Option Investor
Newsletter

Daily Newsletter, Monday, 06/24/2002

HAVING TROUBLE PRINTING?
Printer friendly version
PremierInvestor.net Newsletter                 Monday 06-24-2002
                                                  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/f24b_1.asp
=================================================================

In section one:

Market Wrap:      Microsoft Saves the Day
Watch List:       CECO, KO, AHC, FCEL, VRTS, ABS, CSGS, and more...
Play of the Day:  Their Chairman Sure Ain't No Coach

******************************************************************
MARKET WRAP  (view in courier font for table alignment)
******************************************************************
      06-24-2002          High     Low     Volume Advance/Decline
DJIA     9281.92 + 28.03  9369.95  9083.56  1.57 bln   1341/1898
NASDAQ   1460.34 + 19.38  1476.56  1414.69  2.04 bln   1624/1953
S&P 100   493.04 +  3.62   497.97   480.25   Totals    1965/3851
S&P 500   992.72 +  3.58  1002.11   970.85
RUS 2000  459.09 -  1.98   462.59   452.79
DJ TRANS 2739.57 - 16.07  2754.81  2710.51
VIX        29.87 -  1.41    32.88    29.27
VXN        58.65 -  0.65    60.32     56.24
TRIN        0.83
PUT/CALL    0.79
******************************************************************

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


MICROSOFT SAVES THE DAY

When the market looked like it was going to imitate a drilling 
auger this afternoon, the US dollar suddenly began to firm in 
global trading and Microsoft said, simply, that it would announce 
earnings on July 18th.  The keen thinkers among us, though, read 
between the lines of MSFT's remark, figuring that if the Redmond, 
Washington boys were going to do any bad things today--like, uh, you 
know, announce an earnings shortfall--today would have been the 
perfect time to do it.  Since they didn't, the market concluded 
the bull was back in business, and the Dow presented traders with 
an intraday reversal from its low of 9083 to an intraday high of 
9369.

Today's action was generally impressive--for one day--and if you 
were short any tech stocks you are probably still lying bleeding 
and battered in some trading room gutter.  But one day does not a 
bull market make, and I remain highly skeptical that today was of 
any more significance that any of the other reversals we have 
seen in recent weeks.    

So yes--I remain bearish--and anticipate that we will still see 
more considerable weakness in coming days.

Today's Market:  

You could find plenty of opinions to explain today's considerable 
change of fortune, but the major factors were those noted above: 
a halt in the US dollar's plunge, and Microsoft's coy earnings-
related announcement.  Sure, Cap'n Bush laid out his thoughts on 
Middle East peace--always a reason for short-term giddiness in 
the stock market.  Some might say, too, that since it is near the 
end of the quarter, portfolio managers were wildly dumping their 
losers in favor of the winners they should have had, or shoveling 
bonds out of their portfolios with the vague notion that now 
might be the time to dive head first into equities....or 
whatever.  But if you were watching the market intraday, you know 
that today's about face occurred with the snap of a finger, and 
was due to Microsoft, and the thing that it owns a lot of:  the 
US dollar.

When the smoke cleared at 4 pm EDT, the Dow (INDU) ended up 
pretty much in the middle of its wild trading range, up 28 
points, at 9281.  The S&P 500 (SPX) did pretty much the same, 
tacking on 3 1/2 points to close at 993.  The Nasdaq Composite 
(COMPX) jumped 19 points, finishing the session at 1460.

Will we see any follow-through?  I really have no feel for that 
tonight.  Certainly, if MSFT or a similar giant were to raise 
guidance, tomorrow's trading session could be a doozy.  As of 
tonight, though, the only things likely to move the market in the 
morning will be 1) today's leftover momentum and 2) tomorrow 
morning's Consumer Confidence and Existing Home Sales reports.  

Here's a quick run down on today's market-related news:

Perhaps the most influential item contributing to this morning's 
weakness occurred when Goldman Sach's cut earnings estimates for 
both IBM and Siebel Systems (SEBL).  Goldman cut both 2002 and 
2003 EPS number for each company.

Merrill Lynch presented a report on the tobacco stocks, which 
took a bearish tone.  RJR and MO, among others, we smacked hard 
by traders.  MO, down 7% on the day, was on our Watch List 
recently as a potential short candidate.

Morgan Stanley downgraded defense contractor Raytheon (RTN), 
while UBS Warburg cut estimates on another big cap stock, 
Caterpillar. 

JP Morgan noted that airline fundamentals look fairly grim, but 
said that now may be the time to consider buying the airlines.  
They typically show strong gains as a recession begins to come to 
an end.

Although DaimlerChrysler closed down $0.06 today, the company 
came out this morning saying that it would be profitable this 
year, and that it might raise 2002 full year earnings guidance as 
a result.

Moody's upgraded healthcare provider PacifiCare (PHYS) to a 
"positive" outlook, from a former "stable" rating.  The stock has 
been profiled in PI's Watch List in recent weeks.  Today's 
improved outlook may now give it the ability to conclusively 
break out of its 7-week consolidation.

Getting Ready For Tuesday, June 25th.

Consumer Confidence and Existing Home Sales are released at 10 
a.m. EDT; traders should be cautious around this time since these 
reports could push the market either way.  You'll also want to be 
aware of trading in the US dollar.  The last thing you'll want to 
confront, if you are long the market, is a weak dollar in early 
morning trading, accompanied by economic reports that put more 
pressure on it--and the stock market.

Like so many other days, one of the key events tomorrow will 
occur after the close.  That's when Micron Technology (MU) 
releases its earnings.  I have no view one way or the other about 
what to expect--or how it might influence trading on Wednesday 
morning.  

Here are some quick thoughts on a few major indexes for tomorrow 
and the next few days. 

The Dow Jones Industrial Average (INDU)  Closed today at 9282.  
The rebound, which began today, could take the Dow to the 9450 - 
9525 region over the next day or two.  If it does not turn back 
down before this, a steeper rebound to 9850 is possible.  

The NASDAQ COMPOSITE (COMPX):  The COMPX closed at 1460. Near 
term resistance is in the 1475 - 1485 region.  

The Russell 2000 (RUT):  The RUT closed lower today at 459.  
Resistance for tomorrow is at 465.  As I noted last week, I'm 
still looking for a decline short term to the 448 level.

The Semiconductor Index (SOX):  The SOX closed at 395.  Expect it 
to be influenced by MU's earnings after tomorrow's close.  First 
serious resistance is between 405 - 410 tomorrow.  The index 
continues to look very weak.

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

Be careful over the next week or two. 

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

Career Education Corp. - CECO - close: 46.16 change: +1.06 

WHAT TO WATCH: After trading sideways since mid-April CECO began 
a breakout today on very powerful volume.  The stock successfully 
used its 50-dma as support during its consolidation, and this key 
technical moving average continues to rise.  Traders might want 
to buy CECO as long as it trades above support at about $45.50, 
employing a sell stop just below the 50-dma.




---

Coca Cola Co. - KO - close: 56.95 change: +0.95 

WHAT TO WATCH: Coke began a consolidation in early May from which 
it is now attempting to emerge.  In the three weeks preceding 
June 19th, KO began forming a short-term bottom, trading under 
its 50-dma.  But the stock is now back above the 50-dma, and 
looks like it wants to start a new advance.  There is a lot of 
market risk in almost any long position, given the volatility of 
the broader market.  And KO does have a bit of resistance in the 
56.50 - 57.50 region.  But if the stock can push above this 
congestion region, the stock may be able to breakout for its next 
upward move.  Traders should probably keep a tight stop on this, 
just under the 50-dma, at about $54.90.




---

PRG-Shultz Intl. - PRGX - close: 12.18 change: +0.42 

WHAT TO WATCH: PRGX is a service company that helps big business 
check vendors for billing errors.  This sounds like a good 
business, but as we have noted before, even good companies get 
smacked by bad markets.  PRGX began trading beneath its 50-dma in 
mid-May and it continues to do so today.  The stock has formed an 
awkward topping pattern that looks like a head and shoulders top.  
We like this stock as a short primarily because it is trying to 
dip down into a region in which there is very little support, and 
we think the stock can produce a fast gain if more weakness 
washes over the stock market.  The area of limited support runs 
from about $9.75 to $11.90.  While we think the stock is headed 
to the lower end of this region, traders need to be aware of the 
following considerations:  1) psychological support exists at the 
$10 level and 2) the 200-dma at $10.69 is also capable of 
offering support to the stock.   Aggressive traders may want to 
short PRGX moving back below $11.85; it would make sense to book 
gains if PRGX drops quickly--over the span of a few days--to the 
$10.00 region.  Traders taking only a small short position could 
use a stop above the 50-dma, at $14.30.  For those traders who 
prefer much tighter stops, nearby resistance is at $13.60; a buy 
stop might be placed a few pennies above this.




---

Albertson's Inc. - ABS - close: 30.12 change: -0.08 

WHAT TO WATCH: Grocer Albertson's can't get a break.  On June 
12th Safeway sent analysts an earnings warnings; even though ABS 
reaffirmed its own double-digit EPS guidance the same day, a 
downgrade by Merrill Lynch sent the stock reeling downward, and 
it's had a tough time recovering ever since.  ABS looks like it 
is walking on thin ice at the current time, with a move back 
below $29.50 likely to send ABS down about $2 quickly.  
Aggressive traders might short it near current levels, with a 
tight $31.05 buy stop to protect them in the event the market 
attempts to sharply rebound.




---

Amerada Hess - AHC - close: 78.17 change: +0.26 

WHAT TO WATCH: AHC, and other oil-related companies, continue to 
look to us like they are establishing topping patterns after 
advancing from last November 2001 until mid-May 2002.  AHC has 
been trading (mostly) under its 50-dma since June 10th.  Traders 
might want to give this stock another few days to confirm its 
weakness under the 50-dma.  We'd probably encourage short 
positions in this stock to use a stop above recent highs, at 
$85.09. The 200-dma sits just above $69.00, and this might be the 
goal of AHC over the next several weeks.




---

FuelCell Energy - FCEL - close: 8.36 change: -0.89 

WHAT TO WATCH: FCEL has been on our Watch List in the recent 
week, and it continues to be attractive on the short side.  The 
stock began to break down from its short-term consolidation on 
June 20th, and it has moved lower since then.  The stock is 
trading at all time lows, has been moving lower on increasing 
volume for the last 3 days and, well, we think this stock is 
headed for a potentially nasty plunge.  This is a trade for 
aggressive, experienced traders only, since it could be very 
volatile once a short covering rally commences. Keep stops tight.




---

VERITAS Software - VRTS - close: 19.45 change: -1.03 

WHAT TO WATCH: A powerful rally in MSFT and the broader software 
group couldn't save VRTS from a 5% loss.  The stock produced a 
double-bottom p-n-f breakdown today after setting a new relative 
low.  Volume has been rising in recent sessions, and today's 
reading of 19.7M shares the strongest in over a week.  The MACD 
is also hinting at a bearish crossover.  Aggressive short-term 
traders should watch for a move below today's low of $18.64.  
This could lead to a test the September lows near $17.00.  An 
alternate action point would be a failed rally at the $20 level 
(sort of like this afternoon). 


 

---

Charter Communications - CHTR - close: 4.19 change: -0.43

WHAT TO WATCH: CHTR is trading at all-time lows and looks 
vulnerable to yet another round of selling.  The stock was unable 
to maintain its late-afternoon gains and closed near the lows for 
the day.  The daily stochastics suggest further downside ahead.  
Aggressive traders can target a break below $4.00, but keep those 
stops tight to avoid getting caught in a short-covering rally.
(trading note!  Most (all?) brokers make you cover 100% of the 
trade with cash in your account for shorting stocks under $5.00.
Be careful!)


 

---  

BARRA, Inc - BARZ - close: 37.01 change: -2.75

WHAT TO WATCH: On Monday BARZ staged a dramatic selloff after 
shares broke through near-term support at the $39 level.  Volume 
was a brisk 527K shares, which is nearly twice the daily average.  
The downtrending MACD and daily stochastics indicate the bears 
may have not yet had their fill.  Aggressive short-term entries 
could be evaluated on a break below today's low of $36.73.  We'd 
be targeting a move to the October lows near $35.40.




---

CSG Systems Int. - CSGS - close: 20.80 change: -1.30 

WHAT TO WATCH: One of our recent (short) stock picks was DOX.  We 
hoped to short this stock in the $15.00 range, but on the day 
after we wrote the proposed short play, the company preannounced 
and DOX plunged 30% the following day--and our play was not 
triggered.  We were bummed, that's for sure.  CSGS is a stock in 
the same sector as DOX and, so far, it has avoided a good bit of 
the bludgeoning affecting upon DOX.  But recent volatility and 
weakness in the stock suggest to us that its head might soon be 
on the chopping block.  Traders will probably want to watch for a 
rebound in the stock--perhaps to the $22.00--before deciding to 
short it.  If it simply declines from current levels, you might 
still short it, but keep a tight rein on it.  If you get caught 
in a short covering rally it could be very nasty.




---

Engineered Support Sys. - EASI - close: 53.28 change: +3.34 

EASI trades in small amounts, usually less than 200,000 shares 
daily.  Today more than 400,000 shares traded, the stock was up 
over 6% and there was no news.  What's going on behind the 
scenes, boys?  We like this stock as a potential long position.  
It has support in the $49.50 - $51.00 area, and a pullback 
tomorrow to the upper range of this region would not be 
unexpected. There are surely no guarantees in this volatile 
market, so if you elect to play this stock long, you'd do well to 
keep a close stop on it.  If the market starts to rebound, 
though, this could be a real mover.  We noted that shares stopped 
today just under the old November 01 resistance of $53.50 but the 
real hurdle is probably the old October 01 high near $58.00.





===============
Play-of-the-day (New Active Trader BEARISH Play)
===============

Coach - COH - close: 53.13 change: -1.87 stop: *text*

Company Description:
Coach makes and markets men's and women's accessories such as 
brief cases, purses, gloves, scarves and other leather outerwear. 
The company operates 121 of its own stores in the US, plus an 
additional 68 factory outlets.  The also sell their products 
through mail order catalogs and an online store.

Why We Like It:
Coach has been building a nice triangular consolidation off 
its extensive Sept. 16 2001 - May 17th 2002 advance.  A triangle 
following an advance is typically positive, since it will usually 
continue the previous trend.  With Merrill Lynch's new June 18th 
"Buy" rating, we would have thought COH would be preparing for a 
new breakout.  But COH has not done that; rather, the stock has 
begun to break down, and out of, its consolidation.  We are a bit 
intrigued by today's very strong volume, and relatively steep 
intraday trading range, which both took place in the absence of 
any news.  We are at least a little suspicious that today's 
decline, and brisk trading, may be a tell-tale sign that this 
stock is sitting on some negative news which might make itself 
known in the next couple of days.  We do know that the chairman 
of the firm filed on June 12th with the SEC to sell 260,000 
shares his 450,000-share ownership.  A company news release noted 
that the chairman's "...total ownership, including shares subject 
to options, is at nearly 1.4 million shares, reflecting his 
positive outlook for the company's prospects."  Regardless, we 
just have to wonder what today's volume, and volatility, were all 
about even if it has nothing to do with that recent stock sale.

Our strategy will be to short COH on Tuesday as long as it opens 
between $52.00 - $54.25.  We'll initiate a hypothetical short 
position in this stock at its opening price as long as that price 
is in this range.  Otherwise, we'll wait.  Once triggered, we'll 
use a buy stop that is just above 1) the 50-dma, 2) the upper 
boundary of the triangle and 3) overhead resistance.  The stop 
will be $56.65. Over the next few weeks we think that COH can 
trade down to at least the $44.75 support, or the 200-dma at the 
$42.00 level.  Traders should also be aware that COH apparently 
has some support in the $47.00 to $47.25 area.  This was overhead 
resistance back in late January 2002 but support in early March 
and again in early June this year.  We expect it to fail but very 
short-term traders might want to keep an eye on this level.

Picked on June xth at $xx.xx <- see text
Gain since picked:     +0.00
Earnings Date       07/29/02 (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                  Monday 06-24-2002
                                                   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/f24b_2.asp
=================================================================

In section two:

Net Bulls
  Triggered Plays:       FDC (bearish)
  Closed Bearish Plays:  MXIM, NCR, NTAP

Stock Bottom / Active Trader
  New Bearish Plays:     COH
  Triggered Plays:       CBE, GR (bearish)
  Closed Bullish Plays:  KCP, OHP, THC

High Risk/Reward
  Closed Bullish Plays:  AU, KSWS

Long-term Plays
  Bullish Play Updates:  UHS

Split Trader
                         SSD: 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 Short Plays
---------------------

First Data Corp - FDC - close: 38.28 change: +0.01 stop: 40.55

Our short play in FDC was triggered early this morning when 
shares hit $38.09.  Although the stock proceeded to rebound with 
the broader market, it was unable to rise above $39.00.  If this 
continues to be the case, our stop at $40.55 will be well-
protected.





===============
NB Closed Plays
===============

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

Maxim - MXIM - close: 38.27 change: +1.60 stop: 38.90

Our short play was proceeding nicely this morning, as MXIM dipped 
to a new relative low.  Of course, that was before the bears were 
broadsided by monstrous short-covering rally.  MXIM moved higher 
with the NASDAQ and shot above our break-even stop at $38.90.  
Those who elected to use a more lenient stop should be aware that 
today's reversal might portend further short-covering over the 
next few sessions.  However, we may give MXIM another look on a 
failed rally near $40.

Picked on June 21st at $38.90
Gain since picked:      +0.00
Earnings Date        04/29/02 (confirmed)


 

--- 

NCR Corp - NCR - close: 35.36 change: +1.15 stop: 35.32

NCR, we hardly knew ye.  This play was added on Friday, based on 
the stock's weak technical picture.  Our plans to capture a move 
to the bottom of its regression channel were stymied by today's 
steep rally in the broader market.  NCR tacked on a full point in 
less than an hour, which was more than enough to violate the 
relatively tight stop at $35.32.  Our play was closed for a loss 
of $1.11, or 3.2%.  Although it's worth noting that today's rally 
was not accompanied by strong volume, today's bounce seemed to 
confirm near-term support at the $34 level.  Traders who elected 
to use a more aggressive stop should be watching for a rollover 
near $36.00.

Picked on June 21st at $34.21
Gain since picked:      -1.11
Earnings Date        07/25/02 (confirmed) 


 

--- 

Network Appliance - NTAP - close: 12.60 change: +0.41 stop: 12.82

Well, that was about as much fun as a root canal.  Our short play 
in NTAP was triggered at $11.92 this morning after the stock 
dropped below Friday's low.  The technical breakdown we had 
anticipated seemed to be progressing nicely, as shares fell to an 
intraday low of $11.36.  Just as it seemed that the stock might 
make a move to the $11 level, the broader market began to shoot 
higher.  This in turn sparked a rapid short-covering rally in 
NTAP.  Shares gained nearly 12% in just two hours and rose above 
our stop-loss at $12.82.  Our play was closed for a loss of 7.5%.  
Although today's rally may not have staying power, the daily 
stochastics (5,3,3) are showing signs of a turnaround and today's 
relative low may now act as support.  However, a failed rally 
near $14 would renew our interest in shorting NTAP.

Picked on June 24th at $11.92
Gain since picked:      -0.90
Earnings Date        05/14/02 (confirmed)






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

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

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

Coach  - COH - close: 53.13 change: -1.87 stop: *text*

Company Description:
Coach makes and markets men's and women's accessories such as 
brief cases, purses, gloves, scarves and other leather outerwear. 
The company operates 121 of its own stores in the US, plus an 
additional 68 factory outlets.  The also sell their products 
through mail order catalogs and an online store.

Why We Like It:
Coach has been building a nice triangular consolidation off 
its extensive Sept. 16 2001 - May 17th 2002 advance.  A triangle 
following an advance is typically positive, since it will usually 
continue the previous trend.  With Merrill Lynch's new June 18th 
"Buy" rating, we would have thought COH would be preparing for a 
new breakout.  But COH has not done that; rather, the stock has 
begun to break down, and out of, its consolidation.  We are a bit 
intrigued by today's very strong volume, and relatively steep 
intraday trading range, which both took place in the absence of 
any news.  We are at least a little suspicious that today's 
decline, and brisk trading, may be a tell-tale sign that this 
stock is sitting on some negative news which might make itself 
known in the next couple of days.  We do know that the chairman 
of the firm filed on June 12th with the SEC to sell 260,000 
shares his 450,000-share ownership.  A company news release noted 
that the chairman's "...total ownership, including shares subject 
to options, is at nearly 1.4 million shares, reflecting his 
positive outlook for the company's prospects."  Regardless, we 
just have to wonder what today's volume, and volatility, were all 
about even if it has nothing to do with that recent stock sale.

Our strategy will be to short COH on Tuesday as long as it opens 
between $52.00 - $54.25.  We'll initiate a hypothetical short 
position in this stock at its opening price as long as that price 
is in this range.  Otherwise, we'll wait.  Once triggered, we'll 
use a buy stop that is just above 1) the 50-dma, 2) the upper 
boundary of the triangle and 3) overhead resistance.  The stop 
will be $56.65. Over the next few weeks we think that COH can 
trade down to at least the $44.75 support, or the 200-dma at the 
$42.00 level.  Traders should also be aware that COH apparently 
has some support in the $47.00 to $47.25 area.  This was overhead 
resistance back in late January 2002 but support in early March 
and again in early June this year.  We expect it to fail but very 
short-term traders might want to keep an eye on this level.

Picked on June xth at $xx.xx <- see text
Gain since picked:     +0.00
Earnings Date       07/29/02 (unconfirmed)
 




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

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

Cooper Industries - CBE - close: 38.83 change: -1.15 stop: 41.87

After a week of waiting, we're finally short on CBE.  The play 
was activated this morning when shares hit our action point at 
$39.81.  Although the bears were initially rewarded with a 
decline to $37.00, the lunchtime rally in the broader market 
carried CBE back above the $39.75 level.  Nonetheless, shares 
were unable to muster enough strength to reach the morning high 
of $40.00.  This looks like a failed rally at previous support 
($40) and might be a good opportunity for new short positions.  
However, given the oversold conditions of the broader markets, 
carefully consider your entry before initiating any new 
positions.  Remember that our stop is located at $41.87.


 

--- 

Goodrich Corp. - GR - close: 26.60 change: -0.45 stop: 29.68

GR was seemingly oblivious to the Dow Jones roller coaster today.  
Shares dropped in the morning and traded mostly flat for the rest 
of the session.  This play was activated when the stock reached 
our trigger price at $26.95.  Our stop is now set at $29.68, 
which puts it above the recent highs of Tuesday-Wednesday of last 
week.  An alternative stop would be just above the natural 
resistance at the $30 level but we're already getting a but too 
wide for our tastes.  Now that GR has fallen below the 200-dma, 
the next test for the bears will be historical support (dating 
back to late January/early February) near $25.50.  Check out that 
rising volume on the recent declines!





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

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

Kenneth Cole - KCP - close: 29.10 change: -0.05 stop: 28.79

On Friday we tightened KCP's stop to $28.79.  This level was 
violated on Monday morning as shares sank with the broader 
market, thus closing our play for a gain of 4.6%.  With the stock 
currently trading between the $30 level of resistance and the 50-
dma ($27.61), it's difficult to say where it's headed next.  The 
somewhat bearish daily stochastics and MACD suggest further 
downside movement in the near-term.  Yet at the same time, the 
price action is holding up well.  Today's bounce puts in a higher 
low.  We'd consider long plays if KCP breaks out to the upside 
over $30.00 or $30.51 but we'd consider short plays if it broke 
the 50-dma.  Volume has been light during the sideways 
consolidation.  

Picked on June 7th at $27.50
Change since picked:   +1.29
Earnings Date       05/01/02 (confirmed) 




---

Oxford Health - OHP - close: 46.18 change: -2.93 stop: 46.48

The HMO Index (Health Provider Index) was hit with a wave of 
heavy profit-taking today, as last week's Supreme Court decision 
continued to weigh on the sector.  OHP moved lower with the group 
and plowed through the bottom of its regression channel.  The 
selling accelerated throughout the morning, taking shares below 
the 50-dma.  Our play was stopped out at $46.48 for a loss of 
4.4%.

At this point it's hard to have anything but a bearish outlook on 
OHP.  Not only has the stock violated its ascending channel, but 
the oscillators indicate that there may be a lot more selling 
ahead.  The MACD, which produced a bearish crossover today, is 
looking particularly weak.  Given the current negativity in the 
HMO.X, we wouldn't be surprised to see OHP fall to the $43-$45 
region within the next few sessions.  Odds are investors could be 
using the "news" as a perfect excuse to take profits from the 
group's incredible multi-month run.  Aggressive traders could 
actually consider shorting OHP if it breaks under the $45 to $44 
area.

Picked on June 7th at $48.64
Change since picked:   -2.16
Earnings Date       05/01/02 (confirmed)




---

Tenet Healthcare - THC - close: 71.40 change: -3.35 stop: 72.83

A sharp selloff in the healthcare group (see the OHP update) 
provided the catalyst for today's 4.4% decline in shares of THC.  
Shares fell below the 50-dma and proceeded to violate our stop-
loss at $72.83.  Our play was closed for a loss of 15 cents.  The 
RXH  (Healthcare Index) has suffered some heavy selling since 
failing to move over resistance near 370 and could be headed for 
a test of its 200-dma at 325.  With both the index and THC 
displaying negative oscillators, we would not be looking to buy 
this dip.  Aggressive traders could use a trigger under the $70 
level to short the stock to its next major support level between 
$66 and $65.

Picked on May 29th at $72.98
Change since picked:   -0.15
Earnings Date       04/02/02 (confirmed)
 

 



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

===============
HR Closed Plays
===============

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

AngloGold Ltd. - AU - close: 28.70 change: -0.14 stop: 28.11

As could be expected, AU traded inversely to the broader market 
today.  Our long play was triggered at $29.76 this morning.  Both 
the XAU (Gold and Silver Index) and AU reached near-term highs as 
the Dow Jones approached the 9000 level.  However, the gold 
sector took a dive in afternoon trading as the US dollar, and 
then the US stock market, staged powerful rallies.  In a 
frustrating development, AU pegged an intraday low of $28.11 - 
the location of our stop-loss.  We closed the play for a net loss 
of 5.5%. 

Picked on June 24th at $29.76
Change since picked:    -1.65
Earnings Date        04/20/02 (confirmed)


 

--- 

K-Swiss Inc. - KSWS - close: 24.80 change: +0.15 stop: 24.45

As you can see from the above quote, KSWS began post-split 
trading today.  The stock had quite a run in anticipation of this 
2-for-1 split, and we had tightened our stop in order to protect 
most of these gains.  Shares traded lower this morning and 
dropped below our (post-split) stop at $24.45.  Our play was 
closed for a gain of 4.9%.  Due to the possibility of a post-
split decline, we would not advise holding long positions at 
current levels.  However, a stop under $24.00 might suffice for 
investors who believe the issue still has more upside.  Early May 
showed the $48.00 - now $24.00 level to be heavy resistance so 
this "should" now be a support level.

Picked on June 18th at $46.61
Change since picked:    +2.29
Earnings Date        07/25/02 (unconfirmed)


 



==================================================================
LONG-TERM PLAYS (LT) section
=================================================================

===============
LT Play Updates
===============

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

Universal Health - UHS - cls: 48.90 chg: -1.53 stop: 45.99 

The healthcare sector has enjoyed strong performance in the last 
few weeks.  In particular, the HMO Index advanced from a short-
term low of 588 on May 22 to a high on June 19th of 664.  Since 
the June 19th, though, the sector has been under pressure.  Part 
of this is certainly due to weakness in the broader market.  But 
the HMO index was also whacked with a bout of selling that 
started June 20th--and may still be in process--when the US 
Supreme court ruled in favor of patient's rights. That decision 
allows patients to seek remedies outside their HMO if the HMO 
refuses to provide certain treatments.  There have also been 
reports of corporate officers (insiders) selling HMO stocks 
recently(CVH and HCA have been mentioned on CNBC in the last 
week); this may indicate that the group is ready for a needed 
rest.  

Since UHS is a long-term position, investors should expect a 
healthy pullback in the stock that could bring UHS down to the 
50-dma at $47.20, or the 61.8% Fibonacci retracement (of UHS' May 
14th - June 20th advance) at $46.22.  We would defer any new 
positions in UHS until we have a definitive rebound off one of 
these levels.

Picked on April 19th at $46.60
Gain since picked:       +2.30
Earnings Date         04/18/02 (confirmed)






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

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

Simpson Manufacturing sets 2-for-1 split - Vote pending

After the market closed today, Simpson Manufacturing Co., Inc 
(NYSE: SSD) announced that its Board of Directors had authorized a 
2-for-1 stock split.

The split is subject to shareholder approval at a special meeting 
on July 29th.  Shares of SSD have not split since they began 
trading in 1994.

The stock closed at $56.01 on Monday. For a current quote, click 
here:

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

About the company
Simpson Manufacturing Co., Inc., through its subsidiary, Simpson 
Strong-Tie Company Inc. (SST), designs, engineers and is a 
manufacturer of wood-to-wood, wood-to-concrete and wood-to-masonry 
connectors and shearwalls.


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

BSC     Bear Stearns Companies     61.35     +0.70
IBOC    Intl Bancshares Corp       40.90     +0.66
DLM     Del Monte Foods Co         11.96     +0.66
GTY     Getty Realty Corp          20.29     +0.57
TTI     Tetra Technologies Inc     26.52     +0.92

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

PRW     Practiceworks Inc          19.10     +1.04
SLNK    SpectraLink Corp           11.60     +1.18

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

CECO    Career Education Corp      46.16     +1.06
GGC     Georgia Gulf Corp          24.32     +1.02
EASI    Engineered Support Systems 53.28     +3.34
IGI     Imagistics Intl Inc        20.05     +1.20
NFI     Novastar Financial Inc     34.15     +1.15

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

MO      Phillip Morris Companies   48.80     -3.85
CSR     Credit Suisse Group        28.36     -2.71
CLX     Clorox Co                  42.57     -1.25
INFY    Infosys Technologies ADS   51.40     -1.79
RJR     RJ Reynolds Tobacco        55.70     -5.85

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

THC     Tenet Healthcare Corp      71.40     -3.35
AET     Aetna Inc                  48.45     -1.93
SRCL    Stericycle Inc             37.49     -1.08




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