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Daily Newsletter, Monday, 03/11/2002

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PremierInvestor.net Newsletter                 Monday 03-11-2002
                                                  section 1 of 2
Copyright  2001, All rights reserved.
Redistribution in any form is strictly prohibited.

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In section one:

Market Wrap:      Transports, trucks and diesel engines.
Watch List:       PG, HGSI, EMLX, TXN, DCX
Market Sentiment: Sideways session opens the week.
Play of the Day:  Buying Software Strength.

-----------------------------------------------------------------
U.S. Market Numbers
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MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
      03-11-2002          High     Low     Volume Advance/Decline
DJIA    10611.24 + 38.75 10647.09 10526.00  1.20 bln   1612/1535
NASDAQ   1929.49 -  0.18  1946.23  1905.93  1.80 bln   1920/1683
S&P 100   591.73 +  1.89   594.37   587.69   Totals    3532/3218
S&P 500  1168.26 +  3.95  1159.58  1159.58             
RUS 2000  500.75 +  0.90   502.06   496.17
DJ TRANS 3017.06 +  6.82  3033.07  2970.48
VIX        22.37 +  0.76    23.13    21.90
VXN        42.05 +  0.43    43.70    41.67
TRIN        0.64 
PUT/CALL    0.55
-----------------------------------------------------------------

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

Transports, trucks and diesel engines

Stocks ended the session rather mixed today as a late-afternoon 
rally faded near the close, but left the major averages either in 
positive territory or at unchanged levels.

The Dow Industrials finished higher (+38 points +0.36%) at 10,611 
lead by gains in JP Morgan (NYSE:JPM) $36.30 +4.49%, American 
Express (NYSE:AXP) $41.55 +2.66% and Boeing (NYSE:BA) $50.88 
+2.99%.  Those gains were partially offset by losses in Home 
Depot (NYSE:HD) $48.33 -1.2% and Philip Morris (NYSE:MO) $52.58 -
1.25%.

The broader S&P 500 carved out a 4-point gain (+0.33) at 1,168 
lead by financials.  The regional banks as depicted by the S&P 
Banks Index (BIX.X) rose 1.2% at 680, while the more super-
regional and multinational KBW Bank Index (BKX.X) gained 1.06% to 
895.

The tech-heavy NASDAQ Composite (COMPX) fell fractionally at 
1,929 or just 18-cents as Internet stocks helped boost the CBOE 
Internet Index (INX.X) higher by 3% at 131.  The Fiber Optic 
Index (FOP.X) gained 3.14% to 105 amid speculation that Cisco 
Systems (NASDAQ:CSCO) $17.42 -2.13% might make a play for Ciena 
(NASDAQ:CIEN) $10.29 +11% (has been rumored for several months) 
at these depressed price levels.  That speculation also found 
gains in Sonus (NASDAQ:SONS) $4.19 +9.39%, ONI Systems 
(NASDAQ:ONIS) $7.11 +8.54% and Juniper (NASDAQ:JNPR) 14.71 
+10.5%.  The GSTI Software Index (GSO.X) traded in the green for 
the bulk of the session and closed right on its 200-day moving 
average at 178.89 (+2.42%).  

GSTI Software Index Chart - Daily Interval




The technicals found in the GSTI Software Index (GSO.X) hint that 
resistance levels have bulls and bears doing battle at current 
levels.  The 200-day moving average is rounding out and a move 
above the $184 level would find a breaking of this longer-term 
moving average, or retracement bracket at that level along with 
downard trend from the May 22nd highs.  I will also note that the 
bearish resistance trend from our point/figure chart shows 
resistance at 182.  A trade at 184 would be a break of that trend 
and may get some bears stepping up their short covering.  Not 
surprisingly, sector bellwether Microsoft (NASDAQ:MSFT) $64.34 
+0.6% closed just above its 200-day moving average, which resides 
at the $64.07 level.  A break above $65 could have MSFT running 
to retracement resistance near $67.  Volume traded in MSFT today 
was rather light at 21.8 million shares, with average volume 
running around 27.1 million shares per day.  Had volume been 
heavier (35 million +) I would have been more impressed with 
today's move back above the 200-day MA.  A trader/investor should 
continue to monitor shares of MSFT and expect other stocks in the 
sector to mimic its near-term trading.

Gains in Internet, fiber optic and software stocks were offset by 
losses in the semiconductors as depicted by the Semiconductor 
Index (SOX.X) 622 -2.41% and the Disk Drive Index (DDX.X) 101.36 
-1.15.  Semiconductor Index components Texas Instruments 
(NYSE:TXN) $34.11 -4.48%, Rambus (NASDAQ:RMBS) $9.02 -4.14%, 
Applied Materials (NASDAQ:AMAT) $51.79 -3.25% and Intel 
(NASDAQ:INTC) $33.42 -2.19% all finished lower on the session.

With triple-witching option expiration taking place this coming 
Friday, I expect this week's market action to be somewhat range-
bound and showing some of the ups and downs like we had today as 
traders jockey for position into Friday's expiration.  Many 
positions get "unwound" early in the week as institutions try and 
avoid any last-minute whipsaw action on Friday.

With that said, I heard something on CNBC today that caught my 
ear in regards to Cummins Inc. (NYSE:CUM) $46.83 +6.09%.  In 
recent weeks we felt the transports would be a key sector for 
bulls to look to for some leadership and the Dow Tranpsortation 
Average (TRAN) 3,017 +0.22% continue to hover at recent highs.

Many know Cummins (CUM) for their diesel engines.  Today, 
Prudential raised their rating on the stock to "buy" from "hold" 
on belief the company may be making back some market share gains 
versus rival Caterpillar (NYSE:CAT) $59.10 -0.38%.  Prudential 
raised their earnings estimates for fiscal 2003 to $3.00 from 
$2.65 (+13%) with the average estimate still at $2.77/share for 
FY2003.

Notes:  If Prudential is correct and CUM does earn $3.00 per 
share for FY2003, then at today's close of $46.83, the stock is 
trading roughly 15.6 times 2003 estimates.

Last Thursday, Credit Suisse First Boston made a similar type of 
earnings revision for shares of Caterpillar (CAT), when the firm 
raised fiscal year 2002 earnings estimates to $3.00 from $2.75.  
While the year comparisons are off by a year, there are two firms 
on the street that are making some forward bullish calls to the 
bottom lines.  At today's close of $59.10, CAT trades roughly 
19.7 times Credit Suisse's FY2002 estimates.

Now, I'm going to make a bit of a leap of faith and mention 
DaimlerChrysler (NYSE:DCX) $44.04 +1.56%.  They make Dodge trucks 
that offer the Cummins diesel engine.  A portion of the 
Prudential upgrade mentioned a "sustained truck market 
improvement beginning in 2nd-half of 2003."

Cummins / DaimlerChrysler Comparison - $1 box




I will admit that it may seem to be a "leap of faith" to think 
that Cummins' (CUM) and DaimlerChrysler's (DCX) stock prices 
should track each other, but that does appear to be the case.  
Unfortunately I'm limited on the width of the charts that I can 
show, but if we simply compare the 5,6,7,8,9,A,B,C,1,2,3 periods 
(5-9 is May-September, A-C is November-December, 1-3 is January-
March) we can see how these two stocks really do seem to track 
each other.  You can get free point/figure charts at 
www.stockcharts.com and print these charts out, lay them side-by-
side to get the bigger picture if you'd like.

The "buy signal" off the bottom in Cummins' (CUM) chart back in 
November (chart on left, red B) and resulting X column gave us a 
longer-term bullish vertical count of $56.  A bullish trade in 
DaimlerChrysler (DCS) (right chart) at $46 would have the bullish 
vertical count on that chart bullish to $67.

Both stocks are trading above trend and this is longer-term 
bullish.  Should DCX trade the $46 level, then both stocks would 
have longer-term bullish vertical counts.

What is compelling here is that Cummins (CUM) "rocketed" above 
its upward trending channel line and I think a longer-term 
bullish trader/investor may want to keep an eye on shares of 
DaimlerChyrsler (DCX) at the $46 level.  While DaimlerChrysler 
(DCX) does sell gasoline powered trucks, the Cummins Diesel is 
found in all Dodge diesel pickup trucks and their commercial 
transportation vehicles.

Fundamental traders may also find an interesting comparison in 
analysts forecasted 2003 earnings for DaimlerChrysler (DCX) of 
$2.65 per share.  Very close to recently revised higher estimates 
by Prudential for Cummins.

Full disclosure

I try and look at every investment opportunity with an unbiased 
view, but I should disclose that I recently purchased a Dodge 
pickup truck that has the Cummins Diesel engine.  Part of my 
reasoning for purchasing a Dodge instead of a Ford (NYSE:F) 
$17.20 +2.32% or General Motors (NYSE:GM) $61.14 +0.70% product 
was that I liked the Cummins engine and could only get it through 
Dodge.

There's nothing like the sound or expected longevity of a diesel 
engine and the "slapping" sound of steel.  If you're a long-term 
investor that is looking for some longevity from you engine or 
perhaps an investment, then either of these stocks may have a 
place in your portfolio.

A good strategy would be to keep an eye on both stocks over time.  
It certainly appears that Cummins (CUM) is the "engine" that may 
indeed be powering, or at least leading the advance.  But then 
again, my truck couldn't go far if it didn't have an engine.

Jeff Bailey
Premier Investor


==================================================================
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
---------------------------------

Procter & Gamble - PG close: 84.10 change: +0.18

WHAT TO WATCH: With the economy on the rebound more than one 
investor believes that a big consumables conglomerate like PG 
might be able to profit from the up tick in economic activity - 
not that there was much worry.  A quick look at the chart clearly 
points out that buyers have been stepping in to pick up PG as the 
stock steps up higher.  Regression channel analysts have probably 
already noticed that PG has been in a nice up trend since last 
May.  This has us thinking that the place to buy PG is near $80 
to $81 but in the past the dip bottomed when the MACD was closer 
to the zero line thus we still have some more consolidation to go 
(if the bulls are willing to let it slide a bit lower).  Keep 
your eyes on it and be patient.




--- 

Human Genome Sciences - HGSI - close: 22.97 change: +0.69

WHAT TO WATCH: HGSI added about 15% since bouncing off the $20 
level on March 1st.  The stock has spent the last three sessions 
consolidating those gains, and today's 3% gain could portend a 
break over the 20-dma at $23.36.  This level has acted as 
resistance since late January.  The biotech index (BTK.X) was 
only up 0.45% and we couldn't come up with any news to explain 
today's gain.  If this relative strength continues, aggressive 
investors could consider an entry if HGSI closes over the 20-dma.  




--- 

Emulex - EMLX - close: 32.01 change: -2.80

WHAT TO WATCH: Shares of this storage company took a whipping 
today after Banc of America cut their estimates and price target 
for EMLX based on a lower closure rate on high-end systems than 
had been anticipated.  Today's high-volume (15M vs. the average 
of 9.5M) 8% loss was painful for bulls, but the stock had already 
been weak relative to the NASDAQ.  We think this makes EMLX a 
good short candidate.  However, we'd like to see shares rebound a 
bit before jumping on.  Support could emerge at recent lows near 
$31 or the 200-dma at $30.43.  Waiting for a failed rally to 
$33.50-$35 to enter a position could minimize the risk of taking 
a position so close to potential support levels.  Be aware that 
attempting to short EMLX above its 200-dma is rather risky and 
we'd look for that failed rally at its 20-dma first with a very 
tight stop.  Otherwise, look for it to close under the $30 level 
before evaluating a short play.




---

Texas Instruments - TXN - close: 34.11 change: -1.60

WHAT TO WATCH: TXN was profiled on this weekend's Watch List as a 
possible long candidate.  We liked the way the stock had shot 
over resistance at $34, but were reticent to chase it higher 
after the SOX.X semiconductor index moved up over 25% in only six 
sessions.  The SOX did pull back today, and TXN dipped back to 
$34.  We suggested such a dip would be a good time to consider a 
bullish entry.  So why aren't we adding this one to the Play List 
tonight?  Frankly, we think the SOX could be due for some more 
profit-taking before heading higher.  Given the size of the 
recent rally a dip back to 600 isn't out of the question.  On the 
other hand, the way TXN re-tested $34 and closed above that level 
is bullish.  Aggressive traders may want to enter at current 
levels if the SOX continues higher.   




--- 

Daimler Chrysler - DCX - close: 44.04 change: +0.68

WHAT TO WATCH:  Here's one you might want to consider as a 
longer-term play.  Auto manufacturers have performed strongly 
over the past two weeks in response to the improving economic 
outlook.  Today's Prudential upgrade of Cummings (NYSE:CUM) was 
based partially on an anticipated ramp-up in demand for trucks, 
which would directly benefit DCX.  For more on the relation 
between the two companies, refer to tonight's Market Wrap.  
Technically, the stock could be headed for a breakout above the 
January highs near $46.  Not only would a move above this level 
clear that resistance, but it would also be a buy signal on the 
PnF chart.  Our PnF chart also shows the vertical count for DCX 
is $67.  We wouldn't expect shares to trade that high in the 
near-term, but over 6-9 months such a move is possible.  Note 
that DCX in an ADR, and thus is subject to large gaps up or down 
at the open.






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

Sideways session opens the week.
by Russ Moore

Investor’s hearts were in a different place today as memories of 
the 9/11 tragedy were rekindled. The result was a low volume, 
choppy session and a growing concern that we might be a tad 
overbought.

The DOW ended the day with a gain of +0.4 percent while the 
NASDAQ finished flat and the NDX shed -0.08 percent. Volume was 
the lightest it’s been in awhile with only 1.1 billion shares 
trading on the big board and 1.6 billion on the tech index.

Gold, airlines, oil, oil service and banks attracted the greatest 
share of buying interest on the broad markets while Internet and 
software sectors lead the tech side.

Today’s flat performance shouldn’t have come as much of a 
surprise, after all, the markets have experienced a solid move 
over the last couple of weeks and it’s only natural that 
investors take some time to think things over before committing 
more dollars or deciding to take some profits. 

Looking at charts (daily) we can see that the current pattern 
from 03/01 - 03/11 looks very similar to the pattern we saw from 
02/22 - 02/28. Is this simply a pause, or consolidation period, 
before we move a few steps higher? Bears will tell us it’s the 
calm before the storm, and the storm will blow the markets a good 
deal lower. They’ll point to the low volatility readings and high 
valuations to fortify their reasoning. The bulls will tell you 
that volatility levels can remain low for a sustained period 
while markets continue to rise, and that measuring valuations 
today is a completely different ball game days gone by.

Who’s right? Sorry, don’t have that answer as each side offers 
valid points. However, as I said in the weekend sentiment, 
caution flags should be flying high in the bull’s camp whenever 
we see the divergence between Commercial and Small Spec players 
reach extremes. We’re not quite there yet, but we’re getting 
close. 

One final note, take a look at today’s put/call ratio in 
particular, the index data. When was the last time you saw the 
index put/call ratio below 1.00? Remember, these are contrarian 
indicators and current levels are adding more ammunition to the 
bear’s side.


VIX
Monday 03/11 close: 22.37


VXN
Monday 03/11 close: 42.00


10-yr Bonds
Monday 03/11 close: 5.32


Total Put/Call Ratio:  .55


Equity Option Put/Call Ratio:  .48


Index Option Put/Call Ratio:  .91


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 38.53

Volume/Open Interest
Maximum calls: 40/126,616
Maximum puts : 37/146,403

Moving Averages
 10 DMA 36
 20 DMA 36
 50 DMA 37
200 DMA 38

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: 591.73

Volume/Open Interest
Maximum calls: 600/6,732
Maximum puts : 560/7,053

Moving Averages
 10 DMA  579
 20 DMA  569
 50 DMA  573
200 DMA  589

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: 1168.26

Volume / Open Interest
Maximum calls: 1100/47,583
Maximum puts : 1100/56,277

Moving Averages
 10 DMA 1141
 20 DMA 1121
 50 DMA 1128
200 DMA 1149

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: 10,611.24

Volume / Open Interest
Maximum Calls: 100/18,082
Maximum Puts    96/41,405

Moving Averages:
 10 DMA 10,402
 20 DMA 10,164
 50 DMA 10,005
 200 DMA 10,020

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: 511.12

Volume / Open Interest
Maximum Calls: 520/977
Maximum Puts:  520/924

Moving Averages
 10 DMA 495
 20 DMA 496
 50 DMA 517
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: 622.51

Volume / Open Interest
Maximum Calls: 550/  994
Maximum Puts:  500/1,584

Moving Averages
 10 DMA 583
 20 DMA 562
 50 DMA 553
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: 385.48

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

Moving Averages
 10 DMA 386
 20 DMA 383
 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, 03/08. 
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 
02/19/02     355,905   772,569   (60,759)    5.5%
02/26/02     366,258   432,258   (66,000)    9.0%
03/05/02     361,254   445,989   (84,735)   28.4%

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
02/19/02       130,856    63,311    67,545     1.1%
02/26/02       139,183    62,087    77,096    14.1%
03/05/02       161,711    60,941   100,770    30.7%

Most bearish reading of the year:  36,513 - 5/01/01
Most bullish reading of the year: 100,770 - 3/05/02

NASDAQ-100
Commercials   Long      Short      Net     %Change 
02/19/02      33,871    35,690    (1,819)    (14.6%)
02/26/02      33,589    34,091      (502)    (72.0%)
03/05/02      37,549    35,419    (1,870)

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
02/19/02        9,966     8,073    1,893     18.8%
02/26/02        9,517    11,416   (1,899)  
03/05/02       11,961    11,214      747

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 
02/19/02      29,606    17,953   11,653     12.9%
02/26/02      33,322    21,110   12,212      4.8%
03/05/02      37,036    25,554   11,482     (6.0%)

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
02/19/02       4,654    10,431    (5,777)      5.5%
02/26/02       6,333    12,547    (6,214)      7.5%
03/05/02       6,589    13,057    (6,468)      4.1%

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        +100,770     +77,096        -84,735    -66,000

Total Open
Interest %       (+45.26%)  (+38.30%)      (-10.50%)   (-8.26%)
                 net-long   net-long       net-short  net-short


                     Small Specs             Commercials
DJIA futures     (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value          -6,468     -6,214        +11,482   +12,212
Total Open
interest %       (-32.92%)    (-32.91)      (+17.59%)  (+22.43)
                 net-short   net-short       net-long    net-long


                     Small Spec              Commercials
NASDAQ 100      (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value         +747      +1,899       -1,870     -502

Total Open
Interest %        (+3.22%)   (-9.07%)     (-2.71%) (-.74%)
                 net-long   net-short      net-short  net-short


What COT Data Tells Us
----------------------
Indices:.Last week I mentioned that a lack of commitment from the 
Commercial players i.e. a move in to accumulation mode, would 
make any rally suspect. Well folks, we got the move all right, 
but it’s not in the direction many people would expect. This week 
we have the Commercials adding substantially to their net-short 
positions. More importantly, the Small Specs were also adding 
large positions however; they were in long contracts. 

Remember we are looking for increased divergence between the 
big/small players. This week’s move should have anyone that is 
currently long the markets looking over their shoulder.

Gold:.It’s taken awhile, but maybe we’re finally starting to see 
why the Commercial players have maintained their short positions. 
The gold index (XAU) is starting to give back a little after 
enjoying a very nice run over the last couple of months. 

02/12 62,223 contracts net-short
02/19 60,054 contracts net-short
02/26 56,409 contracts net-short
03/05 58,666 contracts net-short

Data compiled as of Tuesday 03/05 by the CFTC.



===============
Play-of-the-Day  (bullish)
===============
((  New Net Bulls Tech Stock Long Play   ))

Mercury Interactive - MERQ - cls: 41.58 chg: +2.60 stop: 37.75

Company Description:
Founded in 1989, Mercury Interactive is the leading provider of 
enterprise testing and performance management solutions. The 
company's automated software and managed services help companies 
deliver and maintain high-performance applications. Customers 
worldwide use Mercury Interactive solutions across their 
application and technology infrastructures to minimize hardware 
and operational expenses, protect revenue streams and enhance 
their competitive positions. (source: company press release)

Why We Like It:
The GSO.X software index has spent the last two sessions catching 
up to some of the recent gains in the semiconductor sector.  MSFT 
has led the way higher after breaking over $60 and closed above 
its 200-dma today.  The GSO has paralleled this move and is 
trading just under its own 200-dma at 178.75.  With Mr. Softee 
leading the way higher we suspect other software issues will 
follow along, and MERQ appears to be a good candidate to take 
advantage of the sector strength.  Shares have bounced sharply 
since testing the bottom of its ascending channel at $34.  The 
stock gained 6.6% today on high volume of 5.2M versus the 3.7M 
average, but we couldn't find any news to explain the move.  It 
appears that panicked shorts may have covered after MERQ broke 
resistance at $40.  Furthermore, today's move over $41 also 
signaled a double-top breakout on the p-n-f chart.  With the $40 
level out of the way, the next obstacle could be the top of the 
aforementioned channel at $44 but we actually suspect the stock 
could reach the $50 area.  With these levels in mind, aggressive 
traders could consider a bullish position if the GSO continues to 
be strong and leaves its 200-dma in the dust.  However, a dip 
back to $40 would present a more favorable entry from a 
risk/reward standpoint.  Whatever your stance, we're pulling the 
trigger tonight.  Conservative traders could choose to place 
their stop slightly below what should be new support at $40 (near 
$39.50, for example), while we're willing to take a little more 
heat with an initial stop at $37.75.

Picked on March 11th at  $41.58 
Change since picked:      +0.00
Earnings Date          01/22/02 (confirmed)








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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
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Do not duplicate or redistribute in any form.



PremierInvestor.net Newsletter                  Monday 03-11-2002
                                                   section 2 of 2
Copyright  2001, All rights reserved.
Redistribution in any form is strictly prohibited.

The entire newsletter is best viewed in COURIER 10 for alignment
=================================================================
To view this email newsletter in HTML format with imbedded
charts and graphs, click here:
http://www.PremierInvestor.net/htmlemail/c11b_2.asp
=================================================================

In section two:

NetBulls Tech Stocks
  New Bullish Plays:       MERQ
  Stop Adjustment Update:  MONE (in play)

StockBottom Non-tech Stocks
  Stop Adjustment Update:  COL

High Risk/High Reward
  Closed Bullish Plays:    CTX

Split Trader
  Announcements:           THQI: 3-for-2 split announcement


********************
!  WEBSITE NOTICE !

Tonight, Monday, March 11th, 2002, we are having trouble with
the current play list and can not update the new stops and
dropped plays.  Please make a note of what we have here in
the newsletter.

********************


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 Tech Stocks (NB) section
=================================================================

============
NB New Plays
============

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

Mercury Interactive - MERQ - cls: 41.58 chg: +2.60 stop: 37.75

Company Description:
Founded in 1989, Mercury Interactive is the leading provider of 
enterprise testing and performance management solutions. The 
company's automated software and managed services help companies 
deliver and maintain high-performance applications. Customers 
worldwide use Mercury Interactive solutions across their 
application and technology infrastructures to minimize hardware 
and operational expenses, protect revenue streams and enhance 
their competitive positions. (source: company press release)

Why We Like It:
The GSO.X software index has spent the last two sessions catching 
up to some of the recent gains in the semiconductor sector.  MSFT 
has led the way higher after breaking over $60 and closed above 
its 200-dma today.  The GSO has paralleled this move and is 
trading just under its own 200-dma at 178.75.  With Mr. Softee 
leading the way higher we suspect other software issues will 
follow along, and MERQ appears to be a good candidate to take 
advantage of the sector strength.  Shares have bounced sharply 
since testing the bottom of its ascending channel at $34.  The 
stock gained 6.6% today on high volume of 5.2M versus the 3.7M 
average, but we couldn't find any news to explain the move.  It 
appears that panicked shorts may have covered after MERQ broke 
resistance at $40.  Furthermore, today's move over $41 also 
signaled a double-top breakout on the p-n-f chart.  With the $40 
level out of the way, the next obstacle could be the top of the 
aforementioned channel at $44 but we actually suspect the stock 
could reach the $50 area.  With these levels in mind, aggressive 
traders could consider a bullish position if the GSO continues to 
be strong and leaves its 200-dma in the dust.  However, a dip 
back to $40 would present a more favorable entry from a 
risk/reward standpoint.  Whatever your stance, we're pulling the 
trigger tonight.  Conservative traders could choose to place 
their stop slightly below what should be new support at $40 (near 
$39.50, for example), while we're willing to take a little more 
heat with an initial stop at $37.75.

Picked on March 11th at  $41.58 
Change since picked:      +0.00
Earnings Date          01/22/02 (confirmed)





===================
NB Stop Adjustments
===================

Bullish Plays
-------------

MatrixOne Inc - MONE - close: 14.08 chg: +0.29 stop: 12.46

The NASDAQ traded without much conviction today, but the software 
sector stood out as a bullish performer.  With MSFT adding to 
recent gains and closing just above its 200-dma, the GSO.X 
software index gained 2.42% to close at near-term highs.  This 
weekend we wrote our play on MONE with a trigger in order to 
guarantee that we didn't enter until there was more evidence of 
bullish momentum.  Afternoon strength pushed shares above that 
trigger at $14.05 as the stock near the highs for the day.  Now 
that this play has been initiated, our stop is set at $12.46.  If 
the GSO can break its 200-dma we'd look for MONE to trade up to 
psychological resistance at $15.  Alternatively if the sector 
consolidates and shares pull back, support could emerge near the 
50-dma at $13.57 but a dip to $13 is not out of the question.  

Picked on March 11th at $14.05
Gain since picked:       +0.03
Earnings Date         01/23/02 (confirmed)







=================================================================
AT Active Trader/Non-tech plays
=================================================================

===================
AT Stop Adjustments
===================

Bullish Plays
-------------

Rockwell Collins - COL - close: 25.23 change: +1.09 stop: 22.75*new*

We are raising our stop to $22.75 as shares have gained another
4.5% today.  Technically, new support should be at $24.00 and
conservative traders may want to keep a ready eye on the area.
We are still targeting an exit price of $27.50.






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

===============
HR Closed Play
===============

  -------------------
  Closed Bullish Play
  -------------------

Centex Cp. - close: 60.33 change: +0.86 stop: 58.18 

CTX put in a decent performance today and closed over the $60 
level.  Unfortunately, morning weakness had already stopped us 
out at $58.18 for a net loss of $3.14.  In hindsight we'd 
obviously like to have pegged the stop slightly lower, because 
the stock bounced just $0.04 below that level.  Nonetheless we 
still feel justified in being cautious.  Today's close over $60 
is a positive development for CTX but it'll take some real sector 
bullishness to attack near-term highs near $63.  TOL, RYL, BZH 
and other homebuilding stocks all appear to be in the process of 
consolidating recent gains.  If you've been following the updates 
for this play you might remember the correlation between bond 
yields and homebuilding stocks that we've been following.  The 
trend over the past few sessions had been yields heading higher 
while homebuilding stocks sold off, reflecting possible worries 
over higher mortgage rates.  Believe it or not, UBS Warburg 
upgraded CTX to a "buy" from a "hold" on Friday but it was little 
help at the time. 

Picked on March 4th at $61.32
Gain since picked:      -3.14
Earnings Date        01/23/01 (confirmed)






=================================================================
Split Trader / Stock Splits (ST) section
==================================================================

-------------------
Split Announcements
-------------------

Video-Gaming THQI Scores 3-for-2 Stock Split

Before the bell this morning, THQ Inc. (Nasdaq:THQI) announced 
that its Board of Directors has approved a 3-for-2 stock split of 
the company's common stock.  This will be enacted as a 50% stock 
dividend.  

The shareholder record date for the split will be March 26th, 
2002.  The payable date will be on or about Tuesday, April 9th.

According to their press release this is THQI's third stock split 
since 1998.  The President and CEO reaffirmed that the company 
anticipates revenue growth to be 35% this year.

This 3-for-2 split should increase the number of shares 
outstanding from 24.7 million to just over 37 million shares.

The stock closed at $52.03 on Friday.  For a current quote,
click here:
http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=THQI


About the company
THQ Inc. develops and publishes interactive entertainment 
software worldwide for a variety of hardware platforms including 
PC CD-ROM, wireless devices, and those manufactured by Sony, 
Nintendo and Microsoft. (source: company press release)





==================
  Trading Ideas
==================

This section contains stocks that meet criteria which may make
them of interest to long and short side traders.  These are not
recommendations, nor have they been reviewed by PremierInvestor
editors for investment potential.  However, each of them has
technical and fundamental characteristics that make them worthy
of further review by traders and investors looking for fresh ideas.
New stocks will appear daily following the market close.

--------------------------------- 
Value Plays With Bullish Signals 
--------------------------------- 
Ticker  Company Name               Close     Change 

BA      Boeing Co                  50.88     +1.48
EME     Emcor Group Inc            55.54     +0.55
URS     URS Corp                   33.98     +1.50
CMC     Commercial Metals Co       38.01     +1.01
JOSB    Jos A Bank Clothiers       10.30     +1.00

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

GLW     Corning Inc                 8.90     +1.05
JNPR    Juniper Networks            14.71     +1.40
CIEN    Ciena Corp                  10.29     +1.02
TWR     Tower Automotive            13.90     +1.25
VTS     Veritas Dgc Inc             16.61     +1.08

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

COL     Rockwell Collins Inc       25.23     +1.09
CAM     Cooper Cameron Corp        50.00     +2.50
CUM     Cummins Inc                46.83     +2.69
PCP     Precision Castparts Corp   36.07     +1.93
MANU    Manugistics Group Inc      21.57     +2.15

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

TEVA    Teva Pharmaceuticals       53.84     -2.51
ABK     Ambac Financial Group      59.49     -1.50
DRI     Darden Restaurants         38.80     -2.00
EAT     Brinker International      32.56     -2.24

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

RJR     RJ Reynolds Tobacco        64.21     -1.04
CEC     CEC Entertainment          44.86     -2.62
PNRA    Panera Bread Co            57.02     -0.87



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

*****************************************************************
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Newsletter, or any Premier Investor Network newsletter please
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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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