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PremierInvestor.net Newsletter                 Monday 11-11-2002
                                                  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:      Between the Lines
Watch List:       AU, BGEN, GE, GR, MERQ, PCAR, and more...
Play of the Day:  Reliably Weak


******************************************************************
MARKET WRAP  (view in courier font for table alignment)
******************************************************************
11-11-2002                High    Low     Volume Advance/Decl
DJIA     8358.95 - 178.18 8535.88 8349.53  1310 mln   163/1130
NASDAQ   1319.19 -  40.09 1355.10 1319.07  1260 mln   125/1126
S&P 100   447.63 -   9.76  457.39  446.77   totals    288/2256
S&P 500   876.19 -  18.55  894.74  874.63
RUS 2000  369.14 -   9.86  379.00  369.14
DJ TRANS 2271.47 -  75.41 2353.58  2268.22
VIX        36.11 +   2.55   36.21  35.06
VIXN       55.71 +   3.70   56.93  52.47
Put/Call Ratio .78
******************************************************************


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

Between the Lines

by Steven Price

It's tough to draw any conclusions on a light volume day, when
the bond markets were closed for Veterans' Day, but there were
several significant developments. We saw previous
support/resistance levels fall and it appears we are back into
our previous range in the broader indices.   Interestingly, we
may also be forming another pattern similar to the one we saw
earlier this year, but at a lower level.


On Friday, the possibility of war with Iraq helped start the
markets rolling down hill.  The U.S. proposal on weapons
inspections was approved and the Iraqi ambassador responded that
it was simply the will of the U.S. and was crafted in such a way
as to prevent inspectors from entering the country.  That
rhetoric continued today, as the Iraqi parliament took up
consideration of the U.N. proposal.  The opening speaker
expressed the opinion that the proposal be rejected, indicating
that we may be skipping inspections and heading to war sooner,
rather than later.

One interesting non-development the last couple of days has been
the price of oil.  While there has been quite a bit of saber
rattling, oil futures have increased only slightly. They are
nowhere near levels from earlier this fall, when war with Iraq
seemed even further off.  Even then, most pundits predicted we
wouldn't be able to enter the country until winter, simply due to
the extreme heat.  However, now that we are getting closer, with
Iraq apparently ready to reject the U.N inspections proposal, oil
is hanging down around $26 per barrel.  Oil futures traded almost
$31 per barrel a month ago, but have dropped as OPEC member
countries have overproduced by about 15% over stated quotas for
the last few months.  This bodes well for our economy, as it is
apparent that where there is potential profit, supply will
follow.  And since an increase in oil prices makes its way to
almost every product in the U.S., an increase in fuel cost is the
quickest way to put the pinch on our economy.  While Iraq
certainly produces a significant percentage of the Middle East's
oil supply, it is apparent that "quotas" will not restrict supply
as much as we have been led to believe, if prices start to rise
again.   War in the Middle East will certainly lead to some
increase in price, as Iraqi production is restricted, and
transportation in the region may see interruptions, however it
may not be as bad as we thought.   A look at the December futures
shows a slight increase the last three days, since the U.N. began
contemplating the U.S. proposal.  While we may not see a huge
price increase, it is apparent that oil prices have stopped
descent

Chart of Crude Oil Futures


The Dow, S&P 500, and OEX all formed classic head and shoulders
formations from July through September.  When those patterns
concluded themselves with a neckline breakdown in the middle of
September, the downside measuring objectives were achieved in
less than a month. Once we achieved those levels, we skyrocketed
up almost as quickly as we fell.  Both moves seemed extreme and
certainly the business environment has not changed so
dramatically for the worse and then so dramatically for the
better in less than three months. However, as illogical as these
moves may seem, the patterns have been reliable. We now have
begun to form what looks like a possible repeat of the summer-
fall head and shoulders.  The pattern is only two thirds complete
and could certainly turn out to be something completely
different, but as we observe the market from this point forward,
we should look out for history repeating itself.  Since the
patterns are similar on all three, I'll post only the Dow chart
for illustration.

Chart of the Dow
 


After the recent rollover, the Dow is also back in familiar
territory.  The 8200-8550 range has contained the average several
times recently, and now that we are right in the middle, my guess
is that we will test at least that lower end (8200) before the
next move out of the channel. Of course, moving almost 200 points
at a crack, that advice may not be good past Tuesday. Which
brings me to another point.  Picking levels in the current
environment does not have the same impact as it did just a couple
of years ago.  We seem to move in triple digit jumps almost
daily.  I had to go back to September 20 to find a day in which
the Dow did not trade in at least a 100-point range intraday and
even then it was 95 points. So we need to be aware of these
levels and be very nimble, attempting to trade the top of the
range short and then the bottom long.  The move may only last a
day or two, (or even happen intraday) before reaching the next
support/resistance level and reversing itself.

Chart of the Dow Range


We are also seeing a major tech pullback, now that the Nasdaq
achieved its August highs.  The pattern is not the same as the
Dow, but certainly the rejection is similar.   It appears that
the August high around 1425 in the COMP will be our gauge for
whether the tech bear market can break out of its slump.  While a
break above that level certainly does not indicate we will return
to 5000 in the Nasdaq, a repeated failure there may indicate that
the downside still has plenty of room.   The logical bounce point
on the last pullback would have been 1360, after filling the gap
from last Monday.  However, that held for only a day, on Friday,
before today's action took us lower. A re-test of 1300 now
appears likely.

Chart of the Nasdaq


One of the groups that helped the Nasdaq to its recent highs, but
has now rolled over dramatically, is the chip sector. Led by a
downgrade to Taiwan Semiconductor (TSM), the Semiconductor Sector
Index (SOX.X) gave up 5.7%, dropping 16.79 to 283.12.  After
gaining more than 50% in a month, the pullback is beginning to
look like more of a major breakdown.  AMAT's earnings report on
Wednesday should have a pronounced effect on the sector, although
it is hard to imagine anything good coming out of the
announcement, since the company already announced it was cutting
jobs to combat the two year chip slump. In addition, the
Semiconductor Industry Association (SIA) said that global chip
sales are expected to grow 8-10% in coming years, compared to
annual rates of 16% in the past.  That 50% reduction, on the low
end, was not totally unexpected, but seemed to leave investors
wondering why the sector had exploded in value recently. AMD
chairman, who also sits on the SIA board, said," We can no longer
count on the proverbial rising tide that lifts all boats."   The
group also cut its global sales forecasts again for 2002, saying
it expects growth of only 1.8%; a drop from the 3.1% mid year
forecast. SIA also reduced its forecast for 2003 from 23.2% to
19.8% and raised 2004 estimates from 20.9% to 21.7%.

Chart of the SOX


Single stock futures (SSF) began trading on Friday, and although
there has not been much volume to this point, they may actually
provide more options liquidity.  Right now, market makers with
short stock positions are held back from filling large in-the-
money call orders on the buy side, or large in the money put
orders on the sell side, as getting off a short hedge requires an
uptick in the stock.  A stock that may be pulling back only drops
further when a specialist on the NYSE sees a large number of
short sellers enter the picture.  Therefore, there are option
orders that go unfilled, as market makers are not willing to take
on the added risk of trying to sell short.  However, without a
similar rule in the futures, short selling is no longer a
problem.  If the SSF market can draw enough futures market
makers, there may be enough liquidity for options traders to
increase the size of their bids and offers, since they will have
an easier time hedging their trades.

With the bond markets back open tomorrow, we should see heavier
trading and get a better feel for direction.  However, now that
we are in the center of the current Dow range, there are only 150
points to the downside before testing support. In the Nasdaq,
there are only 19 more downside points before the next test.
Right now the prevailing trend is down, so until something
changes, that is the way I'll play.  However, as I said earlier,
given the current wide intraday trading ranges, I won't hesitate
to close positions and play a bounce as soon as we get one at the
above mentioned support levels. That seems to be the best
strategy until we cross another line, at which point we have a
new range to bounce within.   While this makes long term
direction tough, we can only trade what the market gives us, and
right now trading inside the lines seems to be our best
opportunity.


==================================================================
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 - AU - close: 28.31 change: -0.48

WHAT TO WATCH: Our list of sector indices was completely negative
today.  Even the XAU.X gold/silver index (which often finds
defensive buying when the broader market sells off) gave back
1.7%.  That might not come as a surprise to point-and-figure
enthusiasts, who would point out that the index has reversed from
bearish resistance.  This correlates with the long-term trend of
lower highs on the daily bar chart and the 200-dma at $69.84.
Today's violation of the 50-dma ($67.91) could portend a retest
of the October lows near $60.00.  AU is a stock to keep an eye on
if the sector does break down.  Shares have started to fall from
the $29-$30 area of resistance.  Short entries can be considered
at current levels, with an initial profit target near the 50-dma
($25.90).  Other possible gold shorts include HGMCY and NEM.




---

Biogen Inc - BGEN - close: 38.26 change: -0.71

WHAT TO WATCH: The BTK.X biotech index has given back all of its
early-November gains and is approaching support in the 340 area.
BGEN looks like a good short play if the sector continues to
weaken.  The stock has started to roll over from its 200-dma
($41.22), while the descending oscillators are pointing towards a
pullback to the next level of support at $35.00.  The point-and-
figure chart is looking somewhat bullish, but that strength would
be largely negated if BGEN breaks under $38.00.  This would
create a three-box reversal and take the stock below bearish
resistance.




---

General Electric - GE - close: 24.21 change: -0.89

WHAT TO WATCH: Last week's rollover from resistance at $27.00 and
the subsequent violation of support at $25.00 earned GE a slot on
our weekend Watch List.  With the stock giving back another 3.5%
today, we thought it was worth another mention.  Traders looking
for short entries can watch for a failed rally at $25.00 or a
move below $24.00.  A trade at $24.00 will create a three-box
reversal on the p-n-f chart.  A breakdown could take GE to the
October lows near $22.00.




---

Goodrich Corp - GR - close: 14.63 change: -1.06

WHAT TO WATCH: Goodrich announced today that it intends to float
a $200 million public offering to help fund its $1.5 billion
acquisition of TRW's aerospace division.  Investors reacted
negatively to this news and hit GR for a 6.7% loss.  Shares are
now resting precariously above the all-time low of $14.55.  A
breakdown below $14.50 would create a double-top p-n-f sell
signal, offering a possible action point for bearish traders.
Another failed rally at the top of the stock's descending
regression channel (currently near $16.00) might also present a
shorting opportunity.  Those with a short-term timeframe could
target a decline to the $12.00 area.




---

Intel Corp - INTC - close: 17.42 change: -0.73

WHAT TO WATCH: The lack of any fundamental improvement in the
chip sector had many traders questioning the sustainability of
the latest rally in the SOX.X.  The semiconductor index gained
roughly 60% in less than a month and erased a healthy chunk of
its August/September decline.  That's one heckuva rebound, but
the technical picture has been rapidly deteriorating over the
past few sessions.  Looking at the daily chart, we see that the
SOX maintained its multi-month pattern of lower highs.  The index
has broken out of its intermediate-term ascending channel (check
out the 60-minute chart) and wasn't able to find support at 300.
Sector giant INTC is experiencing a similar rollover and could be
headed for a test of the 50-dma ($15.66).  The rolling
oscillators and three-box p-n-f reversal bode ill for the bulls.
In terms of action points, traders can watch for either a failed
rally at $18.00 or a move under $17.25.  Those seeking more
bearish confirmation may want to wait for shares to fall below
support at $17.00.  Remember that chipmaker AMAT announces
earnings on Wednesday.




---

Mercury Interactive - MERQ - close: 25.03 change: -1.45

WHAT TO WATCH: Citing valuation concerns, UBS Warburg cut their
ratings on several infrastructure software stocks last Friday.
Having been targeted by this downgrade, MERQ continued to
distance itself from the 200-dma ($29.51).  Shares underperformed
the NASDAQ on Monday and broke through support at $25.00 on an
intraday basis.  The stock is now threatening to fall below late-
October support at $24.50.  A break below this level could clear
the way for a move to the 50-dma at $22.63.  Technically, bears
can be pleased with the rolling oscillators and recent p-n-f
reversal.




---

Molex Inc - MOLX - close: 25.32 change: -1.22

WHAT TO WATCH: Shares of this electrical component manufacturer
have declined for five straight sessions.  Although the stock may
be due for a rebound after several down days, the oscillators are
not yet at oversold levels.  The daily MACD in particular is
looking weak, having just produced a bearish crossover.  The last
crossover occurred in late August before a substantial sell-off.
MOLX fell below the 50-dma ($25.27) today and reversed into a
column of "O's" on the p-n-f chart.  These bearish technical
developments, combined with a violation of psychological support
at $25.00, could send the stock plummeting towards $20.00.




---

PACCAR - PCAR - close: 41.21 change: -2.17

WHAT TO WATCH: PACCAR's latest quarterly report included tripled
earnings on a year-over-year basis.  Unfortunately for
shareholders the truck manufacturer also said it was anticipating
weak demand in 2003.  The stock managed to trade higher despite
the negative news, due in large part to a rally in the Dow
Transports.  However, PCAR has now started to retrace its October
gains.  Today's close under the 200-dma ($42.30) could bring more
sellers out of the woodwork.  The bearish MACD crossover and
falling daily stochastics add to the technical negativity.  PCAR
could be headed for the 50-dma ($37.34), but watch out for
possible support at $40.00.




---

Hotels.com - ROOM - close: 61.21 change: -1.48

WHAT TO WATCH: Shares of ROOM gained roughly 50% over the past
month, thanks in large part to a strong quarterly earnings
announcement.  The company reported an 83% in revenues and beat
consensus estimates by three cents.  In addition to these strong
numbers, Hotels.com also benefited from an explosive rally in
competitor EXPE.  However, ROOM's strong upside momentum faded as
the stock approached resistance at $65.00.  Shares are now
beginning to retrace the rally and the sinking broader market
certainly isn't helping the bulls to hold on to their gains.
Short entries could be evaluated at current levels, with a stop
just above $65.00.  Short-term traders could look to capture a
move back to the 50-dma ($52.18), which corresponds with the 50%
retracement from October lows to November highs.





=========================
Play-of-the-Day (BEARISH Active Trader play)
=========================

Superior Ind. - SUP - cls: 40.73 chg: -0.83 stop: 44.31

Company Description:
Superior supplies aluminum wheels and other aluminum automotive
components to Ford, General Motors, DaimlerChrysler, BMW,
Volkswagen, Audi, Land Rover, MG Rover, Toyota, Mazda,
Mitsubishi, Nissan, Subaru and Isuzu. (source: company press
release)

- ORIGINAL WRITE UP: October 24th, 2002 -

Why We Like It:
As you can see from the above description, SUP earns its money by
selling wheels and other components to the major auto
manufactures. That fact could weigh heavily on the stock in the
weeks to come. Although zero-interest financing had cars zooming
off the lots over the past year, this brisk pace seems to be
subsiding. The Beige Book data released on Wednesday indicated
"motor vehicle sales generally slowed from very high levels."
This does not bode well for Superior Industries. The company
recently announced some new contracts, but future revenue still
largely depends on strong auto sales. On a technical basis, we
like SUP as a short play because of the way shares have rolled
over from resistance at the converging 50-day ($45.41) and 200-
day ($45.07) moving averages. This level is also the location of
descending resistance on both the bar chart and the point-and-
figure chart. The falling daily stochastics (5,3,3 setting)
provide more ammunition for the bears. The last four times the
stochastics fell out of the overbought region, shares were met
with heavy selling. We're optimistically targeting a retest of
the recent lows near $36.00. Shares bounced from just under
whole-number support at $43.00 today, so we're going to place an
entry trigger at $42.97. If this play is activated we'll use a
stop at $46.01, above the relative high and the aforementioned
moving averages. Shorter-term traders could use a tighter stop
and target a decline to the $40.00 area.

- Most recent update: November 8th, 2002 -

As was the case on Thursday, trading in SUP closely reflected the
action on the Doe Jones. Following this morning's quick spike
above $43.00, shares pulled back to $41.50 and traded sideways
for the rest of the session. Technical bears will note that the
MACD and daily stochastic oscillators have gone from flat to
slightly negative. It's a little early to read much into this
rolling action, but we're encouraged by the continued decline
from the 100-day and 50-day moving averages near $44.00. The
longer-term downtrend is intact and we think the stock will
continue to drift lower with the broader market. However, more
sideways trading above the relative low ($41.16) might lead us to
drop this play.

- Play-of-the-Day Comments: November 11th, 2002 -

It's not the fastest mover, but you have to admire SUP's
reliability.  The stock has fallen from its October 21st high in
a steady pattern of lower lows and lower highs.  Monday's action
was especially encouraging from a technical standpoint, as shares
dropped under $41.00 and closed at the worst levels of the
session.  Investors paid little heed to Superior's announcement
that it plans to expand its annual manufacturing capacity by
approximately 25% over the next two years.  That might be
considered a positive sign for future growth, but Wall Street
seems to be more concerned with underlying economic weakness
dragging on the automotive industry.   As far as our short-term
goals are concerned, we're very pleased with the way SUP has
continued to retrace its mid-October rally.  Today's weak close
is a good sign that shares will continue lower on Tuesday.  New
short entries can be considered on a move below psychological
support at $40.00.  At the current rate of descent, the stock
would retest the $36 level within the next 3-4 weeks.

Picked on October 28th at $42.97
Results since picked:      +2.24
Earnings Date           10/17/02 (confirmed)






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send email to Contact Support
=================================================================
DISCLAIMER
=================================================================

This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

*****************************************************************
ADVERTISING INFORMATION

For more information on advertising in PremierInvestor.net
Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

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Copyright ) 2002  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter                  Monday 11-11-2002
                                                   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:

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)


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

                             

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

                             

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

DIAN    Dianon Systems             46.64     +6.45
RAH     Ralcorp Holdings           22.80     +2.50

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

HDI     Harley Davidson            48.61     -3.84
ARB     Arbitron Inc               31.00     -1.34
MIK     Michaels Stores            29.42     -2.58
AMSG    Amsurg Corp                26.61     -1.37
TRI     Triad Hospitals            28.08     -1.10
DPMI    Dupont Photomasks          20.34     -2.53
WGOV    Woodward Governor          38.65     -1.95
MTD     Mettler Toledo Intl        32.67     -1.51
WMH     Wireless HOLDRS            33.75     -1.40
KYO     Kyocera Corp               58.70     -2.85

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

ROOM    Hotel Reservations Ntwk    61.21     -1.49
SSS     Sovran Self Storage        29.10     -0.40
TRC     Tejon Ranch                27.65     -0.73
DSCP    Datascope Corp             25.47     -1.93
ALK     Alaska Air Group           21.90     -1.03
DBD     Diebold Inc                36.29     -1.20
AXE     Anixter Intl               23.18     -0.77




=================================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to Contact Support
=================================================================
DISCLAIMER
=================================================================

This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

*****************************************************************
ADVERTISING INFORMATION

For more information on advertising in PremierInvestor.net
Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

*****************************************************************


Copyright ) 2002  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.

DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

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