PremierInvestor.net Newsletter Weekend Edition 03-01-2002 section 1 of 3 Copyright © 2001, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= In section one: Market Wrap: Early March winds filled the sails. Play-of-the-Day: Looking For Something Fresh? Watch List: ADBE, FDX, AMAT, WY and Much More! Market Sentiment: Resistance broken. ------------------------------------------------------------------ U.S. Market Numbers ------------------------------------------------------------------ MARKET WRAP (view in courier font for table alignment) ------------------------------------------------------------------ WE 3-01 WE 2-22 WE 2-15 WE 2-8 DOW 10368.86 +400.71 9968.15 + 65.11 9903.04 +158.80 -163.02 Nasdaq 1802.74 + 78.20 1724.54 - 80.66 1805.20 - 13.68 - 92.36 S&P-100 576.16 + 22.12 554.04 - 5.61 559.65 + 2.37 - 12.07 S&P-500 1131.78 + 41.94 1089.84 - 14.34 1104.18 + 7.96 - 25.98 W5000 10560.01 +380.72 10179.29 -136.19 10315.48 + 66.16 -240.85 RUT 478.34 + 13.27 465.07 - 4.18 469.25 + 2.58 - 13.37 TRAN 2897.13 +171.48 2725.65 + 41.42 2684.23 + 24.29 - 99.39 VIX 22.13 - 2.76 24.89 + .80 24.09 - 1.38 + 2.60 VXN 41.94 - 6.63 48.57 + 3.58 44.99 - 4.29 + 6.20 TRIN 0.74 1.33 1.89 .64 TICK +1029 +1044 -128 +957 Put/Call .94 .90 .73 ------------------------------------------------------------------ WE= week ended =========== Market Wrap =========== Early March winds filled the sails Bulls staged an impressive rally today as stronger than expected economic data at the nation's manufacturers picked up at a healthy pace in February. Today's stronger than expected ISM data served as a steady wind to fill the sails of many stocks and have them closing near their session highs. While there was undoubtedly some bulls in the marketplace doing some buying, some strong gains in recently battered sectors also hints that bears were doing some of the buying and closing out some positions. By session's end, there was a lot of "green on the computer screen" as the major market averages and various indexes showed solid gains. If only not for some disappointing news on the earnings front from biotech Protein Design Labs (PDLI) $14.94 - 5.8%, might the Biotech Index (BTK.X) 477.09 -0.43% have made it a gusty one-day victory for the bulls. If you had told me yesterday that the Institute for Supply Management Index (ISM) was going to show a healthy 54.7% reading for February compared to January's reading of 49.9%, I would have placed some short-term bets on some beaten down technology stocks, but picking some bottoms in recent months has left many a bull looking at a new one not too long after. For traders and investors that have been around awhile, it is also a fear that you will have sold a bottom and that too can cause investors/traders to get a little frantic. After closing at a new 52-week low yesterday, the Fiber Optic Index (FOP.X) found the early March wind lifting its boat to a 6.2% gain. The rise came despite news from Sprint (NYSE:FON) that it would further reduce capital expenditures in the coming months. The stronger economic data had bears running to lock in some gains that soon evaporated as the session unfolded. Yesterday, our bearish "fiber-related" and Fiber Optic Index component, PMC- Sierra (NASDAQ:PMCS) actually turned an early morning loss into a 10% gain by session's end. While it would have been nice to keep that extra 10%, we understood the risk, but a 22.5% gain from profiled isn't too bad either. Unfortunately our play list needed that gain as our semiconductor-related bearish play in Maxim Integrated Products (NASDAQ:MXIM) gapped higher at the open to $46.65, traded through our stop of $48.67 and pegged a session high at the close at $50.58 +10.75, and kept pace with the Semiconductor Index (SOX.X) gain of 11%. There are worse things in live than shorting a stock that gaps higher and then strengthens on some type of bullish news. One that comes to mind is shorting a stock that gaps higher and then strengthens on some type of news and a stop was never placed on the trade. That creates uncertainty going forward and brings into play emotion. Maxim Integrated Products Chart - Daily Interval I had a sinking feeling in my stomach this morning when Maxim's (MXIM) stock gapped marginally higher at the open and we hadn't placed a trigger on this trade. The 30-minute chart seems to show how market makers may have let the stock rally to retracement of $47.11 just prior to the 10:00 AM release of the ISM report. When the report came in as "economically bullish" then market makers undoubtedly assessed their risk to the next level of retracement at $51.30. So did most other market participants interested in the stock as bullishness carried on into the close. Had the ISM data been a disappointment things may have turned out different. From here we'll monitor the stock near-term, but at present we would look to avoid the stock. If MXIM looks to have problems at the $51.30 area in coming sessions, we may give the stock another trade from the bearish side, but will take a seat on the sidelines for now. What we did wrong in our play list on Maxim (MXIM) by not setting a trigger point, we did right on Marvell Technology (NASDAQ:MRVL) as that stock didn't hit our trigger and it too rallied from recent relative low. Should we have been looking long these technology high flyers? Have we missed the move in technology? For those that have been following along for the past several weeks, that question is a resounding no. Our weekly spreadsheet makes it clear that a patient bull won't need to "buy a bottom" to make money in the future. Let's take a look at the weekly change and compare it to the yearly changes to see what may be some areas to trade near-term. Weekly market averages/sector performance I've made one change to our weekly market spreadsheet. I've now changed the yearly benchmark "Since 12/31/01" to reflect the closes found on the December 31st, 2001 instead of Friday, December 28th. From here on out, we will use that as a point to help us see just where things are on a weekly change basis and a truer year 2002 change. As you can see, it was a bullish week for many of the indexes. Sector weakness on the week was Healthcare and Biotech. It may be interesting to note that the Biotech Index (BTK.X) fell -2.1% this past week, yet the Biotech HOLDRS (AMEX:BBH) which we have profiled as bullish in our play list rose fractionally this week with a 1.2% gain. Last Friday the BBH closed at $117.85 and finished today's session with a 1.24% gain at $119.38 (see play update). The BBH looks range-bound right now from $115 to $125, but any break from that range could be exciting. We've got our stop firm at $114 to keep us from participating in any excitement to the downside. It was a wild week for the biotechs with some good news and bad news in the sector, which helped bring on a Dr. Jeckyll and Mr. Hyde type of environment. If you own the Biotech HOLDRS (AMEX:BBH) then this is how your "basket of biotechs" looked today. Biotech HOLDRS - # of representative shares Just as we've looked at the Dow Industrials components as a hypothetical portfolio, we can look at the Biotech HOLDRS (BBH) an analyze the various components, then look to see what may be bullish or bearish within a narrower sector. The basis, cost and P/L% are hypothetical values from the February 20th close when we profiled the BBH as bullish. In essence, that's our benchmark and we can take a snapshot look to see what has taken place. If you did trade long the BBH, then you're monitoring those stocks that make up the "bulk" of your investment dollar. I've place blue Up/Down arrows by those stocks that really represent the "bulk" of the BBH. The good news so far as that all the "red down arrows" at the far right (profit/loss) are concentrated in the "smaller positions" and their declines since the February 20th close has had a negative impact on things, but not to a large extent. The "bulk" of the exposure to a BBH bull has shares of Genzyme (GENZ) down -5.56%, while the rest of the weighted exposure has most upper tier stocks showing mixed results. The two stocks that stand out right now are Genzyme (GENZ) which has been underperforming, while IDEC Pharmaceutical (IDPH), Chiron (CHIR) and Gilead Sciences (GILD) have been pulling their weight and acting more bullish since February 20th. From those stocks listed above, I think a bull in the group finds an attractive bullish play in shares of IDEC Pharmaceutical (NASDAQ:IDPH) and waits for a trade at $66. IDEC Pharmaceuticals Chart - $1 box Next week I'd have an alert set on shares of IDPH at $66, which would be a spread triple-top buy signal. This stock looks to have made a rather major reversal from the $51 level and has started setting a series of higher highs and higher lows. The stock looks like it is under accumulation and institutions are working her patiently up the scale. With a longer-term bullish vertical count of $76, a trade at the $66 level could bring some substantial buyers to the table and provide for a nice move higher. Support should be firming at the $60 level, which also coincides with a trending higher 200-day moving average. If you're a Biotech HOLDRS (BBH) this may be one stock to look for some near-term leadership from. The week ahead On Monday, I'll be tuned in and watching Treasuries very closely. This past week, the 10-year YIELD ($TNX.X) moved higher (selling in the bond) and finished the week with a 4.971% YIELD. As Eric Utley pointed out in today's 01:30 update, it looks like something is about to "give" in the bond market. A break out of the recent YIELD range in this bond could send the market in the directional break of YIELD. Today's 10-year YIELD close came right at its flattening out 200-day moving average and beginning to roll-over 50-day moving average. We've seen the bond market action have some significant impact on stock market action in the past so keep your eyes peeled. Billions of dollars have rotated to the perceived safety of Treasuries in the past 18-months. 10-year YIELD Chart - Weekly Interval This could be the week that we get some type of further meaningful message from the bond market. Billions, make that trillions, of dollars rotated into Treasuries starting in January of 2000 and looks to finally have found selling in November of last year. With strong economic data this week, the 10-year found some selling and stocks also responded to the upside. The groups that look to be attracting the cash from our weekly sector watch are Gold/Silver stocks, Airlines/Transports, Forest/Paper, Oil/Oil Service and Semiconductor. I need to add the Defense Index (DFI.X) to our list as it has shown a 13% gain since the December 31st close. Gold stocks can be quite "fickle," but with the economic data showing strength, it is not out of the question that market participants and "smart money" may have been playing this group as an "inflation" play all along. Today's jump in the ISM data was quite strong and much stronger than many had expected. As explained in previous commentary, the question that remains to be answered, and will eventually be answered as more economic data come out, is "is the growth sustainable, or just a near-term blip due to replenishing of inventories?" The answer may come from the bond market this week. Treasuries can be a terrible investment relative to stocks if economic growth is robust. Who wants to own a lower YIELDING Treasury bond if economic growth is strong? The weekly 10-year YELD chart above tells us that from October 5, 1998 to January 21, 2000, bonds saw a lot of selling as that cash rotated to stocks as the economy boomed and earnings (in some cases hopes of earnings) were strong. We're going to continue to place the bulk of our bullish bets on stocks in those groups that have been attracting the bulk of the capital. We're looking for stocks with good relative strength versus the broader market (S&P 500) and within their appropriate sectors. As you can see from the weekly spreadsheet data, there is plenty of time to get long many technology areas and we don't need to try and pick bottoms. The semiconductors are looking better and today's upgrade and revised higher earnings for Micron Technology (NYSE:MU) $36.29 +12.87% was rather astounding. Thomas Weisel Partners dramatically increased its firms earnings estimates on the stock for fiscal 2002 and forecasted the MU to earn $1.55 a share, up from prior estimate for a loss of $-0.05 a share, and raised fiscal 2003 to $4.00 a share, from $1.35. The firm also raised its 12-months price target to $60 from $45. One stock I've commented on in recent weeks in this group to be looking long are shares of Applied Materials (NASDAQ:AMAT) $47.98 +10.37. The point figure chart has been rather bullish in recent weeks and I feel this is one of the "safer" bets for bulls looking for exposure to the group. Subscriber's may remember how I was "hoping" for a pullback to the $37-$38 level in January as an entry point, but the stock never did cooperate. The recent two pullbacks to $42 have found buyers and a break above $49 would be a rather powerful longer-term buy signal and spread- quadruple-top. I'd like to get a chance to buy the stock on a pullback, but if Treasuries see selling (higher YIELD as a result) then some cash from the bond market may flow toward AMAT and I'd be looking long at $49, or a pullback at $44-$45 and stop at $41. If Micron Technology (MU) is going to be earning $4.00 a share in 2003 as Thomas Weisel Partners believes, then Micron may be in the market for some semiconductor equipment in order to meet the demand for its memory chip manufacturing! Have a great weekend. I think next week will be quite interesting. Jeff Bailey Senior Market Technician ========================= Play-of-the-Day (Bullish) ========================= (( this is a new non-tech play for the weekend )) Dole Food Co. - DOL - close: 30.94 change: +1.41 stop: 28.49 Company Description: Founded in Hawaii in 1851, Dole Food Company, Inc. (NYSE: DOL), with 2001 revenues of $4.5 billion, is the world's largest producer and marketer of high-quality fresh fruit, fresh vegetables and fresh-cut flowers, and markets a growing line of packaged foods. The Company does business in more than 90 countries and employs approximately 61,000 people worldwide. (source: company website) Why We Like It: Dole ended the week by exploding almost 5% on high volume and closing above resistance at $30. We searched for some news explaining this strong move, but came up empty-handed. The close over $30 is a positive technical development, and with the daily stochastics heading up and MACD on the verge of giving a buy signal, we’re adding DOL to the Play List tonight. We like the way shares have traded since November and given the many positive technical developments, we think DOL will continue to trade higher in the near-term. Our initial profit target is near $34, at which point we’d take a juicy 10% profit. We’re starting this play with a stop at $28.49. Readers should take note that the bottle-rocket rise on Friday is not sustainable. The best way to play this is to look for a pull back to $30.50 or $30.25 and then evaluate a bullish entry when shares begin to tick higher again. Picked on March 1st at $30.94 Gain since picked: +0.00 Earnings Date 01/31/02 (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. STOCKS WORTH WATCHING --------------------------------- Adobe Systems - ADBE - close: 35.54 change: +2.16 WHAT TO WATCH: This one almost made our play list tonight. We’ve been keeping an eye on ADBE because of its recent relative strength versus the GSO.X software index. What we’ve been anticipating is for shares to close above $38.25. The $38 level is a key level that has acted as support during the middle of last year and has been staunch resistance since. It also corresponds to a key retracement level from its summer 2001 highs to September lows. Well, we finally got that close over $38.25 on Friday and with MSFT also heading higher we find ADBE a very attractive play candidate. However, following ORCL’s profit warning after the market Friday evening, we decided it would be more prudent to first wait and see how ADBE reacts to this news on Monday. If shares are able to maintain strength in the face of the negative sector news, we’ll likely be adding this on to our play list on Monday night. Honestly, we don’t think the ORCL news will weigh too heavily on ADBE but we'd rather be patient. The group has seen its share of bad news for quite some time and Friday’s announcement was just more of the same albeit from a bellwether. --- FedEx Corp - FDX - close: 58.45 change: +0.59 WHAT TO WATCH: If you’ve followed along with Jeff Bailey’s commentary over the past week, you know that the Dow Transports (TRAN) have been strong. Friday’s bullishness saw the index close at levels not seen since August. FDX has traded in a similar fashion and closed on Friday at a new 52-wk high on strong volume of 2 million shares. At this point, we’d be reluctant to chase FDX, since $60 may act as resistance. However, a pullback to $55-$56 could afford a nice entry. On the same note, we’re also watching FDX rival, Airborne Inc (NYSE:ABF). ABF also managed to close at a 52-week high on Friday ($18.70) and looks to be heading towards $20. A pullback to $18 would be a good time to consider an entry with a tight stop since ABF is short-term overbought. --- Applied Materials - AMAT - close: 47.98 change: +4.51 WHAT TO WATCH: Another stock we like is AMAT. While specialized chip companies have taken a beating recently, this semiconductor equipment manufacturer hasn’t seen that type of dramatic sell- off. As a matter of fact, shares are now threatening to break over resistance at $48, which has held since last August. If the semiconductor index (SOX.X) manages to build on today’s gains, AMAT could finally crack that level. We’d be looking for a close over $48 for confirmation. From a fundamental perspective, AMAT seems well positioned to benefit from the sort of increased productivity implied by yesterday’s MU and NVLS news. Additional signs of increased demand in the sector could easily see AMAT challenging last year’s high of $59. Charts readers will note that a move above $49.00 will be a triple-top breakout on the point-and-figure chart. More conservative traders may want to wait for shares to close over $50 since it is a potential psychological level for investors. --- Weyerhaeuser Co - WY - close: 62.23 change: +0.41 WHAT TO WATCH: Shares of this forest products company have really been moving lately. We like how WY moved up to resistance at $62.50 in February, pulled back, and traded right back to this level. A glance at the Forest & Paper index (FPP.X) reveals the strength of the sector - its up 9.1% for the year and closed at levels not seen for over two years. This strength mirrors similar moves in the Dow Transports (TRAN) and the cyclical index (CYC.X), which also reflect improving expectations for the economy. In targeting entries on WY, we like trigger points at $62.76 and $63.01 (just over recent highs of $62.75) to initiate new bullish positions. By waiting for a move over $63.00 traders can get confirmation with a triple-top breakout on the PnF chart. ============= MORE TO WATCH (additional candidates) ============= Bullish Candidates ------------------ IDPH - Look for shares to break over $66 again. Would be a break out on the point-and-figure. Possible move to $72.50. BAC - Look for move over $65. Would be a quadruple top breakout on the p-n-f chart and a breakout on the daily chart. AHP - Not a fast mover but should have reduced risk. Look for move over $65. MACD just produced bullish crossover. ABT - Another drug company that looks good but failed to really participate in the DRG.X rally on Friday. Wait for move over resistance at $58. APD - Has broken out over $49.00. Looks like a potential bullish play. P-n-f bullish price target is currently $70. YUM - several stocks in the restaurants look attractive. YUM is at resistance. Look for pull back to $56 and then consider bounce for potential entry. DRI - Another restaurant stock with incredible strength. We would wait for pull back to $40 or its 30-dma then confirm the bounce before considering a play. PCAR - We wanted to play this one on the break over $70. Now we'd rather wait for pull back to $70 before chasing it. NAV - Same industry as PCAR. Short-term oversold. Look for pull back and bounce at $41. AVP - Breakout over $50 on decent volume the last few days. We'd keep an eye on it for a pull back to $50. Not a fast mover. KLAC - Don't know how much faith to put into the chip rally on Friday but a pull back to $60.00 or $61.00 might be a decent entry. EDS - Friday produced a break in the short-term bearish trend and a close above the $60 resistance level. Lots of overhead resistance still above it but it bears watching. EMR - Really like this one! p-n-f already showing a triple-top breakout. We'd wait for a close over $60, which would break resistance from the gap down in July that has already been filled but not broken. AMWD - We're mad at ourselves for letting this one get away from us. The breakout on Monday was perfect and the rally all week long has been on huge volume. Should be the start of a new trend. Hard to chase with a +10% gain but shows no weakness. Bearish Candidates ------------------ X - Metal stocks fell out of favor just recently although this one hasn't been that strong to begin with. Could fall to $16.00 quickly. NKE - Stock is looking tired. MACD already bearish. Inability to reclaim $60 level is bad sign. A close under the 50-dma might be the signal to short. RBK - Similar play as NKE but looks more negative. Approaching the 200-dma quickly. Friday's decline on strong volume. HMA - Ugly chart is showing another breakdown...this time under $17.50. could fall to $16.00. MCK - Bearish candlestick pattern and failed rally at 10-dma plus the close back under $34 all sound like a recipe for a short play. Watch for move under $33. ANPI - We didn't read the news on the gap down Monday but shares have failed to recover even with Friday's rally. A close under $40 may be worth a new bearish entry. CYH - The breakdown under $22 looks very bearish and volume was decent. Shares could potentially rally back to $22 and a rollover there could offer a low risk short. Otherwise, look for move under $21. ================ Market Sentiment ================ Resistance broken. by Russ Moore After two days of seeing early gains evaporate today’s big time move was a welcome relief for the bulls. Bolstered by a very bullish ISM report, the major indices took off and never looked back. The DOW was able to breakthrough its long-standing barrier of 10,300 finishing with a gain of +2.6 percent. The NASDAQ fared even better with a +4.1 percent advance. Big cap techs were on the move and that powered the NDX to a +5.6 percent performance. Volume was decent but still not at a level indicative of Commercial support. The NYSE traded 1.43 billion shares while the NASDAQ saw 1.89 billion shares change hands. Winners pummeled losers by a margin of 22/9 on the big board and 23/12 on the tech index. All sectors finished in the green with the Biotechs being the lone exception. Chips, Internet and airlines turned in star performances. The ISM number was the "catalyst du jour", giving investors and fund managers another sign that things may be improving. The other piece of data released today was the Michigan Sentiment number. The index fell to 90.7 from last month’s 93.0. With an economic recovery seemingly underway and a major resistance area broken, we could be in for a near-term rally. Sustainability becomes the big issue now. If the markets can hold current levels without collapsing, investor confidence will grow. A month of positive growth on Wall Street will go a long way toward bringing more money into the market. Evidence that this rally is for real will come from volume levels. Next week’s numbers need to show at least a couple of +2 billion dollar days in order to convince the “I don’t want to miss the train” crowd to get on board. VIX Friday 03/01 close: 21.61 VXN Friday 03/01 close: 42.03 10-yr Bonds Friday 03/01 close: 4.97 Total Put/Call Ratio: .66 Equity Option Put/Call Ratio: .53 Index Option Put/Call Ratio: 1.25 === NASDAQ 100 Index (NDX/QQQ) 52-Week High: 103.51 52-Week Low: 28.19 Current close: 35.74 Volume/Open Interest Maximum calls: 40/128,708 Maximum puts : 35/114,263 Moving Averages 10 DMA 34 20 DMA 35 50 DMA 38 200 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: 576.16 Volume/Open Interest Maximum calls: 580/7,561 Maximum puts : 510/6,605 Moving Averages 10 DMA 559 20 DMA 559 50 DMA 573 200 DMA 591 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: 1131.78 Volume / Open Interest Maximum calls: 1150/39,271 Maximum puts : 1100/52,120 Moving Averages 10 DMA 1102 20 DMA 1102 50 DMA 1126 200 DMA 1152 Fibanocci Retracements Relative High: 1176.97 (01/07/02) Relative Low: 1077.78 (02/06/02) 38% 1115.67 50% 1127.37 62% 1139.27 == DJIA (INDU) 52-Week High: 11,518.83 52-Week Low: 8,235.81 Current close: 10,368.86 Volume / Open Interest Maximum Calls: 100/18,500 Maximum Puts 96/38,149 Moving Averages: 10 DMA 10,025 20 DMA 9,914 50 DMA 9,944 200 DMA 10,033 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: 477.09 Volume / Open Interest Maximum Calls: 520/959 Maximum Puts: 520/931 Moving Averages 10 DMA 487 20 DMA 490 50 DMA 527 200 DMA 541 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: 510.83 Volume / Open Interest Maximum Calls: 550/1,213 Maximum Puts: 500/1,292 Moving Averages 10 DMA 532 20 DMA 539 50 DMA 543 200 DMA 546 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: 391.68 Volume / Open Interest Maximum Calls: 400/550 Maximum Puts: 380/500 Moving Averages 10 DMA 383 20 DMA 378 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, 03/01. 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 02/12/02 355,276 412,868 (57,592) 6.6% 02/19/02 355,905 772,569 (60,759) 5.5% 02/26/02 366,258 432,258 (66,000) 9.0% 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 02/12/02 126,730 59,902 66,828 4.7% 02/19/02 130,856 63,311 67,545 1.1% 02/26/02 139,183 62,087 77,096 14.1% Most bearish reading of the year: 36,513 - 5/01/01 Most bullish reading of the year: 91,122 - 3/06/01 NASDAQ-100 Commercials Long Short Net %Change 02/12/02 32,712 34,841 (2,129) (30.1%) 02/19/02 33,871 35,690 (1,819) (14.6%) 02/26/02 33,589 34,091 (502) (72.0%) 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 02/12/02 9,009 7,415 1,594 (29.0%) 02/19/02 9,966 8,073 1,893 18.8% 02/26/02 9,517 11,416 (1,899) 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 02/12/02 26,811 16,488 10,323 5.3% 02/19/02 29,606 17,953 11,653 12.9% 02/26/02 33,322 21,110 12,212 4.8% 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 02/12/02 4,562 10,038 (5,476) 15.0% 02/19/02 4,654 10,431 (5,777) 5.5% 02/26/02 6,333 12,547 (6,214) 7.5% 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 +77,096 +67,545 -66,000 -60,759 Total Open Interest % (+38.30%) (+34.79%) (-8.26%) (-7.86%) net-long net-long net-short net-short Small Specs Commercials DJIA futures (Current) (Previous) (Current) (Previous) Open Interest Net Value -6,214 -5,777 +12,212 +11,653 Total Open interest % (-32.91%) (-38.29) (+22.43%) (+24.50) net-short net-short net-long net-long Small Spec Commercials NASDAQ 100 (Current) (Previous) (Current) (Previous) Open Interest Net Value -1,899 +1,893 -502 -1,819 Total Open Interest % (-9.07%) (+10.49%) (-.74%) (-2.61%) net-short net-long net-short net-short What COT Data Tells Us ---------------------- Indices:.Commercials and Small Specs were moving in opposite directions this week as the big players added to their net-short positions while the Small Specs increased their long exposure. With bullish economic data becoming more prevalent, it’ll be interesting to follow Commercial activity over the coming weeks. If we don’t see some commitment from these players I would be extremely suspect of a sustained rally taking place. Gold:.. 02/05 58,180 contracts net-short 02/12 62,223 contracts net-short 02/19 60,054 contracts net-short 02/26 56,409 contracts net-short Data compiled as of Tuesday 02/26 by the CFTC. ================================================================= 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 Weekend Edition 03-01-2002 section 2 of 3 Copyright © 2001, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= In section two: Net Bulls Bullish Play Updates: BBH Closed Bearish Plays: ALTR, MXIM, MRVL, PMCS, MSFT Stock Bottom / Active Trader New Bullish Plays: DOL, IBI, USFC Bullish Play Updates: APA, CNF, COL Bearish Play Updates: LEH Closed Bullish Plays: FRX, PD High Risk/Reward Bullish Play Updates: AMZN Closed Bearish Plays: ADLAC Split Trader - none - ================================================================== Net Bulls (NB) Tech Stock section ================================================================== =============== NB Play Updates =============== -------------------- Bullish Play Updates -------------------- Biotech HOLDRs - BBH - close: 119.45 chg: +1.54 stop: 114.00 One would expect the BTK.X biotech index to have taken part in the tech rally on Friday, but that just wasn’t the case. Moves lower in stocks such as PDLI (-5.86%) contributed to a down day for the sector, and the index shed -0.43%. Thus, we were please to see the BBH actually manage a gain. The difference in performance can be explained by the fact that the 20 stocks representing the BBH traded better than the broader biotech sector. If the Dow and Nasdaq continue higher next week, the BBH may have a chance at breaking out above $123, but if not we’ll likely see shares continue to vacillate between $122 and $115. Leading the BBH higher today were GILD (+4.66%) and BGEN (+ 2.59%), offsetting losses by AFFX (-4.75%) and SHPGY (-5.80%). FYI: The largest holdings the in BBH are AMGN, DNA, IMNX, IDPH, CHIR, and BGEN. Picked on February 20th at $120.00 Gain since picked: -0.55 Earnings Date N/A =============== NB Closed Plays =============== -------------------- Closed Bearish Plays -------------------- Altera Corp - ALTR - close: 20.76 change: +1.69 stop: 20.55 Ouch, ouch, ouch! The chip sector exploded on Friday with the SOX.X semiconductor index gaining 11% to close at 566 (and this is an index!). The big move was fueled by a number of positive developments almost overnight in the group. Topping the headlines was a mid-quarter update from NVLS, which claimed it continues to see signs of an industry recovery and management had raised their Q1 bookings and revenue guidance. Naturally, they claim this will help them post a narrower-than-expected loss. Another earnings mover was fellow short-play candidate, MRVL. MRVL ended the day up 15% after its Thursday evening earnings report. The numbers didn't seem that strong but Merrill Lynch, JP Morgan and CIBC World Markets all upgraded the stock. And if that wasn't enough, Micron rocketed higher with a 12.9% gain after Thomas Weisel analysts raised estimates on the company based on belief that DRAM pricing would be increasing. It didn't matter that just a week ago ALTR did not offer any guidance while their competitor XLNX raised theirs. Even though ALTR is probably underperforming the group when it comes to business the stock price reacted strongly and stopped us out at $20.55. The meteoric rise in the stock price Friday morning would have been pretty tough to short with any sort of confidence. Picked on February 28th at $19.07 Gain since picked: -1.48 Earnings Date 04/23/02 (unconfirmed) --- Maxim Integrated - MXIM - close: 50.68 change: +4.92 stop: 48.76 If you read the ALTR update then most of this is a repeat. A virtual blizzard of good news swirled around the semiconductor group today, quickly burying our MXIM short play. Upbeat comments from NVLS, wildly positive comments from Thomas Weisel on MU, and positive news from INTC all served to fuel an 11.04% rise in the semiconductor index (SOX.X). We weren’t surprised to see MXIM also bounce higher on this news, but had expected to see more resistance near yesterday’s highs of $48.60. Although our stop at $48.76 was left in the dust, we’re still cautious on this chip stock. Today’s sharp rally smacks of short-covering, and we’d look for shares to roll over again near $51 as the near-term stochastics turn down from overbought. However, we’d wait for sector sentiment to simmer down before reconsidering a short position. Picked on February 28th at $45.76 Gain since picked: -3.00 Earnings Date 02/05/02 (confirmed) --- Marvell Technology - MRVL - close: 35.39 change: +4.70 stop: N/A As outlined in our other short updates, semiconductor bears didn’t stand much of a chance today after multiple positive news stories in the sector. Fortunately for this short play, our trigger for new positions at $29.25 was never reached. Its difficult to tell how much of today’s 15.31% move can be attributed to last night’s earnings release, but the multiple upgrades MRVL received today certainly didn’t help this short. The purpose of our trigger was to avoid getting caught in this sort of sharp post-earnings move. MRVL has some resistance directly overhead at $36, but for now we’ll be stepping aside to avoid getting gored by the bulls. Picked on February Xth at $xx.xx <- see text Gain since picked: +0.00 Earnings Date 02/28/02 (confirmed) --- PMCS Sierra - PMCS - close: 16.09 change: +1.48 stop: 16.05 It had to happen eventually. PMCS finally managed a large enough bounce to trigger our new stop at $16.05. Like most semiconductor stocks, PMCS rallied strongly today on the positive sector news. However, brief weakness this morning was enough to move shares within 20 cents of our bearish target of $14.15, which afforded nimble traders a better exit point. While we would have preferred to be stopped out at our profit target, we’ll gladly close the play with a 22.5% move and start looking for the next high-odds play. PMCS could easily resume its downtrend on Monday, but today’s trading illustrates the importance of continually tightening stops to avoid losing profits on a sudden short squeeze. If the rally continues for the chips we would look for resistance between $17 and $17.25 for PMCS. Picked on February 15th at $20.71 Gain since picked: +4.66 Earnings Date 01/24/02 (confirmed) --- Microsoft - MSFT - close: 61.37 change: +3.03 stop: 61.01 In last night’s update we discussed the way MSFT had been coiling between $58-$60. Shares finally broke out of that range today, but not in the direction we had hoped. With the Dow Jones and NASDAQ both sporting large rallies, it isn’t hard to see how MSFT was able to tack on about 3%. Despite this rally, our stop wasn’t hit until some heavy buying kicked in during the final half hour of trading. There is plenty of overhead resistance for MSFT, but these levels could be quickly overpowered if broader market bullishness continues. Even though the GSO.X software index added 5% today, near-term resistance is directly overhead at Thursday’s highs of 164 and its 15-dma. Picked on February 21st at $58.05 Gain since picked: -2.96 Earnings Date 01/17/02 (confirmed) ================================================================== Stock Bottom / Active Trader (AT) section ================================================================== =============== AT New Plays =============== ----------------- New Bullish Plays ----------------- Dole Food Co. - DOL - close: 30.94 change: +1.41 stop: 28.49 Company Description: Founded in Hawaii in 1851, Dole Food Company, Inc. (NYSE: DOL), with 2001 revenues of $4.5 billion, is the world's largest producer and marketer of high-quality fresh fruit, fresh vegetables and fresh-cut flowers, and markets a growing line of packaged foods. The Company does business in more than 90 countries and employs approximately 61,000 people worldwide. (source: company website) Why We Like It: Dole ended the week by exploding almost 5% on high volume and closing above resistance at $30. We searched for some news explaining this strong move, but came up empty-handed. The close over $30 is a positive technical development, and with the daily stochastics heading up and MACD on the verge of giving a buy signal, we’re adding DOL to the Play List tonight. We like the way shares have traded since November and given the many positive technical developments, we think DOL will continue to trade higher in the near-term. Our initial profit target is near $34, at which point we’d take a juicy 10% profit. We’re starting this play with a stop at $28.49. Readers should take note that the bottle-rocket rise on Friday is not sustainable. The best way to play this is to look for a pull back to $30.50 or $30.25 and then evaluate a bullish entry when shares begin to tick higher again. Picked on March 1st at $30.94 Gain since picked: +0.00 Earnings Date 01/31/02 (confirmed) --- Intimate Brands Inc - IBI - close: 20.17 change: +0.84 stop: 18.89 Company Description: Intimate Brands, Inc. is a specialty retailer of women's apparel, lingerie and personal care products. IBI operates primarily under the Victoria's Secret and Bath & Body Works brand names. IBI is 84% owned by Limited Inc. (NYSE:LTD). Why We Like It: It has been a very interesting month for Intimate Brands. Monday, Feb. 4th, 2002, IBI said it expected Q4 earnings to be 58 to 60 cents a shares versus the then analysts estimates of 49 cents a share. Part of the huge guidance higher was due to Victoria's Secret "Very Sexy Miracle Bra" which was the company's most successful holiday bra launch ever. According to reports, the new bra outsold the seamless satin bra the year before with almost double the sales. As an investor, I would have been surprised when the stock failed to respond to the raised guidance but then the Dow Jones dropped over 200 points on the 4th of February throwing a wet blanket on the positive news. The next day, Feb. 5th, the Limited (LTD) announced an offer to buy back the 16% of the company it did not own. For many on Wall Street and Main street, owning one was like owning the other. They traded very closely in tandem. The Limited had spun off 16 percent of IBI back in 1995 to increase shareholder growth. Now they want it back. LTD offered 1.046 shares of LTD for each share of IBI. Before you whip out your calculator let me tell that yes, IBI is trading above this buyout offer but not by much. Shortly after the news came out more than a dozen lawsuits sprung up by IBI shareholders that claimed LTD was not making a fair offer. With shares of Intimate Brands trading above the buyout ratio investors are betting with their money that LTD might raise their offer. Unfortunately for shareholders, since the LTD already owns so much of the company I'm not sure they will be rewarded by their litigation efforts. This does not mean that the stock doesn't offer us some short- term upside. The recent earnings report on Thursday showed that IBI did indeed have a great quarter with profits up 32%. IBI actually came in above their own estimates with 61 cents per share or net income of $299.9 million for the quarter. While yearly sales were basically flat and management was somewhat cautious in their conference call the trend in the stock has not changed. We readily admit that the stock looks extended but its parent company the LTD is not quite as overbought (still overbought though). The idea is that with retail stocks doing rather well and LTD about to breakout over $19.00 from a bullish wedge, then IBI looks like an easy play since it has already cleared psychological resistance at $20. We have two profit targets for IBI. Short-term we think it can get to $22, especially if LTD breaks out over $19. Longer-term we think IBI might be able to trade near $24 but we're going to play with relatively tight stops to save us from any violent profit taking. We'll begin with a stop at $18.89, which is just below Thursday's low. Picked on March 1st at $20.17 Gain since picked: +0.00 Earnings Date 02/28/02 (confirmed) --- USFreightways - USFC - close: 37.84 change: +1.84 stop: 35.95 Company Description: USFreightways provides comprehensive supply chain management services, including high-value next-day, regional and national less-than-truckload (LTL) transportation, logistics, domestic and international freight forwarding and premium regional and national truckload transportation. (source: company press release) Why We Like It: Its no secret that we’ve been bullish on the transport sector and the Dow Transports (TRAN) have been very strong. The recent move over resistance at 2800 certainly didn’t change our minds. With that index approaching 3000, we’re adding another freight company to our Play List. USFC added over 5% during Friday’s session, and closed above $37.25. This level had been resistance since last July, and with that obstacle now out of the way we think shares are headed to $40 or higher. The transports have been large contributors to the Dow's gains and if this pattern continues USFC could trade to the $43-$44 area. Our trigger for bullish entries is $38.26, one cent above the highs for 2001. Why are we using a trigger point? The point-and-figure chart shows USFC just created a triple-top breakout. However, the $37.00 to $38.00 level has been resistance so long that it would create another triple top buy signal if it trade above $38.00 and by waiting until it trades above the old high we have some measure of conviction by the bulls. Personally, it wouldn't hurt to look for a pull back to the $37.00 level and then jump in on the bounce but the stock has been looking for a breakout for so long, that there could be a ton of shorts (who have probably done well always shorting near $37.00) that may decide to cover when the stock moves over $38.00. Once we are triggered we'll start the play with a stop under Friday's lows at $35.95. Picked on March Xth at $xx.xx <- see trigger. Gain since picked: +0.00 Earnings Date 01/30/02 (confirmed) =============== AT Play Updates =============== -------------------- Bullish Play Updates -------------------- Apache Corp - APA - close: 53.25 change: +0.50 stop: 49.95 A powerful rally to end the week and start off the month of March had bulls cheering on Wall Street. The broad-based rise was also seen in the oil group and the OIX.X index broke through its 200- dma, a resistance level that had been a lid on the sector for the last few sessions, only to have the OIX stop at October's highs near 313. Moving notably higher was the price of oil per barrel and the April contracts shot through price resistance at $22.00 to close at $22.40. A few analysts suspect that the Russia's cooperation or lack there of will once again move oil prices with only two weeks before OPEC's next meeting. Shares of APA rallied higher but remains in its recent trading range from $52.00 to 53.50. We were surprised that the stock didn't move higher with the strength in the OIX and the price of oil. Traders might want to wait for shares to break through resistance at $55 or look for its next bounce at $52.00 before considering new long positions. Conservative investors looking to protect capital might want to consider tighter stops just south of $52 as well. We are leaving ours at $49.95 for the time being. Picked on February 22nd at $51.57 Change since picked: +1.68 Earnings Date 01/31/02 (confirmed) --- CNF Inc. - CNF - close: 32.40 change: +1.39 stop: 29.99 *new* The transport sector really took off today and the Dow Transports (TRAN) added 3% or 86 points to close at 2897. The group looks like it could trade to the 3000 level pretty easily, especially if the rally has any follow through next week. Shares of CNF bounced off the $31 level and quickly traded to $32 before finally breaking above its 50-dma. Bulls can be more optimistic now that the stock has moved through the top of its descending channel. Another positive observation can be noted in the MACD, which is starting to look more bullish even though it technically crossed over three days ago. A pull back to $32 would not be out of the question but the stock looks like it might trade higher before pausing to consolidate again. We're inching our stop up to $29.99 but more conservative traders seeking to preserve capital might be able to sneak in a stop close to the $31 level. Picked on February 22nd at $30.41 Gain since picked: +1.99 Earnings Date 01/28/02 (confirmed) --- Rockwell Collins - COL - close: 22.80 change: -0.45 stop: 20.49 If you looked at the DFX.X defense index, it would be natural to think the more common defense names would have traded higher on Friday. The index added almost 2% but the larger players in the group showed mostly flat to down performances. This doesn't really surprise us. The broad-based rally across the market sectors had investors doing rotating some money from winners in the defense sector to other groups that had been trying to rally but just couldn't (until today). We see this weakness in COL as temporary and an opportunity for traders to look for a dip to the $22 level as the next potential entry point. Obviously, we'd prefer to see COL hold the $23 mark as new support but with the limelight currently shining on other sectors then defense issues may lag for a few days. Take your time and be patient and we'll see how this new strength in the markets play out. There is no rule that says the defense stocks can't rally with the rest of the market but they have been the leaders recently and doesn't hurt to see some profit taking. However, we do note that the pattern today looks very much like a bearish engulfing candlestick, which is typically a short-term indicator for further weakness. If COL closes under $22 we'll start to get concerned. Picked on February 15th at $22.50 Gain since picked: +0.30 Earnings Date 04/17/02 (unconfirmed) -------------------- Bearish Play Updates -------------------- Lehman Brothers - LEH - close: 57.22 chg: +0.72 stop: 58.03 Just about every sector participated in Friday’s broad-based rally, and the XBD.X broker/dealer index followed along with a gain of almost 2%. LEH managed a small gain of its own, but that only tells half of the story. This morning’s trading saw shares fall all the way down to $54.67, near the lows for the week. It wasn’t until the Dow Jones really started picking up steam that LEH was lifted back over $55. We like how prior to this rally, LEH had been trading slightly lower lows over the course of the week and has been unable to crack resistance at $58. The XBD managed to mirror the Dow with a 3.9% move this week, but is still down 7.4% YTD. Both the 200 and 20-dma’s lie just above current levels at 476 for the index and we’d expect some resistance there for the group. Traders may want to consider new bearish positions if LEH rolls over again near $58, but consider the broader market strength first as a rising tide tends to lift all boats. Picked on February 15th at $58.03 Gain since picked: +0.81 Earnings Date 12/20/01 (confirmed) =============== AT Closed Plays =============== -------------------- Closed Bullish Plays -------------------- Forest Labs - FRX - close: 78.64 change: -0.88 stop: 77.49 FRX’s decline on Friday didn’t violate our stop at $77.49, but nonetheless we’re giving this drug stock the boot. Quite simply, we’re disappointed with the way shares failed to rally today. With the DRG.X pharmaceutical index gaining nearly 2%, we were expecting at least a positive day from FRX. We searched for news that may have been weighing the stock down, but couldn’t find any. If anything the stock should have been trading higher Thursday and Friday after the U.S. FDA granted FRX and partner Merck KGaA an expedited review to pursue a promising drug treatment for alcoholism. Unfortunately, analysts seem to feel that approval would do little to boost FRX's bottom line since the American population isn't very active in seeking drug treatments for alcoholism (Reuters). Relative weakness in a strong sector on a strong market day isn’t something we like to see in our long plays. An argument can be made for buying on a pullback to recent support at $78, but we’re not waiting around to see if it bounces. There just isn’t any evidence to indicate that FRX will be breaking out of its sideways trading range anytime soon, and we believe our time is better spent on more promising plays. Picked on February 15th at $82.58 Gain since picked: -3.94 Earnings Date 04/16/02 (unconfirmed) --- Phelps Dodge - PD - close: 38.21 change: +0.30 stop: 37.43 At first glance, it appears our PD play performed reasonably well today. Unfortunately, a morning gap pushed shares slightly below our break-even stop at $37.43 before PD had a chance to rally with the broader market. This gap can be attributed to Prudential, who downgraded PD from hold to sell, based on a slower recovery for demand than they had anticipated. We have to admit we’re a bit puzzled by their position on both PD and AA, who also received a downgrade. All signs seem to be pointing to an economic rebound, which metal stocks should directly benefit from. Does PRU know something we don’t? Is the "slower recovery in demand" an indication that the rebound may not be as strong as expected? Or are they just playing the tried-and-true "downgrade and accumulate" game? In any case, PD has been unable to break the $39 level since we initiated this play, and we’d probably wait for a close above that level before reconsidering any bullish positions. Due to the gap down to $37.25 we have to close the play at that level and not our stop at $37.43. Picked on February 26th at $37.43 Gain since picked: -0.18 Earnings Date 01/30/02 (confirmed) ================================================================== HIGH RISK/HIGH REWARD (HR) section ================================================================== =============== HR Play Updates =============== -------------------- Bullish Play Updates -------------------- Amazon.com Inc. - AMZN - close: 15.39 change: +1.29 stop: 13.89 *new* I'm sure it is just a one-day coincidence but Friday's (1-day, 5-minute interval chart) of AMZN looks extremely close to the (1-day, 5-minute interval) chart of the Dow Jones Industrials. We were positive on the stock Thursday and had expected the online retailer to rebound from the $14 level (from Thursday's newsletter, "Overall we're still bullish on the play and the pull back to the $14.00 area looks like a good entry point"). As it turns out, shares of AMZN really out-performed their retail cousins with a 9.1% gain today. The RLX.X retail index only managed a tepid eight point gain to close at 955 but it did close back over 950, which is positive. We did see several brick and mortar retailers that looked very appetizing but AMZN outshone the majority today. The close over $15 is very strong indicator for the bulls but now the test will be if it can clear $15.77 (essentially $16), which was the high on January 28th, 2002. The point-and-figure chart still looks very bullish and we've added another X with the move above $15.00. We wondered why AMZN out- performed the other retailers by so much and considered if some of the "Internet" stigma may still be lingering over it. If so, it was a positive influence since shares of YHOO rallied strongly on a fresh pre-market upgrade from SoundView on comments about an online advertising recovery. In the news we also noticed that Lehman Brothers is going to have an online analyst conference call with Amazon.com management via a webcast on Wednesday, March 6th, 2002 at 2:30 p.m. Eastern. It may be worth listening to if you're a long term investors or we're still in the play by then. We didn't receive any more email on the AMZN play so we hope Thursday's update answered some of your questions. Please note that we are raising our stop to $13.89, which is a few cents under Thursday's low. Picked on February 26th at $14.40 Gain since picked: +0.99 Earnings Date 12/13/01 (confirmed) =============== HR Closed Plays =============== -------------------- Closed Bearish Plays -------------------- Adelphia Communications - ADLAC - cls: 23.10 chg: +1.15 stop: 22.55 That's it! We give up. We're throwing in the towel, waving the white flag, calling it quits. We've been fighting the trend in ADLAC for two weeks. What first looked like a little oversold bounce has now become a full fledged reversal. Friday's performance was the killing blow when ADLAC gained 5.2% with the broad-market rally. Even though we feel the longer-term trend in ADLAC is bearish and the $23.25 to $23.50 level "should" still be overhead resistance (see mid-February) we can't fight the tape anymore. Fortunately, I feel we have played our bias somewhat intelligently by using a trigger point to wait and let ADLAC prove itself. We were never triggered and thus never at risk. Considering the news on Thursday about ADLAC and CMCSK we're very surprised the stock was even green today. Another negative news story came out today but it was for ADLAC's subsidiary and spin- off Adlephia Business Solutions Inc. (ABIZ) who said it will not make its $15.3 million dollar interest payment due today. It has until March 31st before it is in default for its 12.25% senior secured notes due 2004. We don't know what liabilities ADLAC might have, if any, on this development in ABIZ but obviously Wall Street didn't see it as an issue today. We are removing ADLAC from the play list. Picked on February Xth at $xx.xx <-- see trigger Change since picked: +0.00 Earnings Date 03/08/02 (unconfirmed) ================================================================= 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 Weekend Edition 03-01-2002 Section 3 of 3 Copyright © 2001, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= In section three: Market Watch for Week of March 4th - Major Earnings - Stock Splits - Economic Reports 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) ================================================================= ================================================== Market Watch for the week of March 4th ================================================== ------------------------ Major Earnings This Week ------------------------ Symbol Company Date Comment EPS Est ------------------------- MONDAY ------------------------------- BLDP Ballard Power Systems Mon, Mar 4 -----N/A----- -0.30 ABV Companhia Bebidas Ame Mon, Mar 4 -----N/A----- 0.38 HBC HSBC Holdings plc Mon, Mar 4 -----N/A----- N/A JWa John Wiley & Sons Mon, Mar 4 Before the Bell N/A PSO Pearson plc Mon, Mar 4 -----N/A----- N/A ------------------------- TUESDAY ------------------------------ BJ BJ's Wholesale Club Tue, Mar 5 Before the Bell 0.77 CHS Chico`s FAS Tue, Mar 5 Before the Bell 0.20 COST Costco Wholesale Corp Tue, Mar 5 -----N/A----- 0.41 CRHCY CRH plc ADR Tue, Mar 5 -----N/A----- N/A FMS Fresenius Medical Care Tue, Mar 5 -----N/A----- 0.22 KSS Kohl`s Tue, Mar 5 After the Bell 0.66 SPLS Staples Tue, Mar 5 -----N/A----- 0.26 TLS Telstra Tue, Mar 5 After the Bell N/A UNEWY United Business Media Tue, Mar 5 Before the Bell N/A V Vivendi Tue, Mar 5 -----N/A----- N/A ----------------------- WEDNESDAY ----------------------------- AEOS American Egl Outfit Wed, Mar 6 Before the Bell 0.58 ANN AnnTaylor Stores Wed, Mar 6 After the Bell 0.33 ENT Equant NV Wed, Mar 6 After the Bell N/A GLH Gallaher Group PLC Wed, Mar 6 -----N/A----- 1.31 MIK Michaels Stores Wed, Mar 6 After the Bell 0.95 PAA Plains Am Pipeline Wed, Mar 6 Before the Bell 0.36 RA Reckson Ass Realty Wed, Mar 6 After the Bell 0.64 ------------------------- THURSDAY ----------------------------- AEG AEGON N.V. Thu, Mar 7 -----N/A----- 0.42 DYS Dist y Serv D&S SA. Thu, Mar 7 -----N/A----- 0.18 ICCI Insight Communications Thu, Mar 7 -----N/A----- -0.41 MDZ MDS Thu, Mar 7 -----N/A----- N/A NSM National Semiconductor Thu, Mar 7 -----N/A----- -0.27 NXL New Pln Excl Rlty Trst Thu, Mar 7 Before the Bell 0.43 REXMY Rexam PLC ADR Thu, Mar 7 -----N/A----- N/A AHO Royal Ahold N.V. Thu, Mar 7 -----N/A----- 0.53 SKS Saks Thu, Mar 7 After the Bell 0.50 SCO Scor ADS Thu, Mar 7 -----N/A----- N/A VDM Van Der Moolen Thu, Mar 7 Before the Bell N/A ------------------------- FRIDAY ------------------------------- KKD Krispy Kreme Doughnut Fri, Mar 8 Before the Bell 0.13 LVMHY LVMH Met-Hen Luis Vttn Fri, Mar 8 -----N/A----- N/A ------------------------------- Upcoming Stock Splits In The Next Two Weeks... ------------------------------- Symbol Company Name Ratio Payable Executable NJR New Jersey Resources 3:2 03/01 03/04 RMCF Rcky Mtn Chocolate Factry 4:3 03/04 03/05 TRR TRC Companies 3:2 03/05 03/06 GILD Gilead Sciences 2:1 03/07 03/08 WERN Werner Enterprises 4:3 03/14 03/15 GNWR Genesee & Wyoming 3:2 03/14 03/15 WLP WellPoint Health Network 2:1 03/14 03/15 SMD Singing Machine 3:2 03/15 03/18 -------------------------- Economic Reports This Week -------------------------- The week ahead of us still has a number of economic reports but none as market moving as last week's. Economists will be interested in the Factory Orders and the Fed's Beige book on Weds. plus the Unemployment number and the Avg. workweek and hourly earnings on Friday. -For- Monday, 03/04/02 ---------------- Auto Sales Feb Forecast: n/a Previous: 5.3M Truck Sales Feb Forecast: n/a Previous: 7.1M Tuesday, 03/05/02 ----------------- ISM Services (DM) Feb Forecast: 51.0 Previous: 49.6 Wednesday, 03/06/02 ------------------- Factory Orders(DM) Jan Forecast: 1.0% Previous: 1.7% Fed’s Beige Book Thursday, 03/07/02 ------------------ Initial Claims (BB) 03/02 Forecast: 380K Previous: 378K Productivity-Rev. (BB) Q4 Forecast: 4.2% Previous: 3.5% Consumer Credit (AB) Jan Forecast: $3.2B Previous: -$5.1B Friday, 03/08/02 ---------------- Nonfarm Payrolls (BB) Feb Forecast: N/A Previous: -89K Unemployment Rate (BB) Feb Forecast: 5.8% Previous: 5.6% Average Workweek (BB) Feb Forecast: 34.1 Previous: 34.0 Hourly Earnings (BB) Feb Forecast: 0.3% Previous: 0.0% Definitions: DM= During the Market BB= Before the Bell AB= After the Bell ================== 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 AXA Axa 19.02 +0.58 OXY Occidental Petroleum 27.57 +0.73 BMO Bank of Montreal 23.15 +0.62 UST UST Inc 35.54 +0.68 HP Helmerich & Payne Inc 35.00 +1.26 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- Ticker Company Name Close Change AMKR Amko Technology Inc 16.65 +2.77 CCI Crown Castle Intl. Corp 7.90 +1.69 SNDK Sandisk Corp 17.17 +2.46 CMOS Credence Systems Corp 17.94 +2.26 GSPT Global Sports Inc 17.25 +1.30 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- Ticker Company Name Close Change DEO Diageo 49.40 +1.11 UNP Union Pacific Corp 62.75 +2.08 A Agilent Technologies 32.99 +1.84 NSC Norfolk Southern Corp 25.19 +1.40 ASML ASML Holdings 22.65 +2.30 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change MCK McKesson Corp 33.70 -1.55 KG King Pharmaceuticals 29.30 -1.76 DOX Amdocs Ltd 26.25 -2.00 WAT Waters Corp 29.38 -1.87 IVGN Invitrogen Corp 34.12 -11.52 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change EVG Evergreen Resources 41.10 -0.70 RMCI Right Mgmt Consultants 22.82 -2.22 ================================================================= 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.
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