PremierInvestor.net Newsletter Wednesday 08-07-2002 section 1 of 2 Copyright © 2002, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= In section one: Market Wrap: The Playground Watch List: ADBE, ETM, HD, HSY, KLAC, NOC and more... Play of the Day: Off to a Good Start ******************************************************************* MARKET WRAP (view in courier font for table alignment) ******************************************************************* 08-07-2002 High Low Volume Advance/Decline DJIA 8456.15 + 182.02 8460.17 8214.62 1739 mln 1980/1128 NASDAQ 1280.90 + 21.35 1298.12 1243.49 1567 mln 1704/1530 S&P 100 441.46 + 10.29 442.39 429.15 totals 3684/2658 S&P 500 876.77 + 17.20 878.74 854.15 RUS 2000 383.47 + 2.68 385.21 376.56 DJ TRANS 2271.38 + 35.88 2277.96 2214.87 VIX 43.07 - 2.66 47.01 42.07 VIXN 68.84 + 4.66 69.26 63.91 Put/Call Ratio: 0.76 ******************************************************************* =========== Market Wrap =========== Trading action was mixed today with a gap up opening that looked like disaster as the market quickly faded with traders selling into strength. Luckily, the Dow was able to regain its lost ground closing up +182.06 for the day. The Nasdaq gained +21.35 and the S&P 500 staged a +17.20 point rally to close at 876.77. NYSE advancers outpaced decliners 1980 to 1128, while Nasdaq winners beat losers 1708 to 1527. The Big Board saw 21 new 52- Week Highs and 92 52-week Lows! Nasdaq witnessed 15 news highs versus 96 new lows. 1.7 billion shares traded on the NYSE, and 1.5 billion exchanged hands on the Nasdaq. Overall the market seemed to be jittery in light of earnings from CSCO last night, which topped analysts' expectations. The tech giant beat expectations, reporting 14 cents versus the 12 anticipated by the street. CSCO also increased its treasury buyback program by five billion dollars. Leading sectors of the day were: pharmaceuticals, healthcare, computer software and hardware, transportation, biotech, and chemicals. Losers in the session were: oil services and the Dollar. Former ImClone CEO, Sam Waksal was indicted today on charges that he tried to dump stock (insider trading) several days before an FDA ruling was announced to the public. If convicted, he faces 45 years in prison, and a 1.5 million dollar fine. Martha Stewart faces several class action lawsuits in connection with her sale of IMCL stock, and has refused to talk to a congressional Committee. Today also witnessed the International Trade Import and Export Prices report, which measures the price change of products exchanged with other countries. Export prices ascending 0.4% in July, while import Prices staying flat for July. Analysts fear that a weakening dollar and inflationary threats could lead to a future rise in prices of non-petrol goods. However, this is good news for exporters who will benefit from the appreciation of foreign currencies. Wholesale Inventories increased 0.3%, beating the market forecast of 0.2%. The Wholesale Report is not an incredibly important economic indicator, as the analysis does not reveal anything notable about personal consumption. The numbers do indicate a positive tone for the wholesale industry, as inventory-to-sales ratios remain low. With interest rates remaining low and another potential refinancing boom ahead (if the Fed lowers rates further), the MBA Index hit a record high last week. The MBA Index is a leading indicator of home sales, giving insight into where U.S. housing markets are going by measuring mortgage applications. Further, the Index also depicts refinancing activity, which can be an insight in to future consumer spending activities. The MBA Mortgage Applications Survey reported 1066.9 new applications, up from 732.0 on July 5th. This is 46% higher than where it was only four weeks ago, and more than double the rate a year ago. Even more astounding is the refinance data, which indicates 5097.3 applications versus 2616.6 in July. Re-financing is good for the economy because if more homeowners refinance at lower rates, they then directly have more expendable income to circulate back into the economy. With the surge in refinancing equity, homeowners will likely be putting much of that cash back into their homes in the name of renovation related products. The only negative issue in the numbers is that with heightened demand for mortgages, home prices are once again on the rise. If housing prices continue to climb, it is very possible to see a "bubble" develop which could eventually burst if interest rates climb over 7%. According to CBS Market Watch, the Fed funds futures are currently predicting a 7% chance of a rate change for the FOMC meeting next Tuesday, and a 53% chance for next January. Assuming the economy shows more weakness, the FOMC would likely lower rates sometime in the next year, which would stimulate even more mortgage activity. However, the scenario seems like a catch 22... If the Fed lowers rates in September to spur more consumers into spending through re-financing, the economy could see recovery and possibly inflation. Thus, the Fed probability for another rate cut would decrease in January, as the economy shows signs of a strong real-estate market and consumer backed recovery. If the Fed then sees signs of an inflationary market, it would then have to raise rates, putting a clamp on the money supply. Also, as previously mentioned, if mortgage rates climb above 7%, the "bubble" could burst, as the housing market gets a quick dose of reality when buyers disappear. The equation is a fine line of economic feathering in order to maintain a fruitful equilibrium. I would like to note that obviously the economy is not solely dependant on real-estate backed consumer spending, and the scenario I spoke of above is isolated in data... The real picture has many other factors to consider. It is important to note that the MBA Index is GREAT news for the economy because bottom line, it means revenue. Consumers spend, companies earn. The unknown factor is how much consumers will spend, or will they sock their refinance cash away into savings. If consumer's turn out to be prudent Americans who are careful with their income, we could see slower, more stagnate recovery. Unfortunately, that is not what corporate bean counters and economists want to hear. Today's epiphany is that the economy is sliding into a bottom, and we could definitely see economic recovery as early as this spring. Recent history teaches us that if and when the economy does recover, we should not let the nineties repeat themselves. If we leap frog into the market once again like chickens with our heads cut off chasing overvalued stocks... The whole process could repeat itself. Because a picture tells a thousand words, the rest of today's article will include mostly charts. Chart of: Dow Jones Industrial Average, Daily. The Dow chart clearly shows the descending channel we have been trading in. The 50-dma crossing under the 200-dma in late July was not a good sign. If the Dow hopes to gain strength, the index must breakout of the descending channel and challenge the whole number at 9000. Bears have been using the channel to find short entry points, reconvening their positions each time the index touches descending resistance. In good news for bulls today, the Dow was able to close above resistance at 8400. We will be keeping a close eye on this channel, as is has identified out range for the last five months. Chart of: Dow Jones Transportation Index, Daily. In the Dow Jones Transportation Index, the chart shows an effort at a rebound rally. The question at hand is whether the current move is simply a short covering rally or a sign of future strength? Leading today's gains were the railroads: Union Pacific Railroad (NYSE:UNP), Burlington Northern (NYSE:BNI), and C S X Corporation (NYSE:CSX). If a turn in the Transportation Index appears to be a reality, it could be a leading indicator of economic health. After all, the transportations not only move goods for consumption, but also use many core resources as well. Chart of: S&P 500, Weekly. The S&P chart evidences the descending channel support and resistance, which has been guiding the index. Since September of 2000 the S&P has bounced off descending support 3 times, while the index also recently failed at channel resistance early last spring. If the S&P is able to maintain a rally in the near term, 1000 will be a strong number to test, as it lies at horizontal resistance and descending channel resistance. Bulls are happy to see the weekly Stochastics turning up out of the oversold region, possibly indicating future buying. Chart of: Nasdaq Combined Composite Index, Daily. The Nasdaq chart immediately displays its weakness. The Current descending trend is a smaller move within a larger down trend. Long term descending resistance is characterized by the blue line on the chart, which also seems to appear in tandem with the 200- dma. In the short term, the Nasdaq must not only fight the descending resistance of the pink line, but it must fight through the 1500 area as well. The recent hold at support of 1200 hundred is a good sign for bulls, along with Stochastics seemingly turning up. Chart of: Market Volatility Index: Daily. The VIX is an inverse measure of the markets, calculated from option volatility. The VIX is currently at 43.07 has fallen from the most recent extreme levels, allowing the market room to breathe. The "normal" range for the VIX is 20 to 30, where 20 is usually an indication that the market is topping out, and 30 normally depicts a bottom. However, these are anything but normal times, thus we see the VIX trading at unusual levels. A close over 50 is said to be an extreme circumstance and could be followed by a large short covering move. The Momentum indicator is calculated between the current price and the price length during 12 previous intervals. The indicator is supposed to indicate a change in trend when the signal line crosses above or below the 0 line. Chart of: U.S. Dollar, Daily. The U.S. Dollar has certainly been taking heat of its own over the last several months. Weakness in the greenback can be attributed to foreign flight of investment capital in light of the current weakened economy. The buck was able to hold 105, and has attempted to gain momentum since its low a few weeks ago. Currently trying to trade above the 50-dma, the dollar could pullback here, as the Stochastics also look overbought. A solid move above to 50-dma could bring buyers off the fence and attempt a move higher towards the 200-dma. Of important note, the 200- dma is very close to the Fibonacci retracement number of 61.8%, which could be tough resistance. Although bears would like to see the market decline, a fall in the dollar would be devastating to the economy as whole. Perhaps even patriotic bears would rather not see that? In good news for bulls, the weekly Stochastics (not shown) are turning up from the oversold region. Chart of: Semiconductor Index, Daily. Trading at levels not seen since 1998, the Semiconductor Index $SOX.X is fighting to stay alive. The weekly chart above outlines the wild ride that this index has had since 1999. Even six flags couldn't build a better roller coaster! Currently, the SOX is trading on the low end of the descending channel. On the weekly chart, the Stochastics show three prior instances where the indicator was in oversold territory like now. Incidentally, in each of the three times, the index was also at or near the bottom of the descending channel. Further, each tap on the bottom of the channel (with Stochastics confirmation) was followed by a rally to the upper portion of the range. Although this may not be the bottom, the SOX certainly looks as if it is would like to bounce! Chart of: S&P Retail Index, Weekly. Now this sector is range bound! The S&P Retail Index has been trading up and down in the same range since 1999. However, the index is at a critical level, and needs good news from the sector for a move to higher ground. The daily Stochastics look to be turning higher, and could provide a technical boost to the sector. Tomorrow brings the Chain Store Sales numbers, which will show whether sales in July slowed or not. Making things tougher, Ralph Lauren reported today, reporting numbers in-line with analyst's expectations. The retail giant posted decent gains during the session, closing up 5.82% at 21.06. Chart of: Oil Index, Weekly. With the price of crude trading near highs, the Oil Index seems to be moving with a mind of its own. However, weakness can be attributed to downstream issues, along with a lack of demand for jet fuel. The price of crude is being artificially inflated with worries of an attack on Iraq. Overall tension in the Middle East must be eased before crude will find its true range. Because of low current inventories in crude, OPEC has begun producing more oil, at an excess of 1.5 to 2 bpd per day. This weeks crude inventories are at the lowest levels since 2001. The above Oil Index chart depicts the low level at which the oil companies are currently trading at. The descending channel looks dangerous, as the MACD seems to be moving further into the negative region. Bulls have to be pleased with the trading action of the last two days, where the index was able to close above the 405 level. Chart of: Dow Jones Home Construction Index, Daily. It is said that one of the last sectors to rollover in a recession is Residential Construction. If this is the case, than we certainly have plenty of downside room left in the above chart. Traders seeking positive ground should be encouraged with the recent move up from the 280 area, where the Index was able to hold support. As the index moves back up to test the 200-dma, traders should watch for weakness in the regional areas of construction. If the fed lowers rates by surprise, the housing sector could get a very healthy boost. All in all the market is in a holding pattern until the Fed meeting next week. Traders should be cautious with the immense amount of volatitility, which has surfaced in the market recently. Though sectors look extremely oversold, be careful not to fall into a trap of thinking they cannot go lower. Current valuations of the market are still seemingly high, and could still sustain selling pressure. Sir Alan Greenspan and company should provide useful insights into our economic future with the FOMC meeting next Tuesday. Until then, we will be waiting on pins and needles, while riding on this seesaw market. Mark Whistler Editor mwhistler@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 --------------------------------- Adobe Systems - ADBE - close: 17.64 change: +0.25 WHAT TO WATCH: ADBE kicked off the month of August on a sour note after the company announced reduced Q3 guidance. Shares gapped sharply lower on the news and have since traded in a somewhat narrow range between $16.50-$18.00. This consolidation pattern indicates that another big move could be in the cards. A break below the multi-year low of $16.49 would open the door for a test of the $15.00 level. Alternatively, ADBE may offer itself as a bullish candidate if it moves above $18.36 and starts to fill in its August 1st gap. --- Entercom Communications - ETM - close: 39.93 change: +2.19 WHAT TO WATCH: An upgrade from Bear Stearns gave a boost to shares of ETM today. This followed a strong performance on Tuesday, when Wall Street reacted favorably to the company's earnings report. Technically, ETM looks like it will continue to distance itself from near-term support at $36.00. Volume backing the past two days of gains has been brisk, the daily stochastics are beginning to curl higher from the oversold region, and the p- n-f chart just reversed into a column of "X's." Watch for a move above today's high ($40.05) to offer a potential entry point. --- Home Depot - HD - close: 28.26 change: +0.23 WHAT TO WATCH: There's been a whole lot of economic data to chew on in recent weeks, and most of it has given the bulls a bad case of indigestion. The possibility of a "double-dip" recession has led to a renewed decline in both the RLX.X retail index and HD, the latter of which is dangerously close to setting new multi- year lows. A break below $27.00 may provide a possible action point for bearish positions. P-n-f chartists will note that this would create a triple-bottom sell signal. Although we'd initially be targeting a decline to the next level of psychological support at $25.00, an eventual test of the $20.00 region wouldn't be out of the question if the economic climate continues to deteriorate. --- Hershey Foods - HSY - close: 71.89 change: -1.11 WHAT TO WATCH: On July 25th, HSY gapped sharply higher on reports that the company was going to put itself up for sale. The latest speculation has been that Nestle is the most likely buyer. However, today's developments may throw a wrench in these plans. The Milton Hershey School Alumni Association, which controls 77% of the shareholder voting rights, requested that lawmakers put the proposed sale on hold to allow time for public hearings on the matter. This may create selling pressure in the stock, which already seems to have priced in a buyout. Looking at the daily bar chart, one will note that HSY has begun to fill in the aforementioned gap. A move under today's low could clear the way for a test of the 200-dma at $67.51 or the 50-dma at $66.06. Bear in mind, however, that such a trade would be subject to further news-related volatility. --- KLA-Tencor - KLAC - close: 36.89 change: -0.29 WHAT TO WATCH: KLAC may present a good shorting opportunity if it breaks under the relative low of $34.75. If that occurs, there's not much in the way of historical support to prevent a test of the $30.00 level. More optimistic traders could even shoot for the 52-week low at $28.61. The semiconductor index (SOX.X) has spent the last few sessions bouncing around near the 300 level. Today's rebound from a low of 291 was impressive, but those gains could quickly evaporate if the NASDAQ experiences another rollover. --- Northrop Grumman - NOC - close: 110.72 change: +4.47 WHAT TO WATCH: Short-term traders may want to take a look at NOC. Shares of the defense contractor closed above the 200-dma ($109.09) on Wednesday and are threatening to break above the relative high of $111.25. A move above this level could lead to a rapid test of the 50-dma ($116.37), which coincides with bearish resistance on the p-n-f chart. The daily stochastics (5,3,3) are beginning to rebound from just above the oversold region, hinting at more potential upside. On a related p-n-f note, a trade at $112 will create a double-top buy signal. --- Neoware Systems - NWRE - close: 14.42 change: -0.47 WHAT TO WATCH: Shares of this computer hardware company have risen dramatically since breaking out of the $2.00 range last November. The past two days have seen NWRE tag an all-time high of $14.75. A move over this level could provide a possible action point for aggressive traders. An alternate strategy would be to wait for shares to clear psychological resistance at $15.00. P-n-f enthusiasts will note that a trade at this level will create a double-top buy signal. In the news today, Neoware announced that starting tomorrow, its common stock will trade on the NASDAQ National Market. Shares had previously traded on the NASDAQ SmallCap Market. --- Oakley Inc - OO - close: 12.25 change: -0.30 WHAT TO WATCH: Monday's close under $13.00 did not sit well with shareholders of OO, who have spent the last two sessions enthusiastically selling the stock. Shares fell to a new multi- month low today, backed by the strongest volume of the year. With the p-n-f chart currently signaling a triple-bottom breakdown and the MACD displaying a fresh bearish crossover, OO appears to be headed for a test of the $10.00 level. Entries can be considered on a move under today's low of $11.90. In recent news, OO announced yesterday that it had settled a patent infringement suit against V-2 Optic. This development did not appear to have any impact on the stock, which has been relatively weak versus the broader market. --- Oxford Health - OHP - close: 36.10 change: +0.08 WHAT TO WATCH: The HMO.X health provider index recently bounced from its 200-dma, but shareholders of OHP have had no such luck. The stock has faced heavy selling pressure following the August 1st earnings announcement, when Oxford reported a decline in Q2 earnings. Shares fell below the 200-dma ($38.30) on Monday and are now in danger of taking out psychological and historical support at $35.00. If this occurs, we'd expect OHP to retrace the steep gains from early January. Short entries can be evaluated on a move under the relative low of $34.81, initially targeting a decline to the $30.00 region. The p-n-f chart is looking ugly as well, with shares recently falling below the bullish support trend. --- Sony Corp - SNE - close: 43.85 change: +1.35 WHAT TO WATCH: A two-week uptrend in the U.S. Dollar (DX00y) may be helping to put up bottom under SNE. This is because the stronger Dollar (which leads to a weakening in the Japanese Yen) makes Sony's overseas exports more attractive to consumers. Technically, shares have leveled out near $42 in recent sessions and look poised to stage a short-term rebound. The daily stochastics are starting to turn up from extreme oversold levels suggesting that SNE could eventually rally back to its 200-dma at $48.95. Underlying support lies at the 2002 low of $40.60 and the psychologically important $40.00 level. Because SNE has yet to break out of its multi-month downtrend, bullish entries require an aggressive strategy. With this in mind, traders can consider long positions on a move above today's high of $44.02. =============== Play-of-the-Day (Non-tech BULLISH play) =============== Ball Corp - BLL - close: 45.60 change: +1.55 stop: 42.89 Company Description: Ball Corporation is one of the world's leading suppliers of metal and plastic packaging to the beverage and food industries. The company also owns Ball Aerospace & Technologies Corp. Ball reported 2001 sales of $3.7 billion, of which approximately $3.3 billion came from its packaging segment and $400 million from its aerospace and technologies segment. (source: company press release) - ORIGINAL WRITE UP: August 6th, 2002 - Why We Like It: In a rapid reversal of fortune for its shareholders, BLL has rebounded sharply from its July low of $32.82. Helping to fuel the bounce was a strong earning report that featured a sharp increase in Q2 earnings and a positive outlook for the second half of 2002. The company attributed the results to a strong demand for its plastic water bottles (seems everyone carries around bottled water these days) and a solid performance from its aerospace division. In the most recent news development, BLL received an upgrade today from Salomon Smith Barney. This had shares trading higher by 7.8%, backed by relatively strong volume of 925K shares. BLL is now threatening to break above the $45.00 region, which stymied rally attempts in June and July. This level also happens to coincide with the 61% retracement from April highs to July lows. Furthermore, a glance at the p-n-f chart shows that a trade at $45.00 will create a triple-top buy signal. By placing a trigger to go long at $45.06, we're aiming to ride BLL back to the next shelf of resistance near $49.00. Although BLL has already experienced some strong gains, the daily stochastics (5,3,3) are wavering near the middle range. This suggests that shares may have more upside potential. If our play is triggered we'll use a stop at $42.89, a cent under today's low. More aggressive traders could use a stop under the 50-dma at $41.22. - Play-of-the-Day Comments: August 7th, 2002 - Shares of BLL charged higher with the Dow Jones this morning and quickly eclipsed our entry trigger at $45.06. BLL displayed impressive relative strength for the duration of the trading session, holding strong even as the Dow Jones was firmly in negative territory. Shares outperformed the Industrials and finished with a 3.5% gain, closing well above former resistance at $45.00. This is a very bullish development, and the stock now looks ready to move towards the $47-$49. Traders can consider new entries if BLL rises above today's high ($45.90) or pulls back to $45.00. Our stop is currently set at $42.89. Picked on August 7th at $45.06 Results since picked: +0.54 Earnings Date 07/25/02 (confirmed) ================================================================= 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 © 2002 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter Wednesday 08-07-2002 section 2 of 2 Copyright ) 2002, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= In section two: Net Bulls Tech Stocks Stop Adjustments PIXR Active Trader Non-Tech Stocks Triggered Plays: BLL (Bullish) High Risk/High Reward Triggered Plays MOVI, QCOM (Bearish) Trading Ideas Value Plays With Bullish Signals Breakout to Upside (Stocks $5 to $20) Breakout to Upside (Stocks over $20) Breakout to Downside (Stocks over $20) Recently Overbought With Bearish Signals (Stocks over $20) ================================================================= Net Bulls Tech Stocks (NB) section ================================================================= =============== NB Play Updates =============== Stop Adjustments ---------------- Pixar - PIXR - close: 41.59 change: -0.13 stop: 42.26 *new* This hypothetical trade continues to work in our favor, with PIXR displaying relative weakness on Wednesday and posting a small loss. However, our timeframe is limited by tomorrow night's earnings announcement. To eliminate the risk of getting caught in a positive reaction to the report, we will close this play as of the final trade on Thursday. There simply isn't enough fundamental weakness (i.e. huge flops by movies PIXR has helped produce) to warrant holding over earnings. We're also going to inch our stop down to $42.26, slightly above today's high. This should protect a small gain from our original entry point. ================================================================= Active Trader/Non-tech Stocks (AT) section ================================================================= =============== AT Play Updates =============== Triggered Plays --------------- Ball Corp - BLL - close: 45.60 change: +1.55 stop: 42.89 Shares of BLL charged higher with the Dow Jones this morning and quickly eclipsed our entry trigger at $45.06. Shares outperformed the Industrials and posted a 3.5% gain, closing well above former resistance at $45.00. This is a very bullish development, and the stock now looks ready to move towards the $47-$49. Traders can consider new entries if BLL rises above today's high ($45.90) or pulls back to $45.00. Our stop is currently set at $42.89. ================================================================= High Risk / High Reward (HR) section ================================================================= =============== HR Play Updates =============== Triggered Plays --------------- Movie Gallery - MOVI - close: 13.20 change: +0.37 stop: 14.10 This short play was triggered within the first half-hour of trading when MOVI hit our action point at $12.49. The stock remained weak until a late-afternoon broader market rally lifted it back into positive territory. We suspect that short-term resistance near $13.50 will thwart any further advance, keeping MOVI safely below our stop at $14.10. If MOVI reverses course tomorrow, new entries can be targeted on a move under $12.00. --- QUALCOMM Inc - QCOM - close: 25.01 change: -0.17 stop: 26.11 As we had anticipated, a positive response to last night's CSCO earnings had both the NASDAQ and QCOM gapping higher this morning. The stock tagged an intraday high of $26.00, only to see eager sellers quickly come out of the woodwork. Our play was triggered when QCOM reached $24.08. Shares pared most of their losses during the final two hours of trading, but were barely able to register a close above $25.00. This action does not bode well for the bulls. New entries can be considered on a rollover from $26.00 or a break under the relative low of $23.21. Our stop is set at $26.11, above the highs for the past two days. ================== 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. Ticker Company Name Close Change TSP Telecom De Sao Paulo 10.78 +0.58 YUM Yum! Brands Inc. 28.55 +0.63 FBP First Bancorp Holding 28.50 +1.90 CBE Cooper Industries Inc. 30.92 +1.52 PRX Pharmaceutical Resources 27.28 +1.98 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- Ticker Company Name Close Change ENDO Endocare Inc 13.84 +1.58 UNTD Untied Online Inc 10.90 +1.43 HRC Healthsouth Corporation 11.16 +1.11 NABI Nabi Biopharmaceuticals 5.73 +1.08 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- Ticker Company Name Close Change RL Polo Ralph Lauren 21.06 +1.16 WCNX Waste Connections Inc. 33.24 +1.74 VARI Varian Inc. 34.57 +2.22 MRCY Mercury Computer Systems 23.80 +2.35 BRP Brasil Telecom 26.55 +1.04 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change WFMI Whole Foods Markets 38.59 -1.34 PHTN Photon Dynamics 22.16 -1.71 EAT Brinker International 27.40 -2.30 UVN Univision Communications 21.90 -2.01 ESE Esco Technologies 27.40 -2.38 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- Ticker Company Name Close Change CRH Coram Healthcare 24.77 -0.03 ================================================================= 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 ) 2002 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form.
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