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Daily Newsletter, Wednesday, 01/15/2003

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PremierInvestor.net Newsletter              Wednesday 01-15-2003
                                                  section 1 of 2
Copyright ) 2003, 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:      Buzzkill!
Watch List:       AES, AGN, FS, IBC, KLAC, and more...
Play of the Day:  Will It Or Won't It?


******************************************************************
MARKET WRAP  (view in courier font for table alignment)
******************************************************************
01-15-2003                  High    Low     Volume Advance/Decl
DJIA     8723.18 - 119.44  8854.61 8702.14   1669 mln  447/438
NASDAQ   1438.80 -  22.19  1463.99 1435.29   1692 mln  1184/1236
S&P 100   466.88 -   7.43   475.09  466.44   totals    1631/1674
S&P 500   918.22 -  13.44   932.59  916.70
RUS 2000  395.53 -  2.92   398.45  393.89
DJ TRANS 2360.51  - 22.21  2388.38 2353.90
VIX        27.86  +  1.31    28.44   27.31
VIXN       43.45  +  1.53    44.87   42.85
Put/Call Ratio .89
******************************************************************


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

Buzzkill!

by Steve Price

The warm and fuzzy vibes from Intel's earnings and revenue
surprise last night didn't last long, as traders focused instead
on the company's capital spending projections and drove the
market lower.  Intel said its cap-ex budget would be between $3.5
billion and $3.9 billion and that it would remain flexible.
That number was already below expectations of $4.0 billion and
considering that Intel lowered its budget twice during 2002,
flexibility could lead to further reductions. The company also
made cautious statements about a recovery in the coming year.
"This year will be driven by the pace of the recovery in the
industry and the economy," said Chief Financial Officer Andy
Bryant.  Those comments don't exactly resonate with confidence for a recovery.

As both a Dow and NASDAQ stock Intel led both indices lower.  The
news came just as the Dow and SPX had achieved new breakthrough
levels on a closing basis on Tuesday's closing rally.  The Dow
had been flirting with the 8800 level for six out of the last
seven trading sessions, but unable to hold a close above that
mark.  Similar action in the SPX was found at the 930 level.
Tuesday's close took both indices above those resistance levels
and pointed to a continued rally that had finally broken the
barrier.   Then suddenly the slow, methodical series of higher
intraday highs and higher lows that had formed during the
consolidation of the last few sessions did a U-turn and we rolled
over hard, giving bulls a scare.

The Intel fallout hit the chip equipment makers the hardest,
driving the Semiconductor Index (SOX) down 3.5%.  The SOX has
been climbing for the better part of the year, adding 20% from
its December 31 close to the high of 348.45 on 1/13.   There was
a pullback with the broader markets last Wednesday, but the index
bounced strong off its 50-dma.  We got another test of that
support line today, with the 50-dma now sitting at 323.67, as the
SOX traded as low as 322.22, before finishing the day at 324.94.
A breakdown of that 50-dma could signal further selling in the
sector.  The SOX has been a reliable market indicator for the
last year, reflecting changing patterns in technology spending.
With earnings results due out from Microsoft and IBM on Thursday,
we will likely see additional swings in the chip stocks as demand
for PCs and business technology becomes even clearer.   However,
if Intel is cutting capital expenditures by as much as 25% from
the $4.7 billion it spent in 2002, it is hard to imagine the chip
equipment stocks getting much better news from IBM.

Chart of the SOX


The rollovers on the Intel news in the major indices happen to
coincide with the 200-dmas, either simple or exponential, in the
Dow, OEX, NDX and Nasdaq Composite.  Because we got a bearish
news release at the same time we tested these averages, traders
are left wondering if a rollover was already in the cards, or if
we would have continued upward through those 200-dmas if not for
the Intel news.  We had shown a gain of 6% in the Dow, 6% in the
SPX, 6.7% in the OEX, 11% in the NDX and 9% in the COMP for the
first two weeks of the year.  Multiply those gains by 26 and the
pace is clearly unsustainable.  At some point we were likely to
experience a pullback after the number of investors making their
2003 fund contributions eventually tailed off. The 200-dmas,
which have held as strong resistance in the past, seem a logical
point for that pullback. Today's afternoon bounce in the Dow did
fail to hold the support level of the last couple of days at
8746, eventually closing at 8723.  The question now will be
whether this failure is the first step down in a reversal, or
simply a pullback at a logical level, before heading higher.

Chart of the Dow


Chart of the COMP


Chart of the OEX


Another factor weighing on the markets this morning was a warning
from the number one U.S. chemical company Dupont that its fourth
quarter earnings would come in below estimates.  It blamed to
shortfall on weak demand and higher energy costs. . According to
Standard & Poor's credit analyst Kyle Loughlin, "Rising raw
materials will present pretty stiff headwinds for chemicals
companies until they can try to pass those additional costs to
customers."  However, with the current poor economic situation
for industrial customers, right now that really isn't possible
The rising natural gas and oil prices as a result of the Iraqi
situation, Venezuelan general strike and previous weather
disruptions are apparently making their way through the economy
and seem to justify the inverse correlation between the price of
oil and the movement in equity markets. I highlighted the
correlation between the two a few weeks ago and have updated
those charts to reflect to continuing relationship.

Chart of the Dow and Oil Futures


This morning we got a report from the National Association of
Business Economists, which is made up mostly of in house
economists from corporations and banks.  That report said that
businesses will remain very cautious with their spending and
hiring in 2003.  "Weak profit momentum, continued absence of
price pressures and a cloudy macroeconomic outlook are the main
culprits," said NABE president Tim O'Neill. The report also
showed capital spending dropping for the seventh consecutive
quarter at the end of 2002.  That is the longest stretch of
declines since the survey was begun 21 years ago. However, there
were also some positives in the report, including the expectation
that finance and service firms should see increased spending and
more than 50% of the respondents said they planned to update or
replace equipment. The biggest factor identified in possibly
affecting financial results this year was a prolonged war in
Iraq.

The Beige Book report also came out this afternoon and most of
the comments were not pretty.  The report said reports from the
twelve Federal Reserve Districts showed subdued growth in
economic activity from November to January, with little change in
overall conditions from the last report. Reports on consumer
spending were consistently weak and holiday sales came in at or
below last year's levels. Considering we were still recovering
from 9/11 last year, the lack of improvement seems particularly
gloomy. I mentioned on Monday that I thought the discounting
would have a pronounced effect this year, due to a later
Thanksgiving (thus moving a higher percentage of sales closer to
Christmas) and high unemployment.  That appears to be the case,
as the report highlighted substantial discounting on holiday
retail sales in all districts. Also disturbing, in light of
yesterday's retail data that showed auto sales as one of the few
bright spots, were comments in the report that auto sale showed
signs of weakening. The Beige Book also said most districts
reported little or no increase in capital spending by
manufacturers.  Residential construction and home sales were
still strong, but showed signs of cooling.  The recent surge in
the markets will have a tough time finding support in the
economic data, but that isn't exactly new information.  In fact,
we got rallies following last week's poor jobs data and a bounce
after selling off on poor retail data. If we are back in the "buy
the bad news" swing, then maybe today's pullback was only that -
a pullback before the next higher leg..

However, after the bell, we saw the Intel phenomenon repeat
itself with Yahoo.  The company reported after the bell that it
beat profit estimates by $0.02 per share ($0.08 v. $0.06) and
beat revenue estimates by $7 million.  This was a vast
improvement over last year in the same quarter, when the company
lost $0.02 per share.  The news was apparently not enough to keep
traders happy and the stock dropped over a dollar following the
results.  It did bounce some, but not enough to get back above
the $19 mark, after finishing the regular trading session at
$19.58.

Apple also released results after the bell.  The company met
expectations for a loss of $0.02 per share, but predicted its
2003 second-quarter revenue to be "relatively flat" with the
$1.47 billion it saw in the last quarter, which ended December
28.  It also said it expects a small profit in the next quarter.
After an initial drop, AAPL rebounded close to unchanged.

Traders can look for a move back below Dow 8689, along with a
breakdown of the 50-dma in the SOX, as evidence that a pull back
may continue for some time.  That Dow level was our bounce point
Friday following the poor payrolls report and the 50-dma provided
support in the SOX on the last significant downside test.
However, with the IBM and Microsoft earnings due out after the
bell on Thursday, it is hard to predict how the markets will
react. Traders may be better off waiting for a clearer picture to
develop after those releases.  If we do snap back from today's
losses and cross over the 200-dmas, then a significant barrier
will be removed in case of a positive market reaction and The
December 2 highs in the broader indices should be the next step.


==================================================================
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
---------------------------------

AES Corp - AES - close: 3.88 change: +0.20

WHAT TO WATCH: This low-dollar utility stock has had quite a run
over the past three months - it's more than quadrupled from the
October low of 92 cents!  Investors have been cheering the
company's extensive debt restructuring maneuvers, including a
$2.1 billion refinancing.  Company executives claim this will
ensure adequate cash flow and liquidity in 2003 and 2004.
Although bears could obviously make the case that shares are
overextended, the uptrending oscillators suggest otherwise.
Today's breakout above the 200-dma has raised the possibility
that AES may rally to the next level of historical resistance at
$5.50.  Aggressive traders could target long entries on a move
above $4.00.  A trade at this level would produce a double-top
buy signal on the p-n-f chart.  On a related note, we noticed
that fellow utility player Allegheny Energy (AYE) is also looking
like a bullish candidate after breaking to multi-month highs.

Chart =


---

Allergan Inc - AGN - close: 60.51 change: +1.31

WHAT TO WATCH: Shares of AGN spiked higher on December 24th after
the FDA approved their Restasis drug, a therapy for chronic dry
eye disease.  The stock then spent more than two weeks
consolidating under its declining 200-dma ($59.11).  It wasn't
until today's session that shares finally closed above the moving
average.  This breakout, which was accompanied by strong volume,
has cleared the way for a possible rally to the October highs at
$65.00.  We like AGN as a bullish candidate on a move above the
late-November high at $61.07.  P-n-f chartists will note that a
trade at $61.00 would create a double-top buy signal and also
take the stock above bearish resistance.  A pullback to the 200-
dma might also present a buying opportunity for more aggressive
traders.

Chart =


---

Comcast Corp. - CMCSK - close: 27.11 change: -0.19

WHAT TO WATCH: CMCSK broke to the upside last week after spending
several weeks trading in the $22-$24 range.  This rally has taken
shares above both the 200-dma ($24.12) and the November high at
$26.70.  Speaking of moving averages, technicians will notice
that the 50-dma looks poised to cross over the 200-dma.  With no
overhead resistance until $30.00 and the p-n-f chart showing a
double-top buy signal, it looks like shares could continue to
move higher.  However, we would not recommend entries at current
levels - CMCSK looks due for some profit-taking after several
days of strong gains.  Instead, traders can watch for a pullback
to the $25-$26 area to offer an entry point.

Chart =


---

Walt Disney - DIS - close: 17.97 change: -0.50

WHAT TO WATCH: The Mouse House and other large media companies
were given a victory today when the Supreme Court upheld a law
extending copyright protection by 20 years.  However, this
positive news seemed to fall of deaf ears.  DIS was today's
second-weakest Dow component with a 2.7% loss.  A glance at the
daily chart shows that shares are beginning to roll over from the
200-dma at $18.66.  The other major moving average came into play
today when the stock bounced from its 50-dma at $17.72.  A
violation of this level might lead to a retracement of the rapid
late-December/early-January gains.  Technical bears will note
that the daily stochastics (5,3,3) are falling from overbought
levels while the MACD is beginning to level out above the
baseline.  P-n-f traders looking for a three-box reversal will
have to wait for a trade at $17.00.

Chart =


---

Four Seasons - FS - close: 27.52 change: -1.16

WHAT TO WATCH: A brokerage downgrade of the lodging group sent FS
tumbling to new multi-year lows on Wednesday.  The stock has been
trending steadily lower for 11 months and at this point it
doesn't take much negative news to send more shareholders running
for cover.  The falling daily stochastics and p-n-f double-bottom
sell signal do not bode well for a rebound anytime soon.  Short
entries can be evaluated on a move below today's low ($26.39),
initially targeting a decline to the $20.00 area.  Be aware that
the bulls may offer a defense of psychological support at $25.00.

Chart =


---

Interstate Bakery - IBC - close: 16.10 change: +0.60

WHAT TO WATCH: Shares of Interstate Bakery, the makers of Wonder
Bread and Hostess cakes, were burnt to a crisp on December 17th
after the company said that its quarterly earnings fell by almost
50%.  Poor cake sales and cost hikes of primary ingredients were
cited as the main reasons for the poor results.  Investors
responded by taking IBC from $23 to $15 in just one session.
Shares then spent nearly a month trading in a tight range between
$14.50 and $15.50.  Despite the severity of the sell-off, shares
never violated bullish support on the p-n-f chart.  Things have
gotten more interesting over the past two sessions, with the
stock moving sharply higher and reversing into a column of "X".
Rising volume indicates that bargain hunters have a growing
appetite for IBC.  With shares now retracing the December sell-
off, there are no clear resistance levels until the 50-dma near
$20.00.

Chart =


---

International Paper - IP - close: 37.91 change: -0.32

WHAT TO WATCH: A daily chart for I-Paper shows that the stock has
roughly followed the Dow Industrials over the past six weeks.
But unlike the Dow, IP looks like it's about to form the right
shoulder of a head-and-shoulders pattern, with the left shoulder
at the October highs and the head being formed by the December
highs.  Although shares have traded nicely higher in recent days,
the bulls are now faced with a formidable obstacle in the form of
the 200-dma ($38.63).  IP hasn't traded above this moving average
since early-July.  A rollover from this region would forge a
right shoulder on the daily chart.  Traders could target short
positions at current levels, with a stop slightly above the 200-
dma.  We'd be looking for a pullback to the bullish p-n-f support
trend at $35.00.  Note that possible support lies at the rising
50-dma (36.08).  In terms of sector strength, it's interesting to
see that FPP.X forest/paper products index is also showing signs
of weakness below resistance at 300.

Chart =


---

KLA-Tencor - KLAC - close: 38.45 change: -1.20

WHAT TO WATCH: Chip equipment makers traded lower today after
Intel announced during their earnings report that it had set a
2003 capital spending budget in the $3.5 billion - $3.9 billion
range.  This capex forecast, which was at the lower end of
expectations, is not good news for the companies that supply the
tools that are used to manufacture semiconductors.  The prospect
of a reduction in orders sent KLAC to a 3.0% loss on Wednesday.
Shares closed below the 50-dma ($38.89) after rolling over from
the 200-dma ($42.50) earlier in the week.  The bearish
oscillators and p-n-f reversal are indications that KLAC could
continue to move towards its relative lows near $35.00.
Speculative traders may want to consider short entries at current
levels, with a stop slightly above yesterday's low of $39.36.
However, we would not recommend holding large positions over
Thursday evening's earnings announcements from IBM and MSFT.  An
upside surprise from either one of those companies could send the
semiconductor index (SOX.X) back towards the 340 area.  KLAC
releases their own earnings report after the bell on January
23rd.

Chart =



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

Deluxe Corp. - DLX - close: 40.21 change: -0.05 stop: 41.34 *new*

Company Description:
Deluxe Corporation's business units provide personal and business
checks, business forms, labels, self-inking stamps, fraud
prevention services and customer retention programs to banks,
credit unions, financial services companies, consumers and small
businesses. The Deluxe group of businesses reaches clients and
customers through a number of distribution channels: the
Internet, direct mail, the telephone and a nationwide sales
force. (source: company press release)

- ORIGINAL WRITE UP: December 3rd, 2002 -

Why We Like It:
While Deluxe isn't exactly a household name, the company's
products (ranging from stamps to personal checks) have probably
played a role in your everyday life. Their stock also boasts the
largest market capitalization in the office supplies sector,
ahead of both USTR, and MCL. What drew our attention to DLX was
the way shares have broken down to multi-month lows.
Fundamentally, we can't find a whole lot to explain this
weakness. The stock has been trending lower since mid-October,
despite a lack of noteworthy news developments. The latest
quarterly report actually included an EPS result that was 9 cents
better than consensus estimates. Not bad, but Wall Street didn't
seen to be very impressed - DLX has given back more than 10%
since the earnings announcement on October 17th. Meanwhile, the
Dow Jones has clawed its way to a gain of 5.6% over the same time
period.

That pattern of relative weakness was on display during today's
session, as DLX underperformed the broader market and fell below
support at $42.00. Shares also closed below the 50% retracement
level from July lows to October highs. This breakdown was
accompanied by the largest volume in over a month. With the p-n-f
chart showing a spread-triple sell signal and the daily
stochastics (5,3,3) heading lower, it looks like the stock could
continue to retrace its rapid late-summer gains and reach the
August lows near $37.00. Given enough time (and some cooperation
from the broader market), a retest of the July lows ($33-$34)
wouldn't be out of the question. Possible support lies in the
$39.50-$40.00 region. This play will be activated if DLX moves
under today's low of $41.29. If we're triggered our stop-loss
will be located at $44.09, one cent above the 200-dma. Slightly
more conservative traders could use a stop just above Monday's
high of $43.65.

- Last Update: January 14th, 2003 -

Last Friday we were encouraged by the fact that DLX had fallen
out of its narrow multi-week trading range.  After continually
failing to push shares above the $42.25-$42.50 area, the bulls
finally threw in the towel and relinquished support near $41.25.
So far the stock has behaved just as we'd hoped it would.  DLX
underperformed the Dow Jones over the past two sessions and
continued to gravitate towards support at $40.00.  As we've said
in earlier updates, a violation of this level would provide an
opportunity to add short positions.  The recent relative weakness
bodes well for a breakdown.  The oscillators, on the other hand,
are a bit of a mixed bag.  Although the rolling MACD looks
promising, the latest declining price action has sent the daily
stochastics (5,3,3) into oversold territory.  This suggests that
shares might see some additional consolidation above $40.00.
However, we believe that a move below support would send DLX down
to the $38.00 area - regardless of the stochastics.  For the time
being our stop remains at $42.56.  Conservative traders may want
to use a break-even stop at $41.28.  Also note that Deluxe is
tentatively scheduled to release earnings on January 30th.

- Play-of-the-Day Comments: January 15th, 2003 -

We've talked at length about the importance of support at $40.00.
DLX bounced from that area in December before trading in a narrow
range in the $41-$42 region.  Now shares are once again
threatening a breakdown.  Apparently we're not the only ones who
are keying in on $40.00.  A 5-minute chart of today's session
shows that this level formed a literal floor under the stock in
morning trading, and then continued to act as support during
several downward spikes.  Interest in the stock seems to be
growing - today's volume reading was the highest in over a week.
There's also some intriguing action going on with the
oscillators.  The recent losses have taken the daily stochastics
(5,3,3) down to oversold levels.  That's a sign that the recent
downtrend might be coming to an end.  However, the MACD is
pointing at the opposite outcome.  The fresh bearish crossover
suggests that DLX could witness another prolonged decline similar
to the one that occurred between October and December.  We're
expecting that a violation of support at $40.00 will send shares
towards the $38.00 area.  New short entries can be considered if
a breakdown takes place, although we'd probably wait for shares
to fall below $39.94 or $39.90 in order to confirm the weakness.
At this time we're going to lower our stop-loss to $41.34, just
above the 21-dma.  This is essentially breakeven.  We've been in
this play for over a month, and it's time for the bears to prove
themselves.  If shares manage to rebound again from support we'd
prefer to close the play rather than wait around for another
decline.  Longer-term traders can maintain a stop at $42.56.

Picked on December 4th at $41.28
Results since picked:      +1.07
Earnings Date           01/30/03 (unconfirmed)

Chart =





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DISCLAIMER
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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:
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Copyright ) 2003  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter               Wednesday 01-15-2003
                                                   section 2 of 2
Copyright ) 2003, 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:  TDS

Stock Bottom / Active Trader
  Triggered Plays:       RJR (bullish)
  Stop Adjustments:      DLX (bearish)

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

Telephone Data Systems - TDS - cls: 46.00 chg: -1.03 stop: 47.11

Last night we had a pretty good hunch that this short play would
be stopped out on Wednesday morning.  Although the market soured
on Intel's earnings report overnight, the NASDAQ still managed to
tick slightly higher in the first few minutes of trading.  TDS
joined the tech sector in those brief gains and opened above our
stop-loss.  Our play was closed at $47.17 for a loss of 8.6%.  Of
course if you followed the market throughout the day you're aware
that the NASDAQ quickly reversed course and finished with a solid
loss.  TDS saw its gains evaporate in a similar fashion before
finding solid support at $46.00.  A break below this level could
send TDS back towards the $44-$45 area.  Traders still holding
short positions can be encouraged by the fact that shares rolled
over after failing to fill in the January 8th gap (most easily
visible on a 15-minute chart.)  But as we touched on in
yesterday's update, the good news from Alcatel (ALA) might
portend further upside surprises in the telecom group.  BLS, SBC,
T, and VZ are all announcing in the second half of January.

Picked on January 10th at $43.40
Results since picked:      -3.77
Earnings Date           02/05/03 (unconfirmed)

Chart =




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

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

Triggered Plays
---------------

RJ Reynolds - RJR - close: 45.09 change: -0.18 stop: 42.98

Economic data from the Labor Department that showed few signs of
inflation in the manufacturing sector gave the broader market a
quick boost this morning.  Our long play in RJR was activated
shortly after the opening bell when shares reached our entry
trigger at $45.33.  Although the stock was able to trade up to
$45.75, sellers quickly moved in when the major equity indices
began to weaken.  Tomorrow we'll be looking for shares move back
above this level and move to relative highs.  New entries can be
evaluated if this occurs.  Our stop is set at $42.98.

Chart =



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

Deluxe Corp. - DLX - close: 40.21 change: -0.05 stop: 41.34 *new*

We've talked at length about the importance of support at $40.00.
DLX bounced from that area in December before trading in a narrow
range in the $41-$42 region.  Now shares are once again
threatening a breakdown.  Apparently we're not the only ones who
are keying in on $40.00.  A 5-minute chart of today's session
shows that this level formed a literal floor under the stock in
morning trading, and then continued to act as support during
several downward spikes.  Interest in the stock seems to be
growing - today's volume reading was the highest in over a week.
There's also some intriguing action going on with the
oscillators.  The recent losses have taken the daily stochastics
(5,3,3) down to oversold levels.  That's a sign that the recent
downtrend might be coming to an end.  However, the MACD is
pointing at the opposite outcome.  The fresh bearish crossover
suggests that DLX could witness another prolonged decline similar
to the one that occurred between October and December.  We're
expecting that a violation of support at $40.00 will send shares
towards the $38.00 area.  New short entries can be considered if
a breakdown takes place, although we'd probably wait for shares
to fall below $39.94 or $39.90 in order to confirm the weakness.
At this time we're going to lower our stop-loss to $41.34, just
above the 21-dma.  This is essentially breakeven.  We've been in
this play for over a month, and it's time for the bears to prove
themselves.  If shares manage to rebound again from support we'd
prefer to close the play rather than wait around for another
decline.  Longer-term traders can maintain a stop at $42.56.

Chart =



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

IBC     Interstate Bakeries        16.10     +0.60
TOO     Too Inc.                   19.05     +0.58
CEC     CEC Entertainment          31.39     +1.22
KIND    Kindred Healthcare         19.01     +1.68

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

BMRN    Biomarin Pharmaceuticals    9.15     +2.13
WMAR    West Marine Inc            16.27     +1.97
HBG     Hub International          14.61     +1.11

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

BSTE    Biosite Inc                39.35     +1.70
SCHL    Scholastic Corp            37.52     +2.99
GENZ    Genzyme Corp               35.11     +2.50
APA     Apache Corp                61.36     +2.32
INTL    Inter-Tel Inc              25.30     +1.90
CYN     City National Corp         45.98     +1.91

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

FS      Four Seasons Hotels        27.50     -1.18
MCHP    Microchip Technology       22.98     -1.17
MGG     MGM Mirage                 28.05     -1.07
PDX     Pediatrix Medical Group    34.40     -4.89
ABT     Abbott Labs                37.95     -1.11
IBOC    Intl. Bancshares Corp      38.20     -1.75
DST     DST Systems                35.40     -2.10

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

FSH     Fisher Scientific          30.26     -1.99
EAT     Brinker Intl.              32.45     -0.20
SPF     Standard Pacific Corp      25.85     -0.66
VFC     VF Corp                    36.50     -0.70




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