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Daily Newsletter, Thursday, 05/30/2002

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PremierInvestor.net Newsletter                  Thursday 05-30-2002
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In section one:

Market Wrap:      Weird Day, Interesting Ending
Play-of-the-Day:  Grawing at All-time Highs
Market Sentiment: One Day Chance


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U.S. Market Numbers
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MARKET WRAP  (view in courier font for table alignment)
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        05-30-2002        High      Low     Volume Advance/Decline
DJIA     9910.70 - 11.30  9943.50  9802.20 1236 mln   1493/1681
NASDAQ   1631.92 +  7.53  1637.65  1607.30 1360 mln   1664/1767
S&P 100   528.88 -  1.16   531.56   523.31   totals   3157/3448
S&P 500  1064.66 -  3.00  1069.50  1054.26
RUS 2000  487.83 +  0.23   489.57   482.60
DJ TRANS 2717.96 -  6.96  2725.51  2697.96
VIX        23.14 -  0.54    24.51    22.77
VIXN       46.57 -  1.00    47.66    45.04
Put/Call Ratio      0.80
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===========
Market Wrap
===========

Weird day, interesting ending

Today was perhaps what I would describe as a "weird day, with an 
interesting ending."  The markets came to a standstill at around 
10:30 AM EST today as the traders observed 2-minutes of silence 
in order to reflect on the terrorist attacks of September 11th 
and observe the end of recovery efforts at the World Trade Center 
location in Manhattan, New York.

The most widely quoted market average had the Dow Industrials 
(INDU) trading in negative territory of the bulk of the session, 
only to rally near the close of trading to finish at 9,911 -0.1%.  
Many found it interesting if not very coincidental that the day 
recovery efforts ended at the World Trade Center location from 
the September 11th attacks, having the last three digit close of 
the Dow "911" also remembering what happened in the heavily 
populated financial district.

It should also be noted that today's low in the Dow Industrials 
(INDU) came at 9,802.23.  This is once again rather peculiar as 
the Dow hasn't traded 9,800 despite some pretty close calls on 
April 29th at 9,811.57 (rallied to 10,117 following 3 sessions) 
and May 6th at 9,807.69 (rallied to 10,353.43 9 sessions later).  
It still appears this is a level of support that is still finding 
some buyers.

Volume picked up a bit from previous sessions as the NYSE total 
volume came in at 1.2 billion, compared to recent session of 
under 1 billion shares.  Volume also picked up on the NASDAQ 
Composite with just over 1.5 billion traded.  Breadth was 
marginally negative with 8 stocks declining versus 7 advancing on 
the NYSE, while decliners outnumbered gainers on the NASDAQ by a 
17 to 16 margin.

Today's trading was overshadowed with rising tensions between 
Pakistan and India, which had many traders on edge.  

Defense stocks as depicted by the PHLX Defense Index (DFX.X) 
200.98 +0.91% showed gains, after recently pulling into its 
rising 50-day moving average.

PHLX Defense Index (DFX.X) - Daily Interval




I should have perhaps been more alert last night to what was 
taking place in Pakistan and India.  There was undoubtedly some 
good trades in this group of stocks today.  The DFX.X came right 
into its trending higher 50-day moving average and the lower end 
of upward regression, both good places to be looking for some 
support and using events in the Middle East to be a catalyst for 
a near-term move higher.  It is worth noting that the "group" 
didn't surge.  

One stock in the group that did "surge" or at least had a nice 
gain was shares of Rockwell Collins (NYSE:COL) $26.52 +6.08%.  I 
did profile this stock as bullish in this morning's market 
monitor before the market open at OptionInvestor.com, 
unfortunately I didn't find it for this morning's 09:00 Update, 
but there were some strikingly similar technicals at play in COL 
that were present in the DFX.X.  This may still come in handy for 
traders in coming sessions.

Rockwell Collins Chart - Daily Interval




I don't think I was the only one that built the "correlation" 
between the DFX.X, COL, and events in the Middle East this 
morning.  We've profiled COL as bullish in the past and simply 
missed this one.  Rockwell Collins (COL) is NOT a component of 
the DFX.X, but still a "defense" stock that correlates well with 
the index.  Components of the DFX.X are (ATK, BA, DRS, EASI, EDO, 
ESL, GD, GE, GY, ITT, LLL, LMT, NOC, RTN, TDY, UTX).

So what about Goodrich?

Goodrich (NYSE:GR) $33.31 -0.44% is a "defense" stock that has 
been profiled as bullish in our play list since May 3rd.  Nope, 
they don't make tires, they are a supplier of systems and 
services to the commercial and military aviation markets.  
Today's action in GR shows the stock didn't participate in the 
"defense" bullishness and most likely that's simply due to 
current supply/demand issues.  The technicals in GR look very 
similar to the DFX.X and even COL and we're expecting a move 
higher from current levels, but want to see further bullishness 
in the sector to help out.

Goodrich Corporation Chart - Daily Interval




It has been a slow, yet gradual move higher in Goodrich (GE) 
since our profiling of the stock on May 3rd.  I think the stock 
is currently trying to "eat through" some remaining overhead 
supply dating back just prior to the terrorist attacks.  Some 
general bullishness from the defense group couldn't hurt and 
perhaps have some old bulls changing their minds about selling.  
The lower highs from MACD is worth noting, thus near-term 
importance of stock price appreciation to get MACD to kick 
higher.  If GR can get back above mid-level of regression 
(currently $34.75) then the upper end of regression near $37 is a 
good trading target.

Triple whack!

All three of the energy traders we discussed last night saw some 
downside action today as El Paso (NYSE:EP) $25.50 -5.59%, 
Williams Company (NYSE:WMB) $14.00 -9.5% and Aquila (NYSE:ILA) 
$12.38 -10.67% traded 52-week lows.

Yesterday, El Paso (EP) got crushed lower, but was defended by 
Lehman Brothers today.  Lehman upgraded EP to "buy" from "market 
perform" based on credit clarity, noting that EP's 
restructuring/repositioning action has drawn favorable reaction 
from the rating agencies, with Moody's affirming Baa2 and S&P 
commenting in a positive vein.  Lehman's 12-month price target is 
$33.  

Salomon Smith Barney on the other hand downgraded shares of El 
Paso (EP), Mirant (NYSE:MIR) $9.05 -4.02% , Auila (ILA) and 
Williams (WMB), which aided in the declines.  Salomon cited 
continued scrutiny by the debt rating agencies, mounting legal 
and regulatory risks and concerns over heightened challenges for 
their business models as reasons for downgrading.  "We believe 
all of these will likely negatively impact the earnings potential 
and growth outlooks of merchant business," said analyst Ray Niles 
in a research note.  "Until these issues are resolved, we expect 
upside for the entire group to be limited and for the most credit 
sensitive stocks to trade at or near their respective asset 
values."

I (Jeff Bailey) am not sure what "asset values" Mr. Niles is 
talking about, but I'm thinking that book value is a place to 
start.  According to recent filings here is the calculated "book 
value" for each stock mentioned by Mr. Niles.  EP=$17.56, 
MIR=$13.62, ILA= $22.43 and WMB= $11.18.

As you can see, EP and WMB still trade above their book values, 
while MIR and ILA trade below book value.

According to Investopedia.com (a financial terms dictionary), 
Book Value is basically the net asset value of a company.  
Calculated by total assets minus intangible assets (patents, 
goodwill) minus liabilities.  

I can't remember what Enron's book value was.  However, when a 
company "cooks its books" it can still be tough to be sure.  As 
always, all that really matters is what the MARKET thinks, as it 
is the eventual determiner of a stock's price.

Some reversals in technology

Part of what made today's action rather "weird" was a Wall Street 
Journal report regarding talks between that body and software 
giant Microsoft (NASDAQ:MSFT) $52.64 +1.13%.  

What?  SEC talks and a gain in the stock?  What gives here?  The 
article said that Microsoft (MSFT) and the SEC are in 
negotiations to resolve long-standing SEC allegations that the 
company artificially DIMINISHED its results to satisfy Wall 
Street's demand for steady revenue and profit growth.  
Reportedly, MSFT will not have to pay a fine, but may face civil 
charges that the company failed to keep accurate records.

Microsoft Chart - Daily Interval




I'll admit that I just don't have a directional bias on MSFT 
right now.  I've been monitoring this stock like a hawk watching 
a mouse in recent weeks.  The stock has traded strong "relative" 
to broader technology, but current technicals leave me 50/50.

As I look at it, in the past week, any time a trader shorted a 
break below the mid-point of regression, the stock rallied.  
Under recent market conditions, I would have thought the stock 
would have at least had some more volatile downward spikes.

Also confusing is I just can't get a feel for how the MARKET 
might respond to what kind of "understatement" of earnings 
Microsoft (MSFT) has been giving.  I can't say that this 
"understatement" of financials is necessarily anything new in 
financial reporting.  For years, companies like MSFT and Cisco 
Systems (NASDAQ:CSCO) $16.01 were said to have "deferred" 
revenues to try and smooth out seasonal cycles and have quarterly 
financials end up smoothing out a bit.

I'm not saying this type of accounting is correct, ethical, or 
anything else, but I was always taught that if you're going to 
represent any type of financial "result," its better to do it on 
the side of caution.

The only thing that might have made today any "weirder" was if a 
group of bears sued Microsoft (MSFT) for misrepresenting their 
financials.  I've seen just about everything else, so don't rule 
it out.

By session's end, the GSTI Software Index (GSO.X) 123.12 +2.5% 
came out as today's sector winner.

Helping the sector's gains were shares of PeopleSoft 
(NASDAQ:PSFT) $21.04 +8.51% trading strong after Soundview said 
that early gains in PSFT, ORCL, SAP and SEBL was likely due to 
channel checks in the enterprise software group, indicating 
visibility in May has significantly improved and is running ahead 
of last year, and that professional services firms are indicating 
a significant increase in requests for proposals.

For now, I (Jeff Bailey) will take some notes regarding 
Soundview's channel checks, but requests for proposals (RFPs) are 
a reason for some bears to lock in gains, but not necessarily a 
reason to get bullish on the sector.  However, I'll try and keep 
an eye on some of the stocks in the enterprise resource group 
just in case.  While Soundview didn't mention these two stocks, 
I'd also add Kronos (NASDAQ:KRON) $40.06 +0.32% and SAP 
(NYSE:SAP) $26.50 +1.53% to a watch list for Soundview's 
analysis.

Semiconductors post first gain in 8 sessions

It's been 8 consecutive days of declines for the Semiconductor 
Index (SOX.X) 480.52 +0.08%, but the streak was broken on this 
the 9th trading session.  

It didn't look good for the sector at the open as a pre-market 
comment from Prudential and trimming of earnings estimates on 
Genesis Microchip (NASDAQ:GNSS) $16.70 -28% saw that stock get 
crushed throughout the session and break to a new 52-week low.  
While GNSS is not a component of the Semiconductor Index (SOX.X), 
just the thought that a graphic chip maker was having its 
earnings estimates cut, sent some shivers through the sector.

One "positive" comment I saw today in the sector related to 
programmable chip maker Altera (NASDAQ:ALTR) $18.39 +1.26%.  In 
today's market monitor on OptionInvestor.com, I noted at 02:08:58 
PM EST....

Altera (ALTR) $18.06 -0.54% ... Prudential says their impression 
is that ALTR's new Stratix product is gaining more design-win 
momentum than firm had expected, and if this continues it should 
translate into a rapid ramp for this product over the next 
several quarters; also, software support feedback for Stratix is 
quite good, unlike several years ago with Apex, which led to 
market share losses.  Pru reiterates "buy" rating and $28 price 
target.

I viewed this as very "stock specific" and probably not a "sector 
moving" call.  For the most part, ALTR's intraday action after 
that comment from Prudential saw similar impact on the entire 
sector and broader market.

Besides, I already stuck my neck out

For now, I've gotten bullish enough in technology, specifically 
with semiconductors with Friday morning's "line in the sand" 
comments regarding a bullish 1/2 position in Intel (NASDAQ:INTC) 
$27.42 +0.55%.  Much like the SOX.X, Intel has edged lower day 
after day.

The potential for the "reverse head and shoulders" pattern from 
the bar chart has been eliminated when the stock broke below the 
$27.50 level yesterday.  However, today's trade at $27, had the 
stock testing the bullish support trend on the point and figure 
chart.  For now, stop remains as profiled in my commentary at $25 
and things would get interesting should the stock trade $32.

Yep, that seems "weird" to be thinking this way, but hey, today 
was a weird day, so I'll just try and blend in.

After hours news

Traders that may have traded shares of PDA-maker Research in 
Motion (NASDAQ:RIMM) $14.65 -2.2% from recent bearish commentary, 
are seeing some further downside action in after-hours trading 
tonight at $14.35.  

It wasn't anything RIMM said, but what fellow PDA-maker Palm Inc. 
(NASDAQ:PALM) $2.21 -4.78% said in after-hours trading.  Palm 
(PALM) announced that its Q4 revenue will be approximately $230 
million versus the consensus estimate for revenues of $297.8 
million, saying market conditions deteriorated compared to both 
the year-ago quarter and recent months.

This has most likely put another cloud on the horizon for RIMM as 
it relates to our prior thinking that Handspring's (NASDAQ:HAND) 
$2.02 -3.80 new Treo PDA might bring some further competition to 
RIMM's BlackBerry.

Tomorrow's economic data

Revised Productivity and University of Michigan Consumer 
Sentiment will be released.  The productivity revision will be 
released prior to the open, while the Michigan sentiment will 
come out during trading.

Also due out during market hours is Factor Orders for April.  
Economists are looking for a 0.3% gain.  

While the MARKET seems to have concentrated more on what is going 
on overseas than here at home in recent sessions, we never know 
what type of reaction any surprises from the economic data might 
bring.

Stay alert and don't be complacent!

Jeff Bailey
Senior Market Technician


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

Dentsply Intl. - XRAY - cls: 40.26 chg: +0.78 stop: 37.95

Company Description:
XRAY manufactures dental prosthetics, precious metal alloys for 
dental use, ceramics products for dentistry, endodontic 
instruments, injectible anesthetics, and crown and bridge 
materials.


- ORIGINAL WRITE UP: May 24th, 2002 -

Why We Like It:
In conjunction with Zacks Investment Research, Fortune Magazine 
has developed a list of "all analysts" from a field of more than 
5,500 brokerage analysts, who consistently beat their peers.  One 
of these "All Star" analysts is Ed Snyder who recently 
recommended XRAY (May 3rd).  According to his research, he 
expects XRAY to produce EPS surprises and upward earnings 
revisions in coming quarters; he believes that these EPS 
successes will drive prices higher.  The stock sports a PE of 26 
and has a projected growth rate of 27%, meaning that it trades at 
an extremely attractive PEG of under 1.00.  At a technical level, 
the stock has been in a broad sideways consolidation since mid-
April.  This past week, though, XRAY began edging very close to a 
breakout level of $40.25, doing so on increasing volume. We like 
the fact that daily and weekly momentum indicators are all at 
high levels, supporting our notion of an imminent breakout.  We 
would suggest taking long positions in XRAY once it has moved 
above a trigger price of $40.25, with a sell stop placed just 
beneath the rising 50-dma, at $37.95.  If XRAY breaks out as we 
expect, our initial price target will be $43.25 but aggressive 
traders might consider aiming for a move towards the $45 level.  
Keep an eye on the MACD.  It looks like a bullish crossover is 
imminent.

- Most Recent Update: May 30th, 2002 -

You know that agonizing combination of dread and anticipation 
that you feel when the dentist's drill starts buzzing just inches 
from your teeth?  That must be how XRAY bears feel right now.  
The stock gained nearly 2% today on strong volume of 533K versus 
the 318K average and finished over the $40 level.  That's a new 
all-time closing high.  The near-term high at $40.70 and all-time 
high at $40.95 are looking very vulnerable, especially 
considering the fact that the MACD has just produced a bullish 
crossover.  Entries can be evaluated at current levels, although 
cautious traders (or those with a longer-term approach) may want 
to wait for a close above $41.

- Play-of-the-Day Comments: May 30th, 2002 -

With the MACD signaling a fresh bullish crossover, we think odds 
are good that XRAY will be setting new all-time highs in the near 
future.  We like the close over the $40 mark and the decent 
volume.  We're looking for a follow through heading into the 
weekend.

Picked on May 28th at $40.25
Gain since picked:     +0.01
Earnings Date       04/14/02 (confirmed)





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

One Day Chance
By Eric Utley

Well, so much for the post Memorial Day rally.  Or maybe
Thursday's little late day ramp job was the beginning of the
rally.  It seems a little late, though.  The Nasdaq-100 (NDX.X)
has about 2 percent, or about 25 points to go for a positive
finish for this week, which is certainly possible with month's
end.

Those wily fund managers like to play games at the end of the
month in an attempt to try to boost short term performance,
and in turn appeasing investors who've taken it on the chin
once again this year.  With the light holiday volume it would
be pretty easy to push around tech stocks tomorrow, so that's
something to keep in mind going into the session.

Elsewhere, there was a trend in the sector scorecard that I'd
like to touch upon.  There was a concentrated amount of selling
in some of the more economically senstive sectors today, which
didn't show up in the closing figures for the broader market
averages.  What I saw was weakness in the Airlines, Cyclicals,
and Paper stocks that was disconcerting for those who are
believers in the second-half recovery thesis.

Without the participation from the aformentioned groups,
Thursday's late day rally seems to me nothing more than another
short covering rally with a bit of month-end buying thrown in.
That's not to say it won't continue into tomorrow's session,
because I think it will.  But looking out into next week,
things don't look so well for the bulls.

And at the risk of sounding like a broken record, I didn't
like the action in the CBOE Market Volatility Index (VIX.X)
Thursday.  The S&P 100 (OEX.X) finished off of its lows, but
still fractionally lower.  Yet the VIX couldn't manage to
trade higher, revealing ever more complacency in the market.
The mere sight of the rebound in the OEX was enough for the
VIX to roll over from its earlier rally attempt.  Tying this
observation in with our sector observations, I think that there's
a lot of risk to the OEX names minus tech components.

The one potentially bullish metric in tonight's sentiment is the
short term ARMS Index reading.  The 5-day moving average is
creeping back into extreme oversold readings, perhaps signaling
a short term relief rally around the corner.

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

Market Averages

DJIA ($INDU)

52-week High: 11350
52-week Low :  8062
Current     :  9912

Moving Averages:
(Simple)

 10-dma: 10127
 50-dma: 10167
200-dma:  9890

S&P 500 ($SPX)

52-week High: 1316
52-week Low :  945
Current     : 1065

Moving Averages:
(Simple)

 10-dma: 1085
 50-dma: 1103
200-dma: 1116

Nasdaq-100 ($NDX)

52-week High: 2071
52-week Low : 1089
Current     : 1128

Moving Averages:
(Simple)

 10-dma: 1269
 50-dma: 1325
200-dma: 1445


Software ($GSO)

Here's an unfamiliar sector to the best peforming spot.  But the
GSO earned it Thursday with its 2.50 percent rally on bullish
comments from Wall Street.

Leaders to the upside included Veritas (NASDAQ:VRTS), Rational
Software (NASDAQ:RATL), PeopleSoft (NASDAQ:PSFTA), and Siebel
Systems (NASDAQ:SEBL).

52-week High: 241
52-week Low : 112
Current     : 123

Moving Averages:
(Simple)

 10-dma: 126
 50-dma: 139
200-dma: 159


Gold and Silver ($XAU)

The profit takers did just that in the XAU, which earned the
day's worst performing sector spot with its 2.44 percent give
back.

Leading to the downside included Gold Fields (NYSE:GFI),
Harmony Gold (NASDAQ:HGMCY), Anglogold (NYSE:AU), and
Barrick (NYSE:ABX).

52-week High: 89
52-week Low : 49
Current     : 84

Moving Averages:
(Simple)

 10-dma: 84
 50-dma: 75
200-dma: 62

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

Market Volatility

I though we might finally witness the VIX trade higher in
conjunction with stocks Thursday, but it didn't happen.  The
fear gauge imploded on the late day rebound.

The VXN did have some stick to it, closing higher on the
rebound in the NDX.  From this little observation, I'd be
more inclined to be bullish on tech stocks for a trade than
the NYSE names.

CBOE Market Volatility Index (VIX) - 22.96 -0.07
Nasdaq-100 Volatility Index  (VXN) - 46.62 +0.91

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

          Put/Call Ratio  Call Volume   Put Volume
Total          0.82        300,464       245,610
Equity Only    0.59        257,679       152,740
OEX            1.00         12,617        12,627
QQQ            0.27         17,345         4,689

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

Bullish Percent Data

           Current   Change   Status
NYSE          63      + 0     Bull Confirmed
NASDAQ-100    40      - 1     Bull Correction
DOW           67      + 0     Bear Correction
S&P 500       64      + 0     Bull Confirmed
S&P 100       66      + 0     Bear Correction

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  1.47
10-Day Arms Index  1.22
21-Day Arms Index  1.27
55-Day Arms Index  1.31

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      1494           1697
NASDAQ    1676           1757

        New Highs      New Lows
NYSE      77             60
NASDAQ    95            133

        Volume (in millions)
NYSE     1,237
NASDAQ   1,574

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

Commitments Of Traders Report: 05/21/02

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

S&P commercials added more longs than shorts last week, resulting
in an decrease in the group's net bearish position.  Small traders
did just the opposite for a net increase in their bullish
positions.  Small traders are less than 2,000 contracts away from
their most bullish reading of the year.

Commercials   Long      Short      Net     % Of OI 
05/07/02      348,019   422,801   (74,782)   (9.7%)
05/14/02      343,941   424,893   (80,952)  (12.1%)
05/21/02      354,039   429,803   (75,764)   (9.7%)

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
05/07/02      154,664     59,583   95,081     44.4%
05/14/02      163,035     58,587  104,448     49.8%
05/21/02      164,964     58,950  106,014     47.3%

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 slightly more bullish last week with
a gain of 1,000 contracts to their net bullish position.  Small
traders on the other hand grew more bearish by adding to their
existing chunk of shorts.

Commercials   Long      Short      Net     % of OI 
05/07/02       38,338     39,152     (814)   (1.1%)
05/14/02       40,858     35,761     5,097   (5.5%)
05/21/02       51,448     45,375     6,073   (6.3%)

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
05/07/02       13,229    13,161        68      0.3%
05/14/02       11,920    17,479    (5,559)     8.2% 
05/21/02       12,567    19,899    (7,332)    22.6%

Most bearish reading of the year:  (9,877) - 12/21/01
Most bullish reading of the year:   8,460  -  3/13/01

DOW JONES INDUSTRIAL

Dow commercials grew less bullish last week by reducing their
long position and adding to their short position.  Small
traders remained flat in their actions.  

Commercials   Long      Short      Net     % of OI
05/07/02       19,967    14,045    5,922     17.4%
05/14/02       21,080    14,725    6,355     14.4% 
05/21/02       20,173    15,317    4,856     13.7%

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
05/07/02        5,124     9,831    (4,707)   (31.5%)
05/14/02        4,930    10,899    (5,969)   (25.2%) 
05/21/02        3,661     9,585    (5,924)   (44.7%)

Most bearish reading of the year:  (8,777) - 10/12/01
Most bullish reading of the year:   1,909  -  1/16/01

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




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PremierInvestor.net Newsletter                 Thursday 05-30-2002
                                                    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/e30b_2.asp
=================================================================

In section two:

Net Bulls
  Bearish Play Updates:  BRCD, CLS, TBH

Stock Bottom / Active Trader
  New Bullish Plays:     AZO, RJR
  Bullish Play Updates:  ATK, CR, DCN, DCX, GR, RIG, RSG, THC, XRAY
  Bearish Play Updates:  BA, DHR, TSG
  Closed Bullish Plays:  HRB, RKY

High Risk/Reward
  Bullish Play Updates:  LU, PVN

Split Trader
                         BEL:  3-for-2 split announcement
                         EXPD: 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
==================================================================

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

Brocade - BRCD - close: 19.11 change: +0.78 stop: 20.61 *new*

Uh-oh!  Bears need to be on alert.  Shares of BRCD bounced with 
the markets today on decent volume considering the trend.  Worse 
still was the candlestick formation created today - a bullish 
engulfing pattern, which is (big surprise) bullish.  Since the 
downtrend in the Nasdaq and BRCD are still in effect we're going 
to keep the play open but we'll lower our stop.  Shares failed 
twice last week near the $20.60 mark so our new stop will be 
$20.61.  More conservative traders might consider something just 
north of $20.00.  In the news today, BRCD filed a quarterly 
report with the SEC with answers and counterclaims against McData 
Corp who is suing Brocade over patent infringement.  BRCD claims 
the lawsuit is without merit.

Picked on May 22nd at $19.35 
Gain since picked:     +0.23
Earnings Date       04/15/02 (confirmed)




---

Celestica - CLS - close: 29.50 change: -0.20 stop: 32.01 *new*

Shares of CLS have rolled over as expected and we're very 
encouraged by the new closes under the $30 level.  The stock has 
begun to fall away from the top band of its descending regression 
channel but we did see a small afternoon bounce today.  Bears 
should also take note that the MACD is performing a beautiful 
bearish rollover right up against the zero line but this doesn't 
preclude a potential bounce back to the $30 or $30.50 area.  
Personally, we'd prefer to see CLS remain below the $30 mark and 
another failed rally there might be a new entry point.  We are 
lowering our stop to $32.01 and this will still keep the stop 
both above the top of the channel and above the 10 & 50-dma's.

Picked on May 21st at $30.94
Gain since picked:     +1.44
Earnings Date       04/17/02 (confirmed)
 



---

Telecom Brasil - TBH - close: 29.12 change: -0.28 stop: 30.01

Hmmm... one might think we've been outwitted by TBH in our 
bearish strategy.  Since we've picked it the darn thing has gone 
almost straight up (slowly) back to overhead resistance.  The 
next couple of days could be key to the future direction of TBH.  
Shares are essentially sitting just below the top edge of its 
descending regression channel (from the early March highs) and 
below the $29.65 and $30.00 overhead resistance levels.  Traders 
can watch the $29.65 level as an early warning signal.  A move 
above this mark will probably forecast that we're about to be 
stopped out.  We're still bearish but we need to see some 
confirmation and we would not recommend new positions until the 
stock began to rollover again.  However, more aggressive traders 
could certainly consider this a low risk entry since our stop is 
so close.  We did note that another south-of-the-border 
communication stock, TMX, fell pretty hard yesterday and closed 
under its 200-dma.  There was no bounce in shares of TMX today 
and this negativity could carry over into TBH again.  

Picked on May 22nd at $27.70 
Gain since picked:     -1.42
Earnings Date            N/A
 





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

=============
AT New Plays
=============

  -----------------
  New Bullish Plays
  -----------------

Autozone - AZO - close: 82.56 change: +1.91 stop: 78.94

Company Description:  
AutoZone sells auto and light truck parts, chemicals and 
accessories through 3,052 AutoZone stores in 44 states plus the 
District of Columbia in the U.S. and 27 AutoZone stores in Mexico 
and also sells the ALLDATA brand automotive diagnostic and repair 
software. On the web, AutoZone sells diagnostic and repair 
information through alldatadiy.com, and auto and light truck 
parts through AutoZone.com. (source: company press release)

Why We Like It:
In a market where investors are searching high and low for 
companies that are increasing revenues and sales, AZO might be 
just what they are looking for.  The company recently released 
their Q3 earnings report and the numbers were good.  Earnings per 
share were up 71%, net profit was up 61% and sales were up 11%.  
The EPS estimates were 78 cents and AZO turned in 96 cents a 
share, which beat the 56 cents from a year ago.  Management said 
that sales were rising as the number of aging vehicles on the 
road grows.  You might want to take note that AZO is typically 
seen as a specialty retailer and that may be what's saving it 
from the downturn that recently hit the auto-parts makers.  A 
downgrade by USB Warburg on shares of Lear Corp (LEA) and 
BorgWarner (BWA) to "hold" from "buy", claiming high valuations, 
hit the entire group.  Shares of DCN and DPH and CUM were also 
hit by the downgrade.  In contrast, buyers stepped into AZO today 
after a nice pullback to the new support/previous resistance at 
$80 (on the daily chart).  We also like the pattern on the PnF 
chart and the current bullish price objective is north of $100.  
Despite our enthusiasm for what we see in AZO we are going to be 
conservative with our stop and place it just under the $79.00 
level.  This should keep our risk less than 5%.  We're going to 
be a little aggressive and target a move to $97.50 but we'd be 
happy to see AZO hit $90.  Given the defensive nature of the 
market right now, a company that is increasing sales with a 
growing market (aging cars on the road) is bound to attract 
investor attention.

Picked on May 30th at $82.56
Gain since picked:     +0.00
Earnings Date       05/21/02 (confirmed)
 

 

--- 

RJ Reynolds - RJR - close: 70.34 change: +0.17 stop: 67.94

Company Description:
R.J. Reynolds Tobacco Holdings, Inc. is the parent company of 
R.J. Reynolds Tobacco Company and Santa Fe Natural Tobacco 
Company, Inc. R.J. Reynolds Tobacco Company is the second-largest 
tobacco company in the United States, manufacturing about one of 
every four cigarettes sold in the United States. (source: company 
press release)

Why We Like It:
Tobacco stocks are on the move.  Sector leader MO set a multi-
year high today after it announced the sale of Miller Brewing to 
South African Breweries.  Other strong stocks in the group 
include BTI, UST and RJR.  We think the latter is an attractive 
bullish play, even more so than MO.  RJR has performed nicely 
since bouncing from the 50-dma ($67.68) in mid-May and received a 
shot in the arm on Thursday after MER initiated coverage on the 
company.  This created a powerful bounce from the bottom of RJR's 
ascending regression channel.  We also like the MACD, which is 
about to produce a bullish crossover.  The previous two 
crossovers (in early February and early April) preceded strong 
rallies.  The broader market hardly seems ready to explode to the 
upside (unlike Pakistan and India), but that could actually work 
to our advantage.  Tobacco stocks are traditionally defensive 
plays that do well during market downtrends or periods of 
uncertainty.  Due to the bullish technical developments listed 
above, we think RJR will break though resistance at $72 and trade 
to all-time highs.  With no overhead supply the breakout could be 
powerful.  We're going to initially target the $75 level, 
although we wouldn't hesitate to exit if shares falter near the 
top of the regression channel around $74.  Our initial stop-loss 
is set at $67.94, just under the bottom of the channel.

Picked on May 30th at $70.34
Change since picked:   +0.00
Earnings Date       04/18/02 (confirmed)
 




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

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

Alliant Techsystems - ATK - cls: 107.29 chg: +2.27 stop: 99.33

So far, so good.  ATK outperformed the broader market today and 
tacked on 2.1%, moving above the 50-dma ($105.55) and back into 
its ascending channel.  The relative strength may have been due 
to reports that Pakistan was massing more troops along the Indian 
border.  A full-fledged outbreak of war could spark a short-term 
rally in defense contractors.  In terms of sector performance, 
the DFX.X defense index once again found support at its 50-dma 
and finished the day with a small gain.  If ATK keeps rising on 
Friday we'd anticipate some resistance at the $110 level.  
Cautious traders may want to tighten their stops to $102.27, just 
under the Wednesday low.

Picked on May 24th at $104.85
Change since picked:    +2.44
Earnings Date        05/09/02 (confirmed)


 

---

Crane Corporation - CR - cls: 27.53 chg: -0.02 stop: 26.94

In the most recent update for CR we discussed how the stock had 
bounced from what appeared to be solid support at the 50-dma.  
This level was successfully tested again on Wednesday but was 
violated after shares gapped lower this morning.  The stock 
briefly clawed its way into positive territory but ultimately was 
unable to close over the 50-dma.  Overall, we think the lighter-
than-average volume and fractional loss suggests a lack of 
direction.  Although the MACD is beginning to curl lower, the 
daily stochastics (5,3,3) are approaching the oversold extreme, 
which indicates that the recent downtrend may soon come to an 
end.  Considering that our stop is at $26.94, entries with a 
relatively small amount of risk could be considered if CR bounces 
from current levels.  Just keep in mind that CR could dip a bit 
lower to the $27 mark before it tries to rebound.

Picked on May 17th at $28.22 
Gain since picked      -0.69
Earnings Date       04/18/02 (confirmed)
 



--- 

DaimlerChrysler - DCX - close: 49.14 change: -1.13 stop: 44.66

Our automotive ADR gapped lower this morning following a triple-
digit decline on the German DAX.  The U.S. markets weren't 
exactly a bastion of strength either, and DCX trended lower with 
the Dow Jones for most of today's session before finishing with a 
loss of 2.2%.  Not only was the $50 level abandoned, but shares 
also fell below last week's lows.  Lest we get too negative, it's 
worth pointing out that the stock did not violate its two-month 
uptrend and is firmly above the 50-dma at $46.75.  The afternoon 
recovery also bodes well for the bulls.  However, if DCX does 
head lower on Friday, traders looking for new entries can target 
a bounce from the 50-dma although we'd prefer to see a bounce 
near $48.

Picked on May 6th at $46.50 
Gain since picked:    +2.64
Earnings Date      02/20/02 (confirmed)



 
---  

Dana Corp. - DCN - close: 20.85 change: -0.85 stop: 20.44

Talk about cutting it close.  On Thursday DCN pegged an intraday 
low of $20.48, just four cents above our stop.  Fortunately an 
afternoon rally in the broader market helped to lift the stock 
safely above this level.  Although we're still in the play, 
today's 3.9% loss is not encouraging.  Volume has been increasing 
over the past three days of selling.  Today's break of the 
$21.75-$22.00 support level came on the strongest volume in 
almost two weeks.  With the MACD about to produce a bearish 
crossover, we would be very cautious about entering new positions 
at this time.  A move back over the $22 level would go a long way 
in restoring our confidence in DCN.

Picked on May 17th at $22.26 
Change since picked:   -1.41
Earnings Date       04/17/02 (confirmed)
 



---

Goodrich Corp - GR - close: 33.31 change: -0.15 stop: 30.97 

Resistance at the $34 level proved too much for shares of GR, 
which lost 15 cents today.  GR actually traded under the $33 
level for a short time this afternoon before staging an 
impressive afternoon rally.  Although the stock has fallen back 
to the bottom edge of its ascending channel, the 50-dma at $32.38 
should provide support.  The DFX.X defense index bounced from its 
own 50-dma today and looks like it may have put in a near-term 
bottom.  Entries in GR can be evaluated on a bounce from the 50-
dma or a move above the relative highs between $34.00 and $34.45.

Picked on May 3rd at $31.97
Gain since picked:    +1.34
Earnings Date      04/24/02 (confirmed)


 

--- 

Transocean Inc. - RIG - close: 37.45 change: -0.75 stop: 36.84

The recent downtrend in the price of oil seems to be keeping a 
lid on oil stocks.  Crude futures (cl02n) dropped to a six-week 
low today, while the OSX.X oil service gave back 1.7%.  RIG 
followed suit with a decline of nearly 2%.  Shares tested the $37 
level but seemed to find bidders after the oil market closed 
shortly after 2:00PM.  With the daily stochastics (5,3,3) heading 
lower, we'd prefer to make RIG prove itself by trading over the 
Wednesday high of $38.41 before considering new positions.  More 
conservative traders might want to wait for a close over $39.30 
or even the $40 level.

Picked on May 23rd at $39.26
Gain since picked:     -1.81
Earnings Date:      04/30/02 (confirmed)




--- 

Republic Services - RSG - cls: 21.12 chg: +0.08 stop: 19.87

This long play was activated yesterday after RSG hit our trigger 
at $21.26.  The stock hit a 52-week high after receiving an 
upgrade from JPM.  Shares have been rangebound in the past two 
sessions, trading between $20.95 and $21.41.  The way RSG has 
consolidated last week's gains while remaining above the $21 
level bodes well for the bulls.  Some traders might want to wait 
for shares to get back above the $21.40 level or even $21.50 but 
we wouldn't mind a bounce here at $21.00.

Picked on May 30th at $21.26
Gain since picked:     -0.14
Earnings Date       04/29/02 (confirmed) 




---

Tenet Healthcare - THC - close: 74.20 change: +1.22 stop: 69.33

The healthcare sector continues to display impressive relative 
strength versus the broader market.  The HMO.X health provider 
index turned in a 1.6% gain today and shot through resistance at 
620.  The index hasn't traded this high since early May.  THC 
mirrored the sector with a 1.6% gain of its own, although trading 
was somewhat flat until the final two hours of trading.  It looks 
like the stock is picking up a head of steam that could carry it 
over the all-time high at $75.45.  Volume has been picking up 
over the past two sessions (both positive days), daily 
stochastics are rocketing higher, and a bullish MACD crossover 
looks imminent.  Entries can be evaluated at current levels, 
although conservative players may want to wait for THC to either 
move over its all-time high or pull back to the $72 level.

Picked on May 29th at $72.98
Change since picked:   +1.22
Earnings Date       04/02/02 (confirmed)
 



---

Dentsply Intl. - XRAY - cls: 40.26 chg: +0.78 stop: 37.95

You know that agonizing combination of dread and anticipation 
that you feel when the dentist's drill starts buzzing just inches 
from your teeth?  That must be how XRAY bears feel right now.  
The stock gained nearly 2% today on strong volume of 533K versus 
the 318K average and finished over the $40 level.  That's a new 
all-time closing high.  The near-term high at $40.70 and all-time 
high at $40.95 are looking very vulnerable, especially 
considering the fact that the MACD has just produced a bullish 
crossover.  Entries can be evaluated at current levels, although 
cautious traders (or those with a longer-term approach) may want 
to wait for a close above $41.

Picked on May 28th at $40.25
Gain since picked:     +0.01
Earnings Date       04/14/02 (confirmed)
 



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

Boeing Company - BA - close: 43.66 change: +0.66 stop: 45.80

After a week long downtrend we had expected the bears to keep the 
momentum going until shares touched the 200-dma.  Unfortunately, 
it appears that a new order for two planes from Alaska Airlines 
may have caused some shorts to cover prematurely.  We don't 
really see an order for two planes significantly changing the 
fundamentals for BA but it is improvement in a beleaguered 
sector.  We would probably step back from any new positions until 
we see where BA will find new overhead resistance.  It could show 
up near psychological resistance at $45, the 50-dma at $45.50 or 
$46.00 - at which case we'd be stopped out.

Picked on May 21st at $44.35
Gain since picked:     +0.69
Earnings Date       07/18/02 (unconfirmed)
 



---

Danaher Corp. - DHR - close: 67.86 change: -1.02 stop: 72.01*new*

Bears are gaining momentum in shares of DHR.  The messy head-and-
shoulders pattern the stock had been working on finally broke 
with the close below the neckline (today). If you project a 
target from the broken pattern it would point to a move to the 
$62 area, which happens to coincide with the 200-dma near $62.50.  
Short-term traders may want to consider taking profits as the 
stock approaches potential support at $65 but as indicated in our 
original write up, we're aiming for the 200-dma.  We see more 
good news for the bears as DHR not only closed below its 100-dma 
but did so on rising volume.  A glance at the PnF chart also 
shows a new bearish sell signal and a bullish-signal-reversed 
pattern (not good for long players).  The bullish support line on 
the PnF chart also corresponds closely to the 200-dma on the 
daily and our target.  This could be a good place to consider 
short-term entries as would any failed rally near $69.00.  As we 
approach the $65.00 level we'll adjust our stop again.
 
Picked on May 13th at $69.03
Gain since picked:     +1.17
Earnings Date       04/18/02 (confirmed) 




--- 

Sabre Holdings - TSG - cls: 37.63 chg: +0.06 stop: 38.11 *new*

The PnF chart may look dire for investors but the daily is 
starting to bottom out.  Shares of TSG have found support near 
its January lows.  While the trend is still bearish we're getting 
the feeling that a bounce is on the way.  Dedicated bears can 
keep the play open but we would suggest you use a wide stop above 
the 200-dma or even above $40.00.  We're going to try and salvage 
some of our gains and tighten our stop to just above the 10-dma 
at $38.11.

Picked on May 13th at $39.74
Gain since picked:     +2.11
Earnings Date       04/18/02 (confirmed)





===============
AT Closed Plays
===============

  --------------------
  Closed Bullish Plays
  --------------------

H&R Block - HRB - cls: 44.91 chg: -1.01 stop: 44.49

HRB's Board of Directors declared a regular quarterly dividend of 
16 cents/share today, but that news did little to help the stock.  
Shares gave back 2.1%, falling below both the $45 level and our 
stop at $44.49.  Our long play was closed for a loss of $2.39.  
Given the bearish MACD and daily stochastics, we would not advise 
entries at current levels.  Aggressive short-term traders could 
try to capture a bounce from the 50-dma ($43.99).  We may give 
HRB a second look if it bounces from the $42 level, which is 
bolstered by the 200-dma.

Picked on May 17th at $46.88 
Gain since picked:     -2.39
Earnings Date       06/12/02 (unconfirmed)
 

 

---

Adolph Coors - RKY - close: 65.78 change: -1.40 stop: 65.98

The beverage sector was bubbling with excitement this morning 
over the news that MO had agreed to sell Miller Brewing to South 
African Breweries.  The new company, to be called SABMiller, will 
be second only to BUD in the worldwide brewing market.  RKY 
traded lower on the news as investors speculated that the Coors 
brand may have a more difficult time competing for market share 
against the enlarged company.  The stock began to sell off around 
lunchtime and proceeded to violate our stop-loss at $65.98.  This 
closed out our play for a loss of 3.4%.  Volume came in at a 
brisk 1.1M, which is more than double the average.  With shares 
closing under the 50-dma for the first time since February and 
oscillators looking bearish, we would not be looking to buy this 
dip.

Picked on May 2nd at $68.36
Gain since picked:    -2.38
Earnings Date      04/25/02 (confirmed)






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

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

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

Lucent Technologies - LU - close: 4.85 change: +0.01 stop: *text*

More and more we're seeing LU's friends and foes in the business 
get pounded and yet LU's share price continues to build on its 
pattern of higher lows.  Of course we could just be looking too 
hard with our bullish bias.  Lest we forget, this is purely a 
technical play.  We don't see a lot of fundamental reason to buy 
LU, especially after Nortel's comments yesterday (although NT's 
comments were focused on the fiber business).  As it stands now, 
our play in LU has yet to be triggered but the slow consolidation 
under the $5.00 mark might be coiling for a breakout.  This is 
truly an aggressive play and we are fighting the sector 
downtrend.  Look for a move at or above $5.03 to go long and our 
target is the $6.00 area.  Our stop will be $4.49 when triggered.

Picked on May xth at $xx.xx <- see text
Gain since picked:    +0.00
Earnings Date      04/22/02 (confirmed) 




---

Providian Financial - PVN - cls: 7.87 chg: +0.22 stop: 6.99

A nice run into the close put the ending numbers for PVN with a 
+2.87% gain.  The stock had bounced intraday off its 50-dma on 
Wednesday when the broader markets sank for their third day in a 
row.  More aggressive traders could use today's bullishness as a 
potential signal for new entries but be aware that shares have 
struggled with the $8.00 mark twice in the last few sessions.  We 
want to remind readers that the Newsletter's exit price is 
officially $8.45 and we'll close the play should PVN trade at or 
above that level.  More conservative types could use Wednesday's 
low as a new stop but we're going to leave ours just under $7.

Picked on May 22nd at $7.66
Gain since picked:    +0.21
Earnings Date      05/06/02 (confirmed)






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

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

Bennett Environmental announces 3-for-2 stock split

Bennett Environmental, Inc. (AMEX: BEL) announced this afternoon 
that its Board of Directors had approved a 3-for-2 stock split.

Although no distribution or record dates were given, the company 
expects the split will be completed before the end of June.  Split 
Trader will relay this information as soon as it becomes 
available.

BEL has not split since it began trading in 1996.  Today's 
announcement comes after a meteoric rise in the stock's price, 
which has more than tripled in 2002. 

The stock closed at $18.70 on Thursday.  For a current quote,
click here:
http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=BEL


About the company
Bennett Environmental Inc. is a North American leader in high 
temperature treatment services for the remediation of contaminated 
soil and has provided thermal solutions to contamination problems 
throughout Canada and the US. Bennett Environmental's proprietary 
technology provides for the safe, economical and permanent 
solution to contaminated soil. Independent testing has 
consistently proven that the technology operates well within the 
most stringent criteria in North America.  (source: company press 
release)

--- 

Expeditors International declares 2-for-1 stock split

In late-breaking news this evening, Expeditors International of 
Washington (NASDAQ: EXPD) announced that its Board of Directors 
had approved a 2-for-1 stock split.

The split will take the form of a 100% stock dividend and will be 
issued on or about June 24, 2002 to shareholders of record on June 
10, 2002.

EXPD most recently split in 1999; also a 2-for-1 offering.  Shares 
have gained 4% in 2002.

The stock closed at $59.35 on Thursday.  For a current quote,
click here:
http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=EXPD


About the company
Expeditors is a global logistics company headquartered in Seattle, 
Wash. The company employs trained professionals in 167 offices and 
13 international service centers located on six continents linked 
into a seamless worldwide network through an integrated 
information management system. Services include air and ocean 
freight forwarding, vendor consolidation, customs clearance, 
marine insurance, distribution and other value added international 
logistics services. (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 

MO      Philip Morris Companies    56.58     +0.57
OHP     Oxford Health Plans Inc    48.36     +1.78
STZ     Constellation Brands Inc   29.00     +0.60
DOL     Dole Food Co               32.83     +0.51

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

MEDC    Med-Design Corp            16.60     +2.80

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

HCA     HCA Inc                    50.09     +1.69
COL     Rockwell Collins Inc       26.52     +1.52
TRI     Triad Hospitals Inc        45.60     +1.10
SFG     Stancorp Financial         56.50     +1.81
HOV     Hovnanian Enterprises      30.58     +1.13

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

GSK     GlaxoSmithKline            42.06     -1.47
DUK     Duke Energy Corp           31.78     -1.73
P       Phillips Petroleum         57.00     -1.50
BR      Burlington Resources Inc   40.27     -1.94
AVY     Avery Dennison Corp        64.06     -2.40
TDS     Telephone & Data System    74.80     -2.15

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

PTR     Petrochina Co Ltd          20.10     -0.28
AHC     Amerada Hess Corp          82.07     -0.80
OCAS    Ohio Casualty Corp         20.84     -0.96



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DISCLAIMER

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

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

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