Option Investor
Newsletter

Daily Newsletter, Wednesday, 03/20/2002

HAVING TROUBLE PRINTING?
Printer friendly version
PremierInvestor.net Newsletter              Wednesday 03-20-2002
                                                  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/c20b_1.asp
=================================================================

In section one:

Market Wrap:      You've got to be kidding me!
Watch List:       CAH, ISSX, MLNM, NVDA, and TOL
Play of the Day:  Follow the Leader.


************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************      
      03-20-2002           High     Low     Volume Advance/Decline
DJIA    10501.57 -133.68 10626.98 10496.04 1.28 bln   1013/2142
NASDAQ   1832.87 - 48.00  1861.79  1832.87 1.38 bln   1370/2163
S&P 100   582.17 -  9.92   592.09   581.89   Totals   2383/4305
S&P 500  1151.85 - 18.44  1170.29  1151.85             
RUS 2000  499.09 -  5.69   504.73   499.04
DJ TRANS 2894.11 - 36.53  2930.06  2878.10
VIX        20.70 +  0.35    21.18    20.21
VXN        38.05 -  0.94    39.98    37.20
TRIN        1.21 
PUT/CALL    0.73
************************************************************

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


You've got to be kidding me!

Paralysis by analysis is what this market is all about.  Now that 
the bond market is finally beginning to release its death grip on 
Treasuries, which the market so eagerly began gobbling up back in 
early 2000, some market mavens are now saying that stock declines 
(today's declines) are due to higher Treasury yields that could 
create higher mortgage rates and stem economic growth and 
reflects the MARKET'S fear that the Fed will begin raising 
interest rates.

Sometimes I think that analysts (technical or fundamental) sell 
the market short (figuratively) that it would jump to such a 
foolish conclusion.

One has to wonder why the Fed raising interest rates would in 
itself be a terrible thing?  Was the first Fed rate cut back in 
January of 2001 at NASDAQ 2,600 a sign of good things to come?  
Not hardly.  That first rate cut came in order to try and stem a 
tide of economic slowing.  

On October 4, 2001, in my market wrap "May be a good time to 
think of refinancing" 
http://www.PremierInvestor.net/archive/marketwrap/100401_1.asp 
I talked in depth about why you might want to refinance your 
mortgage.  That evening, the 10-year YIELD closed at 4.508%.  At 
the time, Realtor.com was showing a 30-year fixed rate mortgage 
at 6.41% and a 15-year fixed rate at 5.99%.

At the time, that commentary may not have seemed "important" or 
"relative" to the stock market, but now perhaps it does.  Is it 
beyond our grasp to think that "smart money" was thinking the 
same thing that very day and perhaps acting on those thoughts the 
following month?

Well.  I didn't catch the bottom if I refinanced my mortgage that 
evening as YIELDS did dip lower the following month, but since 
that time, YIELDS have been moving steadily higher and so have 
mortgage rates.  Today the 10-year YIELD is 5.397% and 
Realtor.com is posting the average 30-year fixed rate at 6.79% 
and the 15-year mortgage rate at 6.32%.

Has the move in the 10-year YIELD and mortgage rates priced 
Americans out of the housing market?  You be the judge.

Let's say you were looking at a $250,000 mortgage back on October 
4th when the 30-year mortgage was 6.41%.  You had managed to save 
enough money to make a 20% down payment on the property.  You 
called the mortgage lender and asked him/her what your payment 
would be for a $250,000 mortgage, with 20% down at 6.41%.  In 
essence, you wanted to borrow $200,000 for 30-years at 6.41% APR.  
Your mortgage payment would have been roughly $1,252/month.

Let's take the same numbers today, only bump that mortgage 
interest payment up to today's 6.79% rate and see if you decide 
to become a "person of property."  At 6.79% and the same $200,000 
loan, your payment would be $1,303/month.  

Now be truthful.  Are you less inclined today to buy a $250,000 
house with 20% down at 6.79% than you were back on October 4th at 
a 6.41% rate?  Remember, on October 4th, America had been 
attacked by terrorists 23-days prior.  

How was your "consumer confidence" at that time?  How did you 
feel about your job security or prospects for near-term 
employment if you were looking for a job?

Learn to filter

I can't remember the exact date, but several months ago when the 
Fed was about to cut rates, the "worry" was that a rate cut of 
more than 25 basis-points would have been deemed "worrisome" as 
it would have meant the economy was still slowing and the Fed was 
showing concern and trying to pump more liquidity into the system 
to stem off economic disaster.

Now the talk is that any type of "rate hike" is "worrisome" and 
that the Fed might just choke off the hopes of any type of 
economic recovery!

I don't know about you, but sometimes I get tired of worrying 
about "dumb money" and how we're going to take care of them.  
Let's face it.  Smart money at least may have refinanced their 
mortgages when interest rates were low, raised cash from a rather 
illiquid asset and now has a grin on his/her face.  It's the 
"dumb money" that's probably complaining that the Fed is going to 
raise interest rates, the bond market knows it and now those 
cheaper rates of last year aren't there anymore and it's time to 
cry that "dumb money" has to cough up an extra $51/month for the 
next 30-years to fulfill a portion of the American dream.

Give me a break.  That $51 a month extra in mortgage payment 
isn't any more of a dramatic setback than a 7.5% mortgage payment 
was back in January 2000 when the NASDAQ Composite was busting 
new highs once a week on its way to 5,000.

A concern, but confidence is key

How can it be that the housing market was still rather robust in 
1998-2000 even when the Fed was raising interest rates?  Treasury 
YIELDS were also headed higher as the "low" 5%, 5.5%, 6% then 
6.5% 30-year YIELD just couldn't keep up with 20% stock market 
gains?

It was confidence or consumer optimism that had Bob and Sue 
upgrading from the little 2-bedroom 1-bath and carport, to the 
more spacious 4-bedroom, 3-bath, attached double-car garage with 
a higher mortgage payment.  

Yes, part of that lifestyle was perhaps funded with stock options 
that had skyrocketed, or the Internet mutual fund that had 
doubled the previous two weeks, but confidence that it would 
continue into the future was what had the home buyer not thinking 
about how low mortgage rates were in late 1998 and foregoing the 
purchase of a new home or higher mortgage rates in late 1999.

I will raise my right hand in belief that higher bond YIELDS 
aren't exactly "bullish" for the housing market, but I don't 
necessarily believe that it is the end for further economic 
growth.

Remember, "smart money" has already refinanced their mortgages or 
found a way to have profited from those lower YIELDS or higher 
Treasury prices.  Far be it for me to think that some "bond bear" 
actually shorted the 10-year Treasury YIELD at rock bottom YIELD 
of 4.096% and price has fallen as YIELD now rises to 5.397%.

10-year YIELD Chart - Weekly Intervals




It's a fact.  Mortgage rates are tied to Treasury YIELDS and the 
10-year and 30-year YIELDS.  It's not necessarily a "fact" that 
the economy or the stock market's future performance is directly 
impacted just because mortgage rates rise, or YIELDS on the 
longer-end of the bond MARKET rise.

It is the belief among "market mavens" that the bond market is a 
very good predictor of future Fed interest rate policy.  As I've 
pointed out on the above chart, you can see how the 10-year YIELD 
fell from January 2000 to January 2001.  YIELDS didn't fall 
because the Fed was cutting interest rates.  In fact, on March 
21, 2000, the Fed was actually raised the fed funds rate by 25 
basis points to 6%.  On May 16,2000, the Fed raised rates a 
whopping 50 basis points to 6.5%.  Then on June 28, 2000, the Fed 
left rates alone.  It wasn't until January 3, 2001 (Fed's 1st 
rate cut way down here!) that the Fed actually started lowering 
interest rates, by cutting 50 basis points to 6%.  The YIELD 
chart of the 10-year was well ahead of the Fed.

Now hear this!

I will confess, the higher YIELD action is not necessarily 
bullish for homebuilders.  History and the technicals are proof 
of that.  Perhaps even one of our latest bullish plays in Centex 
(NYSE:CTX) $53.76 -5.86% may also give hint as to what a bear 
should be looking at.

I hope that my use of the terms "smart money" and "dumb money" 
does not offend anyone.  One could say we were "dumb money" in 
recommending Centex (NYSE:CTX) on March 4th at $61.32, but 
perhaps "not too dumb" as we cut our losses small at $59.47.

With some strong housing starts numbers today, one has to be 
scratching their heads as to just what is taking place.  Let's 
try and tie in what we think we know about mortgage rates and 
Treasury YIELDS, then tie it in with a home builder like Centex 
(CTX).  Believe me.  I did all this technical work tonight to try 
and figure out what took place in the past, and what might be 
taking place now and in the future.

Centex Corp. Chart - Weekly Intervals




It may be rather obvious to day that "as mortgage rates/Treasury 
YIELDS move lower, then home builders move higher."  This would 
only make sense if you or I believe that a lower mortgage 
interest rate would have new home sales increasing.  

I've marked the March 2000 point on the chart of CTX, which is 
approximately the same time that the 10-year YIELD chart broke 
DOWN from its regression channel.  Funny how that was right when 
Centex (CTX) achieved a 52-week low.  Now pretend that you or I 
was "smart money" and bought CTX at $20.  Say 10,000 shares.

Let's imagine further that we actually waited for the stock to 
actually break out of its downward channel and bought 10,000 
shares at $25.  After all, we know it's not always the smartest 
idea to try and pick a bottom.

Now what have we started to see?  The 10-year YIELD has broken to 
the upside of its downward channel back in December.  Centex 
(CTX) has been hanging around the upper end of it regression 
channel.  We tried playing CTX bullish on the brief break above 
this channel (I just drew this channel tonight) and got that 
trade crammed right back down our throats.

Today, the housing starts number was rather strong, yet Centex 
(CTX) fell 5.86%.  They weren't the only one to get hit to the 
downside today.

Last night I showed a chart of the DJ U.S Home Construction Index 
(DJUSHB).  Last night's close was 354.24 and today's close at 
337.76 represents a -4.6% decline.  Today's close is also right 
on that rising 50-day moving average, which hasn't been violated 
to the downside since the break above back on November 1, 2001.

I think it is way too early to be getting aggressive with any 
shorting in this sector, but the thought now has to cross my 
mind.  Some of my best longer-term investments have come from a 
previous trade/investment that didn't work in my favor.  

When I'm wrong, or think I was wrong, I'm open to trading the 
inverse if I think I've figured something out.  What I'm going to 
do right now is begin looking for some severe technical 
breakdowns in some homebuilders.

If the MARKET continues to sell Treasury YIELDS, then we know 
that mortgage rates are headed higher.  If we believe in history 
and the technicals shown above, then we have an idea of what to 
expect from the homebuilders.

What I do think you and I need to understand or at least be 
cognizant of is that the higher Treasury YIELDS and homebuilders 
aren't necessarily a "predictor" of broader market action.

Think about the investor that did actually buy some CTX at $20 
back in March of 2000, or bought some CTX at $25 when the stock 
broke out of its downward regression channel.  What might you be 
doing now, some 18-months to 2-year later with the stock $53?  

While it's been a "bear market" for the broader markets, it's 
been anything BUT a bear market for the homebuilders.

If I were an institution that started buying CTX at $20, $25 and 
$30, I'd be looking to raise a little cash and take some profits 
if the 10-year YIELD kicks much higher.

Look at the regression channels.  I just saw this as I was trying 
to explain things to one of our play pickers.  Look how the 10-
year YIELD close is right in the middle of the regression 
channel.  Now note how the close of Centex (CTX) is also right in 
the middle of its regression channel.

For now, these regression channels become our "ranges."  As such, 
a bull or bear understands that they are right in the middle of a 
longer-term range of trend.  As such, we must then understand 
near-term risk/reward. 

A bear that goes "bear wild" and takes all his/her money and 
shorts Centex (CTX) is not implementing proper risk management.  
if YIELDS suddenly turn lower, a bear could be in big trouble.  

I've spent some time tonight on this topic because I think we're 
going to be inundated with some "negative" commentary or "blanket 
type statements" that higher interest rates are "negative" for 
the economy going forward.

Let's take one day at a time and not get too caught up in the 
sudden change of tune that the thought of higher interest rates 
are going to be doom for things going forward.

Refer back to the mortgage interest rate calculations that we did 
above.  Is $51 a month enough to turn away a home buyer right now 
and squash the economy?  You can visit www.realtor.com, find the 
link to their "Mortgage Calculator" and punch in some various 
interest rates to get a feel for various points that you might 
change your mind about buying a new home.

Just remember.  The smartest money in the market buys the bottoms 
and sells the top.  I'd argue that its not always the same 
person(s) that are buying the bottoms and selling the tops.

While I'd love to always buy the bottom and sell the top, I don't 
think it "reasonable" to think that I can.  However, if I can get 
in or out within 10-20% of the tops or bottoms, then we'll do 
alright.

Be patient

I've still got my eye on shares of Applied Materials 
(NASDAQ:AMAT) $51 -2.98% for a pullback near the $47-$48 level.  
If the MARKET wants to worry about what a Fed raising interest 
rates in the future will do to the economy, then let it.  If AMAT 
bulls from $30 want to sell and take a profit, then that's only 
fair.  

On March 21, 2000, when the Fed raised rates as mentioned above, 
AMAT had already been in a bullish run from the $40's (October 
1999) to a March 21, 2000 close of $98.  If memory serves me 
correct, I remember some "worry" also being mentioned during 
AMAT's meteoric run all the way to $114.

All you and I have to do is listen and trade what we observe.  
I'm just not convinced that the simple thought of higher interest 
rates down the road are a bad thing.  That usually happens during 
periods of higher economic growth rates.  I think its just way 
too early to be worrying about that right now.

Jeff Bailey

Senior Technical Analyst
Premier Investor


==================================================================
WATCH LIST
==================================================================

The PremierInvestor.net watch list is not designed to be read
as full fledged stock picks.  Rather we would prefer to offer
it as an extra tool in today's investor toolbox.  Think of it
as a radar screen with your own radar operator pointing out
interesting developments, technical patterns or potential plays
that you may or may not have seen on your own.  Due to time
constraints we do glance at the news but rarely do we have 
time to fully read pertinent news stories, due background 
research and other necessary screens that investors should do
before making a decision.  A common exercise is to read the
entry, glance at the sector and other stocks in that industry
and then compare what's happening in the stock to what's 
happening in the broader market indices.  We hope you enjoy
the Watch List and that it proves to be a useful tool for your
own trading success.

STOCKS WORTH WATCHING
---------------------------------


Cardinal Health - CAH - close: 69.00 change: -0.55

WHAT TO WATCH: Yet another Watch List appearance for CAH.  We're 
still waiting for shares to break over resistance at $70.  The 
stock has flirted with that level over the past three sessions
but just can't manage to move above it.  One of the reasons we're 
feeling so bullish on CAH is the strength of its sector.  The 
HMO.X health provider index is over resistance and posted an all-
time high on Monday.  It was also one of just a handful of sectors 
that finished in the green today, with a 0.30% gain.  Those 
looking for a healthcare stock that has already broken resistance 
might want to take a look at OHP, which is currently featured on 
our Play List.  A close over $70 might be a good time to consider 
a long position in CAH.




--- 

Internet Security Systems - ISSX - close: 25.87 change: -2.13

WHAT TO WATCH: Internet security stocks weren't the most secure 
places to be invested in today.  CHKP (a current PI short play) 
lost 8.3%, VRSN gave back 9.3%, and ISSX lost 7.6%.  ISSX dropped 
quickly after running into bearish p-n-f resistance at $30 and we 
think it could be headed to $20.  The MACD is on the verge of 
giving a bearish crossover and move to $25 would give a double-
bottom sell signal on the p-n-f chart.  A break below this level 
would confirm the bears are still in control may be a good time to 
think about going short.  However, look for potential support to 
emerge at near-term lows near $22.  




---

Millennium Pharmaceuticals - MLNM - close: 23.43 change: -1.76

WHAT TO WATCH: The BTK.X biotech index put in a decent run over 
the past week, but couldn't break above its 200-dma and today's 
session saw them breakdown under their 100-dma.  MLNM also moved 
up last week but wasn't able to stay over $25.  Shares dropped 
almost 7% today despite receiving a reiterated strong buy from 
Wachovia.  This is decidedly bearish, as are the daily stochastics 
and MACD, which is beginning to roll over.  We wouldn't be 
surprised to see MLNM return to the $20 level and possibly retest 
late February -early March support near $18.  Traders can target 
failed rallies to the 100-dma at $24.50 or a move under $23.  We 
would look for bulls to put up a potential fight at $22.  




---

NVIDIA Corp - NVDA - close: 46.52 change: -5.13

WHAT TO WATCH:  It's a safe bet that shareholders of NVDA have 
seen better days.  As discussed in last Friday's Watch List, we've 
been looking for the stock to break below psychological and 
historical support at $50.  We were planning on considering adding 
NVDA as a short play if this level was broken, but weren't 
counting on the strength of today's selloff!  Today's decline of 
almost 10% not only pushed shares below $50 and the 200-dma at 
$49.25, but all the way down to a low of $46.35.  Since support 
may emerge just below at $45 we'd be reticent to chase it lower.  
However, a failed rally back to $49-$50 could offer an ideal entry 
point.  We do suspect that NVDA may retest support at $40.




--- 

Toll Brothers Inc - TOL - close: 48.76 change: -2.60

WHAT TO WATCH:  Talk about selling the news!  Homebuilding stocks 
took it on the chin today after the release of economic data 
indicating housing starts rose 2.8% in February - That's highest 
number of starts since December 1998.  While conventional wisdom 
dictates that homebuilders should have traded higher on that news, 
it appears that Wall Street is discounting the report as merely 
extremely beneficial weather for home builders.  The Dow Jones 
home construction index (DJUSHB) saw a rapid rise in late February 
and topped out at near 380, but enthusiastic selling over the past 
week has led it back to 338.  TOL has paralleled this move and 
looks like it could join the sector in a move lower.  Shares were 
unable to maintain support at $50 and dropped sharply today on 
high volume of 1.9M versus the 682K average.  The MACD is showing 
a bearish crossover and today's decline also triggered a double-
bottom alert on the p-n-f chart.  Traders can target failed 
rallies to $50 or a break below today's low at $48.68.  The latter 
would be a more risky endeavor, but if the homebuilders remain 
weak TOL could continue downward without a bounce.  Verify sector 
weakness with a break of the 50-dma on the DJUSHB.  Traders need 
to be careful with TOL since the stock has a 2-for-1 stock split 
coming up next week on the 28th of March, which is typically a 
positive event for a stock price.







===============
Play-of-the-Day  (bearish)
===============
(( new tech stock play ))


Cisco Systems - CSCO - close: 16.02 change: -0.72 stop: see text

Company Description:
Cisco Systems, Inc. is the worldwide leader in networking for the 
Internet. Cisco's Internet Protocol-based (IP) networking 
solutions are the foundation of the Internet and most corporate, 
education, and government networks around the world. Cisco 
provides the broadest line of solutions for transporting data, 
voice and video within buildings, across campuses, or around the 
world. (source: company website)


Why We Like It:

Is the NASDAQ headed back down to its February lows near 1700?  
It's hard to tell at this point, but today's 48-point loss was a 
large step in that direction.  Techs seem to breaking out of their 
recent sideways trading pattern, and we think networking sector 
could lead the way down.  The networking index (NWX.X) looks 
especially weak and is threatening to break support at 232.  
Profit-taking in the sector has been swift, and a case could be 
made that the index is near-term oversold.  However, with the 
NASDAQ looking weak and the NWX's MACD just beginning to show a 
bearish crossover, we think a drop to 200 may be in the cards.  
CSCO is obviously a good way to play the sector, but it's also 
displaying its own negative technical picture:  The MACD looks 
like it may turn lower after failing to cross the baseline and a 
glance at the p-n-f shows that shares were repelled at bearish 
resistance.  Today's 4.3% decline came to a halt at $16.  A break 
below this level could have CSCO quickly trading near February 
lows at $14.25.  That's our initial profit target, but first we 
want to see the stock break $16.  We're going to set a trigger at 
the March 6th low of $15.91.  If shares trade at or below that 
level we'll initiate a short play with a stop at $16.70, just 
above today's high.

Picked on March xth at $xx.xx <- See text
Change since picked:    +0.00
Earnings Date        05/07/02 (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. 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                Wednesday 03-20-2002
                                                   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/c20b_2.asp
=================================================================

In section two:

NetBulls Tech Stocks
  New Bearish Play:     CSCO
  Closed Bullish Play:  RIMM
  


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


=================================================================
Net Bulls Tech Stocks (NB) section
=================================================================

============
NB New Play
============

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

Cisco Systems - CSCO - close: 16.02 change: -0.72 stop: see text

Company Description:
Cisco Systems, Inc. is the worldwide leader in networking for the 
Internet. Cisco's Internet Protocol-based (IP) networking 
solutions are the foundation of the Internet and most corporate, 
education, and government networks around the world. Cisco 
provides the broadest line of solutions for transporting data, 
voice and video within buildings, across campuses, or around the 
world. (source: company website)

Why We Like It:

Is the NASDAQ headed back down to its February lows near 1700?  
It's hard to tell at this point, but today's 48-point loss was a 
large step in that direction.  Techs seem to breaking out of their 
recent sideways trading pattern, and we think networking sector 
could lead the way down.  The networking index (NWX.X) looks 
especially weak and is threatening to break support at 232.  
Profit-taking in the sector has been swift, and a case could be 
made that the index is near-term oversold.  However, with the 
NASDAQ looking weak and the NWX's MACD just beginning to show a 
bearish crossover, we think a drop to 200 may be in the cards.  
CSCO is obviously a good way to play the sector, but it's also 
displaying its own negative technical picture:  The MACD looks 
like it may turn lower after failing to cross the baseline and a 
glance at the p-n-f shows that shares were repelled at bearish 
resistance.  Today's 4.3% decline came to a halt at $16.  A break 
below this level could have CSCO quickly trading near February 
lows at $14.25.  That's our initial profit target, but first we 
want to see the stock break $16.  We're going to set a trigger at 
the March 6th low of $15.91.  If shares trade at or below that 
level we'll initiate a short play with a stop at $16.70, just 
above today's high.

Picked on March xth at $xx.xx <- See text
Change since picked:    +0.00
Earnings Date        05/07/02 (unconfirmed)
 




===============
NB Closed Play
===============

   ----------------
   Closed Bearish
   ----------------

Research In Motion - RIMM - cls: 26.29 chg: -1.11 stop: 26.49

We were cautiously optimistic on tech stocks last night after the 
book-to-bill numbers came in with a 10% improvement over last 
month.  Unfortunately any bullish sentiment on the NASDAQ was 
obliterated this morning when Piper Jaffray and Salomon Smith 
Barney reduced earnings and revenue forecasts for INTC.  Resulting 
weakness in the chip sector spread to the rest of the NASDAQ, 
including RIMM.  We'd been encouraged by how shares were able to 
stay above support at $27 over the past two weeks.  The stock even 
managed to stay close that level for most of today's session.  It 
wasn't until the five minutes of the trading session that RIMM 
dropped rapidly on a large volume spike.  The move violated our 
stop at $26.49 and ended this play with a loss of $0.83.  We 
initiated this play after the stock closed over resistance at $27.  
Shares proceeded to trade as high as $29.55, but weren't able to 
maintain those levels in the face a wishy-washy, directionless 
NASDAQ.

Picked on March 6th at $27.32 
Change since picked:    -0.83
Earnings Date        04/09/02 (confirmed)






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

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

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

CI      Cigna Corp                 98.80     +2.10
DYN     Dynegy Inc                 32.00     +0.99
EQT     Equitable Resources Inc    35.48     +0.88
DAB     Dave & Buster's Inc        11.25     +0.54

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

PKS     Six Flags Inc              16.95     +1.48
IDXC    IDX Systems Corp           17.68     +1.16
BPUR    Biopure Corp               11.15     +3.13

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

ROH     Rohm & Haas Co             41.35     +1.35
TSG     Sabre Holdings Corp        47.86     +2.35
CPS     Choicepoint Inc            57.40     +1.44
ROXI    Roxio Inc                  21.84     +1.34
HRLY    Herley Industries Inc      21.45     +1.31

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

BMY     Bristol-Myers Squibb Co    41.08     -7.57
ABT     Abbott Laboratories        51.80     -1.58
GDW     Golden West Financial      62.18     -1.54
NVDA    NVIDIA Corp                46.52     -5.13
VRSN    Verisign Inc               26.42     -2.71

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

LLY     Eli Lilly & Company        79.23     -1.46
A       Agilent Technologies       34.36     -2.24
MHK     Mohawk Industries Inc      63.90     -2.00
DCN     Dana Corp                  20.36     -1.25
TTC     Toro Co                    57.91     -1.84




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