PremierInvestor.net Newsletter Wednesday 02-27-2002 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/b27b_1.asp ================================================================= In section one: Market Wrap: Recovery underway, but.... Play-of-the-Day: Failed Rally = New Short Opportunity Watch List: INTC, HTLD, SPF, APD, ADBE, INTU, BBY, EMLX, EBAY, BA ----------------------------------------------------------------- U.S. Market Numbers ----------------------------------------------------------------- MARKET WRAP (view in courier font for table alignment) ----------------------------------------------------------------- 02-27-2002 High Low Volume Advance/Decline DJIA 10127.58 + 12.32 10255.24 10058.66 1.39 bln 1913/1207 NASDAQ 1751.88 - 14.98 1793.73 1741.48 1.80 bln 1813/1721 S&P 100 563.09 + 0.42 570.45 558.95 Totals 3726/2928 S&P 500 1109.89 + 0.51 1123.06 1102.26 RUS 2000 472.61 + 1.32 474.86 471.13 DJ TRANS 2861.06 + 52.76 2861.35 2809.01 VIX 23.09 - 0.48 24.12 22.30 VXN 45.76 + 0.99 46.72 44.05 TRIN 1.04 Put/Call 0.64 ----------------------------------------------------------------- =========== Market Wrap =========== Recovery underway, but.... Federal Reserve Chairman Alan Greenspan testified before Congress today and things were going pretty well for bullish traders on the broader scale of things. After his testimony, traders, investors and economists began looking for any type of "warnings" and the "but word" just kept creeping into things and selling squashed what appeared to be a bullish rally for stocks. "Increasing signs have emerged that some of the forces that have been restraining the economy over the past year are starting to diminish and that activity is beginning to firm," said Mr. Greenspan. "But that impetus to the growth activity will be short-lived unless sustained increases in final demand kick in before the positive effects of the swing from inventory liquidation dissipate," he added. Wow! Mr. Greenspan is thought to be one of the smartest economists to have lived during the modern era (I wouldn't argue with that thought), but those comments above seem to be a true grasp of the obvious doesn't it? While Mr. Greenspan's testimony was rather generic and perhaps cautiously optimistic, the Fed's official monetary policy report was very cautious in its wording, but also speaks to the thought of "trickle down economics." I won't go into great detail of all that was covered as most of it actually shows up in much of our commentary from the past several months. In general it was noted that the lower Treasury yields brought on by the Fed cutting rates along with the terrorist attacks of September 11th that had investors fleeing to the bond market made for attractive levels of mortgage rates. These lower mortgage rates then helped spur a rather strong housing market, which then helped create demand at the consumer level for durable goods. Nowhere was the boost from low interest rates more apparent than in the sales of new automobiles, which soared in response to the financing incentives that were offered by manufactures. The monetary report went on to describe how the strong consumer spending has helped deplete surplus inventories to levels now well below that of sales, which in itself suggests that the scope of a recovery is indeed at hand. When the notes turned to the future and began outlining potential risks (economists are no different than most stock investors. When you explain any type of downside risk, most of them run for the doors) that's when things turn more sour. The notes outline that the extent of a recovery and persistence will depend critically on the trajectory (good word) of final demand in the period ahead. What turned bond traders from sellers into buyers today were most likely these words, "With real federal funds rates hovering around zero, monetary policy should be positioned to support growth in spending." Aha! said bond traders. The Fed won't be raising interest rates anytime soon, so we can buy Treasuries and not necessarily have to worry about the Fed raising interest rates on us. Here are some things we also talked about in the past that the Fed discusses. How is that next round of tax-cuts coming? The Fed notes think some type of tax relief is/was in the works when it said "The second installment of personal income tax cuts and scheduled increases in government spending on homeland security and national defense also will provide some stimulus to activity this year." Well... the Fed has it half right. According to Senator Tom Daschle, there will be no plan to further cut taxes. That got squashed weeks ago when the Democrats and Republicans could come up with any type of agreeable plan. The half that the Fed was right on was most likely the defense spending side of things. The Defense Index (DFI.X) jumped to a 2.4% gain and new 52-week high today. Considering today's report it is little wonder that recently commented on shares of United Technologies (NYSE:UTX) $72.95 +1.6%, Honeywell (NYSE:HON) $37.15 +2.88% and our bullish play in Rockwell Collins (NYSE:COL) $23.23 +3.1% all showed some gains by session's end. All three of these stocks were trading strong and giving hint that they were under accumulation. I can just see some economists at the major institutional brokerage houses saying "wait a minute... there hasn't been any type of renewed talk that there's further tax cuts coming for the consumer. If the Fed is counting on tax cuts to further provide a boost to the economy I don't see it. Get the trader on the phone and tell him to lighten up on some retail stocks and move toward some of the defense stocks." To help boost along a more cautious view and make investors/traders/economists jittery the Fed notes go on to say, "Because outlays for durable goods and for new homes have been relatively well maintained in this cycle, the scope for strong upward impetus from household spending seems more limited than has often been often been the case in past recoveries. Moreover, the net decline in household net worth relative to income over the past two years is likely to restrain the growth of spending in the coming quarters." That's a mouthful isn't it? Are consumers about to spend their very last dollar on washing machines, dryers, and even new cars? Net worth can drop if you've been fully invested from the bullish side in the stock market over the past two years. Net worth can also decline if you've taken out a second mortgage or refinance your house, then gone out and bought that new car and perhaps taken on a 3-year 0% financing arrangement. We can perhaps see from some of these thoughts why the market got a little spooked today. Yes, I added some quirky verbiage in the previous paragraph, but it may be what some market participants were thinking once they started reading the Monetary Policy notes. The final paragraph of the monetary report was mixed with several "buts" that oscillate from "improving signs" to "significant risks." I liked this statement, "To be sure, the contraction in business capital spending appears to be waning. But spending on some types of equipment, most notably COMMUNICATIONS EQUIPMENT, continues to decline, and there are few signs yet of a broad- based upturn in capital outlays." Does that last comment ring a bell? How about those networking/fiber optic stocks?! The Fiber Optic Index (FOP.X) fell 3.43% and the Networking Index (NWX.X) fell 2.7% today. I'm thinking our Friday market wraps and continually pointing out of losses found in the telecom and equipment related sectors covers that last bit of Fed commentary. Enough already. If you'd like to read the complete Fed report, you can view it at http://www.federalreserve.gov/boarddocs/hh/2002/february/testimony.htm Then at the bottom of that page is a link to the February 2002 Monetary policy report. Play list, strategy and analysis The Fed notes are interesting to read and help provide an economic backdrop. If you and I try investing/trade off of those notes over the longer-term, we're going to be doomed! What we do want to do is understand some of the highlights from those notes, perhaps build some trading strategies/scenarios to take advantage of things the Fed sees or test them going forward. How about those transports? This is one of our key "economic" groups that we are monitoring to get a pulse from the MARKET on the economy. The Dow Transportation Average (TRAN) jumped 1.87% today to close at 2,861, which is at the session highs. So what happened with our transportation play in CNF Inc. (NYSE:CNF) $31.50 -1.09%? I think we'll get our answer tomorrow and I think it all depends on how the TRAN trades tomorrow. If the group follows through to the upside, then CNF should break above it's 50-day moving average and close at $34.42. Here's why I think CNF didn't participate in today's transport rally, despite some nice gains since profiled. CNF Inc. Chart - Daily Interval CNF looks to have ran into some technical resistance at its rolling 50-day moving average and our more aggressive upward trend, that if extended serves as resistance. If the broader transportation sector will follow through with a gain tomorrow, I'm thinking that any trade above the $32.25 level has bears assessing immediate risk to the recent high of $35 and looking to cover. If this all happens, does it mean CNF is over and done with at $35? Not at all. The levels defined are those I see as technical hurdles and levels we simply test against going forward. In my mind, the Transports ability to break some key resistance levels that we've been talking about for months is quite bullish. The next hurdle to monitor for the TRAN is our 80.9% retracement level of 2,933. Phelps Dodge (NYSE:PD) $38.06 +1.68%. I feel this one should have been played as bullish today on the economic data we had at the time of the market open, which was the durable goods orders. Unfortunately the new home sales numbers didn't come out until later in the morning, so a trader had to make the decision as to pulling the trigger with the information at hand, or wait until the housing numbers were eventually released. Nothing new for PD. The stock treated bulls right for the most part. I will note that the March Copper futures (hg02h) rose 1.6% to close at $0.7135/lb and both the stock of PD and copper commodity price moved in the same direction. This is what a bull wanted. H&R Block (NYSE:HRB) $50.25 +0.37%. We got stopped out of this one for a decent gain on the play list as we had a tight stop set to protect gains. The company did beat earnings and the stock was trading higher at $51.30 in after-hours trading. I'm not so sure I mind getting stopped out of this one for a gain today. It gives a trader a chance to raise some cash in his/her account and monitor the near-term market reaction to all the economic data and even HRB earnings. I will discuss some things in a later update, but I did look back at past March earnings report and the stock has had a tendency to see some profit taking despite the April 15th tax deadline when people rush to get their taxes done. There are some interesting technicals in this stock that may amaze you. The longer-term bullish vertical count is $60 from the point and figure chart. If you want to do some retracement work on your own, take retracement from the 10/18/01 close of $16.00, then anchor the top at the point and figure bullish vertical count of $60. I may surprise you must how it looks like traders may be trading the various levels of retracement. Don't be surprised if we see some type of pullback to the $47.50 level as a potential new bullish entry point. Looking ahead There's a lot of "economic" scenarios that many firms are going to be mulling over in the coming sessions based on today's testimony from Alan Greenspan, so we expect some jostling of positions as institutions fine tune their portfolios as we head into the last part of the first quarter. I'm thinking some fund managers aren't going to want to go before their board of directors full of telecom and telecom related technology stocks. Especially if one of their board members took the time to read some of Mr. Greenspan's notes. Tomorrow morning traders are going to get another round of economic data with the all-important preliminary Gross Domestic Product (GDP) numbers, which is expected to show a modest rise of 0.2% and the ISM number (formerly Chicago PMI) will also be watched and is expected to stay flat versus January's reading of 45.1%. I'm still pretty comfortable with the thought that a bull should avoid most technology stocks at this time as bears are most likely looking to sell rallies in many of these stocks. When we see a "bellwether" like Cisco Systems (NASDAQ:CSCO) $14.24 -8.12% getting whacked, we know that any technology stock is fair game at this point and vulnerable. There's just enough underpinning bullishness in the economic data to keep some bears away. If you take a stock like heavy machinery equipment maker Caterpillar (NYSE:CAT) $55.90 -0.10%, and give a bear the opportunity to short that stock at $50, just below a rounding over 200-day moving average and buyers are able to drive the stock higher by 10% in just 6 days (the bulk coming in a 4 day period) it raises the doubt among bears of shorting some of the deeper cyclicals. That's a "supply" issue that bulls can use to their advantage with time. All in all, I've tried to pull out some things in the Fed notes that really seem to be at play in what we have been talking about and surmising for all the technical analysis that we do day in and day out. I think our play list really does play into some of the opportunities and even the concerns that the Fed talks about in the economy going forward. Yes, we will have some disappointments, but hopefully you're keeping track as I am of how we're doing. So far, I think we're doing rather well. E-mail me if you disagree. I'm always open to your insights and concerns. Jeff Bailey Senior Market Technician =============== Play-of-the-Day =============== PMC Sierra - PMCS - close: 15.65 change: -1.14 stop: 17.26 Company Description: communications semiconductors and MIPS-based processors for Enterprise, Access, Metro Optical Transport, and Wireless network equipment that makes up the backbone of the Internet. PMC-Sierra is included in the S&P 500 Index and the Nasdaq-100 Index (NDX). (source: company press release) - ORIGINAL WRITE UP: February 15th, 2002 - Why We Like It: The sell-off in the larger telecom stocks has been pretty painful. However, even as investors continue to pound these tech equities into low teens and single digit stock prices the investing public is starting to spread this hunt for weakness into other companies like equipment suppliers. We're certainly not saying that PMCS has been strong lately but it appears that traders have ferreted out their relationship to the telecom and wireless sectors and PMCS could be next on the bears hit list. A look at the PMCS daily chart show a large pennant formation forming from the high in early December from the low in late December coming to a head this last week. Friday's session was a breakout to the downside of this pennant. Therefore we are going to short the stock with an initial stop at $23.01, which is a bit wider than we would prefer. However, once shares close under $20 we'll lower our stop to something more palatable. Our initial target is $18.00 but we'll adjust it as the play progresses. - Most Recent Update: February 26th, 2002 - Our PMCS play missed being stopped out by the smallest of margins this morning, as it traded up to $17.25 - A mere cent below our stop. However, we were somewhat encouraged by the way shares proceeded to quickly drop back below the $17 level, which also thwarted an afternoon rally. A glance at the relevant sectors reveals similar lack of conviction: An attempted SOX rally failed near the 540 level, while the NWX traded flat near $240. A break below today’s low of $15.95 might allow traders a chance to jump on PMCS for a quick move to psychological support at $15 but we'd be careful when it comes to considering new short positions. However, for current position holders, the lack of any semblance of short-covering thus far leads us to believe that PMCS may indeed be heading lower yet again. We’re keeping our stop firmly in place in order to protect existing profits. - Play-of-the-Day Comments: February 27th, 2002 - Today’s weakness in the networking sector quickly spread from CSCO to related issues. PMCS, after barely avoiding its stop yesterday, sold off sharply and gave up nearly all the gains it had made since Monday’s low. Volume accelerated as PMCS closed near the lows of the day, just above recent lows at $15.25. With the faltering networking index (NWX.X) also threatening to trade to new lows, we think additional sector weakness tomorrow may be the catalyst necessary to break PMCS below $15. Conservative bears may want to actually wait for the stock to break under the $15 level before committing capital but then you may want to adjust your target exit point. Ours is still the $14.15 level but it could be argued that PMCS might not fund support until the $13.50 level. Picked on February 15th at $20.71 Gain since picked: +5.06 Earnings Date 01/24/02 (confirmed) ========== Watch List ========== The PremierInvestor.net watch list is not designed to be read as full fledged stock picks. Rather we would prefer to offer it as an extra tool in today's investor toolbox. Think of it as a radar screen with your own radar operator pointing out interesting developments, technical patterns or potential plays that you may or may not have seen on your own. Due to time constraints we do glance at the news but rarely do we have time to fully read pertinent news stories, due background research and other necessary screens that investors should do before making a decision. A common exercise is to read the entry, glance at the sector and other stocks in that industry and then compare what's happening in the stock to what's happening in the broader market indices. We hope you enjoy the Watch List and that it proves to be a useful tool for your own trading success. ---------- Intel Corp - INTC - close: 29.89 change: -0.13 WHAT TO WATCH: The semiconductor sector hasn't been the strongest the last couple of days and arguably the SOX.X appears rather range-bound even if it can overcome resistance near 550. But a rally may not be in the cards for the chip sector as its leader, Intel, appears rather weak. Shares of the chip giant broke down under significant support of $31.50 on Feb. 21st and that old support has now become new resistance. The stock has been bouncing off new lower support of its 200-dma near $29.25 but the last couple of sessions are painting lower highs. We think traders should watch for a breakdown under the 200-dma for a potential short-play opportunity. The point-and-figure chart confirms our bearish outlook with a fresh new sell signal in the works. The p-n-f chart states that support is way down at $21 but we'd actually look for some support near $27 first. --- Heartland Express Inc. - HTLD - close: 24.98 change: +0.98 WHAT TO WATCH: Readers know that we've been playing the transport sector and with the group breaking to higher ground we are optimistic. Another transport stock that traders may find interesting is HTLD. Shares have been very bullish with positive performances five out of the last six sessions. Volume has been rising with the stock price and the MACD has recently turned bullish as well. We wouldn't necessarily go long tomorrow but investors may want to look for a pull back to the $23.50 (old resistance) or the $24.00 level as a potential bullish entry point. The point-and-figure chart confirms the breakout and shares look very strong. --- Standard Pacific - SPF - close: 27.97 change: +1.12 WHAT TO WATCH: As one of the nation's largest homebuilders, SPF has been reaping a lot of investor interest with the growing economic data that supports a positive turnaround in addition to the positive existing home sales numbers on Monday. We were a bit surprised that shares were so strong today after the new home sales number that came out this morning was a bit disappointing. We suspect that after Greenspan's testimony left most analyst guessing there would be no immediate interest rate hikes that bulls decided SPF should continue to benefit from the low interest-rate home buying environment. Furthermore, bulls should be encouraged by the very strong volume over the last few sessions and today's 4% breakout to new highs on volume of 700K shares. Resistance was at $27 and a pull back to this level may offer a buying opportunity for a long play. --- Air Products & Chemicals - APD - close: 48.79 change: +1.32 WHAT TO WATCH: We've highlighted APD before but it has not made the play list on Premier recently. The stock has been building a convincing bullish pattern of higher lows against resistance at $48. The 2.7% gain in Wednesday's session was enough to breakout over the $48 level but longer-term (from last June, again in July, and again in January) resistance at $49 is what has our attention. If APD can close above $49 we'd bet that the psychological $50 level may not even slow it down. The MACD is slowly starting to pick up steam and the point-and-figure chart confirms that a breakout above $49 would be a very bullish signal for investors. --- Adobe Systems - ADBE - close: 37.29 change: +0.26 WHAT TO WATCH: We think ADBE may be a possible bullish play in the making because of the relative strength it has displayed versus the GSO.X software index during the last few sessions. While the GSO has been in a clear downtrend since the beginning of the year, ADBE has vacillated in a range between 33-38. Following its recent move up, ADBE now lies near the top of that range, and is poised to break over $38, which also corresponds to a retracement level and longtime resistance, which was previous support many months ago. While a case could be made for shorting the stock at this point, we believe. If shares do close over $38.25, we’ll evaluate that as a trigger for a possible long play. --- Intuit Inc - INTU - close: 37.39 change: -1.38 WHAT TO WATCH: What drew our attention to INTU was the way it has repeatedly failed at the $40 level. In the most recent case, shares traded up to the 100-dma and 50-dma’s (also near $40), and proceeded to rapidly sell off until finally finding support near $37. Given this weakness, we’d consider opening short positions on moves below today’s low of $36.75, which would be also be a break below the 200-dma. While congestion exists below current levels and potential support at $35, we believe a move to $30 is not out of the question, while the Point and Figure chart shows a bearish target of $28. --- Best Buy Inc - BBY - close: 65.70 change: -4.30 WHAT TO WATCH: Best Buy’s negative divergence versus the RLX.X Retail Index has had us bearish on BBY recently, but it was today’s high-volume decline through the 100-dma that convinced us to add it to the watch list. We suspect, like others on Wall Street, that investors are selling BBY due to problems its rival, Circuit City is suffering. Whether BBY is guilty of similar issues yet to be announced is irrelevant if investors aren't willing to hold on to the stock. The move towards the $65 looks like a great area to watch for a potential short play. It presents a clear entry point since $65 served as support today and is historical support dating back to its December lows. Furthermore, the Point and Figure chart also shows support $65. Due to the importance of this level, aggressive traders can consider opening short positions on moves below $64.95. However, be aware that the 200-dma is sitting at $62.80 and may also act as support. Yet if more weakness hits the group, CC or the market in general then bears may be able to drag BBY through support and towards its next level of support at $60. Longer- term a break below the 200-dma would have us looking for a move to $55. --- Emulex Corp. - EMLX - close: 33.52 change: -3.48 WHAT TO WATCH: Today’s CSCO downgrade seemed to be a downer on the entire networking sector. EMLX had an especially rough day, shedding over 9% on high volume. This move did some severe technical damage, as both recent support near $35 and the 100-dma were violated. Additionally, the point-and-figure chart rolled over into a fresh column of O's. Since shares finally found support at a retracement level, we think aggressive traders may want to target further weakness below current levels, with a short-term profit target near $30, which could be underpinned by the 200-dma nearby. While bulls likely won’t give up this level without a fight, traders with a long-term perspective may want to note that the Point and Figure chart indicates a bearish target of $22. Thus, if EMLX closes under $30 we'll consider a new short play for the newsletter. --- EBay Inc. - EBAY - close: 49.11 change: -4.12 WHAT TO WATCH: EBAY announced last night that they were abandoning the Japanese auction market, and traders hammered the stock today for a 7.73% loss. The break below $50 came on high volume of 13 million shares and is a very negative technical development. The $50 level had acted as support dating back to October and we think its violation may lead to further selling. Shares eventually found support right at the bottom of its descending channel at $49, but that may be a mere resting point before the bears pile on again. We’d consider playing EBAY on further weakness below $49. --- Boeing Co - BA - close: 45.90 change: +0.75 WHAT TO WATCH: Defense-related issues put in another positive trading session today, as stocks like LMT, HON, and COL all finished with nice gains. BA joined the rally, as it tacked on 1.66%. We like Boeing because it managed to close over $45, which had acted as resistance for the past two weeks. This strong performance has us thinking that BA may continue to rise. Aggressive traders can consider jumping on at current levels, in anticipation of a successful break of the 200-dma looming overhead near $46.50. Alternatively, a bounce from $45 would also be a good time to consider a bullish entry. More patient investors may want to just wait for that close over the 200-dma first. Something we noticed that might be helping lift shares of BA was the airline sector, which has been rather strong lately. ================================================================= 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 Wednesday 02-27-2002 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/b27b_2.asp ================================================================= In section two: Stock Bottom (non-tech stocks) Closed Bullish Plays: HRB Closed Bearish Plays: C High Risk/Reward Closed Bullish Plays: COST Split Trader (stock splits) Announcements: EPD: 2-for-1 stock unit split WTNY: 3-for-2 stock split Trading Ideas Value Plays With Bullish Signals Breakout to Upside (Stocks $5 to $20) Breakout to Upside (Stocks over $20) Breakout to Downside (Stocks over $20) Recently Overbought With Bearish Signals (Stocks over $20) ================================================================== StockBottom/Active Trader (AT) section ================================================================== =============== AT Closed Plays =============== ------------- Bullish Plays ------------- H&R Block - HRB - close: 50.25 change: +0.19 stop: 49.74 Last night we outlined the pros and cons of holding HRB over tonight’s earnings. That choice became a moot point this afternoon, as shares sold off with the broader market, triggering our recently-tightened stop at $49.74. Nimble traders were afforded a decent exit point this morning as HRB gapped up to $50.80 on positive economic news, but the trend was largely negative for the remainder of the day. It remains to be seen how investors will react to tonight’s earnings report, but for now we’ll gladly take our gain of +2.73 and move on to the next high- odds play. For those interested, at last check HRB was trading up 1.88% in after-hours trading, after announcing strong Q3 numbers. Picked on February 5th at $47.01 Gain since picked: +2.73 Earnings Date 02/27/02 (confirmed) ------------- Bearish Plays ------------- Citigroup - C - close: 44.24 change: +0.44 stop: 45.05 As mentioned in last night’s update, the lack of selling in Citigroup was beginning to test our patience. Thus, we weren’t too surprised to see C join the broader market in a morning rally. The Premier Investor newsletter would have been stopped out during this rally at $45.05, with a net move of -2.25. Bears can point to the fact that shares were unable to maintain the $45 level, but the short-term upward trend in C since last Friday is fighting against the longer-term bearish trend from late January. While shares seem to be firming up at current levels we’ll be keeping an eye on this stock in the event more accounting worries crop up. Citigroup still has significant resistance at $46. Traders may want to watch the headlines, as another negative story such as the one that plagued JPM last week could see Citigroup quickly trade back down to recent support near $42. Picked on February 21st at $42.80 Gain since picked: -2.25 Earnings Date 01/17/02 (confirmed) ================================================================== High Risk/Reward (HR) section ================================================================== =============== HR Closed Plays =============== ------------- Bullish Plays ------------- CostCo Wholesale - COST - close: 42.19 change: -1.28 stop: 42.74 While we had hoped COST would bounce more vigorously this morning, our short-lived High-Risk play fell victim to today’s afternoon market sell-off. Although it traded above $43 for most of the session, the market weakness brought shares all the way down to $41.90, far below our stop. This exemplifies why we keep tight stops on speculative plays such as this one. A bounce back into its ascending channel is not out of the question, but COST’s break of the $43 level does not bode well for bulls. We’re still bullish on retail, but for the time being we’ll look elsewhere. Secretly we're concerned for COST shareholders. We outlined the stock on the watch list on Monday because it was trading bearishly in contrast to the RLX.X index. The complete lack of strength on higher volume makes us wonder if someone in the institutional side of things knows something that the rest of us don't. Picked on February 26th at $43.47 Gain since picked: -0.73 Earnings Date 03/05/02 (confirmed) ================================================================== Split Trader - Stock Split (ST) section ================================================================== ============== Announcements ============== EPD to Split "Units" 2-for-1 Before the opening bell on Wednesday's trading session, Enterprise Products Partners L.P. (NYSE:EPD) released news that their Board of Directors had approved both an increase in its annual cash distribution rate to partners and a 2-for-1 "stock" split. The company is actually trading what they call partnership units. The increase in its cash distribution will set the new rate at $2.68 per unit on a pre-split basis. This will be effective for the first quarter distribution payable in May 2002. The 2-for-1 split for the company's "units" will be distributed on May 15th, 2002 for shareholders on record as of April 30th, 2002. The stock closed at $50.20 on Tuesday. For a current quote, click here: http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=EPD About the company Enterprise Products Partners L.P. is the second largest publicly traded, midstream energy partnership with an enterprise value of approximately $5.5 billion. Enterprise is a leading provider of midstream energy services to producers and consumers of natural gas and natural gas liquids ("NGLs"). The Company's services include natural gas transportation, processing and storage and NGL fractionation (or separation), transportation, storage and import/export terminalling. The Company's assets are geographically focused on the United States' Gulf Coast, which accounts for approximately 55 percent of both domestic natural gas and NGL production and 75 percent of domestic NGL demand. (source: company press release) --- Whitney Holding Approves 50% Stock Dividend Late during the Wednesday Trading session the Whitney Holding Corporation (Nasdaq:WTNY) released news that their Board of Directors had approved a 3-for-2 stock split. Shares are rather lightly traded so the increased liquidity won't hurt the stock. The shareholder record date will be March 20th, 2002. Management has set the payable date on or around April 9th, 2002. In addition to the stock split, the Board also approved a quarterly cash dividend of $0.27 per share on a post-split basis. The payable date for this will be April 1st (which looks like a typo) to shareholders on record as of March 20th, 2002. The stock closed at $46.24 on Tuesday. For a current quote, click here: http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=WTNY About the company Whitney Holding Corporation, through its banking subsidiary Whitney National Bank, serves the five-state Gulf Coast region stretching from Houston, Texas; across southern Louisiana and the coastal region of Mississippi; to central and south Alabama; and into the panhandle of Florida. (source: company press release) ================== Trading Ideas ================== This section contains stocks that meet criteria which may make them of interest to long and short side traders. These are not recommendations, nor have they been reviewed by PremierInvestor editors for investment potential. However, each of them has technical and fundamental characteristics that make them worthy of further review by traders and investors looking for fresh ideas. New stocks will appear daily following the market close. --------------------------------- Value Plays With Bullish Signals --------------------------------- Ticker Company Name Close Change BA Boeing Co 45.90 +0.75 MBI MBIA Inc 58.21 +1.01 RDN Radian Group 46.91 +2.07 MYG Maytag Corp 39.10 +1.91 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- Ticker Company Name Close Change AW Allied Waste Industries 13.19 +1.28 JLG JLG Industries Inc 13.65 +1.09 NOVN Noven Pharmaceuticals 18.22 +1.51 GADZ Gadzooks Inc 17.80 +1.67 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- Ticker Company Name Close Change BMY Bristol-Myers Squibb Co 47.49 +1.98 TV Grupo Televisa 42.96 +2.19 PGR Progressive Corp 157.02 +1.50 TBH Telecom Brazil 37.70 +1.18 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change HCA HCA Inc 41.60 -1.82 EBAY eBay Inc 49.11 -4.12 WLP Wellpoint Health Network 121.10 -4.34 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change HSY Hershey Foods Corp 70.99 -0.73 AZO Autozone Inc 67.00 -2.50 ================================================================= 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. 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