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Daily Newsletter, Tuesday, 01/21/2003

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PremierInvestor.net Newsletter                 Tuesday 01-21-2003
                                                   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:      Running Out of Time
Market Sentiment: Insatiable
Play-of-the-Day:  Ticket To Ride

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
      01-21-2003           High     Low     Volume Advance/Decline
DJIA     8442.90 -143.80  8623.49  8438.18 1.59 bln   1007/2266
NASDAQ   1364.25 - 11.90  1380.43  1364.25 1.32 bln   1262/2073
S&P 100   450.35 -  7.01   459.68   450.30   Totals   2269/4339
S&P 500   887.62 - 14.16   906.00   887.62
W5000    8400.48 -129.80  8565.12  8400.45
RUS 2000  383.17 -  4.93   389.04   383.08
DJ TRANS 2281.23 - 63.30  2351.83  2279.42
VIX        30.53 +  1.85    31.18    29.22
VXN        43.24 +  0.40    44.78    42.17
Total Volume 3,083M
Total UpVol    738M
Total DnVol  2,278M
52wk Highs  234
52wk Lows    93
TRIN       2.33
PUT/CALL    .53
-----------------------------------------------------------------

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

Running Out of Time

That was the term President Bush used when discussing Saddam in
a press conference today but it applies to the markets as well.
Earnings are flying at a furious pace but guidance is not. The
guidance given is not encouraging and "no guidance" comments due
to lack of visibility are just as bad. With the majority of major
earnings releases already history the market is running out of
time to find a reason to buy.

Dow Chart


Nasdaq Chart


The morning started off so well with Housing Starts soaring to
a 16 year high of 1.835 million units. Builders must not believe
there is any bubble and they are rushing to complete homes in
the spring to capitalize on the current low interest rates. Once
those rates start back up it may be a different story. The number
one reason for buying a new home now is because interest rates
are so cheap according to surveys. Other factors remain very
weak as most needs based buying has already been done.

Major earnings announcements out this morning included MMM which
beat estimates but disappointed investors with guidance that was
good but not exciting. They estimated sales would only grow +3%
to +7% for the year. That may be good for this economy but not
good enough for investors expecting +10% or better gains. The
stock gapped open to $127.25 but sold off to $125.50 at the
close.

Citigroup earned less than expected but still managed to take
home +$15.28 billion in 2002. They took charges for loan write
offs due to high profile bankruptcies like Enron but still
managed to do well. They also forecast double-digit growth for
2003. Sounds like good news but C finished lower on the day.

JNJ also beat estimates by a penny but the stock closed down
for the day on fears of competition from BSX. This should not
be a factor despite BSX grabbing $1.4 billion of the JNJ stent
market. The new JNJ stent is expected to reap $3.4 billion in
2003. BSX guided higher at the open and gapped up to $50 but
sold off to $44 by the close with a -1.71 loss. They announced
they had been given EU approval for their Taxus stent. Sell
the news became the direction as this had been expected for a
week.

Ford reported a smaller 4Q loss and predicted a first quarter
profit of 20 cents a share. Ford expects to earn 70 cents for
all of 2003 but analysts claim the prediction is based on an
"overly rosy" projection of the economy. Ford finished flat
for the day.

Charles Schwab missed estimates by a penny on revenues that
fell -5.9% and produced the second consecutive quarterly loss.
Schwab revenue from customer trades fell -14% with average
daily trades dropping to 126,700 in Dec 2002 from 159,900 in
Dec 2001. Schwab has been raising fees and adding additional
charges to previously free services to try and pull out of
the dive. The company has cut 10,000 of 26,700 employees in
the last year.

HDI hit a slick spot when it affirmed guidance today. Analysts
had expected them to raise guidance instead. The stock lost
nearly -$4 on the news. Could this be a sign of consumer
weakness ahead? Very high dollar motorcycles have been
available on back order for years and a termination of that
trend could be a problem. This was the first time in 16
quarters that HDI did not raise guidance.

After the bell today Motorola beat estimates by three cents
and said sales of its mobile phones were stronger than expected
and margins were also better. Will wonders never cease? Handset
shipments were up +27% over the Dec-2001 quarter. MOT was up
+35 cents in after hours.

Other stocks making news in after hours were RFMD who beat
estimates but guided down . CDN also lowered guidance for the
first quarter. SANM guided inline to slightly lower. However
there were many more companies that beat, affirmed or upgraded
guidance tonight. UIS, CFO, VISG, PCLE, PSEM, JDAS, HTCH, OPWV,
SGI, OAKT, AV, LM, MXO, CKFR, ELON, MCK, MVSN, PXLW. It would
almost seem that the tech sector had miraculously revived and
the MOT earnings are going to be the rally cry.

Also after the bell tonight the December Semiconductor Book-to-
Bill report came in much stronger than expected at .98. This
was up from .80 last month. While it is too early to see this
as a revival of the semiconductor sector it is encouraging.
The orders are about flat with shipments and that could be
seen as a stabilization of the sector. Tech bulls are sure to
grab on to this like a lifeboat from the Titanic and proclaim
salvation from the rooftops. Then again maybe not. The BTB
report does not come out until 6:PM ET and many times it is
completely overlooked by the major news outlets and therefore
by traders as well.

It would not take much bullish tech sentiment to rescue the
Nasdaq. The index put in a remarkable display of strength
and traded in positive territory most of the day. This was
no small feat with the Dow doing the Titanic imitation and
slipping beneath the 8600 and then 8500 waves.

Reviving the Nasdaq would take traders willing to commit
money in the face of a four day Dow sell off. Lipper reported
today that $10 billion in cash was withdrawn from stock funds
in 2002 and the first year with a net withdrawal since 1988.
They also reported that $130 billion was deposited into bond
funds for the same period. That was also a record. This was
repeated numerous times during he day along with the threats
about Iraq and the result was all 30 Dow stocks finishing in
the red.

The continued bad news from Venezuela is also depressing the
markets. American companies are closing locations and shutting
doors to protect employees from the increasing rioting. Today
Bush sent two more aircraft carrier battle groups and 100,000
more troops to the gulf. With the Monday deadline at the UN
there is a very good possibility the rhetoric is going to
increase.

We are setting up for a sentiment tug of war between tech
bulls acting on perceived good news tonight and economic bears
acting on oil, war and economic fears. The Dow at 8443 is about
100 points away from strong support at 8350. The Nasdaq at
1364 is only a few ticks away from support at 1361. Stronger
support is about -30 points below that. While I do not think
the economy has changed much in the last week the selling has
been too much too fast and I expect a rebound before eventually
breaking that 8350/1331 support. I expect any bounce to fail in
the 8600/1400 range as the UN deadline gets closer. Traders
should realize that the next week could be very volatile and
they should only be in the market if they are willing to take
the risk. After the 28th the war direction/timing should be
known and the market should be done with earnings. Will a new
trend begin then? Nobody knows but there will be much less
uncertainty in the market place. Until then be cautious traders
and be prepared for big swings in prices. The 2.33 TRIN at
the close plus the MOT news should be good for a few points
at the open but don't expect them to last forever.

Enter Very Passively, Exit Very Aggressively!

Jim Brown
Editor


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

Insatiable
by Steven Price

That sentiment change I talked about last week has so far
continued through earnings season.  Positive results have been
met with selling, as investors take a "that's all" approach.  It
is no coincidence that we reached a top around Dow 8800, which
was strong resistance over the last several months.  We did tick
over that level on a closing basis for a day, but it appears that
it was nothing but an ideal shorting opportunity.

We got upside earnings surprises from three Dow components this
morning: Citigroup, 3M and Johnson and Johnson, as well as Ford,
which is not a Dow component, but is still one of the NYSE's
largest stocks.  None of the results were enough to boost the
markets.  We did get a brief run in the morning, but that run
eventually sold off to levels not seen since the beginning of the
January rally.

On top of the positive earnings results, we also got housing data
that indicated the housing market remains strong. New home
construction continued its upward trend, reaching a 16-year high
in December.  Building permits for single-family homes also set a
record. New starts rose 5% to an annual rate of 1.8 million,
while single family starts rose a similar amount to 1.47 million,
the most in 24 years. The numbers certainly sound impressive,
however, the Dow Jones Home Construction Index (DJUSHB) showed a
very lukewarm reaction, losing 2.31 points on the day.  That
reaction would seem to mirror the results of an informal survey I
took among our readers.  After seeing home prices drop in what is
considered one of the hotter markets in the Denver area, I asked
readers to email in their observations of what they saw around
them.  While there were several readers that reported strong
sales and firm prices, the overwhelming majority reported homes
that took longer to sale and a lack of appreciation in value over
the last several months.  The responses came from just about
every part of the country, including Northeast, West Coast,
Midwest, Southwest, Southeast and South.  The strongest sales
were in central California and New York, while everyone else
expressed concerns.

The point and figure charts are confirming what we are seeing
across the daily charts.  We got PnF sell signals last week in
the SPX (905) and OEX (457.50), which were confirmed with a sell
signal in the Dow (8550) today. Bears should beware, however, of
adding to short positions at this level.  In fact, the Dow and
SPX have fallen so far (currently 8442 and 887.62) that they are
now sitting right on bullish support lines, which sit at Dow 8400
and SPX 885. If we are going to get an oversold bounce, these are
the levels it is likely to come from.

The one sector that did not participate in today's sell-off was
the tech sector.  The Nasdaq Composite and NDX both spent much of
the day in the green after Friday's big drop.  However, after an
intraday rebound of 10 points in the COMP, the techs eventually
rolled over into the red, registering a loss of 12 points in the
COMP and 8.65 in the NDX.  While it was not a big percentage loss
and much less than the Dow, the fact that the bounce could not
hold after a drop of almost 50 points on Friday spells more
bearishness in the near future.  Even IBM could not hold a bounce
after losing almost $5 on Friday and ended in the red by $0.76.
While IBM is not a Nasdaq stock, it does reflect general
sentiment for the tech sector and right now that sentiment is
anything but positive.

The Market Volatility Index (VIX) seems to have been a reliable
indicator, recently bottoming out at 26. A drop in the VIX
usually results from a rally in the equities and vice-versa. That
26 level is the same support reached in late November, just
before the December swoon, indicating the end of that rally.  The
drop to 26 seemed to indicate the rally rubber band had stretched
to its full length again last week and has now begun to pull back
decisively.  The recent resistance comes at 35 and with a current
reading of 30.53, and the VIX on the way up, the indication is
that the sell-off has some room to run. The 30 level had provided
support on recent drops, but downside fear took over and there
were no apparent premium sellers there today to replace support
with resistance.  The true test now that we broke back above 30
is to look for support there if we get a market bounce tomorrow.


With the broad market indices sitting at bullish support,
following a drop of 400 Dow points and 44 SPX points, traders can
look for some type of bounce.  However, given the recent market
reaction to positive news, the most prudent action may be
shorting the bounce if it runs out of steam around previous
resistance levels.  Look for resistance in the SPX at
900/905/910, in the Dow at 8550/8600/8700, and in the COMP at
1400/1426.
-----------------------------------------------------------------

Market Averages

DJIA ($INDU)

52-week High: 10673
52-week Low :  7197
Current     :  8443

Moving Averages:
(Simple)

 10-dma: 8731
 50-dma: 8598
200-dma: 8696

S&P 500 ($SPX)

52-week High: 1176
52-week Low :  768
Current     :  887

Moving Averages:
(Simple)

 10-dma:  916
 50-dma:  906
200-dma:  943

Nasdaq-100 ($NDX)

52-week High: 1734
52-week Low :  795
Current     : 1008

Moving Averages:
(Simple)

 10-dma: 1061
 50-dma: 1047
200-dma: 1052
-----------------------------------------------------------------

The Dow Jones Home Construction Index (DJUSHB The home-builders
got some good news this morning, with housing starts setting
multi-year highs.  Single-family home permits reached their
highest levels in more than twenty years.  However, with the
economy still weak, investors are growing weary of these stocks
and a market that seems to be looking a little "toppy."  After an
impressive gain over the last few weeks, as well as a breakout
over resistance at 330 on Thursday, the news was not enough to
prevent losses in the sector. Certainly, part of the problem was
a sinking broader market that brought down all boats, but the
DJUSHB is approaching additional significant resistance at 340
and traders should be careful about getting too excited over the
results.

52-week High: 397
52-week Low : 260
Current     : 328

Moving Averages:
(Simple)

 21-dma: 318
 50-dma: 308
200-dma: 331
-----------------------------------------------------------------

Market Volatility

The VIX bounce from support at 26 was one of the more reliable
indicators that the market was ready to rollover.  With a move
over resistance at 30, and the next level of resistance at 35, we
could still have another leg down in the equities if history
repeats itself. Traders looking for an edge in predicting the VIX
can look at the exp. 100-dma, which has capped the last 5 VIX
rallies and sits at 32.83.  I suggested long straddles a week ago
for traders looking to get in at the VIX support level, with the
market up against resistance at 8800.  Those straddles should
have performed nicely by now, with a 400-point Dow sell-off and
the VIX back over 30.  Traders who are long both calls and puts
from that suggestion may want to think about either selling the
position, or buying long shares of the underlying product (DIA or
SPY) on a 1 for 1 basis against the long puts, in order to lock
in some profits ahead of a market bounce.

CBOE Market Volatility Index (VIX) = 30.53 +1.85
Nasdaq-100 Volatility Index  (VXN) = 43.24 +0.40
-----------------------------------------------------------------

          Put/Call Ratio  Call Volume   Put Volume

Total          0.53        707,333       375,386
Equity Only    0.43        610,583       261,619
OEX            0.71         17,188        12,180
QQQ            1.18         22,178        26,183
-----------------------------------------------------------------

Bullish Percent Data

           Current   Change   Status
NYSE          52.2    + 0     Bull Confirmed
NASDAQ-100    61.0    - 2     Bull Confirmed
Dow Indust.   60.0    + 0     Bull Confirmed
S&P 500       61.1    + 0     Bull Correction
S&P 100       61.0    + 0     Bull Confirmed

Bullish percent measures the number of stocks in an index
currently trading on a buy signal on their point and figure
chart.  Readings above 70 are considered overbought, and readings
below 30 are considered oversold.

Bull Confirmed  - Aggressively long
Bull Alert      - Cautiously long
Bull Correction - Pause or pullback in upward trend
Bear Alert      - Take defensive action if long
Bear Confirmed  - High risk if long, good conditions for shorting
Bear Correction - Pause or rebound in downtrend
-----------------------------------------------------------------

 5-Day Arms Index  1.65
10-Day Arms Index  1.30
21-Day Arms Index  1.36
55-Day Arms Index  1.28


Extreme readings above 1.5 are bullish, and readings below .85
are bearish.  These signals don't occur often and tend be early,
but when they do, they can signal significant market turning
points.
-----------------------------------------------------------------

Market Internals

        Advancers     Decliners
NYSE        835          2057
NASDAQ     1163          2008

        New Highs      New Lows
NYSE         85              36
NASDAQ       74              35

        Volume (in millions)
NYSE       1,564
NASDAQ     1,343
-----------------------------------------------------------------

Commitments Of Traders Report: 01/14/02

Weekly COT report discloses positions held by small specs
and commercial traders of index futures contracts at the
Chicago Mercantile Exchange and Chicago Board of Trade. COT data
can be found at www.cftc.gov.

Small specs are the general trading public with commercials being
financial institutions. Commercials are historically on the
correct side of future trend changes while small specs tend
to be wrong.

S&P 500

Commercials left positions mostly unchanged with a small
reduction to the short side.  Small traders reduced the long side
by 1,000 contracts, while adding 9,000 contracts to the short
side.

Commercials   Long      Short      Net     % Of OI
12/23/02      408,592   467,259   (58,667)   (6.7%)
12/31/02      410,968   462,782   (51,814)   (5.9%)
01/07/03      411,542   455,538   (43,996)   (5.1%)
01/14/03      411,052   453,164   (42,112)   (4.9%)

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

Small Traders Long      Short      Net     % of OI
12/23/02      138,756    58,236    80,520     40.9%
12/31/02      139,383    75,640    63,743     30.0%
01/07/03      143,169    83,895    59,274     26.1%
01/14/03      144,182    92,358    51,824     21.9%

Most bearish reading of the year:  36,513 - 5/01/01
Most bullish reading of the year: 114,510 - 3/26/02

NASDAQ-100

Commercials added slightly to the long side, while reducing short
positions by 3,000 contracts.  Small traders added 1,000 to the
 long side and left shorts virtually unchanged.

Commercials   Long      Short      Net     % of OI
12/23/02       32,067     44,451   (12,384) (16.2%)
12/31/02       31,399     44,387   (12,988) (17.1%)
01/07/03       37,966     48,156   (10,190) (11.8%)
01/14/03       38,057     45,060   ( 7,003) ( 8.4%)

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

Small Traders  Long     Short      Net     % of OI
12/23/02       17,009     5,865    11,144    49.0%
12/31/02       19,841     5,009    14,832    60.1%
01/07/03       19,708     8,453    11,255    40.1%
01/14/03       20,757     8,320    12,437    42.8%

Most bearish reading of the year: (10,769) - 06/11/02
Most bullish reading of the year:  14,832  - 12/31/02

DOW JONES INDUSTRIAL

Commercials added slightly to both sides, with a net 500 contract
ncrease on the long side. Small traders reduced long and short
positions slightly.

Commercials   Long      Short      Net     % of OI
12/23/02       14,991    11,103    3,888      14.9%
12/31/02       15,940    11,253    4,687      17.2%
01/07/03       16,210    11,333    4,877      17.7%
01/14/03       17,804    12,427    5,377      17.8%

Most bearish reading of the year: (8,322) -  1/16/01
Most bullish reading of the year: 15,135  - 10/16/01

Small Traders  Long      Short     Net     % of OI
12/23/02        4,584     6,296    (1,712)   (15.7%)
12/31/02        4,997     6,553    (1,556)   (13.5%)
01/07/03        4,963     8,334    (3,371)   (25.4%)
01/14/03        4,552     7,697    (3,145)   (25.7%)

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


===============
PLAY-of-the-Day  ((new BEARISH tech play))
===============

Expedia Inc. - EXPE - close: 63.61 change: -2.57 stop: *text*

Company Description:
Expedia is the world's leading online travel service and was the
eighth largest travel agency in the United States in 2001.
Expedia is a majority-owned subsidiary of USA Interactive
(source: company press release)

Why We Like It:
Shares of Expedia suffered a painful downward gap on January 6th.
The catalyst for this decline was an earnings warning from
competitor Hotels.com (ROOM), who said that a downturn in hotel
occupancy had taken its toll on the bottom line.  EXPE derives a
large chunk of its revenue from selling lodging reservations over
the internet, so it's easy to see why investors were unnerved by
the indications of a hotel industry slump.  The other major
source of business for Expedia is discount airfares.  This sector
is facing some major problems as well.  To wit: The XAL.X airline
index tanked by more than 5% today after Northwest Airlines
(NWAC) reported a quarterly loss of $2.55 per share.  Analysts
had expected a loss of only $2.14 per share.  NWAC's abysmal
numbers bode ill for tomorrow's earnings announcement from AMR,
the world's largest airline.  The sector is in a nosedive and it
doesn't look like it's going to recover anytime soon.  This is
not good news for Expedia.  A sharp downturn in air traffic would
be disastrous for the company.  But with the hotel business
already looking weak, even a small reduction in airfare sales
could have a very adverse impact on the bottom line.  Poor
results from AMR (who announces during the market) would only
underscore these challenges.

On a technical basis, EXPE looks poised to extend its multi-month
downtrend.  Broader market strength helped the stock to fill in a
portion of the January gap before the bears re-emerged at the
descending 21-dma.  After a few days of following the NASDAQ
lower, today's negative airline news sent EXPE down to its 200-
dma at $63.40.  A violation of this moving average would clear
the way for a possible test of the January 6th low of $60.36.
And what if THIS level fails?  That's when things could really
start to get interesting.  The daily chart shows no clear support
until $55.00, with the large October 24th gap just begging to be
filled.  Although we'll initially target a move to the $55.00
area, longer-term traders could look to ride EXPE down to $50.00.
The steep October/November gains could be retraced in a very
rapid fashion if bad news continues to plague the travel group.
Our action trigger for EXPE will be placed at $63.37, just below
the descending 200-dma.  If the play is activated we'll attempt
to limit our upside risk with a stop at $68.01.  More
conservative traders could use a stop slightly above the 21-dma
at $66.94.

Picked on January xxth at $xx.xx <- see text
Results since picked:      +0.00
Earnings Date           02/05/03 (confirmed)







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Copyright ) 2003  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter                  Tuesday 01-21-2003
                                                    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
  New Bearish Plays:     EXPE
  Bullish Play Updates:  BBH

Stock Bottom / Active Trader
  Bullish Play Updates:  BSX, CI, RJR
  Bearish Play Updates:  CTAS, DLX
  Closed Bullish Plays:  SYK

High Risk/Reward
  Bearish Play Updates:  ERTS

Trading Ideas
  Value Plays With Bullish Signals
  Breakout to Upside (Stocks $5 to $20)
  Breakout to Upside (Stocks over $20)
  Breakout to Downside (Stocks over $20)
  Recently Overbought With Bearish Signals (Stocks over $20)


==================================================================
Net Bulls (NB) Tech Stock section
==================================================================

============
NB New Plays
============

  -----------------
  New Bearish Plays
  -----------------

Expedia Inc. - EXPE - close: 63.61 change: -2.57 stop: *text*

Company Description:
Expedia is the world's leading online travel service and was the
eighth largest travel agency in the United States in 2001.
Expedia is a majority-owned subsidiary of USA Interactive
(source: company press release)

Why We Like It:
Shares of Expedia suffered a painful downward gap on January 6th.
The catalyst for this decline was an earnings warning from
competitor Hotels.com (ROOM), who said that a downturn in hotel
occupancy had taken its toll on the bottom line.  EXPE derives a
large chunk of its revenue from selling lodging reservations over
the internet, so it's easy to see why investors were unnerved by
the indications of a hotel industry slump.  The other major
source of business for Expedia is discount airfares.  This sector
is facing some major problems as well.  To wit: The XAL.X airline
index tanked by more than 5% today after Northwest Airlines
(NWAC) reported a quarterly loss of $2.55 per share.  Analysts
had expected a loss of only $2.14 per share.  NWAC's abysmal
numbers bode ill for tomorrow's earnings announcement from AMR,
the world's largest airline.  The sector is in a nosedive and it
doesn't look like it's going to recover anytime soon.  This is
not good news for Expedia.  A sharp downturn in air traffic would
be disastrous for the company.  But with the hotel business
already looking weak, even a small reduction in airfare sales
could have a very adverse impact on the bottom line.  Poor
results from AMR (who announces during the market) would only
underscore these challenges.

On a technical basis, EXPE looks poised to extend its multi-month
downtrend.  Broader market strength helped the stock to fill in a
portion of the January gap before the bears re-emerged at the
descending 21-dma.  After a few days of following the NASDAQ
lower, today's negative airline news sent EXPE down to its 200-
dma at $63.40.  A violation of this moving average would clear
the way for a possible test of the January 6th low of $60.36.
And what if THIS level fails?  That's when things could really
start to get interesting.  The daily chart shows no clear support
until $55.00, with the large October 24th gap just begging to be
filled.  Although we'll initially target a move to the $55.00
area, longer-term traders could look to ride EXPE down to $50.00.
The steep October/November gains could be retraced in a very
rapid fashion if bad news continues to plague the travel group.
Our action trigger for EXPE will be placed at $63.37, just below
the descending 200-dma.  If the play is activated we'll attempt
to limit our upside risk with a stop at $68.01.  More
conservative traders could use a stop slightly above the 21-dma
at $66.94.

Picked on January xxth at $xx.xx <- see text
Results since picked:      +0.00
Earnings Date           02/05/03 (confirmed)





===============
NB Play Updates
===============

  --------------------
  Bullish Play Updates
  --------------------

Biotech HOLDRS - BBH - close: 90.60 change: -0.80 stop: 86.94

The biotech group was relatively quiet today, especially compared
to last week's action.  Many sector traders are already focusing
on the Thursday evening earnings announcement from Amgen.  With
no major news within the group, the Biotech HOLDRS were left at
the whim of the broader market.  Shares underperformed the NASDAQ
but mirrored the Dow Jones with a loss of 1.7%.  Helping to drive
the stock lower was another 2.7% decline in shares of Biogen
(BGEN), which continued to move lower following the recent
positive AMGN news (see Friday's update).  Technically, the
descending oscillators suggest that the BBH may test its 50-dma
at $88.29.  We'd expect this moving average to provide support if
shares do head lower.  However, the bears will first have to
contend with the $90.00 level.  This area has put a floor under
the stock on multiple pullbacks over the past week.  We aren't
anticipating any large moves over the next two trading days, as
investors continue to look forward to Amgen's announcement.
We'll reassess this play after the report is released.

Picked on January 16th at $92.12
Results since picked:      -1.52
Earnings Date                N/A






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

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

  --------------------
  Bullish Play Updates
  --------------------

Boston Scientific - BSX - cls: 44.06 chg: -1.71 stop: 42.22

Tuesday proved to be quite an eventful day for BSX.  We'll take
it from the top.  The session started off on a bullish note as
shares gapped higher and pegged a new multi-year high of $46.82.
Investors appeared to be applauding Monday's FDA approval of
Boston Scientific's heartburn treatment device.  However, this
news wasn't enough to take the stock above $47.00.  You'll recall
from previous updates that we've been expecting these 1999 highs
to provide resistance.  Nimble short-term traders may have been
able to take profits before shares moved back towards $46.00.
The stock gravitated towards this level until about 12:30 EST,
when BSX announced its preliminary fourth-quarter results.  The
company reported EPS income of 31 cents, which was in-line with
analyst estimates.  Shares initially spiked down on the news but
quickly moved back into positive territory.  That's plenty of
action for one day, but there was more news to be had before the
closing bell.  Shortly after 2:00 EST, word came from Europe that
the EU had green-lighted Boston Scientific's Taxus drug-coated
heart stent.  Sounds like a positive development, doesn't it?
However, the stock traded contrary to expectations and actually
sold off on the news.  The fact that shares traded lower on an EU
approval of one of their key products indicates that this news
had already been priced in.  There was also speculation on CNBC
that investors may have frowned on some forward-looking
statements contained in the preliminary report.  The final Q4
earnings announcement will be made on February 4th.  Glancing at
a 15-minute chart, we see that BSX has moved back to the $43.50-
$44.00 area of congestion.  Traders looking to reduce downside
risk could use a stop slightly below this region of likely
support.  We're maintaining our stop at $42.22, under the 50-dma.

Picked on December 20th at $44.01
Results since picked:       +0.05
Earnings Date            02/04/03 (confirmed)




---

Cigna Corp. - CI - close: 45.17 change: -1.06 stop: 42.44

Shareholders of CI came back from the extended weekend in a
decidedly bearish mood.  The stock moved sharply lower during the
first 90 minutes of trading and quickly tested short-term support
near $42.30.  There was no company-specific news to explain the
early weakness.  CI firmed up after the initial decline and
headed higher during the middle of the session, despite a steady
drift lower in the Dow Jones.  Unfortunately the sinking broader
market eventually eroded away at the mid-day gains, ultimately
dragging the stock to a 2.2% loss.  Pulling back to a daily
chart, $45.00 continues to be the key level to watch.  We'll be
looking for this area, which previously acted as resistance, to
now provide support.  We think CI will be well-positioned to
reach new relative highs as long as it remains above $45.00.  At
this time conservative traders may want to place their stops
slightly below last week's low of $44.13.  Our stop remains set
at $42.44.  Speculative traders could consider entering long
positions on a rally from current levels.

Picked on January 14th at $45.01
Results since picked:      +0.16
Earnings Date           02/07/03 (confirmed)




---

RJ Reynolds - RJR - close: 46.55 change: -0.38 stop: 42.98

First things first...On Friday we mentioned that RJR appeared to
have moved their earnings to January 28th.  This information was
confirmed today - RJ Reynolds will announce their quarterly
results before the market opens next Tuesday.  We believe this is
good news for our long play.  RJR has been marching steadily
higher, and with another week before earnings we may have a
better shot at achieving our upside objective of $49.94.  Shares
traced a higher high for the seventh consecutive session on
Tuesday morning before moving lower with the overall market in
late-afternoon trading.  Bulls can be encouraged by the fact that
RJR outperformed both the Dow Jones and its arch-enemy MO, which
finished with a more substantial 1.4% loss.  Shares closed above
very short-term support at $46.15, well within range of new
multi-month highs.  Of course after several days of gains it also
wouldn't be surprising to see more profit-takers come out of the
woodwork.  If this is the case, short-term traders can continue
to watch for a pullback to the $45.00 area to provide an entry
point.

Picked on January 15th at $45.33
Results since picked:      +1.22
Earnings Date           01/28/03




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

Cintas Corp. - CTAS - close: 42.63 change: -0.63 stop: 45.01 *new*

There was zero news to report on for CTAS over the long weekend and
today.  Given the broader market's weak performance, shares of CTAS
were left to fend for themselves and the prevailing trend took over.
The stock has reached an area of potential congestion and we would not
be surprised to see a short-term oversold bounce at the $42 mark.  An
entry point at this time could be somewhat tricky to execute.  A failed
rally at the $44-$45 level would be the most enticing but we don't
believe the stock will have enough strength to get there on its own.
Considering the rapid decline we are going to set an official exit
price on this play.  Shares of CTAS have bounced just this side of the
$40 mark several times since July.  Therefore our official exit point
will be $40.26.  Please note that we have lowered our stop by another
50 cents to $45.01.  Premier is currently up 4% in the play.

Picked on January 17th at $44.49
Results since picked:      +1.86
Earnings Date:          12/19/02 (confirmed)




---

Deluxe Corp. - DLX - close: 39.23 change: -0.59 stop: 41.34

The decline in shares of Deluxe Corp looks ready to pick up steam.
Shares tried to rally early on but were rebuked at the $40 mark.  Then
later in the day when the Dow Industrials and the S&P 500 attempted
their own rally DLX actually managed to break the $40 mark and trade to
$40.15.  This was to be the high for the day and the rally failed.
Volume was pretty strong at 615,000 shares.  Per our update on Friday,
DLX is still offering traders an entry point for new bearish positions.
We would still expect a potential (short-term) bounce at $38 but our
profit target remains in the $35 area (this could take a couple of
weeks to reach).  Don't forget that DLX is to announce earnings on
Thursday, Jan. 30th.  Premier is currently up 4.9% in the play.

Picked on December 4th at $41.28
Results since picked:      +2.05
Earnings Date           01/30/03 (confirmed)





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

  --------------------
  Closed Bullish Plays
  --------------------

Stryker Corp - SYK - close: 66.41 change: -0.74 stop: 66.74

Time to let this one go.  The recent trading in SYK was
characterized by a lack of direction and general sideways
movement.  The bulls had put up a valiant defense of support at
$67.00 but finally succumbed to the overall weakness in the
equity market on Tuesday.  This play was closed for a loss of
2.7% when shares violated our stop at $66.74 during the final
hour of trading.  Looking at a daily chart, it appears as if SYK
might be headed for a test of the 50-dma at $65.67.  Although the
oversold daily stochastics are hinting that the recent downtrend
could be coming to an end, today's breakdown below $67.00 is not
an encouraging development for the bulls.  Traders still holding
long positions also need to remember that Stryker announces
earnings on January 27th.

Picked on January 3rd at $68.26
Results since picked:     -1.85
Earnings Date          01/27/03 (confirmed)






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

===============
HR Play Updates
===============

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

Electronic Arts - ERTS - close: 49.67 change: +1.72 stop: *text*

Just as ERTS looked ready to sink to fresh 52-week lows, a pair
of positive brokerage comments gave the bulls a lifeline this
morning.  Shares were buoyed by an upgrade from Piper Jaffray
(who cited a 7% increase in December videogame sales) and a note
out of Lehman Brothers that suggested ERTS is undervalued at
current levels.  Interesting timing, isn't it?  A slightly
cynical trader might think that the firms are looking to protect
long positions following Friday's breakdown below critical long-
term support at the 200-week moving average.  While we don't
believe their actions were driven by anything but pure
fundamental analysis, the comments were enough to put the bears
on the defensive for the entire session.  Shares gapped higher
and never approached our entry trigger at $47.49.  ERTS cleared
psychological resistance at $50.00 but wasn't able to hold above
that level while the broader market slid steadily lower.  For the
time being we'll keep our action trigger in place.  The multi-
week downtrend is still intact and the $50.00 area should
continue to challenge the bulls.  However, we may alter our
strategy if ERTS rallies a little higher and rolls over from the
21-dma at $51.00.  Shares have not closed above this moving
average since early-December.

Picked on January xxth at $xx.xx <- see text
Results since picked:      +0.00
Earnings Date           01/29/03 (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

NTAI    Nam Tai Electronics        31.90     +1.04

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

KNSY    Kensey Nash Corp           19.99     +1.93
SIFY    Sify Ltd                    5.29     +1.17
SOHU    Sohu.com                   10.00     +1.28

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

KRI     Knight-Ridder              65.38     +1.37
BEC     Beckman Coulter            31.24     +2.06

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

ROAD    Roadway Express            34.73     -1.70
PII     Polaris Industries         52.99     -2.30
VIA.B   Viacom Inc                 39.13     -2.13
YELL    Yellow Corp                23.92     -2.23
SLB     Schlumberger Ltd           38.75     -1.96
NUE     Nucor Corp                 40.23     -2.46
MHK     Mohawk Industries          53.00     -1.30
MAY     May Department Stores      21.99     -1.21
UN      Unilever N.V.              57.44     -1.93
WTW     Weight Watchers Intl.      39.75     -1.86
LF      Leapfrog Enterprises       23.18     -1.07

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

KRON    Kronos Inc                 41.73     -0.73
OSK     Oshkosh Truck Corp         61.84     -2.05




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