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Daily Newsletter, Wednesday, 10/09/2002

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PremierInvestor.net Newsletter              Wednesday 10-09-2002
                                                  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:      Searching for the Bottom
Watch List:       ADBE, BMET, ETN, SNE, TBH, and more...
Play of the Day:  Now Playing: An Action-Packed Breakout!


******************************************************************
MARKET WRAP  (view in courier font for table alignment)
******************************************************************
10-09-2002                High    Low     Volume Advance/Decl
DJIA     7286.27 - 215.22 7500.03 7282.39  2130 mln   300/1817
NASDAQ   1114.11 -  15.10 1135.89 1112.08  1748 mln   836/848
S&P 100   392.69 -  10.19  402.88  392.03   totals    1136/2665
S&P 500   776.76 -  21.79  798.55  775.80
RUS 2000  327.04 -  13.28  340.32  326.88
DJ TRANS 2013.02 - 102.33 2114.67 2008.94
VIX        49.48 +   3.02   49.99  47.94
VIXN       62.22 +   1.06   63.80  61.00
Put/Call Ratio 1.04
******************************************************************


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

Searching for the Bottom

by Steven Price

It appears that the Taft-Hartley market fever was a short-lived 
condition, lasting little more than a few hours.  The President 
gave the bulls an excuse to try some bottom picking, and the 
bears a slight short-covering scare.  However, after the reality 
of the situation sunk in, the bulls got out of the way and 
allowed to selling to commence.  The reality is that even though 
the ships are going to be unloaded, there will be a long delay in 
getting the back log cleared up, and that will lead to a delay in 
replenishing merchandise.  The food that rotted won't be sold and 
after the 80-day relief window expires, the workers may not be 
any happier than they are now.  Which begs the question of how 
hard and fast they will be working under forced conditions. If 
the retailers can't mount a sustained rebound on the news that 
the ports will be open through the holiday shopping season, then 
things do not look good. 

The retailers, as gauged by the S&P Retail Index (RLX.X), still 
look very weak, with the index once again testing support levels 
at its July low. Tuesday's news was good for a significant 
bounce, but only put the index back at its opening level from the 
day before. The group continued its steep decline, led by Wal-
Mart ($50.74 -1.86 ), Target ($26.66 -1.55 ), and Home Depot 
($23.66 -1.59 ).  If the group breaks 250, it could be a long way 
down from there.  Friday will most likely give them a push in one 
direction, as we will get a look at retail sales for the month of 
September and the preliminary university of Michigan Consumer 
Sentiment report. Many stores already reported poor September 
numbers, so unless we get a big surprise, that data may not have 
much of an effect.  However, the Sentiment report will give us a 
snapshot as to consumers' outlook on the economy, and thus their 
willingness to spend heading into the holiday season.   

Chart of the Retail Index


One sector that has received a lot of attention is the 
financials.  A bank crisis is certainly one way to lead the 
market much lower than it already is, and the news from this 
sector has been terrible.  There have been a slew of warnings 
about non-performing assets (bad loans) and today was no 
exception.  This morning Sun Trust Banks (STI) missed earnings by 
a penny, but more importantly said, "it seems unlikely we will 
see a meaningful reduction in nonperforming assets in the near 
future," adding "A strong economy is clearly not what we have, 
nor does it seem to be in the cards any time soon."  

J.P. Morgan (JPM) saw its debt downgraded by Moody's from "A1" to 
"Aa3."  The downgrade affects $42 billion worth of debt and will 
make it more costly for JPM to borrow, as it contemplates 
additional job cuts in its efforts to trim costs. Moody's said 
that JPM, " has lagged behind similarly rated peers during this 
cycle. Moody's is concerned that (JPM's) recent problems may 
further complicate its ability to execute its capital market 
strategy, which has so far met with only partial success."     
The downgrade helped send the entire sector lower. In addition, 
Piper Jaffray cut estimates on JPM, Bank of America (BAC) and 
Bank One (ONE). The S&P Banks Index (BIX.X) has been flirting 
with support around 235, and a move below that level could be 
ominous for the group. 

Chart of the S&P Banks Index (BIX.X)



The Dow lost 215.22 points, closing at 7286.27.  There had been 
some support at 7500 and again at 7400, going back to late 1997.   
Now that that support is gone, I'm looking back to a chart I 
posted several weeks ago.  The head and shoulders pattern in the 
Dow indicated a downside measuring objective around 7180 and the 
Nasdaq Composite pointed to 1030.  I also posted the last few 
times the same pattern appeared in the Dow, and noted that the 
downside objectives were reached each time.  You can use this 
link to review those patterns. 
http://members.OptionInvestor.com/marketwrap/092502_1.asp.

The significant recent support levels in the Dow (7500), OEX 
(400) and SPX (800) were broken on Monday.  At that time I began 
looking for those levels as resistance, before assuring myself we 
were headed even lower.  The other nagging doubt I had was that 
while the Dow and Nasdaq had both broken their July 24 intraday 
lows, the OEX and SPX had yet to do so.  Tuesday's rally actually 
saw the Dow close just over the 7500 level.  The action at the 
end of the day Tuesday saw a massive rally fade after President 
Bush's announcement regarding the West Coast lockout, and saw the 
Dow hold just over 7500, at 7501.  This hold had me wondering if 
7500 would once again act as support.  The OEX and SPX both broke 
their respective support levels, but just barely.  Today made it 
pretty clear that 7500, and even 7400 for that matter, would not 
hold up for the Dow. The SPX, however, bounced right at the July 
24 intraday low of 775.68, trading down to 775.80, before 
finishing the day a point higher.  The OEX has yet to touch the 
July intraday low of 384.96.   Does this mean that we are in 
bounce territory?  I don't think so, but I'd be a lot more 
confident in my short positions if the SPX has broken the 775 
level, rather than bounced right at it. 

Chart of the Dow


Chart of the SPX


Chart of the OEX


An unusual development in the breadth area was the advance 
decline ratios.  While the NYSE ratios were consistent with 
approximately 8:1 decliners to advancers and 6:1 declining to 
advancing volume, the Nasdaq wasn't quite so clear. The ratio of 
3:1 decliners to advancers didn't quite match up to a declining 
to advancing volume that was nearly equal at 1.01:1. 


One of the catalysts for today's drop was a downgrade of General 
Electric (GE).  Morgan Stanley lowered 2003 earnings estimates 
from $1.79 to $1.70, citing concerns over deterioration of its 
power and aerospace businesses, losses to GE Capital's portfolio 
and weakness in the company's short-cycle business.   The stock 
gave up $1.35 to close at $22.00.

The automakers also took a major hit.  Morgan Stanley cut its 
estimates on Ford (F), General Motors (GM), and DaimlerChrysler 
(DCX), citing lower production forecasts.  Lehman also lowered 
its outlook for GM's cash flow for 2003-2006, due to the 
declining value of Hughes Electronics, pension funding worries 
and the exercise of a put on its stake in Fiat.  Ford was hit by 
concerns about its debt, after its bonds were quoted in junk-bond 
type pricing methods. Ford is the largest issuer of corporate 
debt among U.S. companies, with over $60 billion outstanding.  GM 
lost $2.59 to close at $31.01.  For those readers holding the OI 
GM put play, we have closed the play for a $10.51 gain, looking 
to take profits on direction and increased option premiums.  Ford 
lost 0.60 (8%) to close at $7.15 and DCX lost $2.07 to close at 
$30.17.

Abbott (ABT) reported positive news for shareholders, but not 
such great news for employees. Its earnings grew 14% in the third 
quarter, from $0.40 per share to $0.46 per share. It also said it 
expects earnings of $0.55-0.57 in the fourth quarter.   This news 
was tempered by the announcement that it would be laying off  3% 
of its workforce, which amounts to 2,000 jobs. 

Democrats Senate Majority Leader Tom Daschle and House Minority 
Leader Dick Gephart are calling for the president to replace SEC 
Chairman Harvey Pitt. Again.  The cries to replace him started 
last summer, citing the corporate accounting scandals and 
accusing him of being too tight with the accounting industry.  
These requests mirrored sentiment on the trading floors that the 
SEC allowed far too many rule changes in favor of the big 
investment banks, not to mention suspicious activity reports that 
went nowhere over the years.   The latest requests seem to simply 
be a game of hardball, with regard to who will be appointed as 
chairman of the new five member public accounting board. The 
Democrats would like to see John Biggs, former chairman of TIAA-
CREF, one of the nation's largest pension funds, representing 
teachers.  The accounting lobbies have started a campaign to stop 
Pitt from selecting Biggs, a corporate reform advocate and 
outspoken critic of the accounting industry. 

After the bell, there was some good news, as Yahoo (YHOO) said 
quarterly sales grew 50% from a year ago.  The company beat 
estimates by a penny, earning $0.05 per share.  This was a 
welcome change from a loss of - $0.04 a year ago. Quarterly sales 
grew from $166.1 million a year ago, to $249 million, and beat 
estimates by $10 million. Chip technology licensor Rambus (RMBS) 
also beat estimates by a penny.

Dell announced that it will be selling printer cartridges to go 
along with the printers it offers from its new Lexmark (LXK) 
deal. It will not, however, offer cartridges to match printers 
made by competitor Hewlett-Packard.  It also said it will be 
reducing IT service fees, in an attempt to grow a portion of its 
business that has not been a major revenue source.  In the 
current environment, with IT spending on the decline, this should 
only serve to reduce revenue further at Dell's competitors, who 
may be forced to reduce prices as well.  

The Market Volatility Index (VIX.X) has approached 50 once again, 
but has failed to break through for the third day in a row. The 
index value is derived from the implied volatility of eight at 
the money OEX options in the first two months, and it appears 
that several large premium sellers are coming in selling options 
each time it gets close to 50.  Today's high was 49.99, following 
highs the last three days over 49.  The VIX closed today at 
49.48.  The last few major market rallies have come after the VIX 
has spiked into the high 50s, with the exception of the rally 
following August 5 of this year, when the high was just under 50.  
However, even that rallied started back in July after a high 
reading of 56.74 in the VIX.

Things certainly look bearish, but with the SPX bouncing at the 
July lows, we could be in for a bear market rally.  While I'm 
still leaning short, a break of SPX 775 will make me more 
comfortable in that conviction. I have tightened the stops on my 
shorts and will get out of the way quickly if we do break back 
above SPX 800, or Dow 7500.  At least until I see a better short 
entry.  Grrrr.

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

Adobe Systems - ADBE - close: 18.25 change: -1.72 

WHAT TO WATCH: Prior to Wednesday's session, ADBE was holding up 
relatively well compared to the overall tech sector.  The stock 
had been uptrending since bottoming out in August and had even 
managed to spike above resistance at $21.00 last week.  However, 
today's action really changes the technical picture.  Backed by 
the largest volume in over two months, shares were hit for an 
8.6% loss.  Sector weakness isn't the culprit here - The GSO.X 
software index actually finished with a small gain.  Investors 
may have reacted negatively to news that Adobe Co-Chairman John 
Warnock sold 25,000 shares of his company's stock this week.  
Whatever the reason for the sell-off, today's violation of the 
50-dma ($19.45) does not bode well for the bulls.  For even more 
evidence of technical weakness, check out the fresh quadruple-
bottom sell signal on the p-n-f chart.  The falling daily 
stochastics (5,3,3) indicate that ADBE has plenty of downside 
remaining.  Short-term traders could target a retest of the 
August low ($16.49), while those with a longer timeframe could 
look for a move to the $15.00 region.  Entries can be targeted on 
a rollover from the 50-dma or a move under today's low ($17.71).  




---  

Biomet Inc. - BMET - close: 29.56 change: -0.03

WHAT TO WATCH: BMET nearly finished with a gain on Tuesday, 
despite the broader market's sell-off.  Shares seem to be 
building pressure under $30.00, which has acted as solid 
resistance since May.  The past three sessions have seen BMET 
unsuccessfully attempt to slice through that level.  A move above 
resistance could quickly send shares to the $32.50-$33.00 region.  
The recent relative strength bodes well for an imminent breakout.   
Bulls can also be encouraged by the ascending triple-top buy 
signal on the p-n-f chart.




--- 

Eaton Corp. - ETN - close: 59.36 change: -2.41

WHAT TO WATCH: Lately it seems like just about any given automotive
related stock is trading at multi-month lows, and ETN 
is no exception.  Shares broke below the $61.00 support region on 
Tuesday and also fell under whole-number support at $60.00.  This 
created a triple-bottom sell signal on the point-and-figure 
chart.  A glance at the weekly chart shows that there is no 
underlying support to prevent a retest of the September 2001 lows 
near $55.00.  Given ETN's bearish technical picture and the 
overall weakness in the auto sector, it wouldn't be surprising to 
see this level reached within a matter of days.  Note, however, 
that Eaton will announce earnings before the market opens on 
October 14th.




---

Guidant Corp. - GDT - close: 27.36 change: -0.07 

WHAT TO WATCH: Shares of GDT gapped lower on October 2nd after a 
federal judge ruled in favor of competitor BSX, essentially 
blocking the development of Guidant's drug-coated heart stent.  
Shares have since traced a pattern of higher lows, thanks in part 
to valuation upgrades from UBS Warburg and Lehman Brothers.  UBS 
also believes that GDT stands to benefit from growth in the 
cardiac rhythm management business.  As far as a possible play is 
concerned, bullish traders can watch for a move above $28.29.  
This would put GDT into last week's gap.  The rising daily 
stochastics (5,3,3) suggest that shares could eventually move to 
the top of the gap, near $31.50.  Longer-term traders will also 
note that the weekly stochastics are showing signs of turning up 
from the oversold region.




--- 

Harman International - HAR - close: 46.98 change: -1.62 

WATCH TO WATCH: Point-and-figure chartists will notice that HAR 
has bullish support at $44.00.  That's pretty much the only 
positive we can find in the current technical picture for this 
stock.  HAR recently traced a head-and-shoulders pattern on the 
daily chart.  On Tuesday shares broke below the neckline of this 
formation, which happens to also be where the 200-dma ($49.41) is 
located.  Investors continued to punish HAR today, taking shares 
well below the 50-dma ($48.67) on rising volume.  The double-
bottom p-n-f sell signal is pointing towards a continued decline.  
Short entries can be gauged on another rollover from the $48.00 
region or a break under $45.00.  We'd be looking for a near-term 
decline to the $40-$42 area.  Fundamentally, this manufacturer of 
higher-end audio electronics stands to be seriously hampered by 
continued economic weakness.  After all, who can afford a $2000 
speaker system when their discretionary income has been limited 
or erased by stock losses and reduced wages?




---

Payless Shoesource - PSS - close: 47.40 change: -2.10

WHAT TO WATCH: In a classic "buy the rumor, sell the fact" move, 
retail stocks sold off today following yesterday's rebound.  The 
sector had bounced on speculation that President Bush would 
intervene to stop the Dockworkers lockout on the West Coast.  
Unfortunately for the bulls, stocks did not trade higher after 
Bush actually initiated the Taft-Hartley process.  PSS followed 
the retail group lower today after shares failed to move above 
the $50.00 level on Tuesday.  The stock already looks oversold, 
but traders willing to risk an oversold bounce can consider short 
entries on a move below $47.00.  This would take PSS below 
bullish support on the p-n-f chart.  Possible exit targets 
include the July low ($41.20) or August lows near $43.50.




---

Sony Corp. - SNE - close: 39.88 change: -1.60

WHAT TO WATCH: The U.S. equity markets are looking pretty ugly, 
but the current weakness pales in comparison to the Japanese 
Nikkei-225 - The index recently pegged a 19-year low!  The 
overarching concern weighing on the Japanese economy is the 
billions in dollars of bad bank loans that have prevented any 
sustainable recovery from taking hold.  One possible solution to 
this problem would be to simply cancel the bad loans.  However, 
this would cause a good deal of economic upheaval in the short-
run.  On the other hand, the Japanese government seems unwilling 
to sit idly by and watch as the situation continues to worsen.  
As far as equities are concerned, it looks like a lose-lose 
situation.  Consumer-driven companies such as Sony are also 
feeling the effects of global weakness and a weak dollar.  Thus, 
it isn't surprising to see SNE break to new lows.  Wednesday's 
violation of critical support at $40.00 could help to accelerate 
the recent downtrend.  Pulling out to a weekly chart, is looks 
like SNE could quickly fall to the $33-$35 region.  Watch for a 
move under today's low ($39.79) to provide a possible bearish 
action point.


 

--- 

Telecom Brasil - TBH - close: 13.76 change: -0.89

WHAT TO WATCH: Last weekend's Brazilian elections produced the 
expected result of a victory for Labor candidate "Lula" da Silva.  
Da Silva easily outpaced the other candidates, but he was unable 
to garner the necessary 50% of the vote to avoid a run-off 
election later this month.  As disgraced Senator Bob Torricelli 
can attest, nothing is a sure thing in politics.  But at this 
point it seems to be a foregone conclusion that da Silva will 
defeat his government-sponsored opponent in the run-off.  The 
Brazilian markets have already sold off in anticipation of a 
Labor victory, but a good deal of uncertainty remains.  This 
nervousness (along with a general Wall Street distaste for 
telecom stocks) has helped to push TBH back towards its all-time 
low of $13.44.  A violation of this level would open the door for 
a decline to the $10.00 region.  Due to its relatively low price 
and news-sensitive nature, we would not recommend a TBH short to 
conservative traders.




--- 

Viacom Inc. - VIA.B - close: 37.35 change: -1.65

WHAT TO WATCH: Along with most other sectors, media stocks have 
had a rough go of it over the past week.  VIA.B is looking 
especially weak, having just broken out of a multi-week 
consolidation range.  Following a move under the $40.00 level 
(which coincides with the 50-dma), shares have fallen to new 
relative lows.  The recent triple-bottom sell signal and rising 
volume suggest that the bears may eventually be able to take 
VIA.B down to its July lows near $30.00.  Watch for a move under 
today's low $36.95) to clear the way for a continued descent.





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

Hollywood Entertainment - HLYW - cls: 17.49 chg: +1.04 stop: text

Company Description:
Hollywood Entertainment owns and operates the second largest 
video store chain in the United States. (source: company press 
release)

Why We Like It:
Retailers have been having a heck of time lately, with the 
faltering economy resulting in several high-profile earnings 
warnings.  Amid the doom and gloom surrounding the retail sector, 
Hollywood Entertainment has distinguished itself by providing a 
sunny outlook: The company announced last week that it expects Q3 
earnings of 25-26 cents/shares, representing a 3 cent increase 
from its July forecast.  HLYW also announced that same-store 
sales had risen by 7%.  Previous estimates were for growth of 
only 3%.  To what can we attribute this solid growth?  The 
burgeoning DVD market has created growth opportunities, as 
consumers move away from the outdated VHS format.  Hollywood is 
also attempting to take advantage of the lucrative videogame 
market with its "Game Crazy" outlets, which are being opened next 
to selected video rental stores.   On a broader note, the video 
rental industry may be uniquely equipped to weather an economic 
storm.  Compared to higher-ticket items such as electronics and 
clothing, the cheap cost of movie rentals makes them more 
accessible to cash-strapped consumers.  The argument could even 
be made that the escapism offered by movies has become 
increasingly attractive to an American public that's faced with 
layoffs and declining 401(k)'s on a daily basis.  The same 
phenomenon was seen (albeit in a much worse economic climate) 
during the Great Depression, when movie houses were routinely 
packed with poverty-stricken customers.

The strengthening business outlook for Hollywood Entertainment 
has not gone unnoticed on Wall Street.  HLYW has been trending 
higher since August, and shares really caught a bid after last 
week's news.  Now that the stock has cleared resistance in the 
$17.00 range, we believe a rally to the $20-21 region is likely.  
This outlook is supported by the p-n-f chart, which is displaying 
a bullish catapult breakout.  This could lead to a massive short-
covering rally if the broader market manages to reverse its 
losing ways.  Insofar as this play is concerned, we'll enter a 
hypothetical long trade if HLYW trades above today's high 
($17.70).  If we're triggered, our stop will be set at $16.20, 
just under the rising 200-dma.  Those willing to harbor a little 
more risk could use a stop slightly below whole-number support at 
$16.00.

Picked on October xxth at $xx.xx <-- see text
Results since picked:      +0.00
Earnings Date           10/22/02 (unconfirmed)
 






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Do not duplicate or redistribute in any form.




PremierInvestor.net Newsletter               Wednesday 10-09-2002
                                                   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:

Stock Bottom / Active Trader
  New Bullish Plays:     HLYW
  Stop Adjustments:      KMB, RYL
  Closed Bearish Plays:  GM

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)


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

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

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

Hollywood Entertainment - HLYW - cls: 17.49 chg: +1.04 stop: text

Company Description:
Hollywood Entertainment owns and operates the second largest 
video store chain in the United States. (source: company press 
release)

Why We Like It:
Retailers have been having a heck of time lately, with the 
faltering economy resulting in several high-profile earnings 
warnings.  Amid the doom and gloom surrounding the retail sector, 
Hollywood Entertainment has distinguished itself by providing a 
sunny outlook: The company announced last week that it expects Q3 
earnings of 25-26 cents/shares, representing a 3 cent increase 
from its July forecast.  HLYW also announced that same-store 
sales had risen by 7%.  Previous estimates were for growth of 
only 3%.  To what can we attribute this solid growth?  The 
burgeoning DVD market has created growth opportunities, as 
consumers move away from the outdated VHS format.  Hollywood is 
also attempting to take advantage of the lucrative videogame 
market with its "Game Crazy" outlets, which are being opened next 
to selected video rental stores.   On a broader note, the video 
rental industry may be uniquely equipped to weather an economic 
storm.  Compared to higher-ticket items such as electronics and 
clothing, the cheap cost of movie rentals makes them more 
accessible to cash-strapped consumers.  The argument could even 
be made that the escapism offered by movies has become 
increasingly attractive to an American public that's faced with 
layoffs and declining 401(k)'s on a daily basis.  The same 
phenomenon was seen (albeit in a much worse economic climate) 
during the Great Depression, when movie houses were routinely 
packed with poverty-stricken customers.

The strengthening business outlook for Hollywood Entertainment 
has not gone unnoticed on Wall Street.  HLYW has been trending 
higher since August, and shares really caught a bid after last 
week's news.  Now that the stock has cleared resistance in the 
$17.00 range, we believe a rally to the $20-21 region is likely.  
This outlook is supported by the p-n-f chart, which is displaying 
a bullish catapult breakout.  This could lead to a massive short-
covering rally if the broader market manages to reverse its 
losing ways.  Insofar as this play is concerned, we'll enter a 
hypothetical long trade if HLYW trades above today's high 
($17.70).  If we're triggered, our stop will be set at $16.20, 
just under the rising 200-dma.  Those willing to harbor a little 
more risk could use a stop slightly below whole-number support at 
$16.00.

Picked on October xxth at $xx.xx <-- see text
Results since picked:      +0.00
Earnings Date           10/22/02 (unconfirmed)
 




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

Stop Adjustments 
----------------

Kimberly Clark - KMB - cls: 53.22 chg: -1.53 stop: 53.51 *new*

KMB fell in tandem with the Dow Jones on Wednesday and posted a 
loss of 2.7%.  Shares are closing in on our profit-target at 
$52.51.  Given the bearish momentum, we expect this level to be 
reached tomorrow.  Our stop at $53.51 doesn't give this play a 
very long leash, but we'd hate to see our hard-fought gains go up 
in smoke if KMB experiences a relief rally.




---

Ryland Group - RYL - close: 31.61 change: -3.37 stop: 35.60 *new*

Most homebuilding stocks were hit for heavy losses on Wednesday, 
but RYL really got whacked.  Shares sank by 9.6% and set a new 
low for 2002.  With this play proceeding in our favor, we've 
reduced our stop-loss to $35.60, slightly above yesterday's high.  
More conservative traders could use a break-even stop at $34.65.  
We're also going to set an official exit target at $30.06.  In 
addition to psychological support, the $30.00 level also 
coincides with the stock's long-term trend of higher lows.  More 
aggressive traders could look for breakdown and subsequent 
decline towards the $25-$27 area.


 


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

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

General Motors - GM - cls: 31.01 chg: -2.59 stop: 34.06

With shareholders of GM already reeling from a painful sell-off, 
more negative news was not a welcome development for the bulls.  
GM crashed to its worst levels in nearly a decade after Lehman 
Brothers cut its outlook for the company's free cash flow for the 
2003-2006 time period.  The brokerage based its $4.5 billion 
reduction on pension funding concerns, declining value of Hughes 
Electronics, and losses related to General Motors' stake in Fiat.  
Investors reacted by hitting the stock for an 7.7% loss, earning 
GM the dubious distinction of "worst-performing Dow component" on 
a day when the Industrials gave back 215 points.  This play was 
closed for a 15.1% gain when shares hit our profit-target 
($32.06) shortly after the opening bell.  Not a bad move for less 
than a week!  Even with our bearish bias on GM, it was amazing to 
see how fast the stock began to fall once it fell below previous 
support at $38.00.  Speaking of support, the $30.00 level may 
halt the current sell-off.  With shares already looking overdue 
for a relief rally, traders still short should be ready to bail 
out if a bounce does materialize.

Picked on October 3rd at $37.77
Results since picked:     +5.71
Earnings Date          10/15/02 (unconfirmed)





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

BG      Bunge Ltd                  24.26     +0.81
BOBJ    Business Objects           10.71     +0.96
PY      Pechiney S.A.              13.21     +0.53

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

PSFT    Peoplesoft Inc             14.11     +1.74
HLYW    Hollywood Entertainment    17.49     +1.04
AMHC    American Healthways        15.46     +3.34

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

SLE     Sara Lee Corp              21.47     +1.57
ANSI    Advanced Neuro.            37.38     +1.46
IFNY    Infosys Tech.              56.00     +1.03

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

JNJ     Johnson & Johnson          56.20     -2.29
ED      Consolidated Edison        40.92     -2.95
CLC     Clarcor Inc                29.15     -1.54
EME     Emcor Group                47.00     -1.30
AZO     Autozone Inc               77.48     -2.71
HRB     H&R Block                  37.45     -4.20
FDX     Fedex Corp                 47.77     -1.29
YELL    Yellow Corp                26.55     -1.33
BEC     Beckman Coulter            36.20     -2.69

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

FESX    First Essex Bancorp        34.82     -2.55
TPK     Travelers Prop.            20.81     -0.52
AVD     American Vanguard          20.60     -0.45




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