Option Investor
Newsletter

Daily Newsletter, Monday, 07/29/2002

HAVING TROUBLE PRINTING?
Printer friendly version
PremierInvestor.net Newsletter                 Monday 07-29-2002
                                                  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/g29b_1.asp
=================================================================

In section one:

Market Wrap:      News of Stock Buybacks and Dollar's Strength Helps Lift Stocks
Watch List:       APA, BRCM, MTG, ROST, SNPS, VRSN
Play of the Day:  A Textbook Definition of Relative Weakness


******************************************************************
MARKET WRAP  (view in courier font for table alignment)
******************************************************************
       07-29-2002        High    Low     Volume Advance/Decl
DJIA     8711.88+447.49  8711.88 8267.99 2114 mln  2581/614
NASDAQ   1335.25 +73.13  1335.25 1272.46 1607 mln  2537/862
S&P 100   450.87 +23.94   450.87  426.93   totals  5118/1476
S&P 500   898.96 -27.90   898.96  852.84
RUS 2000  400.81 +18.55   400.82  382.26
DJ TRANS 2380.95+126.16  2382.16 2254.93
VIX        33.35 - 6.71    37.44   33.35
VIXN       57.57 -11.45    67.42   57.21
Put/Call Ratio 0.69
******************************************************************


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

News of stock buybacks and dollar's strength helps lift stocks

This morning's news that publicly traded companies had announced 
a staggering $43 billion worth of stock buyback programs in July 
helped lift investor sentiment on thoughts that stocks may once 
again be near a bargain basement type of valuation, that even a 
company's board of directors couldn't pass up if they were 
assured that earnings reports were on the level with generally 
accepted accounting procedures and the economy may be poised for 
a continued rebound.

If the multitude of recently announced buyback programs wasn't 
enough to gain some type of recovery in investor confidence, then 
the further strengthening of the U.S. Dollar Index (dx00y) 106.71 
+1.33% to a 15-session high along with another strong round of 
selling in the Treasury markets, was enough to move even the 
grumpiest of bears off his barstool and do some buying before too 
many more profits evaporated.

The Dow Industrials (INDU) jumped an impressive 447.49 points 
(+5.41%) by session's end to close at 8,711.88.  The only Dow 
component posting a loss was shares of SBC Communications 
(NYSE:SBC) $26.21 -0.15%.

Weighing on the fixed-wireline telecom stock was news out of 
Qwest Communications (NYSE:Q) $1.49 -0.66% confirming it would 
restate financial results for 1999 through 2001 due to the use of 
improper accounting methods.  The company also withdrew its 
previous estimates for future earnings, and warned that its 
accounting review is still not complete.  Still, even this 
beleaguered telecom stock was able to recover from an earlier 26% 
decline and session low of $1.11 to finish down just 1-cent on 
the session.

The broader S&P 500 Index (SPX.X) gained a similar 5.4% adding 
46.12 points to 898.96 on a broad market rally, which found all 
of the major sectors finishing in positive territory.

The smallest of gains among the various indexes came from the 
dividend yielding utility stocks as depicted by the Utility 
Sector Index (UTY.X) 252.33 +0.78%.  

Late today it was announced that Warren Buffett was doing some 
bargain shopping of his own in the energy sector.  Mr. Buffett's 
Berkshire Hathaway (AMEX:BRK.A) $68,305 +7.31% bought Dynegy's 
(NYSE:DYN) $1.20 +76.47% Norther Natural Gas unit's 16,500 mile 
energy-transporting pipeline for $1.878 billion, which would be a 
24% discount to the $2.473 billion that Dynegy paid the now 
bankrupt Enron back in January.  Considered the world's second-
wealthiest man, Mr. Buffett has a reputation for buying 
undervalued assets, then exploiting their intrinsic value for 
handsome gains.

While a relative newcomer to the energy business, as a resident 
of Omaha, Nebraska, Mr. Buffett probably knows more about 
Northern Natural Gas that many.  Years ago, before it was gobbled 
up by Enron during their aggressive growth by acquisitions 
strategy, Norther Natural Gas was based in Omaha.

Today's move by Mr. Buffett isn't his first attempt at buying up 
perceived depressed assets in the energy transport area.  Earlier 
this year, Mr. Buffett bought Williams Company's (NYSE:WMB) $1.99 
+87.73% Kern River pipeline for $450 million, plus the assumption 
of $510 million in debt.  Williams Company's (WMB) booked a loss 
on the deal.

While many utility-related stocks didn't seem to respond to 
today's acquisition news of some of Dynegy's pipeline assets by 
Bufett's Berkshire Hathaway (BRK.A), the Natural Gas Index 
(XNG.X) 122.83 +7.14% surged as components Dynegy (NYSE:DYN) 
$1.20 +76.47% and Williams Companies (NYSE:WMB) $1.99 +87.33% 
posted gains.  Early this morning, before the opening bell, 
Williams Companies (WMB) reported an earning's loss of $-0.34 per 
share, which excluded non-recurring items.

Tomorrow, Dynegy (DYN) is expected to report earnings and 
analysts are looking for the company to post earnings of $0.01 a 
share.  In past commentary, from much higher levels, I've been 
bearish on these "energy traders" and current position would to 
be a buyer ONLY if the trader is looking to lock in gains from 
short positions.

Also boosting the Natural Gas Index's (XNG.X) gains were positive 
comments from David Bradshaw of Deutsche Bank on natural gas 
producers and sector components Apache Corp. (NYSE:APA) $52.07 
+6.28% and Anadarko Petroluem (NYSE:APC) $43.31 +6.67%.  "They 
are managing for returns and not pursuing growth for its own 
sake.  To me, that's a huge positive," said Bradshaw.  

Industry analysts seemed to concur with Bradshaw as other 
industry watchers noted that record natural gas prices in the 
late 2000 and early 2001 led to some high-price acquisitions that 
may now appear imprudent, but otherwise analysts say exploration 
and production companies are generally keeping their word and 
running tighter ships.

Until oil and gas prices plunged in 1998 and 1999 and forced a 
rethink, companies often adhered to a simple mantra of volume 
growth, which resulted in indiscriminate capital spending.

Phillip Dodge of Ryan Beck & Company chimed in by saying "In the 
past, energy companies followed Parkinson's law of corporate 
spending: if the money was there, they spent it."

Major Market Averages/Indexes - Today's action




At the very top of my "US Market Watch" screen, we're already 
trading "tomorrow" in the U.S. Dollar Index (dx00y) 107.03 
+0.41%, but today's close at 106.71 +1.3% hints that cash was 
coming back toward U.S. assets.  The continuation of gains found 
in the dollar against a basket of 7 weighted currencies may also 
bode well for bull's tomorrow.

For some reason, q-charts immediately "resets" the Dow Jones US 
Home Construction Index (DJUSHB) to "unchanged" right after the 
close of trading, but this index also experienced strong gains 
today, jumping 26.3 points (+8.6%) to 331.94 from Friday's close 
of 305.64.

As you can see, equity bears probably saw what they least wanted 
to see in a strengthening dollar and selling in Treasuries, while 
equity bulls finally got both and equities had a broad rally.

The benchmark 10-year YIELD ($TNX.X) saw its YIELD jump to the 
4.533% level.  Just prior to the close, the price on the 10-year 
Treasury dropped 1 15/32 at $102 10/32, representing a -1.4% 
decline in price.  That's a substantial one-day move, especially 
for bond bulls counting on a 4.367% annual return of interest.

Can it continue?  One day at time!

Treasuries look to be the main driver for cash that has found its 
way back into equities and this will be primary focus tomorrow 
morning.  Equity bears need to be careful and not lets trades get 
away from them and stay disciplined with their stops, regardless 
of what they "believe" lays ahead for the economy.

Last fall, the U.S. Treasury decided to suspend further auctions 
of the 30-year Treasury, instead option to finance its debt with 
shorter-term maturities.  As such, we've been using the 10-year 
Treasury YIELD ($TNX.X) as our benchmark bond.  At today's 
closing YIELD of 4.533% in this bond, we find a similar level to 
that of November 14th.  Traders should understand the potential 
for further selling here, which could drive stock prices higher.

10-year Treasury YIELD Chart - Daily Interval




Just as stocks may have gotten a little "oversold" recently, it 
could be argued that Treasuries got a little "overbought."  In 
our July 24th intraday update at 01:00 PM EST, we thought the 
action in the shorter-term 5-year Treasury hinted of some type of 
asset allocation program.  I've marked the July 24th bar on the 
chart above, which also depicts similar action.

A gap higher in YIELD tomorrow morning (if it happens) could have 
equity bears grinding their teeth as they begin assessing further 
selling in the 10-year YIELD to the 4.635% level.  That's 
probably not unreasonable near-term based on some historic action 
that investors witnessed from similar levels back on November 
14th.

It is notable that back in November, stock did indeed look to 
lead higher, despite a falling YIELD in Treasuries.  The lower 
YIELD action into mid-November may have been entirely a near-term 
supply shortage created by the Treasuries decision to suspend 
further auctioning of the longer-term 30-year Treasury.  

Barring some unforeseen decision by the Treasury to either 
suspend other auctions or lift the suspension of 30-year Treasury 
auctions, stocks and Treasury bonds now appear to be more in 
unison. 

S&P 500 Index Chart - Daily Interval




I'd start looking for support to begin firming in the S&P 500 
(SPX.X) from the 854-870 level and bulls may now be targeting 
upside to the 942 and 987 range (keep an eye on Treasury YIELDS 
to tell us if cash continues to free up there that could find its 
way into stocks).  

Equity bulls should NOT be afraid to tighten up some stops and be 
willing to book some gains of 10% or greater in some positions if 
they achieve targets!

Equity bears need to show some discipline with their stops.  
Let's face it, we "knew" that bears had the risk with the bullish 
% charts being at such oversold levels and the two things bears 
DID NOT want to see happen has started to happen (selling in 
Treasuries and strengthening in bonds).  

Today's action also saw the S&P 500 Bullish % ($BPSPX) from 
http://www.stockcharts.com reverse into "bull alert" status and 
now reads 19.8% from Friday's reading of just 13.8% (last 
Wednesday, this indicator fell to just 12%).  

Under the "bull alert" status, bullish equity traders can begin 
taking partial bullish positions in this market, but should be 
willing to trade for profits of 10-15%.  

The narrower S&P 100 Bullish % ($BPOEX) from www.stockcharts.com 
also reversed up into "bull alert" status and currently stands at 
21% bullish, up from Friday's reading of 10%.  In essence, 11 
stock of the 100 found here gave point and figure "buy signals" 
and hints that demand is beginning to outstrip supply.

I would continue to "shy away" somewhat from many technology 
stocks if the bullish trader is risk averse and trying to get 
some type of firm footing in their account.  Equity bears in this 
group need to be careful of near-term short-squeezes as the 
broader market internals begin to show some signs of strength 
from very oversold levels.

The narrow yet very volatile NASDAQ-100 Bullish % ($BPNDX) is 
currently in a "bull correction" status at 28%, but a reading of 
30% would have this market (NASDAQ-100) back into a "bull 
confirmed" status.

Jeff Bailey
Senior Market Technician
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
---------------------------------

Apache Corp - APA - close: 52.07 change: +3.08

WHAT TO WATCH: The past week has produced some impressive gains 
in APA.  Some may argue that the stock is short-term overbought, 
but the bullish MACD and daily stochastics (5,3,3) suggest 
otherwise.  Shares gushed higher by 6.2% today, outperforming a 
strong rally in the OIX.X oil index.  Traders feeling bullish on 
the oil sector can target entries on pullbacks to either 
psychological support at $50.00 or the 200-dma at $51.14.  We'd 
be looking for shares to conquer the 50-dma ($54.22) and make a 
run towards near-term resistance at $58.00.  Point-and-figure 
chartists will note that APA has bearish resistance at $55.00.


 

---  

Broadcom - BRCM - close: 19.11 change: +1.73

WHAT TO WATCH: Semiconductor bulls enjoyed a 6.9% rally in the 
SOX.X today, but they're not out of the woods yet!  A rollover 
from prior support at 350 could trigger another round of selling 
in the chip sector.  If the group does head lower, we think BRCM 
is an attractive short.  Shares have gained 14% in just two 
sessions and face overhead resistance at $20.00 and the 50-dma at 
$20.42.  A rollover from the region would be a good time to 
consider going short.  And check out the MACD...It's curling 
lower from just below the baseline and is threatening a bearish 
crossover.  The last two times this happened (in mid-March and 
late-April), BRCM was soon met with heavy selling.




---

MGIC Invest Cp - MTG - close: 60.96 change: +2.97

WHAT TO WATCH: The IUX.X insurance index has rebounded sharply 
over the past four days and looks to be headed for a test of 
resistance at 280.  A move over this level could quickly send the 
index to 300.  MTG is sitting on some large gains as well, but is 
also the proud owner of a freshly-minted bullish MACD crossover.  
If the broader market continues its winning ways, there's nothing 
in the way of overhead resistance to prevent a test of the 200-
dma at $64.19.  Entries can be gauged on a pullback to 
psychological support at $60.00.  Bears may also want to look out 
for a rollover at the 200-dma, which could send shares back to 
$60.00.  In related sector news, ACE reports earnings tomorrow 
morning.




--- 

Ross Stores - ROST - close: 41.09 change: +1.82

WHAT TO WATCH: ROST has already rebounded sharply from its 200-
dma at $36.00, but the bulls might not be done just yet.  Shares 
closed above both psychological resistance/support at $40.00 and 
the 50-dma at $40.61.  A pullback to either one of these levels 
could provide aggressive short-term traders with an action point 
to go long.  Although the daily stochastics are approaching 
overbought levels, the recent bullish MACD crossover hints at 
more upside movement.




--- 

Siebel Systems - SEBL - close: 9.49 change: +0.10

WHAT TO WATCH: Shares of SEBL finished in the green today, but it 
was a hallow victory.  The rallying NASDAQ created an ideal 
climate for SEBL to break above resistance at $10.00.  
Unfortunately for shareholders, the stock was hammered this 
morning after failing to move above that level.  The 
lackadaisical trading that followed is an ominous sign.  Given 
this relative weakness, one imagines that SEBL could trade 
sharply lower if/when the NASDAQ reverses course.  Short 
positions can be considered on continued weakness from current 
levels, or on another rollover from $10.00.


 

--- 

Synopsys - SNPS - close: 42.85 change: +1.42

WHAT TO WATCH: We scanned a lot of stock charts today, and 
several of them were displaying the same pattern of steep gains 
over the past few sessions.  So steep, in fact, that their 
overbought conditions make long plays a risky proposition.  This 
isn't the case with SNPS.  Shares recently bounced from the sub-
$40 region but haven't seen any sort of skyrocketing price 
action.  The daily stochastics (5,3,3) are only beginning to move 
higher, offering technical confirmation that SNPS isn't 
overbought.  Bullish traders should be watching for shares to 
move above today's high of $43.06.  Although previous support at 
$44.00 may act as resistance, short-covering could propel SNPS to 
the $46 level.


 

--- 

VeriSign - VRSN - close: 6.54 change: -0.15

WHAT TO WATCH: Only a handful of NASDAQ-100 stocks finished with 
losses today, one of which was VRSN.  Shares gapped higher this 
morning but were unable to maintain those gains.  As a matter of 
fact, the stock actually trended lower for most of the session.  
Talk about relative weakness!  Given today's action, we think 
VRSN will trade sharply lower if the NASDAQ begins to pull back 
and consolidate some of its recent gains.  Short entries can be 
gauged on a break under today's low of $6.27.  Our profit target 
would be psychological support at $5.00.  Note that shorting 
single-digit stocks requires a high-risk strategy.  Also, 
different firms may have various rules regarding margin 
requirements.  Check with your broker to find out what their 
specific margin requirements are.





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

Telecom Brasil - TBH - close: 16.99 change: -0.46 stop: 20.01

Company Description:
Telebras HOLDRS operated as a telecommunication company until 
5/98, whereby it spun-off 12 new companies. TBH controlling 
shareholders has announced its intention to liquidate and 
dissolve the Company. For the comparable FY ended 12/31/00, the 
Company reported no revenues. Net income applicable to U.S. GAAP 
fell 82% to CR$2M. Results reflect the absence of any revenue 
generating operation, higher operating expenses, and lower 
interest income.)



- ORIGINAL WRITE UP: July 26th, 2002 -

Why We Like It: 
Talk about a double-whammy!  Shareholders of TBH have had the 
misfortune of holding a stock whose sector is in an absolute 
freefall, and also a flailing political environment surrounding 
the country.  Just take a look at the IXTCX combined telecom 
index, which has been setting all-time lows on almost a weekly 
basis.  The recent WorldCom disaster and allegations of 
accounting irregularities at Qwest have only accelerated the 
downtrend.  But to make matters worse, TBH has also been 
pressured by swirling uncertainty regarding Brazil's political 
and economic climate.  Fears of a socialist agenda being imposed 
by the current Presidential frontrunner (elections are in 
October) have sent foreign investment capital scurrying to safer 
havens.  This has led to a severe decline in Brazil's currency.  
As you might expect, these developments have taken a severe toll 
on TBH.  The stock tumbled below the $20.00 level this week and 
is currently trading at all-time lows.  Technically, the bearish 
MACD and lack of underlying support hint at a continued decline.  
Where the stock finally stops is anyone's guess, but we don't 
think a move to $10.00 is out of the question.  Such an ambitious 
profit target, however, calls for a lenient stop-loss.  After 
all, this IS a high-risk/high-reward play.  Our initial stop will 
be located at $20.01.  More conservative traders may place theirs 
just above today's high of $18.31.  Of course, if all goes as 
planned we'll ratchet down our stop as TBH continues to fall.  
Although psychological support at $15.00 may offer a brief 
respite for the bulls, we don't anticipate more than a small 
bounce from this level.

- Play-of-the-Day Comments: July 29th, 2002 -

Somebody must've forgotten to tell TBH about today's explosive 
8.1% rally in the IXTCX combined telecom index.  Shares finished 
the session with a 2.6% loss and hit a new all-time low of 
$16.86.  Even Qwest fared better than TBH, and Q just disclosed 
accounting errors of over $1 Billion!  Needless to say, TBH looks 
like it could head sharply lower if the current telecom 
bullishness fades.  New short entries can be evaluated on a move 
under today's low or another failed rally at the $18.00 level.

Picked on July 26th at $17.45 
Results since picked:   +0.46
Earnings Date             N/A
 






=================================================================
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 07-29-2002
                                                   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/g29b_2.asp
=================================================================

In section two:

Net Bulls
  Closed Bearish Plays:  KLAC, QLGC, ROOM

Stock Bottom / Active Trader
  Stop Adjustments:      MGAM (bullish)
  Triggered Plays:       HUG, USTR (bullish)
  Closed Bearish Plays:  VFC

High Risk/Reward
  Stop Adjustments:      ISSX (bullish)
  Closed Bearish Plays:  BYD

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 Closed Plays
===============

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

KLA-Tencor - KLAC - close: 38.91 change: +1.62 stop: 40.50

As per the exit strategy outlined in the most recent update, this 
play was closed at the end of trading on Monday.  Our closing 
price is $38.91, which represents a gain of 2.0% from our 
original entry point.  KLAC attracted some buyers ahead of 
tomorrow morning's earnings, but investors seemed to approach the 
stock with a bit of trepidation.  The stock underperformed the 
semiconductor index (SOX.X) and was unable to move above Friday's 
high.  We're expecting a lot of volatility tomorrow following the 
earnings announcement.  Traders who chose to take the high-risk 
approach of holding over the report should be prepared for a wild 
ride!  Be aware of the possibility that if the NASDAQ's bullish 
momentum carries over into tomorrow's session, even a 
disappointing report could be met with buyers.

Picked on July 25th at $39.74
Results since picked:   +0.83
Earnings Date        07/30/02 (confirmed)




---

QLogic - QLGC - close: 40.43 change: +2.74 stop: 40.06

Semiconductor bears were in full retreat today as the NASDAQ 
rocketed to a 73-point gain.  QLGC powered higher by 7.2%, 
slightly outpacing a strong rally in the SOX.X.  Our play was 
closed for a 5.2% loss when the stock violated our stop at 
$40.06.  Despite today's impressive gains in the SOX, the index 
remains under former support at 350.  A rollover from this level 
could lead to another downward leg for QLGC.  However, the 
stock's rising daily stochastics (5,3,3) portend more upside 
movement.  Today's close above psychological resistance at $40.00 
is also a positive technical development.  Traders who elected to 
use a more liberal approach to risk management should be watching 
for the 50-dma at $42.49 to provide resistance, although the most 
prudent strategy would simply be to cover positions on any 
intraday weakness.

Picked on July 23rd at $38.06
Results since picked:   -2.00
Earnings Date        07/18/02 (confirmed)




---

Hotels.com - ROOM - close: 43.09 change: +3.19 stop: 42.01

Shares of online travel stocks TSG, EXPE, and ROOM, all moved 
sharply higher on Monday, with the latter posting an 8% gain.  
Our play was closed for a 6.3% loss when ROOM moved above our 
stop-loss at $42.01. Shares also broke out of the descending 
channel that had been intact since May.  This technical 
development, combined with the bullish MACD, suggests that shares 
will continue higher in the near-term.  Bears, however, will note 
that today's rally came on relatively weak volume and the daily  
stochastics (5,3,3) are approaching overbought levels.  ROOM also 
has overhead resistance at $45.00 (location of the 50-dma) and 
200-dma at $47.00.  We would not be surprised to see shares test 
the 50-dma within the next few sessions.

Picked on July 25th at $39.50
Results since picked:   -2.51
Earnings Date        07/23/02 (confirmed)






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

===============
AT Play Updates
===============  
 
Stop Adjustments
----------------

Multimedia Games - MGAM - cls: 22.44 chg: +1.61 stop: 19.94 *new*

We had a hunch that MGAM would trade higher today, following 
Friday's successful test of psychological support at $20.00.  Of 
course, it didn't hurt that the Dow Jones exploded for it's 
third-largest point gain ever.  In light of today's 7.7% rally in 
MGAM, we're going to tighten our stop to $19.94, just under 
psychological support (and also today's low) at $20.00.





Triggered Plays
---------------

Hughes Supply - HUG - cls: 37.48 chg: +2.65 stop: 34.82 *new*

Shares of HUG tacked on 7.6% today, further distancing themselves 
from the 200-dma ($33.90).  Not a bad start for this play, which 
was triggered when shares reached $35.01.  To minimize our 
downside risk, we're going to tighten our stop to $34.82.  This 
is a penny under today's low.  Also remember that we have a 
profit target set at $39.70.


 

--- 

United Stationers - USTR - cls: 26.15 chg: +1.31 stop: 23.99*new*

USTR chalked up a 5.2% gain on Monday, roughly mirroring the Dow 
Jones.  Our play was triggered when stares traded at $25.01.  
Based on today's action, we're going to bump up our stop to 
$23.99, a penny under today's low.  More conservative traders 
could use a stop just below psychological support at $25.00.  A 
pullback to this region might provide an opportunity to enter new 
long positions.





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

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

VF Corporation - VFC - close: 39.22 change: +1.83 stop: 37.51

The RLX.X retail index continued to retrace its recent losses on 
Monday, thanks in large part to the powerful broader market 
rally.  VFC followed the sector higher and finished with a 4.8% 
gain.  After narrowly avoiding our stop ($37.51) on Friday, the 
stock quickly eclipsed that mark in early-morning trading.  Our 
play was closed for a loss of 2.0%.  It appears the bears are on 
the defensive now that VFC has completely broken out of its 
descending channel.  Traders who are still short should be 
watching for a rollover from psychological support at $40.00, 
which is wedged in between the 50-dma and 200-dma.  The stock has 
gained more than 15% in the past four sessions and may be due for 
a pullback.  Of course, it would probably be futile to try to 
fight a continued rally in the Dow Jones.

Picked on July 25th at $36.76 
Results since picked:   -0.75
Earnings Date        07/17/02 (confirmed)
 





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

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

Stop Adjustments
----------------

Internet Security - ISSX - cls: 16.48 chg: +1.03 stop: 14.94*new*

ISSX moved higher with the NASDAQ today and pegged a new relative 
high of $16.53.  Shares closed just five cents under that level, 
which bodes well for a continued ascent on Tuesday.  We're going 
to tighten our stop to $14.94, which will force shares to trade 
below psychological support at $15.00.  This is essentially a 
break-even stop.  More conservative traders looking to protect a 
gain may want to place theirs just under today's low of $15.58.  
Remember that we'll close this play if ISSX trades at or above 
$16.99.





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

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

Boyd Gaming - BYD - close: 14.85 change: +1.33 stop: 14.01

Well, we knew a large move might be in store for BYD.  The stock 
had traded in an increasingly narrow range, which often precedes 
a breakdown or breakout.  Unfortunately we didn't get the large 
move we had hoped for.  Aided by an explosive across-the-board 
rally in the broader market, BYD exploded with a 9.8% gain.  Our 
play was closed for a 10-cent gain early in the morning when 
shares hit our stop at $14.01.  The stock may also have benefited 
from Friday night's credit rating upgrade, which we discussed in 
the last update.  In light of the powerful rally and rising daily 
stochastics, we would not be surprised to see BYD reach near-term 
resistance at $16.00 within the next few sessions.  It would take 
a serious bullish effort to push shares above that level.

Picked on July 18th at $14.11
Results since picked:   +0.10
Earnings Date        07/17/02 (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 

BCS     Barclays Plc Adr           30.65     +2.09
BBT     BB&T Corp                  36.73     +1.63
MTG     MGIC Investments Corp      60.96     +2.97
RSLN    Roslyn Bancorp             21.54     +1.29
SFD     Smithfield Foods Inc       17.48     +1.33
WFSL    Washington Federal         25.01     +1.76

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

ABN     ABN AMRO Holdings          15.46     +1.39
AEG     Aegon Nv                   13.90     +1.38
PTV     Pactiv Corp                19.07     +1.36
DCN     Dana Corp                  16.66     +1.67
WHI     W Holding Co               19.16     +1.16
IDCO    Interactive Data Corp      13.66     +1.17
CURE    Curative Health Services   17.68     +1.72

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

TEF     Telfonica SA               29.91     +1.20
JPM     JP Morgan                  25.10     +2.85
DB      Deutsche Bank              60.38     +3.98
HIG     Hartford Financial         51.35     +2.65
SPC     St Paul Co                 30.19     +3.19
APOL    Apollo Group Inc           39.14     +2.46
RHI     Robert Half Intl           20.57     +2.05

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

COF     Capital One                29.35     -1.15
GOSHA   Oshkosh B'gosh             31.82     -2.67
LNN     Lindsay Manufacturing      22.55     -1.45

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

None




=================================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to Contact Support
=================================================================
DISCLAIMER
=================================================================

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

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

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

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

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


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

DISCLAIMER

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

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

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

Option Investor Inc
PO Box 630350
Littleton, CO 80163

E-Mail Format Newsletter Archives