PremierInvestor.net Newsletter Monday 06-17-2002 section 1 of 2 Copyright © 2001, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= To view this email newsletter in HTML format with imbedded charts and graphs, click here: http://www.PremierInvestor.net/htmlemail/f17b_1.asp ================================================================= In section one: Market Wrap: Short Term Bullish, Longer Term Bearish Watch List: AMGN, CMVT, E, EBAY, STJ, and lots more... Play of the Day: Biotech Bounce ****************************************************************** MARKET WRAP (view in courier font for table alignment) ****************************************************************** 06-17-2002 High Low Volume Advance/Decline DJIA 9687.42 +213.21 9687.77 9476.50 1.23 bln 2400/ 821 NASDAQ 1553.29 + 48.55 1555.07 1519.26 1.59 bln 2332/1138 S&P 100 516.18 + 14.42 516.18 501.76 Totals 4732/1959 S&P 500 1036.17 + 28.90 1036.17 1007.27 RUS 2000 470.74 + 11.67 470.75 459.07 DJ TRANS 2729.93 + 56.79 2735.24 2672.85 VIX 27.62 - 2.31 29.12 27.00 VXN 54.98 - 0.69 55.33 53.30 TRIN 0.35 PUT/CALL 0.75 ****************************************************************** =========== Market Wrap =========== SHORT TERM BULLISH; LONGER TERM BEARISH ORCL reports earnings after the bell on Tuesday. It could be the catalyst that the techs need to jettison them higher, and cause the bears to scream more loudly--for a while, anyway. The major indexes have come roaring back after plunging at Friday's open. The powerful rebounds we've seen in the Dow, NASDAQ, Semiconductors, Biotechs, Internets, Networkers--and others--have left a lot of us wondering if a bottom was reached last week. My belief is "no." With that said, it is important for traders to respect the current rebound, but recognize that it is likely to be about as loyal as a rattlesnake. I continue to be bearish as I look out into the summer. For this week, though--and perhaps part of next--I've got my bull suit on. How high can the Dow go before it faces another serious drop? My best estimate is 9900-10,000. A failed rally in this region gets my bear claws back out. On Friday, Arch Crawford--a unique combination of technical analyst and astrological observer--told CNBC that major astrological events were shaping up to give the market averages a huge tumble sometime between June 20th - June 23rd. Now, it's easy to dismiss any kind of market prognostication founded (at least in part) on astrological alignments and such. I use to. But I've seen enough human behavior affected by lunar events--ask your local ER physician or 3rd grade teacher how those under their care behave around a full moon--and you'll get plenty of anecdotal evidence. The answer isn't pretty. Humans act irrationally. My point? This is triple witching options expiration week. Plant that on top of Arch's views, and a Dow that perhaps rebounds sharply to the 10,000 region and.....well, you'll have all the ingredients irrational investors need to act irrationally. That doesn't mean the market will go to 7000. But it does mean to me that we could have a very explosive end to this week--either up or down. Don't get co placement. Today's Market: The economic and earnings calendar was essentially blank today. Substantive market news was limited, and the markets largely reacted to the kind of panicked short covering that results when a deeply oversold market decides it's time for the bears to wail a bit. Here are a few of the individual items that may have gotten lost in today's scramble by the bears; maybe they'll have more influence in coming days: McDonalds (MCD)--you know, the hamburger people--raised earnings guidance for their second quarter as well as for the full year. MCD sprinted higher today by 2.5% IBM was whacked by Salomon Smith Barney, which said that it looks for IBM to report lowered Q2 earnings. The firm said that IBM might pre-announce the lowered earnings estimates in late June or early July. In the face of this statement, though, IBM advanced $0.95 to finish the day at $77.12. If you're looking for an event to take the market down hard after the current rebound ends, this could be it. JPMorgan offered similar caution with respect to Caterpillar (CAT). The firm said that CAT might lower guidance when it releases its sales data on Tuesday. CAT traded down about 1/2% on the brokerage's remarks. Abbott Labs (ABT), which has been lambasted in recent trading sessions, announced that it had entered a joint distribution agreement with OraSure to market a test that determines if someone has HIV within 30 minutes. ABT was up about 3% on the news. Looking for a trade the moves big in a short period of time? ABT may be one for you, then. Once the stock is above the $39.25 region, it has little resistance. A short sharp pop to $44 - $45 would not be out of the question. Getting Ready For Tuesday, June 18th. The big event for tomorrow will be Oracle (ORCL), which reports earnings after the close of Tuesday's trading. With the market gaining strength in the last couple of trading sessions, any positive word that emanates from ORCL has the ability to set a fire under the tech sector. CSCO and SUNW will present at the Thomas Weisel Partners Growth Forum on Tuesday, and this increases the prospect of intraday volatility as well, if either offers unexpectedly positive, or negative, remarks. But the market will need to contend with other events as well on Tuesday, all of which might influence where it goes. Earnings to be released on Tuesday will include Best Buy (BBY), Circuit City (CC), Jabil Circuit (JBL) and Lehman Brothers (LEH)--as well as ORCL. Economically, we'll have the CPI for May released before trading begins; it will be joined by the Housing Starts and Building Permit reports. The technical pattern on ORCL is certainly short-term positive. The daily chart below illustrates a couple of these attributes: ORCL formed a double bottom at the end of May, with a bullish RSI divergence, and this can be a strong reversal formation. For the first time since March, ORCL has seen its RSI-- which leads prices by a day or two--break above its resistance line. ORCL closed today at $9.20. It could bump into resistance at its 50-dma (thick blue line), $9.55. However, a double bottom with bullish RSI divergence usually produces a rebound strong enough to pierce such a nearby barrier. My best estimate is that ORCL trades up to at least the 38.2% Fibonacci retracement in coming days, which is at $10.85. Taking all of the above into consideration, the technical picture on ORCL seems to suggest that the market will applaud its earning report--or at least it will not be bludgeoned. Hey, I'm just reading the tealeaves, gang. DAILY PRICE CHART OF ORACLE (ORCL) Now, here are some thoughts on other major indexes (ok, and an average): The Dow Jones Industrial Average (INDU) Looks Like It Will Move Much Lower In Coming Weeks; It Closed at 9687: Although I am short term bullish on the market--over the next week or so--I remain bearish into the summer. As I have noted previously in my Market Wrap, the Dow formed a triangular consolidation on its weekly chart; three weeks ago when it broke through the lower boundary of that triangle (see chart below) I became very cautious on the Dow and the rest of the market. As the chart below suggests, 1) the Dow shows no indication it is ready to rebound back into the triangle, 2) the best it is likely to do in the current rebound is assault the lower boundary, which now stands in the 9000-10,000 area--and then turn back down, and 3) the Dow seems destined to decline to at least the 61.8% Fibonacci retracement, which presently sits at 9166. WEEKLY PRICE CHART OF DOW JONES INDUSTRIAL AVERAGE Nasdaq Composite (COMPX) Closed at 1553; It's Headed Lower in Coming Weeks As Well: I have mentioned my view of the COMPX recently, and that is this: it is probably headed to the 1240 region before the summer is over. Short term, though, the COMPX has already begun a sharp rebound consistent with my forecast from last week. In the last two days, the COMPX has seen its price-leading RSI break out of a decline, suggesting to me that the index will rebound in coming days to either 1) its 38.2% Fibonacci retracement (1565)--the point to which an index like the COMPX will frequently return after sharp declines, or 2) the "standard" 61.8% retracement (1637). DAILY PRICE CHART OF NASDAQ COMPOSITE (COMPX) The Russell 2000 Index (RUT) Closed at 471. It Is Still Headed Lower After Its Short Term Rebound: I continue to think that the Russell 2000 Index (RUT) will see lower levels after this week's (and maybe part of next's) rebound. The weekly chart of the index (below) illustrates that it has yet to fully decline to either the 127% or 161.8% Fibonacci retracements of its February - April advance. Why do I use these retracements? Once a decline has smashed through an index's 78.6% retracement, as the RUT did three weeks ago, the next most frequent points at which an index will attempt a sustained rebound are 127% and 161.8%. As a result, I continue to expect that the RUT will decline to at least the 433-440 region later this summer before it is ready to offer investors another crack at big gains from these small stocks. Short term--this week and next--look for the RUT to attempt to reach 494 before it stalls and turns back down. WEEKLY PRICE CHART OF RUSSELL 2000 INDEX (RUT) PI Readers--I try to offer my technical views on various indexes in "Market Wraps" which I pen each Monday, Wednesday and every other Friday. Do you have one at which you'd like me to take a gander? If so, drop me a note: brian@PremierInvestor.net Lastly, remember my remarks about Arch Crawford, triple witching options expiration, and a sharp rebound. We could be in for some wild fireworks toward the end of this week, or early next. Keep those trading seat belts tightened! It's the law! Siegfried Brian Barger, Editor ================================================================== WATCH LIST ================================================================== The PremierInvestor.net watch list is not designed to be read as full fledged stock picks. Rather we would prefer to offer it as an extra tool in today's investor toolbox. Think of it as a radar screen with your own radar operator pointing out interesting developments, technical patterns or potential plays that you may or may not have seen on your own. Due to time constraints we do glance at the news but rarely do we have time to fully read pertinent news stories, due background research and other necessary screens that investors should do before making a decision. A common exercise is to read the entry, glance at the sector and other stocks in that industry and then compare what's happening in the stock to what's happening in the broader market indices. We hope you enjoy the Watch List and that it proves to be a useful tool for your own trading success. STOCKS WORTH WATCHING --------------------------------- Amgen - AMGN - close: 42.70 change: +2.52 WHAT TO WATCH: The Biotech Index (BTK) was a sizzzzzler today, with AMGN leading the way after an upgrade by AG Edwards. AMGN has advanced the last couple of days on very strong volume, and this is probably the kind of bucking bronco that you just need to grab--and then hold on to for dear life! The stock should have good support at about $40.00, and aggressive traders may want to pounce on this thing if profit-takers push it down intraday to the $41.00 level. It looks to us like it could go to $47.00 if the BTK rebound continues this week. We'd keep a fairly tight stop on a long position in AMZN: when it has run its course, it is likely to reverse quite quickly. --- Comverse Technology - CMVT - close: 10.64 change: +0.50 WHAT TO WATCH: We like that hot market action in the technology sector, but we don't think it will last very long: maybe a few days before more weakness. With that kind of market view, we're inclined to go long only those stocks that have very strong patterns....or which possess gaps (or fast move regions) likely to be filled. CMVT is one of those stocks with a fast move region. Once CMVT is above $10.67, look it to move within a day or two to resistance in the $11.65 - $12.00 region. This is not a stock to fall in love with--just date. If it moves like we think it can, we'd be booking our gains as soon as it hits this region. Don't stick around for the next wave of decline. --- ENI SpA - E - close: 77.35 change: +2.45 WHAT TO WATCH: This Italian Oil Company's ADR is looking ripe for a breakout. Resistance at $78 has held firm on two past previous attempts. The bears successfully defended that level today, but the bullish MACD indicates that it may just be a matter of time before E breaks higher. Today's volume was also impressive, coming in at more than twice the daily average. Possible entries could be considered on an intraday move over $78.00, while those who are more cautious may want to wait for a close over that level. A pullback to the 50-dma ($75.29) might also be worth taking a look at. Speaking of volume, note that E trades on a relatively light 80K shares/day. --- eBay Inc. - EBAY - close: 63.10 change: +4.06 WHAT TO WATCH: A banner day for the Internets! In a performance worthy of the sector's glory years, AMZN, EBAY, and YHOO all posted substantial gains. We couldn't find any news to explain the bullishness. What's really impressive is the fact that these weren't simply stocks bouncing back from extremely oversold conditions (as is the case with say...the Biotech sector). EBAY in particular has held up well versus the NASDAQ and was already trading near relative highs before today's 6.8% gain propelled the stock to levels not seen since early January. If the recent trend continues it'll just be a matter of time before EBAY revisits the $70 area. Of course, this isn't 1999, and the stock will more than likely pull back at some point to consolidate some of its recent gains. Traders looking for entries should watch for a dip to the $60-$61 level. --- St. Jude Medical - STJ - close: 80.20 change: +1.75 WHAT TO WATCH: Since bottoming out near $58 in September, STJ has trended higher in a clearly defined channel. Just as it appeared that the channel would be broken by last week's selloff (prompted by a brokerage downgrade), the 200-dma saved the day. Shares found support at this moving average and proceeded to gain about four points in just two sessions. This bounce has led to some rather bullish oscillators, with both the MACD and daily stochastics (5,3,3) curling higher from the oversold region. Entries can be evaluated on a pullback to the $78 level or on a move above today's high at $80.37. --- Northrop Grumman - NOC - close: 126.05 change: +3.92 WHAT TO WATCH: This weekend it became known that President Bush had given the CIA a wide range of options to oust Saddam Hussein, including the use of force. While war with Iraq is not yet on the immediate horizon, this policy change does indicate that the Bush administration is seriously planning such an invasion. The defense sector responded enthusiastically to this news. BA, ATK, HON, and NOC all posted large gains, and the DFX.X defense index tacked on about 3%. We think NOC in particular is one of the best ways to play the sector. The stock has been relatively strong versus the defense group and is trading mere pennies from its 52-week high. A move above $126.16 could lead to another leg higher. The recent bullish MACD crossover suggests that such a rally would have staying power. P-n-f charts may also want to note that a trade at $128 would create a double-top buy signal. ============= MORE TO WATCH ============= Crown Cork Seal - CCK - close: 7.95 change: +0.05 Since May 29th CCK has been walking up a pattern of higher lows. While rising lows might LOOK good, they are technically dangerous when their trend line is broken. CCK has just started to break this trend line. It is a short once it is back under 7.85, we think. The stock could drop to $6.00, or slightly lower, within a week's time. --- First Health Group - FHCC - close: 29.32 change: +1.07 FHCC has just bounced off its 50-dma and is looking like a candidate ready for breakout. If you go long this stock, remember that it will likely be affected by eventual weakness in the broader market--once that occurs. Be sure to read our Market Wraps. Once we say more market weakness is at hand, it wouldn't be a bad time to take profits in this stock. With a little luck it could hit $31 - $32 before declining again. --- Lowes Companies - LOW - close: 47.79 change: +0.05 Lowes broke down late last week, falling outside of its recent consolidation triangle. But it reversed sharply today, spiking right back into the triangle. We like this kind of reversal back into a triangle because it usually precedes a breakout (of the triangle) and powerful advance. We like LOW as long as it remains above $47.00. --- VERITAS Software - VRTS - close: 24.30 change: +1.66 Since bottoming out at $19.21 last Wednesday, VRTS has gained more than 26%. That's some serious short covering! Based on our belief that this rally is not sustainable, we'd be looking to enter short positions on a failed rally near $25.00. Even better would be a rollover from the 50-dma at $26.74. We'd be using tight stops to avoid getting caught in another round of buying. --- Procter & Gamble - PG - close: 93.90 change: +2.35 PG staged a convincing bounce from just below the bottom of its ascending channel. The stock is now trading at 52-week highs and looks ready for a move to the $100 level. A move above $94.00 could provide a possible action point to go long. =============== Play-of-the-day (BULLISH) =============== Biogen, Inc. - BGEN - close: 44.01 change: +1.59 stop: 41.10 Company Description: Biogen, Inc., winner of the U.S. National Medal of Technology, is a biopharmaceutical company principally engaged in discovering and developing drugs for human healthcare through genetic engineering. Headquartered in Cambridge, MA, the Company's revenues are generated from international sales of AVONEX. (Interferon beta-1a) for treatment of relapsing forms of multiple sclerosis, and from the worldwide sales by licensees of a number of products covered under patents controlled by the Company (source: Company website) - ORIGINAL WRITE UP: June 13th, 2002 - Why We Like It: Our selection of Biogen is closely related to our current market view. And that is this: the stock market remains very weak longer term (looking out over the summer) but short term we think there exists the prospect of a sharp snap-back rebound. As such, we currently only wish to assume long positions in those equities most likely to advance quickly during such a short market rebound. Technically, the kind of price pattern most consistent with our goal is the price gap. Biogen has left two nearby gaps on its chart in the last 3 weeks, and both run from about $43.00 to $47.00. Our interest is very simple: we only want to be long BGEN as it moves into the gap. We're optimistic that tonight's positive FDA news on Biogen's psoriasis drug (Amevive)--as well as recent upgrades by AG Edwards on June 10th and SG Cowen on June 3rd--will conspire to push BGEN into its gap in the next several days. Our strategy is this: first, we will only go long BGEN once it moves into it's gap, above $43.00. Second, we WILL NOT buy BGEN if is gaps up into this gap; we want to buy it as it simply trades into this region. Finally, once triggered, we will use a sell stop of $41.10, which is just below a region of support on our hourly charts. We'll be looking for BGEN to advance all the way to the top of the gap, at about $47.00. - Most Recent Update: June 14th, 2002 - On a day when the general market was extremely volatile--and at times extremely weak--the biotechs were standouts on the upside. The Biotech Index (BTK) was up over 4%, and BGEN scrambled up over 7%. Helped by last night's positive FDA news concerning its psoriasis drug, and today's SunTrust Robinson Humphrey's rating of "outperform", BGEN's strength was accompanied by healthy moves in AMGN and MLNM, among others. But Biogen's advance on Friday still left it short of our trigger point, and this trade remains to be initiated. Our strategy has been changed just slightly: we still wish to only go long once BGEN moves into its gap, but we've upped the entry level to $43.60; please remember that we will NOT buy it if it gaps up into the +$43.00 region; we want to buy it as it simply trades into this region. Finally, once triggered, we will use a sell stop of $41.10. We'll be looking for BGEN to advance all the way to the top of the gap, and resistance in that area, which is in the $47.00 - 48.50. - Play-of-the-Day Comments: June 17th, 2002 - The Biotechnology Index (BTK) was on fire today--shooting up 5.8%--and stocks like BGEN rode the advance hard. The BTK was helped by an upgrade of the Biotech granddaddy, Amgen, by AG Edwards. As readers may recall, on Friday we increased our trigger level to $43.60, and BGEN hit this level during morning trading. Our buy stop is at $41.10. We continue to expect that BGEN can advance all the way to the top of its gap--and an associated resistance region--which are in the $47.00 - $48.50 area. As BGEN moves toward this region, we'll be tightening our stop aggressively. It was also encouraging to see the stock close over it's 50-dma ($43.60) today. BGEN hasn't accomplished that feat since early March. Picked on June 17th at $43.60 Gain since picked: +0.41 Earnings Date 7/18/02 (confirmed) ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. PremierInvestor.net staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control. Please read our disclaimer at: http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html ***************************************************************** ADVERTISING INFORMATION For more information on advertising in PremierInvestor.net Newsletter, or any Premier Investor Network newsletter please contact Contact Support. ***************************************************************** Copyright © 2001 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter Monday 06-17-2002 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/f17b_2.asp ================================================================= In section two: Net Bulls Triggered Plays: MSFT (bullish) Closed Bearish Plays: IBM, NVDA, TEK High Risk/Reward Triggered Plays: BGEN (bullish) Stop Adjustments: AMZN (bullish) Trigger Adjustments: PPL (bearish) Closed Bearish Plays: MYG, MVK Split Trader MLAN: 2-for-1 split announcement REXL: 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 =============== Triggered Long Plays --------------------- Microsoft - MSFT - close: 55.68 change: +0.43 stop: 52.93 MSFT traded to a new relative high today, thanks in large part the continued NASDAQ rally. Our play was activated at the opening price of $55.66 after shares gapped above our entry trigger at $55.62. We'll now be watching for a move above today's high ($56.44) to open the door for a test of the $58 level. Remember that our stop is set at $52.93. =============== NB Closed Plays =============== -------------------- Closed Bearish Plays -------------------- Intl Business Mach - IBM - cls: 77.14 chg: +0.97 stop: 77.41 Friday's reversal in both the NASDAQ and IBM had us getting cautious on this short play. The positive short-term oscillators indicated that another bullish session in the tech sector could bounce us out of this short play. That was the case today, as IBM followed the NASDAQ higher and violated our stop at $77.41. Our play was closed for a 3.2% loss. Although our longer-term outlook for IBM is bearish (it's trading near multi-year lows and is still stuck in a descending channel), the uptrending MACD, RSI, and Stochastics suggest that odds are weighted in the bulls' favor. This view is bolstered by the fact that investors seemed to ignore the fact that Solomon Smith Barney slashed their FY02 earnings forecast on the company. A failed rally at $80.00 or $82.00 (near the 50-dma) would renew our bearish interest. Picked on June 12th at $74.94 Gain since picked: -2.47 Earnings Date 04/17/02 (confirmed) --- NVIDIA Corp - NVDA - close: 28.43 change: +0.25 stop: 29.01 Our short play in NVDA was closed for an 8.8% loss this morning after the stock hit our stop at $29.01. NVDA sure looked technically ripe for a retest of its September lows last week...So what went wrong? The "market - sector - stock" axiom really applies in this case. That is to say, the majority of a stock's movement is determined by the action in both its own sector and the broader market. After tracing a low of 404 on Friday, the semiconductor index (SOX.X) bounced higher with the NASDAQ. The action in NVDA was much the same, with shares putting in a near-term bottom at $25.74. Despite the less-than- ideal timing of this play, we still maintain a bearish outlook on NVDA. We would consider shorting a failed rally at $30.00- $32.00. Picked on June 14th at $26.64 Gain since picked: -2.37 Earnings Date 05/22/02 (confirmed) --- Tektronix - TEK - cls: 19.37 chg: +0.59 stop: 19.46 We had planned to exit TEK ahead of the company's earnings report on Thursday, but that decision was hastened today when the stock experienced a 3.1% rally. Shares moved higher with the broader markets and popped above our stop-loss shortly before noon. This closed our play for a small gain of 9 cents. With TEK subject to possible post-earnings volatility, we would not be looking to hold any positions at this time. Picked on June 7th at $19.55 Gain since picked: +0.09 Earnings Date 06/20/02 (confirmed) ================================================================== HIGH RISK/HIGH REWARD (HR) section ================================================================== =============== HR Play Updates =============== Triggered Long Plays --------------------- Biogen - BGEN - close: 44.01 change: +1.59 stop: 41.10 The Biotechnology Index (BTK) was on fire today--shooting up 5.8%--and stocks like BGEN rode the advance hard. The BTK was helped by an upgrade of the Biotech granddaddy, Amgen, by AG Edwards. As readers may recall, on Friday we increased our trigger level to $43.60, and BGEN hit this level during morning trading. Our stop is at $41.10. We continue to expect that BGEN can advance all the way to the top of its gap--and an associated resistance region--which are in the $47.00 - $48.50 area. As BGEN moves toward this region, we'll be tightening our stop aggressively. Picked on June xth at $43.60 Gain since picked: +0.51 Earnings Date 7/18/02 (confirmed) Stop Adjustments ---------------- Amazon.com, Inc. - AMZN - cls: 18.41 chg: +1.59 stp: 16.19 *new* As we mentioned on Friday, we were expecting near-term bullishness in the tech sector, and AMZN was able to put this bullishness to good use today, closing just a few cents below its intraday high. Amazon may have been helped by Sony's designation of AMZN as an "authorized Internet dealer," allowing it to buy, then resell, a variety of electronic products to its members. We have established a stop on this long position just below the lows of last week and the 50-dma; our stop has accordingly been placed at $16.19. Please remember that our initial profit target will be the $22 level, although we won't hesitate to take our gains off the table if shares have trouble getting over the $20.00 resistance region. Picked on June 14th at $16.82 Gain since picked: +1.59 Earnings Date 04/23/02 (confirmed) Trigger Adjustments ------------------- PPL Corporation - PPL - close: 30.28 change: -0.35 stop: *text* We said on Friday that we would attempt to short PPL on Monday morning--at its opening price--as long as this price met two criteria: 1) the stock did not open above $31.00 or 2) it did not gap down below $29.90. Unfortunately, PPL did gap down with a vengeance, and the first trade of the day was at $29.00. As such, this trade has not been triggered....but we're going to give it another shot. Although PPL's CFO sent a letter to analysts this morning, saying that the Public Utilities Commission has not claimed PPL violated any law, and that PPL has "acted ethically and legally, in compliance with all applicable laws and regulations." This news allowed the stock to rebound sharply off the opening low, trading over $30.00 most of the day. PPL continues to have fairly stiff resistance between 32.00 - $33.50, and we are going to attempt to short it, again, if it begins to approach this region. The specifics of our strategy will be as follows: we will short PPL on any move between $31.60 - $32.50. That is, if PPL gaps up into this region...or if it simply trades up into it intraday, we'll short the stock. We will NOT short PPL below $31.60 or if it were to gap up, above $32.50. Once--if--the trade is finally triggered, we'll use a buy stop of $33.22. As we said last week, we think this stock is capable of falling briskly over several weeks to its next major support, which is in the $24.00 region. Picked on June xth at $xx.xx <- see text Gain since picked: +0.00 Earnings Date 7/18/02 (unconfirmed) =============== HR Closed Plays =============== -------------------- Closed Bearish Plays -------------------- Maytag Corp - MYG - close: 44.20 change: +0.90 stop: 44.04 Maytag opened this morning right at Friday's close, and simply went higher from there. As our readers may recall, we had tightened our stops on Friday with the anticipation that this week--which includes triple witching options expiration--would be a volatile one, and might include a sharp rebound in the broader market. The anticipated market rebound reared its wide-eyed head right at the open; we were stopped out of this play at $44.04, giving us a 1% gain in the trade. We still think this stock will trade lower in coming weeks, and may re-short it later in the week if the Dow fails to move above 10,000. Picked on June xth at $44.50 Gain since picked: +0.46 Earnings Date 07/16/02 confirmed --- Maverick Tube - MVK - cls: 14.32 chg: +0.42 stop: 13.91 Although we set our buy stop at $13.91 on Friday night, MVK gapped higher at the open this morning, producing an opening trade of $14.00. Although MVK did trade briefly below this level, we have officially closed this trade at its opening price for a $0.15 gain, or just a fraction above 1%. The stock has a good deal of resistance in the $15.00 region, and we may be inclined to re-short it later this week, or next, if it fails to move above this barrier. Picked on June 13th at$14.15 Gain since picked: +0.15 Earnings Date 07/18/02 confirmed ================================================================== Split Trader (ST) section ================================================================== Split Announcements ------------------- Midland Company sets 2-for-1 stock split Before the market opened this morning, The Midland Company (NASDAQ: MLAN) announced that its Board of Directors had approved a 2-for-1 stock split. The additional shares will be distributed to shareholders of record on July 8, 2002 and are expected to begin trading by mid- July 2002. The stock's most recent split was a 3-for-1 offering in 1998. MLAN is trading near its all-time highs but trades on relatively low average volume of 11K shares/day. MLAN closed at $47.14 on Friday. For a current quote, click here: http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=MLAN About the company Midland, which is headquartered in Cincinnati, Ohio, is a provider of specialty insurance products and services through its wholly owned subsidiary, American Modern Insurance Group, which accounts for approximately 95 percent of Midland's consolidated revenue. (source: company website) ================== 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 BA Boeing Co 44.00 +1.47 OXY Occidental Petroleum 30.27 +0.59 BPOP Popular Inc 32.45 +0.61 MYL Mylan Labs 31.60 +0.64 FNF Fidelity National 29.99 +0.91 AF Astoria Financial 35.05 +0.85 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- Ticker Company Name Close Change DG Dollar General 18.26 +1.08 WSO Watsco Inc 18.10 +1.01 OVTI Omnivision Technologies 14.12 +1.34 TFS Three-Five Systems Inc 10.07 +1.02 USNA Usana Health Sciences 6.64 +1.12 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- Ticker Company Name Close Change WB Wachovia Corp 39.47 +2.04 E Eni Spa ADS 77.35 +2.45 AIG American Intl. Group 68.80 +4.34 AMGN Amgen Inc 42.70 +2.52 EBAY eBay Inc 63.10 +4.06 BSX Boston Scientific Corp 28.39 +1.14 PX Praxair Inc 55.45 +2.64 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change ADBE Adobe Systems Inc 29.73 -1.64 GETY Getty Images Inc 30.00 -2.83 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change .. none .. ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. 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