Option Investor
Newsletter

Daily Newsletter, Tuesday, 03/19/2002

HAVING TROUBLE PRINTING?
Printer friendly version
PremierInvestor.net Newsletter                 Tuesday 03-19-2002
                                                   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/c19b_1.asp
=================================================================

In section one:

Market Wrap:      Fed bias now "neutral"
Market Sentiment: Healthy Bulls.
Play-of-the-Day:  More On The VIX.

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
      03-19-2002           High     Low     Volume Advance/Decline
DJIA    10635.25 + 57.50 10673.10 10577.48 1.24 bln   1707/1421
NASDAQ   1880.87 +  3.81  1891.51  1873.17 1.35 bln   1827/1710
S&P 100   592.09 +  2.46   594.02   589.62   Totals   3534/3131
S&P 500  1170.29 +  4.74  1173.94  1165.55             
RUS 2000  504.73 +  1.93   504.97   502.56
DJ TRANS 2930.64 - 17.25  2951.06  2908.22
VIX        20.35 -  0.40    21.38    20.21
VXN        38.99 +  0.24    40.01    37.77
TRIN         .85 
PUT/CALL    0.65
-----------------------------------------------------------------

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

Fed bias now "neutral"

The Federal Reserve held the Fed Funds interest rate at 1.75%, 
while still cautioning investors that it was still too early to 
declare that the fragile economic recovery is here to stay.  The 
Federal Open Market Committee (FOMC) said, "The degree of 
strengthening in final demand over coming quarters, an essential 
element in sustained economic expansion, is still uncertain."

The 1.75% Fed Funds rate reflects the rate that banks charge each 
other on overnight loans.  It influences other interest rates 
that are crucial to U.S. economic growth.

The Fed bias shift from "accommodative" to today's "neutral" 
stance was derived from various economic numbers that has the 
centrals banks saying, "The economy, bolstered by a marked swing 
in inventory investment, is expanding at a significant pace."

While the Fed left interest rates alone, the FOMC hinted that it 
moved its so-called bias to "neutral" from an "accommodative" 
stance for the first time in 15 months.  In theory, that means 
the central bank is neither leaning toward raising interest rates 
nor lowering them.  For those that believe the Fed as well as 
markets move in cycles, the bias to a more positive "neutral" 
stance, signals that the Fed is gearing up to nudge rates higher 
if U.S. growth accelerates.

The Fed funds futures market, for instance, is pricing in about a 
60% chance of a quarter-point rate hike at the May 7 meeting, 
which is down from about a 75% chance immediately before the 
Fed's announcement.  

Stocks finished mixed to higher

Stocks achieved their best levels of the session just before 
today's decision on interest rates and gains faded for the most 
part into the close.

The Dow Industrials (INDU) were able to hold onto the bulk of 
their gains with a 57 point increase by the close to finish at 
10,635.  Dow component American Express (NYSE:AXP) $42.53 +1.38% 
closed at a post September 11th high, while shares of Procter & 
Gamble (NYSE:PG) $89.94 +2.6% close at a 52-week high.  Consumer 
products giant Johnson & Johnson (NYSE:JNJ) $65.49 +1.28% closed 
at an all-time high.

The broader S&P 500 Index (SPX.X) 1,170 +0.4%, managed to hold 
onto gains, but once again fell short of breaking the 1,175 
level, which has been a level of resistance since early December.

S&P 500 Index Chart - Daily Interval




"You can only trade what the MARKET gives you," is a well-known 
axiom.  If the S&P 500 is "the market" then there hasn't been a 
whole lot of action taking place in the past two weeks.  The S&P 
500 looks rather range-bound between the 1,144 and 1,175 levels.

There is what I would call two negative at play in the S&P 500 
right now.  One "negative" is that the S&P 500 Bullish Percent 
($BPSPX) is above the "overbought" level of 70%, with a current 
reading of 77%.  This is a level of bullishness not seen since 
January of 1999.  How can this much "bullishness" be a negative 
you ask?  As mentioned before, the bullish % charts give us a 
very good understanding of risk.  Right now, bulls carry the bulk 
of the risk and at the 1,170 level, the technical resistance at 
1,175 may have bulls more hesitant to put further capital at risk 
until some type of further clarity is revealed from upcoming 
earnings reports.  The second "negative" is the resistance found 
at/near the 1,175 level, which may have bulls sitting on their 
hands until that resistance is broken.

S&P 500 Bullish % ($BPSPX) - 2% box




The bullish % is not necessarily a good indicator of market 
direction, but it does a remarkable job of helping us understand 
risk.  Some call the bullish % a contrarian indicator, where 
higher levels of bullishness actually depict bearishness.  After 
all, if 100% is ultimate bullishness, then how much bullishness 
is left to be had at 77% bullish?  In terms of bullish %, the 
answer would be 23% bullishness.  If that's the case, then an 
ultimate bearish reading of 0% helps explain risk/reward 
currently at play in the S&P 500.  

Bearish list showing gains

While some of the broader market averages are showing gains on a 
daily basis, it is our bearish play list that appears to be 
showing more consistent gains in recent sessions.  

In recent weeks/months, we've pulled very few punches on just how 
vulnerable we feel telecom or telecom-related stocks are.  One 
stock we want to move a tight stop down on are shares of Brocade 
Communications (NASDAQ:BRCD) $22.40 -3.03% as subscribers have a 
handsome 16% gain in this bearish play in just 4 trading 
sessions.

Brocade Communications Chart - $0.50 and $1 box




In late February, shares of Brocade Communications (BRCD) 
achieved its bearish vertical count of $22, but recent action in 
the telecom areas had us thinking the stock might just exceed 
that bearish vertical count.  With Lucent (NYSE:LU) $4.30 -10.04% 
and Nortel Networks (NYSE:NT) $4.54 -2.57% cutting new 52-week 
lows, it appears fund managers can't get out of some holding soon 
enough as the first-quarter comes to an end.  

We've said before that bears should not be complacent and the 
market has been rather bullish as depicted by the bullish % 
charts, but there's also some risk that is being systematically 
removed.  Our hopes are still high that there's more downside 
left in Brocade (BRCD), but we want to protect our gains.  If the 
stock wants to continue to fall as the first quarter comes to and 
end we don't want to get in the way of that happening, and a 
trailing stop (see play update) will allow us to still give the 
trade further time to work.

Economic data for tomorrow

Housing starts and building permit numbers are due out tomorrow 
morning at 08:30 AM EST.  Economists are looking for February 
housing starts to come in at 1.63 million, which is down from 
January's reading of 1.678 million.  Building permits are 
expected to come in at 1.650 million, which would also be 
fractionally lower than January's reading of 1.706 million.

DJ U.S. Home Construction Index Chart - Daily Interval




The lower Treasury YIELDs found in September/October/November in 
the benchmark 10-year ($TNX.X) and even the 30-year Treasury 
($TYX.X) had mortgage rates falling to multi-year lows.  That 
helps make new and existing home mortgages more affordable and 
helped spur further spending in durable goods (big ticket items 
that last more than 3-5 years) like washing machines.  Economic 
bulls want to see a strong number to help "assure" that the 
recent higher mortgage rates are not putting a damper on economic 
growth at the base level of the economy.

Some feel that the "American Dream" is to own a home.  Tomorrow's 
housing starts and building permits will give some insight into 
just how strong the "American Dream" of a strengthening economy 
is.

Jeff Bailey
Senior Market Technician


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

More On The VIX
By Eric Utley

The themes that we've been focusing on continued into Tuesday's
trading.  Fear measures fell lower while Bullish Percent data
ticked higher.  The Nasdaq-100 Bullish Percent ($BPNDX) did
shed two stocks Tuesday, but other measures remained flat or
slightly increased.

The weekend piece concerning the CBOE Market Volatility Index
(VIX.X) sparked a lot of questions and criticism.  Several
readers suggested that the VIX could be establishing a new,
lower trading range in which volatility remains low.  Others
pointed out the low levels of the VIX prior to the go-go years,
which in a way supported the first thesis.

I acknowledge that the VIX could be slipping into a lower
trading range.  That's certainly a possibility.  Anything is
possible in the market.  But recent history -- the last five
years, or so -- suggests that relatively low levels of
complacency lead to extended weakness in stocks.  Until
proven otherwise, that's what I'm operating with when using
the VIX.

Away from the VIX, other indicators point to complacency, or
call it confidence, maybe even greed.  The Total and Equity
Only put/call ratios are trading at low levels.  The one
thing to keep in mind concerning the ratios is that we're
coming off of a triple witch, which may temporarily
artificially impact the numbers.  With that said, the ratios
show a lot more calls trading than puts.  Plus the Bullish
Percent data remains high, with major averages near key
resistance levels, such as the S&P 500 (SPX.X) at 1175.

With all of the aforementioned indicators, however, we have
to remember that psychology can trump all else in the short-
term, but not indefinitely.  If the buyers are willing to
buy, they'll do so regardless of where the VIX is trading.
The Fed's shift to a neutral bias didn't derail the bulls'
enthusiasm over the recovering economy.  Whether or not
profits follow remain to be seen in the next quarter.

-----------------------------------------------------------------

Market Averages


DJIA ($INDU)

52-week High: 11350
52-week Low :  8062
Current     : 10635

Moving Averages:
(Simple)

 10-dma: 10575
 50-dma: 10059
200-dma: 10002

S&P 500 ($SPX)

52-week High: 1316
52-week Low :  945
Current     : 1170

Moving Averages:
(Simple)

 10-dma: 1163
 50-dma: 1128
200-dma: 1146


Nasdaq-100 ($NDX)

52-week High: 2071
52-week Low : 1089
Current     : 1505

Moving Averages:
(Simple)

 10-dma: 1513
 50-dma: 1505
200-dma: 1550


Box Makers ($BMX)

The BMX earned the day's best performing sector spot with its
1.99 percent gain, edging out the Brokers' (XBD.X) 1.88 percent
gain.

The market's reaction to the Hewlett/Compaq news certainly
impacted the sector.  Compaq (NYSE:CPQ) was the best performing
component with its 7.52 percent ramp.  Other performers
included Veritas (NASDAQ:VRTS), Gateway (NYSE:GTW), Sony
(NYSE:SNE), and Dell (NASDAQ:DELL).

52-week High: 146
52-week Low :  74
Current     : 107 

Moving Averages:
(Simple)

 10-dma: 107
 50-dma: 104
200-dma: 106


Airlines ($XAL)

The XAL was the poorest performing sector in Tuesday's session.
The index lost 3.89 percent.  Delta (NYSE:DAL) said that it
expected to post a loss of about $365 million during its first
quarter.

Movers to the downside included Continental (NYSE:CAL),
America West (NYSE:AWA), United (NYSE:UAL), Southwest (NYSE:LUV),
and Delta.



52-week High: 153
52-week Low :  59
Current     : 106

Moving Averages:
(Simple)

 10-dma: 110
 50-dma:  96
200-dma: 104

-----------------------------------------------------------------

Market Volatility

The VIX continued to a new relative low in Tuesday's session,
but did not fall below the magical 20.00 level.

Meanwhile, the VXN traced another low, but managed to close
fractionally higher.  The Nasdaq-100 (NDX.X) closed
fractionally lower.

CBOE Market Volatility Index (VIX) - 20.35 -0.40
Nasdaq-100 Volatility Index  (VXN) - 38.99 +0.24

-----------------------------------------------------------------

          Put/Call Ratio  Call Volume   Put Volume
Total          0.65        512,853       332,062
Equity Only    0.57        459,729       262,182
OEX            1.60          5,105         8,160
QQQ            0.33         18,466         6,117
 
-----------------------------------------------------------------

Bullish Percent Data

           Current   Change   Status
NYSE          63      + 0     Bull Confirmed
NASDAQ-100    69      - 2     Bull Confirmed
DOW           77      + 0     Bull Confirmed
S&P 500       77      + 0     Bull Confirmed
S&P 100       78      + 0     Bull Confirmed

Bullish percent measures the number of stocks in an index 
currently trading on a buy signal on their point and figure 
chart.  Readings above 70 are considered overbought, and readings 
below 30 are considered oversold.

Bull Confirmed  - Aggressively long
Bull Alert      - Cautiously long
Bull Correction - Pause or pullback in upward trend
Bear Alert      - Take defensive action if long
Bear Confirmed  - High risk if long, good conditions for shorting
Bear Correction - Pause or rebound in downtrend

-----------------------------------------------------------------

 5-Day Arms Index  1.16
10-Day Arms Index  1.00
21-Day Arms Index  1.08
55-Day Arms Index  1.23

Extreme readings above 1.5 are bullish, and readings below .85 
are bearish.  These signals don't occur often and tend be early, 
but when the do, they can signal significant market turning 
points.

-----------------------------------------------------------------

Market Internals

        Advancers     Decliners
NYSE      1707           1421
NASDAQ    1827           1710

        New Highs      New Lows
NYSE      253             28
NASDAQ    168             27

        Volume (in millions)
NYSE     1,481
NASDAQ   1,683

-----------------------------------------------------------------

Commitments Of Traders Report: 03/12/02

Weekly COT report discloses positions held by small specs
and commercial traders of index futures contracts at the 
Chicago Mercantile Exchange and Chicago Board of Trade. COT data 
can be found at www.cftc.gov.

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 tend 
to be wrong.  

S&P 500

Attention!!  Commercial traders continued to build their net
bearish position while small traders reached an extreme
bullish position.

Commercials   Long      Short      Net     % Of OI 
02/26/02      366,258   432,258   (66,000)   (8.3%)
03/05/02      361,254   445,989   (84,735)  (10.5%)
03/12/02      396,050   483,606   (87,556)   (9.9%)

Most bearish reading of the year: (111,956) -   3/6/01
Most bullish reading of the year: ( 36,481) - 10/16/01

Small Traders Long      Short      Net     % of OI
02/26/02      139,183     62,087   77,096     38.3%
03/05/02      161,711     60,941  100,770     45.3%
03/12/02      179,825     75,025  104,800     42.6%

Most bearish reading of the year:  36,513 - 5/01/01
Most bullish reading of the year: 104,800 - 3/05/02
 
NASDAQ-100

Nasdaq commercial traders added a number of short positions for
a big increase in the group's net bearish position.  Meanwhile,
small traders grew slightly more bullish.

Commercials   Long      Short      Net     % of OI 
02/26/02       33,589     34,091      (502)  (0.7%)
03/05/02       33,549     35,419    (1,870)  (2.7%)
03/12/02       37,415     42,942    (5,527)  (6.9%)

Most bearish reading of the year: (15,521) -  3/13/01
Most bullish reading of the year:   7,774  - 12/21/01

Small Traders  Long     Short      Net     % of OI
02/26/02        9,517    11,416    (1,899)    (9.1%)
03/05/02       11,961    11,214       747      3.2% 
03/12/02       14,571    13,045     1,526      5.5%

Most bearish reading of the year:  (9,877) - 12/21/01
Most bullish reading of the year:   8,460  -  3/13/01

DOW JONES INDUSTRIAL

Dow Jones commercial traders dropped both long and short
positions, while maintaining their net bullish position.
Small traders dropped a number of longs and added a small number
of shorts of an increase in their net bearish position.

Commercials   Long      Short      Net     % of OI
02/26/02       33,322    21,110   12,212     22.4%
03/05/02       37,036    25,554   11,482     18.3% 
03/12/02       35,080    23,204   11,876     20.4%

Most bearish reading of the year: (8,322) -  1/16/01
Most bullish reading of the year: 15,135  - 10/16/01

Small Traders  Long      Short     Net     % of OI
02/26/02        6,333    12,547    (6,214)   (32.9%)
03/05/02        6,589    13,057    (6,468)   (32.9%) 
03/12/02        6,400    13,070    (6,670)   (34.3%)

Most bearish reading of the year:  (8,777) - 10/12/01
Most bullish reading of the year:   1,909  -  1/16/01



===============
PLAY-of-the-Day
===============

Oxford Health - OHP - close: 41.18 change: +0.72 stop: 38.50

Company Description:
Founded in 1984, Oxford Health Plans, Inc. provides health plans 
to employers and individuals in New York, New Jersey and 
Connecticut, through its direct sales force, independent 
insurance agents and brokers. Oxford's services include 
traditional health maintenance organizations, point-of-service 
plans, third party administration of employer-funded benefits 
plans and Medicare plans. (source: company press release)

- ORIGINAL WRITE UP: March 8th, 2002 -

Why We Like It:
We've been looking to go long on a health care stock for a little 
while and it looks like we've found one worth playing. OHP has 
displayed impressive relative strength versus other companies in 
the group such as UNH and THC, both of which we were though also 
looked attractive. The sector as a whole has put in a pretty good 
move in recent sessions and the HMO.X healthcare index bounced 
near its 50-dma while spending three days at new support of 465. 
Currently the HMO.X looks to be heading for a test of resistance 
at 500. In a similar fashion, OHP recently bounced off $36 (just 
above its own 50-dma) and moved up until bumping into the 20-dma 
today. The oscillators also look favorable with the stochastics 
moving up and MACD beginning to curl higher just above the zero 
line. As far as entries, a move above today's high of $38.96 
could be the last obstacle until resistance at $40-$41 or a dip 
back to $38 looks pretty favorable. $40.95 is the 52-week high 
from February, but we think this level can be broken if the 
sector continues to be strong. The point-and-figure chart has a 
bullish price objective near $70. Thus, we don't feel we're out 
of line with an initial target near $45. We're starting this play 
with a stop at $35.90.

- Most Recent Update: March 19th, 2002 -

On Monday the HMO.X healthcare index shot above resistance at 500 
and closed at an all-time high of 507.30.  It's nice to see a 
sector that's really outperforming in a market that's been 
trading sideways for a few weeks.  OHP followed the index higher 
today and closed at its own all-time high of $41.18.  The close 
over $41 is significant because that was where shares topped out 
in mid-February.  With that level out of the way and the HMO.X 
also over resistance we think our near-term profit target at $45 
could be attainable.  If the sector strength continues, entries 
can be considered at current levels but it wouldn't hurt to look 
for dips to $40 either (but you probably had that chance on 
Monday).  PI is currently up 6.9% on this play and tonight we're 
tightening our stop to $38.50 in order to minimize risk.  Right 
now we'll add an exit price of $44.75 and if shares trade there 
intraday we'll close the play.

- Play-of-the-Day Comments: March 19th, 2002 -

OHP has been steadily rising all month and broke to an all-time 
high today.  The HMO.X health provider index is leading the way 
higher and also closed at an all-time high.  Now that shares have 
closed over resistance at $41, we suspect that there may be some 
additional short-covering in store for us.  However, if the stock 
retraces we'd look for a dip to $40 as an entry point.

Picked on March 8th at $38.55
Gain since picked       +2.63
Earnings Date        02/05/02 (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. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

*****************************************************************
ADVERTISING INFORMATION

For more information on advertising in PremierInvestor.net
Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

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


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



PremierInvestor.net Newsletter                 Tuesday 03-19-2002
                                                   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/c19b_2.asp
=================================================================

In section two:

Net Bulls
  Bullish Play Updates: BBH, CSC, RIMM
  Bearish Play Updates: BRCD, CLS, CHKP, EMLX

Stock Bottom / Active Trader
  Bullish Play Updates: DOL, KSS, OHP, PSS

High Risk / High Reward
  Bullish Play Updates: HIG, PVN
  Bearish Play Updates: ADLAC
  Closed Bullish Play:  IKN

Split Trader
                        PGR:  3-for-1 split announcement
                        FULT: 5-for-4 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: 127.39 change: -0.81 stop: 119.45

We've been waiting for quite awhile for the BBH to break over 
resistance near $123-$125.  Our patience was rewarded Monday, as 
HOLDR components AMGN, CHIR, DNR, and SEPR all put in solid days 
and pushed the BBH over $128.  We're pleased with this 
development, but at this point traders looking for fresh entries 
may want to wait for a dip to the $125 level.  The biotech index 
(BTK.X) has resistance overhead at January highs of 545, which 
also coincides with the 100-dma (the BTK.X is still battling with 
its 200-dma as well).  The BBH also faces congestion near the 
$130 area.  In case you missed it, we raised our stop last night 
to $119.45.  More conservative traders may want to place their 
stop just under recent lows at $124.  Today's noteworthy biotech 
news was the FDA's rejection of Picovir, VPHM's cold drug.  That 
shouldn't have much of an impact on the sector, but here's hoping 
someone eventually comes up with a cure for the common cold!

Picked on February 20th at $120.00
Gain since picked:           +7.39
Earnings Date                  N/A




---

Computer Sciences - CSC- close: 52.81 change: -0.04 stop: 49.74

The NASDAQ has spent the last week confined in a narrow 50-point 
range.  While there have no doubt some tech movers that bucked 
the recent trend, CSC seems to be content to let the broader 
market dictate direction. As a listed stock, it isn't as volatile 
as many of its tech counterparts on the NASDAQ.  C.S. First 
Boston issued a reiterated buy on CSC today with a price target 
at $55.  The stock traded flat on the news and lost 0.07%.   The 
$53 level seems to be keeping a lid on CSC, but we do like how 
shares have traded in a pattern of higher lows over the last 
week.  Look for a move over $53.30 or dips to $50-$52 to offer a 
possible entry point.  

Picked on March 15th at $52.25
Change since picked:     +0.56
Earnings Date         01/31/02 (confirmed)




--- 

Research In Motion - RIMM - close: 27.40 change: -0.09 stop: 26.49

Try as they might, the bears just can't push RIMM below support 
at $27.  Shares have bounced at or just below this level five 
times since Friday.  Readers familiar with this play may recall 
that $27 had previously acted as resistance and is also the 
location of a retracement level.  We like how this level has been 
retested but not broken.  The stock may be consolidating before 
making another crack at $30.  Oscillators paint a bit of a mixed 
picture:  The fast daily stochastic line looks to be curling up 
from oversold, but the MACD looks like it's about to give a 
bearish crossover.  In contrast, the hourly MACD is looking 
pretty bullish.  Given the support at $27, traders who would like 
to bet on a move back to recent highs at $29.55 can do so at 
current levels with a relatively favorable risk/reward setup.  
More cautious traders could snug their stops closer to support, 
but we're giving it some breathing room with our stop at $26.49.  
Note that RIMM announces earnings in three weeks.  

Picked on March 6th at $27.32 
Change since picked:    +0.08
Earnings Date        04/09/02 (confirmed)





  --------------------
  Bearish Play Updates
  --------------------

Brocade Comm. - BRCD - cls: 22.40 chg: -0.70 stop: 24.21 *new*
 
Two big volume days and steep losses are exactly what bears want 
to see for stocks like BRCD.  Shares have dropped four days in a 
row and fallen through multiple support levels.  Prior to the 
market open today a couple of brokers tried to defend the stock 
saying the selling was overdone or that they would be buyers at 
these levels.  It looks like the market is going to give them a 
better entry point and some liquidity for their big purchases.  
BRCD's MACD has rolled over and produced a bearish crossover and 
shares are very close to the late February lows near $21.60.  A 
glance at the intraday chart shows what appears to be a failed 
rally today at the $23.80 level.  Therefore we are going to cinch 
our stop to $24.21, which should protect a 10% move in the play.  
The stock does appear oversold at this level but nothing says it 
can't trade to $20 before buyers begin to support it again.  New 
plays might be considered but only if you have a relatively tight 
stop (suggestions $23.85 to $24.21).  Sector leader EMC is 
trading at new relative lows and the close under $11 is not good 
for bulls expecting any leadership.  If EMC has support at $10 
and a breakdown under this level could be a big weight on other 
stocks in the group.  Currently, Premier is up 16.7% in BRCD.

Picked on March 15th at $26.90
Gain since picked:       +4.50
Earnings Date         04/17/02 (unconfirmed)
 



---


Celestica - CLS - close: $36.30 change: -0.60 stop: 39.10 *new*

The selling in CLS continues to slowly erode away at the stock 
price but buyers are currently supporting the stock at $36.00.  
CLS has fallen three days in a row but volume has also been 
drying up.  The stock's MACD appears to be rolling over just 
under the zero line but has not yet produced another bearish 
crossover.  Another indicator we like to follow is the 5-dma vs. 
the 15-dma.  When the 5-dma crosses under the 15-dma it can be a 
bearish clue that more consolidation is forthcoming and that's 
exactly what we see today for CLS.  Chart readers may also note 
that there should be new overhead resistance between the $38.00 
and $38.50 levels.  More conservative traders may want to 
consider adjusting their stops appropriately.  We are going to 
lower our stop to $39.10, which was the March 13th high.  New 
entries can be considered on failed rallies at $38 or a move 
under $36 if you prefer action points.  

Picked on March 13th at $37.98
Gain since picked:       +1.68
Earnings Date         04/17/02 (unconfirmed)
 



---

Check Point Software - CHKP - cls: 32.95 chg: -0.34 stop: 35.51

The software index has been able to post a two day rally despite 
a lack of real leadership in MSFT which is battling with its 50-
dma.  Likewise CHKP has also had a bullish bent but if you read 
our weekend update it is moving as we expected.  The failed rally 
at $34 today looks like an entry point for new shorts.  The MACD 
has still not produced that bearish crossover but it could happen 
soon.  Traders may want to wait for a move under $32 but we like 
the stock as a short here.  More conservative traders could 
tighten their stop now that we have confirmed resistance at $34.  
We did note the positive mention of CHKP in a recent news 
article... you may have read it.  They mention that CHKP is in 
great financial health with about $1 billion in cash equivalents 
and no debt.  We agree that CHKP is a strong company for 
potential long-term investment but short-term the market seems be 
leaning towards the bearish camp on the stock price.  Therefore, 
if you're looking for an entry point to add CHKP to your IRA you 
might get a chance to buy it at $25 or less in the future.  
However, our current target price for our short-term trade is 
only $27.50.  Keep an eye on the Nasdaq and the GSO.X if you're 
trading CHKP.

Picked on March 14th at $33.28
Gain since picked:       +0.33
Earnings Date         01/15/02 (confirmed)
 



---

Emulex Corp. - EMLX - close: 28.46 change: +1.92 stop: 32.31

So far so good.  We encourage you to check out our weekend update 
on EMLX if you missed it.  Toward the end of the update we 
speculated on how trading in EMLX might play out given the 
current state of its stock price and the patterns we see on the 
point-and-figure chart.  The decline on Monday was anticipated 
and was the third decline in a row.  Shares closed Monday at 
$26.54.  The rally or shall we say oversold bounce on Tuesday was 
also part of our crystal ball projection but we find it 
interesting that bulls couldn't get the stock back over the 
$28.63 level, which happens to be a retracement level for us 
using September lows to January highs.  We would still expect the 
stock to potentially trade up to the $30 level and then traders 
can look for a failed rally as a potential bearish entry point.  
Yet traders need to be prepared if stock rolls over at $29.  
Stocks are rarely this predictable.  As we mentioned in the BRCD 
update, the sector leader, EMC, has not been very strong and 
closed today near relative lows.  If EMC breaks down under what 
should be very strong support of $10 it could be a very bad sign 
for the group as a whole.  Editor's note, EMLX's 200-dma at $30 
should make this level of resistance a tough one to crack.

Picked on March 14th at $29.25
Gain since picked:       +0.79
Earnings Date         01/22/02 (confirmed)
 




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

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

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

Dole Food CO. - DOL - close: 29.95 change: +0.06 stop: 28.99

The market traded slightly higher in anticipation of today's fed 
meeting and responded with a collective yawn when the decision 
was released.  DOL traded in a similar manner and finished the 
day with a 0.20% gain, closing just under $30.  We were looking 
for another close over that level, but did find it interesting 
that the stock traded all the way up to $30.50 earlier in the 
day.  That's the highest tick since shares failed at that level 
on March 7th.  A close over $30.50 could be a good time to 
evaluate bullish positions.  Because of the recent tendency of 
shares to gravitate to $30, jumping on any earlier could be 
risky.  Traders may also want to sit on the sidelines another day 
just to see if there is any reaction to the news that Chiquita 
Brands Intl. Inc (NYSE:CQB), the second largest banana producer, 
had reappeared from its Chapter 11 bankruptcy with a new 
restructuring plan.  A Reuters article made mention of CQB's 
troubles in the early 1990s with a trade dispute over banana 
exports with the European Union.  Now that the dispute is 
resolved they will attempt to compete again with market leader 
DOL.

Picked on March 1st at $30.94
Gain since picked:      -0.99
Earnings Date         01/31/02 (confirmed)




---

Kohls - KSS - close: 70.46 change: -1.29 stop: 66.75

Our KSS play was triggered last week after the stock broke over 
resistance at $70.  Retail stocks performed well after Friday's 
consumer sentiment numbers and KSS almost traded to $72 before 
pulling back.  Monday saw another failed attempt to break this 
resistance level as the stock posted a high at $71.95.  It 
appears the lack of bullish conviction at this level may have 
been the catalyst for some profit taking, and today the stock 
lost 1.79%.  Based on how the broader market is behaving this 
pullback may offer an attractive entry point.  We'll be closely 
watching the RLX.X retail index for a breakout over 980.  This 
could portend a quick move up to 1000, much like the index moved 
higher after its recent breakout over 960.
 
Picked on March 15th at $ 70.50
Change since picked:      -0.04
Earnings Date          03/05/02 (confirmed)




--- 

Oxford Health - OHP - close: 41.18 change: +0.72 stop: 38.50 *new*

On Monday the HMO.X healthcare index shot above resistance at 500 
and closed at an all-time high of 507.30.  It's nice to see a 
sector that's really outperforming in a market that's been 
trading sideways for a few weeks.  OHP followed the index higher 
today and closed at its own all-time high of $41.18.  The close 
over $41 is significant because that was where shares topped out 
in mid-February.  With that level out of the way and the HMO.X 
also over resistance we think our near-term profit target at $45 
could be attainable.  If the sector strength continues, entries 
can be considered at current levels but it wouldn't hurt to look 
for dips to $40 either (but you probably had that chance on 
Monday).  PI is currently up 6.9% on this play and tonight we're 
tightening our stop to $38.50 in order to minimize risk.  Right 
now we'll add an exit price of $44.75 and if shares trade there 
intraday we'll close the play.

Picked on March 8th at $38.55
Gain since picked       +2.63
Earnings Date        02/05/02 (confirmed)




--- 

Payless Shoesource - PSS - close: 63.29 change: +0.41 stop: 58.75

Retailers still seem to be basking in the glow of last week's 
positive economic data.  The retail index (RLX.X) traded to a new 
multi-year high of 979.80 today before pulling slightly back into 
the close.  PSS has seen some decent gains this week as well.  
The stock added about 1% on Monday and topped out today at 
$64.70.  That might not be a coincidence - Shares were trading at 
$64.59 on July 3rd before dropping precipitously on bad news.  We 
like how volume has been slowly increasing over the past three 
sessions of gains.  The continued buying interest in a positive 
sign, and aggressive traders could try to jump on if PSS moves 
above $64.70 and the RLX.X breaks over resistance at 980.  
However, we'd prefer to wait for dip to $62 before targeting new 
entries.  The candlestick formed today may indicate that a day or 
two of profit taking is before us.  

Picked on March 15th at $61.74
Change since picked:     +1.55
Earnings Date         02/22/02 (confirmed)





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

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

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

Hartford Financial - HIG - close: 67.26 change: -0.40 stop: 64.45

Like the broader market, HIG has been trading in a narrow range 
lately.  Since Friday shares have bounced between $67, bolstered 
by the 20-dma, and $68.  However, insurance stocks have been 
rather strong lately as a group, which bodes well for a move 
higher.  PGR, MMC, CINF, and ORI are all breaking to new near-
term highs.  As a matter of fact, PGR even announced a 3-for-1 
split today.  As long as these stocks continue to be strong we 
think HIG has a good shot at $70 or higher.  Its recent range 
makes entries a cut-and-dry proposition: Entries can be 
considered on dips to $67 or a break above $68 although a dip to 
$66 is still not out of the question.  End-of-quarter window 
dressing could give the insurance sector a lift over the next 
week and a half as fund managers snap up shares of stronger 
stocks, which might be the catalyst needed to boost HIG over 
resistance.
 
Picked on March 13th at $65.74
Change since picked:     +1.52
Earnings Date         01/28/02 (confirmed)
 



---

Providian Financial - PVN - close: 5.95 change: unch stop: 4.85

Are we about to see a big move in PVN?  Recent price action 
indicates that might be the case.  The stock has traded in an 
increasingly narrow range over the past three days.  It's not 
surprising to see PVN see some consolidation after such a steep 
ascent over the past few weeks.  Bulls and bears appear to be 
duking it out over the $6 level and when the stock finally breaks 
up or down the move could be sharp.  Based on the strong sector, 
we think that the odds are better for a break higher.  The BIX.X 
banks index is trading at multi-year highs and threatening to 
break over 700.  Today's interest rate decision could've thrown a 
wrench in the sector but the switch to a neutral bias was 
expected and shouldn't negatively impact financial stocks.  As 
far as entries, wait for a move over $6.20 to confirm a breakout 
from the current pennant formation.  More aggressive traders 
could use the "inside-day" technique and take a bullish position 
if PVN trades over $6.05. 
 
Picked on March 8th at $5.71
Change since picked:   +0.24
Earnings Date       02/07/02 (confirmed)
 




  --------------------
  Bearish Play Updates
  --------------------

Adelphia Comm. - ADLAC - close: 22.55 change: +0.22 stop: 24.76

In the weekend update for ADLAC we discussed how shares appeared 
to be consolidating at historical support near $22.  This week 
shares have traded in a narrow range above that level...not 
surprising considering the NASDAQ has also been range-bound.  If 
ADLAC starts moving, a break above today's high at $22.81 could 
lead to a bounce to the $24 level, while a break below $22 may 
signal a resumption in the stock's downward trend.  Traders 
looking for new entries could consider going short if shares drop 
below Friday's low of $21.80.  Keep an eye on the MACD, which is 
just a hair away from producing a bearish crossover.  On a 
related note, readers may want to take a look at shares of COX.  
We suspect that if this heavy-hitter in the cable industry 
completes a double-top at $40 it could lead the entire sector 
lower.  However, if it breaks out it may inspire buyers to 
speculate on ADLAC again as well.  Traders should also note that 
ADLAC announces earnings later this month and will hold a 
Q4/year-end conference call on April 27th.  Traders may want to 
adjust their stops accordingly in advance of this event.

Picked on March 12th at $23.99
Gain since picked:       +1.44
Earnings Date         03/29/02 (unconfirmed)






===============
HR Closed Plays
===============

  -----------
  Closed Long
  -----------

Ikon Office Solutions - IKN - cls: 10.99 chg: -0.78 stop: 11.74

Shares of IKN dropped sharply on March 11th, two days before news 
that the company's CEO would be resigning became public.  Without 
any other discernable negative catalyst for the drop, we went 
long on the premise that the selling had been overdone.  The 
stock had managed to find support at $12 but dropped though that 
level during Monday's session.  Today's 6.62% decline came on 
high volume (1.6M versus the 628K average) and dropped IKN far 
below our stop at $11.74, thus ending this play with a $0.62 
loss.  We couldn't find any news to explain this steep decline.  
Nervous investors may be bailing out after shares broke $12.  Or 
perhaps Wall Street knows something we don't?  Regardless of the 
reason, the continued weakness exemplifies why these type of 
speculative plays are considered high-risk endeavors that demand 
the use of expendable capital only.

Picked on March 14th at $12.36
Change since picked:     -0.62
Earnings Date         01/25/02 (confirmed)






==================================================================
Split Trader (ST) section
==================================================================

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

Progressive Declares 3-for-1 split

Thirty minutes before the opening bell, The Progressive 
Corporation (NYSE: PGR) announced that its Board of Directors had 
declared a 3-for-1 stock split, in the form of a stock dividend.

This is the second 3-for-1 stock split in ten years with the last 
split occurring in late 1992.  Shares had previously traded near 
the $170 level in early 1999 before succumbing to profit taking 
and then the bear market later in the year.

The shareholder record date for the stock split will be April 1st, 
2002.  The payable date will likely be Friday, April 19th since 
the company expects shares to be distributed Monday, April 22nd 
and thus shares should begin trading at their new split price on 
that Monday. 

Investors should also note that the company is publishing their 
2001 Annual Report on their website later this afternoon.

PGR closed at $160.43 on Monday.  For a current quote,
click here:
http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=PGR


About the company
Progressive, with headquarters in Mayfield Village, Ohio, is 
one of the nation's largest private passenger auto insurance 
companies. In business since 1937, the Company provides all 
drivers with competitive rates and 24-hour, in-person and online 
services. (source: company press release)


--------


Fulton announces 5-for-4 stock split

During regular trading hours, Fulton Financial Corp. (Nasdaq: FULT) 
announced that its board had given the go-ahead on a 5-for-4 
stock split.  The split will come in the form of a stock dividend 
and will be payable on May 20th, 2002 to shareholders of record on 
April 24th.

FULT has a strong history of offering stock split dividends and in 
the last few years has seen a 5:4 split in 1998, an 11:10 split in 
1999, a 21:20 split in 2000 and another 21:20 in 2001.  Shares 
have added 12.6% YTD.

The stock closed at $24.59 on Monday.  For a current quote,
click here:
http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=FULT


About the company
Fulton Financial Corporation is a $7.8 billion financial holding 
company based in Lancaster, PA. The Corporation operates 188 
banking offices in Pennsylvania, Maryland, Delaware and New 
Jersey. (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 

TMX     Telefonos De Mexico        41.05     +1.00
AHC     Amerada Hess Corp          77.74     +1.83
MIR     Mirant Corp                13.80     +0.54
FMX     Fomento Economico Mex      45.06     +0.70
BJS     BJ Services Co             34.99     +1.21
MUR     Murphy Oil Corp            91.32     +1.30

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

DG      Dollar General Corp        16.99     +1.62
MDR     McDermott Intl. Inc        16.05     +1.40
VPI     Vintage Petroleum Inc      14.25     +1.33
GYMB    Gymboree Corp              14.76     +1.07

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

PG      Procter & Gamble Co        89.94     +2.28
PGR     Progressive Corp          162.60     +2.17
AVP     Avon Products Inc          55.31     +1.25
FO      Fortune Brands Inc         49.33     +1.18
PCAR    Paccar Inc                 75.80     +2.61
NBR     Nabors Industries Inc      42.88     +1.07

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

FE      Firstenergy Corp           32.25     -2.80
DOX     Amdocs Ltd                 24.40     -1.37
ADVP    AdvancePCS                 29.62     -1.97
LE      Land's End Inc             44.70     -1.18
KRON    Kronos Inc                 43.64     -2.65

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

HNI     Hon Industries Inc         27.63     -0.86
SCOR    Syncor Intl. Corp          27.15     -0.65
BDG     Bandag Inc                 38.01     -0.49



=================================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to Contact Support
=================================================================
DISCLAIMER
=================================================================

This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

*****************************************************************
ADVERTISING INFORMATION

For more information on advertising in PremierInvestor.net
Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

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


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




DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

To ensure you continue to receive email from Option Investor please add "support@optioninvestor.com"

Option Investor Inc
PO Box 630350
Littleton, CO 80163

E-Mail Format Newsletter Archives