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PremierInvestor.net Newsletter              Wednesday 09-25-2002
                                                  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:      Not Convinced
Watch List:       AU, CCU, CMCSK, MO, SDS, TXN, and more...
Play of the Day:  Bouncing From Support


******************************************************************
MARKET WRAP  (view in courier font for table alignment)
******************************************************************
09-25-2002                High    Low     Volume Advance/Decl
DJIA     7841.82 + 158.69 7891.28 7665.66  1930 mln   1509/415
NASDAQ   1222.29 +  40.12 1209.72 1177.41  1684 mln   1438/213
S&P 100   417.38 +  6.52  1227.23 1184.12   totals    2947/628
S&P 500   839.66 + 20.37  844.22  818.46
RUS 2000  365.14 +  8.56  365.18  356.58
DJ TRANS 2167.08 + 69.91 2167.08  2097.65
VIX        42.41 -  2.97   46.23  41.84
VIXN       56.69 -  2.71   61.80  56.67
Put/Call Ratio 0.77
******************************************************************


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

Not Convinced

by Steven Price

Have we found a bottom?  This is the question on the minds of 
investors, OI readers and my own.  It's going to take a lot more 
than a 158.69 point gain, after the Dow gave up over 1300 points 
over the last month, to convince me that we have found a bottom.  
That being said, all bear markets experience some bounces, and 
after a 1300-point drop, this bounce could still tack on a few 
hundred more points without changing my overall sentiment.  That 
bounce could provide some great long opportunities, as well.

I looked back at recent head and shoulders reversal patterns in 
the Dow to see just how accurate the downside projections were.  
It was difficult to find a pattern that looked as textbook as the 
recent pattern, but I found a few that fit the description, 
nonetheless.  It was surprising to see just how accurate the 
downside measuring objectives have been.  The measuring objective 
is taken from the top of the head to the neckline, and then that 
distance is projected downward.  Below is a copy of the chart I 
put in Monday's Market Wrap showing the minimum downside 
objective of the current pattern.  It is followed by recent head 
and shoulders patterns in the Dow.

Chart of the Current Dow and Nasdaq Pattern


In the following charts, the distance between the head and 
neckline is in red, the neckline is in black and the projection 
downward is in blue.

The following chart follows a broad pattern from the end of last 
year to the beginning of this year.  The minimum downside 
objective was achieved, and then some.

Chart of Dow H&S from 2001-2002


This chart from the end of 2000 to the beginning of 2001 is not 
as well defined, but still fits the H&S criteria.  The downside 
objective is also achieved in this pattern.

Chart of Dow H&S from 2000-2001


If we go back a couple of months from this point, to July-October 
2000, we see the pattern repeat itself.  The market continues 
downward and bounces when it hits the downside measuring 
objective.

Chart of H&S from July-October 2000


Moving back to the summer and fall of 1999, once again the 
downside objective of a head and shoulders pattern is achieved, 
and provides a bounce point.

Chart of H&S from July to October 1999


By now you get the point.  The recent consistency of the pattern 
suggests to me that today's rally was just a minor bounce on the 
way down.  Tuesday's close brought the Dow down below the closing 
low of July 23(7702.34).  On July 24, the Dow sank 170 points, to 
7532, before staging a 658-point intraday turnaround.  This 
bounce was the beginning of a rally that took the average back 
over 9000.  If there was going to be a similar bounce, this 
double bottom point seemed like the logical place for it to 
happen.  We did get a bounce, but I'm not sure it was terribly 
convincing, especially given the patterns highlighted above.  
Remember that the July low was achieved on the tail end of the 
2000-2001 H&S pattern, shown above.  A double bottom is usually 
portrayed with the second dip being higher than the first.  It 
can be argued that yesterday's intraday low of 7666 was higher 
than the intraday low of 7532 on July 24.  However, the other 
side of the argument is that yesterday's end of day close, 
7683.13, was actually lower than that of 7702 on July 23.

Today's rebound did take out yesterday's resistance level of 
7800.  Intraday resistance had been appearing at successively 
lower round numbers over the last several days.  Today broke that 
daily trend, but was turned back decisively below Monday's 
resistance level of 7900. While a recovery will most likely take 
place in small steps, today's bounce was hardly a reversal in the 
larger trend.  However, it could be the first small step after 
finding support right around the July 23 closing low.

Chart of Dow resistance levels


Over the last several years, the techs have led the market.  One 
of the sectors that has been dragging the Nasdaq down is the 
semiconductors.  With constant warnings, and lower earnings and 
revenue guidance becoming almost a daily event, a look at the 
Semiconductor Index (SOX.X) provides quite a bit of insight as to 
where the broader markets are headed.  Today the group rebounded, 
showing a gain of almost 7%.  However, the index had lost 35% of 
its value in the month between August 21 and September 23.  So 
while today's rally was nice, the sector still remains in a 
strong down trend.  The only silver lining seems to be that the 
last two rebounds have come from the center of the descending 
channel, as opposed to the bottom.  While I wouldn't call this 
bullish, it is an improvement from a technical standpoint.  The 
7% gain, however, has not broken the series of lower highs and 
lower lows.

Chart of the SOX


The International Monetary Fund (IMF) has dialed down its 
expectations for global growth.  It had projected global growth 
at 4% in 2003 just 6 months ago.  It now predicts growth of only 
2.8% in 2002 and 3.7% in 2003.  The outlook stated, "Concerns 
about the pace and sustainability of the recovery have risen 
significantly... The recovery is still expected to continue, but 
global growth in the second half of 2002 and in 2003 will be 
weaker than earlier expected and the risks to the outlook are 
primarily on the downside."  These numbers are still an 
improvement from the 2.2% growth in 2001, but that came during a 
U.S. recession.  Chief IMF economist Kenneth Rogoff cited 
problems in Iraq, uncertainty about when investment will recover 
and investor risk tolerance as the major unknowns. The IMF also 
reduced its growth targets for the U.S. from 2.3% to 2.2% in 2002 
and from 3.4% to 2.6% for 2003.  One of the big problems facing 
the world economy is still Japan, whose economy is expected to 
shrink 0.5% this year, its third recession in the last decade.  
The IMF also said falling equity prices in the advanced nations 
would have negative effects on the global economy and should cut 
spending in the U.S. by about 1% over the year, negating the 
stimulating effects of the weaker dollar and lower interest 
rates.

In another bearish sign, the housing market is continuing its 
cool down.  One of the props holding up consumer spending is the 
ability to refinance and lower mortgage payments. While mortgage 
applications and refinancings are still high historically, home 
resales did fall 1.7% in August, in spite of interest rates still 
heading lower. The August resale rate was also down 3.8% from a 
year ago.  The rates were reported by the National Association of 
Realtors, whose chief economist said, "It's still a very healthy 
pace, but certainly we are winding down from the boom." With 
mortgage foreclosures at an all time high, and housing starts 
dropping, I can't help but feel like the housing bubble isn't so 
much bursting, as developing a slow leak.  

Some positive news came after the bell from Bed, Bath and Beyond 
(BBBY).  The past few days have brought cautious comments from 
Wal-Mart, Target and Federated, indicating that we are seeing a 
slowdown in consumer spending.  However, Bed, Bath and Beyond 
beat estimates by 0.02 and posted a 39% increase over the year 
ago quarter.  The company said same store sales were up 10.4%, 
after a 4.6% gain a year ago.  This may be a result of the 
strength over the last few months of the housing market, as the 
company focuses on home furnishings.  The slowdown in home sales, 
however, could affect them negatively in the future.  Still, a 
retailer that beats the street is a positive sign.

Qualcomm said last week that it expects strong chip demand in its 
current fourth quarter and upped their shipping estimates from 19 
million phone chips to 20 million.  Today after the bell, they 
reiterated those expectations and said that they are also seeing 
an increase in fourth quarter bookings, which is a positive for a 
sector that has seen its book-to-bill ratio slide for the past 
few months.  However, Qualcomm has failed to raise earnings 
guidance along with either of these announcements.  One of the 
problems plaguing the chipmakers has been falling prices; so 
increased production does not necessarily mean they will be 
increasing earnings projections. 

Ford also had some good news.  After claiming recently that the 
market was undervaluing its earnings potential, Chairman Bill 
Ford said the company would be raising production in the fourth 
quarter.  Since vehicles are booked as sold when shipped to 
dealers, this increase may help Ford turn a profit for the year.  
This would be a change from their losses of a year ago.

General Electric (GE) came out and reaffirmed their guidance for 
the quarter. This was one of today's market catalysts.  However, 
I found interesting Jim Brown's Market Monitor comment that a 
reader emailed him with information that employees at a plant in 
Bangor, Maine were told this week that 50-75 workers would be cut 
by Christmas if business did not pick up.  

Former WorldCom controller David Myers has agreed to plea guilty 
to two felony counts.  Expect the case against WorldCom to heat 
up now that one of the high-ranking executives has apparently 
agreed to provide information to the prosecution. 

This quarter, with the Dow and S&P 500 down 15% and the Nasdaq 
down 16%, is shaping up as the worst quarter since the fourth 
quarter of 1987.  Today's bounce from the July lows may be the 
first step in another rally.  However, it seems that expectations 
have been dialed down so dramatically that we have a long way to 
go, as far as consumer and capital spending, before we can 
consider ourselves healthy again.   A CFO survey released today 
showed that the boys/girls in charge are not yet convinced.  
Their level of optimism has dropped, due to concerns about 
consumer spending, business capital spending and global unrest. 
If they are less convinced that things might turn around, then my 
feeling that the worst is not yet over seems justified.   Of 
course, the cliché that "it always seems darkest before the dawn" 
usually applies to the stock market, as well.  

Since we are now into earnings warning season, we can expect the 
market to be extremely jittery, as we have also hit critical 
support levels. Today's rally eased fears a little, but the 
market Volatility Index (VIX.X) still remains over 40, which is 
considered high.  For the moment I am very cautious about short 
positions, as a bear market rally could still have some room to 
run.  However, until we see signs of the pace of economic 
recovery picking up, I still think above outlined downside 
measuring objectives in the Dow and Nasdaq have a good chance of 
being tested.

Steven Price


==================================================================
WATCH LIST
==================================================================

The PremierInvestor.net watch list is not designed to be read
as full fledged stock picks.  Rather we would prefer to offer
it as an extra tool in today's investor toolbox.  Think of it
as a radar screen with your own radar operator pointing out
interesting developments, technical patterns or potential plays
that you may or may not have seen on your own.  Due to time
constraints we do glance at the news but rarely do we have 
time to fully read pertinent news stories, due background 
research and other necessary screens that investors should do
before making a decision.  A common exercise is to read the
entry, glance at the sector and other stocks in that industry
and then compare what's happening in the stock to what's 
happening in the broader market indices.  We hope you enjoy
the Watch List and that it proves to be a useful tool for your
own trading success.

STOCKS WORTH WATCHING
---------------------------------

Anglogold Ltd. - AU - close: 26.93 change: -1.52

WHAT TO WATCH: The XAU.X gold/silver index just cannot seem to 
break above $76.00.  After several days of trying in vain to move 
above that level, the index rolled over today with a 4.1% loss.  
This sell-off was a result of the powerful short-covering broader 
market rally.  With the major indices looking like they may 
extend today's bounce, the near-term outlook for gold stocks is 
not bullish.  Much like the XAU.X, AU recently faltered at 
overhead resistance.  The stock is rolling over from below its 
bearish p-n-f trend and is displaying bearish daily stochastics.  
The MACD isn't looking too hot either, as the fast line begins to 
curl lower from overbought levels.  The 200-dma near $24.50 
offers a potential exit target for short-term traders.  Entries 
could be targeted on a move below $26.50.




---

Clear Channel Comm. - CCU - close: 35.59 change: +2.13

WHAT TO WATCH: CCU has shown good relative strength over the past 
month.  Shares continued to look strong today, outperforming the 
Dow Jones with a 6.3% gain.  There was no noteworthy news to 
explain this rally.  A glance at the stock's bar chart shows that 
CCU has been in a sideways consolidation pattern since mid-
August.  An upside breakout from this range could lead to another 
leg higher.  Watch for a move above bearish point-and-figure 
resistance at $37.00.  Not only would this have the stock trading 
at relative highs, but it would also result in a quadruple-top p-
n-f buy signal.  Should this occur, we'd anticipate a short-term 
move to the 200-dma at $43.32.  The rising daily stochastics 
indicate that a breakout may be forthcoming.




---

Comcast Corp. - CMCSK - close: 21.36 change: +0.56

WHAT TO WATCH: It's been a painful year for shareholders of 
CMCSK.  The stock has been trading lower in a loosely-defined 
regression channel, as various fundamental concerns continue to 
plague the company.  The stock initially traded higher on last 
month's news that Comcast would purchase AT&T's cable division.  
Wall Street, however, seems to be uncertain whether this deal 
will ultimately boost the bottom line.  Technically, CMCSK looks 
pretty weak.  Shares recently sold off from the top of the 
regression channel and fell below the 50-dma at $21.60.  The 
point-and-figure chart is showing a recent double-bottom sell 
signal.  P-n-f chartists will also notice that CMCSK has bullish 
support at $19.00.  Although this level may provide temporary 
relief for the bulls, we believe the longer-term downtrend will 
remain intact.  Aggressive short entries can be targeted on a 
move below psychological support at $20.00, with an initial 
profit-target near the $17.00 level.
 



---  

Fiserv, Inc. - FISV - close: 28.10 change: -1.51 

WHAT TO WATCH: Only a handful of NASDAQ-100 stocks finished in 
the red on Wednesday.  FISV was one of the worst performers in 
the index, with a 5.0% loss.  Investors did not take kindly to 
this morning's downgrade from SunTrust Robinson Humphrey, who cut 
the stock's rating from "Outperform" to "Neutral."  Shares sold 
off on monster volume of 6.2M shares - The highest reading in 
over a year!  This reveals a high degree of shareholder 
nervousness.  A mere brokerage downgrade usually doesn't result 
in such a high-volume decline.  The sell-off appears to be a 
result of the recent technical breakdown.  FISV has abandoned 
historical support in the $29-$30 area and is trading at multi-
year lows.  Short positions can be evaluated on continued 
weakness from current levels.  We'd be looking for a move to the 
$24-$25 region.




---

Hartford Financial - HIG - close: 42.90 change: +0.32

WHAT TO WATCH: The insurance sector continues to look weak, and 
HIG is behaving in a very bearish fashion.  Shares fell to a new 
52-week low today on stronger-than-average volume.  The broader 
market rebound helped to send HIG into positive territory, but 
the 32-cent gain was pretty lackluster when you consider the Dow 
Jones' 2.0% rally.  Further bearish action could have the stock 
breaking under whole-number support at $40.00 and moving to 
retrace the steep gains from early-2000.  Short entries can 
considered on a move below today's low ($41.59), with an initial 
profit-target near the $36-$37 region.  This area acted as 
support back in 1999.




---

Phillip Morris - MO - close: 41.48 change: -1.23

WHAT TO WATCH: Tobacco stocks were notably absent from 
Wednesday's broad-based rally.  The sector traded with a bearish 
bias after Morgan Stanley cut its view on the U.S. tobacco 
industry from "attractive" to "in-line."  The firm slashed 2002 
and 2003 estimates for MO, RJR, and CG, based on their belief 
that increased promotional spending will eat away at profit 
margins.  We think MO in particular might offer a good short 
trade if the stock falls below historical and psychological 
support at $40.00.  Such a breakdown could have MO quickly moving 
towards the $35.00 region.  We witnessed a similar sell-off over 
the past week after shares fell below the $46.00 support level.  
Short-term tobacco bears may also want to take a look at UST, 
which appears to be headed for its July lows near $26.00.




--- 

Sungard Data Systems - SDS - close: 19.45 change: -0.22

WHAT TO WATCH: Someone forgot to tell SDS that tech stocks were 
rallying today!  Despite a solid 40-point gain in the NASDAQ, 
shares of the IT company sank by 1.1%.  This decline came on the 
strongest volume in over two months.  SDS is dangerously close to 
breaking below its July low of $18.60.  Should this level fail, 
shares could rapidly move towards the next level of historical 
support at $15.00.  A glance at the p-n-f chart also shows that a 
trade at $18.50 will trigger a double-bottom sell signal.  Given 
the rising volume and recent relative weakness, odds of a 
continued decline seem good.  Bearish traders can evaluate 
entries if SDS takes out its July low.  A rollover from the 
$20.00 level might also provide an opportunity to open short 
positions.




---

Texas Instruments - TXN - close: 16.35 change: +1.25

Like clockwork, TXN rebounded this week from the bottom of its 
descending regression channel.  Shares exploded for a gain of 
8.2% today and outperformed the rallying SOX.X.  Although more 
conservative traders probably wouldn't want to chase this bounce, 
TXN might offer a good long trade if shares move above today's 
high ($16.65).  The stock has plenty of upside (the top of the 
channel is near $20.00), and the uptrending oscillators hint at 
further upside action.  Bulls will also note that the p-n-f chart 
has just reversed into a column of X's.  As far as profit targets 
are concerned, traders could look for a move to the $18-$20 
region over the next 2-3 weeks.  The overall chip group looks 
pretty strong now that the SOX launched off its multi-year lows.  
This was despite negative earnings news from MU.  Those who like 
the pattern in TXN but are looking for a higher-digit stock may 
want to check out QLGC, which is displaying a similar bounce from 
its descending channel.
 




=========================
Play-of-the-Day (new BULLISH tech play)
=========================

Cognizant Technology - CTSH - cls: 54.90 chg: +1.20 stop: *text*

Company Description:
Cognizant is a leading provider of custom software development, 
integration and maintenance services that link e-business with 
core information systems for companies worldwide. Cognizant 
operates under a high quality, high value onsite/offshore model 
that enables better, faster and more cost effective development 
and deployment of large-scale systems across a wide range of 
transaction intensive business needs. (source: company press 
release)

Why We Like It:
Cognizant is obviously doing something right.  The company's 
stock is in a one-year uptrend!  Meanwhile, the overall IT market 
has been doing its best impression of an Olympic high-diver.  The 
stock recently sold off sharply from its all-time highs near 
$65.00.  This appears to have been a result of weakness in the 
broader market, rather than any negative developments 
specifically related to the company.  The pullback has led to an 
interesting technical situation.  

Although the benchmark 50-day and 200-day moving averages are the 
levels traders most closely watch, we sometimes see correlations 
with the 100-day average.  Fire up a daily chart for CTSH, and 
you'll see that the stock has repeatedly bounced from this level.  
The latest sell-off has taken shares back to the 100-dma for the 
fourth time since April.  Not only is CTSH resting at technical 
support on the bar chart, but shares have also pulled back to 
long-term support on the point-and-figure chart.  We don't think 
the bulls will give up this level easily.  Continued market 
weakness might lead to a breakdown, but after today's relief 
rally it seems the bulls are on the defensive.  The NASDAQ's 
close above 1200 has cleared the way for a rally to the 50-dma at 
1300.  Further tech bullishness should lead to more buying action 
in CTSH.  This hypothetical trade presents a very favorable 
risk/reward ratio.  By going long on a move above today's high of 
$55.50, we're aiming to ride CTSH up to the $63-$64 region.  Our 
stop will be set at $53.19, slightly below today's low.  With the 
daily stochastics (5,3,3) already at oversold levels, we expect 
that shares will continue to rise in the short-run.


For an annotated chart, click here:


Picked on September xxth at $xx.xx <- see text
Results since picked:        +0.00
Earnings Date             10/14/02 (unconfirmed)
 






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Do not duplicate or redistribute in any form.




PremierInvestor.net Newsletter               Wednesday 09-25-2002
                                                   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
  New Bullish Plays:     CTSH
  Closed Bearish Plays:  MXIM

Stock Bottom / Active Trader
  Closed Bearish Plays:  BDK, CUM, DIA

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 Bullish Plays
  ----------------- 

Cognizant Technology - CTSH - cls: 54.90 chg: +1.20 stop: *text*

Company Description:
Cognizant is a leading provider of custom software development, 
integration and maintenance services that link e-business with 
core information systems for companies worldwide. Cognizant 
operates under a high quality, high value onsite/offshore model 
that enables better, faster and more cost effective development 
and deployment of large-scale systems across a wide range of 
transaction intensive business needs. (source: company press 
release)

Why We Like It:
Cognizant is obviously doing something right.  The company's 
stock is in a one-year uptrend!  Meanwhile, the overall IT market 
has been doing its best impression of an Olympic high-diver.  The 
stock recently sold off sharply from its all-time highs near 
$65.00.  This appears to have been a result of weakness in the 
broader market, rather than any negative developments 
specifically related to the company.  The pullback has led to an 
interesting technical situation.  

Although the benchmark 50-day and 200-day moving averages are the 
levels traders most closely watch, we sometimes see correlations 
with the 100-day average.  Fire up a daily chart for CTSH, and 
you'll see that the stock has repeatedly bounced from this level.  
The latest sell-off has taken shares back to the 100-dma for the 
fourth time since April.  Not only is CTSH resting at technical 
support on the bar chart, but shares have also pulled back to 
long-term support on the point-and-figure chart.  We don't think 
the bulls will give up this level easily.  Continued market 
weakness might lead to a breakdown, but after today's relief 
rally it seems the bulls are on the defensive.  The NASDAQ's 
close above 1200 has cleared the way for a rally to the 50-dma at 
1300.  Further tech bullishness should lead to more buying action 
in CTSH.  This hypothetical trade presents a very favorable 
risk/reward ratio.  By going long on a move above today's high of 
$55.50, we're aiming to ride CTSH up to the $63-$64 region.  Our 
stop will be set at $53.19, slightly below today's low.  With the 
daily stochastics (5,3,3) already at oversold levels, we expect 
that shares will continue to rise in the short-run.

For an annotated chart, click here:



Picked on September xxth at $xx.xx <- see text
Results since picked:        +0.00
Earnings Date             10/14/02 (unconfirmed)
 




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

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

Maxim Integrated - MXIM - cls: 25.65 chg: +1.47 stop: 25.36

The stage appeared to be set for another day of weakness in the 
semiconductor group.  Last night's earnings announcement from MU 
featured a hefty Q4 loss...Five times larger than expected!  But 
in sharp contrast to the recent pattern, the SOX.X actually moved 
sharply higher today.  The fact that chip stocks were not heavily 
sold off on this news indicates that the latest downward trend 
may have come to an end.  Day after day of brokerage downgrades 
and general negativity in the group has led to oversold 
conditions that favor explosive short-covering events.  MXIM had 
already shown signs of finding a bid on Tuesday, leading us to 
tighten our stop to $25.36.  This level was reached during 
afternoon trading today.  Our short play was stopped out for a 
gain of $2.08, or 7.5%.  The stock is displaying bullish 
oscillators and looks like it could soon reach the $28.00 area.  
With the SOX.X just beginning to rebound from multi-year lows, 
the overall chip group looks like it will see further upside in 
the near-term.

Picked on September 13th at $27.44
Gain since picked:           +2.08
Earnings Date             11/05/02 (unconfirmed)
 





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

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

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

Black & Decker - BDK - cls: 42.86 chg: +2.46 stop: 42.66

This short play was stopped out today for a loss of 97 cents, or 
2.3%.  With the broader market experiencing an explosive rally, 
BDK experienced a delayed bounce on yesterday's positive earnings 
comments.  Shares gained over 6% and finished near the highs of 
the day.  There was plenty of conviction behind the rebound, with 
BDK moving higher on the strongest volume since late-July.  The 
uptrending oscillators suggest this rally will continue.  
However, the bulls now face overhead resistance at the 50-dma 
($43.80) and 200-dma at $44.34.  An additional obstacle lies at 
the bearish p-n-f resistance of $45.00.  An eventual rollover 
from this region might present another shorting opportunity.  For 
now, we're content to take a manageable loss and move on to 
greener pastures.

Picked on September 18th at $41.69 
Results since picked:        -0.97
Earnings Date             10/22/02 (unconfirmed)
 

 

---

Cummins Inc - CUM - close: 24.27 change: +0.85 stop: 24.01

The steady reduction in volume over the past week had us thinking 
that perhaps CUM was losing bearish momentum.  With the stock 
technically oversold, we elected to use a conservative stop-loss 
at $24.01.  Our paper trade was closed for a gain of 11.0% when 
this stop was hit within the first few minutes of trading on 
Wednesday.  Bears will argue that CUM couldn't crack short-term 
resistance at $24.50, and a resumption of the broader market 
downtrend could send shares plummeting towards the $20.00 region.  
However, the rising daily stochastics (5,3,3) indicate that the 
recent bearish trend may have run its course.  Traders who used a 
more liberal risk management strategy should be watching for 
shares to turn back from psychological resistance at $25.00.  A 
break above this level could lead to an eventual retest of the 
50-dma at $29.31. 

Picked on September 17th at $26.99 
Results since picked:        +2.98
Earnings Date             10/10/02 (unconfirmed)
 



--- 

Diamonds Trust - DIA - cls: 78.66 chg: +1.59 stop: 78.81

Try as they might, the bears just couldn't push the Dow Jones to 
its July lows.  Short-side traders decided to throw in the towel 
today after the index rebounded from the 7665 level.  After 
seeing a precipitous decline over the past week, the broader 
market was overdue for a short-covering rebound.  Several Dow 
components rebounded sharply from their recent multi-year lows, 
including HON, INTC, IBM, IP, GM, and AA.  Reaffirmed earnings 
guidance from GE and IP helped to spark the rally.  With the 
Diamonds moving above our stop at $78.81, this play was closed 
for a gain of 3.1%.  So will this bounce have any staying power?  
We strongly suspect that the Dow will at least revisit the 8000-
8200 level.  Technical bulls can take encouragement from the 
successful test of the July lows (actually a higher-low), bullish 
daily stochastics, and recent p-n-f reversal.  The overall 
economic picture might not be getting any better, but the bears 
appear to have had their fill for now.

Picked on September 18th at $81.41
Change since picked:         +2.60
Earnings Date                  N/A
 

 


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

BMY     Bristol-Myers Squibb       25.55     +1.00
SLE     Sara Lee Corp              19.03     +0.65
MFC     Manulife Financial         21.18     +0.83
ACF     AmeriCredit Corp            7.76     +0.96
IMGC    Intermagnetics General     16.64     +0.74
MTEC    Meridian Medical Tech      32.68     +2.64

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

AGIL    Agile Software              7.05     +1.20
DMRC    Digimarc Corp              11.50     +1.05

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

BSX     Boston Scientific Corp     30.06     +1.28
AZO     Autozone Inc               79.27     +6.22
EDMC    Education Management       44.23     +2.62
AFFX    Affymetrix Inc             20.92     +1.40
YELL    Yellow Corp                29.33     +1.49
ROAD    Roadway Express            37.21     +2.34

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

MO      Phillip Morris             41.48     -1.23
HRB     H&R Block                  44.48     -2.51
FISV    Fiserv Inc                 28.10     -1.51
RJR     RJ Reynolds Tobacco        45.31     -1.83
CBK     Christopher & Banks        30.95     -4.25
PHLY    Philadelphia Consolidated  31.34     -1.29

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

CPBI    CPB Inc                    45.00     -1.28




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