PremierInvestor.net Newsletter Weekend Edition 03-15-2002 section 1 of 3 Copyright © 2001, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= To view this email newsletter in HTML format with imbedded charts and graphs, click here: http://www.PremierInvestor.net/htmlemail/c15b_1.asp ================================================================= In section one: Market Wrap: Healthcare looking healthy. Play-of-the-Day: That's More Like It. Watch List: NVDA, OMX, COST, WAG, OO, CAH, TSG and more! Market Sentiment: Back on course. ------------------------------------------------------------------ U.S. Market Numbers ------------------------------------------------------------------ MARKET WRAP (view in courier font for table alignment) ------------------------------------------------------------------ WE 3-15 WE 3-08 WE 3-01 WE 2-22 DOW 10607.23 + 34.74 10572.49 +203.63 10368.86 +400.71 + 65.11 Nasdaq 1868.30 - 61.37 1929.67 +126.93 1802.74 + 78.20 - 80.66 S&P-100 591.13 + 1.29 589.84 + 13.68 576.16 + 22.12 - 5.61 S&P-500 1166.16 + 1.85 1164.31 + 32.53 1131.78 + 41.94 - 14.34 W5000 10904.69 + 14.02 10890.67 +330.66 10560.01 +380.72 -136.19 RUT 499.12 - .73 499.85 + 21.51 478.34 + 13.27 - 4.18 TRAN 2951.54 - 58.70 3010.24 +113.11 2897.13 +171.48 + 41.42 VIX 20.77 - 0.84 21.61 - 0.52 22.13 - 2.76 + .80 VXN 40.26 - 1.36 41.62 - 0.32 41.94 - 6.63 + 3.58 TRIN 0.56 0.73 0.74 1.33 TICK +855 +927 +1029 +1044 Put/Call .64 .62 .94 .90 ------------------------------------------------------------------ WE= week ended =========== Market Wrap =========== Healthcare looking healthy This week's best performing sector found the Healthcare Index (RXH.X) getting top billing with a 6.2% gain. While many market mavens continue to chat about the future gains from technology stocks, the weekly performance numbers hint that those "tech bulls" may not really be practicing what they're preaching. If they are, then their losses are mounting as little land mines keep going off and the green pastures of 1999 become riddled with holes. This week's "landmines" found Lucent Technology (NYSE:LU) telling analysts that a return to profitability would most likely have to be pushed back to next year. That news had investors selling the stock to a new all-time low and weekly close below the $5 level and placing a dark cloud of skepticism on the Networking Index (NWX.X) and Fiber Optic Index (FOP.X), which both showed double digit weekly percentage losses. While the telecom-equipment business is having a rough time, the software business doesn't look much better. Software stocks came under selling pressure this week after software giant Oracle Corp. (NASDAQ:ORCL) painted a less than rosy picture of the near future after reporting earnings that met previously lowered guidance. The broader GSTI Software Index (GSO.X) fell 4.9% on the week. As fund managers begin focusing on the "returns game" near the end of the first quarter, it's starting to become more evident that money has really been flowing toward those sectors of the market where earnings are perhaps more "predictable" or at least more likely to be found in the scope of a recovering economy or consumer spending. As investors begin to hear about an "economic recovery" you can bet there will be little tolerance for the fund manager that can't show some gains, regardless of what the broader market averages do. As we approach the end of the first quarter, it's becoming more apparent on where the money is flowing into, and where it's flowing out of. According to TrimTabs.com, $7.6 billion flowed into equity funds for the weekly period ending Wednesday, March 13th, which compared to inflows of $3.2 billion during the prior week. Weekly market averages/sector performance In the "tech" arena, only the biotechs were able to hammer out a weekly gain, while the remaining technology sectors found selling. Then end result for the NASDAQ Composite (COMPX) was a -3.4% weekly loss and the larger cap tech and the NASDAQ-100 fell -0.42%. This may be a little upsetting to investors having made some large bets in the groups on the hopes of strong economic data. While this week's economic data was rather upbeat at the industrial level, the MARKET seemed to shy away from most technology groups. Only the Semiconductor Index (SOX.X) is showing a gain for the year. Banks put in a strong showing this week after many of the larger multinationals rallied after fears of accounting concerns abated. Our strategy near-term is to identify those that are leaders and look for pullbacks as entry points. The S&P Banks Index (BIX.X) and the more regional type banks looks to be the place for bulls to focus that want exposure to the banking sector as that index has handily outperformed the larger banks by a 2-to-1 margin as depicted by the KBW Bank Index (BKX.X). For the third week in a row, money rolled out of Treasury bonds and the benchmark 10-year YIELD rose to 5.363%. This is the highest YIELD this bond has shown since last summer's levels. I'd expect Treasury YIELDS to hold near current levels in the next couple of sessions as the FOMC meets next Tuesday. Most economists expect the Fed to hold Fed Funds right where they're at 1.75%. With today's PPI data showing little inflationary pressure, I would be surprised if the Fed took any action next Tuesday. Many economists expect the Fed to take a more "neutral" bias toward the economy, which would be an improvement from past bias of "weakness." Morgan Stanley Provider (RXH.X) - Daily Interval The "label" on the above chart should not be confused with the Morgan Stanley Healthcare Payors Index (HMO.X). The above index is comprised of company's that actually provide healthcare to the consumer. Comprising stock symbols are (AHG, LNCR, BEV, HCR, HMA, THC, HRC and VC). The "strongest" supply/demand chart in the bunch looks to be that of Tenet Healthcare (NYSE:THC) $63.98 +1.96%. The stock traded strong this week from $60.90 to $63.98. The charts of the other stocks are still trading below some downward trends, so we might just get a near-term pullback and a bit of consolidation before the next leg higher. However, if they do catch some fire early in the week, there will still be some good patterns to trade going forward. I'm monitoring our bullish play in shares of Oxford Health (NYSE:OHP) $40.45 +0.57% and I really would have liked to have seen a new 52-week closing high on the stock. OHP is a component of the Morgan Stanley Healthcare Payors Index (HMO.X). I do think OHP bulls want to see some broader bullishness come from the RXH.X stocks to provide somewhat of a "tidal wave of enthusiasm" in the broader healthcare sector. The broader the sector bullishness a bull can get behind a push higher the better. One stock with a "healthcare" theme that I'll have my eye on over the next couple of weeks is Cardinal Health (NYSE:CAH) $69.06 +3.05%. Cardinal Health Chart - Weekly Interval I wanted to show a weekly chart for a couple of reasons. The first is to be able to show you data back to April of 2000 when shares of CAH broke above its 200-day (40-week) moving average. This is considered a longer-term moving average and often times, stocks that break above this longer-term moving average tend to perform quite well. As you can see, the stock eventually cleared its 200-day at $35, then broke above horizontal resistance at $40 and went on an impressive run for several months. Note the large volume pullback at a low, a retest of that low, then major reversal higher. I've marked almost identical technicals that have taken place in recent weeks. A break above the $70 level is a clearly defined level of similar resistance now facing CAH. Should the stock break above that level this week, I'm expecting longer-term bullishness to continue. Cardinal Health - $1 box Shares of CAH have been building a nice base since late November (after red B) and today's break of bearish resistance (red +) trend and trading at $58, set off a triple-top buy signal. I like the "coincidence" shown in the bar chart dating back to April of 2000 and I like the break of bearish trend and the bullish "triple-top" at $58 today. You know what? I also like it back in April of 2000 also. Take a look! Cardinal Health - April 2000 time period This is what the point and figure chart looked like back in April of 2000 when CAH broke a triple-top and also broke its bearish resistance trend. The resulting vertical count column indicated a potential longer-term bullish price objective. As you can see, the stock made an impressive move until my chart runs out of room at $62. Any guesses where the stock topped out at eventually? How about an all-time high of $77.32 set on June 21, 2001. Darn! 68-cents shy. True. If you go back and look that the point/figure chart of CAH on www.stockcharts.com you will see an eventual double-bottom sell signal that took place in October of 2000 that would have negated the bullish count on the above chart. But it does make you wonder if smart money "knew" what was going to happen in the coming years. Will history repeat itself with the technicals now before us? We never know for sure, but history has a funny way of repeating itself. One last note. When looking at a chart of CAH over the past three years. This stock has an uncanny ability to perform well during the April-June time period. Shorter-term bulls should also consider a bullish trade in CAH at current levels. Have a great weekend! I will be out of the office on Monday, but Eric Utley will keep you well informed! Jeff Bailey Senior Market Technician ========================= Play-of-the-Day (Bullish) ========================= Kohls Corp - KSS - close: 71.35 change: +1.38 stop: 66.75 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) - ORIGINAL WRITE UP: March 12th, 2002 - 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. - Most Recent Update: March 15th 2002 - This morning saw the release of a spate of economic data before the bell and the market liked what it saw. KSS gapped up over a half-point and opened right at our $70.50 trigger. At this point we initiated a long play with a stop at $66.75. Adding to the bullishness were the Consumer Sentiment numbers, which came out shortly after the market opened. The reading at 95.0 was stronger than the expected 92.7 and fueled a rise in KSS to $71.91. Shares pulled back a tad into the close but still managed to add almost 2% on strong volume of 2.68M versus the 1.7M average. Now that this play has actually been triggered, lets discuss our strategy: The p-n-f chart shows a bullish triangle breakout with a bullish vertical count of $85. This level may be attainable, but in the near-term we're looking for a move to $77. The first obstacle will be the 52-week high at $71.91. Traders may want to take bullish positions on a move over $72 after confirming strength in the RLX.X retail index. Alternatively a dip back to $70 could afford less risk-averse traders an entry point. FYI: point-and-figure aficionados might recall that a pennant or triangle breakout to the bullish side in a cooperating market, according to the experts, has a 71.4% chance of profitability with an average gain of 30.9% in 5.4 months. We are not expecting these sorts of gains especially given our short-term perspective but it makes for interesting speculation doesn't it. - Play-of-the-Day Comments: March 15th, 2002 - The strength in the RLX.X on Friday was very impressive and with two weeks left in the quarter fund managers may feel the pressure to start window dressing their portfolios with winners in the retail sector. KSS looks like a good play of the day as a move over $72 would be a new high and shorts could panic and cover while a dip back to $70 would be a great entry point for a new position. Picked on March 15th at $ 70.50 Change since picked: +0.85 Earnings Date 03/05/02 (confirmed) ================================================================== WATCH LIST ================================================================== The PremierInvestor.net watch list is not designed to be read as full fledged stock picks. Rather we would prefer to offer it as an extra tool in today's investor toolbox. Think of it as a radar screen with your own radar operator pointing out interesting developments, technical patterns or potential plays that you may or may not have seen on your own. Due to time constraints we do glance at the news but rarely do we have time to fully read pertinent news stories, due background research and other necessary screens that investors should do before making a decision. A common exercise is to read the entry, glance at the sector and other stocks in that industry and then compare what's happening in the stock to what's happening in the broader market indices. We hope you enjoy the Watch List and that it proves to be a useful tool for your own trading success. STOCKS WORTH WATCHING --------------------------------- NVIDIA Corp - NVDA - close: 52.77 change: +2.14 WHAT TO WATCH: We profiled NVDA on the latest Watch List because of the weakness shares have displayed since failing at the $60 resistance level. What makes this stock really attractive as a short is the importance of the $50 level. In addition to psychological support, this has been a significant historical support/resistance level for almost a year. A trade under $50 would trigger a double-bottom on the p-n-f chart, and the MACD just signaled a bearish crossover on Thursday. We would consider entries if NVDA moves below $48.95. A trade below this level would signal a break of both support at $50 and the 200-dma just below. Next major support levels are $45 and $40. --- Officemax Inc - OMX - close: 5.89 change: +0.01 WHAT TO WATCH: First of all, you might want to take a look at the chart link below this paragraph. Okay, done? Yes boys and girls, that's a gain of almost 50% in just three sessions in early March! The stock exploded from a narrow range near $4.00 on March 4th and quickly shot up to $5.99 on the 6th. The news behind this move was the Q4 earnings reports where OMX reported large losses but gave improved forward-looking guidance while industry rival Staples beat their Q4 estimates. The company is well positioned to benefit if the retail/business climate continues to improve. We're obviously not looking to chase the stock higher, but some backing and filling to $5.00 may prove to be a nice entry point. Of course, based on the low price of OMX this would be a speculative high-risk/reward play. --- Costco - COST - close: 42.15 change: +0.83 WHAT TO WATCH: PI subscribers may recall that we had a high-risk long play on COST a few weeks ago in an attempt to buy the bottom of the stock's ascending channel. Unfortunately the stock didn't cooperate, broke through the channel, and stopped us out quickly. Now that shares have bottomed out near $38 and quickly bounced we think the weak hands may have been shaken out. Aggressive traders may want to take a look at a bullish position if shares trade above the 100-dma at $42.70. The MACD just gave a buy signal after curling up from oversold and the stock doesn't face any resistance until $44. --- Walgreen Co - WAG - close: 40.00 change: +0.45 WHAT TO WATCH: Here's another stock that was on Wednesday's Watch List. The retailers performed well today and WAG could be on the brink of a breakout. However, with two retail plays (KSS and PSS) already on the Play List, we decided to put WAG on the watch list section. Shares have been coiling just under resistance $40 and are in the process of filling in a gap from last June. If the sector continues to be strong we may see a powerful breakout. Aggressive traders could jump on a move above recent highs at $40.30, while conservative traders may want to wait for a move above $41. Unfortunately, the stock could see plenty of congestion between $41 and $43. --- Oakley Inc - OO - close: 18.52 change: +0.21 WHAT TO WATCH: The economic outlook is so bright, you gotta wear shades! This sunglass manufacturer just broke though resistance at $17.50, which coincides with the top of a sharp gap down in August. Volume has been increasing over the past two weeks and the MACD is heading higher from the baseline. Thursday's 9.3% move not only moved the stock above resistance but created a triple-top breakout on the p-n-f chart. If retail continues to be strong OO could be headed for a test of the $20 level. Look for a dip to $18 or $17.50 to offer a potential entry point. --- Cardinal Health - CAH - close: 69.06 change: +2.05 WHAT TO WATCH: If you've been following along with our OHP play then you're already aware that healthcare stocks have been acting very bullish lately. CAH is a supplier for HMO's, and the HMO.X healthcare provider index is threatening to break to all-time highs. The stock tacked on +3.05% today and closed just under the 200-dma at $69.17. This move also broke over bearish resistance on the p-n-f chart and created a triple-top breakout. In addition to the 200-dma the stock may encounter some overhead pressure at the November highs of $70. Look for shares to dip to the $68 level and keep an eye on how the HMO.X behaves near 500. We're going to consider a new long play if the stock can close over the $70 mark. --- Sabre Holdings Corp - TSG - close: 45.36 change: -0.14 WHAT TO WATCH: Shares of this online travel company have been trading in an ascending channel since bottoming out at $21 in September. Most recently the stock bumped off resistance at $50 and is now at the bottom of its channel. We're looking for shares to either bounce from this level or break down. The daily stochastics are headed down and the MACD just signaled a bearish crossover, indicating that the latter may be the case. Look for a move below $44 to confirm the breakdown. Alternatively, an aggressive trader could enter on a bounce above the $45 mark with a tight stop just below the bottom of the channel. The recent weakness may be due to the recent announcement from Delta Airlines (DAL) that they would no longer be paying commissions to travel agencies. JPM weighed in with a reiterated buy on TSG with the explanation that the company won't see much financial impact from the decision. This may be true, but if DAL's decision triggers an industry-wide trend then TSG could be vulnerable to more significant losses. On the positive side we're seeing a lot of strength in other travel/hotel/leisure stocks. ============= MORE TO WATCH ============= UN - With retail stocks looking stock this giant in the group could see more buying interest through the end of the month. We're watching for a break over $59.25. JNJ - Drugs are a mixed bag lately but JNJ has been very strong. We would consider a potential play if the stock would pull back to bounce at $62.50 or even $61.00. AOL - Continues to lag the rest of the media stock group. The 50-dma has been overhead resistance for days. Shorts might take a new stab if shares trade under $25.00. Watch out for a break over the 50-dma. ETM - Speaking of media stocks, this one looks like a great long candidate. The growing volume and the breakout to new highs while not being over extended is very tempting. Other media stocks to watch are: TRB, GCI, MHP, CCU, UVN. SVU - With retail stocks looking strong we pulled up a couple of grocery issues and found two that looked appealing. SVU has shown very little weakness and little volatility too. The move back over $26 could be a decent entry for a bullish play. You may want to check out SWY too. N - Some of the non-gold related metal stocks are looking pretty interesting. Inco (N) has been very strong and looks to be targeting a move over $20. Check out EC too. ================ Market Sentiment ================ Back on course. by Russ Moore This morning’s economic data saw a return to the positive reports investor’s had become accustomed to in late February, early March. The bullish overtones pushed markets higher for the day but flat for the week. The DOW closed with a gain of +0.9 percent while the NASDAQ added +0.8 percent and the NDX +1.2 percent. Volume remained light with 1.47 billion shares trading on the big board and 1.68 billion moving on the tech index. Winners nosed out losers by a 19/13 margin on the NYSE and 19/15 on the NASDAQ. The chip sector was Numero Uno on the tech side while financial, oil service and biotech sectors lead the broad markets. Gold posted the lone red arrow in broad market action. Trim Tabs reported that all equity funds had inflows of $7.6 billion for the week ending March 13. The company also reiterated its bearish stance in a research note. "While corporate selling is in abundance, there is no corporate buying going on. By their actions, corporate investors are not seeing any pickup in the U.S. economy." Last week we noted a sharp change in the Commercial net-short position (COT Data). In particular, we found divergence between Commercial and Small Specs increased substantially. The Commercials backed off a little this week, reducing their net- short position by half of one percent. Current levels continue to show a bearish bias however, and should be monitored closely by all investors over the coming months. VIX Friday 03/15 close: 20.84 VXN Friday 03/15 close: 40.93 10-yr Bonds Friday 03/15 close: 5.36 Total Put/Call Ratio: .64 Equity Option Put/Call Ratio: .53 Index Option Put/Call Ratio: 1.70 === NASDAQ 100 Index (NDX/QQQ) 52-Week High: 103.51 52-Week Low: 28.19 Current close: 37.23 Volume/Open Interest Maximum calls: 38/66,890 Maximum puts : 36/42,774 Moving Averages 10 DMA 37 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: 591.13 Volume/Open Interest Maximum calls: 620/3,447 Maximum puts : 520/5,984 Moving Averages 10 DMA 587 20 DMA 573 50 DMA 573 200 DMA 587 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: 1166.16 Volume / Open Interest Maximum calls: 1175/21,221 Maximum puts : 1025/23,956 Moving Averages 10 DMA 1159 20 DMA 1130 50 DMA 1128 200 DMA 1146 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: 10,607.23 Volume / Open Interest Maximum Calls: 106/11,494 Maximum Puts 96/32,726 Moving Averages: 10 DMA 10,556 20 DMA 10,290 50 DMA 10,043 200 DMA 10,006 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: 529.60 Volume / Open Interest Maximum Calls: 580/1,310 Maximum Puts: 520/1,396 Moving Averages 10 DMA 509 20 DMA 498 50 DMA 512 200 DMA 538 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: 594.19 Volume / Open Interest Maximum Calls: 600/1,854 Maximum Puts: 490/2,024 Moving Averages 10 DMA 605 20 DMA 569 50 DMA 558 200 DMA 543 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: 390.34 Volume / Open Interest Maximum Calls: 380/153 Maximum Puts: 360/285 Moving Averages 10 DMA 387 20 DMA 385 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, 03/15. 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 02/26/02 366,258 432,258 (66,000) 9.0% 03/05/02 361,254 445,989 (84,735) 28.4% 03/12/02 396,050 483,606 (87,556) 3.3% 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 02/26/02 139,183 62,087 77,096 14.1% 03/05/02 161,711 60,941 100,770 30.7% 03/12/02 179,825 75,025 104,800 4.0% Most bearish reading of the year: 36,513 - 5/01/01 Most bullish reading of the year: 104,800 - 3/12/02 NASDAQ-100 Commercials Long Short Net %Change 02/26/02 33,589 34,091 (502) (72.0%) 03/05/02 37,549 35,419 (1,870) 03/12/02 37,415 42,942 (5,527) 195.0% 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 02/26/02 9,517 11,416 (1,899) 03/05/02 11,961 11,214 747 03/12/02 14,571 13,045 1,526 104.0% Most bearish reading of the year: (1,899) - 2/26/02 Most bullish reading of the year: 8,460 - 3/13/01 DOW JONES INDUSTRIAL Commercials Long Short Net %Change 02/26/02 33,322 21,110 12,212 4.8% 03/05/02 37,036 25,554 11,482 (6.0%) 03/12/02 35,080 23,204 11,876 3.4% 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 02/26/02 6,333 12,547 (6,214) 7.5% 03/05/02 6,589 13,057 (6,468) 4.1% 03/12/02 6,400 13,070 (6,670) 3.1% 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 +104,800 +100,770 -87,556 -84,735 Total Open Interest % (+41.12%) (+45.26%) (-9.95%) (-10.50%) net-long net-long net-short net-short Small Specs Commercials DJIA futures (Current) (Previous) (Current) (Previous) Open Interest Net Value -6,670 -6,468 +11,876 +11,482 Total Open interest % (-34.26%) (-32.92) (+20.38%) (+17.59) net-short net-short net-long net-long Small Spec Commercials NASDAQ 100 (Current) (Previous) (Current) (Previous) Open Interest Net Value +1,526 +747 -5,527 -1,870 Total Open Interest % (+5.53%) (+3.22%) (-6.88%) (-2.71%) net-long net-long net-short net-short What COT Data Tells Us ---------------------- Indices:.Both sides backed off their respective positions this week as the Small Specs reduced their net-longs while the Commercials eased up (on a percentage basis) in their net-shorts. Current readings remain bearish. Gold:.Commercials are holding steady with their net-short contracts. 02/19 60,054 contracts net-short 02/26 56,409 contracts net-short 03/05 58,666 contracts net-short 03/12 58,507 contracts net-short Data compiled as of Tuesday 03/12 by the CFTC. ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. 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PremierInvestor.net Newsletter Weekend Edition 03-15-2002 section 2 of 3 Copyright © 2001, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= To view this email newsletter in HTML format with imbedded charts and graphs, click here: http://www.PremierInvestor.net/htmlemail/c15b_2.asp ================================================================= In section two: Net Bulls New Bullish Plays: CSC Bullish Play Updates: BBH, RIMM Bearish Play UPdates: BRCD, CLS, CHKP, EMLX Closed Bullish Plays: MERQ, MONE Stock Bottom / Active Trader New Bullish Plays: PSS Bullish Play Updates: COL, DOL, OHP, KSS Closed Bullish Plays: GE High Risk/Reward New Bullish Play: IKN Bullish Play Updates: HIG, PVN Bearish Play Updates: ADLAC Split Trader - none - ================================================================== Net Bulls (NB) Tech Stock section ================================================================== =============== NB New Plays =============== ----------------- New Bullish Plays ----------------- Computer Sciences - CSC - close: $52.25 change: +0.25 stop: 49.74 Company Description: Computer Sciences Corporation, one of the world's leading consulting and information technology (IT) services firms, helps clients in industry and government achieve strategic and operational results through the use of technology. The company's success is based on its culture of working collaboratively with clients to develop innovative technology strategies and solutions that address specific business challenges. (source: company press release) Why We Like It: Resistance at $50 repelled shares of CSC on rally attempts in December, January, and February. This month the bears finally gave way and shares traded up to $53.47. When CSC traded to $51 it triggered a quadruple-top breakout on the p-n-f chart. Another pattern we noticed on CSC was a reverse head-and- shoulders pattern. The neckline was $51.00 to $50.50. When shares gapped up above it the stock pulled back three days later to retest that old resistance as new support. If the market remains bullish we think CSC could quickly trade up to $55 but based on the head-and-shoulders pattern we're looking for a move to $60. Entries could be evaluated if shares move over $53.50 but be aware of possible resistance at $55. On the other hand, a pullback to $50-$51 could provide a lower-risk and preferable entry point. However, the newsletter is picking the stock here at $52.25. Our stop is nestled just under the $50 level at $49.74. In recent news, CSC received a 30M deal to provide services for the Navy's underwater warfare program and a $25M contract to NASA. Picked on March 15th at $52.25 Change since picked: +0.00 Earnings Date 01/31/02 (confirmed) =============== NB Play Updates =============== -------------------- Bullish Play Updates -------------------- Biotech HOLDRs - BBH - close: 125.45 chg: +2.20 stop: 114.00 The biotech sector was one of the big leaders for the markets on Friday and the BBH was a big benefactor of the move. Check out these Friday results for most of the stocks in the BBH basket: AMGN +1.92%, BGEN +2.67%, DNA +2.28%, GENZ +2.35%, ICOS +3.15%, IDPH +2.50%, MEDI +3.02%, MLNM +3.80%. We had been seeing higher lows in the BBH for a while but the trading range had a solid top on it near $124 to $125. The move on Friday above the $125 mark but the HOLDRs above its 200-dma and formed a quadruple top breakout on the PnF chart for the BBH. We're pretty encouraged by the move and if the BBH can confirm with another close over the $125 level we'll be tempted to raise our stop early next week. The next level of resistance for the HOLDRs is $127.50. Picked on February 20th at $120.00 Gain since picked: +5.45 Earnings Date N/A --- Research In Motion - RIMM - close: 27.08 change: -0.79 stop: 26.49 Uh-oh! Looks like trouble in Berry-land. RIMM, the producer of the hot new BlackBerry always on mobile email thingamajig, appears to be failing as the rest of the software sector succumbs to ORCL's nasty news. The GSO.X software index inched lower again on Friday despite a 2% pop in its biggest component Microsoft. We're even more concerned about RIMM because the last 90 minutes on Friday looked like someone pushed RIMM off a steep slope and everyone stepped back to watch it roll down the hill. The only thing that appeared to stop the late afternoon slide was the closing bell. This does not bode well for Monday morning. Technical players will also be concerned because shares closed below their 10-dma. The low on March 11th was $26.82 and the stock closed above that on Friday. Maybe, just maybe shares will bounce again and our remaining tech long play will be saved! Otherwise we fully expect to be stopped out - probably before lunch. However, for individual traders this may not be so bad. The company has earnings coming up on April 9th, which is about three weeks. If the Nasdaq and/or the software sector pulls back for a few more days it could just offer a better entry point for a little pre-earnings run up. Interestingly, a JPM analyst on Friday felt that the stock might be weak ahead of earnings and also cautioned investors that the stock might be overvalued. The JPM analyst has a price target of only $24.00. This is in direct contrast to the Goldman Sachs analyst remarks in late January. RIMM was trading near $25 when the GS analyst came out with a price target near $45 saying the Blackberry roll out and the increase in carrier distribution deals should continue to push RIMM's quarterly performance higher. The belief that a nation- wide service coverage offering the voice-enabled product by RIMM will be completed by the end of the year could have investors moving in ahead of any steep stock appreciation. There has been some other numbers that seem to line up in favor of the GS analyst and not JPM's view. RIMM is the top dog in the corporate market for handhelds and RIMM's backlog of 600K units exceeds the number of BlackBerries currently in existence, which is around 500K. It sounds like the up coming April 9th earnings announcement will be interesting but we may get a better entry point between now and then with the current look of the chart. Picked on March 6th at $27.32 Change since picked: -0.24 Earnings Date 04/09/02 (confirmed) -------------------- Bearish Play Updates -------------------- Brocade Comm. - BRCD - cls: 25.54 chg: -1.48 stop: 28.75 *new* The weakness we saw on Thursday for BRCD continued into the weekend as investors pulled money off the table. The lid on the stock price at $30 looks pretty strong now and the MACD is starting to rollover well under the zero line. Volume has been light but it has been growing on these recent declines. Most stocks in the industry are still under a lot of pressure. There was more negativity today for Brocade's cousins in the networking group with UBS Warburg lowering estimates on JNPR, SONS, NET and TLAB. The weakness today actually triggered our play in BRCD at $26.90, which also included at stop at $30.05. The 5.4% loss on Friday brought shares close to potential support at $25 and shares might bounce but we feel the trend is now down and we see evidence of this on the PnF chart with a fresh column of O's. Very conservative traders could attempt to play with a stop at today's highs or yesterday's highs but we're lowering ours to just $28.75. Traders still looking for an entry point might want to look for a failed rally on either side of $27.50 or a move under $25.00. Our initial profit target is $22 but BRCD might trade to $20. Please read this weekend's wrap for a broader market perspective. Picked on March 15th at $26.90 Gain since picked: +1.36 Earnings Date 04/17/02 (unconfirmed) --- Celestica - CLS - close: $37.15 change: -0.85 stop: 40.25*new* Shares vacillated sideways for the first half-hour of trading on Friday before the bears got a good grip of the stock price and brought CLS lower. By lunchtime the stock had fallen under $37.50 with conviction and it quickly traded to $36.50 before bouncing into the close. I'm not telling you anything you can't see on an intraday chart but the move merely confirms our expectations that the stock will likely see more selling pressure due to the concerns for the contract manufacturing business. When big customers make comments about business still falling or still at a bottom with no visible signs of recovery you can guess that other businesses in the group also struggling. The move under the $37.70 to $37.50 area was a big breakdown under one of our retracement levels and bulls are probably looking at risk to the $34.50 level, of course we're looking for a move lower than that. More conservative traders can probably get away with a much tighter stop but we are lowering ours one dollar to $40.25. Traders looking for new entries might want to look for failed rallies at $38.50 (assuming it can get over $37.50 now) or a break under today's lows. Jeff will probably mention in the wrap that the next day or two might have a bullish bias so bears may want to wait for a potentially better entry. Picked on March 13th at $37.98 Gain since picked: +0.83 Earnings Date 04/17/02 (unconfirmed) --- Check Point Software - CHKP - cls: 32.17 chg: -1.11 stop: 35.51 The GSO.X software index continued to inch lower despite a 2% gain in its biggest component MSFT. This is likely due to the overall weakness across the sector as investors reacted to the negative earnings guidance by MSFT-rival Oracle (ORCL). Shares of CHKP lost another 3.3% and are currently trading near potential support at $32 but we don't expect it to hold. The PnF chart added some more O's and the MACD is still working on that soon to be bearish crossover. Since the stock has closed lower four days in a row it is likely short-term oversold. We'd look for a bounce on Monday as a potential entry point if it trades near resistance near $33.50 to $34.00. Over $34 we'd turn cautious and probably step back a bit. We are looking for a target price near $27.50. No change in our stop. Picked on March 14th at $33.28 Gain since picked: +1.11 Earnings Date 01/15/02 (confirmed) --- Emulex Corp. - EMLX - close: 27.88 change: -1.37 stop: 32.31 Premier just added EMLX to the play list on Thursday and there hasn't been many new developments in the play strategy. There were some more negative analyst comments for the group today when UBS Warburg lowered estimates on JNPR, SONS, NET and TLAB. Shares of EMLX saw a lot of volume on the early morning move but the stock movement and volume seemed to taper off into the close. We're encouraged by the move as it confirms the downside breakout under $30 and its 200-dma the day before. Plus, Friday's move also broke another retracement level for us. However, bears should be careful as the stock and the group looks a bit oversold and we wouldn't be surprised to see it bounce back towards the $30 level. Yet if EMLX does bounce we'd be looking at it as a new short opportunity once the bounce started falter. If you didn't read the initial write up on Thursday we'd like to remind you that the point-and-figure chart (PnF) is showing bullish support near $26.00. This is conflicting with our daily chart that shows the next support level is closer to the $24.00 to $24.75. We'd like to propose a potential hypothetical scenario on how EMLX might trade based on the current PnF chart. Let's assume the bears continue to pull the stock down to $27.00 or $26.00. Then shares bounce as bears cover for a profit and bulls try to play a move off support (remember, this is off the PnF chart). EMLX could then rally to the $29.00 or $30.00 level based off where it bounced and create a three-box reversal on the PnF chart. Bears retake control and move towards its current bearish price objective under $20.00. That's just speculation but let's see what happens. The daily chart is pointing to a move to $25.00 but the Monday after an options expiration Friday is typically bullish and the stock might bounce early. Picked on March 14th at $29.25 Gain since picked: +1.37 Earnings Date 01/22/02 (confirmed) =============== NB Closed Plays =============== -------------------- Closed Bullish Plays -------------------- Mercury Interactive - MERQ - cls: 38.39 chg: -1.05 stop: 37.75 Last night's negative guidance from ORCL was the nail in the coffin for our MERQ play. Although the software index (GSO.X) had fallen steadily this week we were somewhat encouraged by the way the stock had managed to stay near the $40 level. Unfortunately all bets were off after Oracle CFO Jeff Henley expressed his opinion that tech spending would be lagging the overall economy in the near future. This created a decidedly bearish bias in the sector today. We'd been looking for MERQ to hold near-term support at $38, but shares dropped to a low of $37.43. This move violated our stop at $37.75 and ending our play with a net loss of $3.83. The way MERQ traded over the past week illustrates the axiom "don't fight the tape." Despite the relative strength and breakout that led us to pick the stock in the first place, shares just weren't able to maintain that bullishness in a weakening sector. Picked on March 11th at $41.58 Gain since picked: -3.83 Earnings Date 01/22/02 (confirmed) --- MatrixOne, Inc. - MONE - close: 12.34 chg: -0.61 stop: 12.75 We went long on MONE this Monday in an attempt to take advantage of a breakout over $14. Although the stock was performing impressively it wasn't able to buck the broader software trend, which has become decidedly negative. In response to the failed rally and negative sector news, we took a defensive measure on this play last night and raised our stop to $12.75. Shares opened lower this morning and traded below that level almost immediately, stopping us out with a $1.30 loss. This play didn't turn out as we hoped, but traders may want to take note of our exit strategy that allowed us to minimize losses on a day when MONE lost 4.71%. It's always a good idea to re-evaluate stops if the trade does not go as planned. While we opted to wait until last night, conservative traders could've upped their stops after Wednesday's decline below $14. Picked on March 11th at $14.05 Gain since picked: -1.30 Earnings Date 01/23/02 (confirmed) ================================================================== Stock Bottom / Active Trader (AT) section ================================================================== =============== AT New Plays =============== ----------------- New Bullish Plays ----------------- Payless Shoesource - PSS - close: 61.74 change: +0.96 stop: 58.75 Company Description: Payless ShoeSource, Inc. is North America's largest family footwear retailer. The company operates a total of 4,968 stores offering quality family footwear and accessories at affordable prices. In addition, customers can buy shoes over the Internet through Payless.com (source: company press release) Why We Like It: The RLX.X retail index spent most of the week in a narrow range. Wednesday's unimpressive retail sales numbers could have been the catalyst for a sector-wide selloff, but that wasn't the case. Today's bullish consumer sentiment numbers propelled the RLX above resistance near 960 to highs not seen for two years. We like PSS as a long play because it's been one of the stronger performers within the sector over the last few weeks. Shares recently broke over long-time resistance at $60, retested that level, and then headed higher. P-n-f fans may want to note that the stock recently broke above bearish resistance line and has created a bullish catapult breakout. If retail strength continues on Monday, bullish positions could be had on a move back over $62.00. However, we would prefer a dip to $60 or $61 as our favorable entry point. Our initial stop is at $58.75, just below the March 5th low. At less than 5% this is a relatively tight stop, but if PSS abandons the $60 with conviction we'll be looking for the exits. Did anyone notice the strong move up in the last couple of hours on Friday? We did not notice any unusual activity in the after-hours markets. If you're doing your homework, check out other shoemakers and retailers. We liked PSS the best. Picked on March 15th at $61.74 Change since picked: +0.00 Earnings Date 02/22/02 (confirmed) =============== AT Play Updates =============== -------------------- Bullish Play Updates -------------------- Rockwell Collins - COL - cls: 24.40 chg: +0.37 stop: 23.65 *new* Today's 90-point gain on the Dow Jones wasn't extraordinary, but it did help shares of COL to another close over $24. The DFX.X defense index finished fractionally higher and seems to still be in the process of digesting gains from the last three weeks. COL has been gravitating to the $24 level after topping out at $25.35 on Monday. The closing price may have been artificially inflated by options expiration-related action in the final half hour, but nonetheless we're pleased with the way COL traded today. Volume also returned after decreasing over the past three days of consolidation. Targeting new entries could be somewhat tricky due to the top of the ascending regression channel near $26.00 however the move on Friday was encouraging and more aggressive traders may want to look for entries on Monday. If you're reading this from the email version, check out the chart we have provided for the weekend update. It shows the ascending channel and COL's bounce off the bottom. We are a bit less optimistic and thus we're going to lower our bullish target to $25.50 in an attempt to sell into strength. Traders looking for an entry could jump on with at current levels with a minimal amount of risk, because we've pushed up our stop to $23.65, which is only five cents below the Wednesday low. Currently Premier is up over eight percent in COL. Picked on February 15th at $22.50 Gain since picked: +1.90 Earnings Date 04/17/02 (unconfirmed) --- Dole Food CO. - DOL - close: 30.02 change: -0.09 stop: 28.99*new* Not much new to report here. DOL traded in a narrow range today of only 27 cents. The stock did close over resistance at $30 again but we're going to need to see some more buying interest to push it out of its recent range. Honestly, we're getting a bit impatient with the lack of movement in DOL but they keep telling us patience is a virtue. A case could be made that shares are simply consolidating before heading higher, but we'd rather free up the cash and put it to work on stocks that are moving. For now we'll give it some more time to perform. The daily stochastics are bullish and a move back up to near-term highs at $31.46 could produce a bullish crossover on the MACD. We would probably consider new long entries on the play if shares move over $30.25, a feat that has not been accomplished in the last six sessions. We are inching our stop up again to $28.99, which is just under the lows from last week. If you're reading this from the email version, check out the chart online showing the rising channel. Picked on March 1st at $30.94 Gain since picked: -0.92 Earnings Date 01/31/02 (confirmed) --- Oxford Health - OHP - close: 40.45 change: +0.23 stop: 37.49 That was quite a performance by healthcare stocks this week - The RXH.X healthcare index was up 6.2%, and the HMO.X health provider index tacked on 3.3%. There's nothing like a strong sector to really get plays moving and our OHP play didn't disappoint. Shares added nearly 5% this week and closed just below resistance at $41. The MACD produced a bullish crossover this week and still has room to move to the upside. It's interesting to note that early February's attempt to break over $41 had a MACD reading in the overbought range. However, with the HMO.X trading under significant resistance at 500 and OHP bumping its head right at resistance too we wouldn't recommend new entries at current levels. It may be more prudent to wait for OHP to either pullback to the $39.00 - 38.50 level or breakout above $41. Short-term traders who entered at $38.55 should have about a 5% gain and may want to consider taking profits now. We're looking for a full 10% or more and are willing to give the stock some room to pull back before it heads higher. Picked on March 8th at $38.55 Gain since picked +1.90 Earnings Date 02/05/02 (confirmed) --- Kohls Corp - KSS - close: 71.35 change: +1.38 stop: 66.75 This morning saw the release of a spate of economic data before the bell and the market liked what it saw. KSS gapped up over a half-point and opened right at our $70.50 trigger. At this point we initiated a long play with a stop at $66.75. Adding to the bullishness were the Consumer Sentiment numbers, which came out shortly after the market opened. The reading at 95.0 was stronger than the expected 92.7 and fueled a rise in KSS to $71.91. Shares pulled back a tad into the close but still managed to add almost 2% on strong volume of 2.68M versus the 1.7M average. Now that this play has actually been triggered, lets discuss our strategy: The p-n-f chart shows a bullish triangle breakout with a bullish vertical count of $85. This level may be attainable, but in the near-term we're looking for a move to $77. The first obstacle will be the 52-week high at $71.91. Traders may want to take bullish positions on a move over $72 after confirming strength in the RLX.X retail index. Alternatively a dip back to $70 could afford less risk-averse traders an entry point. FYI: point-and-figure aficionados might recall that a pennant or triangle breakout to the bullish side in a cooperating market, according to the experts, has a 71.4% chance of profitability with an average gain of 30.9% in 5.4 months. We are not expecting these sorts of gains especially given our short-term perspective but it makes for interesting speculation doesn't it. Picked on March 15th at $ 70.50 Change since picked: +0.85 Earnings Date 03/05/02 (confirmed) =============== AT Closed Plays =============== -------------------- Closed Bullish Plays -------------------- General Electric - GE - close: 40.19 change: -0.22 stop: text Triple-witching Fridays have a reputation for being wildly volatile, but today's market action was pretty tame. Likewise, GE traded in a narrow 28-cent range. In the process shares dipped below $40 and rebounded to close above that level. Another close above $40 support is bullish, but we're dropping this play tonight anyway. We added GE days ago with a trigger at $42.05 with the expectation that the stock would break over that resistance level. Thus far, it hasn't even threatened to breakout. As a "bellwether" for the broader economy GE should be performing better than it has. The MACD is about to produce a bearish crossover and daily stochastics are heading down. We may give GE another shot if it can actually move above $42, but in the meantime we'll focus our attention elsewhere. Picked on March xth at $xx.xx <- See text Gain since picked: +0.00 Earnings Date 01/17/02 (confirmed) ================================================================== HIGH RISK/HIGH REWARD (HR) section ================================================================== =============== HR New Plays =============== ----------------- New Bullish Plays ----------------- Ikon Office Solut. - IKN - close: 12.36 change: -0.10 stop: 11.74 Company Description: IKON Office Solutions is one of the world's leading providers of products and services that help businesses communicate. IKON provides customers with total business solutions for every office, production and outsourcing need, including copiers and printers, color solutions, distributed printing, facilities management, imaging and legal document solutions, as well as network design and consulting, and e-business development. IOS Capital, LLC, a wholly owned subsidiary of IKON, provides lease financing to customers and is one of the largest captive finance companies in North America. (source: company website) Why We Like It: The plummeting stock price on March 11th sure looked strange on a relatively strong chart like IKN. When news came out two days later that the company's CEO would be stepping down it sure looked like someone got word a little bit early. Fortunately, IKN found support again at the $12.00 level. Since there doesn't seem to be any specific or negative reason he is stepping down we think the news has artificially depressed the stock price and has given us an entry point into a long play. What makes this a high-risk/reward candidate is that odds of us being stopped out look pretty good given the short-term trend. However, we're going to keep our stop pretty tight at $11.74 so we're risking 62 cents. More conservative traders could stick their stops right under $12.00 since shares have not been under this level since January 10th, 2002. Stocks in a somewhat similar business like SPLS, ODP and OMX (they should all benefit from a economic rebound and increased corporate spending) all look pretty bullish so we are betting that IKN will play a little catch up next week. Our short-term target is $14.00 but shares could move higher. Picked on March 14th at $12.36 Change since picked: +0.00 Earnings Date 01/25/02 (confirmed) =============== HR Play Updates =============== -------------------- Bullish Play Updates -------------------- Hartford Financial Svc - HIG - cls: 67.60 chg: +0.73 stop: 64.45 The Dow ended the week higher yet again and HIG joined the broader market sentiment with another gain of its own. We're noticed that a lot of the insurance issues are looking rather bullish so it is not just a HIG phenomenon. There has been nothing new in the headlines for HIG but shares did see stronger volume on Friday and the MACD is starting to curve into a bullish formation. We might even get a bullish crossover in a few more sessions. The intraday chart is also revealing some bullish clues as buyers continued to push the stock up with higher lows. It's very possible that the insurance group, which has been a strong performer this quarter, could continue to see more window dressing by fund managers preparing for the end of the first quarter reporting. Dips to $66 are still buyable but we think shares could see a strong Monday. Picked on March 13th at $65.74 Change since picked: +1.86 Earnings Date 01/28/02 (confirmed) --- Providian Financial - PVN - close: 6.00 change: +0.20 stop: 4.85 Tally Ho! The banking sector sprinted to a strong finish today with the BKX.X ending at a seven-month high and the BIX.X ending at levels not seen since July of 1999. With the group in breakout mode we feel pretty encouraged with our PVN play. The stock has bounced from its intra-week pull back to $5.50 and shares managed to close at $6.00. A couple more positive closes and we'll feel tempted to move up our stop. Readers should remember that this is a high-risk/reward play and we suggested that no one consider this if you can't take about 20% heat given the volatility of the stock price. More conservative traders "could" attempt to get by with less exposure by using a stop under $5.40 but don't get mad if you get stopped out next week. As suggested in our Thursday update traders may want to keep an eye on lending rivals: COF, HI and MBI which appear rather bullish too (some better than others). The sector-wide breakout could have shorts moving to cover but eventually some profit taking will occur. We're still looking for a positive beginning to next week but it depends if anything negative develops over the weekend. Picked on March 8th at $5.71 Change since picked: +0.29 Earnings Date 02/07/02 (confirmed) -------------------- Bearish Play Updates -------------------- Adelphia Comm. - ADLAC - cls: 22.40 chg: -0.11 stop: 24.76 There appeared to be some strength in a few cable operators on Friday and we suspected it may be due to the FCC ruling on Thursday that basically landed in favor for cable players. The ruling classified broadband as an "information service" and cable ISP providers should be able to accelerate their roll out to the U.S. consumer. Unfortunately for ADLAC shareholders the stock did not really respond. Friday's session, while negative, looked like more consolidation sideways while traders juggled for position near the early February support levels. The MACD is looking exceedingly negative and is about to produce a bearish crossover but it hasn't happened yet. Bears are probably encouraged that volume has been decent on the recent declines. However, we are urging a little bit of caution as we expect some bullishness next week in the markets and ADLAC could bounce before moving lower. Look for failed rallies for new positions and gauge it against the markets and the other players in the group. Traders will also want to take note and adjust there stops ahead of Wednesday as ADLAC just announced it would hold a Q4 and year-end conference call to discuss its 2001 results at 10:00 a.m. March 27th, 2002. Picked on March 12th at $23.99 Gain since picked: +1.59 Earnings Date 03/29/02 (unconfirmed) ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. 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PremierInvestor.net Newsletter Weekend Edition 03-15-2002 Section 3 of 3 Copyright © 2001, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= To view this email newsletter in HTML format with imbedded charts and graphs, click here: http://www.PremierInvestor.net/htmlemail/c15b_3.asp ================================================================= In section three: Market Watch for Week of March 18th - Major Earnings - Stock Splits - Economic Reports Trading Ideas Value Plays With Bullish Signals Breakout to Upside (Stocks $5 to $20) Breakout to Upside (Stocks over $20) Breakout to Downside (Stocks over $20) Recently Overbought With Bearish Signals (Stocks over $20) ================================================================= ================================================== Market Watch for the week of March 18th ================================================== ------------------------ Major Earnings This Week ------------------------ Symbol Company Date Comment EPS Est ------------------------- MONDAY ------------------------------- CGA Corus Group plc Mon, Mar 18 -----N/A----- N/A DG Dollar General Mon, Mar 18 After the Bell 0.23 ESIO Electro Scientific Ind Mon, Mar 18 After the Bell -0.01 KPN Koninklijke KPN Mon, Mar 18 -----N/A----- N/A PETC Petco Animals Mon, Mar 18 After the Bell N/A PFP Premier Farnell Mon, Mar 18 -----N/A----- N/A ------------------------- TUESDAY ------------------------------ FDO Family Dollar Stores Tue, Mar 19 Before the Bell 0.36 GPN Global Payments Tue, Mar 19 After the Bell 0.26 GS Goldman Sachs Tue, Mar 19 Before the Bell 0.89 IPR International Power Tue, Mar 19 -----N/A----- N/A JBL Jabil Circuit Tue, Mar 19 After the Bell 0.07 MKC McCormick & Co Tue, Mar 19 -----N/A----- 0.45 PAYX Paychex Tue, Mar 19 -----N/A----- 0.18 RHAT Red Hat Tue, Mar 19 After the Bell 0.01 PKS Six Flags, Inc. Tue, Mar 19 After the Bell -1.02 ----------------------- WEDNESDAY ----------------------------- ATYT Technologies Wed, Mar 20 -----N/A----- 0.06 SID Companhia Siderur Nac Wed, Mar 20 -----N/A----- 0.71 FDX FedEx Corp Wed, Mar 20 Before the Bell 0.36 LEN Lennar Wed, Mar 20 Before the Bell 0.99 NDC NDCHealth Wed, Mar 20 After the Bell 0.34 WGO Winnebago Wed, Mar 20 Before the Bell 0.41 WOR Worthington Industries Wed, Mar 20 -----N/A----- 0.12 ------------------------- THURSDAY ----------------------------- COMS 3Com Thu, Mar 21 After the Bell -0.16 BKS Barnes&Noble Thu, Mar 21 Before the Bell 1.33 CCL Carnival Thu, Mar 21 Before the Bell 0.14 DRI Darden Restaurants Thu, Mar 21 -----N/A----- 0.49 EON E.ON AG Thu, Mar 21 -----N/A----- N/A FTE France Telecom Thu, Mar 21 Before the Bell N/A GUC Gucci Group NV Thu, Mar 21 -----N/A----- 0.62 KBH KB Home Thu, Mar 21 -----N/A----- 0.79 LWSN Lawson Software, Inc. Thu, Mar 21 After the Bell 0.04 NKE Nike Thu, Mar 21 -----N/A----- 0.45 PALM Palm Thu, Mar 21 After the Bell -0.04 SLR Solectron Thu, Mar 21 After the Bell 0.03 TECD Tech Data Thu, Mar 21 Before the Bell 0.61 ------------------------- FRIDAY ------------------------------- BMET Biomet Fri, Mar 22 Before the Bell 0.24 TKA TELEKOM AUSTRIA AG Fri, Mar 22 -----N/A----- N/A ------------------------------- Upcoming Stock Splits In The Next Two Weeks... ------------------------------- Symbol Company Name Ratio Payable Executable SMD Singing Machine 3:2 03/15 03/18 ICUI ICU Medical 3:2 03/15 03/18 ELMS Elmers Restaurants 21:20 03/21 03/22 FELE Franklin Electric CO 2:1 03/22 03/25 YDNT Young Innovations 3:2 03/28 04/01 ESCA Escalade 3:1 03/28 03/29 DWL DeWolfe 3:2 03/28 03/29 TOL Toll Brothers 2:1 03/28 04/01 -------------------------- Economic Reports This Week -------------------------- As the markets march into the last two weeks of the month and the end of the first quarter a lot of eyeballs on Wall Street will be watching the CPI numbers on Friday. However, the beginning of the week will hold investor attention with the Tuesday FOMC meeting. ============================================================== -For- Monday, 03/18/02 ---------------- None Tuesday, 03/19/02 ----------------- Trade Balance (BB) Jan Forecast:-$26.9B Previous: -$25.3B FOMC Meeting (DM) Wednesday, 03/20/02 ------------------- Housing Starts (BB) Feb Forecast: 1.630M Previous: 1.678M Building Permits (DM) Feb Forecast: 1.650M Previous: 1.706M Treasury Budget (DM) Feb Forecast:-$61.0B Previous: -$48.2B Thursday, 03/21/02 ------------------ Initial Claims (BB) 03/16 Forecast: N/A Previous: 377K CPI (BB) Feb Forecast: 0.2% Previous: 0.2% Core CPI (BB) Feb Forecast: 0.2% Previous: 0.2% Leading Indicators (DM) Feb Forecast: 0.3% Previous: 0.6% Philadelphia Fed (DM) Mar Forecast: 17.8 Previous: 16.0 FOMC Minutes (DM) 01/30 Friday, 03/22/02 ---------------- None Definitions: DM= During the Market BB= Before the Bell AB= After the Bell ================== Trading Ideas ================== This section contains stocks that meet criteria which may make them of interest to long and short side traders. These are not recommendations, nor have they been reviewed by PremierInvestor editors for investment potential. However, each of them has technical and fundamental characteristics that make them worthy of further review by traders and investors looking for fresh ideas. New stocks will appear daily following the market close. --------------------------------- Value Plays With Bullish Signals --------------------------------- Ticker Company Name Close Change DD Dupont 48.47 +0.88 AXA AXA Ads 22.00 +1.23 RDN Radian Group 49.09 +0.87 AGY Argosy Gaming Co 36.53 +1.38 JAKK Jakks Pacific Inc 20.64 +1.12 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- Ticker Company Name Close Change LUX Luxottica Group 19.81 +1.08 HHLF Hurricane Hydro 12.79 +1.38 ENTG Entegris Inc 14.07 +2.30 CMLS Cumulus Media Inc 18.45 +1.40 FNIS Fidelity Natl Info Sol 18.50 +1.25 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- Ticker Company Name Close Change WMT Wal-Mart Stores Inc 63.75 +1.48 PG Procter & Gamble 87.00 +2.01 ONE Bank One Corp 42.19 +2.19 PHA Pharmacia Corp 45.24 +2.83 FITB Fifth Third Bancorp 69.13 +1.16 CCU Clear Channel Comm. 51.97 +2.18 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change MRK Merck & Co 59.75 -3.69 HRB H&R Block 45.31 -1.73 PH Parker Hannifin Corp 51.00 -2.87 NAV Navistar Intl. Corp 42.95 -1.10 OVER Overture Services Inc 29.10 -3.10 FLIR FLIR Systems 45.97 -5.53 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change DHI D.R. Horton Inc 40.65 -1.04 FBN Furniture Brands Intl 39.81 -0.96 TOL Toll Brothers Inc 50.12 -2.04 MENT Mentor Graphics Corp 23.63 -0.96 USTR United Stationers Inc 39.35 -2.90 ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. PremierInvestor.net staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control. 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