Option Investor
Newsletter

Daily Newsletter, Monday, 06/17/2002

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

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

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

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

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


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

DISCLAIMER

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

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.

To ensure you continue to receive email from Option Investor please add "support@optioninvestor.com"

Option Investor Inc
PO Box 630350
Littleton, CO 80163

E-Mail Format Newsletter Archives