Investor Newsletter, the low today was not enough to trigger our 
own bearish position.  We want to see ADLAC hit $18.74 before 
we'll short it.  Other stocks in the group that we mentioned over 
the weekend, COX, CHTR, and CVC all traded lower today as well so 
we don't see any strength in this segment.  Wait for the move and 
if we are triggered, then we'll start with a stop at $21.01.

Picked on February Xth at $xx.xx <-- see trigger 
Change since picked:       +0.00
Earnings Date           03/08/02 (unconfirmed)





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

  --------------------
  Closed Bullish Plays
  --------------------

Gemstar-TV Guide Intl. - GMST - cls: 17.31 chg: -0.99 stop: 16.95

The 3% decline in the Nasdaq today was just too much for GMST to 
handle and investors dumped shares in a prolonged bout of 
selling.  The daily chart now looks like it's headed for the $16 
level again where GMST will likely find support again.  Tuesday's 
drop to $16.85 was enough to stop us out even though volume was 
lighter than normal.  If you're still interested in following 
GMST, remember that part of the risk is any negative news 
regarding their patent lawsuit could tank the stock price.  
Likewise, if there is positive news then shares could take off 
again, at least temporarily.

Picked on February 8th at $18.11 
Gain since picked:         -1.16
Earnings Date              03/02 (unconfirmed)







==================================================================
Split Trader (ST) section
==================================================================

===============
Announcement
===============


Adding Some Spice with a 2-for-1 Split - MKC

Just after the market close today, McCormick & Company, Inc. 
(NSYE: MKC) released word that their Board of Directors had 
approved a 2-for-1 stock split of its common stock.  The 
shareholder record date will be March 25th, 2002.

The payable date for the split is effective as Friday, April 5th, 
with shares be distributed on Monday, April 8th, 2002.

The stock closed at $46.58 on Tuesday.  For a current quote,
click here:
http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=MKC


About the company
McCormick & Co., Inc. is the global leader in the manufacture, 
marketing and distribution of spices, seasonings and flavors to 
the entire food industry - to foodservice and food processing 
businesses as well as to retail outlets. In addition, the 
packaging group manufactures and markets specialty plastic bottles 
and tubes for personal care and other industries. (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 

DD      Dupont                     45.51     +0.61
EQT     Equitable Resources Inc    31.20     +0.55
AFCI    Advanced Fibre Comm.       16.89     +0.63
TBCC    TBC Corp                   13.35     +0.74
WLS     William Lyon Homes         23.05     +0.99

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

COTT    Cott Corp                  18.89     +1.05
UAL     UAL Corp                   12.95     +1.59
BONZ    Interpore Intl.            12.22     +1.12
SHRP    Sharper Image Corp         13.98     +2.03

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

ITT     ITT Industries             56.38     +1.05
TVLY    Travelocity.com            24.91     +5.71
CCRN    Cross Country              30.05     +1.84
AMRI    Albany Molecular           26.20     +2.70

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

C       Citigroup                  42.22     -1.91
IBM     Intl. Business Machines    99.54     -3.35
MWD     Morgan Stanley Dean Witter 47.04     -2.84
FTE     France Telecom             24.48     -2.10
V       Vivendi Universal          37.55     -2.11

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

WMT     Wal-Mart Stores            59.29     -0.74
TXN     Texas Instruments Inc      29.94     -1.56
PRU     Prudential Financial       30.26     -1.24
TROW    T.Rowe Price               36.97     -1.07



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