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Daily Newsletter, Monday, 07/15/2002

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PremierInvestor.net Newsletter                 Monday 07-15-2002
                                                  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
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In section one:

Market Wrap:      "The Only Thing To Fear Is Fear Itself"
Watch List:       Expecting A Big Move
Play of the Day:  A Constuctive Technical Development


******************************************************************
MARKET WRAP  (view in courier font for table alignment)
******************************************************************
      07-15-2002          High     Low     Volume Advance/Decline
DJIA     8639.19 - 45.34  8681.90  8244.87  1.93 bln    916/2358
NASDAQ   1382.62 +  9.12  1382.70  1315.30  2.04 bln   1328/2159
S&P 100   457.17 -  1.74   458.91   436.09   Totals    2244/4517
S&P 500   917.93 -  3.46   921.39   876.46             
RUS 2000  409.08 -  4.20   413.28   396.98
DJ TRANS 2434.44 - 46.33  2481.12  2342.30
VIX        39.29 +  0.96    43.76    38.92
VXN        68.76 +  2.76    69.48    66.30
TRIN        0.77
PUT/CALL    0.87
******************************************************************


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

"The only thing to fear is fear itself".

Bears and bulls are undecided as today produced a shakeout.  The 
Dow tested its own strength, looking to see if there were any 
buyers on the horizon.  Apparently, there were.  The Dow was down 
440 points in intraday activity, when it rebounded to close only 
45.34 points negative.  The S&P 500 followed suit with a 45-point 
drop of its own before bouncing at the 876 level and closing near 
918.  Meanwhile the Nasdaq composite behaved better and found 
support at the 1315 level before bouncing back to actually close 
in the green!  Part of the initial decline was noted in 
accounting worries of Duke Energy (NYSE:DUK), and El Paso Energy 
(NYSE:EP).  Pfizer added weight to the market, after it announced 
it was to buy Pharmacia in an all stock deal valued at $53 
billion.  After the President began speaking the market dropped 
another 100 points and the mood on the floor grew increasingly 
pessimistic as the day went on.  After all, during the last week 
alone, the Dow lost 695 points.  One thing still looming over our 
heads, is the weakness of the dollar.  We need the dollar to once 
again gain strength and find its legs.  Future weakness in the 
dollar could indicate problems with inflation, where the Fed 
would then have to once again tighten the money supply.  This 
scenario would cause a tricky balancing act of banking 
institutions, so as to not cause a deeper recession.  On the 
positive side, the weakness of the dollar has allowed a bit of 
breathing room for manufacturers.          

Today's move showed a strong recovery from its lows, a technical 
"heads up" that the bulls and bears are undecided, and at a 
potential temporary technical bottom.  In candlestick patterns, 
today's action on the DJIA is known as a "hammer bottom".  This 
pattern is created when a small real body is created at the top 
of the trading range, with a long shadow hanging below.  In 
short, this means the market went way down, and then went way up.  
If the market trades up during the next two days, this is said to 
be "bullish confirmation".  Unfortunately, we've seen this 
pattern before in the last couple of months but the hammer hasn't 
been this extreme.  The $VIX.X (Volatility Index), traded with a 
high of 43.37.  Is today the bottom?  Who knows?  However, the 
action in the Dow does provide a higher probability to buy some 
of the Dow stocks than last week, that's for sure.  The weekly 
Dow chart displays the large descending channel, which we have 
been trading in since 2000. The chart shows that quite a recovery 
needs to be made still, to allow for confirmation in a change of 
market direction.  

Chart of: Dow Jones Industrial Average, Weekly.




Even though we have a long way to go, some of the chart patterns 
in the Dow do look bullish as of today's close.  Today could be a 
reversal day; the short-term sellers could be temporarily 
exhausted.  However, since this is a technical bounce, as the Dow 
came within just a few points of touching its post-9/11 closing 
low (not intraday low), many feel that shorts decided that's 
enough.  The $INDU had dropped 1100 points in the last several 
sessions and it was time to take profits and run, thus the 
incredibly sharp short-covering rally in the last 90 minutes of 
the day.  If this proves to be nothing more than short-covering 
then the follow through on the rally could run out of steam at 
the 8900 to 9000 levels, which would coincide with both previous 
support and the top of the descending channel.  This could be a 
tough barrier to crack for the bulls unless Intel and IBM 
surprise to the upside with their earnings reports.

Chart of: Dow Industrial Average, Daily





Also leading today's recovery were technology stocks, which 
helped the Nasdaq close positive +9.12 at 1382.62.  The 
Semiconductor Sector Index $SOX.X closed up +17.98, to 395.15.  
Also helping the bulls today was Fannie Mae (NYSE:FNM). The 
mortgage mogul reported a gain in second quarter earnings, up 
4.4% from a year ago.  FNM earned $1.46 billion, or $1.44 a 
share.

On the top of our minds, is how all of this will play out with 
2/3rds of the S&P 500 reporting over the next two weeks.  Intel 
reports tomorrow, with IBM on Wednesday, and Microsoft on 
Thursday.  The fear-factor here is that Intel is expected to 
guide lower after their report on Tuesday.  Shares were hammered 
when they warned in June and with the negative sentiment 
concerning the chip sector's recovery the chip giant could easily 
unplug any rally in the tech group with bearish comments.  In 
addition to INTC, traders are also looking for bad news from IBM.  
The new CEO may feel this is his best time to clean house before 
the August deadline for CEO-approved financials.  Granted a 
positive report from MSFT could help spark another rebound if 
Intel and IBM tank the markets lowered guidance.  Overall, 
earnings are supposed to be down from a year ago, potentially 
dropping 1.5%.  Our "hammer" bottom could be spoiled by poor 
earnings reports from major companies.     

Back to the bears... 

A Bear Market defined:

A Bear Market is a prolonged period of time, which sees a decline 
in the market value of many stocks. Often, markets will fall into 
a downtrend in anticipation of economic decline or periods of 
inflationary concern. Most analysts do not call a bear market 
unless there has been a drop of at least 20% from the market's 
high. Rising interest rates will often throw bonds into a bear 
market. The term "bear" is derived from how the animal attacks, 
as a bear will strike downward with his paw.

Bear Market Trivia:

The most notable bear markets during the 20th century were: 1929, 
1973-1974, and 1987.  The crash of 1929 took 16 years to recover, 
whereas the crash of 1987 took 23 months.  Every bear market has 
been preceded with a new high in the Dow.  In the bear market of 
1973-74 a portfolio fully invested in stocks lost an average of 
48% of its value. A portfolio of 60% stocks and 40% bonds lost an 
average of 29%.  The S&P 500 index gained an average of 14.8% a 
year in the 10 years following the 1973-74 bear market.  Over 15 
years the annual return was 16.6%, 14.6% over 20, and 17.1% over 
24 years.   

Bear market losses for the Dow Jones Industrial Average
in Percentages

Year        Loss        Year             Loss
1901      - 8.70        1966           -18.94
1902      - 0.42        1969           -15.19
1903      -23.61        1973           -16.58
1906      - 1.92        1974           -27.57
1907      -37.73        1977           -17.27
1910      -17.86        1978           - 3.15
1913      -10.34        2000           - 6.18
1914      - 5.14        2001           - 7.10
1916      - 4.19        2002	to date: -15.83
1917      -21.70
1920      -35.28
1929      -17.17
1930      -33.76
1931      -52.67
1932      -23.07
1937      -32.82
1939      - 2.92
1940      -12.72
1941      -15.38
	

The Dow data detailed above indicates that yes, things are bad, 
but they would have to get substantially worse to mirror the bear 
market of the early 30's.  The bear market in 1973-74 lasted for 
23 months, which would have ended our bear market in January of 
2002, thus leaving us wondering: how much longer this will go on?

Typically a bear market is a leading indicator to a recession.  
When a bear market begins, economic numbers begin to shrink, and 
indicators begin to show weakness.  A few indicators, which would 
display the potential recession are: increasing unemployment 
claims, decreasing plant utilization, and decreasing auto and 
steel output.  The Fed initially tries to slow inflation by 
tightening the money supply and raising interest rates.  

During a recession, stocks PE ratios should decrease, while their 
dividends yields should increase.  Investors buy treasuries, 
attempting to put their money in cash and cash equivalents, while 
also investing their money in gold.  Ok, so what's cool here, is 
that we are seeing an almost text book recession... So let's not 
fear it, let's watch it, understand it, and learn from it.  Over 
the weekend, I spoke to one of the most incredible investors I 
have ever met.  We talked about oil... I wasn't trading the oil 
markets during the 80's but I'm a strong student of the markets 
and market history.  I understand it was a terrible time for oil 
and that it put many oil companies out of business.  After all, 
the price of oil fell to almost $10.00 a barrel.  This particular 
oil investor told me that he did not sell at that time.  In fact, 
while his brokers were busy devising strategies to buy and sell, 
hedge, rotate, and then buy and sell some more, he simply held.  
He never lost his position.  It wasn't until we went to war in 
Saudi Arabia, and our economy began to thrive in the 90's that 
the price of oil began to surge once again.  The point here is 
that whether you are a buy and hold investor or a short-term 
swing trader, you have to stick to your strategy.  You have to 
NOT fear the market. You must drown out the yelling of the masses 
and follow YOUR research that you have staked your money behind.  
You have to be confident, for your trade is an extension of you.    

Do bear markets make us afraid?  Are we afraid that this will be 
the one economic cycle that will mysteriously open up on the 
bottom and allow us to plummet the to cold, dark, frozen non-
commerce ground below?  And I argue, that the answer is no.  In 
our great country we have structure, sub-structure, and sub-sub-
structure.  We have an incredible backbone of hard working people 
who believe in the dream our forefathers gave so much for.  We 
are in a bear market, but the outlook for our strong nation WILL 
ALWAYS remain bullish. 
     
Mark Whistler
editor@PremierInvestor.net


-- Trading Supplement --

During the extreme volatility experienced today, investors 
probably noticed that the "curbs" where in place for much of the 
day.  To answer reader questions we outline what trading curbs 
and circuit breakers are. 

Circuit Breakers/Collars "curbs" for the NYSE explained.  

Trading Collars:  Collars are usually referred to on CNBC as 
"curbs in".  Trading curbs apply to Program Trading whenever the 
Dow moves 180 points in either direction of the previous day's 
close.  Trading curbs are then kept in place until the Dow moves 
within 90 points of the previous day's close, or the end of the 
trading day.  

Trading curbs only apply to Program Trading firms.  

A Program trade is either: a basket of 15 or more stocks from the 
S&P 500 index, and/or a basket of stocks from the S&P 500 valued 
at $1 million dollars or more.  

After curbs have been instituted, program buying and selling can 
only be done on an up or down tick on the opposite side of the 
market.  In English, program buying can only be executed on a 
downtick and program selling can only be done on an up-tick.  The 
idea behind the rule is that to buy in a panic, one must wait 
until the market moves down, thus providing liquidity instead of 
simply panic buying the market higher.  The same applies to 
selling; one must wait for an up-tick instead of constantly 
selling on the bid, or locking the markets down, thus creating 
further panic.  

Sidecars: "Sidecars" were a trading curb that was eliminated on 
February 16th, 1999.

Circuit Breakers:  On large percentage drops, "circuit breakers" 
temporarily close the market, attempting to stop whatever panic 
is fueling the decline.  

Circuit breaker events: 

---Time-----      ---Halt---

10% Drop
Before 2:00pm	1-Hour HALT
2-2:30 pm		30-Minute HALT
After 2:30pm	No HALT

20% Drop
Before 1:00pm	2-Hour HALT
1-2:00 pm		1-Hour HALT
After 2:00pm	Market CLOSES


(Source: HL Camp & Company)



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

Broadcom Corp - BRCM - close: 22.29 change: +1.90 

WHAT TO YOU: Whoa!  What we're got here is a tech stock that's 
advanced nearly 50% in less than two weeks.  That's quite an 
impressive performance, but we think BRCM is just begging for some 
consolidation.  There are several events that could provide the 
catalyst for a selloff.  First and foremost, INTC announces 
earnings tomorrow night.  It goes without saying that any 
downside surprise will probably tank the sector.  On a technical 
basis, the SOX.X semiconductor index is currently resting just 
under resistance at 400.  A failure to move over this level would 
be decidedly bearish for the chip sector in general, thus putting 
more selling pressure on BRCM.  Finally, BRCM reports earnings 
after the bell on Thursday.  A disappointing announcement would 
make the recent rally seem more like a huge (and painful) bull 
trap.  Although a move back below the 50-dma ($21.99) may provide 
an action point to go short, we'd really be salivating at a 
failed rally near recent resistance at $24.00.  Our downside 
target would be psychological support at the $20 level.




---

Chiron Corp - CHIR - close: 29.72 change: +1.92

WHAT TO WATCH: Nothing goes down in a straight line, so we're 
expecting a short-covering bounce in the biotech group in the 
near future.  The BTK.X biotech index is already showing signs of 
leveling out and is displaying a bullish MACD crossover and 
uptrending daily stochastics.  CHIR has bounced strongly over the 
past three sessions and looks to be headed for a test of 
psychological resistance at $30.00.  A move above this level 
could quickly take shares to the next level of resistance at $33, 
especially if the entire sector starts to gain some bullish 
momentum.  Keep in mind that biotech stocks are subject to sudden 
news-related moves and should only be played using high-risk 
capital.


 

--- 

City National Corp - CYN - close: 48.54 change: -1.28

WHAT TO WATCH: On Monday morning CYN fell below key support at 
$50.00.  Investors were not happy with this development, as 
evidenced by the way shares steadily declined until the final 
hour of trading.  The close under the 200-dma ($49.00) and 
relatively tepid afternoon rebound do not bode well for the 
bulls.  Although the oscillators appear oversold, aggressive 
traders could target a move under today's low of $47.66. This 
also represents the lowest price reading since January.  In terms 
of downside potential, we'd be looking for an eventual decline to 
the $42-$44 region.




---

Semiconductor HOLDRs - SMH - close: 31.17 change: +1.46

WHAT TO WATCH: The semiconductor index (SOX.X) has gyrated in a 
50-point range for nearly a month.  Support has emerged near 350, 
while the bears have consistently defended the 400 level.  With 
INTC announcing earnings tomorrow night, we're expecting that 
this range will soon be violated.  An upside surprise could 
launch the SOX.X into the 450-500 region as panicked shorts run 
for their lives.  The SMH trades almost in tandem with the SOX.X, 
thus offering a way to play such a breakout.  In terms of 
specific action points, we'd be looking for a move above $32.  
This could open the door for a move to the $34-$36 level.  
Traders who are anticipating good news from the INTC camp could 
even buy the SMH ahead of Tuesday evening's announcement.  Note 
that this would be considered a very high-risk speculative 
"lottery" trade.  The most prudent strategy would be to wait for 
the dust to settle on Wednesday morning before targeting any 
entries.




---

Synopsys Inc - SNPS - close: 44.01 change: -1.41

WHAT TO WATCH: Short-term traders may want to consider a bearish 
play in SNPS.  The stock has fallen sharply over the past week 
and was conspicuously absent from today's afternoon tech rally.  
Granted, shares are already oversold (as measured by the daily 
stochastics), but there is no reason they can't head lower.  SNPS 
is on a triple-bottom p-n-f sell signal and recently violated 
bullish support at $47.  A move below today's low ($43.52) would 
clear the way for a test of the $40.00-$40.50 region, near the 
May lows.





=========================
Play-of-the-Day ( New Active Trader BULLISH play)
=========================

Pulte Homes, Inc - PHM - close: 48.76 change: -0.25 stop: *text*

Company Description:
Pulte Homes, Inc., based in Bloomfield Hills, Michigan, has 
operations in more than 43 markets across the United States. 
Under its Del Webb brand, the Company is also the nation's 
leading builder of active adult communities for people age 55 and 
older. Over its history, the Company has constructed more than 
300,000 homes and has been named Builder of the Year for 2002
by Professional Builder magazine. (source: company press release)

Why We Like It:
Depending on which analyst you ask, you'll get a wide variety of 
opinions on whether the homebuilding sector has formed an 
unsustainable bubble.  If the DJUSHB home construction index is 
any indication, the Wall Street consensus seems to be somewhat 
optimistic.  Even the strongest sectors, however, were unable to 
escape the past week's steep Dow Jones decline that culminated 
with today's wild session.  With nearly every sector trading 
sharply lower, the DJUSHB tumbled all the way down to its 200-dma 
at 320.  Unless you were in a cave all day you know what happened 
next: The broader market went ballistic ("bull"-istic?) and 
erased most of its losses.  This in turn brought the index back 
to break-even territory.  PHM traded in a very similar fashion on 
Monday and tested its own 200-dma ($46.11).  Shares bottomed out 
just above reliable historical support at $45 and finished the 
day with a small loss.  Based on the strong reversals in the 
DJUSHB and PHM, we're anticipating more upside in the near 
future.  Specifically, the stock looks like it could test the 50-
dma ($53.80) within the next week.  This outlook is bolstered by 
the daily stochastics (5,3,3), which are hinting at a reversal 
from the oversold region.

The obvious choice for a stop-loss in this case is just under the 
aforementioned support at $45.00.  But because we're aiming for a 
continuation of today's bounce, we don't want anything to do with 
PHM if it falters and begins to retrace this afternoon's rebound.  
Our stop will instead be located at $46.99.  Of course, this stop 
will not go into effect until shares trade at or above our entry 
trigger at $49.01.  Our exit official exit price will be located 
at $53.74, just under the falling 50-dma.  Keep in mind that 
we'll probably exit the play before Pulte's July 23rd earnings 
announcement.

Picked on July xxth at $xx.xx <- see text
Change since picked:    +0.00
Earnings Date        07/23/02 (confirmed)
 






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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
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guaranteed as to accuracy or completeness. PremierInvestor.net
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Copyright  2001  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.




PremierInvestor.net Newsletter                  Monday 07-15-2002
                                                   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/g15b_2.asp
=================================================================

In section two:

Stock Bottom / Active Trader
  New Bullish Plays:     APA, PHM
  Triggered Plays:       BUD, ITT, SAH (bearish)
  Closed Bearish Plays:  NEM, RJR

High Risk/Reward
  Triggered Plays:       NVDA (bullish)
  Closed Bearish Plays:  CHKP

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)



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

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

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

Apache Corp - APA - close: 52.33 change: -0.41 stop: *text*

Company Description:
Apache Corporation is a large oil and gas independent with 
operations in the United States, Canada, Egypt, Western 
Australia, China, Poland and Argentina. (source: company press 
release)


Why We Like It:
With a decent PE ratio of 14.79, a current ratio of 1.56, and an 
annual dividend of .40, APA is an up-and-coming Oil Company to be 
watched for years to come.  On our trading radar screen we like 
the price action of Apache recently, with seemingly strong 
psychological and technical support at $50.00  - Not to mention 
support of the 200-Day MA at $50.67.  It would seem that APA has 
had weakness in the recent weeks due to sector related pressure.  
Keep in mind that the price of oil is over 27.00 per barrel!  In 
the last week Apache announced that it brought two wells online 
in Australia, and that it has struck natural gas offshore in 
Egypt.  The latest natural gas find was the second gas well 
discovered in its West Mediterranean block.  

Although we think Apache could be a good long, we are going to be 
very careful with our stop.  Initially this play will have a 
higher risk-to-reward, as our trigger is at $52.86 and our stop 
is $49.99.  Our trigger at $52.86 is 12 cents above today's high, 
slightly above resistance, and simply looks for follow through 
from today.  It looks as if the weekly stochastics have dipped 
below the lower band on the Daily, and are trying to bounce.  The 
weekly chart also shows APA trading on the bottom of the channel, 
indicating a bounce in its trading range.  Our stop loss at 
$49.99 is very important, as a breach of this number could bring 
sellers off the fence, seriously weakening our position.  Because 
of the institutional implications here, we WILL sell ALL of our 
position if this stop is met.  If this position is triggered, 
keep checking back to see our updated stops...  We plan on 
instituting a trailing stop on this trade to protect ourselves 
from substantial downside damage.  Our target for APA is 57.75, 
where we hope to have profited from the spoils of oils!

Picked on July xxth at $xx.xx <- see text
Change since picked:    +0.00
Earnings Date        01/03/03 (unconfirmed)
 



---

Pulte Homes, Inc - PHM - close: 48.76 change: -0.25 stop: *text*

Company Description:
Pulte Homes, Inc., based in Bloomfield Hills, Michigan, has 
operations in more than 43 markets across the United States. 
Under its Del Webb brand, the Company is also the nation's 
leading builder of active adult communities for people age 55 and 
older. Over its history, the Company has constructed more than 
300,000 homes and has been named Builder of the Year for 2002
by Professional Builder magazine. (source: company press release)

Why We Like It:
Depending on which analyst you ask, you'll get a wide variety of 
opinions on whether the homebuilding sector has formed an 
unsustainable bubble.  If the DJUSHB home construction index is 
any indication, the Wall Street consensus seems to be somewhat 
optimistic.  Even the strongest sectors, however, were unable to 
escape the past week's steep Dow Jones decline that culminated 
with today's wild session.  With nearly every sector trading 
sharply lower, the DJUSHB tumbled all the way down to its 200-dma 
at 320.  Unless you were in a cave all day you know what happened 
next: The broader market went ballistic ("bull"-istic?) and 
erased most of its losses.  This in turn brought the index back 
to break-even territory.  PHM traded in a very similar fashion on 
Monday and tested its own 200-dma ($46.11).  Shares bottomed out 
just above reliable historical support at $45 and finished the 
day with a small loss.  Based on the strong reversals in the 
DJUSHB and PHM, we're anticipating more upside in the near 
future.  Specifically, the stock looks like it could test the 50-
dma ($53.80) within the next week.  This outlook is bolstered by 
the daily stochastics (5,3,3), which are hinting at a reversal 
from the oversold region.

The obvious choice for a stop-loss in this case is just under the 
aforementioned support at $45.00.  But because we're aiming for a 
continuation of today's bounce, we don't want anything to do with 
PHM if it falters and begins to retrace this afternoon's rebound.  
Our stop will instead be located at $46.99.  Of course, this stop 
will not go into effect until shares trade at or above our entry 
trigger at $49.01.  Our exit official exit price will be located 
at $53.74, just under the falling 50-dma.  Keep in mind that 
we'll probably exit the play before Pulte's July 23rd earnings 
announcement.

Picked on July xxth at $xx.xx <- see text
Change since picked:    +0.00
Earnings Date        07/23/02 (confirmed)
 




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

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

Anheuser Busch - BUD - close: 49.57 change: +0.37 stop: 50.10

This short play was activated today when BUD traded at $48.74.  
Shares trended lower for most of the session until the final 
hour, when they were lifted by the soaring Dow Jones.  If this 
rally continues on Tuesday morning, we'd expect the $50.00 level 
to act as resistance.  Our stop is located at $50.10.  




--- 

ITT Ind. - ITT - close: 62.86 change: -2.13 stop: 64.26 *new*

The gargantuan intraday Dow Jones decline weighed heavily on 
shares of ITT today.  Our play was triggered within the first 
half-hour of trading when shares reached $64.24.  The stock 
reached a new multi-month low and experienced a relatively tame 
afternoon rally compared to the Dow Jones.  Although this bodes 
well for a continued slide lower on Tuesday, we're going to 
attempt to eliminate most of our upside risk by placing a stop at 
$64.26, two cents above break-even.  Also remember that we'll 
close this play if ITT trades at or below $60.11.  Aggressive 
traders could target a breakdown to the 200-dma at $57.96.




--- 

Sonic Automotive - SAH - close: 22.86 change: +0.01 stop: 24.26

SAH continued its losing ways today and fell to levels not seen 
since January.  We entered this hypothetical bearish trade when 
shares reached $22.73.  Shares traded as low as $21.61 but 
actually erased all of those losses by the closing bell.  This 
could be indicative of a near-term capitulation.  In light of 
today's powerful reversal, we would not recommend entries at 
current levels.  Our stop is currently set at $24.26, but more 
conservative traders may want to use a stop just above today's 
high of $23.00.


 


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

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

Newmont Mining - NEM - close: 27.75 change: -0.79 stop: 29.10

Shares of NEM edged higher on Monday as the broader market 
continued its decline.  Interestingly, the XAU.X gold/silver 
index was negative for most of the session, even when the market 
was seeing its sharpest losses.  Perhaps gold traders had a hunch 
that a monstrous reversal was coming?

Our short play was closed for a 3.7% loss when NEM violated our 
stop at $29.10.  The fact that shares saw another failed rally at 
the 50-dma ($28.97) will not inspire much hope in the bulls... 
Especially if the markets keep moving higher on Tuesday.  Traders 
who are still short will want to be watching for NEM to fall 
below recent support at $27.50.

Picked on July 3rd at $28.05
Gain since picked:     -1.05
Earnings Date       07/30/02 (confirmed)


 

--- 

RJR Reynolds - RJR - close: 52.35 change: -0.07 stop: 53.06 

In another negative development for the tobacco group, the 
Tobacco Fee Arbitration Panel announced on Monday that several 
companies must pay $1.25 billion for lawyer fees related to the 
1998 settlements.   RJR traded lower on the news and hit our 
official exit target of $51.50.  Our play was closed for a gain 
of 6.2%.  Traders still holding short positions should be 
watching for shares to break below psychological support at 
$50.00 and retest the 52-week lows near $48.  Keep those stops 
tight, as RJR has fallen sharply over the past month and thus 
could experience a powerful short-covering rally at any time, 
much like what the major market indexes experienced on Monday 
afternoon.

Picked on July 10th at $54.94
Gain since picked:      +3.44
Earnings Date         7/19/02 (confirmed)






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

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

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

NVIDIA - NVDA - close: 21.89 change: +1.98 stop: 19.99 *new*

In an impressive display of relative strength, NVDA remained in
the green for nearly all of Monday's session.  Thus, we weren't 
surprised to see shares lead the way higher when the NASDAQ 
bounced from its intraday lows.  Today's 9.9% gain is a great 
start for this play, which was triggered when shares moved above 
$20.01.  We're going to take this opportunity to inch our stop up 
to $19.99.  Traders looking to protect gains could tighten their 
stops to just under previous resistance at $21.00.  Also note 
that because we entered this play at lower levels that we had 
originally anticipated, we're lowering our exit price to $23.49.  
Aggressive traders can continue to target the $24-$25 region.





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

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

Check Point - CHKP - close: 14.50 change: +1.17 stop: 14.06 

CHKP was suspiciously strong throughout Monday's session.  Even 
when the NASDAQ was dipping to multi-year lows, the stock stayed 
safely in positive territory.  There was no company or sector-
related news to explain today's outperformance.  As a matter of 
fact, Solomon Smith Barney downgraded several software stocks on 
Monday morning.  CHKP had flirted with our stop at $14.06 before 
the markets reversed.  Our play was stopped out for a seven-cent 
loss when CHKP reached this level just after 3:00.  Given the 
powerful reversal in the broader market and CHKP's newly-found 
relative strength, our expectation is that shares will continue 
higher in the near-term.  This view is supported by the 
uptrending MACD and daily stochastics.

Picked on July 8th at $13.99
Gain since picked:     -0.07
Earnings Date        7/22/02 (confirmed)





==================
  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      First Energy Corp          30.74     +0.84

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

HGSI    Human Genome Sciences      13.59     +1.44
PDLI    Protein Design Labs        12.19     +1.24
LNOP    Lanoptics Ltd               8.44     +1.85

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

PHA     Pharmacia Corp            39.25     +6.66
BRCM    Broadcom Corp             22.29     +1.90
QLGC    QLogic Corp               42.81     +3.39
INVN    Invision Technologies     27.15     +2.77

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

RD      Royal Dutch Petroleum     46.30     -2.50
PG       Procter & Gamble         82.30     -1.33
PFE     Pfizer Inc                28.78     -3.42
CVX     ChevronTexaco             80.75     -2.05
BP      BP Plc                    44.85     -1.85
UBS     UBS Ag Ord. Shares        45.52     -1.44
AXP     American Express          33.64     -1.34
DEO     Diageo Plc Ads            44.30     -1.95
LMT     Lockheed Martin           58.55     -3.64
FBF     FleetBoston Financial     27.42     -1.62

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

NRT     North European Oil        23.08     -1.29




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