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Daily Newsletter, Tuesday, 05/07/2002

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PremierInvestor.net Newsletter                 Tuesday 05-07-2002
                                                   section 1 of 2
Copyright  2001, All rights reserved.
Redistribution in any form is strictly prohibited.

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In section one:

Market Wrap:      Fed Leaves Rates Unchanged
Market Sentiment: Capitulation Coming?
Play-of-the-Day:  Jumping the Gap


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U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------        
      05-07-2002           High     Low     Volume Advance/Decline
DJIA     9836.55 + 28.51  9919.03  9810.53 1.35 bln   1394/1758
NASDAQ   1573.82 -  4.66  1594.57  1560.29 1.87 bln   1433/2076
S&P 100   518.22 -  1.26   523.31   517.90   Totals   2827/3834
S&P 500  1049.49 -  3.18  1058.67  1048.96             
RUS 2000  498.98 -  3.93   504.07   498.97
DJ TRANS 2683.84 - 19.57  2723.17  2681.60
VIX        24.38 -  0.50    25.10    23.94
VXN        50.00 +  0.88    50.99    49.73
TRIN        1.22 
PUT/CALL   0.75

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

Fed leaves rates unchanged

Today's FOMC decision was to leave the Fed funds rate unchanged 
at 1.75% and to leave the discount rate unchanged at 1.25%.  All 
Fed policy members voted in favor of today's "non action."  
Comments from the FOMC has the policymakers making observation 
that economic activity has been receiving considerable upward 
impetus from a marked swing in inventory investment, but the 
degree of strengthening in final demand over coming quarter, an 
essential element in sustained economic expansion, is still 
uncertain.  The policymakers added that although the stance of 
monetary policy is currently accommodative, the Committee 
believes that , for the foreseeable future, against the 
background of it long run goals of price stability and 
sustainable economic growth and of the information currently 
available, the risks are balanced with respect to the prospects 
for both goals.

Just prior to today decision on interest rates, the major market 
averages had neared their best levels of the session, but by the 
close, market participants didn't seem to find any type of over-
bullish comments from the FOMC about the economy to push stocks 
higher and stocks fell back near their session lows into the 
close.

The Dow Industrials were the only major market average to finish 
in positive territory, gaining 28 points on the session to close 
at 9,836.  Shares of defense contractor Honeywell (NYSE:HON) 
$37.80 +5% were the Dow's best performing stock, while consumer 
products maker Johnson&Johnson (NYSE:JNJ) $60.42 -2.7%.

The S&P 500 finished down 3 points at 1,049.49 and closed at its 
lowest level since October 2nd.  The broader NASDAQ-Composite 
(COMPX) had one of its better days in recent weeks, finishing 
down just 4.6 points at 1,573.

Consumer credit up 4.5% in first quarter

The Federal Reserve reported that consumer credit rose at an 
annual rate of 4.5% in the first quarter, down from a revised 
8.9% rate in the fourth quarter of 2001.  

In March alone, consumer credit grew to $4.6 billion or an annual 
rate of 3.3%.  February's growth was revised to $7 billion or 
5.1%.  Economists were looking for a $6.6 billion rise in 
consumer borrowing in March.

The consumer credit report may have had a negative impact on 
stocks today.  While it may be partially perceived as "good news" 
that consumers are "spending within their budgets" many feel (me 
included) that its the consumer that has really been carrying the 
economy.

Growth in non-revolving credit slowed substantially in the first 
quarter from its rapid fourth-quarter pace, while growth in 
revolving credit, such as credit cards, remained modest.

Revolving credit edged up 1.9% in the first quarter, following a 
revised 0.6% in the fourth quarter.  Non-revolving credit, which 
comprises all other loans, including those for automobiles, 
mobile homes, camper trailers, jumped 6.4%, after a 15.1% jump in 
the fourth quarter.  Mortgage loans are not included in the 
survey.

Earlier today, the Cambridge Consumer Credit Index showed that 
Americans are more aggressive in paying off debt and less willing 
to run up their credit cards this past month than over the past 
several months.

The consumer sensitive S&P Retail Index (RLX.X) 917.12 +1.70% was 
the strongest performing sector index today.  Dow component Wal 
Mart (NYSE:WMT) $55.01 +1.02% along with other department store 
retailers Target (NYSE:TGT) $44.94 +2.13%, J.C. Penny (NYSE:JCP) 
$22.01 +3.3%, Sears (NYSE:S) $52.46 +2.02% and Kohls (NYSE:KSS) 
$71.15 +1.23% showed gains on the session.

Deutch Bank Healthcare Conference attended by bears?

I could not find any news on JNJ today to explain the stock's 
price action, but will note the company was scheduled to be a 
presenter at the Deutsche Bank Healthcare Conference and 
presented at 03:00 PM ET.  However, shares of JNJ found sellers 
at the opening of trading and throughout the session.  Other 
notable presenters at the conference were BMET $28.01 unchanged, 
CHIR $36.65 -0.81%, OHP $44.60 -1.5%, THC $73.52 -1.68%, ABT 
$51.68 -0.95%, LLY $64.85 -1.09%, FRX $71.09 -3.39%, GENZ $35.80 
-0.7% MDT $42.63 -3.13% and CAH $69.51 -2.04%.

I didn't pull up price quotes for all of the scheduled 
presenters, but will note that there must not have been anything 
overly bullish said as many traded lower on the session.  Almost 
as if there's a "buyers strike" in the markets.

Cisco jumps in after-hours after beating estimates

After the close of trading, Cisco Systems (NASDAQ:CSCO) $13.08 
+1.47% reported pro forma net income of $0.11 a share, which beat 
consensus estimates by 2-cents.  Cisco said Q3 revenues came in 
at $4.82 billion versus consensus estimates of $4.85 billion.  
The company said bottom line results improved as gross margins 
grew to 63.6%, well above its goal of 60%, due to cost savings, 
including lower overhead and lower inventory levels.  Cisco also 
said that their products continue to take market share from their 
top-ten competitors, with revenue growth growing 2% year-over-
year versus a drop of 43% for their competitors.

Looking forward, Cisco said it sees Q4 (July) revenues 
sequentially flat or up slightly (low single digits).  
Considering Q3 revenue was $4.82 billion, a 3% growth rate would 
have Q4 revenues at $4.96 billion compared to current consensus 
of $4.99 billion.  The company said it expects gross-margins to 
remain near the lower end of the 60% range, with orders to be up 
5% sequentially, give or take 2%.  At the end of the recent 
quarter, the company's book-to-bill (orders received vs. orders 
shipped) was below one.  The trend for the recently completed 
quarter was soft orders in February, in-line for March and April 
was better than expected.  Cisco reminded investors that the 
third month was always ban end loaded.

In after-hours trading, Cisco (CSCO) traded near the $15.00 level 
and is settling out at $14.75 as I write.

Big tech gets a boost in after-hours

Tonight's earnings from Cisco (CSCO) looks to have some tech 
bulls breathing a sigh of relief as many larger cap technology 
stocks see gains.  Shares of Microsoft (NASDAQ:MSFT) $49.47 
+1.74% trade higher at $50.78, Intel (NASDAQ:INTC) $26.15 +1.43% 
is edging higher at $26.99, Applied Materials (NASDAQ:AMAT) 
$22.32 are trading $23.10 and Dell Computer (NASDAQ:DELL) $22.33 
-5.97% is seeing some activity at $23.06.

Prudential tops estimates, updates guidance

Insurance concern Prudential (NYSE:PRU) $31.16 -1.61% reported Q1 
earnings of $0.58 per share, which was $0.11 better than the 
consensus estimates looking for $0.47 a share.  Revenues rose 
14.7% year-over-year to $5.06 billion versus the $5.19 billion 
consensus.  Prudential said it expects earnings per share in the 
range of $2.10 to $2.30 for fiscal 2002 versus the current 
consensus estimate of $2.16 per share.

SEC to impose new rules

Tomorrow, the Securities and Exchange Commission will endorse new 
rules to clamp down on Wall Street research practices and said 
more changes will come as its formal inquiry into analysts' 
conflicts of interest continues.

The new rules will no longer allow analysts to be supervised by 
the investment banking department and cannot have compensation 
tied to specific investment banking transactions. As well, 
investment banking personnel can only discuss a research report 
with an analyst before its publication if the conversation is 
monitored by compliance lawyers.

Late this evening, Reuters reported that Merrill Lynch's 
(NYSE:MER) $40.80 -0.51% court appearance with New York Attorney 
General Eliot Spitzer has been pushed back until May 16 due to 
"productive discussions" between the parties.

Energy shares could get a boost

Energy shares may get a boost tomorrow morning after tonight's 
American Petroleum Institute (API) report revealed that crude 
stocks were down 4.495 million barrels for the week ended May 3.  
June Light, Sweet Crude Oil futures (cl02m) jumped 1.42% to 
$27.00 on the news.

Jeff Bailey
Senior Market Technician


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

Capitulation Coming?
By Eric Utley

My thinking was that we were going to get a big one or two
day capitulation event before a trading rally.  I'm starting
to wonder if the slow bleed will continue.  Although it feels
as if we're on the edge of a major washout in the technology
space.  Several sentiment measures are reaching extreme levels
that point towards that end.

The Nasdaq-100 ($VXN.X) has entered into a near parabolic move
higher during the last two days.  Usually when you see fear
increase at the rate at which the VXN has rallied in the last two
days it signals that a short term bottom is around the corner.
In today's session, the VXN traded up to its 200-dma, which
hasn't been traded above since last November.  At this point,
however, the VXN is confirming the fear in the Nasdaq.  It's
not by itself signaling a bottom.  What we need to see in the
coming days is skepticism in the face on any rally attempt.
Obviously if the VXN implodes on any signs of strength in NDX
stocks, then we're still far off from any meaningful trading
rally.  But a VXN with "stick" in the face of strength in stocks
may indeed confirm a turning point in the tech sector.

Certainly the oversold nature of the Nasdaq-100 Bullish
Percent ($BPNDX) lends to the possibility of a rally.  But we
must remember that the bullish percent is only a measure of
market risk, and not necessarily a forecasting tool.  We saw
the BPNDX reach zero last fall, so it's also important to
remember that the indicator can always grow more oversold.
Still, a great deal of downside risk is now out of the NDX
as measured by the low level of the NDX bullish percent.

The notoriously early ARMS Index is trading in extreme
ranges, specifically the shorter term measures of the
indicator.  The 5 and 10 day measures are now into the
extreme territory, above the key 1.50 reading.  Again, this
indicator is historically early, but generally reliable in
the bigger scheme of things.  Anytime you see Mr. Arms on
CNBC, as he was last week, you know that his index is in
extreme territory.

Whether or not we see a big one day capitulation event
remains to be seen.  That may not happen with the slow
bleed that has taken place up to this point.  Instead, we
may have been experiencing a capitulation during the last
two weeks judging by the way that some stocks have been
trading, especially in the technology space.

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

Market Averages

DJIA ($INDU)

52-week High: 11350
52-week Low :  8062
Current     :  9837

Moving Averages:
(Simple)

 10-dma:  9955
 50-dma: 10276
200-dma:  9919

S&P 500 ($SPX)

52-week High: 1316
52-week Low :  945
Current     : 1049

Moving Averages:
(Simple)

 10-dma: 1078
 50-dma: 1125
200-dma: 1126

Nasdaq-100 ($NDX)

52-week High: 2071
52-week Low : 1089
Current     : 1159

Moving Averages:
(Simple)

 10-dma: 1238
 50-dma: 1394
200-dma: 1478


Paper ($FPP)

The FPP edged into the best performing sector spot again today
with a measly gain of 0.68 percent on the day.  Continued
rotation into cyclical names boosted shares in the sector.

Sector leaders included Louisiana Pacific (NYSE:LPX),
Meadwestvaco (NYSE:MWV), Smurfit Stone & Container (NASDAQ:SSCC),
International Paper (NYSE:IP), and Boise Cascade (NYSE:BCC).

52-week High: 381
52-week Low : 269
Current     : 368

Moving Averages:
(Simple)

 10-dma: 356
 50-dma: 363
200-dma: 335


Disk Drive ($DDX)

The DDX under performed the broader market today to earn the
day's worst performing sector spot.  The index shed 2.87
percent on the day.  PC related stocks such as Dell Computer
(NASDAQ:DELL) traded poorly all day, playing into the weakness
we observed in the disk drive space.

Leaders to the downside included shares of Maxor (NYSE:MXO),
Sandisk (NASDAQ:SNDK), Read Rite (NASDAQ:RDRT), Hutchinson
(NASDAQ:HTCH), and Iomega (NYSE:IOM).

52-week High: 120
52-week Low :  59
Current     :  82

Moving Averages:
(Simple)

 10-dma: 92
 50-dma: 96
200-dma: 92

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

Market Volatility

The VIX ended higher in Monday's session, but fell back on today's
strength in blue chip names.  I'm watching for a retest of the
overhead 200-dma now at 26.37 on any short term future weakness
in the S&P 100.

Fear is on the rise in the Nasdaq-100!!  The VXN traded up to
its 200-dma in today's session before easing intraday.  Downside
risk is becoming less and less in the NDX with fear levels
rising in a near parabolic fashion.

CBOE Market Volatility Index (VIX) - 24.38 -0.50
Nasdaq-100 Volatility Index  (VXN) - 50.00 +0.88

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

          Put/Call Ratio  Call Volume   Put Volume
Total          0.75        690,185       517,539
Equity Only    0.69        579,955       401,684
OEX            1.01         19,815        20,065
QQQ            0.39         89,849        34,714

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

Bullish Percent Data

           Current   Change   Status
NYSE          63      + 0     Bull Confirmed
NASDAQ-100    17      - 2     Bear Confirmed
DOW           47      + 0     Bear Confirmed
S&P 500       58      - 1     Bear Alert
S&P 100       51      - 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  1.56
10-Day Arms Index  1.52
21-Day Arms Index  1.43
55-Day Arms Index  1.27

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      1399           1776
NASDAQ    1443           2069

        New Highs      New Lows
NYSE      102             78
NASDAQ    131            175

        Volume (in millions)
NYSE     1,360
NASDAQ   2,127

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

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


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


===============
PLAY-of-the-Day  ((BULLISH play))
===============

Timberland Company - TBL - cls: 42.29 chg: +0.54 stop: 39.95

The Timberland Company makes shoes and clothing under the 
Timberland PRO and Mountain Athletics brands. The company 
primarily sells its products in department and fitness-related 
stores around the world. In May 2001, Timberland began selling 
its brands online, through timberland.com.
 (source: company press release)


- ORIGINAL WRITE UP: May 3rd, 2002 -

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.

- Most Recent Update: May 7th, 2002 -

The S&P Retail Index (RLX.X) moved nicely higher today, up 1.7%, 
and shoe/apparel maker Timberland rode its coat tails.  We like 
the technical pattern on this stock quite a bit; it began a 
gentle advance off its 50-dma just a couple of days ago.  Short 
term, we are looking for a nice pop in its price over the next 
few days.  Our reasons are twofold.  First, TBL is on the cusp of 
moving into a price gap which it left in mid-April.  The gap runs 
from about 42.68 to 44.66.  We believe that once TBL's price 
moves above 42.68 it will advance rapidly to the upper level of 
the gap, perhaps over just a day or two.  The short term 
Stochastic Oscillator is overbought, which can be positive when 
other technical indicators, like the RSI, remain positive, and in 
the presence of a gap which seems to be begging to be filled.  
Traders will frequently enjoy a "Stochastic Pop," or a sharp 
spurt in price, when this indicator moves into its overbought 
region (before, obviously, it begins to deteriorate).  Aggressive 
traders may wish to take profits if the gap is filled, since we 
will expect a modest pullback once this occurs.

- Play-of-the-Day Comments: May 7th, 2002 -

With CSCO's earnings likely to give the Nasdaq and most of the 
tech sector a needed boost at tomorrow's open, what's a trader to 
do who wants to be long....and isn't?  Buy when everything gaps 
higher at the beginning of trading? Sure, that could work, but 
it's about as safe as sleeping under a bull dozer--with ear 
plugs. We prefer to take a slightly more prudent approach and 
suggest that active traders consider "sneaky" stocks like 
Timberland which may be initially overlooked at Wednesday's open.  
As we noted in tonight's update of TBL, there are plenty of 
positive technical reasons to expect that this stock could be an 
impressive short term performer. Its price is enjoying good 
upward momentum; it has a gap to be filled and is trading just 
below it; it has just begun to work higher after consolidating 
along its 50-dma. TBL looks like it will offer a nice combination 
of reasonable risk and good profit potential on a day (Wednesday) 
that might see all the averages sprint considerably higher most 
of the day.  

Picked on May 3rd at $41.89 
Gain since picked:    +0.40
Earnings Date      04/18/02 (confirmed)
 





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PremierInvestor.net Newsletter                  Tuesday 05-07-2002
                                                    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/e07b_2.asp
=================================================================

In section two:

Net Bulls     
  Bullish Play Updates:  SNE, TTN
  Bearish Play Updates:  CA, TBH

Stock Bottom / Active Trader
  Bullish Play Updates:  CTX, DCX, GR, LTR, MHK, SII, RKY, TBL
  Bearish Play Updates:  GCI, GDT, JPM, MER, V

High Risk/Reward
  Bullish Play Updates:  AMAT
  Bearish Play Updates:  DOX

Split Trader
  Stock Splits
                         GGG: 3-for-2 split announcement
                         YUM: 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 Play Updates
===============

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

Sony - SNE - close: 52.65 change: -1.35 stop: 51.25	

If Sony's stock is able to enjoy any of the success of its recent 
"Spider-Man" motion picture, produced by subsidiary Columbia 
Pictures, then PI investors will indeed be pleased.  Forbes 
reported on Monday that the newly released "Spider-Man" 
established a three-day record for gross revenue earned by a 
motion picture: $114 million.  However, despite the positive 
news, Sony continues to ebb up and down with Japan's Nikkei--in 
fact, their chart patterns are (surprise!) very similar.  Last 
night's 2% dive in the Nikkei put pressure on SNE, but we remain 
comfortable with the attractive technical pattern and support 
levels on the stock.

Picked on April 4th at $53.01
Gain since picked:      -0.36
Earnings Date        04/25/02 (confirmed)




---

Titan Corporation - TTN - close: 22.44 change: +0.06 stop: 20.99

Last week we reported that TTN had acquired a new contract from 
the US Navy; this week it was announced that its same subsidiary, 
Titan Systems Corporation, had scored a repeat, this time with 
the U.S. Air Force.  The new contract is worth a reported $21.5 
million.  Although the 23.00 level continues to offer a bit of 
frustrating resistance, we see nothing in TTN's technical pattern 
that changes our positive stance on the stock. However, investors 
considering new positions in TTN should probably wait until this 
resistance is taken out by a move over 23.00.

Picked on April 15th at $21.26
Change since picked:     +1.18 
Earnings Date         04/25/02 (confirmed)





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

Computer Associates - CA - cls: 17.38 chg: -0.02 stop: 17.80 *new*

With the release of CSCO's positive earnings on Tuesday evening, 
we have elected to lower the buy stop on our CA short position.  
Our thinking with respect to the CA short position is fairly 
simple: if CSCO earnings are still considered positive by the 
time the market opens on Wednesday morning (CSCO is up nearly 
1.40 in after hours trading as of 5 p.m. EDT), we could be faced 
with a strong rebound in stocks like Computer Associates.  It 
goes without saying that we would not encourage new short 
positions at this time. On the news front, CA announced this 
morning that Korea's leading Commercial Bank selected several 
Computer Associate software products to provide ebusiness 
management capabilities to the bank's next-generation financial system.

Picked on April 18th at $18.49 
Gain since picked:       +1.11
Earnings Date          05/14/02 (unconfirmed)




---

Telecom Brasil - TBH - close: 28.61 change: -0.52 stop: 30.20 *new*

Technically, out telecom short play continues to look weak.   We 
noted on May 3rd, when we first presented this play, that we were 
looking for a near term move down to the 27.50 level.  So far, 
TBH remains few percent above this level.  As long as TBH stays 
below 29.65 we'll feel comfortable.  We have elected to lower the 
buy stop to the 30.20 level to reduce our risk in our 
hypothetical position in this stock. 

Picked on May 3rd at $29.83 
Gain since picked:    +1.22
Earnings Date           N/A





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

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

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

Centex Corp - CTX - close: 56.25 change: +0.74 stop: 54.89

Shares of CTX traded higher today ahead of the Fed announcement 
about short term interest rates.  The decision to keep rates 
unchanged was expected, and Wall Street reacted with a collective 
yawn.  The interest-rate sensitive homebuilding index maintained 
its previous gains and finished with a respectable 1.0% gain, 
while CTX outperformed with a gain of 1.3%.  On Monday, shares 
bounced off the 50-dma, which happens to coincide with the 100-
dma.  As long as bulls continue to defend this level our stop 
under 55.00 will remain intact.  If the market stages a rebound 
in the next few sessions we'll be looking for a move over 59.00, 
which so far has served as formidable near-term resistance.

Picked on May 1st at $57.78 
Gain since picked:    -1.53
Earnings Date      04/23/02 (confirmed) 




--- 

DaimlerChrysler - DCX - close: 46.82 change: +0.01 stop: 44.66

We like the way that the big cap cyclical stocks, like the autos, 
continue to form attractive consolidation patterns as the broader 
market oscillates back and forth.  We noted that a German 
industrial strike might crimp DCX a bit this week, but the stock 
remains nicely above its 50-dma.  Conservative traders might be 
content to wait for the stock to break out above short term 
highs, above 48.09, which should then start DCX on a new multi-
week upward price move.  

Picked on May 6th at $46.50 
Gain since picked:    +0.32
Earnings Date      02/20/02 (confirmed)




---

Goodrich Corp - GR - close: 31.00 change: -0.02 stop: 30.74 

Over the last 2 trading weeks, Goodrich's stock price has traded 
over, on and under its 50-dma.  Tonight it closed under the 50-
dma, but we are optimistic that support, in the 30.80-30.90 level 
will hold.  The bearish challenge to our optimism is the news 
that the Pentagon, at the urging of Rumsfeld, is likely to cancel 
the $11 billion Crusader project, produced by UDI.  Shares of UDI 
are reflecting the news and this could be a damper on the entire 
defense sector.  As a counterweight to the news, tonight's 
suicide bombing in Israel might keep American investors focused 
on our own defense and they may be reluctant to sell current 
positions.

Picked on May 3rd at $31.97
Gain since picked:    -0.97
Earnings Date      04/24/02 (confirmed)




---

Loews Corporation - LTR - cls: 59.80 chg: -0.96 stop: 58.45

A long position in Loews was triggered today when it dipped into the 
59.90-60.50 region. We said Monday evening that a move into this region 
would put us in the trade. Accordingly, we are now long the stock at 
60.50, and are using a sell stop of 58.45. LTR continues to trade just 
a bit above its 50-dma and this remains positive; we think a rebound 
off this moving average is likely within the next few days.

Picked on May 7th, at $60.50 
Gain since picked:     -0.70
Earnings Date       05/09/02 (confirmed)




----

Mohawk Industries - MHK - close: 64.84 change: -1.66 stop: 62.98 

Today's 2.5% decline in MHK was a bit disconcerting, considering 
that the homebuilding sector moved higher.  Bulls were once again 
stymied by resistance at 68.00.  MHK traded over this level on 
Monday but quickly succumbed to a wave of selling.  If shares 
continue lower we'd expect the 50-dma at 63.35 to serve as 
support.  Aggressive traders could consider new entries on a 
bounce at this level.

Picked on May 3rd at $66.30
Gain since picked:    -1.46
Earnings Date      04/15/02 (confirmed)




---

Smith Intl - SII - close: 70.39 change: -0.98 stop: 68.95

Oil-related stocks weathered some selling yesterday after Iraq 
said it would end its 30-day oil embargo.  The primary concern 
was that other Arab nations would join the embargo, and the price 
of crude (cl02m) declined after it became apparent that Saddam's 
ploy had failed.  SII mirrored the sector action and dropped 
1.3%.  In this morning's trading, shares came within 16 cents of 
our stop-loss, but rebounded to finish above the 70.00 level.  If 
the OSX (oil services index) continues lower we'll expect support 
to emerge at the psychological 100 level, at which the 50-dma 
resides.  New entries in SSI can be evaluated if the stock 
continues to work higher off the 70.00 level. 

Picked on April 26th at $71.29 
Gain since picked:       -0.90
Earnings Date         05/02/02 (confirmed)




---

Adolph Coors - RKY - close: 67.35 change: -1.19 stop: 63.89

Much like a warm beer, the RKY rally finally fizzled out today.  
Shares fell below 68.00 and finished with a loss of 1.7%.  We'd 
been hoping bulls would defend this level, which had previously 
acted as resistance.  On a more positive note, we like how the 
pullback in RKY has taken place on less volume compared to last 
week's ascent.  This indicates a lack of bearish conviction.  The 
stock is also still on a triple-top p-n-f buy signal.  As long as 
the technical picture remains strong we think a rebound in the 
broader market should propel shares above 68.00.  If shares 
continue to decline, aggressive traders can target entries on a 
bounce from the 50-dma at 64.79.

Picked on May 2nd at $68.36
Gain since picked:    -1.01
Earnings Date      04/25/02 (confirmed) 




---

Timberland Company - TBL - cls: 42.29 chg: +0.54 stop: 39.95 

The S&P Retail Index (RLX.X) moved nicely higher today, up 1.7%, 
and shoe/apparel maker Timberland rode its coat tails.  We like 
the technical pattern on this stock quite a bit; it began a 
gentle advance off its 50-dma just a couple of days ago.  Short 
term, we are looking for a nice pop in its price over the next 
few days.  Our reasons are twofold.  First, TBL is on the cusp of 
moving into a price gap which it left in mid-April.  The gap runs 
from about 42.68 to 44.66.  We believe that once TBL's price 
moves above 42.68 it will advance rapidly to the upper level of 
the gap, perhaps over just a day or two.  The short term 
Stochastic Oscillator is overbought, which can be positive when 
other technical indicators, like the RSI, remain positive, and in 
the presence of a gap which seems to be begging to be filled.  
Traders will frequently enjoy a "Stochastic Pop," or a sharp 
spurt in price, when this indicator moves into its overbought 
region (before, obviously, it begins to deteriorate).  Aggressive 
traders may wish to take profits if the gap is filled, since we 
will expect a modest pullback once this occurs.

Picked on May 3rd at $41.89 
Gain since picked:    +0.40
Earnings Date      04/18/02 (confirmed)





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

Gannett Company - GCI - cls: 71.50 chg: -0.71 stop: 72.37 *new*

In our original statement on this trade, we noted that we thought GCI 
might decline, over a week or two, to the 78.6% Fibonacci retracement 
level (of the February-April advance), which was also near the 200-dma.   
In recognition of this, and the nice gains we've enjoyed thus far, we 
have decided to sharply lower our stop on this short position, as well 
as place a target price of 69.10 on the trade, a level which is just 
slightly above the 200-dma.  Accordingly traders will close out the 
trade if Gannett 1) trades down to 69.10 or lower, giving us a 7% gain 
or 2) rebounds up to our new buy stop of 72.37 (giving us a smaller 
profit).

Picked on May 3rd at $74.13 
Gain since picked:    +2.63
Earnings Date      04/16/02 (confirmed)




---

Guidant Corp - GDT - close: 37.00 change: -1.50 stop: 39.01 *new*

GDT shareholders are probably suffering a bit of heartburn today 
after the stock hit a multi-month low.  Shares dropped nearly 4% 
and finished at levels not seen since September.  It appears that 
last week's FDA approval of GDT's heart device was already priced 
into the stock; Shares are down over 10% from last Thursday's 
high. In intra-day trading GDT dropped below $36.95, which 
triggered our short play; we have tightened our buy stop on this 
trade, placing it at $39.01.  This move also created a triple-
bottom sell signal on the p-n-f chart.  Now that this play is 
active, we're targeting a move to the next level of historical 
support at $34.  We were hoping for a close under $37 but a move 
below today's low of $36.85 would help to confirm that the bears 
are in control.  Cautious traders may want to wait for this to 
occur.

Picked on May 7th at $36.94
Gain since picked:    -0.06
Earnings Date      04/18/02 (confirmed)




---

J.P. Morgan - JPM - close: 34.63 change: +0.23 stop: 35.56 *new*

JPM recovered some of Monday's losses today, gaining 23 cents to 
close just under the 50-dma.  The stock had been pressured in 
sort of a guilty by association with the news that Moody's would 
cut its debt rating on MER if the brokerage suffered a criminal 
indictment.  It's hard to read too much into today's action, but 
we did like how JPM closed at the low of the day.  On the other 
hand, shares have been trading in a trend of higher lows since 
April 11th.  Watch for a move below Monday's low of $34.24 to 
verify a break of this trend.  Note that we're tightening our 
stop to $35.56, which is two cents above today's high.  More 
aggressive traders could probably get away with a stop just above 
the 200-dma at $36.46.

Picked on April 24th at $35.40
Gain since picked:       +0.77
Earnings Date         04/17/02 (confirmed)
 



---

Merrill Lynch - MER - cls: 40.80 chg: -0.21 stop: 41.01  *new*

Shares of MER tumbled on Monday after Moody's announced that a 
criminal indictment of Merrill would result in a downgrade of 
their long-term debt.  The selling spilled over into today's 
session, as the stock lost half a percentage point.  This 
represents bearish divergence from the fractional gain in the 
XBD.X broker/dealer index.  Although MER continues to be weak, we 
think the odds may now be tilted in the bulls favor.  The XBD is 
currently sitting at a level of historical support, which happens 
to coincide with the 50% retracement level from September lows to 
January highs.  MER may also have its own support at $40.  This 
level was successfully tested today.  Furthermore, in after-hours 
news there was a report that the Thursday hearing into Merrill's 
research practices had been postponed.  This could indicate a 
possible upcoming settlement, which would likely give the stock a 
boost.  Our defensive strategy is two-fold:  First and foremost, 
we're moving our stop to $41.01.  This should protect a gain of 
6%.  Secondly, we're setting an exit price of $40.01.  We'll 
close the play if shares trade at or below this level.  Given the 
positive developments after hours, we think the first scenario is 
more likely.

Picked on April 24th at $43.72
Gain since picked:       +2.92
Earnings Date         04/17/02 (confirmed)
 



--- 

Vivendi - V - close: 27.57 change: -0.69 stop: 27.91 *new*

Sacre Bleu!  Yet another 52-week low for V.  Shares fell for yet 
another consecutive session today after S&P chopped its short-
term rating on the company.  The stock dropped as low as $26.75 
in morning trading before rebounding to finish with a 2.4% loss.  
The PI Newsletter is now sitting on a 17.3% gain and we're going 
to protect more of those gains by moving our stop down to $27.91, 
a penny above today's high.  We think this is a good placement 
for a stop because V has not traded above the previous day's high 
since last Wednesday.  We're also setting a profit target of 
$26.06.  If shares trade at or below that level, we'll close the 
play out for a 21% gain.

Picked on April 24th at $33.35
Gain since picked:       +5.78
Earnings Date         04/24/02 (confirmed)





==================================================================
HIGH RISK/HIGH REWARD (HR) section
==================================================================

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

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

Applied Materials - AMAT - close: 22.32 change: +0.20 stop: 20.89

AMAT has continued to display impressive relative strength when 
compared to the NASDAQ.  Today's gain of 0.90% outperformed the 
Composite and the semiconductor index (SOX.X), both of which 
finished with losses.  Traders still looking to go long AMAT may 
want to wait for a move over the 50-period MA on the 30-minute 
chart, which has acted as resistance for the past two sessions.  
Of course, if today's after-hours session is any indication, AMAT 
should gap above this level at tomorrow's open.  Shares were 
trading above 23.00 after strong earnings from CSCO.  This should 
buoy the entire tech sector tomorrow and may create a long-
awaited short-covering rally.  We're looking for AMAT to move 
over yesterday's high of 23.33 and test near-term resistance at 25.00.

Picked on May 2nd at   $22.99 
Change since picked:    -0.67 
Earnings Date        05/14/02 (confirmed)
 




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

Amdocs Ltd - DOX - close: 18.00 change: -0.05 stop: 20.01

Bearish traders in DOX kicked the week off in style yesterday 
after the stock plummeted 8.5%.  Selling volume was brisk, at 
10.1M versus the 2.7M average.  Due to the steep decline, we 
tightened our stop to 20.01.  Today's trading was more subdued, 
as shares traded in an extremely narrow range near the 18.00 
level for most of the day.  Although the lack of buyers is 
encouraging, DOX will likely receive a shot in the arm tomorrow.  
We think the NASDAQ (including the oversold software sector) will 
rally on the news that CSCO reported strong-than-expected Q3 
profits.  Of course, any less than positive news from the CSCO 
camp before tomorrow's open--or negative brokerage opinions--
could quickly change the bullish outlook.  If DOX does head lower 
we'll be looking for a move below today's low of 17.85.  This 
would be a violation of today's "inside day."  Note that because 
of the gap lower on Monday, our entry price is the opening price 
of 19.25, instead of our original picked price of 19.73.

Picked on May 3rd at $19.25
Gain since picked     +1.25
Earnings Date      04/23/02 (confirmed)
 




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

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

Graco declares 3-for-2 stock split

Graco Inc. (NYSE: GGG) announced this morning after the market 
opened that its Board of Directors had approved a 3-for-2 stock 
split.

The split will be payable on June 6, 2002 to stockholders of 
record on May 21, 2002.  

GGG most recently split in February 2001, also a 3-for-2 offering. 
The stock has been steadily uptrending since September and YTD is 
up by more than 11%.

The stock closed at $43.05 on Monday. For a current quote, click here:

http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=GGG

About the company
Graco Inc. supplies technology and expertise for the management of 
fluids in both industrial and commercial applications. It designs, 
manufactures and markets systems and equipment to move, measure, 
control, dispense and spray fluid materials. (source: company 
press release)

--- 

Tricon Global delivers 2-for-1 split.  Cheesy bread not included.

After the bell today, Tricon Global Restaurants Inc. (NYSE: YUM) 
announced a 2-for-1 stock split.  

The split will take the form of a 100% stock dividend and will be 
distributed on June 17, 2002 to shareholders of record on June 6, 
2002.  Split-adjusted trading will commence on June 18.

YUM has benefited from bullishness in the restaurant sector and 
has gained 68% from its September lows.  Shares are currently 
trading at multi-year highs.

The stock closed at $62.95 on Monday. For a current quote, click here:

http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=YUM

About the company
Tricon Global Restaurants Inc, based in Louisville, Kentucky, is 
the world's largest restaurant company in terms of system units 
with over 30,000 restaurants in over 100 countries and 
territories. The company's brands -- KFC, Pizza Hut and Taco Bell 
-- are the global leaders of the chicken, pizza and Mexican-style 
restaurant categories, respectively. (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 

EXC     Exelon Corp                56.27     +0.87
DFS     Department 56 Inc          19.10     +0.59
XMM     Cross Media Marketing      13.35     +0.65

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

MGEN    Micro General Corp         18.61     +1.13
AMZ     American Medical Sec Inc   19.60     +2.10
MXWL    Maxwell Technologies       14.50     +1.09

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

CTAS    Cintas Corp                53.25     +2.30
EFX     Equifax Inc                28.68     +1.17
FAST    Fastenal Company           85.18     +1.49
WFMI    Whole Foods Market Inc     49.70     +1.57
HSIC    Henry Schein Inc           49.16     +1.90
COLM    Columbia Sportswear Co     39.88     +1.55
FLM     Fleming Companies Inc      24.83     +2.38

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

JNJ     Johnson & Johnson          60.42     -1.68
DELL    Dell Computer Corp         22.33     -1.42
SAP     SAP Ag ADS                 28.75     -1.10
TV      Grupo Televisa Sa          43.18     -1.01
QCOM    QUALCOMM Inc               24.80     -1.65
BRCM    Broadcom Corp              24.72     -5.22

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

WLP     Wellpoint Health Network   73.31     -2.66
ATH     Anthem Inc                 67.59     -1.91
MME     Mid-Atlantic Med Service   33.36     -2.41
HUG     Hughes Supply Inc          37.95     -3.26
CDI     CDI Corp                   28.90     -1.08
DP      Diagnostic Products Corp   49.17     -0.64



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