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Daily Newsletter, Thursday, 08/22/2002

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PremierInvestor.net Newsletter                  Thursday 08-22-2002
                                                    section 1 of 2
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In section one:

Market Wrap:      Lots of Green on the Screen
Play-of-the-Day:  Ante Up!
Market Sentiment: Turning the Corner


************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
      08-22-2002           High     Low     Volume Advance/Decline
DJIA     9053.64 + 96.40  9077.01  8926.92 1.71 bln   2042/1136
NASDAQ   1422.95 + 13.70  1426.76  1398.83 1.82 bln   1978/1442
S&P 100   485.95 +  5.91   487.42   478.73   Totals   4020/2578
S&P 500   962.70 + 13.34   965.00   946.43 
RUS 2000  409.67 +  2.88   410.92   404.86 
DJ TRANS 2463.96 + 31.80  2469.91  2412.64   
VIX        30.96 -  0.67    32.54    30.44   
VXN        45.00 -  1.11    47.70    58.70 
Total Vol   3,726M
Total UpVol 2,705M
Total DnVol   909M
52wk Highs    92
52wk Lows    137
TRIN        0.51
PUT/CALL                 .55
*************************************************************

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

Lots of green on the screen

There was just one sector that finished in the red today (besides 
Treasuries) as it relates to my US Market Watch list of major 
market averages and indexes.  It's that one sector that finished 
in the red, which may have some technology traders (bullish or 
bearish) still jittery as it was the strongest technology sectors 
just before the "last collapse" for technology stocks this past 
spring.

I've often referred to how a market moves as being similar to a 
"snake" or an "inchworm."  As it relates to the "technology" 
markets, the Semiconductor Index (SOX.X) 357.26 -1.25% was at the 
"head" or strength of technology just prior to this summer's 
decline.  The bulk of the recent technology advance has come from 
the "tail" and "mid-body" sections where the weaker sectors have 
made for the bulk of the advance.  Again, the analogy is that 
institutions are longer-term investors (some have become much 
more trading oriented) and will accumulate their favorite 
stocks/sectors on pullbacks as long as fundamentals are in place, 
and are less willing to "chase" a steeper advance as their 
valuation models become stretched.

If thinking of the technology market, you've got the "snake's 
body" or the "inchworm's body" being comprised of various sectors 
like Biotech (BTK.X) 397.97 +2.4%, Software (GSO.X) 105.83 +3.2%, 
Semiconductor (SOX.X) 357.26 -1.25%, Networking (NWX.X) 138.64 
+2.1%, Internet (INX.X) 75.74 +4.5%, Disk Drive (DDX.X) 66.36 
+0.6%, Wireless Telecom (YLS.X) 44.49 +5.5%, Fiber Optic (FOP.X) 
43.70 +3.2%, Combined Telecom (IXTCX) 105.62 +2.3%.  Many of 
these sectors in the technology arena are all very much 
interrelated and associated with "computers," while the more 
obvious exception is biotechnology, which tends to trade off of 
new breakthroughs or a MARKET'S bullishness/bearishness and 
psychology of investors.

US Market Watch - from Wednesday's close to today's close



For a more "healthy" advance, I think technology bulls want to 
see the semiconductors exert some type of renewed or further 
strength.  In Tuesday's market wrap "Ooooo doggie!" 
http://www.PremierInvestor.net/markets/marketwrap/082002_1.asp
I talked about how the major market averages had broken above 
their 50-day moving averages, but the Semiconductors (SOX.X) were 
a group that still appeared technically weak.

It is worth of noting, that the SOX.X did trade a session high of 
367.90 today, which would have been 0.90 higher than my short-
term level of horizontal resistance.  Also noteworthy is the 
bearish trade in fellow semiconductor stocks Maxim Integrated 
(NASDAQ:MXIM) $37.41 -0.79% has yet to trigger a bear's action 
point and finds suspicious resistance near the $37.78 level of 
retracement where market makers may well be feeding some stock 
out to bulls on the current rally.

Today's lagging in the group most likely was attributed to 
morning comments out of Salomon Smith Barney and their cutting 
semiconductor industry growth forecast for 2002 to +0.05% from 4% 
and for 2003 to 12% from 21%, and projects 17% growth for 2004.  
"Solly" as the firm is affectionately called thinks shipments in 
the first-half of 2002 had been running slightly above trend, but 
the firm believes this was due to excess inventory builds being 
worked off, with the exception of wireless handsets, demand in 
most segments remaining slow and a seasonal uptick in the second-
half of this year being weaker than normal.  Despite these 
cautious comment, the firm listed its "top picks" as Analog 
Devices (NYSE:ADI) $27.62 +1.17%, Texas Instruments (NYSE:TXN) 
$22.98 +1.14%, Micron Technology (NYSE:MU) $21.10 -0.42%, and 
INTC (NASDAQ:INTC) $19.15 -2.25%.  

Over the years, I've found Intel (INTC) to be the "key stock" in 
the semiconductor group along with Applied Materials 
(NASDAQ:AMAT) $16.17 +0.81 on the equipment side.  Yes, they're 
the biggest and as an old trader/investor saying goes, "as the 
big guys go, so goes the sector."

Per past commentary, I also believe in a "chain of events" much 
like a snake will move or inchworm moves.  In simplistic form, my 
thinking is that Intel makes chips, and when business picks up 
and capacity becomes limited, it then orders more or better, more 
efficient equipment to meet building demand.  As such, I'd look 
for some type of leadership from Intel (INTC) and right now, that 
hint of leadership doesn't become more prevalent until a trade 
above $20.18 is achieved.

Intel Chart - Daily Interval



It's probably not a coincidence that Intel is trading very 
similar to last fall's extended rally when benchmarked back to 
the October-November timeframe as we've done in the broader-
market averages with the 50-day MA.  Hey, at least INTC unlike 
the SOX.X is holding above its 50-day MA for four sessions now, 
while the SOX.X hasn't been able to do so yet.  

Another sign of near-term bullishness is the stock's recent 
ability to get above the mid-point of regression.  At points 
labeled "cool!" see how it looks like this mid-point of downward 
regression served as "bearish support" in April and then in May, 
but after the "flush" lower on June 7th after INTC's less than 
bullish mid-quarter update, that very mid-point of regression 
served as resistance, until just recently when INTC began 
DIVERGING from that trend to the upside.

Now, the point and figure chart shows formidable resistance just 
below the $20 level and a trade at $20 would have INTC's point 
and figure chart triggering a "triple-top buy signal" at that 
level.  That would be just ahead of our 19.1% retracement level 
of $20.18.

A trader that is looking to trade Maxim Integrated (NASDAQ:MXIM) 
$37.41 should be keeping an eye on Intel.  It's my perception if 
Intel (INTC) breaks back below its 50-day MA of $18.57, the MXIM 
should exhibit further weakness to a bear's target between $30 
and $32.20.  

Conversely, should Intel (INTC) lead higher and break above 19.1% 
retracement, I'd rather trade a sector bellwether bullish, that a 
second tier name.  Besides, Intel (INTC) currently has a nice 
two-month base under construction and serves as a better "powder 
keg" on a break to the upside.

Oh yes!  The Cyclicals

Ooooo doggie!  Things are starting to get interesting as the 
Morgan Stanley Cyclical Index (CYC.X) 502.71 +1.48% has held 
longer-term upward trend on its bar chart and once again rallies 
right back near our 50% retracement level near 505.  

Remember our July 30th market wrap 
http://www.PremierInvestor.net/markets/marketwrap/073002_1.asp
just ahead of the release of GDP data.  We thought equity bulls 
needed to see a break ABOVE the 505 level and that bears with 
conviction on a slower economy would be shorting with a tight 
stop just above that level.  Well.... here we go again and this 
will be a key sector for all traders to be monitoring yet again!

Morgan Stanley Cyclical Index (CYC.X) - Daily Interval



Bullishness looks to be building in the broader cyclicals as the 
CYC.X has rallies back near the 505 level.  Note today's high of 
504.47.  Could it be that another leg higher in the broader-
markets as well as the very economically sensitive cyclicals is a 
"line in the sand at 505?"  Downward trend is still a problem, 
but to challenge trend, the first step is a break above 505.  
Note:  CYC.X closed 505.11 on 07/29/02, but 505 is round number).

Now, the 50-day moving average on the CYC.X is also in play and 
that moving average should be monitored closely too.  We've seen 
the major market averages hover around and finally break higher 
from this moving average today, that's bullish.  

But don't think that the CYC.X is LONGER-TERM weak at this time.  
There's not too many sector-type indexes that have an UPWARD 
trend in place from the September lows.

Other sectors I see that didn't violate their September 2001 lows 
are cyclical sub sectors like the Forest/Paper (FPP.X) 314.48 
+0.48%, Dow Transports (TRAN) 2,463 +1.3%, Oil Service (OSX.X) 
86.86 +4.65%.  Other sectors having not violated their September 
lows are Broker/Dealer (XBD.X) 426.36 +0.84%, HMO Index (HMO.X) 
589.29 +2.39%, and Gold/Silver Index (XAU.X) 63.91 +3.18%.

Another sector that just barely broke its September lows was the 
S&P Banks Index (BIX.X) 307.25 +0.95%, on an intra-day basis.  
This group of banks (BIX.X), unlike the KBW Bank Index (BKX.X) 
803.62 +1.17%, depicts more of a domestic blend of banks with 
fewer ties to foreign/global markets.

Of course, stocks have a hard time pushing higher without cash.  
Keep an eye on those Treasury bonds.  We saw another good round 
of selling today and the broader equity markets pushed higher.  
We can't expect day after day of selling in Treasuries, but 
correlative action dating back to the late October early November 
timeframes still looks to be in play.

Jeff Bailey
Senior Market Technician
PremierInvestor.net


=========================
Play-of-the-Day           (New BEARISH tech play)
=========================

QLogic Corp - QLGC - close: 38.34 change: -0.50 stop: *text*

Company Description:
QLogic Corporation simplifies the process of networking storage 
for OEMs, resellers and system integrators with the only end-to-
end infrastructure in the industry, consisting of award-winning 
controller chips, host bus adapters, network switches and 
management software to move data from the storage device through 
the fabric to the server. (source: company press release)

Why we like it:
The semiconductor index has been doing its best impression of a 
car stuck in mud.  This week's action has seen the SOX.X spin its 
tires near the 50-dma, only to lose traction every time it 
advanced above the moving average.  The group was pressured today 
by negative comments from Solomon Smith Barney.  Solly slashed 
their 2002 growth estimates for the chip sector from +4% to only 
+0.5%, and cut its 2003 forecast from +21% to +12%.  The 
brokerage believes that demand remains weak and the latter half 
of 2002 will see a smaller-than-average seasonal increase.  We 
also hold a bearish outlook for the chip sector, albeit on a much 
shorter timeframe.  A glance at the SOX reveals several negative 
technical developments.  As mentioned above, the 50-dma has acted 
as stubborn resistance.  With the daily stochastics (5,3,3) just 
beginning to fall from the overbought region, odds of a rollover 
seem high.  The MACD also looks like it may begin rolling from 
just below the baseline, although we'd probably need to see some 
negative price action for this to occur.  For what it's worth, 
industry behemoth INTC is also struggling with solid resistance 
its $20.00.

Given our belief that the chip sector will head lower in the 
near-term, we think QLGC is a good short candidate.  Much like 
the SOX, QLGC has been unable to pierce its 50-dma ($39.13).  
This level also happens to be the location of bearish resistance 
on the point-and-figure chart.  The bulls are faced with another 
hurdle in the form of psychological resistance at $40.00.  
Furthermore, the stock is trading just below its multi-month 
descending trendline.  That's a lot of obstacles for the bulls to 
contend with!  The daily stochastics (5,3,3) are beginning to 
level out in overbought territory, indicating that QLGC has run 
out of upward momentum.  By entering this hypothetical short 
trade on a move under $38.00, we're aiming to ride the stock down 
to the $33.50 region.  This is where QLGC found support in early 
June.  More conservative traders could target a decline to 
psychological support at $35.00.  If this play is triggered, our 
stop will be located at $40.06.  Those who are more risk-averse 
could use a stop just above the 50-dma.

Picked on August xxth at $xx.xx <-- see text 
Results since picked:     +0.00
Earnings Date          07/18/02 (confirmed)





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

Turning the Corner

by Steven Price

Hand me the road map, because it certainly appears the we will be 
going forward.  The Dow took out resistance at 9000 today, and 
appears to be ratcheting its way up the Fibonacci retracement 
brackets. Today's rally of 96.41 points seems to have us headed 
up to at least the next level of 38.2%, or 9143.79.  This 
retracement is based on the Dow's high of 11,750.28 in January 
2000, and low of 7532.66 on the morning of July 24, 2002.  The 
series of higher highs and higher lows makes the middle of July, 
when we were in the midst of a precipitous fall, seem like years 
ago.  News flash - Saturday  marks only one month since that 
recent low.  

In spite of disappointing unemployment data, which showed a weak 
recovery, the bulls were again out in force today.  The labor 
Department reported a drop in jobless claims for the week ending 
August 17, of 2,000, which is 4,000 less than expected.  In 
addition, the claims for the previous week were revised upward.  
The four-week moving average reached its highest level of 
unemployment in a month. The total number of unemployed workers 
collecting from the states was 3.25 million in the week that 
ended August 10.  There was also new data showing a 40% increase, 
since last September 11, in the time it takes unemployed workers 
to find a new job.

The one weak spot showing red in today's sea of green was the 
semiconductor sector.  This is one major sector that has been 
unable to follow the leader in crossing over and holding its 50-
day moving average.  On Monday, the Dow, Nasdaq, NDX and S&P 500 
all crossed the 50-dma mark for the first time in months.  These 
groups continued their rise following this crossover, much like 
the Dow did in leading us out of the 1998 Asian crisis.  The 
Semiconductor Sector Index finally held its 50-dma at the end of 
Wednesday's close, but gave in today, falling below that level 
once again.  Salomon Smith Barney cut its growth forecasts for 
the sector for 2002 from +4% to +0.5% and for 2003 from 21% to 
12%. The danger is that this sector will continue to act as an 
anchor for the broader markets. This danger seemed remote this 
morning as Microsoft received an upgrade from Salomon Smith 
Barney.  While this upgrade helped lift the Nasdaq and Dow, we 
might have seen much larger gains if not for the semis.

The Retail Index (RLX.X) has continued to claw its way upward, in 
spite of repeated warnings about a lack of back to school sales.  
This is one sector to keep a close watch on, as it reflects 
consumer spending, which makes up 2/3 of all GDP.  This index 
also managed to break through its 50-dma this week, and has held 
on to these gains.

Now that the Dow has broken 9000, the Nasdaq has broken 1400, the 
NDX has broken 1000 and the S&P 500 has broken 950, we will have 
to dial up our expectations.  Instead of looking for failure 
levels, we may need to start looking for new levels of 
achievement.  To begin with, if the Dow can cross the 38.2% 
retracement level referenced above, then 9641.47 would be the 
next target.  This would signal the Dow retracing a full 50% of 
its losses since its high of January 2000.  The similar 50% 
retracement level would be 1164.27 in the S&P 500.  The Nasdaq 
Composite and NDX have quite a ways to go before making up their 
losses from highs of almost 5000 in March of 2000.  But we've got 
to start somewhere.





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

Market Averages

DJIA ($INDU)

52-week High: 10679
52-week Low :  7702
Current     :  9053

Moving Averages:
(Simple)

 10-dma: 8812
 50-dma: 8813
200-dma: 9726

S&P 500 ($SPX)

52-week High: 1226
52-week Low :  797
Current     :  962

Moving Averages:
(Simple)

 10-dma:  927
 50-dma:  928
200-dma: 1070

Nasdaq-100 ($NDX)

52-week High: 1782
52-week Low :  892
Current     : 1049

Moving Averages:
(Simple)

 10-dma:  984
 50-dma:  993
200-dma: 1336


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

The Semiconductor Index (SOX.X): The semiconductor sector was 
downgraded this morning by Salomon Smith Barney. They reduced 
growth estimates for 2002 from 4% to 0.5%, and reduced 2003 
estimates from 21% to 12%.  They project 17% for 2004.  The index 
finally managed to hold above its 50-dma on Wednesday, only to 
give it back today following the downgrade.  The fact that the 
sector was down, on a day when a Microsoft upgrade helped rally 
the Nasdaq, seems bearish and makes the index look overextended 
after a rally of almost 80 points in two weeks.

52-week High: 657
52-week Low : 282
Current     : 357

Moving Averages:
(Simple)

 10-dma: 335
 50-dma: 358
200-dma: 495


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

Market Volatility

The VIX held above 30 once again today.  This is far above normal 
summer volatility levels, especially considering the recent 
upward climb of the Dow and S&P 500.  Bears are eyeing the 
September 11th anniversary and stepping in to buy at this level.  
Even with no attack, there may be a sell-off, and premium at a 30 
implied volatility might still be cheap if we have a significant 
drop in the next couple of weeks.  Considering we saw levels soar 
past 50 on the recent drop, buying here may turn out to be a 
bargain.

CBOE Market Volatility Index (VIX) = 30.96 -0.67
Nasdaq-100 Volatility Index  (VXN) = 45.00 -1.11

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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.55        671,021       372,085
Equity Only    0.41        572,710       235,765
OEX            1.40         14,983        20,922
QQQ            0.09         98,759         8,474

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

Bullish Percent Data

           Current   Change   Status
NYSE          44      + 3     Bull Confirmed
NASDAQ-100    59      + 3     Bull Confirmed
DOW           60      + 10    Bull Confirmed
S&P 500       58      + 5     Bull Alert
S&P 100       58      + 5     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  0.86
10-Day Arms Index  1.00
21-Day Arms Index  1.13
55-Day Arms Index  1.29

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 they do, they can signal significant market turning 
points.

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

Market Internals

        Advancers     Decliners
NYSE       1793          1698
NASDAQ     1901          1369

        New Highs      New Lows
NYSE         31              69
NASDAQ       27              60

        Volume (in millions)
NYSE     1,651
NASDAQ   1,828

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

Commitments Of Traders Report: 08/13/02

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 have reduced positions on both sides of the coin, 
resulting in a net change of 700 short contracts.  Small Traders 
have reduced long positions by 3700 more contracts than shorts.


Commercials   Long      Short      Net     % Of OI 
07/23/02      405,969   471,704   (65,735)   (7.5%)
07/30/02      430,833   482,957   (52,124)   (5.7%)
08/06/02      431,590   478,879   (47,289)   (5.2%)
08/13/02      427,618   475,536   (47,918)   (5.3%)

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
07/23/02      166,713    73,778    92,935     38.6%
07/30/02      153,858    67,451    86,407     39.0%
08/06/02      159,561    67,434    92,127     40.5%
08/13/02      155,040    66,546    88,494     39.9%

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 have added to long positions by 1300 contracts, while 
short contracts increased slightly.  Small traders also added to 
long contracts, increasing positions by 1200 contracts, while 
leaving shorts virtually unchanged.


Commercials   Long      Short      Net     % of OI 
07/23/02       37,204     43,601    (6,397) ( 8.0%)
07/30/02       38,163     47,343    (9,180) (10.7%)
08/06/02       41,014     50,025    (9,011) ( 9.9%)
08/13/02       42,303     50,354    (8,051) ( 8.7%)

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
07/23/02       12,756    11,152     1,604     6.7%
07/30/02       13,159     9,237     3,922    17.5%
08/06/02       11,547     8,782     2,765    13.6%
08/13/02       12,797     8,933     3,864    17.8%

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 have maintained the status quo, subtracting 600 
contracts from the long side and 400 from their shorts.  Small 
traders got decidedly shorter, dumping almost 3,000 long 
contracts and only 900 shorts.


Commercials   Long      Short      Net     % of OI
07/23/02       22,369    14,745    7,624      20.5%
07/30/02       22,429    12,811    9,618      27.3%
08/06/02       23,491    14,290    9,201      24.4%
08/13/02       22,837    13,833    9,004      24.6%
 
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
07/23/02        9,101    12,604    (3,503)   (16.1%)
07/30/02        6,778     8,999    (2,221)   (14.1%)
08/06/02        7,981     9,258    (1,277)   ( 7.4%)
08/13/02        5,050     8,349    (3,299)   (24.6%)

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

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




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PremierInvestor.net Newsletter                 Thursday 08-22-2002
                                                    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
=================================================================
To view this email newsletter in HTML format with imbedded
charts and graphs, click here:
http://www.PremierInvestor.net/htmlemail/h22b_2.asp
=================================================================

In section two:

Net Bulls
  New Bearish Plays:     QLGC
  Bullish Play Updates:  IBM, MIL, RX
  Bearish Play Updates:  MXIM, SBC
  Closed Bullish Plays:  CA

Stock Bottom / Active Trader
  Bullish Play Updates:  MGG, NCEN, NKE, SWFT
  Bearish Play Updates:  CPG
  Closed Bearish Plays:  AGN, OIH

High Risk/Reward
  New Bullish Plays:     IDPH
  Closed Bullish Plays:  FDRY

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 New Plays
============

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

QLogic Corp - QLGC - close: 38.34 change: -0.50 stop: *text*

Company Description:
QLogic Corporation simplifies the process of networking storage 
for OEMs, resellers and system integrators with the only end-to-
end infrastructure in the industry, consisting of award-winning 
controller chips, host bus adapters, network switches and 
management software to move data from the storage device through 
the fabric to the server. (source: company press release)

Why we like it:
The semiconductor index has been doing its best impression of a 
car stuck in mud.  This week's action has seen the SOX.X spin its 
tires near the 50-dma, only to lose traction every time it 
advanced above the moving average.  The group was pressured today 
by negative comments from Solomon Smith Barney.  Solly slashed 
their 2002 growth estimates for the chip sector from +4% to only 
+0.5%, and cut its 2003 forecast from +21% to +12%.  The 
brokerage believes that demand remains weak and the latter half 
of 2002 will see a smaller-than-average seasonal increase.  We 
also hold a bearish outlook for the chip sector, albeit on a much 
shorter timeframe.  A glance at the SOX reveals several negative 
technical developments.  As mentioned above, the 50-dma has acted 
as stubborn resistance.  With the daily stochastics (5,3,3) just 
beginning to fall from the overbought region, odds of a rollover 
seem high.  The MACD also looks like it may begin rolling from 
just below the baseline, although we'd probably need to see some 
negative price action for this to occur.  For what it's worth, 
industry behemoth INTC is also struggling with solid resistance 
its $20.00.

Given our belief that the chip sector will head lower in the 
near-term, we think QLGC is a good short candidate.  Much like 
the SOX, QLGC has been unable to pierce its 50-dma ($39.13).  
This level also happens to be the location of bearish resistance 
on the point-and-figure chart.  The bulls are faced with another 
hurdle in the form of psychological resistance at $40.00.  
Furthermore, the stock is trading just below its multi-month 
descending trendline.  That's a lot of obstacles for the bulls to 
contend with!  The daily stochastics (5,3,3) are beginning to 
level out in overbought territory, indicating that QLGC has run 
out of upward momentum.  By entering this hypothetical short 
trade on a move under $38.00, we're aiming to ride the stock down 
to the $33.50 region.  This is where QLGC found support in early 
June.  More conservative traders could target a decline to 
psychological support at $35.00.  If this play is triggered, our 
stop will be located at $40.06.  Those who are more risk-averse 
could use a stop just above the 50-dma.

Picked on August xxth at $xx.xx <-- see text 
Results since picked:     +0.00
Earnings Date          07/18/02 (confirmed)





===============
NB Play Updates
===============

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

Intl Business Machines - IBM - cls: 81.99 chg: +0.99 stop: 78.99

International Business Machines continued to travel aloft today, 
as the stock seemingly showed strength.  With our stop residing 3 
points below the current price, we are attempting to give IBM 
plenty of room to jiggle.  With no earth moving news surfacing 
today, IBM's ascension could be attributed to a broader market 
gain.  Although daily Stochastics are extended into the 
overbought region, we will continue to maintain our profit target 
at $84.95.  New positions could be considered at current levels, 
though with our stop at $78.99 the risk to reward would be almost 
one to one.  Stay tuned for further updates, as the newsletter 
could move its profit target depending on future market action.      

Picked on August 15th at $75.06 
Gain since picked:        +6.93
Earnings Date          07/15/02 (confirmed)




---

Millipore Corp - MIL - cls: 38.24 chg: +1.35 stop: 36.45 *new*

After raising our stop to $34.49 on Tuesday, we discussed whether 
the stop "challenge" would force us to close our trade.  What we 
discovered was that this stock has legs.  Admittedly, news from 
AstaZeneca had us worried about the sector.  However, MIL and the 
biotech sector have traded to new relative highs today, and could 
potentially continue to ascend.  With no company specific news 
coming forth on MIL today, we are attributing the move to sector 
related strength.  Unfortunately, MIL is beginning to run into 
congestion resistance, and could slow down as the stock attempts 
to trade above $38.00.  Given today's move, we will "challenge" 
this trade further by moving our stop up to $36.45, just below 
today's low.  Also, the newsletter is going to shift our profit 
target to $42.49, just under the window from early April.  If the 
stock can acquire legs through congestion, and the whole number 
$40.00, our target could become a reality.       


Picked on August 16th at $36.60 
Results since picked:     +1.64
Earnings Date          07/16/02 (confirmed)



---

IMS Health - RX - close: 18.14 change: +0.29 stop: 16.98 *new*

Let it run!  After closing half of our position on Monday, we are 
ecstatic to see the remaining portion gaining ground as the stock 
forges ahead!  Closing above the 50-dma for the fifth day in a 
row, RX seems to have its eyes on the 200-dma.  However, 
formidable resistance lies above the $18.50 area, as the stock 
begins to enter congestion.  Remember, the newsletter is letting 
the stock run without a specific profit target because we closed 
half of our hypothetical position on Monday at $17.95.  The 
newsletter will move the stop for the remaining half of our 
position up to $16.98, one penny below the low three days ago.  
There is no contemporary news today regarding IMS Health.   

Picked on August 9th at $16.21  
Gain since picked:       +1.93
Earnings Date         07/15/02 (confirmed)




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

Maxim Integrated - MXIM - cls: 37.41 chg: -0.30 stop: *text*

As Maxim has displayed strength over the last two days, our 
trigger has not yet been violated.  Thus, the newsletter is yet 
to activate its hypothetical position.  However, we are leaving 
this play open in case market pressure begins to weigh heavily on 
the chip sector.  We will not enter our position unless MXIM 
drops below $35.38, which is one penny below the low three days 
ago.  Without being triggered, if the broader market does begin 
to show more strength, we will drop this play to avoid a fluke 
trigger on a potential gap down open.  If activated, our initial 
stop for the position will be at $38.51.  Stay tuned for updates!

Picked on August xth at  $xx.xx  <--- See text
Gain since picked:         0.00
Earnings Date          08/06/02 (confirmed)




---

SBC Comm. - SBC - cls: 27.38 chg: -0.73 stop: $29.01 *new* 

Displaying poor relative strength compared to the North American 
Telecom Index ($XTC.X) in today's trading, SBC could be revealing 
some of its weakness.  The XTC closed positive on the day staging 
a +3.05% rally, while SBC fell -2.59%.  In light of today's move, 
the newsletter will move its stop down to $29.01, which is 
slightly above the 50-dma, and the whole number.  With daily 
Stochastics continuing to look weak, and the most recent 
ascending trend line breached, SBC could still prove to be a 
great short candidate. New short positions could be considered at 
current levels.  

Picked on August 21st at $27.49 
Results since picked:     +0.11
Earnings Date          07/23/02 (confirmed)




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

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

Computer Associates - CA - cls: 12.61 chg: +1.28 stop: 10.42 

Today, CA announced that Acer Inc has deployed several aspects of 
CA's technologies to build a state of the art "Think Tank" for 
managing its global businesses.   The news along with a green 
Nasdaq helped to push CA into our profit target at $12.34.  We 
had moved our profit target down slightly yesterday, in light of 
the declining 50-dma.  The trade was closed today for a 19.7% 
gain!  Bulls still in their positions might be encouraged by the 
recent strength of CA.  Bulls could certainly be encouraged with 
today's close above the 50-dma.  However, conservative traders 
might consider moving their stop up to today's open, protecting 
themselves against a possible failure at the 50-dma.   

Picked on August 15st at     $10.31 
Results since picked:         +2.03
Earnings Date              07/22/02 (confirmed)






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

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

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

MGM Mirage - MGG - close: 36.27 change: -0.73 stop: 34.99

News that Nevada was considering an increase in casino taxes had 
shares of MGG trading in a bearish fashion on Thursday.  The 
stock gave back 1.9% on strong volume of 2.3M shares.  This 
technical action is somewhat concerning.  Shares were unable to 
move above intermediate-term resistance at $38.00, and the daily 
stochastics are beginning to head lower.  However, the bears may 
have a tough time pushing MGG below the $35.00 mark.  MGG 
remained safely above this level during today's session and 
managed to recoup a healthy chunk of its losses before the 
closing bell.  If this reversal continues on Friday, aggressive 
traders can target new long positions on a break above the 
relative high of $37.85.

Picked on August 19th at $37.02
Results since picked:     -0.75
Earnings Date          07/24/02 (confirmed) 




---

New Century Financial - NCEN - cls: 31.99 chg: +1.64 stop: 28.28

As we had hoped would be the case, Tuesday's dip to the 50-dma 
washed out most of the weak hands in NCEN.  Shares have performed 
bullishly over the past two sessions, with today's 5.4% gain 
propelling shares to a new relative high.  Investors responded 
positively to the company's announcement that its CEO and CFO had 
certified the Q2 financial statements.  The next challenge for 
the bulls is overhead resistance in the $32.00-$32.20 region.  A 
move above this level would clear the way for a test of the June 
highs near $35.00.  Traders looking to open new long positions 
may want to watch for a pullback to $31.00.  Although we're 
keeping our stop set at $28.28, more conservative traders may 
want to use a stop just under psychological support at $30.00.

Picked on August 16th at $30.16
Results since picked:     +1.83
Earnings Date          07/25/02 (confirmed)




--- 

Nike Inc - NKE - close: 46.15 change: +0.66 stop: 43.29

Thus far we're pretty pleased with how this long play has 
developed.  NKE reached our action trigger on Wednesday and 
proceeded to rally to a new relative high of $46.31.  
Interestingly, today's high was also $46.31.  Shares traded in a 
narrow range just below this level for most of the session.  This 
offers a clearly-defined action point for traders who are still 
looking to go long.  We're definitely pleased with today's 
consolidation action, which often comes before a short-term 
breakout.  It was also encouraging to see some relative strength 
versus the Dow Jones.  NKE could quickly make its way to the 50-
dma at $49.48 if a breakout does take hold.  In the news today, 
NKE announced a licensing agreement with GolfGear International.  
Here's hoping that this play yields a hole-in-one!

Picked on August 22nd at $45.36
Results since picked:     +0.79
Earnings Date          06/27/02 (confirmed)




---

Swift Transportation - SWFT - cls: 18.75 chg: -0.13 stop: 17.64

SWFT just keeps on truckin'!  Today's action saw the stock peg a 
new relative high of $18.95 before pulling back to finish with a 
small loss.  With loose resistance lying directly overhead at 
$19.00, it wasn't surprising to see some consolidation of the 
recent gains.  Turning to the Dow Jones Transportation Index, we 
see that the TRAN has broken above resistance at 2400 and rallied 
right up to the 50-dma.  Conventional market wisdom holds that 
any market rebound is suspect without confirmation from the TRAN, 
so the bulls will be paying a lot of attention to how the group 
behaves in the days to come.  A break above the 50-dma (2471) 
could see the index retrace its July decline and move back 
towards the 2600 region.  SWFT would likely benefit from such a 
breakout.  Aggressive short-term traders can take new long 
positions if the stock moves above $19.00, but keep in mind that 
our official profit target is set at $19.95.

Picked on August 19th at $18.01
Results since picked:     +0.74
Earnings Date          07/25/02 (confirmed)




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

Chelsea Property - CPG - close: 33.30 change: +0.11 stop: 34.11

With CPG continuing to trade in a holding pattern, this play is 
hanging by a thread.  We're tempted to close it at current 
levels, but are somewhat encouraged by the declining action in 
the daily stochastics and the stock's inability to approach the 
$34 level.  Volume remains as lackluster as the recent range, 
with today's reading clocking in at nearly 30% below the daily 
average.  We'll either challenge CPG with a very tight stop-loss 
or simply drop the play if the stock price does not begin to 
follow the stochastics lower.  There have not been any fresh news 
developments for Chelsea.

Picked on August 2nd at $32.68
Results since picked:    -0.62
Earnings Date         08/12/02 (confirmed)





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

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

Allergan Inc - AGN - close: 62.00 change: +2.39 stop: 60.01

The past two sessions have seen the DRG.X pharmaceutical index 
bounce from the 300 region.  This bullish sector action benefited 
AGN, as evidenced by the powerful bounce from the $57 area.  Our 
short play was closed for a 6.4% loss this morning when shares 
gapped above our stop-loss and opened at $60.25.  In a surprising 
display of technical strength, shares then proceeded to move 
above the 50-dma and briefly tested near-term resistance at 
$62.50.  With the MACD and daily stochastic oscillators clearly 
trending higher, a rally to the 200-dma ($65.69) appears likely.  
We would not recommend holding short positions at this time.

Picked on August 20th at $56.59
Results since picked:     -3.66 
Earnings Date          07/24/02 (confirmed)




--- 

Oil Service HOLDRs - OIH - close: 56.85 change: +2.40 stop: 57.01

Crude oil futures (cl02z) pulled back by 50 cents today, after 
setting a new relative high during Wednesday's trading.  Given 
the lack of a sizable rally in the price of the commodity, it was 
surprising to see the oil service index (OSX.X) bounce by 4.6%.  
But bounce it did, and the OIH finished the day with a 4.4% gain.  
Shares moved above $57.01 during the final hour of trading and 
stopped out our play for a loss of 5.1%.  Although bulls will be 
pleased that the stock closed above its 50-dma ($56.40), the 
recent trend of lower highs has not been broken.  We continue to 
maintain a bearish longer-term view of the oil sector, and would 
strongly consider another short play if the OIH rolls over from 
its 200-dma at $60.99.  Of course this outlook could change 
depending on the situation in the Mideast.

Picked on August 21st at $54.20 
Results since picked:     -2.81 
Earnings Date:              N/A






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

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

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

IDEC Pharmaceuticals - IDPH - cls: 46.79 chg: +1.66 stop: 43.74

Company Description:
IDEC Pharmaceuticals focuses on the commercialization and 
development of targeted therapies for the treatment of cancer and 
autoimmune diseases. IDEC's antibody products act chiefly through 
immune system mechanisms, exerting their effect by binding to 
specific, readily targeted immune cells in the patient's blood or 
lymphatic systems.  (Source: company press release)

Why We Like It:
Earlier in the week, the Biotech Index struggled to hold ground 
as AstraZeneca (NYSE:AZN) plummeted with the disappointing 
announcement that the company's drug Iressa was not achieving 
expected results. The domino effect weighted down shares of 
ImClone Systems (Nasdaq:IMCL), Genentech (NYSE:DNA), and OSI 
Pharmaceuticals (NYSE:OSI), all of which have similar drugs in 
development. However, the Biotech Index BTK.X was able to recover 
as the index found strength over the last two days.  This type of 
buying in light of "bad news" could bode well for bulls as the 
sector shows resilient vigor.  

Over the last few days several biotech companies have begun to 
rise with the BTK. Several recently bullish companies are: 
Protein Design Labs (Nasdaq:PDLI), Chiron Corporation 
(Nasdaq:CHIR), Genzyme Corporation (Nasdaq:GENZ), and ICOS 
Corporation (Nasdaq:ICOS).  Also displaying strength, IDEC 
Pharmaceuticals could be an attractive long play, as the company 
has been attempting to break above recent relative highs.  After 
closing above the 50-dma several weeks ago, the stock has been 
able to ascend while allowing the daily Stochastics time to cool 
off.  The current up trend has been combating congestion 
resistance in an effort to move higher.  Ideally, we would like 
to see IDPH close above the recent relative high of $47.40, and 
then challenge $50.00 on its way to the 200-dma.  Daily 
Stochastics appear to be entering the overbought region, and 
could help bring buyers off the fence.  Furthermore, the weekly 
Stochastics have recently entered the overbought region as well.  
On a short-term basis, this could be a positive technical 
development. 

Considering a possible long position, the newsletter will enter 
this hypothetical trade at current levels.  If the stock begins 
to ascend, we will watch the $50.00 level very close, though our 
official profit target will be at $54.49, slightly below the 200-
dma.  If the stock begins to fail, our stop loss will be four 
cents below the low two days ago at $43.74.  

For Annotated Chart: Click Here
Chart of: IDPH, Daily.



Picked on August 22nd at $46.79 <-- See text 
Results since picked:     +0.00
Earnings Date          07/17/02 (confirmed)
 




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

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

Foundry Networks - FDRY - close: 9.21 change: +0.03 stop: 8.99

After gapping down, FDRY dropped two cents below our stop on this 
mornings open.  As a consequence, our position was closed out for 
a 5.6% gain.  With no innovative news surfacing today, Foundry 
Network seemed to be trading with the broader market.  Bulls 
could still be encouraged, as FDRY has not broken the ascending 
trend yet, however, the daily Stochastics look to be falling out 
of the overbought region.  New entries could be considered on a 
pullback to the $8.75 area, though traders entering positions at 
that level would want to be careful that the ascending trend line 
is not defeated.  

Picked on August 9th at  $8.51 
Results since picked:    +0.48
Earnings Date         07/24/02 (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 

EDS     Electronic Data Systems    43.75     +1.90
CI      Cigna Corporation          88.75     +2.25
VLO     Valero Energy Corporation  36.95     +1.80
TLB     Talbots                    34.54     +1.32
CMX     Caremark                   16.22     +1.24
IVX     Ivax Corporation           14.00     +0.6

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

JDEC    J.D. Edwards & CO.        14.17     +2.32
MACR    Macromedia Inc.            8.03     +1.75
PDE     Pride International       14.02     +1.02
SHFL    Shuffle Master            17.25     +1.25
VRSN    Verisign                   8.79     +1.31

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

SFNT    Safenet Inc.               21.48     +1.23
ITMN    Intermune                  22.35     +1.01
SNPS    Synopsys Inc               47.25     +3.25
MGAM    Multimedia Games Inc       23.47     +1.69
ELBO    Electronics Boutique       29.00     +1.95
PSFT    Peoplesoft Inc.            21.30     +1.80

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

PNRA    Panera Bread Co.           30.87     -3.99
LSTR    Landstar Systems           50.81     -1.78
MYGN    Myriad Genetics Inc.       22.50     -1.29
XRAY    Dentsply International     41.50     -1.11
SONC    Sonic Corporation          23.78     -2.97

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

CEO     Cnooc Ltd.                 27.80     -1.39




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