PremierInvestor.net Newsletter 04-25-2002 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/d25b_1.asp ================================================================= In section one: Market Wrap: M, I, Ceeee .... see ya real soon.... Play-of-the-Day: Beating Estimates Market Sentiment: Is Fear Creeping Back into the Markets? ----------------------------------------------------------------- U.S. Market Numbers ----------------------------------------------------------------- MARKET WRAP (view in courier font for table alignment) ----------------------------------------------------------------- 04-25-2002 High Low Volume Advance/Decline DJIA 10035.06 + 4.63 10039.56 9926.57 1526 mln 1641/1504 NASDAQ 1713.70 + 0.36 1724.01 1697.27 1788 mln 1611/1942 S&P 100 540.69 - 1.17 542.71 537.31 totals 3252/3446 S&P 500 1091.48 - 1.66 1094.36 1084.81 RUS 2000 508.85 + 1.53 509.07 503.31 DJ TRANS 2726.43 + 51.69 2732.16 2660.17 VIX 22.97 + 0.29 23.96 22.47 VXN 40.41 + 0.23 42.51 39.87 Put/Call Ratio 0.78 ----------------------------------------------------------------- =========== Market Wrap =========== M, I, Ceeee .... see ya real soon.... K, E, Y.... Why? Because we wanted to surprise you! M, O, U, S, E. MICKEY MOUSE! The Walt Disney Company (NYSE:DIS) $25.00 +1.95% pulled a "Mickey Mouse" on investors just prior to the close of trading and announced earnings that beat expectations. Almost like an "in your face" type of move to disbelievers that were short the stock, Disney (DIS) reported earnings of $0.13 a share, which was better than consensus estimates of $0.10 a share. Walt Disney Chart - Daily Interval Shares of Disney (DIS) traded as low as $23.68 earlier today as earlier market weakness and broader market action had most bulls rather nervous. Longer-term however, the technicals from the bar chart are starting to shape up and beginning to look bullish. The technicals and observations from the bar chart are perhaps indicative of Disney's tone in tonight's brief commentary from their conference call. The company says its seeing "early signs of improvement" in the advertising market, but it will take some time to see a complete turnaround in its ABC unit. The positive notes had the company saying that theme park bookings are running better than year ago levels. I'm starting to warm up to Mickey on a longer-term basis. Psychological resistance comes at $25.00. Hey, $25.00 is about as "round" as you can get and this $25 number has really show up in recent weeks. Technically however, I think the $25.89 or $26 (also a round number) really comes into play. The other day, a subscriber asked me about some stocks that might be good long-term investments (12-18 year time horizon) for a child's college fund. Right now, I can't think of a better long- term stock for a child's education fund than Disney. The technicals are there and note how the stock hit what looks to be a "bottom" just after the terrorist attacks! Look at that volume! I'm guessing there were perhaps some parents out there that also had DIS in the kids college fund, watched it go from $13 back in 1994 to over $40 in 1998 and then back down to $20 on September 11th and finally did something about it. They may have sold it, told the kid he/she was going to the community college this year and Harvard was not in the books. Now, NEVER put all of the kids college fund or even your own investment capital in just one stock. With Disney still below its bearish resistance on the point and figure chart, I'd be just confidence enough right now to start legging into the stock with the recent break of longer-term downward trend (from the bar chart) and follow with a stop at the rounding 200-day MA. I like to invest longer-term (gradually building a position) in stocks where the technicals seem to depict what the company is saying about the future. It's when the technicals DIVERGE from what the company is saying that we need to be very concerned. Say Cheese! Disney's before market close earnings report wasn't the only surprise dropped on the market today. Subscriber e-mail has me looking for yet another level of resistance for the HMO Index (HMO.X) which surged to yet another 52-week high at $610! While our play list doesn't have an HMO stock on it, there's still some subscribers hanging in there on recently profiled HMO stocks. Instead of "trying to pick a top" on each of them, I'll try again and this time we're going to really get outlandish! I'll call it the "triple-decker stacked regression." Morgan Stanley Healthcare Index (HMO.X) - Daily Interval Wow! NEVER underestimate the power of supply and demand. Today's action in the HMO's was fueled by Wellpoint Health (NYSE:WLP) $74.84 +4.7% reporting better than expected earnings. This good news had the HMO's blowing through our recently added "2nd" level of stacked regression. I sure hope there aren't some bears trying to short these upper levels of regression. Strange things can happen when no overhead supply remains. Now I've added a "3rd" stacked regression (interesting close near the mid-point), which now gives bulls another target to be shooting for. I've also "rolled up" retracement to try and get another "crisscross" from a retracement/regression line that also fits with past trading. We can see how the brief periods of consolidation (533 and 584) are perhaps indicative of some institutions "legging out" of some partial positions (taking profits) and when they're done, demand takes over again, outstrips supply and its off to the races once again. There's also going to be the bears trying to pick a top, then turn into buyers on the breaks higher as they cover their losses, making for the rather impressive moves higher. Eventually this will end as risk/reward becomes too unfavorable. I will note that the bullish vertical count from the point and figure chart of 565 was exceeded several days ago. The first sell signal on the point and figure chart would be at $570 (on the $5 box scale). At this point, a bull that's been long for a couple of weeks or months could care less, it's the bears that are short and looking for the pullback that are most concerned. For those still long a stock(s) in this group, just keep raising your stops to levels where you are satisfied with a profit and let things play out. Monitor your "like stock" with the index and if you start seeing DIVERGENCE (your stock acting bearish relative to the index) then be on the alert for potential price declines in your holdings! Always use a stop If you're short any stock, regardless of market conditions, always use a stop. The HMO rally is impressive, but for those that have been trading/investing for a while, we've seen it too many times. It doesn't matter what "type" of stock you're short (healthcare, networking, internet, software, cyclical) when the MARKET hungers for it, strange things can happen. We don't want any trader to be "afraid" to short a stock, but the above chart of the HMO Index is also a reminder that any stock, regardless of sector association needs to be traded with discipline. Alarming divergence! It was a rather "wild" day today and just before the close of trading I was looking for some DIVERGENCE and saw that shares of Macromedia (NASDAQ:MACR) $21.66 +23.7% were really bucking the trend. Usually when I go through the % gainer list of stocks they are mostly filled with $1 or $2 stocks that are up 25-50 cents. What's interesting about Macromedia's gain today is that the only news I could find was that Thomas Weisel (an investment firm) upgraded the stock to "attractive" from "market perform" due to a recently reported "solid" Q4 and the belief that the new product cycle looks promising. (Note: the word "solid" was their word not mine) On April 24th (Wednesday) after the bell, MACR reported a Q4 loss of $0.10 a share, which beat consensus estimates looking for a loss of $0.14 a share. Reported revenues of $75.6 million were also better than the consensus estimate of $72.7 million. The company did say it expected a return to profitability in the June quarter and sees sequential revenue growth, or roughly $83 million. Macromedia Chart - Daily Interval There was some impressive volume in today's trading for MACR. Back in January, the stock had fallen sharply from a high near $27 and the $21.17 level was violated to the upside on 1.4 million shares volume. I think that "rally attempt" was met with selling by bulls "getting out" on the rally after a shocking drop to the $17's (I don't blame them, I would have too). Now we see the same level of trading take place ($21), but volume has really shown a pickup. To me, this is very "obscure" as if somebody knows something that isn't being said. I've asked our play writers to add MACR to our "watch list," for now, but I think an aggressive bull might want to play this stock as bullish, with a stop just below $17.47 (that's some heat to take, but if you'll trade light in a partial position then that reduces the risk in your account/trade). Is it a short squeeze? The March 8th short interest data shows just 1.4 million shares short, roughly 1.92 short ratio based on 925K average daily volume. But that doesn't mean short interest hasn't increased (since March 8th) on the consolidation sideways from $17.47-$21.17 and looking for a break of $17.47 to collapse to $14.76. Well, that hasn't happened and if shorts have built in the stock, they might be in trouble. Somebody (the MARKET) has been supporting the stock at $17.47. That's pretty evident from the chart and worth understanding. Don't let the $27.17 0% retracement fool you with regards to potential upside either. It serves as a good trading target, but shares of MACR traded the $120 level back in July of 2000. A break above the $28.00 level would have the stock breaking out of a long-term base dating back to April 2001. Macromedia Chart - $1 & $0.50 box The point and figure chart MACR is also compelling and looking bullish. Today's trade at $21 sets off a spread-triple-top buy signal that takes place "outside" of downward trend. A "patient" bull would like to look for entry on a pullback near the $19 level (tie that in with bar chart's 50% retracement). A more aggressive bulls takes the stock long here on the thought he/she might not get a pullback. Again, you can "lessen" risk in your trades by implementing some trade management and trading 1/2 positions, then build the position as the trade unfolds. Brokers under pressure Broker/dealers were under pressure for most of the day, but later in the day selling picked up after the Wall Street Journal reported that the Securities Exchange Commission (SEC) has launched a formal investigation into the stock research practices of Wall Street Analysts. The probe follows a face-to-face meeting between SEC Chairman Harvey Pit and New York Attorney General Eliot Spitzer yesterday afternoon. Some expect enforcement action to result from the examination. Last night, we added two bearish plays that may be impacted by future developments from today's Wall Street Journal report. Each stock J.P Morgan (NYSE:JPM) $34.39 -2.39% and Merrill Lynch (NYSE:MER) $42.50 -4.8% gapped lower at the open and recovered slightly from their session lows. What I want to make "known" to traders of these stocks is that I feel MRL is a much weaker stock than JPM and both reside at different ends of the "snake" so to speak. In essence, MER is at the "tail" of the snake, while JPM is more at the "head" of the snake. The reason we profiled both of them is the we felt the "snake" as a whole was looking sick. Here's what I'm looking at and the point and figure charts do a very good job (I think) of showing "field position" of each as it relates to each other and the technicals we are trading on the bigger picture. Merrill Lynch Chart - $1 box Merrill Lynch (MER) has been in the news a lot lately regarding and found itself getting "headlines" regarding potential SEC investigation. The long column of O's (supply) keeps getting longer and we thought a break of the $45 level could have bulls pulling the plug on the stock. A short-term trader would be pretty happy if the stock traded $38 or $37 and willing to lock in a gain. The current bearish vertical count of $27 (could grow if column of O gets longer) will strike "fear" into a bull's hear if he/she is uncertain of today's SEC news. J.P. Morgan Chart - $1 box Several sessions ago, JPM broke above its 200-day moving average. I was watching the stock closely. I was also aware that the stock was trading at its bearish resistance trend, often times closely watched and traded by institutional money managers. Based on market conditions and weakness found in some of the "broker/dealers" and drift back below JPM's 200-day MA, we thought the stock was a good risk/reward bearish play. Note how much "weaker" the p/f chart is of MER compared to JPM. Almost as if they're at two ends of the spectrum (or the snake's body). I don't know what will come from today's news that the SEC might be pressing things regarding misleading brokerage upgrades/downgrades or what firms might be scrutinized the most (if at all). Traders that are short either of these stocks can expect some volatility due to the uncertainty of today's news. How big might the fines be? We don't know. The fine, if they ever come to fruition might even be covered by some type of insurance and have little impact. Just trade the technicals and the trading plan as outlined by yourself or the play updates we post in the play list. If I see something intraday that I think a trader should be doing with either of these trades, I will mention it in the intraday wraps (most likely at the 01:00 update). If you're a subscriber to the OptionInvestor.com site, I will also make comments in the market monitor regarding both stocks! Today's action Treasury bonds finished the session relatively unchanged, and much like stocks, YIELDS did recover from their lows. This action from the bond market gives us a very short term perspective that money wasn't rushing toward bonds. Money has been moving toward bonds in recent sessions, but today's action didn't look like the MARKET was fleeing to safety. The Dow Industrials were interesting to watch as it really oscillated back and forth from the psychological 10,000 level. The broader NYSE Composite (NYA.X) 579.97 -0.19% closed below its 200-day moving average (582.43) for the second consecutive session. This needs to be monitored and understood as bearish due to this index of stocks being heavily institutionally owned. There are no market makers holding inventories of these stocks (not to the level that NASDAQ stocks are) and is thought by many to be the "true" market. The 50-day moving average is starting to roll up at $590 and now becomes a closely watched level of potential resistance. Market breadth was about as mixed as trading and really reflects the observations we've made about "uncertainty" and expected volatility. Many sectors of the market remain technically bearish and caution is advised. Under current market conditions, strict adherence to stops is a must. This goes for both bullish and bearish traders! Jeff Bailey Senior Market Technician ========================= Play-of-the-Day (Bullish) ========================= Titan Corp - TTN - close: 21.98 change: +0.31 stop: 20.99*new* Company Description: Headquartered in San Diego, The Titan Corporation creates, builds and launches technology-based businesses, offering innovative technical solutions. For more than 20 years, Titan has provided comprehensive information systems solutions and services to the Department of Defense and intelligence agencies. Today, three of Titan's four core businesses develop and deploy communications and information technology solutions and services for both government and commercial customers. (source: company press release) - ORIGINAL WRITE UP: April 12th, 2002 - Why We Like It: These days it's a bit difficult to find a tech stock that's threatening to break to new near-term highs, but TTN fits the bill (that's near-term as in relative, not 52-week highs). Recent strength in the stock can be attributed to the fact that TTN provides services to both the commercial and defense sectors. A scan of news releases for the company shows four defense contracts have been awarded in the month of April; The most recent being a $103M IT contract from the Air Force that was announced today. This propelled shares of TTN higher by 5.6 percent and set up what could be an attractive entry point. The stock closed right at the $21 resistance level, which has kept a lid on every attempted rally since early February. The 200-dma at $21.18 provides additional resistance. We think the recent flurry of contracts could power the stock above this level, but want to verify a breakout first. For this reason, we're going write this play with a trigger at $21.26. If TTN trades at or above this level, we'll go long with a stop at $19.74. This should prevent us from getting trapped in a reversal. P-n-f chartists may notice that the stock has bearish resistance at $22. This would be logically be the next level of resistance after the 200-dma, but we think the momentum created by the breakout above $21 will be enough to carry it though $22. Such a move would also create a double-top breakout on the p-n-f and put our profit target of $25.50 within reach (although expect resistance at $24). Be sure to monitor events in the Mid East, as a deterioration of the regional tensions (can it get much worse?) could spotlight the defense sector even more. - Most Recent Update: April 25th, 2002 - The pull back in TTN may be over. The defense contractor and information technology company reported Q1 earnings after the bell today and the revenue numbers were impressive. According to their press release TTN's Q1 revenues were $340.5M vs. $239.1M the year before. That's a 42 percent increase. Pro forma operating income rose 33 percent to $23.5M and pro forma net income rose 62 percent to $9.1M with earnings per share rising to 12 cents. The estimates were for 10 cents. If you missed the two bounces at the $21.50 level, traders got another chance today before the stock shot higher in the last hour of the day. We didn't see any after hours activity but expect the stock do perform well tomorrow. We are still targeting a move to $25.50 but short-term traders may want to consider taking profits if TTN hits $24.00, which could be resistance. We are going to move our stop to $20.99 but conservative traders might be able to get away with $21.45 if they felt the need to. - Play-of-the-Day Comments: April 25th, 2002 - TTN reported earnings today after the bell. The company announced an EPS result of 12 cents/share for Q1, versus the Multex estimate of 10 cents. Revenues rose over 42% on a year/year basis. We have yet to see any brokerages weigh in on the news (do their opinions even matter anymore?), but it certainly sounds bullish to our ears. We're looking for a positive reaction to power shares above near-term resistance at $22.50. This would clear the way for a test of the $24 level. Picked on April 15th at $21.26 Gain since picked: +0.72 Earnings Date 04/25/02 (confirmed) ================ Market Sentiment ================ Is Fear Creeping Back into the Markets? By Kent Barton It never ceases to amaze me how quickly the consensus changes when it comes to forecasting the market. A mere six weeks ago, the talking heads on CNBC were falling all over themselves in predicting a bottom in tech spending and all-time highs on the Dow. The institutions sure seemed to agree, as evidenced by the way the markets were shooting higher with reckless abandon. Of course, in hindsight it's pretty clear that the rally in late- February/early-March was a combination of short covering and hey the economy is turning around event. The current earnings cycle has made it blatantly obvious that IT spending will not be improving anytime soon, and the Dow is mired in a month-long downtrend. Suddenly, those optimistic forecasts seem at-odds with reality. Don't look now, but the VIX is now at levels not seen since February. The recent move higher could be attributed to a number of factors, including skittishness in the oil market, nervousness over tensions in the Mideast, a plethora of SEC investigations (the latest of which is targeting Wall Street brokerages), and earnings-induced volatility. Whatever the reason for the recent move higher, it appears the tried-and-true "sell when the VIX is low" axiom is still intact. Traders who shorted the market when the VIX dropped below 20 in late March are likely now sitting on some nice gains: The NASDAQ has dropped 7.1% since the VIX.X bottomed out on March 28th, while Dow has shed 3.5%. Of course, that doesn't mean there aren't any strong sectors. The bullish percentage data reveals where the strength is - and it sure isn't in four-lettered stocks. The NDX just reverted back to bear confirmed after briefly shifting to bull confirmed. Breakdowns in the software, biotech, and semiconductor groups all suggest that there may be more downside ahead. On the other hand, the NYSE is firmly in bull confirmed territory. Moves higher in the healthcare and homebuilding sectors have helped to offset losses in brokerage and cyclical stocks. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 11350 52-week Low : 8062 Current : 10035 Moving Averages: (Simple) 10-dma: 10156 50-dma: 10277 200-dma: 9935 http://www.optioninvestor.com/charts/financial.asp?ticker=$INDU S&P 500 ($SPX) 52-week High: 1316 52-week Low : 945 Current : 1091 Moving Averages: (Simple) 10-dma: 1111 50-dma: 1128 200-dma: 1130 http://www.optioninvestor.com/charts/financial.asp?ticker=$SPX Nasdaq-100 ($NDX) 52-week High: 2071 52-week Low : 1089 Current : 1302 Moving Averages: (Simple) 10-dma: 1358 50-dma: 1424 200-dma: 1497 http://www.optioninvestor.com/charts/financial.asp?ticker=$NDX Health Provider ($HMO) The HMO was the day's best performing sector during Thursday's session. The index tacked on 5.7% to finish at an all-time closing high of 610. Boosting the sector today was Wellpoint (WLP), which rose sharply after reporting strong earnings. Other sector performers included PacifiCare (PHSY), Trigon Healthcare (TGH), and Oxford Health (OHP). 52-week High: 611 52-week Low : 366 Current : 610 Moving Averages: (Simple) 10-dma: 567 50-dma: 510 200-dma: 449 Broker/Dealer ($XBD) The XBD was the worst performing sector on Thursday, declining by 2.3% after the SEC announced a probe of Wall Street analysts. This news only exacerbated the selling in an already-weak sector. Leading the group lower were Morgan Stanley (MWD), Merrill Lynch (MER), and Goldman Sacs (GS). 52-week High: 570 52-week Low : 317 Current : 455 Moving Averages: (Simple) 10-dma: 485 50-dma: 498 200-dma: 475 ----------------------------------------------------------------- Market Volatility The Market Volatility Index (VIX.X) received a shot in the arm this morning after news of an explosion in NYC briefly spooked the market. Although traders quickly shrugged off the news, the VIX.X finished higher for the fourth session in a row. The VXN finished fractionally higher and is now above the $40 level, which had kept a lid on the index over the past week. CBOE Market Volatility Index (VIX) - 22.97 +0.29 Nasdaq-100 Volatility Index (VXN) - 40.41 +0.23 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.78 593,336 463,701 Equity Only 0.68 527,689 360,122 OEX 1.15 10,312 11,912 QQQ 0.96 30,310 29,329 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 64 + 0 Bull Confirmed NASDAQ-100 33 - 4 Bear Confirmed DOW 53 + 0 Bear Alert S&P 500 64 - 1 Bear Alert S&P 100 60 - 1 Bear Alert 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 1.36 10-Day Arms Index 1.15 21-Day Arms Index 1.33 55-Day Arms Index 1.19 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 1655 1518 NASDAQ 1613 1934 New Highs New Lows NYSE 152 56 NASDAQ 149 109 Volume (in millions) NYSE 1,513 NASDAQ 1,972 ----------------------------------------------------------------- Commitments Of Traders Report: 04/16/02 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 The spread between S&P commercials and small traders narrowed during the most recent reporting period. Commercials added a few more longs than shorts, resulting in a small reduction in the group's net bearish position. Meanwhile, small traders added quite a few short positions, coming off of the group's yearly high in bullishness. Commercials Long Short Net % Of OI 04/02/02 313,294 406,337 (93,403) (13.0%) 04/09/02 320,101 411,075 (90,974) (12.4%) 04/16/02 322,578 411,245 (88,667) (12.1%) 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 04/02/02 149,449 43,139 106,310 55.2% 04/09/02 151,237 47,678 103,559 52.1% 04/16/02 150,529 50,424 100,105 49.8% Most bearish reading of the year: 36,513 - 5/01/01 Most bullish reading of the year: 107,702 - 3/26/02 NASDAQ-100 Nasdaq commercials grew less bearish during the most recent reporting period. The group added a number of long positions, while maintaining last week's short position. Net, however, the group is still bearish. Small traders went in the opposite direction by adding more shorts than longs, for a decrease in the group's net bullish position. Commercials Long Short Net % of OI 04/02/02 26,211 31,840 (5,629) (9.7%) 04/09/02 28,985 35,221 (6,236) (9.7%) 04/16/02 32,024 35,723 (3,699) (5.5%) 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 04/02/02 10,615 7,769 2,846 15.5% 04/09/02 11,640 8,353 3,287 16.4% 04/16/02 12,458 10,572 1,878 8.2% 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 commercials grew less bullish during the most recent reporting period by reducing their number of longs and increasing their number of shorts. The group's net bullish position dropped by about 1,100 contracts. Small traders added slightly more longs than shorts for a reduction in the group's net bearish position. Commercials Long Short Net % of OI 04/02/02 18,717 12,549 6,168 19.7% 04/09/02 19,393 13,445 5,948 16.7% 04/16/02 19,080 14,267 4,813 14.4% 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 04/02/02 5,192 9,007 (3,815) (26.9%) 04/09/02 5,459 9,340 (3,881) (26.2%) 04/16/02 5,644 9,448 (3,804) (25.2%) Most bearish reading of the year: (8,777) - 10/12/01 Most bullish reading of the year: 1,909 - 1/16/01 ================================================================= 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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PremierInvestor.net Newsletter 04-25-2002 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/d25b_2.asp ================================================================= In section two: Net Bulls Bullish Play Updates: SNE, TTN Bearish Play Updates: BRCM, CA, KRON, SRNA Stock Bottom / Active Trader Bullish Play Updates: CTEC, PHM Bearish Play Updates: JPM, MER, V Closed Bullish Plays: ISLE Closed Bearish Plays: PATH High Risk/Reward New Bullish Play: AMAT (was an NB long play) Bullish Play Updates: AMZN, GNCMA, PVN Bearish Play Updates: CVC Closed Bullish Plays: HIG Split Trader UCBI: 2-for-1 split announcement AAON: 3-for-2 split announcement BKNW: 5-for-4 split announcement CNTL: 3-for-2 split announcement COCO: 2-for-1 split announcement CPS: 4-for-3 split announcement KSWS: Pre-announced 2:1 coming! 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) Tech Stock section ================================================================== =============== NB Play Updates =============== -------------------- Bullish Play Updates -------------------- Applied Materials - AMAT We have not yet been triggered on our AMAT long play. However, due to the pull back in shares, we are changing our entry strategy and have moved AMAT to the High Risk/Reward section of the play list. Please seek tonight's comments in the HR section of the newsletter or website. --- Sony Corp (ADR) - SNE - cls: 56.00 chg: +2.02 stop: 51.25*new* Traders following the SNE play have probably noted a strong correlation between the chart of SNE and the chart of the NIKKEI index. This might be about to change, but first a little update. The NIKKEI dropped about 64 points to 11,672 after hitting new relative highs on Wednesday. Investors appeared to be waiting to hear earnings reports from the ten largest Japanese consumer and industrial electronics makers. A few of the bigger announcements that came out after the Japanese market closed were Sony Corp (SNE), NEC (NIPNY) and Fujitsu (FJTSY). The numbers in SNE's earnings report were somewhat discouraging but shares gapped higher in the U.S. markets after management confirmed expectations that profits would be higher this year. SNE's fiscal year end results fell across all groups due to a slow in its main electronics business with operating profits falling 40 percent. The year ending March 31st, 2002 turned in operating profits of Y134.6 billion but SNE expects next year to more than double that with guidance of Y280 billion. Most of the numbers noted above were from a Dow Jones report and you might see additional news articles with alternative numbers. What's important to us, is that shares have rallied higher and buyers might be more willing to commit now that the earnings picture is clearer. After shooting higher at the open, the ADR shares did trade down throughout the day but rallied higher again towards the close. We are going to raise our stop to $51.25, which is just below the rising 50-dma. More conservative traders could probably place their stop under last Friday's lows near $53.00. The stock does have some resistance at $57 but we would expect bulls to bust through it. New entries might be considered on pull backs but do so carefully. We mentioned above that the connection between SNE and a chart of the NIKKEI might change. We feel the overall pattern will remain closely tied together but with the positive earnings guidance, SNE could out perform to the upside. Our initial target of $60 seems much more attainable but we're not quite willing to enter an official exit point just yet. Picked on April 4th at $53.01 Gain since picked: +2.99 Earnings Date 04/25/02 (unconfirmed) --- Titan Corp - TTN - close: 21.98 change: +0.31 stop: 20.99*new* The pull back in TTN may be over. The defense contractor and information technology company reported Q1 earnings after the bell today and the revenue numbers were impressive. According to their press release TTN's Q1 revenues were $340.5M vs. $239.1M the year before. That's a 42 percent increase. Pro forma operating income rose 33 percent to $23.5M and pro forma net income rose 62 percent to $9.1M with earnings per share rising to 12 cents. The estimates were for 10 cents. If you missed the two bounces at the $21.50 level, traders got another chance today before the stock shot higher in the last hour of the day. We didn't see any after hours activity but expect the stock do perform well tomorrow. We are still targeting a move to $25.50 but short-term traders may want to consider taking profits if TTN hits $24.00, which could be resistance. We are going to move our stop to $20.99 but conservative traders might be able to get away with $21.45 if they felt the need to. Picked on April 15th at $21.26 Change since picked: +0.72 Earnings Date 04/25/02 (confirmed) -------------------- Bearish Play Updates -------------------- Broadcom Corp - BRCM - close: 35.03 change: +1.02 stop: 36.76 We were triggered in our BRCM short play on Wednesday as shares fell lower as the SOX posted its fifth loss in a row. The index managed a meager gain today and held its 200-dma but we don't put any faith in its precarious grip on support. The rebound in BRCM was a bit more surprising as shares rallied strongly from its morning lows. Traders could keep an eye on the 50-dma (36.36) and look for failed rallies as potential entry points for new shorts. If the SOX does produce an oversold bounce then BRCM could rally to resistance. Investors will also want to take note that BRCM's CEO is expected to speak on Monday, April 29th at 4:00 PM ET in the Merrill Lynch Hardware Technology Conference in San Francisco. Positive or negative comments at these events can produce moves in the stock price. Picked on April 24th at $34.84 Gain since picked: -0.19 Earnings Date 04/17/02 (confirmed) --- Computer Assoc. - CA - close: 18.63 change: +0.19 stop: 20.26 The rollover in shares of CA continues. The stock actually traded under the $18 level today before rebounding for a small gain. It would appear that traders are keying in on the 10-dma as very short-term overhead resistance. Our strategy comments from Tuesday still apply. Picked on April 18th at $18.49 Gain since picked: -0.54 Earnings Date 05/14/02 (unconfirmed) --- Kronos Inc. - KRON - close: 39.79 change: +0.42 stop: *text* Shares of KRON traded in a fairly narrow range but despite some intraday strength they remain under both its 200-dma and the $40 level. We have not yet been triggered and wait for a move at or below $38.79 to create a short play. If and when that occurs we'll start with a stop loss at $43.01. Picked on April xth at $xx.xx <- see text Gain since picked: +0.00 Earnings Date 04/23/02 (confirmed) --- SERENA Software - SRNA - close: 13.91 change: -0.89 stop: 16.51 Shares of SRNA look more and more like the GSO.X each day. Both are hitting new relative lows and both look like they are aiming for a re-test of their September lows. There has not been any recent news on SRNA but the close under $14.00 is good news for the bears. Yes, shares are short-term oversold and if they do bounce we would look for the $15 level to act as resistance. According to the PnF chart, the recent declines have produced a bearish catapult breakdown. Picked on April 23rd at $14.94 Gain since picked: +1.03 Earnings Date 02/21/02 (confirmed) ================================================================== Stock Bottom / Active Trader (AT) section ================================================================== =============== AT Play Updates =============== -------------------- Bullish Play Updates -------------------- Cholestech Corp - CTEC - close: 19.57 change: -0.11 stop: *text* Close, but no cigar. CTEC briefly traded to a new near-term high of $19.86 but couldn't quite muster a test of the $20 resistance level. This leaves our long play un-triggered. The way CTEC steadily trended higher after a morning dip suggests that it may make another run at resistance tomorrow. A move over 368 for the RXH.X healthcare index could be just what CTEC needs to break above $20. Remember that our trigger is $20.05 and we'll start with a stop at $17.49. Picked on April Xth at xx.xx <- see text Gain since picked: +0.00 Earnings Date 04/24/02 --- Pulte Homes - PHM - close: 53.55 change: -0.70 stop: 52.34 Homebuilding stocks traded with a slight negative bias yesterday after new home sales for March came in at 878K, which was weaker than the estimate of 884K. As we suspected might be the case, profit-taking hit PHM after shares failed to move over the $55 resistance level. PHM and the DJUSHB homebuilding index have both stalled near the midline of their ascending regression channels. The technical picture for the index is slightly stronger, since it's already trading at near-term highs. Due to the overhead resistance in PHM, entries at current levels demand an aggressive strategy. Traders can minimize their risk by waiting for another bounce from the $53 level. We'll also be keeping an eye on the 10-year note (TNX.X), which has attracted some buying attention with week. A continued decline in bond yields (and subsequent decline in mortgage rates) could spark another rally in the homebuilding sector. Picked on April 15th at $50.13 Gain since picked: +3.42 Earnings Date 04/23/02 (confirmed) -------------------- Bearish Play Updates -------------------- J.P. Morgan - JPM - close: 35.03 change: -0.86 stop: 38.01 Yesterday's weakness in shares of JPM carried over to today's session, courtesy of a report before the bell that said the firm may face civil charges for taking excessive IPO commissions in 1999-2000. The stock gapped lower and proceeded to trade flat for most of the session. At 3:00 news hit the wires that the SEC was launching a probe of market analysts. JPM traded to a low of $34.49 before rebounding into the close. The technical picture is downright ugly. Not only is JPM trading under its 200-dma but the MACD and daily stochastics are also looking bearish. We wouldn't be surprised to see a test of the 50-dma at $33.83 in the near-term, and traders might want to consider going short on a move below today's low. Note our picked price has been changed to today's opening price to reflect that fact that the stock gapped down this morning. Picked on April 24th at $35.40 Gain since picked: +0.37 Earnings Date 04/17/02 (confirmed) --- Merrill Lynch - MER - close: 42.50 change: -2.15 stop: 47.57 It was a bad day to be bullish on the brokerage sector. Existing negative sentiment in the group was accelerated this afternoon after the SEC announced that they would be conducting an investigation into the practices of Wall Street analysts. The XBD.X broker/dealer index, already reeling from a steep loss on Wednesday, shed another 2.32 percent. MER, having gapped down this morning, also sold off on the news but rebounded off its lows into the close. Backing today's 4.8 percent decline was strong volume of 17M. That's more than twice the average. As far as gauging new entries, traders can look for a rollover near today's high of $43.73 or the $45 level. Those with a short-term approach could take bearish positions on a move below today's low, but be aware that the $40 level may provide support. Note that due to the gap lower, our initial picked price is today's opening price of $43.72. Short-term traders may want to actually target the $40 level and cover. We're going to see if the bad news can actually force MER to retest its September lows (or at least the $35 level). Picked on April 24th at $43.72 Gain since picked: +1.22 Earnings Date 04/17/02 (confirmed) --- Vivendi Universal - V - close: 33.14 change: -0.21 stop: 36.01 V just can't seem to find a bid. The stock performed a post- earnings decline of 21-cents today and is now within striking distance of all-time lows of $31.20. Given the lack of buyers, it appears this level could be within reach. Short-term traders could consider entries if V breaks below today's low of $32.80, while a rollover near $33.50 to $34.00 would present a more favorable risk/reward scenario. Picked on April 24th at $33.35 Gain since picked: +0.21 Earnings Date 04/24/02 (confirmed) =============== AT Closed Plays =============== -------------------- Closed Bullish Plays -------------------- Isle of Capris - ISLE - close: 20.29 change: -1.12 stop: 19.62 ISLE spent the majority of today's session recovering from a morning dip. Things were looking good until 2:00 PM, when the stock was broad-sided with a flood of sell orders. Volume shot higher as the stock spiked to a low of $19.11. This move violated our stop at $19.62, which closed this short play for a net loss of $0.88. Although the decline was very brief we must still honor our stop loss. We couldn't find any news to explain the sudden move lower, but the stock quickly bounced back after testing the bottom of its ascending channel. In any case, today's 5.23 percent loss doesn't bode well for bulls. Despite the trading action the up trend is still intact and more aggressive plays can keep it on their watch list. Just for kicks, check out a chart of ISLE with a 40-dma. Notice where buyers are supporting the stock? Picked on April 19th at $20.50 Gain since picked: -0.88 Earnings Date 02/14/02 (confirmed) -------------------- Closed Bearish Plays -------------------- AmeriPath, Inc. - PATH - cls: 25.86 chg: +0.86 stop: 25.51 Bullish caution flags were raised earlier this week after PATH began outperforming the healthcare index (RXH.X). Yesterday's trading saw a failed rally that came within six cents of our stop at $25.51. The stock moved well above that level today, which closed this play for a loss of $1.59. PATH tacked on 3.4 percent despite a flat day on the RLX.X. It appears that bulls might be frantically looking for anything in the group that isn't overextended and are now willing to place their bets on PATH despite its weakness. We would not recommend any short positions at this time. Picked on April 19th at $23.92 Gain since picked: -1.59 Earnings Date 04/30/02 (confirmed) ================================================================== HIGH RISK/HIGH REWARD (HR) section ================================================================== ============ HR New Plays ============ ----------------- New Bullish Plays ----------------- Applied Materials - AMAT - close: 25.23 change: +0.23 stop: 20.89 It has been days now that the Premier Investor Newsletter has been looking for and discussing a pull back in shares of AMAT as a preferable entry point to go long. The recent dip under the 50-dma and today's trading around $24.50 to $25.00 looks like a great dip to support at the bottom of its ascending regression channel (we would encourage you to use a standard regression channel from the September lows). It would seem now is the time to put our "money" where our mouth is (using a hypothetical portfolio of course). Previously, we had AMAT on the bullish tech stock play list but we were never triggered as shares never traded at $27.20 or above. Yet now that the sector has pulled back we believe traders might get a favorable entry point as AMAT slips with the sector movement. The challenge is that while buying AMAT between $24 and $25 looked good a few days ago, the deterioration in the SOX has suddenly soured our stomach on going long AMAT at this level. Investors should use a market, sector, stock focus when evaluating plays because the vast majority of a stock's movement is market and sector related. Yet AMAT is a good example of how a strong stock, who has seriously been out performing the sector, will still get dragged down as the group moves lower. The belief follows that when the sector turns around then AMAT will out perform to the upside. This all sounds well and good but both Jeff and I look at AMAT's chart and feel like we're about to try and grab a falling knife. Hence the move from the tech list to the high risk/reward list. This is our plan. We're going to set an entry range on AMAT and if shares trade anywhere inside it we'll "go long" but by doing so we have to give the stock some room to move if the SOX keeps slipping. Traders who follow this strategy have to be willing to take some heat or just sit back and wait for a bottom and turnaround to reappear. Given that the SOX had fallen five days in a row, today's less than 1 percent gain does not offer us a lot of confidence. The chip index is less than one point above its 200-dma. Is the group short-term oversold? Yes. Can it continue to breakdown? Absolutely. If the SOX moves lower tomorrow, then a re-test of the 500 level of support seems like a sure thing. Now how do we apply this to AMAT? With the expectation that the SOX is doomed to trade lower, then we are going to use an entry range of $22.99 to $22.00. Odds are good we'll get triggered at the $22.99 side of the range but when we do we'll start the play with a stop loss at $20.89, which is below the Feb. 22nd low. AMAT would have to cross its 200-dma before we got stopped out. Traders should feel comfortable adjusting the entry range to their own style. Maybe yours is between $22.49 and $21.50. Maybe you'd rather wait to see if AMAT trades to its 200-dma first. Whatever you do, we would suggest you look at a PnF chart of the SOX to give you perspective on the chip sector's strength. FYI: AMAT has set its earnings date for Tuesday, May 14th, 2002. Picked on April xth at $xx.xx <- see text Change since picked: +0.00 Earnings Date 05/14/02 (confirmed) =============== HR Play Updates =============== -------------------- Bullish Play Updates -------------------- Amazon.com - AMZN - close: 16.85 change: +0.06 stop: 15.64 As you probably know, Wall Street has responded very positively to AMZN's Q1 earnings report from Tuesday night. The 19 percent gain from Wednesday came on very strong volume so we raised our stop to $15.64. The MACD has finally crossed the zero line and the stock looks like it is straining to breakout above resistance at $17.00. We would still shy away from new long positions at this time but aggressive traders could still look for a bounce at $16.00 or a close and consolidation above $17.00. Short-term traders can probably begin to take profits while we are aiming for a move to the top of the ascending channel between $18.50 and $19.00. Picked on April 17th at $14.35 Gain since picked: +2.50 Earnings Date 04/23/02 (confirmed) --- General Communication - GNCMA - cls: 9.99 chg: -0.06 stop: *text* You wouldn't have noticed by the action in the stock price but GNCMA announced its Q1 results on Wednesday. EBITDA numbers show revenues and earnings at $88.2M and $25.1M respectively. This was an increase of 14 percent in revenues and 27.4 percent in earnings. Since there was no reaction to the announcement we didn't bother searching for the diluted earnings per share. The chart pattern still looks bullish as if GNCMA wants to rally higher but just can't get over resistance and its 200-dma. If it does breakout, our trigger to go long is $10.31. Picked on April xth at $xx.xx <- see text Gain since picked: +0.00 Earings Date 04/25/02 (confirmed) --- Providian Financial - PVN - cls: 7.59 chg: -0.26 stop: *text* We continue to sit and wait for PVN to trade through our trigger point but the way shares are moving it could be a while yet. Weakness in the financials has been weighing on PVN and the stock has fallen back below the $8.00 level. The month long trading range between $7.00 and $8.50 is still intact but if PVN falls under the $7.00 level we'll drop it. Our trigger remains at $8.51. Picked on April xth at $xx.xx <- see text Gain since picked: +0.00 Earnings Date 05/06/02 (confirmed) -------------------- Bearish Play Updates -------------------- Cablevision - CVC - close: 24.75 change: -1.48 stop: 27.51*new* The pain is intensifying for shareholders of CVC. The stock declined 5.6 percent today and is now trading at all-time lows. We couldn't dig up any news to explain the selling. CVC is just plain weak, and can't seem to find buyers at current levels. Without any technical support to buoy the stock, we're expecting shares to continue lower in the near-term. Short-term traders may want to consider taking profits near the bottom of the short- term channel at $22. We're going to keep the play open and look for a move to the next psychological support level of $20.00, which would be the mid-line of the long-term downward regression channel. Due to today's decline, we're also going to tighten our stop to $27.51. This will force CVC to trade above both yesterday's high and the midline of the short-term regression channel Picked on April 22nd at $26.24 Gain since picked: +1.49 Earnings Date 05/02/02 (confirmed) =============== HR Closed Plays =============== -------------------- Closed Bullish Plays -------------------- Hartford Financial - HIG - close: 68.07 change: -1.13 stop: 68.24 Wednesday's close over $69 had us thinking that HIG could make another run at the $70 resistance level, but shares quickly reversed course during today's session. En route to a 1.6 percent loss on the day, the stock violated our stop-loss at $68.24. This closed our short play with a gain of 3.8 percent. Those with a longer-term approach may want to note that HIG is currently trading near the bottom of its ascending regression channel, which is bolstered by the 50-dma. Of course, it's going to take some serious bullish conviction to push HIG above $70. More aggressive traders who believe it will get over $70 could see this dip to the 50-dma as an entry point. Shares have not closed under the 50-dma (currently 67.65) in five months. Picked on March 13th at $65.74 Gain since picked: +2.50 Earnings Date 04/22/02 (confirmed) ================================================================== Split Trader (ST) section ================================================================== Split Announcements ------------------- Summary. (for details, scroll down) UCBI: 2-for-1 split announcement AAON: 3-for-2 split announcement BKNW: 5-for-4 split announcement CNTL: 3-for-2 split announcement COCO: 2-for-1 split announcement CPS: 4-for-3 split announcement KSWS: Pre-announced 2:1 coming! ----- United Community announces 2-for-1 split, declares dividend United Community Banks, Inc (NASDAQ: UCBI) announced this afternoon that its Board of Directors had authorized a 2-for-1 stock split. The split will come in the form of a 100% stock dividend and will be distributed on May 29, 2002 to stockholders of record on May 15, 2002. A regular quarterly dividend of $.0625/share (post split) was also announced, and will be payable on July 1, 2002 to stockholders of record on June 14, 2002. This represents no change from the previous quarter's dividend. UCBI began trading on the Nasdaq in March of this year, and has moved up roughly 34% from its opening price of $41.00. Shares closed at $55.00 on Wednesday. For a current quote, click here: http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=UCBI About the company Headquartered in Blairsville, GA, United Community Banks is the third-largest bank holding company in Georgia. At March 31, 2001, United had assets of $2.9 billion and operated 50 banking offices located throughout north Georgia, metro Atlanta, and western North Carolina. (source: company press release) ----- AAON offers a cool 3-for-2 split. It's been nine days since AAON, Inc. (Nasdaq: AAON) announced its Q1 numbers and shares have been on a strong rally higher since Wall Street heard the numbers. This morning before the bell, AAON's Board of Directors announced a 3-for-2 stock split in the form of a 50% stock dividend. The shareholder record date will be May 17th, 2002. Cash will be offered for fractional shares that result from the split. The company says that after the split, AAON will have close to 13.2 million shares outstanding. The payable date for the split will be Tuesday, June 4th, 2002. Therefore, we would expect shares to begin trading at their post- split price on Wednesday, June 5th. Shares of AAON last split 3-for-2 in 2001. Shares closed at $32.18 on Wednesday. For a current quote, click here: http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=AAON About the company AAON Inc. manufacturers and markets rooftop air conditioning and heating equipment for commercial and industrial markets.(source: company press release) ----- Another bank stock, another split announcement (BKNW) Before the bell this morning, Bank of the Northwest (NASDAQ: BKNW) announced that a 5-for-4 stock split had been approved by its Board of Directors. The split will be issued on May 24, 2002 to shareholders of record on May 10, 2002. BKNW has risen over 38% this year, but trades on a low average volume of 2600 shares/day. The stock most recently split in July 2001, when shares split 11:10. BKNW closed at $21.50 on Wednesday. For a current quote, click here: http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=BKNW About the company Bank of the Northwest is a Portland based full-service commercial bank that provides exceptional banking services in four distinct markets: Commercial Banking, Private Banking, Professional Banking and Real Estate Banking. (source: company press release) ----- Cantel Medical declares 3-for-2 stock split Before the market opened today, Cantel Medical Corp. (NASDAQ: CNTL) announced that its Board of Directors had declared a 3-for-2 stock split. The split will come in the form of a stock dividend and will be payable May 14, 2002 to shareholders of record on May 7, 2002. This will be the first split for CNTL since the company began trading in 1992. The recent rise in the stock price has reflected a similar move in the RXH.X healthcare index, which is currently trading at all-time highs. CNTL closed at $26.64 on Wednesday. For a current quote, click here: http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=CNTL About the company Cantel Medical Corp., a healthcare company, is a leading provider of infection prevention and control products, specialized medical device reprocessing systems and sterilants, diagnostic imaging and therapeutic medical equipment primarily focused on endoscopy, hollow fiber membrane filtration and separation technologies for medical and non-medical applications and scientific instrumentation. (source: company press release) ----- COCO investors score a 2-for-1 split Before the bell on Thursday, Corinthian Colleges, Inc. (Nasdaq: COCO) announced a 2-for-1 split with its Q3 earnings report. The shareholder record date will be May 9th, 2002 while the payable date will be May Tuesday, May 28th, 2002. Shares of COCO last split 2:1 in the fourth quarter of 2000. Traders will note that COCO has been in a very steady up trend from its September lows and the positive announcement today has it trading at new 52-week highs. Shares closed at $53.25 on Wednesday. For a current quote, click here: http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=COCO About the company Corinthian Colleges, Inc. is one of the largest for-profit post- secondary education companies in the United States. As of April 1, the Company operated 61 colleges in 20 states, including 17 in California, 12 in Florida. Corinthian serves the large and growing segment of the population seeking to acquire career-oriented education to become more qualified and marketable in today's increasingly demanding workplace environment. (source: company press release) ----- ChoicePoint offers a 4-for-3 stock split At a regular meeting of the Board of Directors this afternoon, ChoicePoint Inc. (NYSE: CPS) announced a 4-for-3 stock split. The split will come in the form of a 33 percent dividend, to be paid on June 6, 2002 to shareholders of record on May 16, 2002. Shares last split in March 2001, a 3-for-2 offering. YTD, the stock is higher by 10.4%. CPS closed at $56.00 on Wednesday. For a current quote, click here: http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=CPS About the company ChoicePoint is the leading provider of identification and credential verification services for making smarter decisions in today's fast-paced world, serving the information needs of business, government and individuals. ChoicePoint is committed to protecting personal privacy and promoting the responsible use of information to help create a safer world. (source: company press release) ----- KSWS pre-announces a 2:1 split coming soon. This morning, K-Swiss, Inc. (Nasdaq: KSWS) announced its Q1 earnings report and shares have rallied higher on the news. We noticed that farther down in the Q1 report, management pre- announced that they would offer a 2-for-1 stock split. The KSWS press release stated that the company had filed with the SEC in its proxy statement a proposal to increase the number of authorized shares from 18 million to 36 million. If the company's shareholders approve this at the annual shareholders meeting on May 23rd, 2002, then the Board of Directors would immediately issue a 2-for-1 split following the meeting. They also noted that the Board was likely to approve a quarterly cash dividend increase to $0.01 per share on a post-split basis. Since we've never heard of a shareholder vote not approving an increase in authorized shares, odds are good KSWS will announce a 2:1 split on May 23rd, 2002. KSWS last split its shares 2:1 in mid-1999. Shares closed at $43.45 on Wednesday. For a current quote, click here: http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=KSWS About the company K-Swiss Inc. designs, develops and markets athletic footwear for high performance sports use and fitness activities. The Company presently offers footwear for court, casual and children's categories. (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 CBSS Compass Bancshares 34.60 +0.58 CYN City National Corp 55.97 +1.79 TNT Tatneft ADS 16.76 +0.89 WHES W-H Energy Services Inc 24.52 +1.02 SWM Schweitzer Mauduit Intl 28.25 +1.05 SPAR Spartan Motors Inc 11.48 +1.07 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- Ticker Company Name Close Change SBSA Spanish Broadcasting Sys 16.50 +1.48 PBY Pep Boys 19.10 +1.35 MVK Maverick Tube Corp 17.38 +1.13 ALTH Allos Therapeutics Inc 8.34 +1.54 SPLX Simplex Solutions 17.39 +5.09 LTUS Garden Fresh Restaurant 13.35 +1.20 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- Ticker Company Name Close Change SNE Sony Corp 56.00 +2.02 UNH Unitedhealth Group Inc 87.00 +1.01 WLP Wellpoint Health Network 74.84 +3.36 GSF GlobalSantaFe Corp 35.11 +1.75 APA Apache Corp 58.33 +1.19 ATH Anthem Inc 71.20 +3.45 ABC AmerisourceBergen Corp 75.60 +4.00 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change TYC Tyco Intl Ltd 20.75 -5.15 MWD Morgan Stanley Dean Witter 48.13 -2.86 MMC Marsh & Mclennan Cos 102.86 -1.22 MER Merrill Lynch 42.50 -2.15 GS Goldman Sachs Group Inc 77.21 -2.28 GIS General Mills Inc 45.30 -3.77 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change CEG Constellation Energy Group 30.60 -1.23 RKY Adolph Coors Co 64.70 -1.30 HTHR Hawthorne Financial Corp 29.71 -1.20 ACF Americredit Corp 44.00 -1.25 BKH Black Hills Corp 34.11 -0.53 ================================================================= 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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