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Daily Newsletter, Tuesday, 10/08/2002

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PremierInvestor.net Newsletter                 Tuesday 10-08-2002
                                                   section 1 of 2
Copyright ) 2002, All rights reserved.
Redistribution in any form is strictly prohibited.

The entire newsletter is best viewed in COURIER 10 for alignment
=================================================================

In section one:

Market Wrap:      The Market Giveth and The Market Taketh...
Market Sentiment: Still in the Shallow End
Play-of-the-Day:  Entry Point!

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
     10-08-2002           High     Low   Volume Advance/Decline
DJIA     7501.49  + 78.65 7623     7331    1939 mln   1325/1425
NASDAQ   1129.22  +  9.82 1144     1110    1840 mln   1572/1711
S&P 100   401.62  +  5.47  408.57   393.49 totals     2897/3136
S&P 500   796.32  + 11.04  808.86   779.50
RUS 2000  338.77  +  0.48  341.04   333.77
DJ TRANS 2115.35  + 56.78  2131     2059
VIX        46.46 - 2.72
VIXN       62.32 + 2.04
Put/Call Ratio     0.90
-----------------------------------------------------------------

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

The Market Giveth and The Market Taketh Away - and Giveth again!
By Mike Parnos

This morning the S&P futures were positive throughout the pre-
market period - finishing about 10-points above fair value
signifying a rather strong positive opening.  It looked like the
wishful thinkers were going to have a day to remember.  And
that’s exactly how it started.

Chart of the DOW:



Watching the DOW bounce around a 290 point trading range was like
watching a tennis match.  I felt like Linda Blair in The
Exorcist.  The eternal optimists were happy as the DOW moved up
to the 7530 level early.  Then, before you can say, “Gee, this
may be a bottom,” it gave back 60 points to 7470.  We’re just
getting started.  The DOW then decided to test the high and move
back up to over 7520.  The air was a little thin and so was the
buying, so down it went - about 90 points -- until it reached its
intra-day low of 7331 at about noon.   Then, while the sellers
were at lunch, the DOW reversed direction, showed some strength,
and slowly made its way up to the high for the day - 7623 shortly
before 3 p.m.  But, as usual, it was too good to be true.  Profit
takers stepped in and snatched back over 75 points and the DOW
finished at just over 7500.

A decent day, but let’s not break out the cheerleader uniforms
just yet.  The DOW may have finished positive (18 of the DOW 30
were up), but the broader market showed decliners beating
advancers by 1425 to 1325.  The NYSE volume was up a little from
yesterday at 1.94 million shares and the DOW 78-point gain
snapped a four-day losing streak.
__________________________________________________________

The NASDAQ chart was very similar - starting strong, giving it
back, testing the high, tanking down, moving to the day’s high
and giving back most of the positive move, leaving only a gain of
9.21.  Decliners on the NASDAQ led decliners 1711 to 1572.

Chart of COMPX:



After four losing days in a row, today could be interpreted as a
faint light at the end of the tunnel, but, then again, we may as
well be waiting for the Tooth Fairy to show up.  I hope he does,
because many bulls have, not only lost their teeth, but lost
their shirts as well.  The earnings have been more positive than
negative, but it’s going to take more than that to change the
direction of the market.

BBH (Biotech Holders) made a nice move up, broke through
resistance at $80, ran up to $80.80, but came back down to finish
just below the $80 level.  We’ve been keeping an eye on BBH in my
columns, tracking the stock for the past month.

Chart of BBH:




It’s been hovering around $80 and, one of these days, is going to
bust out.  The direction?  Flip a coin.  But, if you are looking
for a straddle or strangle candidate, you might check this out.
If you have any questions on the right way to put on a straddle
or strangle, feel free to contact me.  I go into these strategies
in depth in my Option 101 and Traders Corner articles that can
easily be found in the OptionInvestor archives.

What’s Up Docks?
Retail index was up about 5%. Partially as a result of the news
that the dock workers are scheduled to return to work tomorrow.
They’re debating on whether it’s justified to invoke the Taft-
Hartley act to force the end of the work stoppage.  Today, the
dock-workers were bored so they were driving their trucks around
in circles blowing their horns in support of their union.  What
can I say?  Some bulbs don’t burn as bright as others.

Inventories are already low at many retailers because they’re
trying to run lean and mean.  Without the ability to replenish
their already lean inventories, they’d be running mean - without
the lean - and without sales.  The potential devastating effect
on our sensitive economy prompted George W. to take his attention
away, at least temporarily, from his saber rattling, to do
something productive for the economy.   Some CEO of a toy company
was interviewed on CNBC.  He was crying the blues because his
products might not be able to get to the U.S. market in time for
the Christmas season.

Some big option bets were being placed on Ford Motor Co. (F) as
the AMEX January 5 calls and November 5 calls were the most
actively traded today.  Why?  Today Ford traded at a 52-week low
of $7.51 before finishing at $7.75.  That’s a nasty looking
chart.

Pepsi (PEP), after tremendous option volume on Monday, beat the
street’s estimates and was up $5.32 today to finish at $41.10.
It has some serious resistance to get through at $41-42.  If it
does, the next resistance level is at $45.  Remember, Pepsi owns
a large chunk of YUM - which owns KFC, Pizza Hut, Taco Bell and a
lot of snack foods.  If you’ve read my columns, you can
appreciate why PEP is one of my favorites.  When I go on a diet I
always get two letters - one from PEP and the other from Hostess.
They want to know what’s wrong and why I don’t love them any
more.

Morgan Stanley trimmed estimates for car sales for 2003.  Tobacco
stocks rebounded Monday from getting nailed on Friday, but today
these same stock’s sails lost a few puffs.  MO was down $2.36 and
CSCO keeps going down as analysts keep reducing their estimates.

Support & Resistance Levels
Dow Jones Industrial Average (INDU) - support at 7330; resistance
at 7700
Nasdaq Composite (COMP) - support at 1080; resistance at 1160
S&P 500 (SPX) - support at 775; resistance at 825

Tomorrow’s Earnings Announcements
Tomorrow’s trading should be interesting.  Among the companies
that will be announcing earnings are Rambus, Yahoo, YUM, Abbot
Labs, Commerce Bancorp, Winn-Dixie, Sun Trust, Genentech, Sonus
Networks, and Redback Networks.

Happy Trading!  Do your homework and make sure you know, and limit,
your risks before you click those “buy” and “sell” buttons.

Regards,
Mike Parnos

Contact me at: mparnos@OptionInvestor.com


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

Still in the Shallow End
by Steven Price

I've been discussing the levels in the Dow (7500), S&P 500 (800)
and S&P 100 (400) that I felt would be pivotal points that could
send us in one direction or another.  For some reason, these
indices have failed to co-operate with my plan.  Actually they
have only underscored their importance as pivot points and
support and resistance levels, confounding me slightly in the
process. The Dow finished above 7500 (7501.49); the OEX (S&P 100)
finished above 400 (402.88) and the S&P 500 (SPX) finished below
800 (798.55).   After yesterday's close below the aforementioned
levels, I was looking for intraday resistance at those points, in
order to reinforce my bearish sentiment. That did not happen
today.  Instead, all of the averages broke through those levels
and then two of them found support as the market sagged toward
the end of the day.

Does this mean I'm bullish?  Not a chance - at least not yet.
But what it does mean is that I haven't gotten the sign I was
looking for to pile on the shorts. I want to know there is a
ceiling to my short positions before I put them on in entirety.
While I have been bearish for the last couple of months, we are
at a point where the drop has slowed.   It is true that we have
continued to establish a series of lower highs and lower lows,
but a look back at the Dow shows an awful lot of noise between
7400 and 7500 in the falls of 1997 and 1998.   The SPX also shows
some consolidation at that point in time, although it is 100
points higher, around 900.  The SPX, however, has yet to break
its July intraday low of 775.  The OEX activity is similar to
that of the SPX.  My point is, the screw seems to be tightening,
and I'm not going to bet the farm until I get the signals I am
looking for.

OK, now that I have presented both sides of the argument, the
market still "feels" awfully bearish.  The rally in the banking
sector, with the S&P Banks Index (BIX.X) gaining 10.99 to close
at 248.44, looks like short covering; or possibly short profit
taking, as there is still nothing but bad news coming out of the
group.  More layoffs and bad loans have plagued the banks and
unless bankrupt companies start having garage sales to pay off
their debt, there doesn't appear to be a rosy immediate future
for lenders. The series of lower lows remains in tact and the
sector was probably due for a bounce after the BIX lost 16% in
the previous four trading sessions.

The Retail Index (RLX.X) also got a boost, gaining 11.86 to close
at 265.54.  This group had also lost 12% in the last three weeks,
as September sales continued the trend of coming in under
previous estimates.  The west coast port lockout also hurt the
stores, as merchandise sitting on ships could not be sold.  News
that the President was getting involved in the dispute, helped
boost the group today. The announcement that he would invoke the
Taft-Hartley Act, re-opening the docks for 80 days (which
conveniently ends just after Christmas), should continue to give
the retailers a boost tomorrow.  However, it does not solve the
problems that led to the sell-off in the first place - people
aren't buying merchandise, due to increased layoffs and a poor
economy.  Friday should be a big day for the sector, as we will
get the final retail numbers for September and a look at the
preliminary University of Michigan Consumer Sentiment report.
Sentiment will give us an idea just how consumers are faring and
what can be expected for the holiday shopping season.

A look at the final market data for the day looks pretty
positive, but doesn't really tell the story of the late afternoon
fade. At one point the Dow was up almost 200 points, before
falling back and landing right above 7500, for a gain of 78.65.
The SPX was up almost 25 points, before falling back and closing
just under 800, for a gain of 13.27.  The OEX was up over 12
points, before landing just over 400, for a gain of 6.73.
Overall, the rally didn't feel like such a rally by the end of
the day.  I am still looking for that intraday resistance before
jumping into the deep end, but until then I will be wading in the
short, I mean shallow, water.


The S&P Retail Index(RLX.X): The retailers finally got a bounce,
as the president got involved in the west coast port lockout.
President Bush said he would invoke the Taft-Hartley act, keeping
the docks open through the holiday shopping season (he didn't
mention the shopping season, but that was the effect).  The group
was led higher by Wal-Mart (+2.25), Target (+2.06) and Kohl's
(+2.83).  This was a nice boost, after Sears reduced earnings
estimates on Monday.  Unfortunately, the President can't do much
about shoppers staying out of the malls because they are worried
about their jobs. The end of the week will bring us September's
retail sales numbers, but we already know they will be rather
low, as a host of companies have already said that numbers will
be below expectations. the RLX has now bounced at its July
support level of 250, but I expect that level to be re-tested
before the end of the year.


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

Market Averages

DJIA ($INDU)

52-week High: 10679
52-week Low :  7331
Current     :  7501

Moving Averages:
(Simple)

 10-dma: 7699
 50-dma: 8351
200-dma: 9458

S&P 500 ($SPX)

52-week High: 1176
52-week Low :  775
Current     :  798

Moving Averages:
(Simple)

 10-dma:  821
 50-dma:  882
200-dma: 1027

Nasdaq-100 ($NDX)

52-week High: 1734
52-week Low :  795
Current     :  811

Moving Averages:
(Simple)

 10-dma:  843
 50-dma:  818
200-dma: 1224


Market Volatility

The VIX gave back some of yesterday's pop, which had put it just
below the 50 level, getting as high as 49.71 intraday and closing
at 49.18.  the slow and steady rise in market volatility has
mirrored the drop, although the drop has occurred at a faster
rate.  The last several times the VIX has hit 50, we have
experienced a broad market rally shortly thereafter.  However, it
has made it into the upper 50s or 60 before the rally ensued. I
am still looking for the VIX to break 50 on another downswing in
the Dow and S&P, before we begin to hit higher ground.  The VXN
has mirrored the movement in the VIX, with the upper 60s, or
possibly 70 being the target before a Nasdaq rally.

CBOE Market Volatility Index (VIX) = 46.46 -2.72
Nasdaq-100 Volatility Index  (VXN) = 31.16 -1.16

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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.90        635,529       574,415
Equity Only    0.71        465,468       328,736
OEX            1.09         40,933        44,452
QQQ            0.66         35,734        23,822

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

Bullish Percent Data

           Current   Change   Status
NYSE          27      - 3     Bull Correction
NASDAQ-100    15      - 2     Bear Confirmed
Dow Indust.   10      + 3     Bull Correction
S&P 500       20      - 4     Bear Confirmed
S&P 100       20      + 0     Bear Confirmed

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   1.50
10-Day Arms Index  1.40
21-Day Arms Index  1.49
55-Day Arms Index  1.34

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       1324          1426
NASDAQ     1581          1708

        New Highs      New Lows
NYSE         22              10
NASDAQ      351             414

        Volume (in millions)
NYSE     2,231
NASDAQ   1,831


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

Commitments Of Traders Report: 10/01/02

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

There has not been much change in the positions of Commercials,
who reduced both longs and shorts by about 2,000 contracts each.
Small traders are also relatively unchanged, with reductions of
about 1,000 contracts to both the long and short sides.


Commercials   Long      Short      Net     % Of OI
09/10/02      426,230   470,537   (44,307)   (5.0%)
09/17/02      476,224   503,268   (27,044)   (2.7%)
09/24/02      425,276   442,661   (17,385)   (2.0%)
10/01/02      423,661   440,133   (16,472)   (1.9%)

Most bearish reading of the year: (111,956) -   3/6/02
Most bullish reading of the year: ( 16,472) - 10/01/02

Small Traders Long      Short      Net     % of OI
09/10/02      166,696    85,259    81,437     32.3%
09/17/02      182,243   116,377    64,866     21.7%
09/24/02      124,232    73,506    50,726     25.7%
10/01/02      123,371    74,704    48,667     24.5%

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 longs and shorts, but by a relatively
small percentage, giving up 600 long contracts and 1,700 shorts.
Small Traders also made few changes to their overall positions,
getting slightly longer overall, by about 600 contracts.


Commercials   Long      Short      Net     % of OI
09/10/02       53,309     58,745    (5,436) ( 4.9%)
09/17/02       72,522     75,815    (3,293) ( 2.2%)
09/24/02       46,637     54,613    (7,976) ( 7.9%)
10/01/02       46,000     52,976    (6,976) ( 7.0%)

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

Small Traders  Long     Short      Net     % of OI
09/10/02       14,024    10,494     3,530    14.4%
09/17/02       15,288    14,142     1,146     3.9%
09/24/02       11,163     9,421     1,742     8.5%
10/01/02       11,896     9,575     2,321    10.8%

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 left long positions unchanged, while reducing shorts
by 10%.  Small traders reduced longs by 1,000 contracts, while
adding the same amount to the short side.


Commercials   Long      Short      Net     % of OI
09/10/02       22,946    14,936    8,010      21.1%
09/17/02       26,863    21,187    5,676      11.8%
09/24/02       18,951    10,074    8,877      30.6%
10/01/02       18,969     8,903   10,066      36.1%

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
09/10/02        7,568    10,129    (2,561)   (14.5%)
09/17/02       13,393    11,637     1,756      7.0%
09/24/02        7,939     9,453    (1,514)   ( 8.7%)
10/01/02        6,809    10,503    (3,694)   (21.3%)

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

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


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

InterMune Inc - ITMN - close: 31.39 change: +1.11 stop: 29.74

Company Description:
InterMune is a commercially driven biopharmaceutical company
focused on the marketing, development and applied research of
life-saving therapies for pulmonary disease, infectious disease
and cancer. (source: company press release)

Why We Like It:
The overall drug sector has proved to be surprisingly strong over
the past two weeks.  The Dow Jones is stuck in an extended
downtrend and has fallen by 2.3% since September 24th.
Meanwhile, the DRG.X pharmaceutical index has actually risen by
3.6% over the same time period.  The lack of any high-profile
disasters within the sector (FDA rejections, earnings warnings,
etc) has helped the bulls to find some traction.  But investors
are also taking notice of companies like InterMune that are
touting positive news.  ITMN exploded in late-August after the
company announced that its Actimmune drug had substantially
reduced the mortality rate in lung disease patients.  The results
weren't good enough to pass FDA regulators, but analysts believe
that doctors could still prescribe the drug (which is already
approved to treat congenital diseases) to needy patients.  This
"off-label" use essentially allows ITMN benefit from the recent
positive data, regardless of what the FDA decides.  The latest
news has been positive as well: On Monday ITMN announced it was
seeing progress in efforts to produce an Actimmune drug that only
has to be taken once a week.  Today the company announced that it
had entered into a deal with INHL to develop a hepatitis C drug.

The promising outlook for Actimmune has helped to push ITMN to
multi-month highs.  The past week has seen shares pull back and
retrace some of its gains.  What grabbed our attention was the
way shares bounced from the 200-dma ($30.23) on Tuesday.  We
think this could be the beginning of a rebound that eventually
takes ITMN back to the $35.00 region.  This view is supported by
the daily stochastics (5,3,3), which have reached oversold
levels.  The last two oversold stochastic reversals heralded
impressive rallies.  We're also satisfied with the risk/reward
ratio that ITMN offers.  This play is active at current levels,
with an official profit-target of $34.94.  Our stop will be set
at $29.74, safely below the 200-dma.  Those who are more
aggressive could use a stop just under the $29.00 mark.  On
another risk-related note, it's worth mentioning that drug stocks
are subject to sharp and volatile moves.  A negative news event
isn't likely, but the chance is always there.  Conservative
traders may want to take smaller positions or move on to another
play.


Click here for an annotated chart of ITMN:



Picked on October 8th at $31.39
Results since picked:     +0.00
Earnings Date          10/23/02 (unconfirmed)






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newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
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Copyright ) 2002  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter                  Tuesday 10-08-2002
                                                    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
  Closed Bearish Plays:  ACS

Stock Bottom / Active Trader
  New Bullish Plays:     ITMN
  Bearish Play Updates:  GM, KMB, NEU, RYL
  Closed Bearish Plays:  FLIR, LNC, MWRK

High Risk/Reward
  Closed Bearish Plays:  BGEN

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 Closed Plays
===============

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

Affiliated Cmptr Srvcs - ACS - cls: 37.15 chg: +1.12 stop: 36.51

When shares closed on Monday at $36.03, we felt that the stock
was within striking distance of trading at or below our exit
price of $35.50.  However, given the sharp declines, the stock's
oversold nature, the VIX near resistance, we lowered our stop on
ACS Monday night to $36.51 in hopes of protecting our gains.
Fortunately, we did because the stock did manage a bounce this
afternoon with the broader markets but not before trading within
38 cents of our target.  If you remember our chart from the
initial write up, we drew some descending channel lines for ACS.
The stock is right at the bottom of its channel and could bounce
higher if the market decides to bounce or even trade sideways.
There was news today for ACS and the company announced a new one
year contract for $18.8 million to service some NASA computers.
This did little to really lift the stock price as the news was
out this morning and shares didn't rally until this afternoon.
As it stands now, we're still bearish on ACS but this is not a
good risk/reward entry point for new bearish plays.  A failed
rally at $40.00 or the top of the channel would be a much better
play.  Those investors still interested in following ACS should
keep an eye on IBM.  IBM, who has a significant services
division, was downgraded today by Goldman.  The company countered
with a share buy back program but then IBM is notorious for
buying back its own shares to manage its earnings numbers.
Earnings for IBM are October 16th, while earnings for ACS aren't
due until Oct. 22nd.  Premier is closing the play with a +4.55
move or an 11.0% change.

Picked on October 2nd at $41.06
Change since picked:      +4.55
Earnings Date          10/22/02 (unconfirmed)






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

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

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

InterMune Inc - ITMN - close: 31.39 change: +1.11 stop: 29.74

Company Description:
InterMune is a commercially driven biopharmaceutical company
focused on the marketing, development and applied research of
life-saving therapies for pulmonary disease, infectious disease
and cancer. (source: company press release)

Why We Like It:
The overall drug sector has proved to be surprisingly strong over
the past two weeks.  The Dow Jones is stuck in an extended
downtrend and has fallen by 2.3% since September 24th.
Meanwhile, the DRG.X pharmaceutical index has actually risen by
3.6% over the same time period.  The lack of any high-profile
disasters within the sector (FDA rejections, earnings warnings,
etc) has helped the bulls to find some traction.  But investors
are also taking notice of companies like InterMune that are
touting positive news.  ITMN exploded in late-August after the
company announced that its Actimmune drug had substantially
reduced the mortality rate in lung disease patients.  The results
weren't good enough to pass FDA regulators, but analysts believe
that doctors could still prescribe the drug (which is already
approved to treat congenital diseases) to needy patients.  This
"off-label" use essentially allows ITMN benefit from the recent
positive data, regardless of what the FDA decides.  The latest
news has been positive as well: On Monday ITMN announced it was
seeing progress in efforts to produce an Actimmune drug that only
has to be taken once a week.  Today the company announced that it
had entered into a deal with INHL to develop a hepatitis C drug.

The promising outlook for Actimmune has helped to push ITMN to
multi-month highs.  The past week has seen shares pull back and
retrace some of its gains.  What grabbed our attention was the
way shares bounced from the 200-dma ($30.23) on Tuesday.  We
think this could be the beginning of a rebound that eventually
takes ITMN back to the $35.00 region.  This view is supported by
the daily stochastics (5,3,3), which have reached oversold
levels.  The last two oversold stochastic reversals heralded
impressive rallies.  We're also satisfied with the risk/reward
ratio that ITMN offers.  This play is active at current levels,
with an official profit-target of $34.94.  Our stop will be set
at $29.74, safely below the 200-dma.  Those who are more
aggressive could use a stop just under the $29.00 mark.  On
another risk-related note, it's worth mentioning that drug stocks
are subject to sharp and volatile moves.  A negative news event
isn't likely, but the chance is always there.  Conservative
traders may want to take smaller positions or move on to another
play.


Click here for an annotated chart of ITMN:



Picked on October 8th at $31.39
Results since picked:     +0.00
Earnings Date          10/23/02 (unconfirmed)





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

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

General Motors - GM - cls: 33.60 chg: -2.28 stop: 34.06 *new*

Quite a busy day for GM!  Last night's installment of CNBC's
"After Hours" featured an extended interview with General Motors
CEO Rick Wagoner.  Mr. Wagoner didn't unleash any bombshells, but
did acknowledge that that his company (and the auto industry in
general) is facing some very tough challenges.  GM's multi-
billion dollar pension and health care obligations in particular
were addressed, but no specific solutions were outlined.  This
may have turned off investors, but the real blow came this
morning when an Italian newspaper reported that Wagoner said the
he expects 2003 vehicle sales to decline.  Previous guidance had
been for a flat 2003.  This news sent GM into a freefall during
the first two hours of trading, with shares dropping to an
intraday low of $33.07.  Bargain hunters moved in shortly after
noon when the company released a press release that implicitly
denied that Wagoner had made any comments regarding visibility in
2003.  Judging by the way GM rolled over from the $35 level, Wall
Street didn't seem very impressed with this denial.  As far as
our play is concerned, we're very pleased with the current 11%
gain.  We'd dropped our stop down to $34.06 in order to protect
the lion's share of these hypothetical profits.  We've also set
an official profit target at $32.06, which would be a 15% move
from our entry point.  Due the stock's current oversold
condition, we would not recommend opening new short positions.

Picked on October 3rd at $37.77
Results since picked:     -4.17
Earnings Date          10/15/02 (unconfirmed)




---

Kimberly Clark - KMB - cls: 54.75 chg: -0.57 stop: 56.06 *new*

Our patience has been rewarded.  After waiting two weeks for KMB
to live up to our bearish aspirations, the stock is finally
breaking down.  Today's action was encouraging for the bears, as
shares set a new relative low and closed under the
psychologically-important $55.00 level.  KMB underperformed both
the Dow Jones and FPP.X forest/paper products index, the latter
of which finished solidly in the green.  The overall technical
picture suggests that shares will soon reach our profit-target at
$52.51.  However, the deeply oversold FPP.X looks like it could
extend today's bounce.  KMB may be weak, but the bears would have
a tough time dragging it lower if the paper sector is rallying.
With this in mind we've lowered our stop to $56.06, three cents
above today's high.  Given the stock's proximity to our profit-
target, we would not advise taking new entries at this time.

Picked on September 20th at 56.85
Results since picked:       -2.10
Earnings Date            10/22/02 (unconfirmed)




---

Neuberger Berman - NEU - close: 24.39 chg: +1.31 stop: 26.51

We knew this would happen sooner or later.  The market begins to
run out of sellers and bears begin to cover some shorts and take
some profits off the table.  Just as a bull market has
corrections, so does a bear market.  The XBD.X broker/dealer
index bounced off its 320 lows while shares of NEU rallied with
most other investment related issues.  We do not see this as a
reversal but would not look to enter new positions until we see
shares begin to fail at potential resistance of $25.00 or $26.00.
Volume was light and despite the uptick in several of the
oversold indicators we still expect lower prices ahead.

Picked on October 5th at $24.01
Results since picked:     -0.38
Earnings Date          10/22/02 (confirmed)




---

Ryland Group Inc - RYL - close: 34.98 change: +1.88 stop: 37.26

RYL continued its losing ways on Monday, as shares set a fresh
multi-month low of $32.61.  A breakdown appeared to be in the
works this morning, but the bears were unable to push the stock
below $32.68.  Shares moved higher with the broader market in
afternoon trading, as investors cheered on news that President
Bush would enact the Taft-Hartley act to temporarily halt the
West Cost dockworkers strike.  Tomorrow's action may be very
telling for this short play.  Another failed rally above the
$35.00 mark could lead to a retracement of today's gains.  On the
other hand, continued market strength could scare more shorts
into covering.  If this occurs, conservative traders may want to
use a stop just above today's high ($32.58) to minimize their
upside risk.  We would not advise new bearish entries until RYL
breaks under Monday's low.

Picked on October 4th at 34.65
Results since picked:    -0.33
Earnings Date         10/22/02 (confirmed)





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

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

FLIR Systems - FLIR - cls: 30.63 chg: +2.41 stop: 29.01

The bears piled on FLIR yesterday after the stock fell through
intraday support at $31.  There wasn't any apparent news to push
the stock lower, but the technical breakdown really seemed to
spook investors.  With the stock sharply lower from our entry
point, we elected to use a tight stop at $29.01.  Our play was
closed for a 12.7% gain when FLIR gapped slightly higher with the
broader market on Tuesday morning.  The stock also seemed to
benefit from news that FLIR Systems had been selected by the U.S.
government to assist state and local law enforcement agencies
with their thermal imaging technology.  From a technical
perspective, shares were deeply oversold and looked overdue for
some short-covering.  We would not recommend holding bearish
positions at this time.

Picked on October 2nd at $33.52
Results since picked:     +4.27
Earnings Date          07/24/02 (confirmed)




---

Lincoln National - LNC - cls: 26.60 chg: +0.69 stop: 27.68

Fourteen measly cents!  That's how close LNC came to our exit
target ($25.06) on Tuesday.  Shares fell to a new 52-week low
this morning on news that the President and CEO of Delaware
Investments and Lincoln National Investment Companies (both
subsidiaries of LNC) had resigned.  Shares looked poised to test
the $25.00 level, but the selling pressure abated when the
broader market began to rise in afternoon trading.  LNC finished
in positive territory, creating a bit of conundrum for this play.
Do we keep the play open with our current stop and hope for
another dip to the $25.00?  The downtrend is still intact, but
the oversold oscillators indicate that shares could continue to
bounce.  We could lower our stop, but we'd prefer to lock in our
hypothetical profits before the bulls have a chance to push the
stock any higher.  That's why we've decided to close this play at
current levels ($26.60) for a gain of 7.9%.  Considering that LNC
has bounced near the bottom of its short-term descending
regression channel, it wouldn't be surprising to see a rally back
to the $28-$30 region.

Picked on October 3rd at 28.89
Results since picked:    +2.29
Earnings Date         10/30/02 (confirmed)




---

Mothers Work - MWRK - close: 30.80 change: +1.30 stop: 30.06

MWRK wasn't working very well for the bulls on Monday.  Shares
were slammed as investors reacted to the Sears earnings warning.
The stock set a new relative low and closed below round-number
support at $30.00.  This had us anticipating a decline to our
profit-target at $26.60.  However, shares mustered a strong
bounce this morning after traders reacted positively to the
company's latest sales data.  Mothers Work reported that
September same-store sales rose by 2.6%, and total net sales rose
16.5% on a year-over-year basis.  Not exactly blowout numbers,
but these days it can be difficult to find retailers that are
experiencing growth in business.  Our stop at $30.06 was reached
shortly after the opening bell, closing this paper trade for a
profit of 10.2%.  The oversold daily stochastics suggest that
MWRK may continue higher in the short-run, but a failed rally
near the 50-dma ($33.72) might offer another bearish entry point.

Picked on October 4th at $33.49
Results since picked:     +3.43
Earnings Date          07/15/02 (confirmed)






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

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

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

Biogen Inc. - BGEN - close: 29.63 change: +0.44 stop: 30.06

That's the way it goes.  On Monday we were looking at BGEN and
decided that if the stock wasn't going to move our direction we
were going to put a tight stop on it.  After all, it wasn't
moving against us but it was displaying some relative strength.
We choose to look at a 30-minute interval chart.  By doing so we
could see the intraday highs and lows.  Chart readers will see
the trend of lower highs from mid-August through yesterday,
October 7th.  By attaching a trendline across these tops we could
clearly identify where the stock might break this trend.  The
afternoon rally today that took it above the $30 level did just
that - break the short-term trend.  While we have been stopped
out of the play with a $1.37 loss we will continue to keep an eye
on the stock.

Picked on September 30th at $28.69
Results since picked:        -1.37
Earnings Date             10/18/02 (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

TCLP    TC Pipelines              27.45     +0.55

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

       

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

LPNT    Lifepoint Hospitals        34.05     +1.01
ZOLL    Zoll Medical Corp.         33.45     +1.60
RKY     Adolph Coors               58.88     +1.54
IFF     International Flavors      33.66     +1.25
GLH     Gallaher Group             41.85     +3.41
ETR     Entergy Corp.              43.09     +3.24

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

EME     Emcor Group                48.50     -1.14
DP      Diagnostic Products        44.60     -1.37
FDX     FedEx Corp.                49.05     -2.01
MTB     M&T Bank Corp.             69.39     -2.97
FITB    Fifth Third Bancorp        55.86     -1.61
ROOM    Hotel Reservations Net.    43.76     -3.05

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

HCP     Health Care Prop.          41.43     -0.87
FNFG    First Niagara Fncl.        30.94     -0.38
MYL     Mylan Laboratories         32.00     -0.79
AFL     Aflac Inc.                 29.66     -1.45
BREL    Bioreliance Corp.          20.21     -2.55
CXP     Centex Construction Prod.  34.96     -1.64
BFS     Saul Centers Inc.          22.52     -0.48




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