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Daily Newsletter, Wednesday, 02/27/2002

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PremierInvestor.net Newsletter              Wednesday 02-27-2002
                                                  section 1 of 2
Copyright  2001, All rights reserved.
Redistribution in any form is strictly prohibited.

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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 

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 
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 

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 

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


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 


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.

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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:

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 

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 

Picked on February 26th at $43.47
Gain since picked:          -0.73
Earnings Date            03/05/02 (confirmed)

Split Trader - Stock Split (ST) section


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, 

The stock closed at $50.20 on Tuesday.  For a current quote,
click here:

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:

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

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