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Daily Newsletter, Thursday, 03/07/2002

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PremierInvestor.net Newsletter                Thursday 03-07-2002
                                                   section 1 of 2
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In section one:

Market Wrap:      Things are starting to change.
Market Sentiment: Cautious day on Wall Street.
Play-of-the-Day:  Riding the transports.

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
      03-07-2002           High     Low     Volume Advance/Decline
DJIA    10525.37 - 48.92 10606.88 10468.64 1.51 bln   1597/1564
NASDAQ   1881.63 -  8.77  1910.70  1865.06 1.86 bln   1875/1666
S&P 100   586.88 -  3.33   592.73   582.76   Totals   3472/3227
S&P 500  1157.54 -  5.23  1167.94  1150.69             
RUS 2000  494.92 +  0.12   497.29   493.64
DJ TRANS 3020.27 +  5.74  3042.46  3016.13
VIX        21.88 -  0.16    22.78    21.88
VXN        43.76 +  1.03    44.73    43.21 
TRIN        1.19 
PUT/CALL    0.65
-----------------------------------------------------------------

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

Things are starting to change

Today's impressive selling in the Treasury markets now makes it 
imperative for traders and investors to understand and use some 
of the tools at your disposal.  It will also be imperative for 
our play-pickers and me to be doing the same.

The selling in the Treasury MARKET is a near-term sign that the 
MARKET is further beginning to find the perceived "safety" of 
Treasuries less attractive and will begin looking elsewhere to 
begin putting some money to work.

However, long gone are the days like the late 1990's when 
investors shunned risk analysis and only looked toward reward.  
The MARKET is a different place today than it was a couple of 
years ago.  The market environment is also different for bearish 
traders/investors that have recently been able to pick on stocks 
as they felt capital was limited as the bulk was stashed away in 
the perceived safety of Treasuries.  Bears that were able to 
short strong stocks in a weaker market environment and find 
success simply due to a lack of cash flowing toward the stock 
market, may now find a different market environment beginning to 
develop.

What can take place right now is some good old-fashioned 
rotation.  Many of our "bullish percent" indicators are now at 
"overbought" levels and risk for bulls on a broader scale is 
high.  The key to for near-term bullish entry is to try and 
envision some more aggressive amounts of rotation.

For example.  A stock like Dow component Boeing (NYSE:BA) $47.98 
-3.77%.

Boeing (BA) - $1 box




I've put some hypothetical quotes on the above charts to try and 
envision what "smart money" may be thinking in regards to Boeing 
(NYSE:BA) $48.03 -3.67% after the stock traded $50 today.  I was 
nowhere "smart enough" to pick the bottom in shares of BA at $30, 
but may have been smart enough to buy some renewed strength at 
the "triple-top" at $38.  "Smart money" undoubtedly bought the 
stock at $30, and like most smart institutions may have added to 
their positions in the mid-to-high 30's and that demand created 
the nice triple-top buy signal back in December (red C).  

Is Boeing (BA) the only game in town?  Maybe its time to pay back 
our mutual fund shareholders with a nice little gain near $50 and 
look for another stocks that is going to offer some favorable 
upside and less downside risk.  Diversify the holdings a bit, be 
smart, and take some profit off the table.  After all, the Dow 
Industrials Bullish % ($BPINDU) is back near overbought levels 
and it might be wise to just turn into an "accumulator" of stock 
right now and begin drying out some powder.

For you and I

Most of us don't have the luxury of calling up the trading desk 
and telling the trader to "work me 500,000 shares at $29-$31 
today."  However, that doesn't mean we can't try and get inside 
the heads of some institutional traders/investors and try and see 
what they may have done, and then try and lay out a scenario for 
what they might be getting ready to do.

If you had a 750,000 share position in BA with a cost basis of 
$32.67, what might you be doing at current levels.  What's your 
upside potential reward, and what's your downside risk.  Are 
there any other stocks in your universe that may offer a more 
favorable risk/reward?

It's never certain what upside or downside remains in a stock, 
but if we think big (even though we may trade just 50 or 100 
shares) then we put ourselves in the shoes of big money.  Too 
often an individual will look at a bullish 50-share position in 
BA at $38 and say "at $48, I've only made $500."  If you "think 
big" and say "from $38, I've got 250,000 shares and have profit 
of $2.5 million," then your thinking may change a bit as it 
relates to risk/reward.

Competition

Now bring in the "competition" factor that may indeed come from 
the cash coming out of the Treasury market.  Some of this cash 
may have been hiding out in the bond market for the last 18-
months or even longer.  Where's it going to go?

Will "smart money" go after a stock like BA that has jumped 
nearly 31% since giving a triple-top buy signal?  Or will it look 
elsewhere in other stocks giving triple-tops, bullish triangles 
or bearish signals reversed where risk/reward is more easily 
defined or at least controlled with a stop that makes some type 
of technical sense.

Just remember, it's a different market environment than that 
found in the late 1990's, and may well be a different market 
environment than that found in the past 2-years.

We'll need to think both sides of the trade

The playing field is now leveling out.  The past couple of weeks 
we discussed that some of the economic reports were signaling 
strength, but some of the "accounting worries" most likely had 
bulls sitting on the pocketbook and just too uncertain and 
unwilling to pull the trigger.

On the other side of things, we did warn bears that they couldn't 
get complacent and thing the pullback in stocks was taking place 
solely on economic growth uncertainty, but also in play was the 
lack of buyers in the market due to the accounting concerns.

While I might argue that the "playing field" looks to be shifting 
to the bullish side as far as "accounting concerns" abating and 
economic data still showing some strength.  But today's address 
by Mr. Greenspan and more bullish tone on an economic recovery 
underway didn't help a bear that had been shorting stocks with 
abandon on the thought that the economy was going in the tank.

While accounting concerns somewhat abating (there will be those 
that argue we're nowhere close to the end of the accounting 
concerns) and a strengthening economic backdrop (there will be 
those that argue we're nowhere close to a recovering economy) has 
found the broader markets bullish, we are now at higher levels of 
bullish percent data, and with it comes risk.  

Our Strategy

What I will be doing is thinking the following in each trade.

1)  Who's got the profits and what are they looking to do?
2)  Who's got the losses and what are they looking to do?

I/you must put ourselves "into the trade" and set a disciplined 
course of action that includes a disciplined stop.  One where we 
will enter the trade based on a technical entry point, where we 
feel that demand (for a bullish trade) will suddenly "turn" even 
more bullish and won't get pushed back down our throats by 
somebody with a large and profitable position that is looking to 
sell strength.  Bullish trades must have some type of bullish 
vertical count associated with the trade that is bullish enough 
to keep the bears off our backs and actually get them to 
capitulate and run for cover as the stock breaks higher against 
them.

For bearish trades, we will try and use the "overbought" nature 
of the bullish percent charts that tells us that market risk is 
running higher for the bulls.  To find success, we've got to 
identify weak stocks (weak relative strength) that are giving 
some sell signals on their point/figure charts and have some 
bearish vertical counts that would have even the bullish of bulls 
questioning his/her holdings.  

A bull that's been holding a stock for 2-months and has seen his 
holding decline 20%, then rally back to break-even, and at the 
same time seeing a stock like Caterpillar (NYSE:CAT) jump from 
$52 to $58 in a seemingly "easy money" trade, becomes an eager 
seller of his/her holdings on any type of weakness.

One of our strategies will have to include the scenario of 
rotation that includes stock-to-stock rotation.

I think that stock-to-stock rotation will begin to pick up, 
instead of the "stock-to-bond" rotation that may have been more 
the norm in recent months.

With cash really starting to come out of the Treasury market, 
there is now some competition for stocks.  Mutual fund inflows 
are also rather robust in recent weeks, so fund managers may have 
some major amounts of capital to be putting to work.

According to TrimTabs.com, mutual funds saw a $3.2 billion net 
inflow of cash into all equity mutual funds.  While robust, these 
inflows were down from the prior week's $8.6 billion inflows.

We'll remember our conversation from last week, that March marks 
the end of the first quarter for many mutual fund reporting 
periods.  These mutual funds will want to dress up their 
portfolios in the coming weeks and most likely adding to their 
"favorites" that have been treating them well.  The most 
"logical" entry points will be on pullbacks, but there is an 
emphasis to get the money invested.

What I don't like

I would be lying to each and every subscriber if I told you I 
"loved this market" for bullish trades.  I can't say that, and I 
won't say that.  The bullish percent data tells me that we're are 
at an overbought level.  You know it, I know it, the bulls know 
it and the bears know it.

But this is where the market technician, or technical analyst can 
attempt to stack some odds in his/her favor.

Take last night's commentary as an example.  

Imagine you're a mutual fund manager and you've got about $300 
million sitting in cash that you HAVE to put to work.  Where are 
you going to put it?  Can you sit an wait on a pullback in 
Caterpillar (NYSE:CAT) to $52?  Or do you play the recovering 
economic scenario and put it to work in a stock like General 
Electric (NYSE:GE).

I don't want to beat you over the head with GE, but since we 
talked about it last night and you've got some background on 
other thought, then lets talk about the "getting it shoved back 
down our throats" on profit taking.

I will argue (from the institutional perspective) that there 
aren't many profits that can be shoved back down our throats in 
General Electric (GE), but there may be plenty of bears that are 
short the stock as the "bellwether" with global economic exposure 
that has been easy pickings on every rally to $42.

General Electric Chart - $1 box




General Electric (GE) has perhaps been the "favorite" short of 
bears that have been bearish on the economy, both here and on a 
more global view.  Recent action in the currency markets hints 
that money is rotating back to Japan, money that may well be 
invested there as signs of economic recovery are starting to 
present themselves.  But not all of the money is going into Asian 
stocks, some will most likely be put to work in US-based stocks, 
even if the bullish percent charts are overbought.  

One trading scenario that I like about GE if the stock trades 
$42, is that it provides a decision point by bearish traders that 
have been shorting the stock on every rally to $41.99 or lower on 
their true conviction of lingering recession.  The $42 level in 
my mind is a clear and distinct level that a bear would look to 
cover his/her position.  At that point, the bullish vertical 
count would become $57 and it could grow should the column of X 
continue higher.

I've added the "volume" bars on the bottom of the chart to try 
and get a feel for where "profits" are from bulls that have been 
buying the stock.  If I bought 3.9 million shares from $30-39 and 
have waited since October for the stock to break above $42 and 
see what happens on the triple-top, am I going to sell once I get 
the trade at $42?  I'm thinking... "You've come this far, wait it 
out and see what happens."

I've also marked a point on the chart as "shake-out."  This is a 
pattern we've seen recently.  In fact, we may have gotten caught 
in a similar pattern in a recently profiled bearish play in 
shares of Microsoft (MSFT) when that stock traded $58 and gave a 
"sell signal."

But here are a couple of other charts that show similar action in 
the past that show up in the chart of GE.  Take one of our 
bullish plays in Apache Corp. (NYSE:APA).

Apache Corp. Chart - $1 box




I think we talked about the potential for a shake-out to take 
place in shares of Apache (APA) before it happened.  I've marked 
what certainly looks to have been a shake-out or bear trap on the 
stock that came just above bullish support trend.  Volume was 
light and you get the distinct feel that the specialist pulled a 
little trick on "weak bulls" and even some "bears" to take the 
bait.  

Ideally, a bullish trader waiting for a buy signal would have 
taken the stock long at $50.  We played it a little safer and 
waited for the stock to break to a new relative high and clearly 
away from the base at $51.57.  "Better late than never!"  Now we 
have the task of protecting a nice gain. (see play update).

A classic?  Go back up to the first chart and that of Boeing 
(NYSE:BA).  See that little "dip" at $32 in November (red B), 
then the quick reversal back higher and the "triple-top buy 
signal" at $38?  Shake, rattle and roll!

We love the bears!

Bears!  Don't fret.  We talked about a potential short in shares 
of Adelphia Communications (NASDAQ:ADLAC) back in February and 
set up a trade with a trigger for a break lower, but the stock 
didn't cooperate.  Since that time, the stock has rallied back to 
the $24.44 level (up 30% from the lows) and with the bullish % 
data at "overbought" levels, it may be prime-time for some 
nervous bulls that bought the stock in early January near $26 
(looking for a January rally that never came) and watched the 
stock get crushed to $19 look for the doors.

Adelphia Communications Chart - Daily Interval




It's decision time for that BIG volume spike from $27.20 to 
$25.27.  The stock has rallied back to levels near that volume 
spike and a decision has to be made.  We're looking at the point 
and figure chart with a bearish vertical count of $4.  Given the 
current risk/reward setup, a bear may be willing to risk a couple 
of bucks and use the rolling 50-day moving average and 50% 
retracement as leverage to cast doubt in a bulls mind.  If the 
stock is truly headed to $4 then this looks like a good trade for 
the bears.

Jeff Bailey
Senior Market Technician


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

Cautious day on Wall Street.
by Russ Moore

Friday’s employment data coupled with two mid-quarter earnings 
reports from Intel and Sun Microsystems put investors in a 
cautious mood, and the markets in the red.

The after hours reports were released a short time ago and came 
in pretty much as expected. The news has had little impact on 
stock price to this point.

Mr. Greenspan was in the spotlight once again, and this time he 
actually used the word expansion. The Fed chief has apparently 
grown more optimistic after the release of the last few economic 
goodies.

The major indices were underwater most of the day with the DOW 
sinking a little further than the tech index. The last hour of 
trading saw the markets stage a mild recovery attempt leaving the 
boards red, but with only fractional losses. The DOW and NASDAQ 
dropped -0.5 percent respectively while the NDX shed -0.8 
percent.

Volume remained steady with 1.50 billion shares moving on the big 
board and 1.89 billion on the NASDAQ. Market breadth ended in a 
draw.

Natural gas and retailers enjoyed strong gains while the gold and 
Internet sectors hit the skids.

All eyes will be on tomorrow’s employment numbers with investors 
looking for signs of stabilization. The jobless rate is expected 
to show a slight increase, and that will probably be handled well 
by investors. What the bulls are hoping to avoid is another major 
shocker. Today’s initial claims numbers would seem to indicate 
that’s unlikely to happen.


VIX
Thursday 03/07 close: 21.88


VXN
Thursday 03/07 close: 43.76


10-yr Bonds
Thursday 03/07 close: 5.21


Total Put/Call Ratio:  .65


Equity Option Put/Call Ratio:  .57


Index Option Put/Call Ratio: 1.16


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 37.68

Volume/Open Interest
Maximum calls: 40/127,022
Maximum puts : 37/137,851

Moving Averages
 10 DMA 35
 20 DMA 35
 50 DMA 37
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: 586.88

Volume/Open Interest
Maximum calls: 580/6,140
Maximum puts : 550/7,274

Moving Averages
 10 DMA  572
 20 DMA  565
 50 DMA  573
200 DMA  590

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: 1157.54

Volume / Open Interest
Maximum calls: 1100/47,814
Maximum puts : 1100/55,196

Moving Averages
 10 DMA 1127
 20 DMA 1113
 50 DMA 1127
200 DMA 1150

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: 10,525.37

Volume / Open Interest
Maximum Calls: 100/18,258
Maximum Puts    96/41,550

Moving Averages:
 10 DMA 10,295
 20 DMA 10,074
 50 DMA  9,984
200 DMA 10,026

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: 506.59

Volume / Open Interest
Maximum Calls: 520/953
Maximum Puts:  520/941

Moving Averages
 10 DMA 491
 20 DMA 493
 50 DMA 521
200 DMA 540

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: 611.01

Volume / Open Interest
Maximum Calls: 550/1,109
Maximum Puts:  500/1,584

Moving Averages
 10 DMA 562
 20 DMA 552
 50 DMA 549
200 DMA 545

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: 387.12

Volume / Open Interest
Maximum Calls: 400/550
Maximum Puts:  380/800

Moving Averages
 10 DMA 386
 20 DMA 381
 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.



===============
Play of the Day
===============

USFreightways - USFC - close: 38.45 change: +0.26 stop: 36.49

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)

- ORIGINAL WRITE UP: March 1st, 2002 -

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.

- Most Recent Update: March 7th 2002 -

Transports continued their drive higher on Thursday and took USFC 
along for the ride albeit bulls seem to be in first gear after 
the explosive moves earlier this week.  The TRAN managed a 0.19% 
gain on a day when the Dow Jones lost 48 points, and USFC did a 
bit better with a 0.68% gain on moderate volume.  We think the 
trading pattern over the past two days is promising: Shares 
pulled back from recent highs at $39.20 and twice bounced from 
$38.  If the broader market resumes its bullish stance tomorrow 
the TRAN could attempt another breakout over near-term resistance 
at 3050.  Keep an eye on this level, as a move over resistance 
could see USFC heading towards $40, while another failed rally at 
3050 could be a signal to take some profits.  Ultra-conservative 
traders could try and get away with a much tighter stop than we 
have listed but be prepared to be stopped out if the TRAN sees 
any profit taking back under the 3000 level.

- Play-of-the-Day Comments: March 7th, 2002 -

The Dow Transports (TRAN) have been consolidating over 3000 and 
could break resistance at 3050 if the market turns higher.  In a 
similar fashion, USFC has been consolidating over the $38 level.  
Shares bounced from that level two times in as many days, 
indicating a willingness of the bulls to buy the dips.   
Additionally, today's gain of 0.68% outperformed both the Dow 
Jones and the TRAN.  If the transports do manage to break 
resistance at 3050, we think USFC is in good shape to lead the 
move higher.  Confirm stock and market direction before 
considering any new positions!

Picked on March 4th at $39.01
Gain since picked:      -0.66
Earnings Date        01/30/02 (confirmed)






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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
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factors beyond our control.

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Do not duplicate or redistribute in any form.



PremierInvestor.net Newsletter                Thursday 03-07-2002
                                                   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
=================================================================
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charts and graphs, click here:
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In section two:

Net Bulls
  Bullish Play Updates: BBH, RIMM

Stock Bottom / Active Trader
  New Bullish Play:     GE
  Bullish Play Updates: APA, CNF, COL, DOL, USFC

High Risk / High Reward
  New Bearish Play:     ADLAC
  Bullish Play Updates: CTX

Split Trader
  - none -

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


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

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

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

Biotech HOLDRs - BBH - close: 122.75 chg: -2.20 stop: 114.00

Today's disaster du jour came courtesy of SEPR, who got slammed 
for a 58% loss after the FDA announced plans to reject their 
allergy relief medication Soltara over safety concerns.  SEPR is 
a component of BBH (albeit a relatively small one), but the 
HOLDRS were still down 1.76% today.  This vividly illustrates the 
advantage of using the HOLDRS to invest in the biotech sector in 
a sector where individual companies are prone to FDA-related news 
events that can violently move their stocks up or down.  Another 
recent example that comes to mind is IMCL, whose shares doubled 
in less than a week after a meeting with the FDA.  Previous to 
today's drama, we were very pleased with the way the BBH had 
broken over the $123-$124 resistance level on Wednesday:  Shares 
closed at $124.95, a level not seen since mid-January.  We also 
like how the biotechs held up today.  The BTK.X biotech index 
managed to hold above 500 after crossing that resistance level 
yesterday and the BBH closed above recent support at $122.  The 
negative sector news could blow over quickly.  After all, the 
SEPR news was company-specific.  If biotech bullishness returns 
tomorrow we'd look for a move back over $124 before considering 
new positions.  Or if you're feeling more conservative, wait for 
the BBH to close above its 200-dma again (essentially $125).  
FYI, traders may want to look at a point-and-figure chart of the 
BBH.  The HOLDR actually pierced its upside bearish resistance 
line after several failed attempts.  Now we just need a little 
follow through by the bulls.

Picked on February 20th at $120.00
Gain since picked:           +2.75
Earnings Date                  N/A




---

Research In Motion - RIMM - close: 27.94 change: +0.62 stop: 25.60

As we suspected might be the case, RIMM continued higher this 
morning after closing over resistance at $27.  The way shares 
rapidly moved up without support from the broader tech market 
supports our theory that nervous shorts may be moving out of this 
stock.  Although it pegged a high of 28.54, RIMM joined the 
NASDAQ in some afternoon selling and finished the day with a 
2.26% gain.  We're encouraged by the way shares closed above the 
$27 level again, and traders still looking for an entry point 
could target dips to $27.0-$27.5.  Alternatively a move over 
today's high could open the door for a test of the next level of 
resistance at $30.  Another clue bullish traders can look at, and 
what drew our attention to it in the first place, was the 
strength of the point-and-figure chart.  Today's move over $28.00 
added another X to the column and confirmed the bullish triangle 
breakout.  As you know, the probabilities for a successful 
bullish trade are pretty attractive on this sort of pattern.  
Editor's note: if you think the stock looks a little short-term 
overbought then you're not alone.  This isn't a trade for 
everyone and the stock could retrace some of its recent gains 
back (just above) the $25.00 level without much change on the on 
the p-n-f chart.  Waiting for a dip is not a bad strategy...but 
knowing when to jump in could be a tough call.  

Picked on March 6th at   $27.32 
Change since picked:      +0.62
Earnings Date             04/09/02 (unconfirmed)







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

============
AT New Plays
============

  ----------------
  New Bullish Play
  ----------------

General Electric - GE - close: 40.95 change: -0.60 stop: 39.79

Company Description:
GE is a diversified industrial corporation whose products include 
appliances, lighting products, aircraft engines and plastics. GE 
also provides television, cable, Internet, distribution, 
engineering and financial services.

Why We Like It:
In a meeting last week here at the Premier Investor offices we 
were speculating why shares of GE seemed to be somewhat stagnant.  
Because of its exposure to just about every industry, GE is 
generally viewed as the "bellwether" stock that indicates the 
health of the US economy.  If the outlook was really so positive, 
why were shares underperforming the market?  This week's trading 
hasn't answered our question, but it seems that GE is finally 
gathering steam.  The first positive development came on Monday, 
when shares closed over psychological resistance at $40.  The 
stock proceeded to trade higher until running into the 200-dma at 
$41.40.  From a fundamental perspective, the recent sell-off in 
bonds should benefit this play, as should end-of-quarter window 
dressing at the end of March at least for all the fund managers 
professing the economic rebound is upon us.  As far as an entry 
goes we're going to wait for GE to prove itself.  Not only is the 
200-dma directly overhead, but resistance at $42 has put a lid on 
shares since September.  For this reason we're going to start 
this play with a trigger at $42.05.  Once we are triggered our 
initial stop will be at $39.79, just below Tuesday's lows.  

Picked on March xth at $xx.xx <- See text  
Change since picked:      N/A
Earnings Date        01/17/02 (confirmed)
 




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

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

Apache Corp - APA - close: 55.80 change: +0.83 stop: 54.95 *new*

The price of crude oil (cl02j) continued to move higher midday 
after breaking its 200-dma on Wednesday, fueling our APA play to 
levels not seen since last May.  However, crude futures did close 
fractionally in the red and are starting to look tired.  
Fortunately, APA still managed a 1.5% gain and was able to close 
over historical and psychological resistance levels at $55.  If 
you believe in head-and-shoulder patterns, then today's move in 
APA also breaks the neckline of a reverse head-and-shoulders that 
began last June (yes, this one has to right shoulders which is 
not that uncommon).  Although we're encouraged by a close over 
the $55 level, at this point, with oil up so much without a pull 
back, we'd be expecting some profit taking in APA to the $52.50 
to $53.00 area before shares continue higher.  Traders who are 
still looking to go bullish on APA could evaluate a dip to those 
levels.  If the price of oil continues to rise, a move up to $60 
is not out of the question.  Note that we're raising our stop to 
$54.95 tonight in order to protect a 6.5% gain from our entry 
price.  Remember that a dip may be an attractive entry for the 
next leg up but we're going to protect our current move in the 
stock first.

Picked on February 22nd at $51.57
Gain since picked:          +4.23
Earnings Date            01/31/02 (confirmed)




---

CNF Inc. - CNF - close: 34.06 change: +0.31 stop: 33.90 *new*

Chalk up another positive day for the transport sector.  The Dow 
Transports (TRAN) outperformed the broader market and closed over 
3000 for the second day in a row and the third out of the last 
four sessions.  This sector bullishness was reflected in CNF, 
which added 0.91% to close over $34 for the first time since mid-
January.  We continue to be pleased with the way shares have 
displayed relative strength versus the TRAN.  However, with CNF 
now at our original profit target traders may want to consider 
taking some money off the table at current levels.  Overhead 
resistance still remains directly overhead at the January highs 
of $34.50 and $35.  On the other hand, if transport strength 
continues a move up to our current profit target at $36 isn't out 
of the question.  We're updating our stop tonight to yesterday's 
high of $33.90, directly below current levels.  Why the extra-
tight stop?  Premier Investor already has exposure to another 
trucking stock in USFC.  We're not necessarily more bullish on 
USFC, but it looks a little less prone to profit taking than CNF.  
If our stop does get triggered, we'll gladly take our gains from 
CNF and still be able to benefit if the transport bullishness 
continues in USFC.  Currently, Premier is up 12% in CNF and our 
stop at $33.90 should still protect more than a 10% move.

Picked on February 22nd at $30.41
Gain since picked:          +3.65
Earnings Date            01/28/02 (confirmed)




---

Rockwell Collins - COL - cls: 24.04 chg: -0.01 stop: 21.74 *new*

Slow and steady is the theme for COL, which pegged another 52-
week high today before selling off with the broader market.  
Fortunately for the bulls, the selling ended quickly for COL and 
shares immediately bounced back to hover near the $24 level. 
Shares of COL haven't seen the same sort of dramatic rise that 
some of its defense counterparts have had, but have marched up 
steadily for almost a month.  With another close over the stock's 
initial spin-off price of $23.50 on July 2nd, 2001, trader may 
suspect that level might now act as support.  We're also 
encouraged by how shares outperformed the DFX.X defense index by 
2.0% today.  If defense weakness continues we'd look for COL to 
dip to $23-$23.25, at which point new long positions could be 
evaluated.  Note that we're raising our stop tonight to $21.74, 
which is below the Feb. 26th low.  We are also going to get 
aggressive with our exit target.  If the stock truly has no 
overhead supply (this is up for debate considering how the stock 
was split off from Rockwell) then a confident close over $24 
could have shorts in a panic and shares might start to move 
quickly.  We're going to set an exit price of $27.75 then adjust 
it as we see the play progress.

Picked on February 15th at $22.50
Gain since picked:          +1.54
Earnings Date            04/17/02 (unconfirmed)




---

Dole Food CO. - DOL - close: 30.00 change: -0.12 stop: 28.49

DOL continues to trade in a lackluster fashion after moving above 
$30 last week.  Although it posted a small loss for today's 
session, we like how the stock moved up into the close to end the 
day at $30.00.  What we'd like to see is for shares to move up 
off this level tomorrow and close above today's high of $30.50.  
Frankly, the increasing volume over the past three down days is a 
bit worrisome.  In the news, a possible buyout of Chiquita (CQB) 
by a group of U.S. and Latin American investors has spurred 
speculation that DOL may respond with a counter-offer for the 
world's second-largest banana producer.  We'll see how this pans 
out, but thus far it doesn't appear this story is having much of 
an impact on the stock.  Regression channel enthusiasts might 
notice that the recent low today in DOL was a clean bounce off 
the bottom its ascending channel.  A positive close tomorrow 
might be the time to pounce.  Yet don't forget that stop!  If DOL 
does make a bid for CQB the acquiring company normally drops in 
share price and we're not investing in DOL, just trading it.

Picked on March 1st at $30.94
Gain since picked:      -0.94
Earnings Date        01/31/02 (confirmed)




---

USFreightways - USFC - close: 38.45 change: +0.26 stop: 36.49

Transports continued their drive higher on Thursday and took USFC 
along for the ride albeit bulls seem to be in first gear after 
the explosive moves earlier this week.  The TRAN managed a 0.19% 
gain on a day when the Dow Jones lost 48 points, and USFC did a 
bit better with a 0.68% gain on moderate volume.  We think the 
trading pattern over the past two days is promising: Shares 
pulled back from recent highs at $39.20 and twice bounced from 
$38.  If the broader market resumes its bullish stance tomorrow 
the TRAN could attempt another breakout over near-term resistance 
at 3050.  Keep an eye on this level, as a move over resistance 
could see USFC heading towards $40, while another failed rally at 
3050 could be a signal to take some profits.  Ultra-conservative 
traders could try and get away with a much tighter stop than we 
have listed but be prepared to be stopped out if the TRAN sees 
any profit taking back under the 3000 level.

Picked on March 4th at $39.01
Gain since picked:      -0.66
Earnings Date        01/30/02 (confirmed)





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

============
HR New Plays
============

  ----------------
  New Bearish Play
  ----------------

Adelphia Communications - ADLAC - cls: 24.40 chg: -0.29 stop: *note*

Company Description:
Adelphia Communications Corporation, headquartered in 
Coudersport, Pennsylvania, is the sixth largest cable television 
operator in the United States, serving over 5.5 million cable 
subscribers in more than 30 states. (source: company press 
release)

Why We Like It:
We're going to try this again.  Readers know that we tried 
shorting ADLAC multiple times in the last three weeks but it 
would never trade through our trigger point to enter the play.  
Shares have been incredibly strong during that time... almost too 
strong.  Only once during its recent trend did it ever trade 
below the previous day's close yet volume has been pretty even 
during this time with little fluctuation until today.  The stock 
has rallied right to its previous support back in January at the 
$25.25 level.  The stock immediately began to sell off once 
reaching this level while the rest of the market was actually 
bouncing this afternoon.  Not only do we think the stock is 
short-term overbought but reporters are bringing more attention 
to the Comcast-Adelphia cable swap we mentioned a couple of weeks 
ago.  Don't remember it?  It's the cable swap where ADLAC labeled 
it worth $516 million but CMCSK labeled it worth $1.19 billion 
and no money changed hands.  That's right, in a post-Enron era of 
accounting the kind of cable swap unveiled between these two 
companies "should" attract a lot of negative attention.  Why the 
share price remains unaffected as this deal is uncovered is a 
mystery.  Thus, we're going to try and short ADLAC again but 
we're sticking to our use of trigger points.  We'll "enter" a 
bearish play on ADLAC if the stock trades at or below $23.99.  If 
we are triggered we'll initiate the play with a stop at $25.31.  
We're putting this in the high-risk section because volatility 
could actually trigger us and stop us out all in the same day.

Picked on February Xth at $xx.xx <-- see trigger 
Change since picked:       +0.00
Earnings Date           03/29/02 (unconfirmed)





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

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

Centex Corp - CTX - close: 60.54 change: -1.62 stop: 57.39
 
Homebuilding stocks did well on Wednesday, but paused again today 
to consolidate recent gains.  RYL, TOL, and BZH all finished with 
small losses, while CTX lost 2.60%.  Despite the loss, shares 
still closed above $60 for the second day in a row.  We're 
encouraged by the ability of CTX to stay above this level and 
also like how the MACD is continuing higher after the initial 
bullish crossover last week.  With this in mind, entries could be 
considered at current levels.  Risk-averse traders could enter 
with a stop at $59.10 in order to avoid a breakdown below 
Wednesday's support but any profit taking in the broader markets 
could stop you out.  Something we noticed today was the way bond 
yields headed higher while homebuilding issues saw some profit 
taking.  This could just be a coincidence, but it stands to 
reason that higher yields could put a damper on the housing 
market.  This isn't something that has us concerned, but we'll be 
keeping an eye on how CTX reacts to changes in the TNX.X 10-year 
treasury note.  

Picked on March 4th at $61.32
Gain since picked:      -0.78
Earnings Date         01/23/02 (confirmed)







==================
  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 

NTT     Nippon Telephone           19.61     +0.82
CVX     ChevronTexaco              88.63     +0.73
BR      Burlington Resources       40.29     +0.96
UST     U S T Inc                  37.01     +1.11
SHW     Sherwin-Williams Co        29.33     +0.85

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

CPN     Calpine Corp               12.07     +1.20
ROIA    Radio One, Inc.            20.30     +1.09
MEE     Massey Energy Co           15.60     +1.20
CGO     Atlas Air Worldwide        14.15     +1.14
FSII    FSI Intl. Inc              11.23     +1.08

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

JNJ     Johnson & Johnson          63.62     +1.10
SNE     Sony Corp                  56.05     +2.65
GM      General Motors Corp        61.41     +1.49
BBY     Best Buy Co Inc            72.99     +4.42
TJX     TJX Companies Inc          39.78     +2.23

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

ABT     Abbott Laboratories        54.35     -1.67
GDT     Guidant Corp               38.78     -1.72
CELG    Celgene Corp               23.26     -4.51

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

CYTC    CYTYC Corp                 22.40     -1.69
HRB     H&R Block Inc              47.40     -2.05
FRK     Florida Rock Industries    40.90     -1.98
DIGE    Digene Corp                30.65     -1.99



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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

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





DISCLAIMER

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