PremierInvestor.net Newsletter Tuesday 03-12-2002 section 1 of 2 Copyright © 2001, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= To view this email newsletter in HTML format with imbedded charts and graphs, click here: http://www.PremierInvestor.net/htmlemail/c12b_1.asp ================================================================= In section one: Market Wrap: Can retail sales cancel out telecom concerns? Market Sentiment: The Bulls refuse to give in. Play-of-the-Day: Breakout Ahead? ----------------------------------------------------------------- U.S. Market Numbers ----------------------------------------------------------------- MARKET WRAP (view in courier font for table alignment) ----------------------------------------------------------------- 03-12-2002 High Low Volume Advance/Decline DJIA 10632.35 + 21.11 10639.68 10510.91 1.31 bln 1544/1597 NASDAQ 1897.12 - 32.37 1899.01 1879.42 1.71 bln 1480/2059 S&P 100 591.09 - 0.64 591.73 584.84 Totals 3024/3656 S&P 500 1165.58 - 2.68 1168.26 1154.34 RUS 2000 498.90 - 1.85 500.75 495.03 DJ TRANS 2994.81 - 22.25 3017.59 2967.14 VIX 21.95 - 0.42 23.14 21.31 VXN 43.03 + 0.98 44.48 42.71 TRIN 1.13 PUT/CALL 0.65 ----------------------------------------------------------------- =========== Market Wrap =========== Can retail sales cancel out telecom concerns? Telecom stocks took it on the chin today after telecom equipment maker Lucent Technologies (NYSE:LU) $5.60 -10.54 warned that its goal to achieve profitability would most likely be delayed into next year and that telecom service providers were still holding back capital expenditures, which were expected to help grow revenues. Lucent Technology Chart - Daily Interval Lucent's (LU) news that the telecom turnaround might not be as close at hand as previously thought had many telecom equipment stocks under pressure today. The good news near-term was that shares of LU didn't trade a new 52-week low. They say "all the bad news comes out at the bottom." I'm just not sure all the "bad news" is out at this point, nor am I convinced the stock has found a bottom. I'm not looking to trade Lucent (LU) long or short, but if a picture can tell a thousand words, then the chart of Lucent (LU) hints that there is still some time before the telecom equipment sector sees any improvement. Nortel Networks Chart - Daily Interval Fellow telecom equipment manufacturer Nortel Networks (NYSE:NT) didn't warn on earning's today, but Moody's lowered its rating on the company's long-term debt securities to Baa3 from Baa2 and the company's commercial paper to Prme3 from Prime2. The downgrade on NT's debt reflect Moody's concerns that weakness in key end markets is likely to be deeper and more protracted (see Lucent's comments) than previously anticipated. Moody's said their ratings remain on review for possible further downgrade. Fiber optic-related stocks that depend on the equipment providers to drive demand for their products were under selling pressure as the Fiber Optic Index (FOP.X) fell 6% to 99.04. In Friday's market wrap we talked about how this group is a "momentum" traders dream. One stock I mentioned as a bullish candidate on Friday was shares of Juniper Networks (NASDAQ:JNPR) $13.57 -7.74. Friday's close was $13.31 and Monday found the stock gaining some upside to the $14.71 level, but today's "bad news" out of Lucent took some early March wind out of Juniper's sail. Juniper Networks Chart - Daily Interval Call me "chicken," but I thought shares of Juniper (NASDAQ:JNPR) might be able to find some bullish momentum and offer an aggressive bull a decent trade this week. Things were looking pretty good at yesterday's close of $14.71, but Lucent's outlook may take some wind out of Juniper's sails too. Even though I profiled this stock in my market wrap on Friday for aggressive bulls looking for a short-term trade, I'd still raise a tight stop to break-even or just under Monday's low of $12.85. I've also pointed out Monday's "spike higher" that looks similar to a past bump above the $14.46 level. If the past is any indication of the future, then it makes more sense to raise a stop tight than relive a relatively painful decline back to the lows. By raising a stop to break-even or tighter just under a previous day's low, an aggressive bull still gives the stock a chance to prove itself, but at the same time helps limit downside risk when a trading scenario doesn't play out as previously planned. Not good, but not all that bad The negativity from the telecom sector didn't help bulls today, but the damage seemed to be rather limited or at least the bearishness was targeted at the telecom-related sectors. I've been keeping a close eye on General Electric (NYSE:GE) $41.10 -0.12% and after filing its 10-K on Friday, the stock continues to hover just under the $42 level. The stock traded sideways today and yesterday and I would have thought under a bearish market tone like we saw earlier in today's session, that this Dow component might have seen more selling pressure. That wasn't the case today. This one stays on our bullish play list with a trader's trigger to go long at $42 (see play write up). Tomorrow morning we're going to get some economic data and Retail Sales. Last night I talked a little about Cummins (NYSE:CUM) $46.53 -0.64% and DaimlerChrysler (NYSE:DCX) $43.92 -0.27%. Both stocks traded sideways today. Depending on tomorrow morning's retail sales numbers, DaimlerChrysler (DCX) may be a stock to watch. The retail sales number is reported in two parts. One includes auto sales and the other excludes the auto sales numbers as they are bigger ticket items and dealer incentives can have an influence on sales numbers. One stock a trader/investor might want to have a bullish eye on if the retail numbers are strong (excluding autos) is shares of Kohls (NYSE:KSS) $69.19 +1.09%. This may be the classic "short it because it's rolling over" type of stock. As I see it, the point/figure chart shows a bullish vertical count of $64 and a nice "triangle" formation presents itself. A trade at $70 would be a "bullish triangle" and that's a high probability point/figure pattern for a bullish trader. If the retail sales numbers are weak, then I don't think the stock would trade the $70 level. Kohls Corp. (KSS) - $1 box A bearish trader may also have KSS on his/her trade list for tomorrow, but I've gotten numerous e-mails from bearish traders in KSS wondering why the stock just won't break down. One reason I can think of is that the stock just seems to be in favor and have its defenders. Relative strength versus the broader S&P 500 (SPX) is also more bullish. This may well be one of those "March" stocks that some mutual fund managers have been adding to in order to "dress up" their portfolios before the end of the 4th quarter. If the retail sales numbers are strong tomorrow morning, then a bull wearing something from Kohls (KSS) may just find a mink coat on the sale rack tomorrow morning with at trade at $70. The retail sales numbers will be released at 08:30 AM EST, so we'll get a chance to "shop the number" before stocks open for trading. Jeff Bailey Senior Market Technician ================ Market Sentiment ================ The Bulls refuse to give in. by Russ Moore Two big name telecom warnings and a 3 percent slide in Mr. Softy failed to keep the DOW from climbing to its highest level of 2002. The blue chip index got off to a rocky start before recovering in the late going to post a modest gain of +0.2 percent. The NASDAQ was a different story as the index was unable to work off the telecom weakness and the negative analyst’s comments on Microsoft. The tech index finished the day with a loss of -1.7 percent while the big cap NDX dropped -2.1 percent. Volume remained soft with 1.30 billion shares moving on the big board and 1.72 billion on the NASDAQ. Losers outpaced winners by a 16/15 margin on the NYSE and 20/15 on the NASDAQ. We’ve been talking a lot about volatility in recent articles so I thought we’d take a break from that subject and turn our attention to another area which we continue to monitor i.e. "corporate commitment". We all know that the fund managers will be busy trying to bolster their end of quarter performances, and, that may lead to further upside in the next couple of weeks. We also know that the overall market sentiment has grown decidedly bullish, at least from the retail and analyst side. What we haven’t seen yet, is the commitment from corporate America. I know I’ve harped on this point in the past but I believe it is an extremely important piece of the recovery puzzle. Sure, fund managers can prop things up for short periods of time however, without the dollar outlay from the corporate side, rallies will continue to be short-lived. Fund flow tracker, Trim Tabs, is saying much the same thing when it notes, "the trading float grows when either companies or insiders sell never before traded shares. The trading float shrinks via stock buybacks and cash takeovers". The company said that last week saw 4.6 billion in new offerings with only 497 million in new cash takeovers and 235 million in stock buybacks. "Corporate investors are bearish and Wall Street strategists are bullish. There is no doubt that corporate investors have a much better record of predicting the future". VIX Tuesday 03/12 close: 21.31 VXN Tuesday 03/12 close: 43.01 10-yr Bonds Tuesday 03/12 close: 5.30 Total Put/Call Ratio: .65 Equity Option Put/Call Ratio: .54 Index Option Put/Call Ratio: 1.31 === NASDAQ 100 Index (NDX/QQQ) 52-Week High: 103.51 52-Week Low: 28.19 Current close: 38.00 Volume/Open Interest Maximum calls: 40/131,356 Maximum puts : 37/146,681 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: 591.09 Volume/Open Interest Maximum calls: 600/6,883 Maximum puts : 560/7,589 Moving Averages 10 DMA 581 20 DMA 570 50 DMA 573 200 DMA 588 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: 1165.58 Volume / Open Interest Maximum calls: 1100/47,582 Maximum puts : 1100/56,257 Moving Averages 10 DMA 1146 20 DMA 1124 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: 10,632.35 Volume / Open Interest Maximum Calls: 100/18,036 Maximum Puts 96/41,141 Moving Averages: 10 DMA 10,453 20 DMA 10,202 50 DMA 10,015 200 DMA 10,017 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: 509.60 Volume / Open Interest Maximum Calls: 520/987 Maximum Puts: 520/924 Moving Averages 10 DMA 497 20 DMA 497 50 DMA 516 200 DMA 539 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: 605.50 Volume / Open Interest Maximum Calls: 550/ 713 Maximum Puts: 500/1,584 Moving Averages 10 DMA 590 20 DMA 565 50 DMA 555 200 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: 386.81 Volume / Open Interest Maximum Calls: 400/550 Maximum Puts: 380/800 Moving Averages 10 DMA 386 20 DMA 383 50 DMA 379 200 DMA 388 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 =============== (( New Bullish non-tech play )) Kohls - KSS - close: 69.19 change: +0.75 stop: see text Company Description: Based in Menomonee Falls, Wis., Kohl's is a family-focused, value oriented specialty department store offering moderately priced national brand apparel, shoes, accessories and home products. (source: company press release) Why We Like It: KSS is making the Play List tonight in anticipation of tomorrow morning's release of retail sales numbers. Obviously retail stocks could trade higher if those numbers are well-received and KSS stands out as being a particularly good candidate to take advantage if the reaction is positive. The stock is trading just under resistance at $70, which has been a lid on the share price for most of the year (2002). The p-n-f chart also shows that KSS is threatening to break out of a bullish triangle, with a trade above $70 confirming the move. We also like how the stochastics and MACD are heading higher with room to move. Given the fact that we're basing this play on unknown economic data we're going to use a trigger. If KSS trades at or above $70.50 we'll go long as this is above the January high at $70.49. We'll initiate the play with a stop at $66.75. Picked on March xth at $ xx.xx Change since picked: +0.00 Earnings Date 03/05/02 (confirmed) ================================================================= 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. 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PremierInvestor.net Newsletter Tuesday 03-12-2002 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/c12b_2.asp ================================================================= In section two: Net Bulls Bullish Play Updates: BBH, RIMM, MERQ, MONE Stock Bottom / Active Trader New Bullish Play: KSS Bullish Play Updates: COL, DOL, USFC, GE, OHP High Risk / High Reward Bullish Play Updates: PVN Bearish Play Updates: ADLAC Split Trader NDN: 4-for-3 split announcement ABM: 2-for-1 split announcement YDNT: 3-for-2 split announcement 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: 121.45 chg: -0.38 stop: 114.00 We're not much farther along after Tuesday's session than we were at Friday's close. The BBH continues to trade in a range bound pattern but the good news is the ascending channel pattern is becoming more defined. If the holders are going to keep building on its higher lows then we'd like to see it trade up from today's lows near $119.45. This dip under 120 coincided with the BTK.X's dip to 501 today. The BTK (closed: 509) continues to trade sideways as well with the channel forming between 500 and 520. Hopefully, we'll get a move soon one way or the other as the BTK's 50-dma (516), which has been acting as overhead resistance, is quickly approaching the index and traders might make a move one way or the other. We're not surprised that the index and the holders are trading sideways. We looked at charts for all the stocks that make up the holders' basket and all of them traded relatively flat except for HGSI, which was up 4.9%. If you're still looking for an entry on the BBH this may be a good one but we'd probably recommend a tighter stop than the one we have listed in the newsletter. Otherwise we're still waiting for that breakout over 125 for the next move higher. FYI, the BBH 200-dma is at 124.50. Picked on February 20th at $120.00 Gain since picked: +1.45 Earnings Date N/A --- Research In Motion - RIMM - cls: 29.29 chg: +1.14 stop: 26.49*new* The point-and-figure bullish triangle breakout continues for shares of RIMM. The stock pulled back to bounce off its 5-dma on Friday/Monday and Tuesday's session saw a 4% rally in the face of a negative day in the Nasdaq. Volume was very strong for RIMM at 4.4 million, which really helps confirm the bullish sentiment for the stock. News for RIMM is still focused on its Blackberry roll out but initial reactions seem to be positive. Traders that do not already have a position may want to wait and see if the stock can conquer the $30 level, which could be psychological resistance. Of course extremely short-term traders may want to be looking for the exits as the stock approaches $30. Dips to $28.00 or $28.50 could still be buyable but be sure to consider the broader market tone. We are raising our stop to $26.49 but if you want to consider tightening yours up under Monday's low. Currently, Premier is up 7.2% in the play. Picked on March 6th at $27.32 Change since picked: +1.97 Earnings Date 04/09/02 (unconfirmed) --- Mercury Interactive - MERQ - cls: 40.95 chg: -0.63 stop: 37.75 Yup, Mr. Bailey is really giving the stock picking staff a hard time today about MERQ. He's trying to push RATL on us but we chose MERQ instead. We like both stocks but RATL has yet to breakout above the $21.50 to $22.00 level of resistance. On the other hand, MERQ broke above the $40 level of resistance on Monday and the pull back today back to $40 was exactly what we ordered for a favorable entry point in our initial write up. Confirm market direction and don't forget to add your stop, which by the way could probably be tighter than ours but we want to give MERQ enough room to maneuver if the Nasdaq sees more profit taking again. Picked on March 11th at $41.58 Change since picked: -0.63 Earnings Date 01/22/02 (confirmed) --- MatrixOne Inc - MONE - close: 14.20 chg: +0.10 stop: 12.46 We were very encouraged by the trading in MONE today as the stock confirmed Monday's move over the $14 level. Incidentally, if you didn't read the Monday newsletter we were triggered in MONE on Monday when shares traded at $14.05. Tuesday's performance was a little rocky as MONE gapped down with the Nasdaq's move lower but MONE was able to overcome this bearishness to close in the green. The MACD is looking very strong and about to cross the zero line. Bulls can be evaluating new entries but keep the $15.00 to $15.25 level in your sites as possible resistance. Fortunately, we don't expect $15.00 to be a serious threat (at this time). By the way, if you were looking for a dip to $13, the low at $13.30 may have been your chance today. Picked on March 11th at $14.05 Gain since picked: +0.15 Earnings Date 01/23/02 (confirmed) ================================================================== Stock Bottom / Active Trader (AT) section ================================================================== ============ AT New Plays ============ ---------------- New Bullish Play ---------------- Kohls - KSS - close: 69.19 change: +0.75 stop: see text Company Description: Based in Menomonee Falls, Wis., Kohl's is a family-focused, value oriented specialty department store offering moderately priced national brand apparel, shoes, accessories and home products. (source: company press release) Why We Like It: KSS is making the Play List tonight in anticipation of tomorrow morning's release of retail sales numbers. Obviously retail stocks could trade higher if those numbers are well-received and KSS stands out as being a particularly good candidate to take advantage if the reaction is positive. The stock is trading just under resistance at $70, which has been a lid on the share price for most of the year (2002). The p-n-f chart also shows that KSS is threatening to break out of a bullish triangle, with a trade above $70 confirming the move. We also like how the stochastics and MACD are heading higher with room to move. Given the fact that we're basing this play on unknown economic data we're going to use a trigger. If KSS trades at or above $70.50 we'll go long as this is above the January high at $70.49. We'll initiate the play with a stop at $66.75. Picked on March xth at $ xx.xx Change since picked: +0.00 Earnings Date 03/05/02 (confirmed) =============== AT Play Updates =============== -------------------- Bullish Play Updates -------------------- Rockwell Collins - COL - close: 23.96 change: -1.27 stop: 22.75 COL had been consolidating near $24, which coincides with its initial spin-off price. Then Monday's trading saw shares break above that level and add 4.5% on strong volume to close at $25.23. That's an unusually large one-day move for COL and thus we weren't too surprised to see the stock move back today on some profit taking. We were hoping to see another close above $24 but unfortunately an afternoon sell-off dropped the stock to $23.96. Today's decline could be due to rumors that Loral Space (LOR) may be a takeover target. COL wasn't specifically implicated as a possible buyer, but nervous investors may have bailed out anyway. If today's pullback continues we'd look for support near $23.75 to $23.50. Traders still looking for an entry may want to consider entries on a dip to this level or wait for a move back over $24. Due to the recent gains we raised our stop to $22.75 in Monday's newsletter, which is a quarter above our initial entry point. Picked on February 15th at $22.50 Gain since picked: +1.46 Earnings Date 04/17/02 (unconfirmed) --- Dole Food CO. - DOL - close: 29.96 change: +0.04 stop: 28.49 Did someone forget to tell investors that DOL was trading today? Volume was the lowest in nearly two months, coming in at a tepid 123K compared to the 303K average. As you might expect the stock also traded in a small range of just 37 cents. The indecision and lack of conviction could be attributed to the way shares have been coiling under resistance at $30. We'd avoid opening any new positions until DOL closes above $30, and other investors likely feel the same way. On the other hand, there don't appear to be many sellers. It's encouraging to note that the daily stochastics appear to be curling higher after topping out above the 80% level last week. Today's move up into the close is also positive, but as mentioned above we'd recommend waiting for a close over $30 before considering any new positions. Picked on March 1st at $30.94 Gain since picked: -0.98 Earnings Date 01/31/02 (confirmed) --- USFreightways - USFC - close: 38.80 change: +0.20 stop: 36.49 We've been waiting for almost a week to see if the range-bound Dow Transports (TRAN) would break up or down. Our wait ended today, as a 0.73% loss moved the index below recent support at 3000. Fortunately for this play, USFC continued its trend of outperforming the TRAN. Technically the stock looks very strong after breaking over resistance at $38, pulling back to retest that level (multiple times), and then heading higher. Given the pattern of relative strength, it stands to reason that if the TRAN heads back over 3000, USFC could lead the way. Buyers are supporting the stock at $38 but sellers have a lid on it at $39.20 for the moment. Picked on March 4th at $39.01 Gain since picked: -0.21 Earnings Date 01/30/02 (confirmed) --- General Electric - GE - close: 41.10 change: -0.05 stop: see text Still waiting. GE has traded in a narrow range since this week without threatening to either break below support at $40 or resistance at $42. It's not the most exciting thing to watch, but we had this in mind when we initiated the play with a trigger at $42.05. Hopefully when GE finally does crack resistance we'll get some real upside movement. Although today's trading was somewhat lackluster, we did like how shares moved up with the Dow Jones as the day progressed and closed just below the 200-dma. Picked on March xth at $xx.xx <- See text Gain since picked: 0.00 Earnings Date 01/17/02 (confirmed) --- Oxford Health - OHP - close: 39.19 change: +0.03 stop: 35.90 So far, so good. OHP started the week by gapping above its 20- dma and quickly moved above Friday's highs near $39. Today's gain was fractional, but we're not going to complain about another higher close. The HMO.X healthcare index has traded in a similar fashion and could be headed for a test of historical and psychological resistance at 500. Such a move could have OHP challenging its 52-week high at $40.95, but first we'll need to see a move over its own psychological resistance at $40. The MACD is on the verge of producing a bullish crossover, which could portend a move higher. However, in light of the resistance levels overhead traders may want to wait for shares to pullback to the $38.50 area before considering an entry. Picked on March 8th at $38.55 Gain since picked +0.64 Earnings Date 02/05/02 (confirmed) ================================================================== High Risk / High Reward (HR) section ================================================================== =============== HR Play Updates =============== -------------------- Bullish Play Updates -------------------- Providian Financial - PVN - close: 5.90 change: -0.24 stop: 4.85 The BIX.X (682) moved higher over the past two sessions and thus far hasn't had any trouble with long-term resistance near 680 but it's still too close to call it a strong breakout. From here, a move above 687 would mark highs not seen since 1999. Closer to home, we knew PVN could be volatile due to its low price, and that was certainly the case with yesterday's 7.5% gain as shares gapped higher and continued to move up until topping out near $6.30. Today the stock pulled back on lower volume to digest some of those gains. Believe it or not, PVN's move lower this morning was a perfect fill in of the gap from Monday's open. While the stock looks short-term overbought it could continue to run higher on momentum but will likely be pushed or pulled with any major move in the banking indices. A move to $5.50 would not be unexpected and a bounce there might be a potential entry. Picked on March 8th at $5.71 Change since picked: +0.19 Earnings Date 02/07/02 (confirmed) -------------------- Bearish Play Updates -------------------- Adelphia Communications - ADLAC - cls: 24.26 chg: -0.59 stop: 25.76 Telecom and wireless weakness were the themes for the day after profit warnings from LU and NOK, but the negativity wasn't confined to just those sectors. ADLAC followed the NASDAQ lower and finally dipped far enough to trigger our entry point at $23.99. Shares managed a small bounce from that level but still look weak. After trading through the 100-dma, the stock faltered at the 50-dma and fell back below both levels. We find it interesting that volume has been steadily tapering off over the past four sessions, indicating a general lack of interest at current levels. Obviously our first obstacle is a move back below $24. Aggressive traders could consider jumping on should that occur. Now that we've been triggered our stop is a penny above the $25.75, which was Friday's intraday high. We do want to confirm that this play is not for everyone. We readily admit that the stock should be trading much lower, especially considered the puzzling reports about its cable swap transactions with CMCSK in a post-Enron era. Why shares have been so strong is a mystery and the support ADLAC showed at $24 today is troubling if I am a bear about to risk a short trade. Picked on March 12th at $23.99 Gain since picked: -0.27 Earnings Date 03/29/02 (unconfirmed) ================================================================== Split Trader (ST) section ================================================================== Split Announcements ------------------- NDN Announces 5th Split in 5 Years. This morning before the bell the 99 Cents Only Stores (NYSE:NDN) released news that their Board of Directors had approved a 4-for-3 stock split of its common stock. The shareholder record date will be March 25th, 2002 and the split is payable on April 3rd, 2002. We would expect shares to begin trading at their post-split price on Thursday, April 4th. Fractional shares resulting from the split will be paid in cash based on the closing price as of the record date. Post-split, NDN will have almost 70 million shares outstanding. The company has a history of stock splits with most of them being 5:4 or 4:3. NDN's last split was a 3-for-2 in early 2001 near the $37 level. The stock closed at $34.76 on Monday. For a current quote, click here: http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=NDN About the company 99 Cents Only Stores®, the nation's oldest existing one-price retailer, operates 130 retail stores in Southern and Central California, Nevada and Arizona and a wholesale division called Bargain Wholesale. 99 Cents Only Stores® emphasizes name-brand consumables, priced at an excellent value, in its clean attractively merchandised stores. (source: company press release) ----- Services Giant ABM Announces 2-for-1 Most of the market had expected ABM Industries Inc. (NYSE:ABM) to announce its first quarter earnings after the closing bell today. For some reason they chose not to wait and released their results during the market. Q1 results showed a 1% increase in revenues over the same period last but net income was down 5% with the company citing loss of business due to the September 11th attacks. A short while after their earnings release was out the company also announced a 2-for-1 stock split. The Board of Directors had a approved the 2:1 in the form of a stock dividend for shareholders on record as of March 29th, 2002. The distribution date is scheduled for Monday, May 6th, 2002. The company does not have a big history of stock splits with only two in the last ten years. The last split was a 2-for-1 in 1996 near the $40 level. After the new split takes affect, ABM should have about 48.7 million shares outstanding. The Board also declared a quarterly cash dividend of $0.18 a share on a pre-split basis to be paid on May 3rd, 2002 for shareholders on record as of March 29th, 2002. The stock closed at $33.08 on Monday. For a current quote, click here: http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=ABM About the company ABM Industries Incorporated is the largest facility services contractor listed on the New York Stock Exchange. With annualized revenues in excess of $1.9 billion and more than 60,000 employees, ABM provides air conditioning, elevator, engineering, janitorial, lighting, parking, security and related services to thousands of commercial, industrial, institutional and retail facilities in hundreds of cities across North America. The ABM Family of Services includes American Building Maintenance, Ampco System Parking, American Commercial Security (ACSS), Amtech Elevator, Amtech Lighting, ABM Engineering, ABM Janitorial, and CommAir Mechanical. (source: company press release) ----- Young Innovations Offers Investors 3-for-2 Split An hour after the market closed this evening, Young Innovations, Inc. (Nasdaq:YDNT) announced a 3-for-2 stock split. Its Board of Directors has declared the split for shareholders on record as of March 22nd, 2002. Fractional shares resulting from the split will be paid in cash based on the closing price as of the record date. The payable date for the split will be March 28th, 2002. This marks the first split since YDNT began trading in 1997. YTD its been performing quite well, but be aware that shares trade on very low average volume of 10.5K, making potential trades a high- risk endeavor. The stock closed at $29.93 on Tuesday. For a current quote, click here: http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=YDNT About the company Young Innovations develops, manufactures and markets supplies and equipment used by dentists and dental hygienists and consumers. The Company believes it is the leading manufacturer of prophylaxis angles and cups (used in teeth cleaning and polishing procedures) and distributor of panoramic x-ray equipment in the United States. The Company also offers a line of dental handpieces (drills), prophy pastes, fluorides and infection control products, orthodontic tools and brushes, flavored gloves used in the dental office as well as children's toothbrushes and toothpastes used for home care. (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 PNC PNC Financial Services 59.73 +0.84 UCL Unocal Corp 38.44 +0.52 MRO Marathon Oil Group 29.47 +0.70 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- Ticker Company Name Close Change DMRC Digimarc Corp 18.02 +1.11 VVUS Vivus Inc 9.40 +1.65 JWL Whitehall Jewellers 15.91 +1.01 VISG Viisage Technologies 7.25 +1.41 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- Ticker Company Name Close Change UB Unionbancal Corp 41.91 +1.72 MYG Maytag Corp 45.30 +4.63 ACF Americredit Corp 38.31 +3.46 RIMM Research In Motion Ltd 29.29 +1.14 FS Four Seasons Hotels Inc 56.62 +1.27 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change DRI Darden Restaurants 37.41 -1.39 CDWC CDW Computer Centers 55.09 -2.88 BRO Brown & Brown 30.26 -1.14 GOSHA Oshkosh B'gosh 37.50 -1.50 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change DV Devry Inc 33.48 -0.15 JWA John Wiley & Sons 25.40 -0.14 FSS Federal Signal Corp 25.50 -0.75 ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. 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