PremierInvestor.net Newsletter Weekend Edition 05-03-2002 section 1 of 3 Copyright © 2001, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= To view this email newsletter in HTML format with imbedded charts and graphs, click here: http://www.PremierInvestor.net/htmlemail/e03b_1.asp ================================================================= In section one: Market Wrap: New market terminology comes of age. Play-of-the-Day: Hickory, Dickory, DOCS... (bearish) Watch List: CMH, APA, MAS, IBM, BCC, EBAY, IMCL and much more! Market Sentiment: Retest or Recovery? ------------------------------------------------------------------ =========== Market Wrap =========== New market terminology comes of age The term "Blue Chip" is an age-old term used by investors to describe stocks that represent large, well-established companies that usually pay dividends. Subscribers are beginning to use the term "Red Chip" to describe the bulk of technology stock that continue to have a habit of dishing out disappointment to the bulls as the weekly statistics continue to show red numbers on a more regular basis. This also has some thinking/believing we're in a "bear market." Well, I guess that depends on where you've been that last several months. One might even say it depends where you were this week. For the week, the Russell 2000 Index (RUT.X) gave bulls a stellar gain of 2.2%. That's right! A gain. The "Blue Chip" Dow Industrials managed to shrug off some of the previous weeks losses and rebounded with a 1% gain of its own. Heck, even the NYSE Composite (NYA.X), what some old-timer considered the "real market" edged higher with a 0.5% gain. I'm getting a little tired of some media channels and anchors talking about the beating bulls took this week. The S&P 500 Index (SPX.X) didn't show a gain this week, it slipped lower by 0.3%, but it hardly suffered the shellacking the NASDAQ Composite (COMPX) and narrower NASDAQ-100 (NDX.X) took this week as they fell 3% and 4.8% respectively. Bear market? Yes, for most of technology. What we saw this week was a good old-fashioned "belch" from technology bulls. I get the feeling that the last little bit of last year's four-course meal of losses has now created the feeling of indigestion. If you've ever seen a sick dog, then you know what I'm talking about. A sick dog usually starts salivating, then its stomach start retching, just before it lays a rather unpleasant surprise right on the new dining room carpet. No, it's not a pretty sight and just about enough to make one gag. Plop, plop, fizz, fizz.... Last night we talked about the NASDAQ-100 Bullish % ($BPNDX), which showed a reading of 25%. Today's action found a net-loss of 5 stocks to sell signals on their point and figure charts as the gut retching picked up. It's rather interesting to me that we seeing such a nice round of selling in technology, when for the first time in over nine months, the economy actually added jobs! That's right, sell them technology stocks just when the economy actually adds some jobs. So why all this selling? Because the technology bulls can't take the pain anymore, that's the most probable reason. Yes, the 8- year high unemployment rate of 6% is enough to make a bull's stomach queasy, but once again, there's been areas of relief and even select stocks with a technology theme that have done well. Weekly market averages/sector performance Forest/Paper Products (FPP.X) were this weeks winners with a 4.3% gain. It's nice to see a deep cyclical group like the paper stocks bounce back strong and help boost the Morgan Stanley Cyclical Index (CYC.X) back after a four-week losing streak. It's interesting that just as the economy begins to add some jobs, some of the more economically sensitive sectors that should benefit most from an early recovery actually show yearly gains! This is something we've been talking about in the last 12 months and it continues to show up. Also worth noting is that the 10-year Treasury YIELD ($TNX.X) stayed rather steady this week and actually edged higher. Lots of subscriber's have been asking just where the money is going since it isn't going back into the bond market at an alarming rate. One area of bullishness that may be "hidden" a bit is the slight DIVERGENCE between the Airline Index (XAL.X) and the Dow Transportation Average (TRAN). The XAL.X got hit for a 7.2% loss this week, but look at the broader Transportation Average (TRAN) showing a marginal gain of 0.8%. As I flip through the charts of the Dow Transport components, one stock I'll monitor closely at the beginning of this week are shares of Fedex Corp. (NYSE:FDX) $51.49 -0.29%. I want a few observation days, but I like the way the stock found support right at the $50 level. PremierInvestor.net has profiled the stock as bullish in the past and if not for a tight stop and a brief 1-session decline, the stock performed quite well. Fedex Corp. Chart - Daily Interval Unfortunately our play list didn't get the "full potential" from a previous bullish trade in FDX as a one-day decline triggered our stop just before the stock really got going. Here we are about 3-months later and FDX is right back where it started from in January. I'd like to see the stock hold above the $48 level as a trade there would have a sell signal on the point and figure chart canceling out the current bullish vertical count of $83, which has been in place since October of last year. Roadway Corporation (NASDAQ:ROAD) $34.01 +7.35% was today's transport winner. While I consider it a "trucking/ground" stock and Fedex (FDX) an "air/ground" transport, it's the similar patterns and today's bullish move from ROAD that has my attention. Roadway Corporation Chart - Daily Interval After a week of consolidation right at it's 50% retracement bracket, shares of Roadway (ROAD) made a nice move this week and today broke back above its 200-day moving average on strong volume. Roadway's earning's warning of March 21st that it would post a loss of $0.08-$0.12 a share for its 1st quarter had all the truckers seeing some losses that day (YELL, JBHT, KNGT, SWFT), but for some reason (we'll eventually find out) the stock continues to trade rather strong. Here's the Dow Transport components and how they traded today. Notice the commercial aircraft stocks like LUV, NWAC, AMR, UAL and DAL trading down today, but transport stocks that carry packages and cargo traded stronger. Dow Transport Components - Sorted by % gain When sorted by % gain on today's session, we see that the "truckers" were really the stocks that outperformed. I think one reason that CNF Inc. (NYSE:CNF) 31.98 -2.94% didn't participate today was that the stock had traded strong in the previous two trading sessions. CNF has also found good support in recent months at its 50% retracement level of $30.31, but stays range- bound with resistance at $34. The trade in the transports has been to buy weakness at support, then sell strength at resistance. I haven't see monstrous gains of more than 10%, but those have been very hard to come by in bullish trades in recent weeks. However. As the group continues to consolidate, it looks as if weaker hands are passing stock off to stronger and more longer- term committed hands. As this stock "turns over" it can then create a supply/demand setup where the bulk of the stock is owned at a rather tight level and should a bullish catalyst present itself and sellers become few, a strong move can take place. Say it isn't so! My goodness! There's a four-lettered technology stock in our play list and it's in the "bullish" section. What's up with that! I had to go back to early March to find a 4-lettered technology stock in our bullish play list. That was a play in Research in Motion (NASDAQ:RIMM) $16.40 -5.36% from the $27.32 level. We actually held that silly bugger until March 20th, when the play was stopped at $26.49. With the stock now at $16.40, it's another lesson on how important a stop loss can be when investing/trading. I guess you could say the dog was salivating when we got stopped out, and now suffers from "motion sickness." I have to say, I am somewhat impressed with how Applied Materials (NASDAQ:AMAT) $22.17 -3.06% traded today. The Semiconductor Index (SOX.X) fell 4.72%, so there was a little bit of relative strength in AMAT. One thing we should note today is that AMAT and "like" semiconductor equipment stocks Novellus (NASDAQ:NVLS) $43.50 -4.66% and KLA Tencor (NASDAQ:KLAC) $52.78 -4.40 tested, or came very close to testing their 200-day moving averages today. There's been quite a bit of "risk" taken out of the stocks in the past two-weeks as AMAT has lost about 21%, KLAC has fallen approximately 24% and NVLS has dropped 19% from their recent highs. When enough is enough! Bears should have looked to book some gains today in one of our bearish plays and I think the action in SERENA Software (NASDAQ:SRNA) $13.10 +3.47%, while not indicative of the entire technology area right now, hints that there are definitely some bears locking in gains on broader tech weakness. As profiled in the SERENA (SRNA) trade, our bearish target of $12.51 was achieved. While the stock did trade as low as $12.45 and below our target, evidently we weren't the only ones watching current levels closely. SERENA Software Chart - Daily Interval It's always nice to lock in a gain ahead of the weekend and build a little cash in the account. The bearish side of the play list is off to a nice start this month, as it should be, considering tech weakness. Also closed out today on the bearish side was semiconductor stock DuPont Photomask (NASDAQ:DPMI) $32.32 -4.05% at the profiled target of $35.50. There may be some downside left in this one to the bearish vertical count of $29, but the stock has fallen for about 5-straight sessions. A trader that may have played AMAT long could have held the stock short, but a nice gain was at hand and that's what a trader is looking for. Gains. Dow Industrials just didn't have it As mentioned earlier, the Dow Industrials did manage to edge out a gain this week and didn't get hit to the downside too bad today, loosing just 85 points on the session. Last night we felt a break above the 10,120 level might spark a rally, but the MARKET was too fixated on this morning's 6% jobless rate. Dow Components Intel (NASDAQ:INTC) $26.60 -4.55%, SBC Communication (NYSE:SBC) $31.14 -3.97% and Microsoft (NASDAQ:MSFT) weighed on the index, while gains in Eastman Kodak (NYSE:EK) $33.65 +4.5%, McDonalds (NYSE:MCD) $29.29 +2.77% and Hewlett Packard (NYSE:HWP) $17.44 +2.04 helped keep the Dow above the 10,000 level on a closing basis. Dow Industrials Chart - Daily Interval Chart If any of the major market averages shows any technical strength or ability to stage a rally, then it's the Dow Industrials. General Motors (NYSE:GM), 3M (NYSE:MMM), Procter & Gamble (NYSE:PG) and Wal-Mart (NYSE:WMT) are now showing the biggest gains since the terrorist attacks, while SBC Communications (NYSE:SBC), Eastman Kodak (NYSE:EK), AT&T (NYSE:T) and General Electric (NYSE:GE) are now at the bottom. Hypothetical Dow Portfolio - $1000 in each on Sept. 10th The good old Dow "hypothetical portfolio" we started on September 10th, the day before the terrorist attacks is holding up rather well on a total basis with a 2.92% gain. There's a large disparity between the upper 15 and lower 15. Quick generalizations continue to have telecom in SBC $31.14 - 3.97% and T $13.86 +1.38% at the bottom. Eastman Kodak (EK) $33.65 +4.50 rallied right back to its 200-day moving average today and may be a stock to watch for a move off the bottom. Conglomerate General Electric (GE) $31.70 +0.31% managed a small gain today and I'd like to think the weaker U.S. $ would help, but the MARKET just doesn't seem interested in the stock. General Motors (GM) $65.68 -0.84% "shocked" the market earlier in the week reporting strong car sales and saying it would ramp up production. Look for a bullish play in "like stock" Daimler Chrysler (DCX) $47.33 +0.55% next week in our bullish play list. For a "prep," traders and investors may want to go back and review Wednesday's market wrap and comparisons between the big 3 automakers and their point and figure charts. All eyes on Cisco You can bet that technology bulls will have their eyes and ears open next week when networking giant Cisco Systems (NASDAQ:CSCO) $13.14 -3.66% is scheduled to report earnings on Tuesday, after the close of trading. Analysts polled by Multex are looking for CSCO to report earnings of $0.09 a share. I'm not expecting an earnings "surprise" from CSCO, but what most likely influence technology trading is what CSCO says about visibility. Suffice it to say, if CSCO gives negative or "lack of visibility" type guidance Tuesday evening, then expect a now salivating dog to finally cough up what's been stuck in its throat since the December highs. Conversely, any bullish outlook on the future will most likely see a large short-covering rally as gains have been plentiful. Have a great weekend! Jeff Bailey Senior Market Technician ========================= Play-of-the-Day (Bearish) ========================= (( new high risk/reward short play )) Amdocs Ltd - DOX - close: 19.73 change: -0.75 stop: 20.76 Company Description: Amdocs is the world's leading provider of CRM, billing and order management systems to the communications industry. Amdocs has an unparalleled success record in project delivery of its mission- critical products. (source: company press release) Why We Like It: Recently one of the hotly debated subjects at the PI office has been whether it's too late to short tech stocks. No doubt about it, the NASDAQ is looking oversold and the software sector has been hit even harder. The GSO.X software index has lost over 30% since early March and is just 9 points away from its all-time low at 112. Nonetheless, we're playing DOX because the stock is technically weak and there is no guarantee that the GSO will find support. After all, the SOX.X just fell below the 500 level that had provided support for several months. What grabbed our attention today was the way DOX dropped 3.6 percent on high volume and closed under support at $20. Shares have traded in a descending channel for most of the year and are just now dropping from the upper band. The downtrend has accelerated in recent weeks, following the April 23rd earnings announcement in which the company reported higher profits but guided lower for the year. This resulted in no less than three brokerage downgrades for DOX. Thanks for the head's up, guys. With the bears firmly in control, we're looking for a near-term move to the channel's midline at $18. This would be a move of nearly 9%. A complete breakdown in the sector could bring the stock even lower, but we'll evaluate our exit strategy if/when DOX trades near the $18 level (a move to the $17 or $16 area does not seem out of the question). Under normal circumstances we have no problem taking 10% risk with our stop on a high-risk play. However, given the sharply oversold sector, we're going to go with a 5% stop at $20.76. This will still force shares to trade over $20, which should now act as resistance. Traders with a more aggressive approach may want to place their stop above near-term resistance at $22. Picked on May 3rd at $19.73 Gain since picked: +0.00 Earnings Date 4/23/02 (confirmed) ================================================================== WATCH LIST ================================================================== The PremierInvestor.net watch list is not designed to be read as full fledged stock picks. Rather we would prefer to offer it as an extra tool in today's investor toolbox. Think of it as a radar screen with your own radar operator pointing out interesting developments, technical patterns or potential plays that you may or may not have seen on your own. Due to time constraints we do glance at the news but rarely do we have time to fully read pertinent news stories, due background research and other necessary screens that investors should do before making a decision. A common exercise is to read the entry, glance at the sector and other stocks in that industry and then compare what's happening in the stock to what's happening in the broader market indices. We hope you enjoy the Watch List and that it proves to be a useful tool for your own trading success. STOCKS WORTH WATCHING --------------------------------- Clayton Homes Inc - CMH - close: 17.51 change: +0.46 Clayton Homes Inc. manufactures, sells, finances and insures low to medium priced manufactured homes. CMH markets its homes in 33 states through more than 1000 retailers and company-owned stores. In its most recent earnings announcement, on April 1, 2002, Clayton reported third quarter earnings rose by 23%, in line with analyst expectations. Since December 19th, 2001, the stock has been in a broad cup and handle consolidation (a bullish pattern) which is portending a breakout in the stock. The shares should have good support in the 17.15 region, about 2% below Friday's close. --- Apache Corporation - APA - cls: 59.68 change: +0.49 WHAT TO WATCH: Apache is a diversified energy corporation involved in the exploration for, and production of, natural gas, crude oil and other raw fuels. On April 2nd APA began a short- term consolidation when it peaked just below 60.00. On Friday, APA briefly broke above the 60.00 resistance region and we believe that it will make another--this time, successful--attempt to break out in coming days. We know that the market has been volatile as of late, including the oil complex. But the price pattern on APA remains bullish. Traders will want to watch for a modest pullback to 58.75-59.00 as the ideal point of entry. --- Masco Corp. - MAS - cls: 29.08 change: +0.19 WHAT TO WATCH: Masco manufactures home improvement and building products. While many stocks in the home building sector have risen sharply in recent months, MAS has been in a quiet 2 month price consolidation with its stock predominantly trading between 26.00 and 29.00. In recent days, however, Masco's price has been rising in a manner consistent with a possible breakout. We are also attracted by the stock's price momentum, measured by the RSI, which is quite positive. MAS should have very good short term support in the 28.00-28.20 region, which is also just above the 50-dma. Traders who elect to play this trade from the long side will want to use a sell stop in or near 27.45. --- International Business Machines - IBM - cls: 81.78 change: -2.06 WHAT TO WATCH: IBM's price has been flopping wildly over the last few weeks, ever since it gapped down hard on April 5th. Some traders now believe that all the bad news is in the stock, and that its double bottom (that can be seen if you view a weekly chart of IBM) is suggesting that a sharp, near term rebound could be at hand with shares so close to support at $80. The double bottom has been accompanied buy a bullish divergence on the RSI, which is just a fancy way of saying that there is a good chance IBM could surprise everyone and spike higher sometime in the next two weeks. This is not a trade for the faint of heart, or those with a nervous constitution. If you elect to buy IBM at or near current levels, a tight stop in the 79.95+- area is mandatory since you will be going long the stock at what should be an important bottom. Let me repeat: a tight stop is mandatory! Because frankly the stock looks like it has no reason not to fill its previous bearish vertical price target of $70. --- Boise Cascade - BCC - close: 34.62 change: +0.44 WHAT TO WATCH: BCC missed making tonight's Play List by a paper- thin margin. What caught our attention was the strength in the FPP.X Forest/Paper products index. It bucked the negative broader market today with a 1.25 percent gain and was actually the top-performing sector of the week. BCC looks like an attractive long play because it recently pulled back and successfully test its bullish p-n-f support, which roughly coincides with the 50% retracement level from the September lows to March highs. Furthermore, the MACD is about to signal a bullish crossover. Bullish positions can be evaluated now, with a near-term target of $38. Possible resistance may crop up at $36, which is near the 19% retracement and the 50-dma. If you prefer something else in the group that is trading above its 50- dma, check out NYSE:WY. --- eBay Inc. - EBAY - close: 51.28 change: -0.97 WHAT TO WATCH: Shares of EBAY have spent the past month vacillating between $50-$55. With the NASDAQ plummeting, it might be a good time to start thinking about a breakdown below $50. In addition to the obvious breech of support, this would create a double-bottom p-n-f sell signal. On a related note, it's also interesting to see that EBAY has been pressured by bearish p-n-f resistance for the entire year. If shares break to the downside, the move could be severe. --- ImClone Systems - IMCL - close: 14.76 change: -0.86 WHAT TO WATCH: Along with semiconductors and software, biotech has taken a severe beating in recent weeks. IMCL hasn't exactly been a bastion of strength within the sector, but we think the selling may have just about run its course. The stock is currently sitting above support at $14 and daily stochastics (using 5,3,3) have begun to emerge from the oversold region. Aggressive traders could evaluate long positions with a stop just under the February low of $13.77. Considering that the BTK.X biotech index has lost over 15% of its value since April 19th, a short-covering rally may be in store. Today's move to new 52- week lows certainly must've sucked in a lot of bears. Of course if IMCL breaks to new lows, it will be the bulls that look like suckers. We'd confirm stock direction first before committing capital. --- KLA-Tencor - KLAC - close: 52.78 change: -2.43 WHAT TO WATCH: Chip equipment makers AMAT, KLAC, and NVLS are all displaying similar patterns. They've fallen off a cliff in recent weeks (what semi stock hasn't?!) and are resting just above the 200-dma. The SOX has been absolutely smashed over the past two weeks and seems to be begging for an oversold rally. Although the index broke support at 500 today, a short-covering rally could quickly have the SOX trading back at 550. The action in late-February/early-March is indicative of what can happen when the bears decide they've had their fill. Aggressive traders can target KLAC at current levels with a stop just under the 200- dma, while others may want to wait for a dip to the $50 level and use a stop below the $50 (but we'd wait for that bounce first!). ============= More To Watch ============= Ambac Financial Group - ABK - cls: 65.24 change: +0.59 This insurance company broke out to new highs this week after a strong and steady climb from its October lows. --- McDonald's Corporation - MCD - cls: 29.29 change: +0.79 This big hamburger chain seems to be moving out of a longer term bottoming process and has recently established new short-term highs. Don't expect a lot of fast fireworks from MCD--after all, its not an Internet stock, you know--but it does appear that better days are ahead for Ronald and the gang. --- Celgene Corporation- CELG - cls: 19.00 change: +0.60 Celgene is a biopharmaceutical company, which has been suffering as badly as the BTK.X sector index. You don't need a Ph.D. to know that the biotechs have had a horrific few weeks; the same is true for Celgene. The stock broke under 20.00 this week and further weakness is very possible. If you short this stock, be sure to keep your buy stop in place: short covering rallies can be unbearably painful to the unsuspecting trader. Although the failed rally at $20 does look like the bears are still firmly in control. ================ Market Sentiment ================ Retest or Recovery? By Eric Utley Last week's economic releases had investors questioning the direction of the U.S. economy. Friday's jobs data added to the confusion. The unemployment rate reached an eight year high despite non-farm payrolls rising to 43,000 during April. The number fell short of expectations. Rising unemployment may sneak over into consumer confidence for the worse, which is probably what the market was thinking late last week. There weren't any major company specific developments in the technology sector last Friday to spur continued weakness there, expect for maybe the chatter about Worldcom (NASDAQ:WCOM) possibly seeking bankruptcy. Other than that, it appeared that investors deferred to the crumby macro data, and began to lose belief in the new economy way of thinking. (Yes, there is an element of that line of thought still alive.) The sector scorecard saw another day of bifurcation between the old economy names, such as papers, and the tech sectors. Again, big losses were sustained in the technology sector. Another trend that we've seen build through the year is the upside in gold. Both the metal and equities traded to a new yearly high in last Friday's session. There may have been a defensive bid there. Treasuries continued trading with a bid; the benchmark 10-year Yield (TNX.X) finished lower to 5.062%. The weak run of economic data has helped to ease fears of inflation, and thus a rise in short term rates. The Fed is now expected to stay off the brake longer than previously thought, but we'll now more about the Fed's action or inaction next week. Each down day in the market makes stocks increasingly oversold. Indeed, most oscillator type measures are at or near oversold readings, including bullish percent, the ARMS Index, and weekly and daily Stochastics readings. But that doesn't mean the market can't grow more oversold, which has happened before. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 11350 52-week Low : 8062 Current : 10007 Moving Averages: (Simple) 10-dma: 10013 50-dma: 10285 200-dma: 9925 S&P 500 ($SPX) 52-week High: 1316 52-week Low : 945 Current : 1073 Moving Averages: (Simple) 10-dma: 1086 50-dma: 1126 200-dma: 1127 Nasdaq-100 ($NDX) 52-week High: 2071 52-week Low : 1089 Current : 1191 Moving Averages: (Simple) 10-dma: 1274 50-dma: 1403 200-dma: 1484 Gold and Silver ($XAU) The falling dollar continued lending a bid to bullion. Spot gold traced a yearly high at $312.50 per ounce. The move in the metal boosted the equities to a fresh yearly high. The XAU was the day's best performing sector; it finished 2.61 percent higher. Leading to the upside included shares of Harmony Gold (NASDAQ:HGMCY), Gold Fields (NASDAQ:GOLD), Meridian Gold (NYSE:MDG), Anglogold (NYSE:AU), and American Eagle Mines (NYSE:AEM). 52-week High: 79 52-week Low : 49 Current : 78 Moving Averages: (Simple) 10-dma: 75 50-dma: 69 200-dma: 59 Semiconductor ($SOX) The rout in the technology sector continued last Friday, led lower by the SOX. The sector lost 4.72 percent for the day, arguably breaking down below the psychological 500 level. Leading to the downside included shares of LSI Logic (NYSE:LSI), Altera (NASDAQ:ALTR), Broadcom (NASDAQ:BRCM), National Semi (NYSE:NSM), and Teradyne (NYSE:TER). 52-week High: 711 52-week Low : 344 Current : 480 Moving Averages: (Simple) 10-dma: 527 50-dma: 570 200-dma: 536 ----------------------------------------------------------------- Market Volatility The VIX ticked higher during Friday's weakness in stocks. The fear gauge added 3.79 percent to finish the week at 23.23. The VXN'x relative strength versus the VIX was reinforced Friday when the former broke to a new relative high, which only made sense because the NDX broke to a new relative low. At this point, the VXN is confirming the weakness in the NDX, but it's not to an extreme level yet... CBOE Market Volatility Index (VIX) - 23.23 +0.85 Nasdaq-100 Volatility Index (VXN) - 46.26 +1.74 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.91 571,200 522,569 Equity Only 0.82 487,584 401,677 OEX 0.99 15,036 14,861 QQQ 1.11 80,143 88,833 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 63 + 0 Bull Confirmed NASDAQ-100 20 - 5 Bear Confirmed DOW 47 - 3 Bear Confirmed S&P 500 60 - 1 Bear Alert S&P 100 53 - 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 1.44 10-Day Arms Index 1.48 21-Day Arms Index 1.39 55-Day Arms Index 1.26 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 1643 1475 NASDAQ 1578 1886 New Highs New Lows NYSE 257 58 NASDAQ 193 137 Volume (in millions) NYSE 1,297 NASDAQ 1,777 ----------------------------------------------------------------- Commitments Of Traders Report: 04/30/02 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 Commercials grew less bearish again during the most recent reporting period by adding more longs than shorts. It was the third week of decreased bearishness for the S&P commercials. Meanwhile, small traders grew less bearish by adding more short positions. Commercials Long Short Net % Of OI 04/09/02 320,101 411,075 (90,974) (12.4%) 04/16/02 322,578 411,245 (88,667) (12.1%) 04/30/02 340,936 421,673 (80,737) (10.6%) 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 04/09/02 151,237 47,678 103,559 52.1% 04/16/02 150,529 50,424 100,105 49.8% 04/30/02 153,158 56,372 96,786 46.2% 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 by adding a number of long positions last week. The group is still net bearish, but growing less so with each week. On the other side, small traders slipped from a net bullish to a net bearish position. Commercials Long Short Net % of OI 04/09/02 28,985 35,221 (6,236) (9.7%) 04/16/02 32,024 35,723 (3,699) (5.5%) 04/30/02 34,591 35,933 (1,342) (9.7%) 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 04/09/02 11,640 8,353 3,287 16.4% 04/16/02 12,458 10,572 1,878 8.2% 04/30/02 12,271 12,703 (432) 1.7% 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 Commercial traders reduced their net bullish position again during the most recent reporting period. The group grew less bullish by dropping more longs than shorts. Meanwhile, small traders went in the opposite direction by reducing their net bearish position. Commercials Long Short Net % of OI 04/09/02 19,393 13,445 5,948 16.7% 04/16/02 19,080 14,267 4,813 14.4% 04/30/02 17,275 13,341 3,934 12.8% 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 04/09/02 5,459 9,340 (3,881) (26.2%) 04/16/02 5,644 9,448 (3,804) (25.2%) 04/30/02 5,813 8,869 (3,056) (20.8%) 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. 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PremierInvestor.net Newsletter Weekend Edition 05-03-2002 section 2 of 3 Copyright © 2001, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= To view this email newsletter in HTML format with imbedded charts and graphs, click here: http://www.PremierInvestor.net/htmlemail/e03b_2.asp ================================================================= In section two: Net Bulls New Bearish Plays: TBH Bullish Play Updates: SNE, TTN Bearish Play Updates: BRCM, CA Closed Bearish Plays: DPMI, SRNA Stock Bottom / Active Trader New Bullish Plays: DCX, GR, LTR, MHK, TBL New Bearish Plays: GCI Bullish Play Updates: CTX, RKY, SII Bearish Play Updates: JPM, MER, GDT, V High Risk/Reward New Bearish Plays: DOX Bullish Play Updates: AMAT Long-Term Plays New Bullish Plays: GLBL Bullish Play Updates: HC, UHS, UNM Closed Bullish Play: SPLS Split Trader FBC: 3-for-2 split announcement ================================================================== Net Bulls (NB) Tech Stock section ================================================================== =============== NB New Plays =============== ----------------- New Bearish Plays ----------------- Telecom Brasil - TBH - close: 29.83 change: -0.19 stop: 31.51 Company Description: Telebras HOLDRS operated as a telecommunication company until 5/98, whereby it spun-off 12 new companies. TBH controlling shareholders has announced its intention to liquidate and dissolve the Company. For the comparable FY ended 12/31/00, the Company reported no revenues. Net income applicable to U.S. GAAP fell 82% to CR$2M. Results reflect the absence of any revenue generating operation, higher operating expenses, and lower interest income. Why We Like It: Our Friday night brainstorming session turned up several possible telecom/wireless shorts. QCOM, NOK, T, AT, all piqued our interest, but appeared too oversold to add to our Play List (okay, maybe not AT but that's another story). TBH, on the other hand, looks to have ample downside remaining. Today shares of this holding stock closed below $30 for the first time in six months. Although the daily stochastics are buried in oversold, TBH is currently on a double-bottom p-n-f sell signal and the MACD is bearishly curling lower from under the baseline. We're looking for a near-term move to $27.50, which acted as resistance back in October. Previous resistance, of course, often turns into support once that level is broken. We'll start this play with a stop at $31.51. This is above last week's high of $31.48. Technicians may want to take note...we've placed a Fibonacci retracement tool on the chart from the September lows to the January highs. What we found was the 61.8% retracement level came in right near the $29.65 area. More conservative traders may want to consider positions once this level is conquered by the bears first (but then that wouldn't take much from here). On another note, we did find it somewhat frustrating with the lack of true information available on this stock/ADR/Holder and some traders may want to shy away from it merely due to the lack of material available for their own due diligence. Picked on May 3rd at $29.83 Gain since picked: +0.00 Earnings Date N/A =============== NB Play Updates =============== -------------------- Bullish Play Updates -------------------- Sony Corp (ADR) - SNE - close: 54.02 change: +0.57 stop: 51.25 Sony did an about face today, rebounding nicely in afternoon trading after dipping early in the morning with the rest of the market. The shares of SNE continue to trade above their 50-dma, which now sits at 52.43. We noted yesterday that short term profit-taking may still occur over the next few days, but we expect that 51.75-52.75 will serve as a region from which the stock should be able to rebound. SNE continues to build a short term triangular consolidation pattern since it peaked on March 8th. These technical patterns, which progressively squeeze prices into a tighter trading range, typically produce a breakout in the same direction as the previous trend; in this case that trend, which was formed from early February to early March, 2000, was upward. Picked on April 4th at $53.01 Gain since picked: +1.01 Earnings Date 04/25/02 (confirmed) --- Titan Corp - TTN - close: 22.80 change: +0.00 stop: 20.99 After Wednesday's announcement that one of TTN's subsidiaries, Titan Systems Corp., had been awarded a contract with the US Navy, Titan's stock price continues to hold up like, well, a titan in the current market turbulence. Although we like the improving upward momentum in price movement, readers should remember our technical observation that the 23.00 level represents a potential area of resistance (see initial write up, and PnF chart). Active traders may want to consider this when determining where profits might be taken on this trade. At this point in the game, we'd probably wait for a close over $23 before considering new positions. Picked on April 15th at $21.26 Change since picked: +1.54 Earnings Date 04/25/02 (confirmed) -------------------- Bearish Play Updates -------------------- Broadcom Corp - BRCM - close: 30.00 change: -2.23 stop: 31.26 *new* Broadcom was broadsided today, while the Semiconductor Index (SOX.X) was pummeled as well, tumbling over 4.5%. The weakness in this sector provided an excellent environment for--and big gains in--our Broadcom short position. By the time trading finished on Friday, Broadcom had given up nearly another 7%, closing the day at 30.00. Like yesterday, we are again lowering our buy stop on this position, reducing it to 31.26. Our reason for lowering our stop to this level is this: BRCM is now sitting just a few percent above the 127% Fibonacci retracement level (calculated off the April 8th-19th advance) of 29.45. Technically, this is one of two important retracement levels (161.8% is the other one) off of which battered, heavily oversold stocks--like BRCM--will frequently attempt to rebound sharply. Not to mention, shares stopped dead at the $30.00 mark multiple times today. Who says round numbers aren't psychological support? At any rate, buy lowering our buy stop, we still have the ability to profit even further if BRCM does decline to the 161.8% retracement, while protecting the attractive gains made thus far in this trade. We suspect that the next few days could produce sharper selling before an actual rebound in stocks like Broadcom. For this reason, we are now adding profit target of 28.05 to this position. A decline to this level, or lower, could be used as an opportunity to cover this short position, and close this trade (and the newsletter will do so if we're not stopped out on a bounce in the sector first). Our new stop should protect a gain of 10% in the play thus far. FYI: for the PnF chart readers out there, some are saying the Friday decline produced a bearish triangle breakdown in BRCM. Picked on April 24th at $34.84 Gain since picked: +3.84 Earnings Date 04/17/02 (confirmed) --- Computer Assoc. - CA - cls: 18.01 chg: +0.16 stop: 18.60 *new* It was announced on Friday morning that Sanjay Kumar, president and CEO of Computer Associates, will speak at the JPMorgan H&Q Technology Conference on Monday, May 6th at 11 a.m. EDT. It may have been on anticipation of some forthcoming positive news that helped CA advance about 1% on a day when software stocks, as measured by the GSTI Software Index (GSO.X), declined 1.7%. Other reasons for the positive performance of the stock may well be attributable to our observation on Thursday that CA has now traded down to its 61.8% Fibonacci retracement, and a healthy rebound at this level cannot be dismissed in coming days. Recognizing this, we have chosen to lower our buy stop on this short trade to 18.60, which should reduce our risk to 11 cents. We would not encourage new short positions at this time. Picked on April 18th at $18.49 Gain since picked: +0.48 Earnings Date 05/14/02 (unconfirmed) =============== NB Closed Plays =============== -------------------- Closed Bearish Plays -------------------- DuPont Photomasks - DPMI - cls: 34.32 chg: -1.45 stop: 38.35 DuPont Photomasks (DPMI) tumbled hard again today, declining more than 4%. Prudential initiated coverage of the stock with a "hold" rating this morning, though we suspect this action had little to do with DPMI's drop today, or its unrelenting weakness since April 17th. We said on Thursday night that we would use an exit price of 35.50 on DPMI, closing the play for a profit if shares traded to that level, or lower. The stock did exactly that, hitting a low of 33.64 before crawling back to finish the trading day at 34.32. We closed this short play at our target of 35.50 for a 10% gain. Sure, we would have liked to have been more aggressive, covering at the lower levels. But prudent profit- taking is a discipline which helps keep traders out of trouble, and in the money. I'll always remember the advice a weathered trader, Bogs Hamilton, once offered me when I complained about a trade in which I felt more profit should have been made. His advice? "Pigs get fat," he said, "but hogs get slaughtered." Then he drew his finger across his thin neck as if it were a knife, and it dawned on me that maybe he had a point. Picked on April 26th at $39.47 Gain since picked: +3.97 Earnings Date 04/24/02 (confirmed) --- SERENA Software - SRNA - cls: 13.10 chg: +0.44 stop: 13.41 The opening weakness in the Nasdaq this morning offered PI readers an opportunity to close out our short position in SRNA at the target price of 12.51, which we outlined Thursday evening for a gain of 16.25%. Shares of SERENA Software dropped at the open to a low of 12.45, then began a rebound which lasted most of the trading day. SRNA went on to trade up over 3% on an otherwise fairly negative market day. It is helpful to remind readers that we use stops, and profit targets, in order to retain gains we've enjoyed in trades like this. Maybe we got lucky this morning; maybe we were just smart. If you ask me, it was the latter. Picked on April 23rd at $14.94 Gain since picked: +2.43 Earnings Date 02/21/02 (confirmed) ================================================================== Stock Bottom / Active Trader (AT) section ================================================================== =============== AT New Plays =============== ----------------- New Bullish Plays ----------------- DaimlerChrysler - DCX - cls: 47.33 chg: +0.26 stop: *see text* Company Description: DaimlerChrysler AG is a German-based manufacturer of automobile and automobile products. The company is additionally involved in the financing of automobiles. The DaimlerChrysler corporation has five business segments, of which Mercedes-Benz Passenger Cars and the Chrysler Group are the most well known. Why We Like It: DaimlerChrysler's stock has not done much in the last two months, as it has consolidated in a broad range in the mid-40's. We like this stock for that very reason: it has taken a breather and now seems ready to move higher as the overall market struggles out of its doldrums. Like any marathon runner, stocks need to rest between long runs; DCX has been using its 40-dma and 50-dma as a resting point in recent weeks, and its stock price is modestly above the 50-dma as of Friday's close. Even though a worker strike in Germany may affect some DCX manufacturing operations, the stock was able to edge higher on Friday while much of the market was negative. Our strategy is to either buy DCX on a breakout above 48.12 to new short-term highs, OR acquire it on a modest pullback to support in the 45.50-46.50. We will present a stop level once our trade has been triggered but it will likely show up between $43 and $44. You might find a longer-term chart, like a weekly interval, an interesting view for DCX. Picked on May xxth at $xx.xx <- see text Gain since picked: +0.00 Earnings Date 02/20/02 (confirmed) --- Goodrich Corp - GR - close: 31.97 change: -0.10 stop: 30.74 Company Description: With 2001 aerospace sales of $4.2 billion, Goodrich Corporation is a leading worldwide supplier of aerospace components, systems and services. The company plans to spin off its engineered industrial products business to shareholders in the second quarter of 2002. (source: company press release) Why We Like It: We've been eyeing GR for months but never felt comfortable enough to add it as a long play. However, a recent pullback has convinced us otherwise. GR announced earnings on April 24th that were in-line with lowered estimates, and also guided slightly higher for Q2. Shares suffered a post-earnings decline but recently have firmed up near the bottom of the ascending channel dating back to the September lows. This consolidation has created some intriguing technical developments, with the MACD leveling out at the baseline and daily stochastics heading higher from the oversold band. These lend credence to the notion that GR might bounce from its channel. We also like the risk/reward setup this trade offers. The potential downside is limited by our stop at $30.74 (below the near-term low of $30.77), while our upside target is the top of the channel at $36. Although we'd anticipate some resistance near $34.50-$35.00, continued strength in the DFX.X defense index should propel shares above this level. The index is trading at all-times highs and shows no signs of topping out as the Pentagon continues to pump out new contracts. Regarding entry points, one could look for GR to move over the Thursday high of $32.25. No need to rush onboard with this stock - it's a relatively slow mover. Picked on May 3rd at $31.97 Gain since picked: +0.00 Earnings Date 04/24/02 (confirmed) --- Loews Corporation - LTR - cls: 61.81 chg: +0.76 stop: 58.45 Company Description: Loews Corporation is a holding company involved in a variety of industries and services. Its subsidiaries include insurer CNA Financial Corporation; Lorillard, Inc., a manufacturer of cigarettes; Loews Hotels Holding Corporation; and offshore oil and gas drilling interests conducted by Diamond Offshore Drilling, Inc. Why We Like It: LTR's stock has been in a 4+ month sideways consolidation, and we like stocks that have been able to weather the turbulence of the market with such stable behavior. Late this past week, LTR began an upward move, which looks like it will seriously challenge its January 25th, 2002 high of 62.26. The stock enjoyed a substantial surge in volume with its impressive price performance today, flashing a signal that it is ready to break out for a new upward move, perhaps in advance of its May 9th earnings report. Our preference is to acquire LTR on a pullback to the 60.50+- support region early next week; if Loews fails to cooperate with us--stocks can be stubborn at times!--our alternative approach will be to buy LTR as it moves above the January 25th level (62.26). We will protect the position with an appropriate stop; if we can buy on the pullback active traders could use a 58.45 sell stop. Currently, our profit target is near the $70 area. Picked on May Xth at $xx.xx <- see text Gain since picked: +0.00 Earnings Date 05/09/02 (confirmed) --- Mohawk Industries - MHK - close: 66.30 change: +0.54 stop: 62.98 Company Description: Mohawk is a leading supplier of flooring for both residential and commercial applications and a producer of woven and tufted broadloom carpet, rugs and ceramic tile. (source: company press release) Why We Like It: The continued rise in homebuilding-related issues has made it a bit difficult to find a long play in the sector. Sure, there are plenty of stocks with strong charts. The problem is finding one that doesn't look overbought. Fortunately, our scan of stocks in the group turned up MHK. The company is not a homebuilder per- se, but as a manufacturer of carpets, rugs and flooring, it stands to benefit from a strong sector. Business is brisk, as evidenced by the April 15th earnings announcement that featured an EPS of 77 cents/share, versus the estimate of 67 cents. Sales were up 12% from the year-ago total. MHK is displaying technical strength as well. Shares have trended higher since the earnings announcement and are within striking distance of the all-time high at $68.10. The daily stochastics are rising higher with room to move, which indicates that the stock may break over this level. The DJUSHB home construction index is at the midline of its ascending channel. Traders looking to confirm bullish sector sentiment may want to wait for the index to continue higher before going long. We're starting this play with a stop at $62.98, below the 50-dma. This would be a 5% move from the current price. We do expect potential resistance at $70 but the top of the channel should be close to $75, which is our initial profit target. Picked on May 3rd at $66.30 Gain since picked: +0.00 Earnings Date 04/15/02 (confirmed) --- Timberland Company - TBL - cls: 41.89 chg: +0.49 stop: 39.95 Company Description: The Timberland Company makes shoes and clothing under the Timberland PRO and Mountain Athletics brands. The company rimarily sells its products in department and fitness-related stores around the world. In May 2001, Timberland began selling its brands online, through timberland.com. Why We Like It: Like many retailers, Timberland has suffered during the current US economic slump. On April 18th, when the company last released its earnings, company management noted that the sluggishness in its business was not yet over and that future sales may be pressured. Not surprisingly, TBL suffered a 3.22 percent drop in its stock price, leaving a considerable gap in its price pattern. Since then, though, TBL has quietly consolidated and this past week the stock used the 50-dma as a firm support along with the psychological $40 level. Friday's performance was particularly impressive as the stock rose over 1% on a decidedly negative day. We currently believe that TBL can rally back toward the 46.00 level--perhaps rapidly--as it fills the price gap it left on April 18th. Our entry strategy is to buy the stock at current levels (41.89) or, preferably, on a modest pullback early next week to the 41.00 support region. Please be sure to use a sell stop on this position of 39.95, a level that is just below the 50-dma. Technical traders should be encouraged by the bullish developments in TBL's MACD, stochastics, RSI and Momentum oscillators. Picked on May 3rd at $41.89 Gain since picked: +0.00 Earnings Date 04/18/02 (confirmed) ----------------- New Bearish Plays ----------------- Gannett Company - GCI - cls: 74.13 chg: -0.73 stop: 75.65 Company Description: Gannett Co., Inc. is a diversified information company, which has two principal business segments: newspaper publishing and television broadcasting. The company operates 110 daily newspapers in the US and the United Kingdom; one of its properties is USA Today. Its newspapers are read by more than 8 million readers, while its 22 TV stations have an audience of nearly 19 million households. Why We Like It: In early February, 2002, Gannett spiked higher for several days in a row, leaving a "fast move" region which is not unlike a price gap. Gaps and fast move regions represent brief periods of frantic buying behavior typically conducted by emotional investors who impatiently, and perhaps imprudently, dive into a long position. Experience has taught us that these stock holders frequently represent "weak hands", and that they sell the stock just as quickly as they bought it once the stock price falls back into the gap (or fast move region). This is the situation which we believe GCI has now produced, particularly since it broke below its 50-dma on April 25th. Our interest is to short GCI at current levels, or slightly above, using a 75.65 buy stop. If this trade evolves as we expect, we will be looking for a decline, over a week or two, which pulls GCI down through its fast move region, to a level of about 68.75, which represents both support and the 78.6% Fibonacci retracement and not coincidentally the 200-dma. However, we'd be just as happy if we could close it at potential support near the $70 level. Picked on May 3rd at $74.13 Gain since picked: +0.00 Earnings Date 04/16/02 (confirmed) =============== AT Play Updates =============== -------------------- Bullish Play Updates -------------------- Centex Corp - CTX - close: 58.01 change: -0.17 stop: 54.89 Homebuilders seem to be almost oblivious to the broader market bearishness. Although the Dow gave back 84 points today, the DJUSHB home construction index finished with a fractional gain. CTX also held up relatively well but continues to be stymied by resistance at $59. If the market experiences a relief rally next week we'd expect CTX and the rest of the sector to lead the way higher. CTX traded within yesterday's range, which constitutes an "inside day." Aggressive traders could use the inside day strategy to go long on a move above today's high of $58.19. However, with resistance directly overhead the most prudent approach would be to wait for a move over $59. We'll be closely watching next week's Fed meeting, since any change in interest rates could have an impact on the mortgage-rate sensitive homebuilding sector. Picked on May 1st at $57.78 Gain since picked: +0.23 Earnings Date 04/23/02 (confirmed) --- Adolph Coors - RKY - close: 68.62 change: -0.14 stop: 63.89 All things considered, today's fractional pullback in shares of RKY could be deemed a victory for the bulls. After several days of gains it wasn't surprising to see some backing and filling. The process was hastened this morning after a Morgan Stanley analyst downgraded the beverage sector, based on his belief that the group only offered "moderate upside." Regarding RKY, he said he maintains "a cautious stance." Far be it for us to second- guess a Wall Street analyst, but the technicals suggest that it's the bears who should have a cautious stance on the stock. RKY is currently on a triple-top p-n-f breakout and the MACD has just given a bullish crossover. Today's successful test of previous resistance at $68 is encouraging as well. We'd look for this level to continue to act as support. Volume continues to climb, and today's reading of 850K was the highest of the year. Bullish positions can be considered at current levels, although those who are more cautious may want to place their stops just under $68.00 or Friday's lows of 67.70. Picked on May 2nd at $68.36 Gain since picked: +0.26 Earnings Date 04/25/02 (confirmed) --- Smith Intl - SII - close: 74.34 change: +1.04 stop: 68.95 *new* Among the few indices showing green on our sector list today was the OSX.X oil service index. We couldn't find any specific sector news to explain the bullishness, but we're not about to second-guess a group that is trading at multi-month highs. SII outperformed the OSX, tacking on 1.4 percent to finish at another near-term high. Today's volume was the highest in two weeks. The increasing volume on the breakout over $70 bodes well for this play. Now that SII has yielded a 4.2% gain from our original entry price, we're going to minimize our risk by moving the stop to $68.95. More conservative traders could go flat on a move below the $70 support level. Staying ahead of the curve is the name of the game when it comes to trading, and at this point it wouldn't be out of line to discuss our exit strategy. SII has traded in an ascending channel for several months, and the top of that channel lies just under $80. We will likely be closing this play if shares reach this level. As far as new entries are concerned, short-term traders can target a move over $75 or today's high of $75.65 although pull backs to $72 wouldn't hurt either. Picked on April 26th at $71.29 Gain since picked: +3.05 Earnings Date 05/02/02 (confirmed) -------------------- Bearish Play Updates -------------------- J.P. Morgan - JPM - close: 35.68 change: -0.57 stop: 36.53 *new* In Thursday night's update we speculated that the recent uptrend in JPM may be stifled if the Dow Jones rolled over from the top of its descending channel. Sure enough, today's sell-off in the Industrials led to a 1.5 percent loss in JPM. That's the first negative day since Monday. Although we're encouraged by the decline, we're going to minimize our risk by lowering our stop to $36.56. This will force JPM to trade above the 200-dma. With this adjusted stop, aggressive traders who are looking for a continued market sell-off could go short at current levels. The daily stochastics look like they have rolled over mid-rally, suggesting that the near-term buying may have almost run its course. On the other hand, there is enough upside room for a few more days of gains. If JPM does head lower, the real test for bears will come at the 50-dma (currently $34.50), which acted as support earlier in the week. We probably wouldn't be looking for new positions at this time. Picked on April 24th at $35.40 Gain since picked: -0.28 Earnings Date 04/17/02 (confirmed) --- Merrill Lynch - MER - close: 43.33 change: +0.39 stop: 43.80 *new* Bears should be getting cautious on MER after Friday's session. Despite an 85-point loss on the Dow Jones, MER finished the day with a 0.83% gain. The stock trended higher for most of the session and closed above what had been short-term resistance at $43. Also concerning is the relative strength MER displayed versus the XBD.X broker/dealer index, which shed nearly 2%. The uptrending oscillators also suggest that the stock may have put in a near-term bottom. Due to the bullish oscillators, recent relative strength, and head-and-shoulders formation on the hourly chart, we're going to get defensive with our stop. We'll close this play if it trades at or above $43.80. This will force MER to move over the 10-dma, which has acted as resistance over the past month. This afternoon the Wall Street Journal reported that settlement negotiations with New York's Attorney General regarding Merrill's research practices had run into a glitch that could prolong the talks indefinitely. The news didn't seem to have much of an impact on MER during end of the session. We'll see how this plays out over the weekend, but at this point it seems that the investigation is priced into the stock. Picked on April 24th at $43.72 Gain since picked: +0.39 Earnings Date 04/17/02 (confirmed) --- Guidant Corp - GDT - close: 38.40 change: -0.95 stop: *text* A "sell on the news" mentality dominated GDT today, following the FDA approval of the company's Contak heart failure treatment system. Shares spiked higher on the initial news yesterday, but quickly sold off and closed near the lows for the day. USB Warburg chimed in this morning and said that although the product will likely increase the company's market share, it will not expand the market. GDT finished the day with a loss of 2.4%. As far as this play is concerned, we'll stick with our current strategy and continue to wait for GDT to hit our trigger at $36.94 before opening a hypothetical short play. This ensures that the stock will be trading at multi-month lows before we go short. If shares rally back above the $40 level we'll likely close this play. Picked on April xth at $xx.xx Gain since picked: +0.00 Earnings Date 04/18/02 (confirmed) --- Vivendi - V - close: 29.07 change: -1.60 stop: 30.06 *new* Nice timing! Just as V was approaching potential support at $30, Moody's downgraded the company's long-term debt rating from "stable" to "negative." The stock was weak from the get-go this morning and quickly fell below $30. Shares rebounded from an intraday low of $28.30 before finishing with a loss of 5.2 percent. Volume was robust, coming in at 2.1M shares. That's the highest reading in over a year. The PI Newsletter is currently up 12.8% on this play, and once again we're going to lower our stop-loss. Assuming that the $30 level will act as psychological resistance, we're going to move our stop to $30.06. This should protect a gain of nearly 10%. It's difficult to gauge where V may finally find support, but we'd expect a relief rally sometime in the near-future. Due to its oversold nature we wouldn't recommend new entries at this time. As long as V keeps falling we'll continue with our strategy of trailing stops. Some traders may want to consider potential exit or profit triggers near the $26 level. Picked on April 24th at $33.35 Gain since picked: +4.28 Earnings Date 04/24/02 (confirmed) ================================================================== HIGH RISK/HIGH REWARD (HR) section ================================================================== =============== HR New Plays =============== ----------------- New Bearish Plays ----------------- Amdocs Ltd - DOX - close: 19.73 change: -0.75 stop: 20.76 Company Description: Amdocs is the world's leading provider of CRM, billing and order management systems to the communications industry. Amdocs has an unparalleled success record in project delivery of its mission- critical products. (source: company press release) Why We Like It: Recently one of the hotly debated subjects at the PI office has been whether it's too late to short tech stocks. No doubt about it, the NASDAQ is looking oversold and the software sector has been hit even harder. The GSO.X software index has lost over 30% since early March and is just 9 points away from its all-time low at 112. Nonetheless, we're playing DOX because the stock is technically weak and there is no guarantee that the GSO will find support. After all, the SOX.X just fell below the 500 level that had provided support for several months. What grabbed our attention today was the way DOX dropped 3.6 percent on high volume and closed under support at $20. Shares have traded in a descending channel for most of the year and are just now dropping from the upper band. The downtrend has accelerated in recent weeks, following the April 23rd earnings announcement in which the company reported higher profits but guided lower for the year. This resulted in no less than three brokerage downgrades for DOX. Thanks for the head's up, guys. With the bears firmly in control, we're looking for a near-term move to the channel's midline at $18. This would be a move of nearly 9%. A complete breakdown in the sector could bring the stock even lower, but we'll evaluate our exit strategy if/when DOX trades near the $18 level (a move to the $17 or $16 area does not seem out of the question). Under normal circumstances we have no problem taking 10% risk with our stop on a high-risk play. However, given the sharply oversold sector, we're going to go with a 5% stop at $20.76. This will still force shares to trade over $20, which should now act as resistance. Traders with a more aggressive approach may want to place their stop above near-term resistance at $22. Picked on May 3rd at $19.73 Gain since picked: +0.00 Earnings Date 4/23/02 (confirmed) =============== HR Play Updates =============== -------------------- Bullish Play Updates -------------------- Applied Materials - AMAT - close: 22.17 change: -0.70 stop: 20.89 Like a warm knife cutting through butter, the SOX.X descended through the 500 support level this morning without even a whimper of protest from the bulls. The index dropped to an intraday low of 477 before trading in a narrow 11-point range for the rest of the session. So now that the SOX has violated support, what about our AMAT play? We had been looking for a sector bounce to lead the stock to some near-term gains. Today's developments have thrown a wrench in those plans, but by no means is this play a lost cause. As a matter of fact, a case could still be made for going long on AMAT. Shares declined by 3.06 percent, which is a lot stronger when compared to the 4.72 percent loss on the SOX. This relative strength could be attributed to the fact that AMAT is currently sitting just above bullish support on the p-n-f chart. The same is true of sector leader INTC. It was also encouraging to see that AMAT bounced near the 200-dma at $21.55. The consensus around the office is that the NASDAQ will see a sharp short-covering rally sometime next week. A possible catalyst for the rally could be CSCO earnings on Tuesday. An earnings miss or downward guidance could cause a tech sector capitulation that would create a near-term bottom in the NASDAQ. On the same token, a forecast of increased IT spending could also result in a short-covering event. The SOX has dropped more than 20% since April 17th and looks painfully overdue for a relief rally. Picked on May 2nd at $22.99 Change since picked: -0.82 Earnings Date 05/14/02 (confirmed) ================================================================== LONG-TERM PLAYS (LT) section ================================================================== =============== LT New Plays =============== ----------------- New Bullish Plays ----------------- Global Industries - GLBL - close: 9.80 change: -0.10 stop: 8.98 Company Description Global Industries provides pipeline construction, platform installation and removal, and diving services to the oil and gas industry in the deepwater and shallow-water areas of the Gulf of Mexico, West Africa, Asia Pacific, Middle East/India, South America, and Mexico's Bay of Campeche. (source: company press release) Why We Like It: The combination of a growing or recovering economy, the onset of the summer driving season, tensions in the middle East and a potential war with Iraq on the horizon should be enough to create a stable and profitable level for oil prices. With that in mind, investors have been slowly buying up shares of GLBL in a steady and deliberate fashion. We encourage you to draw a trendline across the lows of the daily chart from the September bottom. However, make one exception for the dip and reversal just two days before GLBL's recent second offering of shares in mid-March. What you'll find is an extremely steady trend where buyers have slowly been walking the price higher. Given this trend, patient investors should be able to leg into a position on a pull back to the $9.50 to $9.60 levels. While this appears to be a decent strategy, the current overhead resistance at $10.00 is not something to be taken lightly. We're going to use a trigger point above the recent high of $10.06 to enter a bullish position. More conservative investors might want to consider waiting for GLBL to trade above the early April high of $10.50 but the Premier newsletter will use $10.11 to go long. Our long- term three to six month target is the $12.50 to $13.00 level. We're going to begin the play, once we're triggered, with a stop at 8.98 and adjust it as the play progresses. Traders can use the point-and-figure chart to identify the slow and steady accumulation pattern and the descending bearish resistance near $12.50. Truly long-term traders might want to look at a weekly chart of GLBL. If you do so, connect a trendline to the highs starting at the peak back in May of 1998. By laying the trendline across the two other peaks (which line up rather perfectly) it projects a long-term resistance line for the stock. Now look three to six months out and see if the PnF bearish resistance makes sense. Despite the looming hurdles, we'd be happy to collect the +20% move in the share price and as long as the current trend is intact it might happen for us. Picked on May 3rd at $xx.xx <-- see text Gain since picked: +0.00 Earnings Date 05/02/02 (confirmed) =============== LT Play Updates =============== -------------------- Bullish Play Updates -------------------- Hanover Compressor - HC - close: 18.30 change: +0.13 stop: 15.99 We never did get that close over $20 like the one we recommended more conservative traders wait for before considering a bullish position in HC. It has been about one month since we went long HC at $18.80 and we're down half a point. The consolidation has been slow and boring but we have re-learned an important lesson. Do not ignore the PnF bearish resistance line. Shares of HC have been battling with supply and demand resistance for five weeks and the bulls have been slowly losing. Currently, shares are at an interesting juncture. The stock has been bouncing near the $18.00 level as support and have not met up with the rising 50- dma, which should also be support. Will the bears ease up or will they make the next move and take HC through these levels? Aggressive traders could consider plays here with a tight stop under $18 (I guess that isn't really aggressive) but we'd probably want to see HC close over its 100-dma, which has been pressuring the stock for weeks. We don't see any reason to rush into this play as it is not one to get away from you (normally). Entered on April 5th at $18.80 Gain since picked: -0.50 Earnings Date June/02 (not confirmed) --- Universal Health Services - UHS - cls: 45.50 chg: -0.85 stop: 41.49 Up until this last Monday, we were feeling pretty confident in this healthcare play. We added it a couple of Friday's ago after a strong earnings report and the next Monday the stock got an upgrade to a buy. Not that an upgrade means much anymore, it didn't hurt and UHS climbed steadily to the $48 level. Suddenly, with the broader markets in retreat, shares of UHS hit major selling pressure and drop more than two points to produce a bearish engulfing candlestick pattern. The stock pauses to consolidate sideways this week but by Friday it appears we are looking at a full scale pull back. Most of the major indicators say there is still more downside to go. Thus, bullish investors may want to take a step back and wait and see where UHS finds support again. A good place to look would be the 200-dma near the $44 level. A bounce there might be your entry point. Under the 200-dma and we'd probably avoid the stock for new entries. Picked on April 19th at $46.60 Gain since picked: -1.10 Earnings Date 04/18/02 (confirmed) --- Unumprovident Corp - UNM - close: 28.00 change: +0.14 stop: 26.89 UNM was another long-term play that got off to a great start and went on to display early gains. Unfortunately, our prediction that shares would see selling pressure near the $29.70 level was too good (and only off by 20 cents). Mid-April saw bears keep a lid on shares of UNM at the $29.50 mark and buyers couldn't breakthrough it in this negative market environment. Since then the stock has pulled back and consolidated slowly towards the $27.50 area. We do believe that UNM should be able to benefit going forward as investors turn to the industry for solid earnings growth. A test of this theory may come soon as UNM has announced it will report earnings on May 8th, 2002. We were a little perplexed by the strong volume on Friday but we'd consider a move back over the $28.50 level as a possible entry point for new longs. Squeamish investors may want to avoid the stock until after their earnings report. Picked on April 5th at $28.48 Gain since picked: -0.48 Earnings Date 05/08/02 (confirmed) =============== LT Closed Plays =============== -------------------- Closed Bullish Plays -------------------- Staples, Inc - SPLS - cls: 20.15 chg: -0.03 stop: 19.99 We have to admit this update is a bit late for SPLS. The last time we discussed strategy on this long-term play was Wednesday, April 10th, 2002 and the stock had closed at $22.14. The stock was looking exceptionally strong and we encouraged traders to consider locking in some profits with SPLS up 20% from our picked price of $18.44. That same night we raised our stop to $19.99 in order to protect a gain of 8.4%. Unfortunately, about two weeks later, our long play would have been stopped out when SPLS dipped below the $20 level to bounce off its 50-dma. That was April 23rd, 2002. Since then the stock has continued to consolidate but it has been able to maintain the $20 level. Believe it or not, if you look at some of the oscillators it also appears like SPLS could be at an entry point for a new bullish play. However, we're not going to suggest one at this time and will leave it for the diehard SPLS fans. The Premier newsletter will close this play as of April 23rd at $19.99 for an +8.4% move. If you like the sector but aren't interested in SPLS, check out MCL. That's a stock/company in the same/similar industry. Picked on January 4th at $18.44 Gain since picked: +1.55 Earnings Date June/02 (unconfirmed) ================================================================== Split Trader (ST) section ================================================================== Split Announcements ------------------- Flagstar Bancorp announces 3-for-2 split, boosts dividend Before the final bell sounded this afternoon, Flagstar Bancorp (NYSE: FBC) announced that its Board of Directors, at a special meeting, had declared a 3-for-2 stock split. The split will be payable on May 31, 2002 to shareholders of record on May 15, 2002. The board also raised the cash dividend to 6 cents/share, which is expected to be paid on or about August 15, 2002. FBC most recently split in July 2001, also a 3-for-2 split. Shares closed at $30.40 on Thursday. For a current quote, click here: http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=FBC About the company Flagstar Bancorp is a Michigan-based thrift holding company and the parent of Flagstar Bank, FSB, the largest savings institution and third largest banking institution headquartered in Michigan. During 2001, Flagstar was the most profitable publicly-traded banking institution in the nation with a 35% return on equity. (source: company press release) ================================================================= 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 Weekend Edition 05-03-2002 Section 3 of 3 Copyright © 2002, 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/e03b_3.asp ================================================================= In section three: Market Watch for Week of May 6th - Major Earnings - Stock Splits - Economic Reports Trading Ideas Value Plays With Bullish Signals Breakout to Upside (Stocks $5 to $20) Breakout to Upside (Stocks over $20) Breakout to Downside (Stocks over $20) Recently Overbought With Bearish Signals (Stocks over $20) ================================================================= ================================================== Market Watch for the week of May 6th ================================================== ------------------------ Major Earnings This Week ------------------------ Symbol Company Date Comment EPS Est ------------------------- MONDAY ------------------------------- BMC BMC Software Mon, May 06 Before the Bell 0.11 CEPH Cephalon Mon, May 06 After the Bell 0.15 CHD Church & Dwight Mon, May 06 Before the Bell 0.32 ABV Companhia Bebidas Am Mon, May 06 Before the Bell 0.19 MAS Masco Mon, May 06 -----N/A----- 0.29 PRE PartnerRe Mon, May 06 After the Bell 1.30 PPS Post Properties Mon, May 06 After the Bell 0.72 PVN Providian Financial Mon, May 06 After the Bell 0.02 QGENF QIAGEN Mon, May 06 After the Bell 0.07 SKM SK Telecom Mon, May 06 Before the Bell N/A SKE Spinnaker Exploration Mon, May 06 -----N/A----- 0.20 WRC Westport Resources Mon, May 06 -----N/A----- -0.25 ------------------------- TUESDAY ------------------------------ ATVI Activision Tue, May 07 After the Bell 0.11 AEG AEGON N.V. Tue, May 07 Before the Bell 0.41 ALS Alstom SA Tue, May 07 Before the Bell N/A AMH AmerUs Group Tue, May 07 After the Bell 0.86 RMK ARAMARK Corporation Tue, May 07 -----N/A----- 0.17 ASN Archstone-Smith Trust Tue, May 07 Before the Bell 0.52 CSCO Cisco Systems Tue, May 07 After the Bell 0.09 CCU Clear Channel Comm Tue, May 07 Before the Bell 0.08 CPWR Compuware Tue, May 07 After the Bell 0.07 CCRN Cross Country, Inc. Tue, May 07 -----N/A----- 0.20 CRWN Crown Media Holdings Tue, May 07 Before the Bell -0.56 DEG Delhaize Group Tue, May 07 -----N/A----- N/A HAL Halliburton Tue, May 07 Before the Bell 0.19 HSIC Henry Schein Tue, May 07 Before the Bell 0.42 HSP Hispanic Brdcstng Cmp Tue, May 07 Before the Bell 0.05 LAMR Lamar Advertising Tue, May 07 After the Bell -0.21 LM Legg Mason Tue, May 07 Before the Bell 0.66 CLI Mack Cali Realty Tue, May 07 Before the Bell 0.92 MBI MBIA Tue, May 07 Before the Bell 1.04 MDG Meridian Gold Tue, May 07 After the Bell 0.16 MET Metropolitan Life Ins Tue, May 07 Before the Bell 0.58 MNY MONY Group Tue, May 07 -----N/A----- 0.24 NJ Nidec Tue, May 07 -----N/A----- N/A PC Perez Companc Tue, May 07 -----N/A----- -0.73 PAA Plains All Am Pipline Tue, May 07 Before the Bell 0.32 PRU Prudential Financial Tue, May 07 After the Bell 0.47 QLGC QLogic Tue, May 07 After the Bell 0.20 SPP Sappi Ltd ADS Tue, May 07 Before the Bell 0.22 STO Statoil ASA Tue, May 07 Before the Bell N/A TI Telecom Italia Tue, May 07 Before the Bell N/A TSP Telecomunicações São Tue, May 07 -----N/A----- 0.31 TMPW TMP Worldwide Tue, May 07 After the Bell 0.14 TZH Trizec Hahn Tue, May 07 Before the Bell 0.57 UNM UnumProvident Tue, May 07 After the Bell 0.63 WMI Waste Management Tue, May 07 -----N/A----- 0.26 HLTH WebMD Tue, May 07 After the Bell 0.01 WON Westwood One Tue, May 07 Before the Bell 0.14 ----------------------- WEDNESDAY ----------------------------- ARG Airgas Wed, May 08 After the Bell 0.20 ARI Arden Realty Wed, May 08 After the Bell 0.73 ANZ Aust&New Zelnd Bank Wed, May 08 After the Bell N/A BBV Bnco Blbao Vizcaya Arg Wed, May 08 Before the Bell N/A BRL Barr Laboratories Wed, May 08 Before the Bell 0.83 VNT C. A. Nac Tele Ven Wed, May 08 -----N/A----- 0.32 CAMT Camtek Wed, May 08 -----N/A----- -0.18 CED Canadian Natural Res Wed, May 08 Before the Bell 0.44 CM Coles Myer Wed, May 08 After the Bell N/A CCI Crown Castle Inter Wed, May 08 After the Bell -0.46 CVS CVS Wed, May 08 Before the Bell 0.43 DF Dean Foods Company Wed, May 08 Before the Bell 0.54 DYS Distribucion y Servic Wed, May 08 -----N/A----- 0.15 E ENI SpA ADR Wed, May 08 -----N/A----- N/A ENZN Enzon Wed, May 08 -----N/A----- 0.26 EXPD Expeditors Int WA Wed, May 08 After the Bell 0.39 FST Forest Oil Wed, May 08 After the Bell -0.05 GALN Galen Holdings PLC Wed, May 08 Before the Bell 0.22 JBX Jack in the Box Wed, May 08 Before the Bell 0.44 LQI LA QUINTA PPTYS Wed, May 08 Before the Bell -0.02 MME Mid Atlantic Med Serv Wed, May 08 -----N/A----- 0.42 MYL Mylan Laboratories Wed, May 08 Before the Bell 0.50 PSC Philadelphia Suburban Wed, May 08 Before the Bell 0.17 PIXR Pixar Wed, May 08 After the Bell 0.23 PFG Principal Fin Grp Wed, May 08 Before the Bell 0.51 REG Regency Centers Corp Wed, May 08 After the Bell 0.66 SRV Service Corp Int Wed, May 08 After the Bell 0.12 SPG Simon Property Group Wed, May 08 After the Bell 0.79 TDK TDK Wed, May 08 -----N/A----- N/A TRLY Terra Lycos, S.A. Wed, May 08 During the Market-0.05 TMBR Tom Brown Wed, May 08 After the Bell -0.12 TGH Trigon Healthcare Wed, May 08 Before the Bell N/A WPI Watson Pharmaceutical Wed, May 08 Before the Bell 0.34 WTM White Mount Ins Grp Wed, May 08 -----N/A----- N/A WFMI Whole Foods Market Wed, May 08 -----N/A----- 0.33 ------------------------- THURSDAY ----------------------------- ATK Alliant Techsystems Thu, May 09 Before the Bell 1.02 BRG BG Group Thu, May 09 Before the Bell N/A CNA CNA Financial Corp Thu, May 09 Before the Bell 0.50 CEI Crescent Rl Es Eq Co Thu, May 09 Before the Bell 0.45 ERTS Electronic Arts Thu, May 09 After the Bell 0.28 EVC Entravisions Comm Corp Thu, May 09 After the Bell -0.04 HCC HCC Insurance Holdings Thu, May 09 After the Bell 0.39 HB Hillenbrand Industries Thu, May 09 Before the Bell 0.85 JS Jefferson Smurfit Thu, May 09 -----N/A----- 0.30 LTR Loews Thu, May 09 Before the Bell 1.24 NAB National Australia Bk Thu, May 09 -----N/A----- N/A NXL New Pln Excel Rlty Tst Thu, May 09 -----N/A----- 0.44 OCA Orthodontic Cent of Am Thu, May 09 Before the Bell 0.36 PCO Premcor U.S.A. Thu, May 09 Before the Bell N/A PDLI Protein Design Thu, May 09 After the Bell 0.01 PRS Pure Resources, Inc. Thu, May 09 Before the Bell -0.14 RSA Royal&Sun All Ins Grp Thu, May 09 Before the Bell N/A SHU Shurgard Storage Thu, May 09 Before the Bell 0.67 NZT Telecom New Zealand Thu, May 09 After the Bell N/A UBB Unibanco Thu, May 09 Before the Bell 0.71 UVN Univision Comm Thu, May 09 After the Bell 0.01 WGR Western Gas Resources Thu, May 09 Before the Bell 0.21 ZL Zarlink Thu, May 09 Before the Bell -0.09 ------------------------- FRIDAY ------------------------------- BSY BritishSky Brdcstng Fri, May 10 Before the Bell N/A FS Four Seasons Hotels Fri, May 10 Before the Bell 0.13 ICCI Insight Communications Fri, May 10 -----N/A----- -0.41 MGA Magna International Fri, May 10 -----N/A----- 1.67 MITSY Mitsui & Co Ltd Fri, May 10 -----N/A----- N/A ORH Odyssey Re Holdings Fri, May 10 -----N/A----- 0.27 ------------------------------- Upcoming Stock Splits In The Next Two Weeks... ------------------------------- Symbol Company Name Ratio Payable Executable ABM ABM Industries 2:1 05/03 05/06 TJX TJX Companies 2:1 05/08 05/09 MCHP Microchip Technology 3:2 05/08 05/09 PNG Penn-America Group 3:2 05/08 05/09 WSM Williams Sonoma 2:1 05/08 05/09 CATY Cathay Bancorp 2:1 05/09 05/10 WTSLA The Wet Seal Inc 3:2 05/09 05/10 LH Laboratory Corp 2:1 05/09 05/10 FAST Fastenal 2:1 05/10 05/13 IFNY INFINITY Inc 2:1 05/10 05/13 BBY Best Buy 3:2 05/10 05/13 STZ Constellation Brands 2:1 05/13 05/14 CNTL Cantel Ind 3:2 05/14 05/15 EPD Enterprise Products 2:1 05/15 05/16 FULT Fulton Financial 5:4 05/17 05/20 VLY Valley National Bancorp 5:4 05/17 05/20 ANN Ann Taylor 3:2 05/17 05/20 OCFC OceanFirst Financial 3:2 05/17 05/20 MAXS Maxwell Shoe Co 3:2 05/17 05/20 YORW York Water Co 2:1 05/17 05/20 LLL L-3 Communications 2:1 05/17 05/20 -------------------------- Economic Reports This Week -------------------------- Wow, we've got one heck of a week in front of us. While Wall Street is still wrapping up earnings, Tuesday could be a day for volatility with the Wholesale Inventories report and the FOMC meeting. Plus, after the close on Tuesday, CSCO is expected to announce earnings which could set the tone of the tech sectors for the rest of the week. On Friday, analysts will be watching for the PPI report. ============================================================== -For- Monday, 05/06/02 ---------------- .. none .. Tuesday, 05/07/02 ----------------- Productivity-Prel (BB) Q1 Forecast: 7.0% Previous: 5.2% Wholesale Invntries (DM) Mar Forecast: -0.4% Previous: -0.7% FOMC Meeting (DM) Consumer Credit (DM) Mar Forecast: $7.0B Previous: $7.1B Wednesday, 05/08/02 ------------------- .. none .. Thursday, 05/09/02 ------------------ Initial Claims (BB) 05/04 Forecast: 407K Previous: 418K Export Prices ex-ag.(BB) Apr Forecast: N/A Previous: 0.2% Import Prices ex-oil(BB) Apr Forecast: N/A Previous: 0.0% FOMC Minutes (DM) 03/19 Friday, 05/10/02 ---------------- PPI (BB) Apr Forecast: 0.4% Previous: 1.0% Core PPI (BB) Apr Forecast: 0.1% Previous: 0.1% Definitions: DM= During the Market BB= Before the Bell AB= After the Bell ================== Trading Ideas ================== This section contains stocks that meet criteria which may make them of interest to long and short side traders. These are not recommendations, nor have they been reviewed by PremierInvestor editors for investment potential. However, each of them has technical and fundamental characteristics that make them worthy of further review by traders and investors looking for fresh ideas. New stocks will appear daily following the market close. --------------------------------- Value Plays With Bullish Signals --------------------------------- Ticker Company Name Close Change FRE Freddie Mac 67.07 +1.32 ANF Abercrombie & Fitch Co 32.60 +1.68 AXL American Axle & Mfg 34.50 +1.79 DSL Downey Financial Corp 55.56 +1.06 MDC M.D.C Holdings Inc 52.80 +0.61 PNP Pan Pacific Retail Propt 32.75 +0.75 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- Ticker Company Name Close Change DFS Department 56 Inc 17.56 +1.36 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- Ticker Company Name Close Change DEO Diageo Plc ADS 54.41 +1.21 WY Weyerhauser Co 62.61 +1.49 TEVA Teva Pharmaceutical 58.71 +1.36 TLM Talisman Energy Inc 44.63 +1.05 WFT Weatherford Intl. Inc 53.33 +1.28 BVN Compania De Minas Buena 28.43 +1.24 SAH Sonic Automotive Inc 38.56 +1.78 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change AMGN Amgen Inc 48.80 -1.52 V Vivendi Universal 29.07 -1.60 STM STMicroelectronics 28.60 -1.66 QCOM QUALCOMM 26.84 -1.59 KLAC KLA-Tencor Corp 52.78 -2.43 MAR Marriott Intl. Inc 42.95 -1.03 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change ...none... ================================================================= 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 © 2002 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form.
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