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Daily Newsletter, Tuesday, 07/30/2002

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PremierInvestor.net Newsletter                 Tuesday 07-30-2002
                                                   section 1 of 2
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In section one:

Market Wrap:      Steady Market Ahead of Second Quarter GDP
Market Sentiment: Holding Firm
Play-of-the-Day:  Fasten Your Seatbelts...


-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------        
      07-30-2002           High     Low     Volume Advance/Decline
DJIA     8680.03 - 31.90  8762.14  8540.12 2.16 bln   1713/1487
NASDAQ   1344.19 +  8.90  1354.48  1313.49 1.68 bln   1834/1600
S&P 100   452.90 +  2.03   455.87   443.53   Totals   3547/3087
S&P 500   902.78 +  3.82   909.81   884.70
RUS 2000  400.91 +   .10   402.32   390.55
DJ TRANS 2389.51 +  8.60  2417.55  2327.99
VIX        35.15 +  1.42    36.73    33.74
VXN        56.46 -  1.11    60.74    55.35
Total UpVol 2,614.3M
Total DnVol 1,439.4M
52wk Highs    59
52wk Lows    294
TRIN        0.89
PUT/CALL     .69
-----------------------------------------------------------------

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

Steady market ahead of second quarter GDP

Stocks traded rather steady today with modest upside despite this 
morning's Conference Board report that had consumer confidence 
falling to its lowest levels since February.

The Conference Board's Consumer Confidence Index, which declined 
in June, fell further in July.  The Index now stands at 97.1, 
down sharply from 106.3 last month.  The Present Situation Index 
fell to 99.2, down from 104.9.  The Expectations Index fell to 
95.7, down from 107.2 last month.

The Conference Board's survey is based on a representative sample 
of 5,000 U.S. households and is intended to represent the current 
pulse and future outlook of the U.S. consumer.

Lynn Franco, Director of The Conference Board's Consumer Research 
Center said, "The erosion in consumer confidence represents a 
significant deterioration in consumer attitudes.  The continued 
decline in the value of stock market portfolios, coupled with 
ongoing reports of corporate scandals, have taken a toll on 
consumer confidence.  The continued decline in the Present 
Situation Index suggests that consumers would tend to curb their 
spending in the absence of offsetting incentives."

A look inside today's report shows that expectations for the next 
six months have soured from last month.

Those participants polled expecting business conditions to 
deteriorate increased from 7.1% to 9.2%, while those anticipating 
an improvement in the months ahead fell from 23.7% to 20.9%.

The employment outlook also slid in July.  The percent of 
consumers expecting fewer jobs to become available in the next 
six months increased from 14.3% to 17.1%, while the percent of 
consumers expecting more jobs to become available declined from 
20.4% to 17.3%.  About 19.5% of consumers expect their incomes to 
rise over the next six months, down from 20.9% last month.

Consumers' assessment of the present situation was less favorable 
in July.  Those rating current conditions as "bad" climbed from 
19.5% to 22.1%, while those rating current business conditions as 
"good" rose, but modestly from 19.9% to 20.1%.  Consumers 
reporting that jobs were "hard to get" rose from 23.2% to 24.0%, 
while those claiming jobs were plentiful fell from 20.1% to 
18.8%.

One has to wonder

The consumer confidence report sure doesn't show too many signs 
of bullish sentiment does it?  The only area showing any type of 
bullishness was a very slight increase from 19.9% to 20.1% in 
those consumer's rating current business conditions as "good."

On the surface, I sure would have thought the major market 
averages would have seen more of a decline today, especially when 
considering the recent gains of the major averages in recent 
weeks.  Of the major market averages, only the Dow Industrials 
(INDU) 8,680 -0.36% finished in negative territory, giving up 
just 31 points of yesterday's spectacular 447 point gain.

Even the consumer sensitive retailers held the bulk of recent 
gains as depicted by the Retail HOLDRS (AMEX:RTH) $79.05 -1.18%.  
I'm still following a "hypothetical" portfolio of these stocks as 
benchmarked against their December 31st close.  

Retail HOLDRS - Hypothetical weighting as of 12/31/02 close




I've sorted the above Retail HOLDRS portfolio by cost weighting 
as if we had bought the stated amount (per the RTH weighting in 
each stock) on December 31st.  In essence, Wal-Mart (WMT) and 
Home Depot (HD) are by far the most heavily weighted stocks in 
the HOLDRS, while Radioshack (RSH) and Amazon.com (AMZN) carry 
the least amount of weight.

Note the "cost" of the portfolio as of the December 31st close 
shows $9,659.24, which is pretty darned close to the RTH close of 
$96.63 on the same date.  Today's portfolio value shows a total 
of $7,918.94, which is also pretty darned close to today's RTH 
close of $79.05.

I've placed red and green arrows by the worst and best 4 
performing stocks year-to-date.  This shows that while 
heavyweight Wal-Mart (WMT) hasn't been pulling its weight, Home 
Depot's (HD) 40% year-to-date decline and its heavy weighting has 
been a drag on the HOLDRS.

Tomorrow's GDP looms large

I'm not certain if today's consumer confidence report was 
overshadowed by tomorrow's second-quarter GDP data or not.  As 
mentioned earlier, today's market action perhaps displayed some 
caution with regard to the drop in confidence, but one could 
argue that the market may have already factored that into things 
in recent months.  

As stated in the Conference Boards report "consumer confidence is 
at its lowest levels since February, a quick check shows the S&P 
500 Index (SPX.X) closed at 902 today, compared to February's low 
trade of 1,074, which preceded the spring highs near 1,175.

While the equity markets have rallied in recent sessions and 
begin to digest some gains, tomorrows GDP data could loom large.

The market sure didn't tip its hat today as it relates to any 
type of "confirmed" thoughts about the economy with regards to 
tomorrows release of GDP data.

I was monitoring the Morgan Stanley Cyclical Index (CYC.X) 497.22 
-1.55% rather closely today, and subscriber's that have their 
charts set up with retracement as shown in past commentary were 
undoubtedly doing the same at current levels today.  This is 
perhaps a "key" sector or group of stocks to be monitoring as it 
relates to Gross Domestic Product and what the MARKET thinks 
about this set of numbers.  Today's action did not foretell of 
any type of bullish conviction toward tomorrow's GDP report.  

However, I'd keep an eye on this group after the report.  While 
I'd expect some type of "knee jerk" reaction to take place in the 
sector after the release of the GDP data, it may well be the 
market's reaction and sector trading in the deep cyclicals, that 
hints at broader market direction and perhaps the economy's 
strength/weakness in the months to come.

Morgan Stanley Cyclical Index Chart - Daily Interval




Any type of "conviction" that we are going to get an "upside" 
surprise was well hidden as it relates to today's trading in the 
Morgan Stanley Cyclical Index (CYC.X) or at least the basket of 
stocks that are contained within.  

Technicians will note very similar short-term technicals between 
the CYC.X and the Dow Industrials.  Undoubtedly, bears were 
shorting like crazy today with a tight stop just above the 505 
level.  It may be interesting on a more historical basis to go 
back and review the July 11th market wrap, when we were looking 
at the weekly interval chart of the CYC.X, then at 516.96, just 
after the break of 61.8% retracement at 531:
http://www.PremierInvestor.net/markets/marketwrap/071102_1.asp

Part of me thinks that bears had ample opportunity to lock in 
gains below the 477 level of retracement and yesterday's break 
back above that level had some bears rushing to cover further.

Key levels now become the 475 level as "support" and 505 as 
"resistance."  Bears may need to exercise some caution at 
shorting the open in some cyclical stocks (PI is adding Du Pont 
(DD) $42.10 -4.2%) if after the GDP numbers are released, equity 
futures slide.  If you can, monitor the CYC.X and see where it 
opens for trading.  If it opens right at or near the 477 
retracement level, just be alert that there may be some demand 
still looking to cover that didn't get it done last week.

If the market responds favorably to the GDP data and the CYC.X 
clears the 505 level, then the recent rally from 434 may have 
just been a "little" rally and a bigger rally in the sector could 
just be getting started.

Treasuries still found some sellers

Stocks traded firm today and Treasuries had a rather interesting 
session.  What was interesting was that the shorter-end of the 
maturities (less risky) saw a good round of selling, while the 
longer-term 30-year YIELD ($TYX.X) 5.395% finished with a 
marginally lower YILED, thus fractional buying.

This flattened the YIELD curve a bit and had me doing some 
looking around and pointing out in the 01:00 Update today that 
the Utilities as depicted by the Utility HOLDRS (AMEX:UTH) 270.09 
+7.03% were perhaps attracting cash in some "income oriented" 
investors were willing to take on a little more risk (like a bond 
investor would do if selling shorter-term maturities and buying 
the longer-dated 30-year Treasury).  As it relates to utility 
stocks, we can imagine even greater risk of an equity, which has 
no guarantee of anything (versus a Treasury bond or corporate 
bond, which is backed by underlying assets and are guaranteed by 
the underlying entity) which the MARKET was willing to buy today.

This is an observation that hints of a market willing to take on 
some equity risk and perhaps getting a little more aggressive on 
the "buy side" of things.

Jeff Bailey
Senior Market Technician
PremierInvestor.net


================
Market Sentiment
================

Holding Firm
By Steven Price


Another day, another Enron hearing.  In the continuing saga of 
"All My Enron Brokers," Merrill Lynch took the stand, and was 
quite contrite in admitting they would never have done business 
with Enron if they knew then what they know now.  Sounds like my 
description of several past relationships.  Unfortunately, in 
their case, a break-up doesn't solve the problem.  While Merrill 
Senior Vice President G. Kelly Martin claimed appropriate 
behavior based on knowledge at the time, former Merrill Managing 
Director Robert Furst and current Managing Director Schuyler 
Tilney each invoked the Fifth Amendment and refused to testify.  
Senator Carl Levin, who is chairing these hearings, referred to 
the Merrill deal in question, which netted a $750,000.00 profit, 
and allowed Enron to pad earnings by $12 million in 1999, as "an 
accounting sham."  These hearings are earning plenty of face time 
for the Senators, however the investing public seems to have 
gotten used to them and has shrugged off fears of more accounting 
problems to continue the broad market rally over the past week.

It appeared we would have a significant pullback today after the 
rally of over 1000 points in the last four days.  After release 
of the Consumer Confidence report, the Dow sank more than 170 
points, but recovered quickly and at one point was up more than 
50 points on the day.  The index finished down only 31.85 points 
on the day, which feels bullish, considering the gains it has 
managed to hold onto.  The S&P 500 finished up on the day by 
3.82, 16 points above its low for the day. This was in spite of 
Qwest's announcement that they are restating earnings for the 
years 1999-2001.  Apparently, Qwest insiders sold approximately 
half a billion dollars worth of stock during this period, 
including their legal counsel, which sold $13 million of the 
stock.

We expect more of these announcements as the August 14 period for 
CEOs and CFOs to sign their companies' financial statements 
approaches.  The idea of expensing executive stock options seems 
to be catching on with the talking heads, as this is another area 
where losses may be hidden.  If these options are expensed, and 
compensation is deducted from the bottom line, it could have a 
noticeable effect on earnings.

The most compelling news of the day was the Consumer Confidence 
report, which came in lower than expected.  There was a drop from 
June's reading of 106.3 to a July reading of 97.1, which was 
below expectations of 101.5.  This is troubling because it shows 
consumers' short-term outlook, which affects their spending 
habits.  The Confidence report is put together by the Conference 
Board Consumer Research Center, which also conducts surveys on 
consumers' expectations and employment outlook. According to the 
Center, these indicators were also negative. Those consumers 
expecting business conditions to deteriorate increased from 7.1% 
to 9.2%.  The percent of consumers expecting fewer jobs to become 
available in the next six months increased from 14.3% to 17.1%. 
The reason these numbers are important is that when people aren't 
sure about the reliability of their jobs or their brokerage 
accounts, they spend less.  Certain sectors, such as retail, are 
directly affected by quantifiable lack of purchases, while the 
economy as a whole is affected because the money we spend 
trickles into every sector.  Consumer spending makes up 
approximately 2/3 of GDP, so a reduction can lead to a major 
drain on the economy.

The president today signed into law the new corporate reform 
bill.  He pronounced the "era of low standards and false profits 
is over."  The law requires new reporting and disclosure rules 
and increases maximum penalties.  Bush hopes this will restore 
confidence in corporate reporting for timid investors who have 
seen the above referenced Senate soap opera each day on 
television.

After the bell, IBM announced their intention to buy Price 
Waterhouse Consulting for $3.5 billion. 

It was encouraging to watch investors shake off the poor 
Sentiment numbers today, but there is a slew of data due out this 
week.  Tomorrow is the GDP report, Beige Book and Chicago PMI.  
Thursday we have auto and truck sales, as well as initial 
unemployment claims for the week ending July 27 and construction 
spending.  On Friday, we have non-farm payrolls, unemployment for 
the month, personal income and factory orders.  Each day will re-
test the market's ability to hold gains.  
 
After the past week's rally, a pullback is likely.  Today 
however, the bulls saw the dip as a buying opportunity.  The VIX 
held steady, up only 1.42, but still in the mid 30s at 35.15.  At 
the end of the day, the charts appear to be moving sideways, 
however this does not tell the story.  If we retrace even half of 
the past weeks gains, this would be a drop of more than 500 
points.  The coming economic numbers will no doubt give 
ammunition to either the bears or bulls throughout the week.  If 
we rebound from intraday drops as we did today, the market may be 
forming a new bottom in this area.  A continuation of the rally 
is still a strong possibility given today's strength but the DJIA 
could see tough resistance between 8900 to 9000.  Yet let us not 
forget the ride down has taken several months, and the 
possibility of falling back to the 7500-point range in the Dow, 
from which we bounced, is a definite possibility.  

Keep an eye not only on closing prices, but also on the battle 
within the days' ranges this week.  After the next three days, we 
may have a better idea of whether we'll be wearing horns, or 
hibernating come winter.


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

Market Averages

DJIA ($INDU)

52-week High: 10679
52-week Low :  7702
Current     :  8680

Moving Averages:
(Simple)

 10-dma: 8249
 50-dma: 9224
200-dma: 9781

S&P 500 ($SPX)

52-week High: 1226
52-week Low :  797
Current     :  902

Moving Averages:
(Simple)

 10-dma:  858
 50-dma:  979
200-dma: 1085

Nasdaq-100 ($NDX)

52-week High: 1782
52-week Low :  896
Current     :  980

Moving Averages:
(Simple)

 10-dma:  953
 50-dma: 1077
200-dma: 1373


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

The Semiconductor Index (SOX.X) seems to have found a bottom 
after setting new 52-week lows last week, after Taiwan 
Semiconductor announced it was slashing its 2002 budget.  The 
sector has rebounded with 2 straight gains, and is knocking on 
the 350 level once again.  This level will be a test as it 
provided support on several occasions on the way down, and should 
now serve as resistance on the way up.

52-week High: 657
52-week Low : 315
Current     : 346.46

Moving Averages:
(Simple)

 10-dma: 348
 50-dma: 410
200-dma: 507

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

Market Volatility
The VIX is holding stable, as the market has held its current 
level.  This morning's big drop reminded everyone of the downside 
possibilities ahead, which should keep the VIX in the thirties 
until traders are convinced we have found a new bottom.  A slew 
of economic data will also provide support for the index through 
the end of the week.

CBOE Market Volatility Index (VIX) = 35.15 +1.42
Nasdaq-100 Volatility Index  (VXN) = 56.46 -1.11

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

          Put/Call Ratio  Call Volume   Put Volume
Total          0.69        665,397       459,815
Equity Only    0.58        492,066       283,326
OEX            0.89         35,538        31,504
QQQ            0.35         72,324        24,982

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

Bullish Percent Data

           Current   Change   Status
NYSE          29      + 4     Bull Correction
NASDAQ-100    31      + 5     Bull Confirmed
DOW           23      +20     Bull Alert
S&P 500       25      +11     Bull Alert
S&P 100       26      +16     Bull Alert

Bullish percent measures the number of stocks in an index 
currently trading on a buy signal on their point and figure 
chart.  Readings above 70 are considered overbought, and readings 
below 30 are considered oversold.

Bull Confirmed  - Aggressively long
Bull Alert      - Cautiously long
Bull Correction - Pause or pullback in upward trend
Bear Alert      - Take defensive action if long
Bear Confirmed  - High risk if long, good conditions for shorting
Bear Correction - Pause or rebound in downtrend

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

 5-Day Arms Index  0.96
10-Day Arms Index  1.23
21-Day Arms Index  1.30
55-Day Arms Index  1.32

Extreme readings above 1.5 are bullish, and readings below .85 
are bearish.  These signals don't occur often and tend be early, 
but when the do, they can signal significant market turning 
points.

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

Market Internals

        Advancers     Decliners
NYSE       1679          1452
NASDAQ     1774          1544

        New Highs      New Lows
NYSE        25             84
NASDAQ      103           121

        Volume (in millions)
NYSE     2,163
NASDAQ   1,723

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


Commitments Of Traders Report: 07/23/02

Weekly COT report discloses positions held by small specs
and commercial traders of index futures contracts at the 
Chicago Mercantile Exchange and Chicago Board of Trade. COT data 
can be found at www.cftc.gov.

Small specs are the general trading public with commercials being 
financial institutions. Commercials are historically on the 
correct side of future trend changes while small specs tend 
to be wrong.  

S&P 500

Commercials increased both longs and shorts, however increased 
long contracts totals by an additional 10,000 contracts more than 
shorts. Small traders continued to get longer, while adding 2,800 
net longs to their position.


Commercials   Long      Short      Net     % Of OI 
07/09/02      396,321   456,164   (59,843)   (7.0%)
07/16/02      388,943   464,162   (75,219)   (8.8%)
07/23/02      405,969   471,704   (65,735)   (7.5%)

Most bearish reading of the year: (111,956) -   3/6/02
Most bullish reading of the year: ( 36,481) - 10/16/01

Small Traders Long      Short      Net     % of OI
07/09/02      145,017    71,402    73,615     34.0%
07/16/02      157,370    67,247    90,123     40.1%
07/23/02      166,713    73,778    92,935     38.6%

Most bearish reading of the year:  36,513 - 5/01/01
Most bullish reading of the year: 114,510 - 3/26/02
 
NASDAQ-100

Commercials added contracts both long and short to their 
positions, maintaining approximately the same ratio, however 
increasing their positions by approximately 8,000 total 
contracts.  Small Traders added to their short positions reducing 
their net by approximately 400 contracts.


Commercials   Long      Short      Net     % of OI 
07/09/02       31,227     39,592    (8,725) (12.3%)
07/16/02       33,152     39,866    (6,714) ( 9.2%)
07/23/02       37,204     43,601    (6,397) ( 8.0%)

Most bearish reading of the year: (15,521) -  3/13/02
Most bullish reading of the year:   9,068  - 06/11/02

Small Traders  Long     Short      Net     % of OI
07/09/02       12,520     8,348     4,175     20.0%
07/16/02       12,816    10,774     2,042      8.7%
07/23/02       12,756    11,152     1,604      6.7%

Most bearish reading of the year: (10,769) - 06/11/02
Most bullish reading of the year:   8,460  -  3/13/02

DOW JONES INDUSTRIAL

Commercials added 2,000 contracts to their long position, while 
adding only 671 to their shorts.  Small Traders increased both 
sides of their position, however added almost 2,000 more short 
contracts than long contracts. 


Commercials   Long      Short      Net     % of OI
07/09/02       20,761    14,122    6,639     19.0%
07/16/02       20,357    14,074    6,283     18.2%
07/23/02       22,369    14,745    7,624     20.5%

Most bearish reading of the year: (8,322) -  1/16/01
Most bullish reading of the year: 15,135  - 10/16/01

Small Traders  Long      Short     Net     % of OI
07/09/02        6,831     6,623       208     1.50%
07/16/02        8,524    10,133    (1,609)   (8.62%)
07/23/02        9,101    12,604    (3,503)   (16.1%)

Most bearish reading of the year:  (8,777) - 10/12/01
Most bullish reading of the year:   1,909  -  1/16/01

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


===============
PLAY-of-the-Day  ((new BEARISH non-tech play))
===============

Alaska Air Group - ALK - close: 23.62 change: -0.34 stop: 25.06

Company Description:
Alaska Air Group is the holding company for Seattle-based Alaska 
Airlines and Horizon Air.  Alaska Airlines is the nation's ninth 
largest airline with more than 11,000 employees. (source: company 
press release)

Why We Like It:
The latest round of airline earnings has been abysmal.  Nearly 
every major carrier has posted huge losses, with signs of an 
industry rebound few and far between.  It's getting so ugly that 
bankruptcy rumors have been swirling around UAL, the world's 
second-largest airline.  Maybe they should start shipping sick 
bags with their quarterly reports!  Despite the lack of any 
evidence of an upturn in business, the XAL.X airline index has 
rebounded sharply from last week's low of $45.60.  Is this rally 
sustainable?  We think not.  

Last Monday's earnings report from ALK also featured a loss.  The 
company blamed the results on higher operating expenses, lower 
airfares, and reduced spending by business travelers (source: 
AP).  Although the losses were narrower than expected, the 
explosive rally that followed was probably more a result of the 
upturn in the broader market.  From last Monday's low to today's 
high, ALK posted a 27% gain.  Shares finally sold off today after 
colliding with the 50-dma ($24.93), setting up what we think is a 
high-odds play.  The stock is extremely overbought (technically, 
the daily stochastics confirm this) and looks ready to retrace 
some of the recent gains.  Although there's some congestion near 
$22.00, shares could eventually reach the $20.00 level if the 
XAL.X resumes its downward course.  Longer-term traders may also 
want to note that the weekly stochastics are also deeply 
overbought.  Our stop is set at $25.06, above both the 50-dma and 
psychological resistance at $25.00.

Trading note: the danger to this bearish play was the Vanguard 
Airlines bankruptcy news today.  Losing a key player in the 
business should boost customers across the board for the 
remaining airliners.  This will boost revenues and they didn't 
have to raise a finger or raise marketing costs.  However, this 
news came out intraday, so why didn't shares react more 
positively to the news?  The possibility, as we alluded to with 
UAL, is that if Vanguard is going under, who's next?

Picked on July 30th at $23.62
Gain since picked:      +0.00
Earnings Date        07/22/02 (confirmed)
 






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PremierInvestor.net Newsletter                  Tuesday 07-30-2002
                                                    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
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To view this email newsletter in HTML format with imbedded
charts and graphs, click here:
http://www.PremierInvestor.net/htmlemail/g30b_2.asp
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In section two:

Net Bulls
  Bearish Play Updates:  CYMI

Stock Bottom / Active Trader
  New Bearish Plays:     ALK, DD, MO
  Bullish Play Updates:  HUG, MGAM, USTR

High Risk/Reward
  New Bullish Plays:     HGSI
  Bearish Play Updates:  TBH
  Closed Bullish Plays:  ISSX

Split Trader
                         NBY: 4-for-3 split announcement
                         SSD: 2-for-1 split confirmation

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

  --------------------
  Bearish Play Updates
  --------------------

Cymer Inc. - CYMI - close: 29.94 change: +1.04 stop: 30.01

The semiconductor index (SOX.X) posted some respectable gains 
over the past two days, but thus far hasn't been able to crack 
resistance at 350.  In similar fashion, CYMI was unable to break 
though psychological resistance today.  Shares traded up to 
$30.00 and avoided our stop-loss by one cent.  With the stock 
closing just under this level, we would not be surprised to be 
stopped out tomorrow.  However, it's interesting to note that 
today's 3.5% gain was backed by the lowest volume in over three 
weeks.  A rollover from the current levels could lead to a sell-
off that takes CYMI back to the $27.00-$28.00 region.  The MACD 
and daily stochastics are somewhat neutral and do not give any 
clear indication as to where CYMI be headed next.  Due to the 
lack of a clear technical picture, we would not recommend opening 
new positions at this time.

In sector-related news, NVDA announced lower-than-expected 
preliminary Q2 results this evening.  Shares of the graphics chip 
company were trading sharply lower in the after-hours session.  
This news may weigh on the semiconductor sector tomorrow.

Picked on July 26th at $27.55
Change since picked:    -2.39
Earnings Date        07/22/02 (confirmed)






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

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

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

Alaska Air Group - ALK - close: 23.62 change: -0.34 stop: 25.06

Company Description:
Alaska Air Group is the holding company for Seattle-based Alaska 
Airlines and Horizon Air.  Alaska Airlines is the nation's ninth 
largest airline with more than 11,000 employees. (source: company 
press release)

Why We Like It:
The latest round of airline earnings has been abysmal.  Nearly 
every major carrier has posted huge losses, with signs of an 
industry rebound few and far between.  It's getting so ugly that 
bankruptcy rumors have been swirling around UAL, the world's 
second-largest airline.  Maybe they should start shipping sick 
bags with their quarterly reports!  Despite the lack of any 
evidence of an upturn in business, the XAL.X airline index has 
rebounded sharply from last week's low of $45.60.  Is this rally 
sustainable?  We think not.  

Last Monday's earnings report from ALK also featured a loss.  The 
company blamed the results on higher operating expenses, lower 
airfares, and reduced spending by business travelers (source: 
AP).  Although the losses were narrower than expected, the 
explosive rally that followed was probably more a result of the 
upturn in the broader market.  From last Monday's low to today's 
high, ALK posted a 27% gain.  Shares finally sold off today after 
colliding with the 50-dma ($24.93), setting up what we think is a 
high-odds play.  The stock is extremely overbought (technically, 
the daily stochastics confirm this) and looks ready to retrace 
some of the recent gains.  Although there's some congestion near 
$22.00, shares could eventually reach the $20.00 level if the 
XAL.X resumes its downward course.  Longer-term traders may also 
want to note that the weekly stochastics are also deeply 
overbought.  Our stop is set at $25.06, above both the 50-dma and 
psychological resistance at $25.00.

Trading note: the danger to this bearish play was the Vanguard 
Airlines bankruptcy news today.  Losing a key player in the 
business should boost customers across the board for the 
remaining airliners.  This will boost revenues and they didn't 
have to raise a finger or raise marketing costs.  However, this 
news came out intraday, so why didn't shares react more 
positively to the news?  The possibility, as we alluded to with 
UAL, is that if Vanguard is going under, who's next?

Picked on July 30th at $23.62
Gain since picked:      +0.00
Earnings Date        07/22/02 (confirmed)
 



---

DuPont - DD - close: 42.10 change: -1.85 stop: *text*

Company Description:
DuPont--the oldest industrial company listed on the Fortune 500 -
- was founded on July 19, 1802 along the banks of the Brandywine 
River near Wilmington, Del., by French immigrant Eleuthere Irenee 
du Pont as a small family firm manufacturing black powder for 
guns and blasting. Entering its third century today with 79,000 
employees and operations in 70 nations, DuPont invented some of 
the world's best-known innovations and technologies. (source: 
company press release)

Why We Like It:
First things first...DD is a Dow Jones component, so we'd be 
remiss if we didn't briefly discuss our outlook for the 
Industrials.  The index rebounded more than 1000 points from last 
week's lows and has retraced roughly 61% of the downward leg that 
began on July 8th.  This level would be a logical point to see 
some profit-taking emerge.  The tentative nature of the current 
rally was displayed today when the markets sold off after the 
White House expressed concern about the latest consumer 
confidence data.  It looks like traders sitting on massive gains 
from last week are itching for an excuse to take profits.  Such 
an excuse might be provided by tomorrow's GDP report, which is 
announced before the bell.  A disappointing number (market 
consensus is 2.3%) could lend a bearish bias to the broader 
market indices.

Given our belief that the Dow has limited upside in the near-
term, we think DD offers a good short opportunity.  The stock 
gained more than 20% in just four sessions, but finally ran out 
of steam at the 200-dma ($44.23) on Monday.  Shares distanced 
themselves from that level today and also closed below the 50-dma 
at $43.61.  With these moving averages looming overhead and DD 
looking overbought (as shown by the daily stochastics) we think 
odds of a pullback are good.  Specifically, we're going to target 
a move to the $37 region, near the recent lows.  Psychological 
support at $40.00 provides a possible obstacle to our goal, but 
we think a pronounced sell-off in the Dow Jones will see this 
level fall to the wayside.  We'll limit our upside risk with a 
stop at $44.26, just above the rising 200-dma.  However, we will 
not enter this play until DD falls under today's low of $41.62.  
Fundamentally speaking, DuPont's recent earnings report revealed 
a large amount of uncertainty about their outlook for the near 
future.  The company stated that they were expecting a "more 
modest" rebound during the second half of 2002.  That probably 
isn't what investors want to hear, especially considering the 
underlying fears that the U.S. economy will slip into a "double-
dip" recession.

Picked on July xxth at $xx.xx <- see text
Gain since picked:      +0.00
Earnings Date        07/24/02 (confirmed)
 



---

Philip Morris - MO - close: 46.76 change: -0.44 stop: 48.01

Company Description:
The Philip Morris family of companies, including Kraft Foods Inc. 
(Kraft), is the world's largest producer and marketer of consumer 
packaged goods. Philip Morris Companies Inc. recorded 2001 
underlying net revenues of approximately $81 billion and owns 
83.9% of the outstanding common shares of Kraft and is the 
largest shareholder, with an approximately 36% economic interest, 
in SABMiller plc. The Philip Morris family of companies also 
includes Philip Morris Incorporated (PM USA), Philip Morris 
International Inc. and Philip Morris Capital Corporation. 
(source: company press release)

Why We Like It:
With the Dow staging a strong rally over the last few days, MO 
has showed reactionary strength.  Based on chart technicals, 
Philip Morris seems to have run into horizontal resistance.  
Since the recent July low, MO has rebounded 16% in just two 
weeks.  On July 15th, the tobacco stock had a low of 40.30. 
Although we are happy to see the company's stock price 
appreciate, the move could be a dead cat bounce, potentially 
foreshadowing another failure.  

The horizontal resistance that we mentioned earlier sits in the 
45.90-47.30 area, with the most recent high at 47.20.  We are 
looking at three points to gauge resistance, and pinpoint our 
stop.  Our first area of resistance is in the consolidation 
occurring in November, December, and January of the last year.  
Second, the July 9th, 10th, and 11th highs gave us an indication 
that last year's resistance meant business.  Third and final, 
after failing in the 47.50 area during early July, MO flopped to 
the bottom of its range, where it made the most recent low at 
40.30.  Please see the annotated chart below.  We believe that 
the same resistance (which the stock is at now) could be a 
potential short swing trade worth our time.  Also of commendable 
notoriety, the Stochastics are showing the stock is currently 
overbought, and could fall back into the mid-range of the 
indicator.  

Because the 50-dma, and the 200-dma are well above where the 
current price is, we will keep a tight stop on this trade.  Our 
concern is that although we like the current horizontal 
resistance, the stock could still make a run at the benchmark 
averages.  Because the newsletter is planning to add this as a 
short at current levels, we want to make sure our stop is 
somewhat constrictive.  The initial stop for our position will be 
at $48.01, a little more than a quarter above the high on July 
8th.  The official price target for this position is 42.05, which 
is slightly above support.  We anticipate support in the 44 area, 
which would be both: psychological and technical.  If the support 
at 44 is breached, the stock could fade into our hands, with the 
stock price going up in a cloud of smoke. 

For an annotated chart, click here:
Chart of: MO, Daily.



Picked on July 25th at $46.76 
Gain since picked:      +0.00
Earnings Date        07/18/02 (confirmed)
 




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

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

Hughes Supply Inc. - HUG - cls: 37.01 chg: -0.47 stop: 34.82

Over the last few days, Hughes Supply Inc. has ascended towards 
our profit target of $39.70.  After our original trigger of 
$35.01 was hit, the stock began a slow climb, breaking away from 
the 200-dma.  Yesterday's rally gave HUG legs, allowing the stock 
to close at $37.48.  Although we are closer to our profit target, 
the last mile can always be the longest one, thus attempting to 
protect our position from a hefty loss, we will keep our stop 
tight at $34.82.  Our profit target still points towards the 50-
dma, where we hope to exit our entire position.   Daily 
Stochastics have moved up from the oversold region and are 
pointing higher.  The MACD is also looking bullish and is about 
to produce a bullish crossover from an extremely oversold 
condition.  We would like to see buying volume surge in this 
stock to confirm bullishness.  No new press has surfaced on HUG.   

Picked on July 29th at $35.01 
Gain since picked:      +2.00
Earnings Date        05/21/02 (confirmed)
 



---

Multimedia Games - MGAM - close: 22.33 change: -0.11 stop: $19.94

Onwards and upwards!  To date MGAM has traded strongly from the 
early July low.  Our position, initiated at $20.50, is showing 
strength, as it trades towards our profit target.  With the MACD 
trending back towards the zero line, buyers could begin to flow 
into MGAM.  The Stochastics are still above the overbought line 
at 86.96, on the daily chart but they can still go higher.  With 
no fresh media buzz on MGAM, the stock's recent upward movement 
is simply a technical rebound.  We would like to see this equity 
hit our profit target at $24.49, though just in case it begins to 
lose strength, we will keep our stop at $19.94.  

Picked on July 25th at  $20.70
Results since picked:    +1.63
Earnings Date         07/25/02 (confirmed)
 




---

United Stationers - USTR - close: 25.80 change: -0.35 stop: 23.99

Although we like to think this equity is independently strong, 
yesterdays rally in the Dow definitely helped to push this stock 
higher.  With the MACD hovering on the lower end of its range, we 
are encouraged that the 26-dma just crossed above the 12dma.  
Daily Stochastics are midrange, but headed higher which is 
bullish.  We will keep our stop reasonably protective, leaving it 
at 23.99.  Our initial profit target is in the $28-29.00 area, 
which is below the 50-dma and the 200-dma.  Traders who would 
like to increase their chances of a quicker, though less 
lucrative profit target, could attempt to sell their positions at 
$27.95.  Conservative traders could still also put a stop below 
$25.00, which is just underneath the whole number and 
psychological support.       

Picked on July 29th at $25.01 
Change since picked:    +0.79
Earnings Date        07/23/02 (confirmed)
 





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

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

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

Human Genome Sciences - HGSI - cls: 17.20 chg: +1.20 stop: 15.49

Company Description:
Human Genome Sciences is a company with the mission to treat and 
cure disease by bringing new gene-based drugs to patients. Human 
Genome Sciences has eight drugs in clinical development: 
repifermin, BLyS, TRAIL Receptor-1 human monoclonal antibody, 
Albuferon, Albutropin, LymphoStat-B, Albuleukin and LymphoRad. 
(source: company press release)

Why We Like It:
Over the last couple of years, the biotech sector was definitely 
not spared from selling.  However, with a potential end to the 
ImClone debacle in sight, there is a chance that the devastated 
sector could attempt a comeback.  Prosecutors have recommended 
that ImClone CEO Samuel Waksal serve 10 years in prison for his 
role regarding insider trading.  Although this news is not 
directly biotech related in terms of science, it is a potential 
win for investor confidence.

The $BTK.X, Biotech Index closed up 4.82% today, trading above 
the 50-dma.  Also, the Stochastics for the BTK have just crossed 
above the upper line, slightly entering over-bought territory.  
Our stock, HGSI, has also rallied over the last three weeks, 
trading respectably off its recent lows.  The Stock has closed 
above the 50-dma, and looks as if it has its eyes set on the 200-
dma at $25.20.  Although this is not a reality for our profit 
target, we would not rule out the possibility of it happening.  
Today's session provided a breakout of the most recent 
consolidation from $13.00 to just above $16.00.  This move does 
not guarantee the stock will immediately gain strength, as there 
is still congestion all the way through $18.00.  However, if HGSI 
can gain strength, our official profit target is at $19.95.  This 
target is just below resistance and the whole number, attempting 
to beat sellers hoping to get out at $20.  Conservative investors 
could lower their target to $19.38, one penny below pending 
resistance at $19.39.  Adding HGSI at current levels, the stop 
for this trade is $15.49, alluding to a 2-1 reward to risk ratio.  
If our stop is breached, we will close the entire position.  Stay 
tuned for stop updates!       

For an annotated chart, click here:
Chart of: HGSI, Daily.



Picked on July 30th at $17.20 
Change since picked:    +0.00
Earnings Date        07/25/02 (confirmed)
 




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

  --------------------
  Bearish Play Updates
  -------------------- 

Telecom Brasil - TBH - cls: 16.40 chg: -0.59 stop: 18.32 *new*

With all the reliability of the Energizer Bunny, TBH keeps 
falling and falling.  The stock seemed to be completely oblivious 
to the explosive broader market rally on Monday and shares 
finished solidly in the red.  Today's action was much the same, 
with TBH dropping by 3.4% and setting a new all-time low of 
16.03.  This action might be expected if the telecom sector was 
still sinking, but the past two days have actually seen solid 
gains in the IXTCX combined telecom index.  Today's decline was 
backed by the third-strongest volume reading of the year.  Shares 
appear to have been pressured by continued worries concerning the 
devaluation of Brazil's currency.  International Monetary Fund 
officials are meeting tomorrow to discuss the situation.

Based on the results of the past two days, we're going to tighten 
our stop to 18.32, a cent above Friday's high.  A more cautious 
strategy would utilize a stop just above today's high at $17.20.  
Although we don't have an official profit-target for this play, 
short-term or conservative traders may want to think about 
locking in gains if shares bounce near psychological support at 
$15.00.

Picked on July 26th at $17.45 
Results since picked:   +1.05
Earnings Date             N/A
 




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

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

Internet Security - ISSX - cls: 17.05 chg: +0.57 stop: 14.94
 
Now that's what we like to see!  ISSX continued its jaunt higher 
and posted a 3.4% gain.  Our play was closed when shares hit our 
profit-target of $16.99.  This represents a 13.1% move from our 
entry point.  As impressive as the recent uptrend is, shares are 
now faced with resistance in the $17.50-$18.00 region.  The GSO.X 
software index also remains under resistance at 100.  ISSX may be 
due for a pullback to consolidate some of the gains from the past 
week.  The stock is technically overbought (as shown by the daily 
stochastics), so traders still long should be using tight stops 
to protect their gains.  

Picked on July 24th at $15.01
Results since picked:   +1.98
Earnings Date        07/18/02 (confirmed)






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

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

NBC Capital Sets 4-for-3 Stock Split 

Shortly after the closing bell today, NBC Capital Corp. (AMEX: 
NBY) announced that its Board of Directors had authorized a 4-for-
3 stock split.  

The split will be distributed on September 9, 2002 to shareholders 
of record on August 16, 2002.

This will be the stock's first split since it began trading in 
1999.  NBY is a relatively slow mover and trades on thin average 
volume of 4,300 shares/day.

NBY closed at $36.95 on Tuesday.  For a current quote, click here:

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

About the company
NBC Capital Corporation is a financial holding company providing 
full financial services, including banking, trust services, 
mortgage services, insurance and investment products in east 
Mississippi and Tuscaloosa, Alabama. NBC's stock is listed on the 
American Stock Exchange under the ticker symbol of NBY. (source: 
company press release) 


Split Updates
-------------

Shareholders of Simpson Manufacturing Approve 2-for-1 Split 

On June 24th, Premier Investor reported that a 2-for-1 stock split 
had been authorized by Simpson Manufacturing, Inc (NYSE: SSD), 
pending shareholder approval.  This approval was given at a 
special meeting on Monday, July 29th.

The split will be distributed on August 16th, to stockholders of 
record on August 8th.

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

About the company
Founded in 1982, Immucor manufactures and sells a complete line of 
reagents and systems used by hospitals, reference laboratories and 
donor centers to detect and identify certain properties of the 
cell and serum components of blood prior to transfusion. Immucor 
markets a complete family of automated instrumentation for all of 
our market segments. (source: company press release)


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

AN      Autonation Inc.            13.81     +0.57
NLS     Nautilis Group Inc.        31.06     +1.23
CHKP    Check Point Software       17.47     +0.66
INTL    Inter-Tel Inc.             21.06     +1.26
TTWO    Take-Two Intera Software   21.53     +1.53

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

KOPN    Kopin Corporation          6.91      +1.21
EP      El Paso Energy             14.55     +3.40
PRSE    Precise Software Solutions 12.33     +1.29
ABI     Applera Associates         18.00     +1.30
ALXN    Alexion Pharmaceuticals    14.25     +1.24

--------------------------------------- 
Breakout to Upside (Stocks over $20) 
--------------------------------------- 
Ticker  Company Name               Close     Change 
ICOS    Icos Corporation           24.50     +2.53
MEDI    Medimmune Inc.             29.59     +2.15
BBH     Biotech Holders Trust      79.15     +2.90
MYGN    Myraid Genetics Inc.       23.08     +1.40

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

BBOX    Black Box Corporation      34.79     -2.20
SKE     Spinnaker Exploration Co.  27.60     -4.75
GOSHA   Oshkosh B'gosh Inc.        30.66     -1.16

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

None




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