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Daily Newsletter, Monday, 05/06/2002

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PremierInvestor.net Newsletter                 Monday 05-06-2002
                                                  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
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To view this email newsletter in HTML format with imbedded
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In section one:

Market Wrap:      IBM breaks to multi-year lows
Watch List:       SFAM, MCD, BRCD, SSCC, OATS
Play of the Day:  No P.O.D - Fed meeting tomorrow

******************************************************************
MARKET WRAP  (view in courier font for table alignment)
******************************************************************
       05-06-2002          High     Low     Volume Advance/Decline
DJIA     9808.04 -198.59 10023.86  9807.69  1.12 bln   1038/2130
NASDAQ   1578.48 - 34.56  1622.83  1577.93  1.77 bln   1178/2373
S&P 100   519.48 - 11.04   531.88   519.27   Totals    2216/4503
S&P 500  1052.67 - 20.76  1075.96  1052.65
RUS 2000  502.91 -  9.41   513.07   502.51
DJ TRANS 2703.94 - 40.15  2749.21  2702.48
VIX        24.88 +  1.65    24.92    22.75
VXN        49.12 +  2.86    49.12    46.02
TRIN        2.38
PUT/CALL    0.77
******************************************************************

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

IBM breaks to multi-year lows

Dow component International Business Machines (NYSE:IBM) $76.00 
-7.06% broke to multi-year lows today and sent technology and the 
Dow Industrials (INDU) 9,808 -1.98% trading lower today.  
Analyst's cautioned investors that building inventory levels at 
the computer giant would have "big blue" aggressively cutting 
prices in both hardware and software offerings and could 
negatively impact other names competing against IBM.

The Dow Industrials fell 198 points and now sits very close to 
the bearish vertical count of 9,800 from its point and figure 
chart.  Again, bearish counts can be exceeded to the downside, 
but are used to help assess further downside.

The S&P 500 Index (SPX.X) fell 20 points (-1.93%) to 1,052 as 
financials and technology woes drug this index lower.  A break of 
the 1,050 level then has the SPX vulnerable to its bearish 
vertical count of 980.

The tech-heavy NASDAQ Composite (COMPX) continues to lead the 
more heavily followed averages lower, losing 34 points (-2.14%) 
to 1,578.  Further downside risk is difficult to ascertain in 
this broader market average as the $50 box chart had the bearish 
vertical count at 1,700, which was achieved in September.  The 
$100 box (not conventional scale) would have the current bearish 
vertical count at 500.  While this may seem unrealistic to some, 
this same box size did show a bearish vertical count of 1,900 
back in October of 2000.

When IBM broke the multi-year lows of $80.00, other stocks found 
noticeable selling as tech-psychology took another hit to the 
downside.

International Business Machines Chart - Weekly Interval



The weekly interval chart of IBM gives the trader/investor the 
observation of a major break of support in IBM today.  IBM had 
not traded below the $80.00 level since it broke above that level 
on November 23, 1998.  Current support looks to be near the 
$66.50, a level that served as resistance back in August and 
September of 1998.

Exacerbating losses in IBM were comments from JP Morgan Chase 
saying that channel checks in the disk/drive sector showed a 
build in inventory and that April demand was sluggish.  JP Morgan 
saw IBM as being very competitive on pricing in the hardware area 
in order to try and boost demand for the building inventories.

JP Morgan lowered current quarter estimates on Maxtor (NYSE:MXO) 
$5.99 7.84%, Western Digital (NYSE:WDC) $5.10 -14.28% and 
Hutchinson Technology (NASDAQ:HTCH) $16.76 -6.78%, but said it 
did think valuation were attractive for MXO and WDC, trading 
between 0.4-0.5 times sales and 15-20 times earnings.  The Disk 
Drive Index (DDX.X) 84.57 -5.06% was the second largest 
percentage looser today, trailing only the Biotechnology Index's 
(BTK.X) 386.16 -5.06% loss.

PC-makers under pressure

Word that PC-makers may be experiencing a slow April had shares 
of Gateway Computer (NYSE:GTW) $4.97 -4.23% and Dell Computer 
(NASDAQ:DELL) $23.75 -2.34% under pressure.  Shares of Hewlett-
Packard (NYSE:HPQ) $18.22 +4.47% bucked the broader-market trend 
today, sporting its new stock symbol (HPQ) on the first day of 
trading for HP since buying Houston-based Compaq Computer.

Dell Computer Chart - Daily Interval



Word of a potentially "slow April" and competitive pricing in the 
desktop PC area had shares of Dell Computer (NASDAQ:DELL) $23.75 
-2.35% under pressure today.  A break below the $23.55 level 
could see a sharp decline to $21.92 near-term.  Look for 
resistance to be building at $25 with heavy overhead supply above 
that level.

Financials dragged the Dow lower too!

It wasn't just IBM's 7% decline that weighed on the Dow 
Industrials today.  Financial components like Citigroup (NYSE:C) 
$42.43 -4.19% and JP Morgan (NYSE:JPM) $34.40 -3.58% did their 
part.  Not a single stock in the AMEX Securities Broker/Dealer 
Index (XBD.X) 436.19 -4.63% closed the session in positive 
territory.

Weighing on things was Moody's saying that investigations of 
investment banks that lead to criminal indictments of individual 
firms could lead to negative rating actions.  These rating 
actions may range from rating outlook changes to rating 
downgrades, depending on circumstances, and if the course of the 
investigation turns very negative for a particular firm, then 
multiple notch downgrades are possible.  The Moody's press 
release listed the following investment banks:  Bear Stearns 
(NYSE:BSC) $60.32 -4.05%, CS First Boston, Goldman Sachs 
(NYSE:GS) $75.16 -4.31%, Lehman Bros. (NYSE:LEH) $59.99 -2.24%, 
Merrill Lynch (NYSE:MER) $41.01 -5.35%, Morgan Stanley (NYSE:MWD) 
$45.05 -6.14% and Citigroup's (NYSE:C) $42.43 -4.19% Salomon 
Smith Barney Unit.

FOMC meets tomorrow

Tomorrow at approximately 02:15 PM EST, the Federal Open Market 
Committee is expected to announce its decision on interest rates.  
Economists look for the Fed to keep the Fed Funds rate right 
where it is at, at 1.75%.

Treasuries were little changed today with the 5-year YIELD 
($FVX.X) rising marginally to 4.38%.  Both the 10-year ($TNX.X) 
and 30-year ($TYX.X) YIELDS edged higher at 5.078% and 5.549% 
respectively.

Economic data before the opening bell

Tomorrow morning at 08:30 AM EST, traders will get a look at the 
first quarter productivity data where economists are looking for 
productivity to surge to 6.8%.  In December, Q4 productivity 
gained a robust 5.2%, giving the Fed some breathing room to keep 
rates lower.

Productivity gains are a key indicator that the Fed likes to keep 
track of as productivity gains are often times associated with 
lower rates of inflations as manufacturers are able to produce 
goods more efficiently and at a lower cost.

Then after the bell

Tech traders are expected to show some jitters ahead of 
tomorrow's after the bell earnings from communications networking 
giant Cisco Systems (NASDAQ:CSCO) $12.88 -1.97%.  Consensus 
estimates among analysts are for the company to earn $0.09 a 
share.  

It's my view that CSCO will most likely be the catalyst on 
Wednesday for one of two things.  One being "total capitulation 
for technology bulls to throw in the towel, or two being an 
opportunity for a massive short covering rally in technology.

It's so difficult to every predict a market response.  However, 
It's been my view the continued cuts in IT spending among 
corporations and telecom service providers will still have Cisco 
(CSCO) giving a cautious outlook going forward.

Stay disciplined!

I feel bearish traders should continue to implement the 
systematic approach of snugging stops lower in their bearish 
trades in the technology arena.

Bullish traders need to be very selective in their bullish 
technology plays, opting for "strong stocks" that have pulled 
back to a level of support, where downside risk can be minimized 
with a tight stop loss.  

While our bullish profiled play in Applied Materials 
(NASDAQ:AMAT) $22.12 -0.22% traded with a 4% gain during today's 
session after Deutsche Banc Alex Brown said it expected AMAT to 
report a strong April quarter next week and perhaps beat 
estimates by 2-cents, IBM's break below the $80.00 did negatively 
impact the stock's trade as it witnessed selling from its best 
levels of the session.

Jeff Bailey
Senior Market Technician


==================================================================
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
---------------------------------


SpeedFam-IPEC, Inc - SFAM - close: 3.15 change: +0.15

WHAT TO WATCH: SpeedFam-IPEC manufactures chemical mechanical 
planarization (CMP) systems.  Some of the company's products are 
designed for use in the semiconductor industry.  Recent 
volatility in the stock has left an upside gap, and down side 
"fast move region", either of which could spur sharp short term 
price action in the stock.  Accordingly, traders may want to 
consider playing SFAM on the short side if it drops into the gap 
below 2.95, or buy it for a long play if it advances into its 
fast move region above 3.16.  The positive bounce back above the 
200-dma on stronger volume and the bullish pattern developing in 
the MACD look encouraging.




--- 

McDonald's Corporation - MCD - close: 29.10 change: -0.19

WHAT TO WATCH: Over the weekend, we offered a brief note on 
McDonald's, saying that MCD seemed to be moving off a longer term 
bottoming process, while establishing new short-term highs. We 
have added MCD to our Watch List because we continue to like its 
price action.   MCD was up briefly today, before fading with the 
market.  But we still like the short-term consolidation pattern.  
Watch for MCD to attempt to find support in the 28.50-28.75 
region before edging higher again.


 

--- 

Brocade Communications - BRCD - close: 21.89 change: -0.49

WHAT TO WATCH: Over the past two months BRCD has traded in a 
trend of lower highs, and is currently on the verge of breaking 
below the $21.75-22.00 support level.  The pivotal CSCO earnings 
coming tomorrow night could provide the catalyst for BRCD to fall 
below support.  P-n-f chartists may be interested to know that a 
trade at $21 will create a spread-triple sell signal.  The $22 
level also happens to coincide with the bearish vertical count.  
Another storage stock that looks like a good short is EMLX, which 
could see some substantial selling if it breaks support at $25.




--- 

Smurfit-Stone Container - SSCC - close: 16.86 change: +0.46

WHAT TO WATCH: Unlike most components of the NASDAQ-100, SSCC has 
been trading higher in recent sessions.  Last week the stock 
bounced from the bottom of its ascending channel and has since 
shown impressive relative strength versus the broader market.  
Shares also came within one box of testing bullish p-n-f support 
at $15.00.  The MACD has just signaled a bullish crossover, which 
bodes well for a continued rally.  Watch for a short-covering 
rally in the NASDAQ-100 to power SSCC over resistance at $17.50.  
This could clear the way for a move to the top of the regression 
channel near $19.00.  We would be remiss if we failed to mention 
SSCC does have historical price resistance at $18.00.


 

---

Wild Oats Markets, Inc. - OATS - cls: 13.95 change: +3.15

After consolidating for the last 5 weeks, OATS broke out hard 
today.  Although its pattern looks like it will move higher in 
coming weeks, very aggressive traders may want to short this 
stock, perhaps on a low volume advance to the 14.20-14.35 area, 
in the next day or two.  It would be essential to use an 
extremely tight buy stop. A drop from today's high of 14.33 to 
12.65 would represent a normal retracement, and the point at 
which a short position could be covered.  Bullish traders may 
want to consider long positions should shares pull back to the 
$12.00 to $12.65 levels.


 

=============
MORE TO WATCH
============= 


Intl Business Machines - IBM - close: 76.00 change: -5.78

WHAT TO WATCH: We're still kicking ourselves for not adding Big 
Blue to the Play List.  We strongly considered doing so this 
weekend, but figured that the stock may be due for a bounce off 
the $80 level (thus our weekend watch list comments for a 
potential long play).  Of course, that support level never 
materialized.  Shares shed over 7 percent today and closed at 
multi-year lows.  IBM is well below all its MA's and does not 
have historical support until $68-$70.  Negative news from the 
CSCO camp tomorrow night could send the stock even lower.  
However, keep in mind that the most recent bearish counts 
(bearish PnF price targets) were to the $73 to $70 levels.




---

Pacific Sunwear of California - PSUN - cls: 23.52 chg: -1.19

PSUN broke a 6-month up trend in the last few days and its price 
momentum, as measured by the RSI, has broken down as well.  
Aggressive traders may want to short the stock on a weak rebound 
to its breakdown region of 24.22.


 

---

Kroll, Inc. - KROL - cls: 21.15 change: +1.41

Kroll is a worldwide provider of investigation and security 
services.  The stock consolidated sideways from Jan. 2002 until 
late last week.  Kroll appears to be preparing for a longer-term 
advance and should be viewed as a potentially attractive long 
candidate.





===============
Play-of-the-day
===============

We are not listing a play-of-the-day for Tuesday due to the 
FOMC meeting tomorrow.  The opportunity for high volatility
should they surprise or the stronger possibility of very
low volatility as the market waits does not lend itself to
any one particular play that would stand out as our best
pick for that day.



=================================================================
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.

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




PremierInvestor.net Newsletter                  Monday 05-06-2002
                                                   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/e06_2.asp
=================================================================

In section two:

Net Bulls
  Closed Bearish Play:     BRCM

Active Trader
  Triggered Play:          DCX (bullish)
  Trigger Adjustments:     LTR (bullish)

High Risk/Reward
  Stop Adjustments:        DOX (bearish)

Split Trader
                           ALC: 2-for-1 split announcement

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


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

===============
NB Closed Plays
===============

  --------------------
  Closed Bearish Plays
  --------------------

Broadcom - BRCM - close: 29.94 change: -0.06 stop: 31.26

A brief jaunt below the $30 level this morning turned out to be a 
buying opportunity for intraday bulls, which would seem pretty 
brave given the declines in the Nasdaq today.  The stock bounced 
higher and violated our stop at $31.26.  This closed our short 
play for a gain of $3.58, or 10.2%.  BRCM appears to have further 
downside (it closed under $30), but at this point we'd expect a 
potential bounce.  The SOX.X is also severely oversold and could 
experience a short-covering rally at any time.

Picked on April 24th at $34.84 
Gain since picked:       +3.58
Earnings Date         04/17/02 (confirmed)





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

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

Triggered Long Play
-------------------

DaimlerChrysler - DCX - close: 46.81 change: -0.52 stop: 44.66

On Friday, May 3rd, we presented our positive view of 
DaimlerChrysler and indicated that we wanted to go long this 
stock if it dipped to an attractive buy level early this trading 
week.  DCX dropped at the open this morning, putting us in this 
trade with a buy price of 46.50, which is in an area of short 
term support.  We continue to like the consolidation pattern 
forming on DCX; any rebound in the big cap averages this week 
should benefit long positions in DaimlerChrysler.  We have set 
our sell stop at 44.66, just below both another region of support 
as well as the 50-dma.

Picked on May 6th at  $46.50  
Gain since picked:     +0.31
Earnings Date       02/20/02 (confirmed)





BULLISH PLAY UPDATE
-------------------

Loews Corporation - LTR - cls: 60.76 chg: -1.05 stop: *see text*

On Friday, May 3rd, we said that we wanted to go long Loews 
Corporation on a modest pullback to the 60.50+- level.  We did 
not quite reach that level today (the low was 60.70), but expect 
that we may be able to reach lower levels within the next few 
days.  Please note that we have decided to slightly alter our buy 
level to accommodate a stronger dip or perhaps even an opening 
gap--and, hence, a more attractive buying level.  Accordingly, 
traders should use a buy trigger of 59.90-60.50.  If our trigger 
range is hit, we will use a sell stop of 58.45.  

Picked on May xxth, at $xx.xx  <--see text
Gain since picked:      xx.xx
Earnings Date        05/09/02 (confirmed)
 




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

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

Stop Adjustments
----------------

Amdocs Ltd - DOX - close: 18.05 change: -1.68 stop: 20.01 *new*

Not a bad start for this software short.  DOX sank 8.5 percent 
today, backed by heavy volume of 10M shares.  We searched for 
news to explain the decline, but came up empty-handed.  It 
appears that investors may simply be throwing in the towel 
following the break of support at $20.  Although DOX may drop to 
the bottom of its descending channel at $16, we're going to tighten 
our stop to $20.01.  Short-term traders may want to 
consider taking gains ahead of Tuesday evening's CSCO earnings.  






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

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

Alltrista sets 2-for-1 stock split

Before the bell this morning, Alltrista Corp. (NYSE: ALC) released 
its Q1 earnings report and announced a 2-for-1 stock split.

Shareholders of record on May 20, 2002 will receive the additional 
shares on or about June 3, 2002.  This is expected to coincide 
with the change of Alltrista's name to Jarden Corp.  The name 
change is subject to a shareholder vote on May 30, 2002.

ALC has not split since it began trading in 1993, but the stock 
has more than doubled since January 1st.

Shares closed at $36.04 on Friday. For a current quote, click 
here:
http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=ALC

About the company
Alltrista Corporation is a leading provider of niche consumer 
products used in home food preservation. Tilia's FoodSaver® line 
is the U.S. market leader in home vacuum packaging systems and 
accessories. (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 

PTV     Pactiv Corp                22.41     +0.87
PMI     The PMI Group Inc          84.84     +1.34
JOSB    Jos A Bank Clothiers       19.90     +1.59

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

OATS    Wild Oats Markes Inc       13.95     +3.15
MXWL    Maxwell Technologies       13.41     +2.12
TENT    Total Entertainment Rest   12.98     +1.23
ANFI    American National Fincl    13.02     +1.02

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

WY      Weyerhauser Co             63.70     +1.09
MCO     Moody's Corp               47.18     +2.41
DORL    Doral Financial Corp       36.71     +1.23
CHD     Church & Dwight Co Inc     31.59     +2.05
CUB     Cubic Corp                 29.10     +1.65
PECS    PEC Solution Inc           26.32     +1.82
KROL    Kroll Inc                  21.15     +1.41

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

STT     State Street Corp          46.56     -3.02
AYE     Allegheny Energy Inc       38.40     -1.28
TMPW    TMP Worldwide Inc          22.88     -1.38
MRX     Medicis Pharmaceutical     49.80     -3.05
ENZN    Enzon Inc                  30.74     -3.41
SLAB    Silicon Laboratories Inc   24.50     -2.60

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

PSUN    Pacific Sunwear            23.52     -1.19
NCS     NCI Building Systems       22.91     -1.64
FDP     Fresh Del Monte Produce    23.02     -0.68
POG     Patina Oil & Gas           35.30     -0.98



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=================================================================
DISCLAIMER
=================================================================

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

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

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

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

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


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





DISCLAIMER

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

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