Option Investor
Newsletter

Daily Newsletter, Wednesday, 06/19/2002

HAVING TROUBLE PRINTING?
Printer friendly version
PremierInvestor.net Newsletter              Wednesday 06-19-2002
                                                  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/f19b_1.asp
=================================================================

In section one:

Market Wrap:      Bears And Fear Maul Bulls
Watch List:       AEE, JPM, PCAR, RKY, and lots more...
Play of the Day:  Not A Pretty Picture


*******************************************************************
MARKET WRAP  (view in courier font for table alignment)
*******************************************************************       
        06-19-2002        High      Low     Volume Advance/Decline
DJIA     9561.57 -144.55  9733.39  9542.74 1126 mln   1194/1998
NASDAQ   1496.83 - 46.13  1538.36  1496.08 1725 mln   1095/2407
S&P 100   507.64 -  9.09   516.99   506.33   totals   2289/4405
S&P 500  1019.99 - 17.15  1037.61  1017.88
RUS 2000  462.62 -  6.79   473.83   462.92
DJ TRANS 2755.10 + 21.42  2786.54  2724.58
VIX        29.71 +  1.38    29.87    28.05
VIXN       55.24 -  0.16    56.86    54.49
Put/Call Ratio      0.90
*******************************************************************


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

BEARS & FEAR MAUL BULLS

I remain bearish.  Although the Premier Investor play list 
includes a number of longs (THC, UHS, OHP, TOL, MSFT, INTC, BGEN) 
we have primarily focused stocks which have been performing well 
recently--and we've also have heavily hedged our plays with a 
growing list of short positions.

THE 38.2% FACTOR:  In the three days since last Friday's market 
plunge, the major indexes have generally retraced just about 
38.2% of their most recent decline (May 17 - June 14th).  Sharp 
declines like the May-June one usually produce weak rebounds that 
have only enough energy to retrace about 38% of the decline.  The 
fact that the Dow, Nasdaq Composite (COMPX), Semiconductor Index 
(SOX), Software Index (GSO) and Internet Index (IIX) have ALL 
rebounded only to the region of their 38.2% retracements leaves 
me with one conclusion:  more downside in coming days.

TREASURIES SUGGEST MORE DOWN SIDE: I'm also basing part of my 
negativity on the technical pattern that has formed on 1) the 
ten-year US Treasury Note and 2) the Market Volatility Index 
(VIX).  

In the last several months, Treasury yields have traded in lock 
step to the equities market.  As the stock market has declined, 
investors have been willing to pay more for Treasuries 
(particularly the 5 year and ten-year notes).  Treasury prices 
have accordingly risen, meaning that T-Note yields have declined.  
When the equity markets have risen, Treasuries have been in less 
demand, and their prices have fallen--that is, yields have risen.  
Ten-year notes have recently pierced the 5% yield level, and now 
trade at 4.73%.  Why is this important?  Because it now appears--
from a technical perspective--that the ten-year T-Note is headed 
straight down to a yield of 4.45% - 4.60%.  And while that might 
not sound like a big deal, it is likely to be just that: I 
suspect that the stock market will get whacked hard in order for 
yields to move to those levels.  

The weekly chart of the ten-year T-Note, below, indicates that 
yields are likely to decline to either the 61.8% or 78.6% 
Fibonacci retracement level before starting to turn higher again.

I've placed a weekly chart of the Dow Jones below that of the 
ten-year Note.  Do these two charts look similar?  NO!  They look 
nearly identical!  The interpretation:  the move to 4.45% - 4.60% 
in Treasury yields will be a rough one for the markets--and the 
Notes want to get there sooner than later.


Weekly Yield Chart of the 10 year Treasury Note



The weekly chart suggests that yields are in a mini "free 
fall" and will spike lower before they go meaningfully higher.

Weekly Price Chart of the Dow Jones Industrial Ave.




THE MARKET VOLATILIY INDEX WANTS TO GO HIGHER:   The VIX rises in 
value, say from a reading of 25 to a reading of 40, as traders 
become increasingly fearful (when the market is moving lower).  
Since the VIX is based on the prices of OEX Index options, a 
higher VIX means that traders are willing to pay proportionally 
higher prices for puts than for calls. Once trader fear--and the 
VIX--peak, a sharp rebound in the market typically occurs.  
Hence, the VIX is a contrarian indicator--but only once it begins 
to reverse direction. Until then, the VIX serves as a predictive 
tool for anticipating how much more weakness might occur in the 
market.  

The weekly chart of the VIX (below) shows us that it is rising 
higher, accompanied by a sharply rising Bollinger Band (5-wma & 
1.7sd) and its equally sharply advancing moving average. The VIX 
appears to me as if it is simply not ready to peak out yet; 
rather, it wants to move higher.  How high?  I'm looking at 
roughly another move to a reading of 34, or possibly 42 (see 
associated retracement levels).  

Weekly Chart of the Market Volatility Index (VIX)




So, yes: I remain bearish.  Both the ten-year T-Note yield, and 
the VIX, are pressuring me to remain so.

Today's Market:  

Today's pitiful market action was largely influenced by two 
factors:  a wealth of lowered EPS announcements, and downgrades, 
and investor fear that the turmoil in the middle east will get 
considerably worse before it gets better.  

To parody the Charles Schwab commercial, there's simply no way to 
put lipstick on this pig!  After the close last night, 1) 
Advanced Micro Devices (AMD) warned that its earnings would 
likely miss the target, 2) Apple (AAPL) said pretty much the same 
and 3) INTC said that it was taking a 100 million dollar charge 
in order to exit the web hosting business.  Yes, there were some 
good items: ORCL's earnings last night, and the Semiconductor 
Book-To-Bill, which was the highest in nearly 2 years.  

But the good was outweighed by the ugly by the time the morning 
bell rang to signal the start of trading.  NVIDIA (NVDA) had its 
EPS estimates cut, as well as its price target.  Apple (AAPL) was 
downgraded by Merrill--who could have guessed that might happen?  
TriQuint (TQNT) Semiconductor got a hair cut on its quarterly 
earnings from Credit Swiss First Boston.  JP Morgan crabbed that 
Solectron's (SLR) revenue estimates for Q3 might be too high.  
CIBC World Markets dissed Juniper Networks' (JNPR) estimates for 
Q2 and its 2002 fiscal year. Salomon Smith Barney took its 
shaving knife to Ciena's (CIEN) Q3 revenues and EPS--the company 
pre-announced lower estimates this morning, also.  Then Solly 
turned around and spanked Advanced Micro Devices (AMD) with a big 
fat downgrade.  And Micron Technology disclosed that the 
Antitrust Division of the US Dept of Justice was looking into its 
possible anticompetitive practices in the DRAM market.  

By the time mid-morning hit the markets, the tech sector was 
covered in enough earnings honesty and brokerage scorn to make 
even a perma-bull want to think about applying for a bear card.  
Remarkably, though, the NASDAQ, Dow and S&P 500 all waddled into 
positive territory around lunchtime.  It looked, for a while, 
like another Friday-style reversal to the upside could be 
possible.  Jabil's (JBL) Tuesday night positive earnings surprise 
prompted JP Morgan to add it this morning to their "Focus List.  
Brokerage firms are reporting earnings this week; Morgan Stanley 
Dean Witter (MWD) hit their numbers while Bear Stearns came in 
above estimates.  Things were looking up as the east coast went 
to lunch.

But after lunch, and more bad news from the Middle East--well, 
let's just say that investors had had it with most of the market, 
and technology in particular.  And the decline into the close 
began.  

The one shining light in a sea of red:  following Tuesday night's 
earnings surprise from trucking company Yellow Corp., investors 
bought anything with more than four wheels.  YELL, CLDN, ROAD, 
JBHT, HTLD, SWFT all spiked higher today on the belief that money 
needed to form a big old convoy, leaving computers far in the 
distance.  Money piled high into everything that moved on the 
ground.

When everything was over today, the Dow closed very near to its 
lows, down nearly 145, finishing at 9561.  The NASDAQ Composite 
plunged three percent. It closed at 1496.  The SPX was off 17 
points, concluding an otherwise lousy day in the trading pits at 
1020.  And the Russell 2000 (RUT) shed 1.5%, closing Wednesday's 
trading at 463.


Getting Ready For Thursday, June 19th.

In addition to the negative momentum generated by today's 
decline, the markets will contend with a variety of economic data 
on Thursday, including:

Initial Jobless Claims
April US Trade Balance
May Leading Economic Indicators
The Philadelphia Fed's Forecast of June's Business Conditions.

As I look into my crystal ball tonight, here are my thoughts on 
how some of the major indexes might fare in coming days.

The Dow Jones Industrial Average (INDU):  The Dow ended today at 
9561.  The big cap average might still be able to rebound to the 
9900-10,000 region in coming days, before being hit hard again.  
The more likely reality, though, is that the Dow is headed down, 
again, and perhaps pretty hard.  I would need to see it move back 
above 9600 to become short term optimistic.  Otherwise, I'm 
looking for my red ink short term.

The Dow Jones Transportation Average (TRAN):  The TRAN closed 
today at 2755.  Today's pop in the truckers has this index 
starting to look like it might...gulp...start a new advance.  The 
key level for me is 2750; if it can't hold this, I lose my 
enthusiasm for the transports. 

The NASDAQ Composite (COMPX): The COMPX finished today at 1496. 
My view:  1450, or lower, here we come.

The Russell 2000 (RUT):  The RUT closed at 463.  It looks to me 
like it is headed to at least 448, unless it can hold today's 
closing level.

The Semiconductor Index (SOX):  The SOX closed at 412.  I think 
this thing is now headed to 370 or so, unless it pulls some sort 
of miraculous recovery at the 400 supports.  It is depressing.

The Defense Industry Index (DFX):  Finally, the prospect of good 
news.  The DFX closed at 200. If it can hold support over the 
next few days at 197, it is likely ready to begin a new advance.  
Smells like sector rotation to me.

The Dow Jones US Home Construction Index (DJUSHB): The Home 
Building Index closed at 377. Like the DFX, money seems to want 
to rotate back to this index.  The only problem: if we have a 
huge drop in the Dow in coming days, it's likely that few areas 
will be left unscathed.  As long as the Dow does not go into a 
free fall, this may be one of the few places in which traders can 
hide.  Important support is at 370; I become a nervous Nelly if 
it starts closing under this level again.

The Oil Services Index (OSX):  The OSX finished today at 99, down 
less than 1%.  I personally think oil prices have peaked, and 
will be coming down.  This index looks to me like it is forming a 
large head and shoulders top.  I am bearish on it below 105. It 
may make another effort to reach this level; if the rally fails, 
though, this sector will be ripe for heavy profit taking.

The Gold and Silver Index (XAU):  The XAU closed down a little 
over 1% today, at 75.5.  Like the OSX, I think it has peaked for 
the time being.  I am bearish on the XAU until it is back above 
85, which I don't expect to see for a while.

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

If you don't remember my remarks on Monday about Arch Crawford, 
triple witching options expiration, and the market, you'd do well 
to re-read them.  I just have this uneasy feeling about the next 
several days. 

Keep those trading seat belts tightened!  It's the law!

Siegfried Brian Barger, 
Editor   
brian@PremierInvestor.net



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

Ameren Corp - AEE - close: 41.77 change: -0.38

WHAT TO WATCH: With bond yields plummeting to the lowest levels 
of the year, utility stocks (and their typically large dividends) 
are looking more and more attractive.  AEE in particular looks 
like a good way to play the sector.  Shares recently bounced from 
the bottom of the ascending regression channel, which in turn has 
led to bullish action in the MACD.  Entries can be gauged on a 
move above the 50-dma (and also today's high) at $42.60.


 

---

J.P. Morgan - JPM - close: 34.61 change: -0.41

WHAT TO WATCH: JPM put in a nice rally after hitting a low of 
$31.25 last Friday, but the bulls are now faced with the daunting 
task of pushing the stock through the 50 and 200 DMA's.  Both of 
these moving averages are located near $35.50.  Short positions 
with a relatively small amount of risk could be considered at 
current levels, with a stop near $35.76.  The more conservative 
strategy would be to wait for the daily stochastics to reverse 
into a downtrend before targeting an entry.




---

PACCAR Inc - PCAR - close: 41.96 change: +0.03

WHAT TO WATCH: This NASDAQ-100 component recently bounced from 
the $38-$39 area, which happens to coincide with bullish support 
on the p-n-f chart.  Today the stock briefly traded over 200-dma 
($42.55) but was pulled down with the broader market in afternoon 
trading.  The bullish MACD and daily stochastics (5,3,3) suggest 
that PCAR may continue to be strong in the near-term.  Long 
positions could be considered on a move above today's high of 
$42.89.  We'd be looking for a rally to the 50-dma at $45.82.  


 

--- 

Pulte Homes - PHM - close: 56.20 change: +1.91

WHAT TO WATCH: The homebuilding sector caught a bid today after 
LEN annihilated Q2 earnings estimates.  PHM gained 3.5% on the 
news, which was actually better than 3.2% gain posted by LEN.  
The large move could be attributed to shorts running for the 
exits as PHM broke through resistance near $55 and traded to new 
all-time highs.  If the oscillators are any indication, shares 
could see the $60 level in the near future.  Not only are the 
daily stochastics trending higher, but the MACD has just produced 
a bullish crossover.  We also like the action in the DJUSHB 
housing index, which appears to have put in a double-bottom at 
340.  With both sector and stock looking quite bullish, we were 
tempted to add PHM as a play tonight.  What ultimately convinced 
us not to be was the fact that the stock has risen nearly 12% in 
just four sessions.  We're also concerned that the sinking Dow 
Jones will eventually take its toll on PHM.  Nonetheless, a break 
above today's high ($57.20) could prove to be a good entry 
point...Especially if the broader market begins to head higher.


 

---

Adolph Coors - RKY - close: 61.05 change: -4.79

WHAT TO WATCH: We're still kicking ourselves for not adding RKY 
as a play last night.  We had a bearish outlook on the stock 
based on its recent downtrend, weak MACD, and inability to close 
over the 50-dma.  The likelihood of possible support near $64.00 
was what eventually convinced us not to add RKY.  That level was 
obliterated today after the Beer Institute (I think I have some 
friends that went to college there) released shipment data that 
indicated possible weak sales.  RKY lost 7.2% on the news, 
falling to levels not seen since early March.  Other than the 
psychological $60.00 level, there is little in the way of support 
until the 200-dma at $57.05.  Aggressive traders could target 
this level, using a break below today's low of $60.90 as a 
possible action point.


 


-------------
MORE TO WATCH
-------------

Atmel Corporation - ATML - close: 6.47  change: -0.38

After trying to move higher for the last week, ATML has finally 
begun to break down again.  Both its weekly and daily technicals 
are about as appealing as grilled Kangaroo tail.  As long as it 
trades under $7.00, a free fall in this stock cannot be discounted.  




---

ADC Telecomm. - ADCT - close: 2.33  change: -0.16

ADCT possesses a technical pattern very similar to ATML above.  
As long as it trades below $2.50, it's likely to begin a free 
fall as well. With the stock near all time lows, who is going to 
be out there trying to buy it...and stop this knife from falling?  
You get the point.  




---

Sealed Air Corporation - SEE - close: 43.08  change: -0.33

Since early June, SEE has been trading in a tight range, between 
roughly $43.00 $44.00.  The stock now looks ripe to begin a new 
sharp decline, which will propel it into a region of little 
support.  Once under $42.75, look for an aggressive decline to 
begin.  Buy stops should be in the $44.00 region.  






===============
Play-of-the-Day  (New high-risk/reward BEARISH play)
===============

Amdocs Ltd - DOX - close: 14.81 change: -0.99 stop: *text*

Company Description:
Amdocs is the world's leading provider of CRM, billing and order 
management systems to the communications industry. Amdocs has an 
unparalleled success record in project delivery of its mission-
critical products. (source: company press release)

Why We Like It: 
You know that clichéd scene in desert movies where vultures begin 
to swarm above a doomed and dehydrated traveler?  One can't help 
but get the feeling that DOX is in a very similar 
predicament...Except instead of vultures anticipating a large 
meal, it's a horde of hungry bears.  Both technically and 
fundamentally, there are a lot of reasons to have a negative 
outlook on DOX.  The most recent piece of bad news was last 
Friday's downgrade from Kaufman Brothers, who said channel checks 
suggest that pipeline opportunities may be at risk and key 
partnerships with CWP and ACN could be discontinued.  The 
viability of Amdocs' product pipelines has been in question for 
several months.  However, what could really be weighing on the 
stock are persistent allegations of accounting irregularities.  
While it probably isn't the next Enron, the company has 
nonetheless been dogged by accusations that it may have reported 
artificially inflated earnings.  This flow of negative news, 
combined with a continued downtrend in the software sector, has 
resulted in DOX trading at multi-year lows.  Shares plummeted by 
over 6% today on more than twice the average daily volume.  With 
the stock just beginning to fall from the top of its descending 
channel, we're anticipating continued selling in the near-term.  
Our bearish perspective is reinforced by the triple-top p-n-f 
sell signal and recent reversal in the daily stochastics (5,3,3 
setting).  We're going to initially target the psychologically 
critical $10.00 level, which coincides with the bottom of DOX's 
regression channel.  Due to the possibility of short-covering 
rally, we're going to use a stop at $15.26, slightly above 
today's high.  More aggressive traders may want to place their 
stops just above $16.00.  Note that we won't enter this play 
until DOX trades under today's low of $14.45.

Picked on June xth at $xx.xx 
Gain since picked:     +0.00
Earnings Date        7/23/02 (unconfirmed)
 





=================================================================
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                Wednesday 06-19-2002
                                                   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/f19b_2.asp
=================================================================

In section two:

Net Bulls
  New Bearish Plays:     CMCSK

Active Trader Non-Tech Stocks
  Triggered Plays:       TOL (bullish)
  Closed Bearish Plays:  ACV, FBN

High Risk/Reward
  New Bearish Plays:     CCK, DOX
  Triggered Plays:       PPL (bearish)


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 New Plays
============

  -----------------
  New Bearish Plays
  -----------------

Comcast Corp - CMCSK - close: 26.12 change: -0.79 stop: *text*

Company Description:
Comcast Corporation is principally involved in the development, 
management and operation of broadband cable networks, and in the 
provision of electronic commerce and programming content. Comcast 
Cable is the third largest cable company in the United States 
serving more than 8.5 million cable subscribers. Comcast's 
commerce and content businesses include majority ownership of 
QVC, Comcast-Spectacor, Comcast SportsNet, The Golf Channel, 
Outdoor Life Network, G4, a controlling interest in E! Networks, 
and other programming investments. (source: company press 
release)

Why We Like It:
Tonight we're bringing CMCSK back to the Play List on the same 
premise that led us to short it last time - namely, using the 
stock's downtrending regression channel as a way to gauge an 
entry point.  Our previous attempt to play a bump from the top of 
the channel (closed on June 10th for a 12% gain) worked quite 
well.  The first thing you'll notice when you look at the chart 
for CMCSK is that it has yet to reach the top of its channel, 
which is currently located just below the 50-dma at $27.97.  So 
why not wait for the stock to actually come up to that level 
before shorting it?  Frankly, we have our doubts that shares will 
make it that high.  The steadily declining volume behind the 
recent uptrend was not convincing, and the cable group as a whole 
has not been able to stage any sort of reversal.  The bullish 
MACD crossover is also a point of concern.  While this often 
portends a near-term uptrend, we think the recent lack of buying 
volume and oversold Daily Stochastics (5,3,3) tilt the odds in 
our favor.  Since we want to see more evidence that the bears are 
in control, we won't short CMCSK until it trades below today's 
low of $25.75.  If we get triggered we'll use a stop at $26.77, 
just above today's high.  Why so tight?  Because this play is 
based on the notion that CMCSK will not actually reach the top of 
its channel.  If we're wrong, we'd rather be out of the play 
before the stock has a chance to build a head of bullish steam.  
More aggressive traders could elect to use a stop above 
yesterday's high of $27.08. 

Although we'll initially be shooting for a move to the $22 level 
(near the relative lows), an eventual decline to $20.00 isn't out 
of the question.  We'll re-evaluate or exit strategy if/when 
shares approach $22.00. 

Picked on June xth at $xx.xx <- see text
Gain since picked:     +0.00
Earnings Date       05/01/02 (confirmed)
 





=================================================================
Active Trader/Non-tech Stocks (AT) section
=================================================================

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

Triggered Long Plays
--------------------- 

Toll Brothers - TOL - close: 29.83 change: +0.31 stop: 26.87

The entire homebuilding sector received a shot in the arm today 
after LEN announced blowout earnings.  Our long play in TOL was 
activated this morning when the stock hit our entry trigger at 
$30.36.  Shares may have also benefited from news that TOL had 
been named one of America's top companies to work for by 
Professional Builder magazine.  Our stop is now set at $26.87.





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

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

Alberto Culver - ACV - close: 52.10 change: -0.72 stop: 53.01

Just before lunchtime today, ACV moved above the 20-dma that had 
previously acted as resistance.  Our play was stopped out for a 
3.6% loss when shares hit our stop-loss at $53.01.  The MACD and 
daily stochastics oscillators are uptrending, suggesting more 
short-term bullishness.  We may give ACV a second look if it 
rolls over from the 50-dma ($54.70) or falls below $50.00.

Picked on June 14th at $51.14
Gain since picked:      -1.87
Earnings Date        05/25/02 (confirmed) 


 
 
---

Furniture Brands - FBN - cls: 35.89 chg: +0.14 stop: 36.76

Our short play in FBN was closed for a loss of 4.6% today after 
the stock violated our stop-loss at $36.76.  Although the stock 
moved lower in afternoon trading, shares still outperformed the 
weak broader market and finished the session with a 14-cent gain.  
A glance at the MACD and daily stochastics indicates that the 
odds are currently tilted in the bulls' favor, which lends 
credence to the notion that Friday's dip to the 200-dma was a 
bear trap.  We would not recommend holding any short positions at 
these levels.

Picked on June 7th at $35.12
Gain since picked:     -1.64
Earnings Date       04/24/02 (confirmed)


 



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

============
HR New Plays
============

  -----------------
  New Bearish Plays
  -----------------

Crown Cork Seal - CCK - close: 7.47 change: -0.43 stop: *text*

Company Description:
Crown Cork & Seal is a packaging company.  They produce metal and 
plastic packages, as well as steel and aluminum cans for food, 
sodas, beer and a host of other consumer products.

Why We Like It:
Crown Cork Seal broke below its 50-dma in mid-May, and has been 
struggling since then.  Over the last two weeks, the stock 
produced a pattern of rising lows; as we have noted several times 
in Premier Investor, this pattern--if it breaks down--can produce 
a serious decline.  That is precisely the situation that CCK now 
faces, having broken its rising trend line today.  Technically, 
CCK is displaying deteriorating a RSI, Stochastics and MADC on 
both its weekly and daily charts.  There is simply nothing 
positive to be said about its price pattern.

In addition to these negative attributes, CCK is currently 
involved with a series of asbestos lawsuits.

Our strategy is simple: we'll short CCK at any price between 
$7.25 and $7.60.  If it gaps above or below this range, we will 
not take a short position at the current time.  Once we are 
short, we'll use a stop at $8.21, which is above both resistance 
and the trend line CCK broke below today.  Our downside target is 
at least $6.00, though a move to the 200-dma, at about $5.40, is 
not improbable.

Picked on June xxth at $xx.xx <- see text
Change since picked:    +0.00
Earnings Date         07/18/02 (confirmed)
 



--- 

Amdocs Ltd - DOX - close: 14.81 change: -0.99 stop: *text*

Company Description:
Amdocs is the world's leading provider of CRM, billing and order 
management systems to the communications industry. Amdocs has an 
unparalleled success record in project delivery of its mission-
critical products. (source: company press release)

Why We Like It: 
You know that clichéd scene in desert movies where vultures begin 
to swarm above a doomed and dehydrated traveler?  One can't help 
but get the feeling that DOX is in a very similar 
predicament...Except instead of vultures anticipating a large 
meal, it's a horde of hungry bears.  Both technically and 
fundamentally, there are a lot of reasons to have a negative 
outlook on DOX.  The most recent piece of bad news was last 
Friday's downgrade from Kaufman Brothers, who said channel checks 
suggest that pipeline opportunities may be at risk and key 
partnerships with CWP and ACN could be discontinued.  The 
viability of Amdocs' product pipelines has been in question for 
several months.  However, what could really be weighing on the 
stock are persistent allegations of accounting irregularities.  
While it probably isn't the next Enron, the company has 
nonetheless been dogged by accusations that it may have reported 
artificially inflated earnings.  This flow of negative news, 
combined with a continued downtrend in the software sector, has 
resulted in DOX trading at multi-year lows.  Shares plummeted by 
over 6% today on more than twice the average daily volume.  With 
the stock just beginning to fall from the top of its descending 
channel, we're anticipating continued selling in the near-term.  
Our bearish perspective is reinforced by the triple-top p-n-f 
sell signal and recent reversal in the daily stochastics (5,3,3 
setting).  We're going to initially target the psychologically 
critical $10.00 level, which coincides with the bottom of DOX's 
regression channel.  Due to the possibility of short-covering 
rally, we're going to use a stop at $15.26, slightly above 
today's high.  More aggressive traders may want to place their 
stops just above $16.00.  Note that we won't enter this play 
until DOX trades under today's low of $14.45.

Picked on June xth at $xx.xx 
Gain since picked:     +0.00
Earnings Date        7/23/02 (unconfirmed)
 




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

Triggered Short Plays
---------------------

PPL Corp - PPL - close: 31.35 change: +0.31 stop: 33.22

We were finally triggered in PPL this morning when the stock hit 
$31.60.  Now that we're short, we're going to be watching for 
shares to falter near the $32 level and eventually break below 
the relative low of $28.97.  Our stop is located at $33.22.  
Hitting the newswires this afternoon was word that PPL plans to 
cut 7% of its workforce in an effort to cut costs.





==================
  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 

FE      FirstEnergy Corp           34.95     +0.60
BNI     Burlington North-Santa Fe  29.79     +0.56
CTX     Centex Corp                56.56     +1.26
KBH     KB Homes                   50.33     +0.96
PII     Polaris Industries         72.10     +0.85
CMC     Commercial Metals          45.52     +0.82

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

CENT     Central Garden & Pet Co   18.20     +1.10
CLDN     Celadon Group Inc         13.00     +1.69
CVU     CPI Aerostructures          7.99     +1.29

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

NCEN    New Century Financial      31.87     +1.91
PHM     Pulte Homes Inc            56.20     +1.91
NYT     New York Times             52.03     +1.24
NOC     Northrop Grumman Corp     132.50     +2.80
MCO     Moody's Corp               50.64     +1.38
SSP     E.W. Scripps Company       79.56     +1.01
THO     Thor Industries Inc        72.90     +2.20

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

BUD     Anheuser-Busch Cos         50.55     -2.06
CSR     Credit Suisse Group        31.00     -1.23
KYO     Kyocera Corp               66.22     -4.08
LXK     Lexmark Intl               54.35     -4.15
ADBE     Adobe Systems             27.08     -3.01
NVDA     NVIDIA Corp               23.85     -4.43

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

KFT     Kraft Foods Inc            42.38     -1.46



=================================================================
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