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Daily Newsletter, Thursday, 08/29/2002

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PremierInvestor.net Newsletter                  Thursday 08-29-2002
                                                    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:      Semi(s) Were Today's Disappointment
Play-of-the-Day:  Building Weakness
Market Sentiment: Lack of Confidence


************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
      08-29-2002           High     Low     Volume Advance/Decline
DJIA     8669.74 - 23.10  8742.01  8558.02 1.39 bln   1796/1376
NASDAQ   1334.75 + 21.39  1345.37  1295.79 1.38 bln   1914/1416
S&P 100   461.81 -  0.53   465.69   454.89   Totals   3710/2792
S&P 500   917.77 -  0.07   924.59   903.33 
RUS 2000  394.50 +  5.02   396.10   387.23 
DJ TRANS 2246.30 - 67.10  2312.80  2211.57   
VIX        36.32 +  0.09    39.14    35.84   
VXN        55.05 +  1.53    57.63    54.20 
Total Vol   2,975M
Total UpVol 1,874M
Total DnVol 1,032M
52wk Highs   84
52wk Lows   209
TRIN        1.34
Put/Call               .93
*************************************************************

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

Semi(s) were today's disappointment

A play on words, but semi(s) were today's disappointment in what 
turned out to be a rather mixed picture for the major market 
averages.

One of the "semi" groups had trucking stocks trading lower after 
this morning's earnings warning from land transportation concern 
and Dow Transportation Average (TRAN) 2,246 -2.89% Roadway 
Corporation (NASDAQ:ROAD) $23.10 -14.2% guided lower on upcoming 
third-quarter earnings, citing disappointing tonnage in the long-
haul portion of its business.

"Trucking" stocks - Over $9.00; sorted by price



From my q-charts trading station, I pulled up a list of stocks 
where "trucking" is part of the company's business model.  Those 
with a "pink *" by the symbol are components in the Dow 
Transportation Averages (TRAN).  As we can see, this is the sub 
sector of transportation that weighed on the Dow Transports 
today.  While Roadway (ROAD) lead the declines, there were some 
very negative associations made with USFreightways (NASDAQ:USFC) 
$26.50 -11.5%, Covenant Transport (NASDAQ:CVTI) $16.63 -9.76% and 
Yellow Corp. (NASDAQ:YELL) $21.80 -8.50 to name just a few.

I don't like to chase stocks that have made some "big" moves in a 
day like ROAD and USFC, but when I "hear" of some fundamental 
weakness in a sector or group of stocks, I'll sneak down the % 
loser column and look for some technicals that hint of weakness.  

One stock in the group that looks short is shares of Knight 
Transportation (NASDAQ:KNGT) $17.00 -6.6% that recently found 
"suspicious" resistance at its bearish resistance trend.  Bears 
can establish 1/2 positions at current levels and then look for a 
potential break at $15.50 to have the stock unwinding to the 
downside.  Current stop on a bearish trade would be $19.50.

Knight Transportation Chart - $1 & $0.50 box



Bearish traders looking for some exposure to the trucking sector 
after today's earning's warning from ROAD may like the technicals 
(I do at least) in a bearish trade in KNGT.  While today's 6.6% 
decline is sharp, I see some similar things beginning to develop 
in KNGT that I "missed" in ROAD.

Roadway Express Chart - $1 box



Unfortunately for my account and subscriber's accounts, I didn't 
see the p/f chart of ROAD prior to today's earning's warning, but 
it sure doesn't look as if today's warning was a surprise to the 
market.  Back in April (after red 4) the stock violated its 
bullish support trend (just as KNGT has done), then broke a 
spread-triple bottom at $29 (just as KNGT has done at $16.50), 
then rallied to bearish resistance trend (just as KNGT has done) 
then reversed lower, giving a sell signal at $28 which turned the 
vertical count bearish to $19 and collapsed today to a session 
low of $20.58.  Most likely, the intraday recovery to ROAD's 
close of $23.10 was shorts covering as a downside target of $19 
from the bearish count left just $1.58 of potential gain to $19 
versus risk to a "buy signal" at $30 too much.  

Now, KNGT looks to be following the past pattern of fellow 
trucking stock ROAD, only KNGT has yet to establish a bearish 
vertical count column and then "collapse" like ROAD has.  Is 
business any better at KNGT than ROAD?  I doubt it and 1/2 
bearish position at $17.36 with a stop at $19.50 may be worth the 
risk for a bearish trader to find out.

The "other" semi

While broader technology had a more bullish trading session 
today, a notable lagging sector were the semiconductors as 
depicted by the Semiconductor Index (SOX.X) 304.33 +0.17%.  The 
only bullishness I find from this sector today was its ability to 
close above the 300-level.

Many market analysts have looked for this portions of "computer 
technology" to carry broader tech out of its multi year doldrums, 
but recent action looks as if this group firmness is that of a 
cardboard box, where the bottom of the box has been soaked in 
cold water and about to fall out.

Undoubtedly, the sector lacked bullishness today as we have 
previously mentioned that semiconductor equipment maker Novellus 
Systems (NASDAQ:NVLS) $24.29 +0.45% would be having its mid-
quarter update tonight.

In after-hours trading, Novellus' (NVLS) shares fell to $23.65 
after the company guided lower for its upcoming Q3, saying 
revenues look to be at $230 million, which is about $20 million 
shy of consensus for $250 million.  The company said Q3 EPS 
looked to be breakeven, which is below consensus for $0.10 EPS.

In the company's conference call, "look ahead" numbers had the 
company initially saying that Q3 booking guidance was $220 
million versus July 22 guidance of $250 million, but later in the 
call, the just given $220 million guidance was sketchy as the 
company then said bookings guidance could be as low as $200 
million as over the last three weeks, NVLS has seen "significant 
push-outs from two key customers.

You and I have a pretty good feeling who one of those customers 
is don't we?  In Friday night's wrap 
http://www.PremierInvestor.net/markets/marketwrap/082302_1.asp 
we talked about that morning's call out of Goldman Sachs and Goldman's belief 
that chip-maker Taiwan Semiconductor (NYSE:TSM) $8.35 +1.21% was 
about to cancel "significant orders," and that jives with some of 
what Novellus (NVLS) alluded to in tonight's mid-quarter update.

Other after-hours trading had chip-equipment giant Applied 
Materials (NASDAQ:AMAT) $13.44 +1.43% trading down at $13.15 and 
KLA-Tencor (NASDAQ:KLAC) $33.62 +0.96% trading lower at $32.90.  

It should be notable that after-hours trades did NOT violate 
today's intra-day lows and hints that Novellus' guidance wasn't a 
total surprise.

Gold breaks out of slump

Gold stocks caught fire today and had the Gold/Silver Index 
(XAU.X) 69.92 +4.67% challenging the CBOE Internet Index (INX.X) 
70.98 +4.7% for today's sector gainer.

Key technicals here has the XAU.X breaking downward trend on its 
$1 box point and figure chart and giving a triple-top buy signal.

Gold/Silver Index Chart - $1 box



In Tuesday's 01:00 intra-day update 
http://www.PremierInvestor.net/markets/intradayupdates/082702_3.asp
"gold bugs" were put on alert for a potentially bullish move in 
the XAU.X on a break at $68.  Today's bullishness had gold bugs 
glowing.

Two "different types" of stocks were mentioned in that update.  
Our key stock for gold producers that doesn't hedge had shares of 
Newmont Mining (NYSE:NEM) $28.07 +3.65% slightly outperforming 
shares of "hedger" Barrick Gold (NYSE:ABX) $16.05 +2.75% on a 
percentage basis.

Share of recently removed from the S&P 500 Placer Dome (NYSE:PDG) 
$10.23 +4.92, which has also been a heavier hedger, broke above 
its 50-day simple MA today.  Then after the bell, the company 
announced that it was cutting its gold hedge position by 20% from 
the 8.5 million ounces of gold reported on June 30.  The company 
said that the recent volatility in gold prices has afforded it 
the opportunity to reduce its call option commitments for 2003 
and 2004 at an anticipated net cost of about $2 an ounce, or 
about $2 million.

Placer said it expects its committed ounces to total 6.8 million 
at an expected realized gold price of more than $400/oz. by 
December 31 and at this level of committed ounces would represent 
less than 40% of its average expected production over the next 
five years, or 15% of currently published reserves.

For 2003, Placer said it expects to have more than 90% of its 
production uncommitted.

Getting more "bearish"

My market outlook has gotten decidedly more bearish from the 
technicals I'm seeing in recent sessions.

From a supply/demand perspective and the point and figure charts, 
I've noted in recent commentary that the Dow Industrials (INDU) 
8,671 -0.25% recently gave a triple-bottom sell signal at 8,750.  
I've also noted that the S&P 500 Index (SPX.X) 917 which traded 
unchanged today gave a triple bottom sell signal at 930 on its 
p/f chart with box setting of $5.

Today I see a more defensive sector like the Gold/Silver Index 
(XAU.X) 69.92 +4.67% giving a triple-top buy signal at 68 and 
breaking downward trend to the upside.

Either the MARKET is trying to pull a fast one on me and going to 
great lengths and expense to do so, or the MARKET is telling me 
something about getting much more defensive.  I'm leaning way 
toward the second explanation and that the MARKET is truly 
getting more defensive.

Combining the technicals with the month of September phenomena, 
I'm taking a 1-month outlook toward the bearish pool.

Now... I recently mentioned that the Stock Trader Almanac pointed 
out that the last two days of August were "murderous" for the Dow 
and S&P 500 the last 5-year.  While day one of two was not 
"murderous," it certainly wasn't overly bullish.

I would never want to be accused of being just one sided and only 
mentioning bearish things, so I will also note here that 
according to the Stock Trader's Almanac, the first two days of 
September (next Tuesday and Wednesday, as stocks won't trade on 
Monday in observance of Labor Day) has opened strong for stocks 
six years in a row.

Now, if you're a "tech bear" that may have locked in some partial 
positions at some targets today or yesterday and are looking for 
another type of rally point, perhaps early next week you'll get 
it.

Jeff Bailey
Senior Market Technician
PremierInvestor.net


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

Centex Corp. - CTX  - cls: 50.14 chg: -1.55 stop: *text*

Company Description:
Centex Construction Company, a leader in the commercial 
construction industry for 66 years, provides general contracting, 
construction management, design-build, program management, and 
preconstruction services. Centex Construction Company is a 
division of Centex Construction Group, a subsidiary of Dallas-
based Centex Corporation. Centex ranks No. 1 on Engineering News-
Record magazine's list of top 400 contractors. Centex also ranks 
No. 1 for the third consecutive year on FORTUNE® magazine's list 
of "America's Most Admired Companies"(TM) in engineering and 
construction. (source: company press release)

Why We Like It:
Although yesterday's MBA Mortgage Applications Survey indicated 
high mortgage and re-finance application filings, the report also 
revealed a 7% pull back in purchasing applications.  There is 
speculation that some "would be" homeowners have simply been 
priced out of the market, even with low interest rates.  Further, 
analysts are beginning to have concerns about the sustainability 
of real estate if the economy begins to recover and interest 
rates begin to rise.  Seven percent is said to be the benchmark 
number that could cause the "bubble" to burst if and when 
interest rates elevate from the current low levels.  Today also 
revealed that industry insiders were beginning to sell shares of 
in their own companies.  Insiders sold $258 million dollars of 
stock in the second quarter, which was the highest quarterly net 
stock sale in the sector since 1996.

As a potential short candidate, the newsletter is considering 
adding CTX to its play list.  The stock has recently descended 
from its March 7th high at 63.09.  Currently trading under the 
200-dma, CTX also fell below the 50-dma in today's session.  On 
the weekly chart, the stock has formed a potential "tweezers" top 
at the 50-Week MA. CTX is presently below the 50-Week MA at 
$50.34.  Bears are further encouraged by the daily Stochastics, 
which have recently released from the overbought region.  If the 
stock continues to trade beneath the 50-dma, the newsletter will 
place an entry trigger to go short at $49.99.  If our trigger is 
met, the newsletter will place a stop above the 200-dma at 53.01.  
Our initial profit-target for CTX will reside at $43.25 slightly 
above the August lows. Bulls will attempt to hold the $49.00 
level, which has formidable support.  Additionally, the $45.00 
and $47.00 levels provide possible technical and psychological 
support for CTX.  In light of the weakening sector, we believe 
these levels will eventually fail.

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



Picked on August xxth at $xx.xx <-- see text 
Results since picked:     +0.00
Earnings Date          07/17/02 (confirmed)
 




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

Lack of Confidence

by Steven Price

This morning started out with a downgrade of several chip 
equipment makers.  This development seemed to simply pile on the 
recent slew of IT spending warnings, as UBS Warburg warned that 
semiconductor production equipment order momentum has gone from 
slowing to declining.   This accompanied an earnings estimate cut 
for General Electric by Lehman Bros. Lehman cut its 2003 
earning's estimate for GE from $1.81 to $1.76.  It cited pension 
income problems, expensing stock options and the negative impact 
of the firm's aircraft engines and power systems forecast.  

Another triple digit down day was under way for the Dow.  Before 
we knew it, though, the rally caps were on and we had bounced 
strongly.  The Dow posted a rally of 183.99 from its lows, before 
finishing down just 23.10 points for the day.  The Nasdaq, on the 
other hand, posted a 50-point turnaround, before settling up 
21.39 on the day.  The one sector to lag, however, was the 
semiconductors.  The Semiconductor Index (SOX.X), which broke 
support of 300, trading as low as 293.17, also experienced a 
rebound, but ended with an increase of only 0.53 on the day, at 
304.33.  After the bell, Novellus warned that third quarter 
revenue would come in at $230 million, under previous estimates 
of $250 million.  What was interesting about the company's 
comments was that it said it saw a small uptick in IT spending.  
It also said this small increase was not enough to overcome a 
slowdown in consumer spending.  However, it has been quite some 
time since a company has talked about increased IT spending.  It 
still looks like this will send the semis back under 300, as a 
warning is still a warning, regardless of the reason.

This revelation will be interesting to watch play out.  The 
increase in IT spending is something the industry has been 
waiting a long time for and is the first bullish sign in a while.  
The fact that consumer spending is continuing its slowdown, 
however, could have much larger implications.  Consumer spending 
makes up 2/3 of GDP and with GDP at just 1.1%, a continued 
slowdown could lead to a contraction in the economy.  Tuesday's 
Consumer Confidence came out lower than expected, which is an 
indication of consumers' willingness to spend.  Friday's 
University of Michigan Consumer Sentiment will actually give a 
more recent snapshot of consumers' current state of mind.  The 
Conference Board's Consumer Confidence survey is actually mailed 
out to 5,000 recipients at the beginning of the month, some who 
fill it out then, and some who fill it out as the month goes on.  
Much of the University of Michigan Survey is completed this week.  
That report, just prior to the long weekend and less than two 
weeks before the September 11 anniversary, could have great 
impact.   If wee see a surprisingly high number, along with 
Novellus's comments about an increase in IT spending, we could 
see a significant rally into the weekend.  If not, there could be 
a sell-off, as investors don't want to stay long over the four 
days from Friday to Tuesday, knowing volume will pick up after 
the holiday and any sell-off at that point would probably be much 
more substantial. 

Watch for weakness in the semiconductors tomorrow morning, and a 
reversal of today's Nasdaq gains.  That is unless we get some 
good news from the folks in Michigan.


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

Market Averages

DJIA ($INDU)

52-week High: 10679
52-week Low :  7702
Current     :  8670

Moving Averages:
(Simple)

 10-dma: 8863
 50-dma: 8734
200-dma: 9707

S&P 500 ($SPX)

52-week High: 1226
52-week Low :  797
Current     :  917

Moving Averages:
(Simple)

 10-dma:  938
 50-dma:  919
200-dma: 1006

Nasdaq-100 ($NDX)

52-week High: 1782
52-week Low :  892
Current     :  961

Moving Averages:
(Simple)

 10-dma: 1002
 50-dma:  980
200-dma: 1323


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



The Semiconductor Index (SOX.X): After this morning's downgrade 
of semiconductor equipment makers by UBS Warburg, the group 
looked poised to take out its recent low of 282.75.  However, the 
Nasdaq rally lifted this group as well.  After the bell, however, 
Novellus warned that revenue would come in 8% below previous 
guidance.  This was blamed on continued weakness in consumer 
spending, although they saw an uptick in IT spending.  This 
conflicts with UBS's comments about semiconductor production 
equipment order momentum declining. Guiding lower still is a 
disappointment and should help push this group back below 300, 
thus taking some shine off the Nasdaq with it. 

52-week High: 657
52-week Low : 282
Current     : 304

Moving Averages:
(Simple)

 10-dma: 337
 50-dma: 347
200-dma: 491


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

Market Volatility

The Market Volatility Index is awfully high for a day in which 
the Dow was only off by 23 points, and the Nasdaq finished up 21. 
I sense a lack of confidence in today's bounce, ahead of the long 
weekend.  The VIX seems to be predicting a sell-off, although the 
high level may be due to today's initial drop.  Consumer 
Sentiment should tip the scales in the morning.  We'll see just 
how many investors are willing to hold long positions into the 
long weekend with September 11 approaching. 

CBOE Market Volatility Index (VIX) = 36.32 +0.09
Nasdaq-100 Volatility Index  (VXN) = 55.05 +1.53

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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.92        366,947       339,306
Equity Only    0.75        269,656       203,499
OEX            1.13         18,858        21,264
QQQ            1.17         28,977        33,846

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

Bullish Percent Data

           Current   Change   Status
NYSE          49      + 4     Bull Confirmed
NASDAQ-100    52      - 6     Bull Correction
DOW           60      + 0     Bull Confirmed
S&P 500       58      - 2     Bull Alert
S&P 100       57      - 1     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  1.80
10-Day Arms Index  1.33
21-Day Arms Index  1.30
55-Day Arms Index  1.31

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       1512          1222
NASDAQ     1841          1336

        New Highs      New Lows
NYSE         28              27
NASDAQ       36              96

        Volume (in millions)
NYSE     1,361
NASDAQ   1,419

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

Commitments Of Traders Report: 08/20/02

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 reduced both long and short positions by about 6000 
contracts, as can be expected during the end of summer, a 
notoriously slow time for the markets.  The got slightly longer, 
but by only 500 contracts.  Small traders added to positions 
slightly, with a net short increase of 500 contracts.


Commercials   Long      Short      Net     % Of OI 
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%)
08/20/02      422,100   469,556   (47,456)   (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
07/30/02      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%
08/20/02      156,974    69,071    87,903     38.9%

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 reduced both long and short positions slightly, with 
500 more reductions on the short side.  Small Traders also 
reduced slightly on both sides, with a net long reduction of 500 
contracts.


Commercials   Long      Short      Net     % of OI 
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%)
08/20/02       41,876     49,461    (7,585) ( 8.3%)

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
07/30/02       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%
08/20/02       11,321     7,980     3,341    17.3%

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 reduced long positions by about 1700 contracts, while 
adding 1500 to the short side.  This led to a reduction of over 
3000 contracts from their long positions.  Small traders added 
1200 to the long side, while reducing shorts by only 200 
contracts.  This led to a net reduction of 1300 short contracts.


Commercials   Long      Short      Net     % of OI
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%
08/20/02       21,160    15,349    5,811      15.9%

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
07/30/02        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%)
08/20/02        6,216     8,163    (1,947)   (13.5%)

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 08-29-2002
                                                    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
  Bearish Play Updates:  MXIM, QLGC, SBC

Stock Bottom / Active Trader
  New Bearish Plays:     CTX, RKY
  Bearish Play Updates:  C, CB, CL, COX, PSS, RTH
  Closed Bullish Plays:  NCEN, NKE

High Risk/Reward
  New Bullish Plays:     SFA

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

Maxim Integrated - MXIM - cls: 32.12 chg: +0.56 stop: 35.06

The semiconductor group was pushed lower this morning by news 
that UBS Warburg downgraded four chip equipment stocks, including 
NVLS and NEWP.  The firm based the downgrade on their belief that 
semiconductor production equipment orders have begun to decline.  
The SOX.X spiked under the 300 level and tagged a three-week low 
of 293.17 before rebounding with the broader market.  MXIM traded 
in a similar fashion, with shares falling as low as $30.63 before 
bouncing back to finish with a 1.7% gain.  Although it certainly 
would've been nice to see this play reach our profit-target, 
tonight's news may send MXIM back towards this level ($30.10).  
In their mid-quarter update, NVLS said they expect to report 
lower-than-expected earnings, orders, and revenue for Q3.  The 
overall tech sector could also be weighed down by comments from 
Sun Mircrosystems' CFO, who said that the market for IT spending 
may be worsening.  Given Maxim's proximity to our exit target, we 
would not recommend adding positions at current levels.  However, 
traders looking for fresh entries can watch for a rollover from 
near-term resistance in the $32.75-$33.00 area.  Premier Investor 
is currently up 9.2% on this play.

Picked on August 23rd at  $35.38
Results since picked:      +3.26
Earnings Date           08/06/02 (confirmed)




--- 

Qlogic - QLGC - cls: 35.30 chg: +0.62 stop: 37.91

The semiconductor index experienced weakness early Thursday 
morning, following a UBS Warburg downgrade of several chip 
equipment stocks.  QLGC traded down to yesterday's low of $34.15 
before bouncing back to a 1.7% gain.  That's a decent intraday 
rebound, but shares will be hard-pressed to maintain those gains 
in the face of tonight's after-hours news.  Chip maker NVLS 
reported in their mid-quarter update that a significant decline 
in orders from two major customers would lead to less-than-
expected Q3 earnings.  SUNW also announced that Q1 revenue would 
probably be at the low end of its predicted range.  The company's 
CEO described the outlook as "very, very murky."  Although 
Friday's pre-holiday action will likely be characterized by low 
volume and directionless trading, tonight's negative news could 
lead to a further decline in the SOX.X.  If QGLC heads lower, new 
bearish positions can be targeted on a move below $35.14.  

Picked on August 23rd at $37.85 
Results since picked:     +2.55
Earnings Date          07/18/02 (confirmed)



---

SBC Comm. - SBC - cls: 25.80 chg: -0.01 stop: 28.51

SBC has been trending lower over the past nine days.  Today's 
trading was no exception, as shares hit a short-term low of 
$25.18 in morning trading.  Underlying psychological support at 
$25.00, combined with a broader market rebound, helped to propel 
SBC back to break-even levels.  SBC nonetheless underperformed 
the combined telecom index (IXTCX), which has spent the last two 
sessions meandering on either side of its 50-dma.  SBC's 
oscillators are currently painting a mixed picture.  The daily 
stochastics have begun to turn higher from the oversold band, 
while the MACD just produced bearish crossover.  In light of the 
recent downtrend and today's relative weakness, we believe the 
latter indicator may be more accurate.  Aggressive traders can 
consider adding short positions on a move under $25.00.  Such a 
breakdown would open the door for a test of the July lows near 
$22, but keep in mind that support may emerge near the August low 
of $24.60.  

Picked on August 21st at $27.49 
Results since picked:     +1.69
Earnings Date          07/23/02 (confirmed)


 



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

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

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

Centex Corp. - CTX  - cls: 50.14 chg: -1.55 stop: *text*

Company Description:
Centex Construction Company, a leader in the commercial 
construction industry for 66 years, provides general contracting, 
construction management, design-build, program management, and 
preconstruction services. Centex Construction Company is a 
division of Centex Construction Group, a subsidiary of Dallas-
based Centex Corporation. Centex ranks No. 1 on Engineering News-
Record magazine's list of top 400 contractors. Centex also ranks 
No. 1 for the third consecutive year on FORTUNE® magazine's list 
of "America's Most Admired Companies"(TM) in engineering and 
construction. (source: company press release)

Why We Like It:
Although yesterday's MBA Mortgage Applications Survey indicated 
high mortgage and re-finance application filings, the report also 
revealed a 7% pull back in purchasing applications.  There is 
speculation that some "would be" homeowners have simply been 
priced out of the market, even with low interest rates.  Further, 
analysts are beginning to have concerns about the sustainability 
of real estate if the economy begins to recover and interest 
rates begin to rise.  Seven percent is said to be the benchmark 
number that could cause the "bubble" to burst if and when 
interest rates elevate from the current low levels.  Today also 
revealed that industry insiders were beginning to sell shares of 
in their own companies.  Insiders sold $258 million dollars of 
stock in the second quarter, which was the highest quarterly net 
stock sale in the sector since 1996.

As a potential short candidate, the newsletter is considering 
adding CTX to its play list.  The stock has recently descended 
from its March 7th high at 63.09.  Currently trading under the 
200-dma, CTX also fell below the 50-dma in today's session.  On 
the weekly chart, the stock has formed a potential "tweezers" top 
at the 50-Week MA. CTX is presently below the 50-Week MA at 
$50.34.  Bears are further encouraged by the daily Stochastics, 
which have recently released from the overbought region.  If the 
stock continues to trade beneath the 50-dma, the newsletter will 
place an entry trigger to go short at $49.99.  If our trigger is 
met, the newsletter will place a stop above the 200-dma at 53.01.  
Our initial profit-target for CTX will reside at $43.25 slightly 
above the August lows. Bulls will attempt to hold the $49.00 
level, which has formidable support.  Additionally, the $45.00 
and $47.00 levels provide possible technical and psychological 
support for CTX.  In light of the weakening sector, we believe 
these levels will eventually fail.

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



Picked on August xxth at $xx.xx <-- see text 
Results since picked:     +0.00
Earnings Date          07/17/02 (confirmed)
 



--- 

Adolph Coors - RKY - cls: 59.00 chg: -1.09 stop: *text*

Company Description:
Founded in 1873, Adolph Coors Company is the third-largest U.S. 
brewer and the world's eighth-largest brewer. Its principle 
subsidiary is Coors Brewing Company. (source: company press 
release)

Why We Like It:
With weakened consumer sentiment numbers of late, even 
"defensive" stocks like alcohol manufacturers are having a hard 
time keeping the beer glass full.  Further, as a potential 
baseball strike looms over our heads, brewers are concerned about 
lost revenue.  Coors has several regional pouring rights for 
baseball parks, thus an actualized strike could impact a portion 
of Coors sales for the quarter.  They even lent their namesake to 
the baseball stadium here in Denver.  

RKY has been in the most recent down trend since December of 
2000.  The stock hit a recent relative low of $48.40 on July 
24th.  An ascending trendline is formed when a line is traced 
back to the September low of $42.65.  This ascending support is 
part of a greater consolidation pattern, which has been occurring 
for 20 months.  Looking at the daily chart, one can see that RKY 
fell below the 200-dma ($60.11) yesterday, and closed just under 
the 50-dma ($59.06) on Thursday.  The daily Stochastics have also 
witnessed selling, recently falling into the oversold region.  
Point-and-figure chartists will also notice that RKY has just 
produced a double-bottom sell signal.  In light of this technical 
weakness, the newsletter plans to enter this hypothetical short 
position by putting a trigger slightly below today's low at 
58.24.  IF the stock declines and a position is initiated the 
newsletter will put its stop slightly above the 200-dma at 60.25.
The initial profit target for Adolph Coors is at $52.25, just 
above horizontal and ascending support.

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



Picked on August xxth at $xx.xx  <-- See text 
Results since picked:     +0.00
Earnings Date          07/25/02 (confirmed)
 




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

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

Citigroup Inc - C - close: 32.82 change: -0.33 stop: 35.01 *new*

Today, Rep. John LaFalce of the House Financial Services 
Committee criticized companies for giving hot IPO shares to 
investment-banking clients as a perk.  Rep. LaFalce concluded 
that Congress and regulators "must look more deeply into the 
matter".  This statement combined with corporations recently 
canceling IPO's, has bulls concerned about the troubled financial 
company.   Closing down -0.99% for the day, C displayed poor 
relative strength in relation to the Dow.  Further, daily 
Stochastics (14,1,3) have just entered the oversold region, and 
could indicate further selling on the horizon.  The newsletter 
will move the current stop down to 35.01, just above the whole 
number and the 200-dma.      

Picked on August 26th at $33.49
Results since picked:     +0.67
Earnings Date          07/17/02 (confirmed)




---

Colgate Palmolive - CL - cls: 53.65 chg: -0.01 stop: 55.01

After gapping down this morning, Colgate Palmolive attempted to 
find strength into the mid-afternoon, but closed down one penny 
for the day.  CL continues to trade under the 200-dma, which is 
at $54.83.  Bears remain encouraged, as today's trading action 
produced a lower high than yesterday's session.  With volume 
coming in at mediocre levels, today's move is speculated to be 
short covering in light of the approaching holiday weekend.  The 
newsletter will keep the current stop at 55.01, just above the 
200-dma and the whole number.  Maintaining a close eye on our 
stop, new positions could be considered at current levels.   

Picked on August 26th at $53.59
Results since picked:     -0.06
Earnings Date          07/23/02 (confirmed)




---

Chubb Corporations - CB - cls: 61.42 chg: -0.33 stop: 65.01

Gapping down this morning CB tried to recover on the day, but 
faltered, closing down -0.33 cents.  Although CEO Dean O'Hare 
declared that "happy days are here again", Chubb still has 
technical concerns if the stock is to regain strength.  The good 
news for bears is that daily Stochastics are approaching the 
oversold region, and could move lower.  Further, the MACD 
recently tested the 0 line, but looks as if it is rolling over.  
The P&F chart indicates near-term resistance at $65.00, which is 
just below our stop at $65.01.  Giving CB plenty of room to 
wiggle, the newsletter is not moving our stop just yet.  

Picked on August 28th at $62.49
Results since picked:     +1.07
Earnings Date          07/29/02 (confirmed)




---

Cox Communications - COX - cls: 25.77 chg: +0.81 stop: 27.02

With no fresh buzz on Cox Communications today, bears could be 
slightly discouraged as today's move allowed the stock to close 
above the 50-dma at $25.77.  However, the descending trend has 
not been broken, and thus, shorts have not given up just quite 
yet!  With daily Stochastics entering the overbought region, the 
stock could see weary bulls in the near future.  The newsletter 
will leave the current stop at $27.02, giving the stock continued 
room to wiggle if bulls persist to engage this cable company.   

Picked on August 28th at $24.64
Results since picked:     -1.13
Earnings Date          07/31/02 (confirmed)




---

Payless Shoesource - PSS - close: 52.77 change: +0.44 stop: 55.68

Gapping down near the 50-dma today, PSS was able to rebound 
during the session to close up +0.44 cents.  The stock displayed 
outstanding relative strength compared to the Dow and has some 
bears shaking in their boots.  However, with the daily 
Stochastics releasing from the overbought region, and the MACD 
potentially rolling over, the stock could still see weakness in 
the future.  In addition, PSS continues to have the descending 
trend to contend with if the stock intends to travel to higher 
ground.  Leaving our stop at 55.68, the newsletter is attempting 
to give PSS plenty of room to breathe.  New positions could be 
considered at current levels.  

Picked on August 26th at $52.99
Results since picked:     +0.22
Earnings Date          08/14/02 (confirmed)




---

Retail Holders - RTH - close: 80.00 change: -0.30 stop: 83.56

Continuing to trade below the 50-dma, the Retail Holders Trust 
could still be an Achilles' heel in the overall market.  Tomorrow 
brings forth the University of Michigan Consumer Sentiment 
Numbers.  If consumer sentiment continues to lack faith in the 
U.S. Economy, the RTH could be one of the first areas of the 
market affected.  Earlier in the week Merrill Lynch stated, 
"consumers just don't seem to be spending money".  Further, on 
Tuesday the BTM-UBS Warburg Chain Store Sales index declined -0.3 
percent.  Back to school sales have been slower than expected and 
could drag down retail income statements during the fall.  The 
newsletter will retain its stop at $83.56.       

Picked on August 26th at $80.70
Results since picked:     +0.70
Earnings Date               N/A


 


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

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

New Century Fncl - NCEN - cls: 30.33 chg: +0.18 stop: 29.65 

With NCEN trading flat and the technical indicators looking less-
than-bullish, we elected to tighten our stop to $29.65 on Tuesday 
night.  This level was violated on Thursday morning when shares 
slipped lower with the broader market.  Our play was closed for a 
loss of 1.6%.  Although NCEN did manage to climb back above the 
$30.00 before the closing bell, the downtrending oscillators 
suggest that the stock may have a tough time breaking above near-
term resistance at $32.  Traders still long may want to consider 
taking their money off the table if shares experience another 
rollover from this region.

Picked on August 16th at $30.16
Results since picked:     -0.51
Earnings Date          07/25/02 (confirmed)




---

Nike - NKE - close: 42.98 change: -1.55 stop: 43.74

The footwear group was met with heavy selling on Thursday after 
two shoe retailers cut their earnings forecast for the current 
quarter.  FTS slashed their Q3 expectations by up to 50%, while 
FINL reduced its Q2 estimates by as much as 27%.  Both companies 
citied weak sales of athletic shoes as one of the reasons for the 
revenue decline, so it wasn't surprising to see NKE gap lower on 
the news.  Our play was closed at the initial trade of $43.21.  
This represents a loss of 4.7% from our original entry point.  
Obviously the fundamental weakness implied by today's warnings is 
not a good sign for NKE.  The technical picture is looking 
bearish as well, with the MACD and daily stochastics moving 
lower.  The p-n-f chart has also reversed into a column of "O's."  
Given these developments, we would not be surprised to see a 
retest of the August low ($40.50) within the next few sessions.

Picked on August 22nd at $45.36 
Change since picked:      -2.15
Earnings Date          06/27/02 (confirmed)






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

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

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

Scientific Atlanta - SFA - close: 15.01 change: +0.79 stop: *text

Company Description:
Scientific-Atlanta, Inc. is a leading supplier of digital content 
distribution systems, transmission networks for broadband access 
to the home, digital interactive set-tops and subscriber systems 
designed for video, high-speed Internet and voice over IP (VoIP) 
networks, and worldwide customer service and support. (source: 
company press release)

Why We Like It:
The beleaguered cable sector received a shot in the arm last week 
after AOL Time Warner and AT&T agreed to a deal that streamlines 
the joint ownership of Time Warner Entertainment.  Analysts 
believe that this will lead to additional consolidation in the 
cable industry.  These efforts had previously been derailed by 
the collapse of Adelphia Communications.  Caught in a "guilt-by-
association" downdraft, shares of set-top box maker SFA were 
hammered for sharp losses from during the May-June time period.  
Now that the Adelphia-related selloff seems to have run its 
course, SFA stands to benefit from the potential upturn in the 
cable sector.  

Technically, the stock is poised to stage a breakout.  Shares 
showed impressive relative strength versus the broader market 
today and posted a 5.5% gain.  Helping to push the stock higher 
was news that Cablevision (CVC) will be purchasing SFA's digital 
boxes.  Volume was the strongest in three weeks, and shares 
closed above psychological resistance at $15.00 for the first 
time since July 1st.  The climbing MACD and middling daily 
stochastics (5,3,3) indicate that SFA is not yet overbought.  
We'll enter this hypothetical bullish trade on a move above the 
July high of $15.25.  If this level is cleared, there are no 
substantial levels of overhead resistance to impede the stock's 
progress.  We're hoping to ride SFA up to its June highs near 
$18.50.  If our play triggered we'll use a stop at $13.74, one 
cent under Wednesday's low.  This would represent a loss of 
roughly 10% from our action point.

For annotated chart: click here.
Chart of: SFA, Daily.


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

RJR     RJ Reynolds                57.81      +0.78

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

CHS     Chico's Fashion           17.18      +2.10
ACAP    American Physicians       18.49      +1.24
PRGO    Perrigo Co.               11.15      +1.05
GLGC    Gene Logic Inc.            9.02      +1.05
WIND    Wind River Systems         5.73      +1.13
ESL     Esterline Technology      19.34      +1.59

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

MIK     Michaels Stores Inc.       45.21      +5.46
VALM    Valmont Industries Inc.    24.55      +1.05
APOL    Apollo Group Inc.          42.18      +3.76
EASI    Engineered Support Systems 54.00      +1.60
COCO    Corinthian Colleges Inc.   37.19      +2.99
JASA    Jo-Ann Stores Inc.         29.97      +1.47

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

ABS     Albertson's Inc.           23.10      -3.73
FDC     First Data Corp.           34.80      -1.84
VLO     Valero Energy              32.50      -1.35
PTEN    Patterson-Uti Energy       24.96      -1.25
PTSI    Pam Transportation         20.93      -1.33
PNC     Pnc Financial Services     45.10      -1.10

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

BMY     Bristol-Myers Squibb       24.29      -0.77
CHE     Chemed Corp.               33.00      -1.00
ETN     Eaton Corp.                70.45      -1.34
PD      Phelps Dodge               31.97      -1.02
KMG     Kerr-McGee                 46.66      -1.21
KBH     Kb Home                    48.06      -1.20





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