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Daily Newsletter, Thursday, 01/23/2003

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PremierInvestor.net Newsletter                 Thursday 01-23-2003
                                                    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:      Telecom Bounce, Telecom Drop
Play-of-the-Day:  Returning To the Well
Market Sentiment: Do Over


************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
      01-23-2003           High     Low     Volume   Adv/Dcl
DJIA     8369.47 + 50.70  8386.61  8255.86 2.01 bln 2033/1201
NASDAQ   1388.27 + 28.80  1388.27  1377.50 1.49 bln 1902/1399
S&P 100   450.70 +  5.03   452.34   445.27   Totals 3935/2590
S&P 500   887.34 +  8.98   890.25   876.89
W5000    8405.68 + 83.60  8429.05  8311.22
RUS 2000  383.71 +  3.18   384.39   380.22
DJ TRANS 2230.77 + 17.10  2236.56  2211.52
VIX        30.97 -  1.04    33.22    30.42
VXN        43.27 -  0.89    45.20    42.56
Total Volume 3,700B
Total UpVol  2,693B
Total DnVol    953M
52wk Highs  210
52wk Lows   126
TRIN       0.87
PUT/CALL    .68
*************************************************************

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

Telecom Bounce, Telecom Drop

The market was poised to open up this morning on the stronger
than expected earnings news from QCOM, TXN and NOK. Just as
the opening appeared to be a shuttle launch AT&T announced
earnings that missed by a mile and the Telecom bounce turned
into a retest of the Dow's December lows.

Dow Chart - Daily


Nasdaq Chart - Daily


Adding to the negative earnings announcements before the open
was news that Jobless Claims rose again last week. There was
only a +18,000 gain to 381,000 but it showed that the holiday
pause in the layoffs was over. Continuing claims also rose to
3,408,000 despite expiring benefits for many workers. Jobless
claims should actually be dropping as employers hire workers
to replace soldiers called up for Gulf duty. The pace of
layoffs is still increasing with corporations announcing
426,000 layoffs in the 4Q compared to 269,000 in the 3Q.
Nearly two million workers have now been out of work from
6 to 12 months.

Helping hold up the market was the Leading Indicators which
rose +0.1% to 111.3. This was the third consecutive monthly
gain however slight. The gain today was the total gain for
the last six months which indicates how fragile this recovery
really is.

The really significant news that shook the market was earnings
related. AT&T shocked investors with a loss of -79 cents a
share compared to a loss of -31 cents a year ago. Revenue
is dropping fast and they said it would continue in 2003
but at a slower rate. The stock dropped from yesterday's
close at $25.29 to $19.50 in early trading. This was a
huge deficit for the Dow to overcome and AT&T kept it in
the cellar most of the day. AT&T said it would no longer
provide forward guidance and joined a growing group of
companies who would rather release no news than bad news.

Adding to the Dow problems was an earnings miss by another
telecom, BellSouth. BLS missed earnings by a penny. The
results by BLS and T knocked -$1.40 off Dow component SBC.
Also hurting the Dow was the first ever quarterly loss by
McDonalds. The company pulled out of three foreign markets
and was closing 719 outlets. The loss included an -$810
million charge related to store closures. The current fast
food price war as well as healthier eating habits are
taking a bite out of the big Mac. They also lowered growth
prospects going forward.

CAT, another Dow component, beat estimates but lowered
its outlook for 2003. They expect profits to drop -5%
on flat revenue.

KRB, a prime credit lender which operates at the opposite
end of the spectrum from COF and PVN reported its first
loss since 1993 due to higher charge offs and repossessions.
We have been reporting for months that auto repossessions
were soaring as much as 50% in some areas as unemployment
made it tough to keep up those payments. KRB is feeling
the heat. KRB said it may be forced to slow loan growth
especially in its consumer division which makes home repair
and college tuition loans. They said the economy and the
market has been bad for so long that even the better credits
are starting to "fray" around the edges.

After the bell today AMZN reported earnings that beat the
street's estimates by four cents. The stock traded down in
after hours after comments about potential 2003 earnings.
The company said it was going to keep the free shipping
for orders over $25 as a permanent feature and they were
going to lower prices across the board again. This was
expected to raise revenues by as much as 30% for the year
but reduce profits by -8%. Since this was only the second
quarter ever that they made a profit analysts were
disappointed and expressed concern that the business model
was never going to work. You can't keep raising costs and
reducing prices forever to capture customers. Eventually
you have to make a profit to keep the doors open. I had
a lot of email about my editors play on AMZN last Sunday.
Evidently many other investors felt the same way.

KLAC also reported earnings that beat the street by a penny
and said current orders were "roughly" the same as the last
quarter. Analysts are currently forecasting a -9% drop in the
current quarter. BRCM posted a 4Q loss of about -$2 billion
including charges for prior acquisitions and the CEO resigned.
Without charges the loss amounted to -2 cents a share and
inline with analyst's estimates. They said they expected to
post a penny profit in the current quarter. Needless to say
these two earnings reports are not going to energize the chip
sector tomorrow. The SOX has tried unsuccessfully for three
days to break above 300 again.

Thursday was a big earnings day with 10% of the S&P reporting.
206 S&P companies have now confessed and the guidance is
shaping up like this. 40% of companies are giving guidance
inline with estimates, which is not really exciting. 20%
have raised guidance for the current quarter. Here is the
kicker, 40% have warned going forward. That 2:1 warn:raise
guidance is very disturbing. Analyst estimates for 2003
are dropping fast. On Oct 1st analysts were expecting +17.4%
earnings growth for 2003. On January 1st it had dropped to
only +11.7% for the year. As of today the estimates have
dropped into the single digits at +9.8% for the year. This
means that the end of year rally on +17% earnings growth
expectations is very overdone at +9.8% and dropping.

The war update for the day came in the form of another
"running out of time" speech by Colin Powell. The emphasis
was on "if we decide to act we will act with or without
the UN or willing partners." Sounds like a warning that
next week the war will be announced regardless of the UN
report. Hans Bliz also got some more face time with news
of Iraq road blocks to the inspectors including things
like refusing to let the helicopters take off once the
destination was known. Iraq police dressing up as scientists
and posing for interviews and acknowledgement from several
sources that Saddam has promised to kill any scientist who
talks to inspectors and his family. Whether you believe
these reports or not the rhetoric is increasing and we all
know what the end result will be.

Late this afternoon there was news out of Korea that they
would work toward diplomatic resolution of the nuclear
problem. The market spiked up slightly, just enough to
stop me out of a short signal on the futures monitor, then
it sold off again. The headline caught attention but the
reality was that nothing changed. South Korea is simply
trying to keep North Korea and the U.S. from starting a
fight that would involve the South.

The Dow gained +50 points! Cheers and backslapping was
could be seen on the trading floor. You would have thought
the new bull market had begun. In reality all we got was
a wimpy bounce after a retest of the December lows. We
got a +50 point rebound after a five day -600 point drop.
Am I being too bearish? My thought process after a -600
point drop to major support is a V bottom rocket on heavy
volume, IF it is really the bottom. Instead we stopped
well below yesterday's resistance on the Dow and the
Nasdaq rolled over right on schedule at 1391 again.

The Dow dropped to 8255, only +13 points above the
December lows and the last major line on the chart
before a potential retest of the October lows at 7197.
Yes, 7197. Very few traders actually expect it to drop
that far but should 8242 fail it could be a quick trip.
Do not discount this possibility because it is very
real. Maybe not 7197 but somewhere below 8242 is a
chart point waiting for us.

Tomorrow has no major economic reports. The markets will
be left to react to earnings from a reduced slate of
35 companies, most of which I have never heard of.
There will be the required smattering of IRAQ news
and posturing for next weeks events. I don't see it as
being a wildly bullish day. Dow gains, if any are likely
to stop at 8425 and Nasdaq gains at 1400. Many traders
will probably decide to go flat for the weekend with the
UN report on Monday, State of the Union on Tuesday and a
two day FOMC meeting ending on Wednesday. Keep your
seatbelt fastened. There could be some bumps ahead.

Enter Very Passively, Exit Very Aggressively!

Jim Brown
Editor


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

Forest Labs - FRX - close: 52.87 change: +1.01 stop: *text*

Company Description:
Forest Laboratories develops, manufactures, and sells ethical
pharmaceutical products that are used for the treatment of a wide
range of illnesses. Forest Laboratories' growing line of products
includes: Lexapro(TM), indicated as initial as well as
maintenance treatment of major depressive disorder; Celexa(TM),
an antidepressant; Tiazac., a once-daily diltiazem, indicated for
the treatment of angina and hypertension; Benicar(TM)*, an
angiotensin receptor blocker indicated for the treatment of
hypertension; and Aerobid., an inhaled steroid indicated for the
treatment of asthma. (source: company press release)

Why We Like It:
It's deja vu all over again!  PI readers will recall that we had
featured FRX as a bullish play ahead of the 2-for-1 stock split
in early-January.  Fearing a post-split depression, we closed the
play for a gain of roughly 5% before the dividend actually
occurred.  While FRX managed to continue higher for a few days,
our suspicions eventually proved to be correct.  Shares proceeded
to retrace all of the 2003 gains and fill in a portion of the
January 3rd gap.  This came in spite of a very strong third-
quarter earnings report that was two cents better than analyst
expectations.  Technically, it wasn't surprising to see some
profit-taking and consolidation - the stock had rallied nearly
20% in just one month.  Now that the post-split decline has taken
place, we think FRX will resume its winning ways.

On Thursday FRX spiked lower and moved below its 21-day and 50-
day moving averages.  Shares also violated a trend of higher lows
dating back to December.  The powerful rebound from these various
support levels is a very encouraging technical development.
Bulls can also be pleased with the daily stochastics (5,3,3),
which are just beginning to rise from oversold levels.  Similar
stochastic reversals have offered reliable buy signals in recent
months.  Investors might also be buying the stock in anticipation
of good news related to one of Forest Labs' experimental drugs.
On December 20th Forest Labs submitted to the FDA an application
for Memantine, an investigational Alzheimer's treatment.  The
government agency has 60 days from that date to decide whether it
will accept the filing for review.  Memantine holds a lot of
promise for FRX because it's the only drug that's shown positive
Phase III results in the treatment of moderate-to-severe
Alzheimer's disease.  With thousands of people suffering from the
disease, it's possible that the FDA could grant "fast-track"
status to Memantine in order to get the drug to market as quickly
as possible.  Actual approval of Memantine might not occur for
several months, but we suspect that investors would react
positively to news that the drug is up for review.

Our strategy for playing FRX is as follows: We'll activate this
hypothetical trade if shares move above today's high of $53.00.
If the play is triggered we'll use a stop at $49.74, slightly
under the bottom of the January 3rd gap.  Our initial upside
target will be the $60.00 region.  Shorter-term traders may want
to aim for the all-time highs near $56.00.  Given enough time, we
think shares will eventually move above this level.

Full Disclosure: Premier Investor analyst Jeff Bailey currently
holds a long position in Forest Labs.

Annotated chart - FRX:



Picked on January xxth at $xx.xx <-- see text
Results since picked:      +0.00
Earnings Date           01/16/03 (confirmed)





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

Do Over
by Steven Price

We got yet another look at the support level between Dow 8200 and
8300 that we tested as we closed out 2002.  One of the big
reasons for that support test was the earnings release from AT&T,
which almost doubled the expected losses for the fourth quarter.
The company recorded a loss of $0.79, versus expected and
expected loss of $0.40.  Those results were followed by a
downgrade from JP Morgan, which cited the company's poor outlook
for 2003.  On the flip side, Goldman Sachs upgraded the stock.
That upgrade, however, did little to soothe investors that
hammered the stock, which lost $4.83 on the day.  The other big
loser in the Dow, albeit to a smaller extent, was SBC
Communications, which fell in sympathy with AT&T.

This morning's economic data was slightly better than expected,
with a rise in weekly jobless claims to 381,000 coming in just
below expectations of 383,000.  The index of leading economic
indicators rose a slightly better than expected 0.1%, versus
expectations for a flat reading.  There were also gains in eight
of the ten components, although the two negatives were big ones
for the markets: unemployment claims and stock prices.

The techs actually saw green, with the COMP adding 28.79 points
and the NDX adding 26.16.  The COMP has fallen into the
congestion point that held it through much of December between
1350 and 1400, prior to the sell-off of the last two days of
2002. There were several large tech stock upgrades, including
EMC, Symantec (SYMC), Siebel Systems (SEBL) and PeopleSoft
(PSFT), which contributed to the rally.

After a drop of over 500 points in the Dow over the last five
days, some bounce could be expected.  However, as we continue to
set lower intraday lows, the head and shoulders pattern that has
appeared over the last several months gets closer to its neckline
down at Dow 8200.  The question will likely be just how high the
bounce can take us.  If we continue to find support in the 8200-
8300 range, with a top at around 8800, maybe we are simply seeing
a range bound market, rather than a bearish head and shoulders
pattern. However, if we do crack the neckline, which is really
more of an approximation depending on how it's drawn, the
measuring objective of the pattern will be somewhere around Dow
7500, where it can find support at the July sell-off low of 7532.
Most of the Dow stocks finished in the green, and the index shook
off the AT&T results to finish up 50 points on the day.   Part of
the reason for a late day surge came from an announcement that
North and South Korea had agreed to hold cabinet level talks to
resolve the issue of North Korea's nuclear weapons program.

Any rally has several factors working against it, which can be
seen on the point and figure charts.  First of all, the Dow and
SPX have both sunk far enough below their sell signals, which
came at 8550 and 905, to break through their bullish support
lines at 885 and 8,400.  The OEX has not yet broken through its
bullish support, but sits right on top of it at 447.50. Today's
rebound was certainly a positive sign, but not so strong as to
reverse these charts into bullish columns of "X."  After flipping
into columns of "O" at 8800 and 930, a bounce that cannot
establish at least a minor reversal is most likely insignificant.
Another factor on the point and figure charts is the bullish
percent. The bullish percent in the Dow has reversed down after
the rebound to 8800 failed and now sits in a column of "O" at
54%.  The SPX bullish percent looks similar, with a reversal down
to 58%. With plenty of room to fall until the bullish percents
reach oversold territory below 30%, there is little to stop the
fall, given most of the recent bearish responses to even positive
earnings results.  Most comments accompanying recent earnings
have been cautious for 2003 and are holding far more weight than
upside surprises for the final quarter of 2002.

If we get a sustained rally, which looks doubtful, traders can
look to see where it runs out of gas.  A failed rally below
recent resistance at Dow 8600/SPX 910/COMP 1400 may simply be
another shorting opportunity.  Until we get a breakout above or
below the Dow 8200-8900 range that has held us for most of the
past three months, we may simply be restricted to picking our
entry and exit points within that range.  It can still make for
some nice swings within that range, but entering at midpoints
should be done carefully with position sizes that reflect the
possibility of whipsaws.  For now the overall trend is down.

With no economic data due out on Friday, the market will be left
to digest earnings reports from Amazon, which beat estimates, but
gave mixed guidance going forward. Other companies that beat
forecasts include KLA-Tencor (KLAC), Microchip (MCHP) and Nortel
(NT).  NT also warned that first quarter 2003 revenues would be
lower than fourth quarter 2002.  There are several earnings
reports coming out tomorrow as well, but tonight's releases are
likely to set the tone.
-----------------------------------------------------------------

Market Averages

DJIA ($INDU)

52-week High: 10673
52-week Low :  7197
Current     :  8369

Moving Averages:
(Simple)

 10-dma: 8648
 50-dma: 8593
200-dma: 8876

S&P 500 ($SPX)

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

Moving Averages:
(Simple)

 10-dma:  910
 50-dma:  906
200-dma:  942

Nasdaq-100 ($NDX)

52-week High: 1734
52-week Low :  795
Current     : 1033

Moving Averages:
(Simple)

 10-dma: 1054
 50-dma: 1048
200-dma: 1049
-----------------------------------------------------------------

The Semiconductor Index (SOX): The chip stocks rallied along with
the rest of the techs today, but fell short of resistance in the
SOX at 300.  After the bell, MCHP beat earnings forecasts and
provided guidance for this quarter roughly in-line with
expectations.  AMCC also matched expectations. VSEA predicted a
much more profitable quarter than expected, saying it would earn
$0.10-$0.20 per share, versus expectations of a loss of $0.01.
KLAC, however, gave mixed guidance, saying net orders this
quarter would be flat, but overall 2003 spending on chip
equipment should be up by about 10%.  That's an awful lot of data
for traders top sort through and they can watch the 300
resistance level for an indication of just how well the market
reacts.  The SOX has failed at 301 on 2 of the last 3 days and
tomorrow should give us a better overall picture of whether 300
is our new ceiling in the sector.

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 finally settled down with today's overall market bounce.
It did, however, find support above 30, indicating that downside
fear is still alive and well. It traded as high as 33.22,
eventually failing the converging 200-dma and exp 100-dma, which
come in just below 33.  The exp 100-dma has capped the last three
VIX rallies, as well, although at the time it was closer to 35.
Look for a move under 30 to confirm renewed bullishness, but
given a one-day rally, following a five-day sell-off, that may
not happen.

CBOE Market Volatility Index (VIX) = 30.97 -1.04
Nasdaq-100 Volatility Index  (VXN) = 43.27 -0.89
-----------------------------------------------------------------

          Put/Call Ratio  Call Volume   Put Volume

Total          0.68        581,729       398,007
Equity Only    0.58        459,019       265,191
OEX            0.63         17,692        11,119
QQQ            1.86         21,872        40,698
-----------------------------------------------------------------

Bullish Percent Data

           Current   Change   Status
NYSE          50.4    - 2     Bull Confirmed
NASDAQ-100    57.0    - 4     Bull Confirmed
Dow Indust.   43.3    -17     Bear Confirmed
S&P 500       56.4    - 5     Bull Correction
S&P 100       54.0    - 7     Bull Correction

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  1.56
10-Day Arms Index  1.25
21-Day Arms Index  1.32
55-Day Arms Index  1.27


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       1800          1068
NASDAQ     1829          2390

        New Highs      New Lows
NYSE         89              51
NASDAQ       76              44

        Volume (in millions)
NYSE       2,033
NASDAQ     1,537
-----------------------------------------------------------------

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




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Do not duplicate or redistribute in any form
PremierInvestor.net Newsletter                 Thursday 01-23-2003
                                                    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
  Bullish Play Updates:  BBH
  Bearish Play Updates:  EXPE

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

High Risk/Reward
  Closed Bearish Plays: 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 Play Updates
===============

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

Biotech HOLDRS - BBH - close: 92.20 change: +0.77 stop: 86.94

To quote from Tuesday's update: "...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."  That was
the case once again on Wednesday morning, as the HOLDRS pegged a
low of $90.01 before launching higher with the NASDAQ.  The
successful test of this support level is a positive sign for the
bulls.  Today's trading saw the BBH tick slightly higher with the
BTK.X biotech index.  Both the stock and index showed relative
weakness versus the NASDAQ, indicating that many investors did
not want to take long positions ahead of tonight's earnings
report from Amgen.  So how did AMGN do?  The leading biotech
company reported fourth-quarter results that were in-line with
estimates.  As expected, acquisition-related charges pushed the
full-year numbers deeply into the red.  The all-important
forward-looking guidance was also without any major surprises -
AMGN reiterated its full-year forecast for 2003.  Shares were
moving lower by roughly 2% in the extended trading session.  This
"sell on the news" reaction suggests that the past three weeks of
gains may have priced in a slightly better-than-expected earnings
result.  Technically, AMGN was looking strong today when it
closed above long-term resistance at $53.00.  It'll be
interesting to see if shares can recoup this level following a
likely downward gap on Friday morning.  As far as our long play
is concerned, we'll be looking for shares to shake off any AMGN
related weakness and move towards the relative highs of $94.00.
New entries could be targeted on a break above this level or on
another pullback to $90.00.

Picked on January 16th at $92.12
Results since picked:      +0.08
Earnings Date                N/A




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

Expedia Inc. - EXPE - close: 64.67 change: +0.69 stop: 68.01

We didn't have to wait long to be triggered in this bearish play.
EXPE broke under its 200-dma on Wednesday morning and quickly
reached our action point at $63.37.  Shares rebounded on an
intraday basis but found solid resistance at $65.00.  This
morning's action saw EXPE briefly move above that level before
the bulls succumbed to a downdraft on the NASDAQ.  Although we'd
like to have seen the stock close well below $65.00, today's 1.0%
gain is not that impressive when you factor in the NASDAQ's +2.1%
performance.  It's also interesting to note that shares of
competitor Hotels.com (ROOM) finished solidly in the red.
Furthermore, the weak volume behind today's gain indicates that
the Expedia isn't generating much buying interest at current
levels.  On Friday we'll be looking for EXPE to remain under
today's high ($65.36) and fall towards the relative low of
$62.76.  New entries could be targeted on a move under this
level.  Our stop-loss is located at $68.01.  Traders seeking less
upside risk could use a stop just above the descending 21-dma,
currently at $66.62.

Picked on January 22nd at $63.37
Results since picked:      -1.30
Earnings Date           02/05/03 (confirmed)






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

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

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

Forest Labs - FRX - close: 52.87 change: +1.01 stop: *text*

Company Description:
Forest Laboratories develops, manufactures, and sells ethical
pharmaceutical products that are used for the treatment of a wide
range of illnesses. Forest Laboratories' growing line of products
includes: Lexapro(TM), indicated as initial as well as
maintenance treatment of major depressive disorder; Celexa(TM),
an antidepressant; Tiazac., a once-daily diltiazem, indicated for
the treatment of angina and hypertension; Benicar(TM)*, an
angiotensin receptor blocker indicated for the treatment of
hypertension; and Aerobid., an inhaled steroid indicated for the
treatment of asthma. (source: company press release)

Why We Like It:
It's deja vu all over again!  PI readers will recall that we had
featured FRX as a bullish play ahead of the 2-for-1 stock split
in early-January.  Fearing a post-split depression, we closed the
play for a gain of roughly 5% before the dividend actually
occurred.  While FRX managed to continue higher for a few days,
our suspicions eventually proved to be correct.  Shares proceeded
to retrace all of the 2003 gains and fill in a portion of the
January 3rd gap.  This came in spite of a very strong third-
quarter earnings report that was two cents better than analyst
expectations.  Technically, it wasn't surprising to see some
profit-taking and consolidation - the stock had rallied nearly
20% in just one month.  Now that the post-split decline has taken
place, we think FRX will resume its winning ways.

On Thursday FRX spiked lower and moved below its 21-day and 50-
day moving averages.  Shares also violated a trend of higher lows
dating back to December.  The powerful rebound from these various
support levels is a very encouraging technical development.
Bulls can also be pleased with the daily stochastics (5,3,3),
which are just beginning to rise from oversold levels.  Similar
stochastic reversals have offered reliable buy signals in recent
months.  Investors might also be buying the stock in anticipation
of good news related to one of Forest Labs' experimental drugs.
On December 20th Forest Labs submitted to the FDA an application
for Memantine, an investigational Alzheimer's treatment.  The
government agency has 60 days from that date to decide whether it
will accept the filing for review.  Memantine holds a lot of
promise for FRX because it's the only drug that's shown positive
Phase III results in the treatment of moderate-to-severe
Alzheimer's disease.  With thousands of people suffering from the
disease, it's possible that the FDA could grant "fast-track"
status to Memantine in order to get the drug to market as quickly
as possible.  Actual approval of Memantine might not occur for
several months, but we suspect that investors would react
positively to news that the drug is up for review.

Our strategy for playing FRX is as follows: We'll activate this
hypothetical trade if shares move above today's high of $53.00.
If the play is triggered we'll use a stop at $49.74, slightly
under the bottom of the January 3rd gap.  Our initial upside
target will be the $60.00 region.  Shorter-term traders may want
to aim for the all-time highs near $56.00.  Given enough time, we
think shares will eventually move above this level.

Full Disclosure: Premier Investor analyst Jeff Bailey currently
holds a long position in Forest Labs.


Annotated chart - FRX:



Picked on January xxth at $xx.xx <-- see text
Results since picked:      +0.00
Earnings Date           01/16/03 (confirmed)





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

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

Boston Scientific - BSX - cls: 44.88 chg: -0.12 stop: 43.11 *new*

A 10-minute chart for BSX looks a lot like the heart cardiogram
of an increasingly relaxed patient.  Shares traded a very large
range on Tuesday when investors reacted to the various news
events.  Our "patient" has since showed signs of stabilizing,
with BSX trading two consecutive Inside Days.  The stock traded
sideways for most of today's session before finishing with a
small loss.  This decline was backed by the lightest volume in
over a week.  On a daily chart we see that BSX has continued to
hold above the bottom of its ascending regression channel.
Assuming that this level holds, we think shares will be able to
move back towards the relative high of $46.81.  Speculative
traders could consider new entries on a move above $45.00.  Our
stop has been bumped up to $43.11, one cent under last week's
low.  More cautious types may want to use a stop just below
$44.00.

Picked on December 20th at $44.01
Results since picked:       +0.87
Earnings Date            02/04/03 (confirmed)




---

Cigna Corp. - CI - close: 44.86 change: +0.62 stop: 42.44

On Wednesday the weakening broader market dragged CI below
$45.00.  We'd been looking for shares to find support at this
level (which formerly acted as resistance), but the bulls were
simply unable to counteract a steady downtrend in the Dow Jones
and $IUX.X insurance index.  The inverse was true on Thursday.
Cigna managed a solid 1.4% gain and easily outpaced both
aforementioned indices.  Shares spiked above $45.00 during the
final hour of trading and closed slightly under that level.
Overall this action is somewhat encouraging for the bulls.  On
Friday we'll be watching for CI to break out of today's Inside
Day pattern and rise above yesterday's high of $45.18.  Such a
move would clear the way for a possible test of the relative
highs near $46.75.  On the other hand, a breakdown out of today's
Inside Day formation would be a clearly bearish technical
development.  With this in mind, very conservative traders may
want to place their stops slightly under yesterday's low of
$44.15.

Picked on January 14th at $45.01
Results since picked:      -0.15
Earnings Date           02/07/03 (confirmed)




---

RJ Reynolds - RJR - close: 44.37 change: -0.84 stop: 43.88 *new*

On Tuesday we mentioned that RJR might be due for some profit-
taking after moving sharply higher from the early-January lows.
Thus, it didn't come as a surprise when shares moved lower with
the broader market on Wednesday.  What is concerning, however, is
today's 1.8% decline.  RJR underperformed the Dow Jones and
closed below support at $45.00.  We'd been looking for any
profit-taking to subside near that level.  Factoring in the
declining daily stochastics and MACD, bears can make a pretty
convincing argument for more near-term downside movement.  In
light of these recent developments we're going to move our stop-
loss to $43.88, two cents under today's low.  This would
represent a 3.1% loss from our entry point.  Traders willing to
give RJR a little more breathing room could use a stop just below
either the 21-dma ($43.63) or the 100-dma at $43.25.  We would
not advise taking any long entries at this time.

Picked on January 15th at $45.33
Results since picked:      -0.96
Earnings Date           01/28/03 (confirmed)




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

Cintas Corp. - CTAS - close: 42.70 change: +0.14 stop: 45.01

Today's session for CTAS was rather interesting.  The broader
markets, as well as CTAS, were pretty short-term oversold and way
over due for a bounce.  The bounce came today for the markets but
for CTAS it was almost non-existent.  Shares of CTAS had
attempted an oversold bounce on Wednesday after DB Securities
started Cintas with a "buy" rating.   While the broker was not
very forthcoming with details on the positive analyst rating it
didn't stop bulls from trying to rally twice.  Both times the
rally failed at the $44 mark.  Buyers tried to get CTAS to rally
again late this afternoon but they only got as far as $43.25
before huge volume drove the stock back down.  This would appear
to paint a bearish picture for the stock but we would still not
be surprised by a rally attempt back to the $45 level.
Conservative traders may want to use the $44 level as their stop.
The Premier Investor Newsletter will continue to use the $45
level for now.

Picked on January 17th at $44.49
Results since picked:      +1.79
Earnings Date:          12/19/02 (confirmed)




---

Deluxe Corp. - DLX - close: 39.49 change: +1.03 stop: 41.34

We had been expecting shares of DLX to bounce soon and the
reaction in the broader markets today provided that opportunity
for DLX.  Fortunately for the bears the stock could not break
through the current overhead resistance at $40.  This would
appear to be an entry point for new bearish positions but we
would suggest watching and waiting to see if the stock makes
another attempt to run higher again tomorrow.  More aggressive
traders can take advantage of today's failed rally at $40 but a
tight stop loss may be prudent.

Picked on December 4th at $41.28
Results since picked:      +1.79
Earnings Date           01/30/03 (confirmed)






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

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

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

Electronic Arts - ERTS - close: 50.90 change: +1.37 stop: *text*

There wasn't much conviction behind ERTS' latest rebound from
multi-year lows.  Tuesday's bullish brokerage comments propelled
shares back to $50.00.  However, the stock was unable to close
above this level of psychological resistance.  This continued to
be the case on Wednesday as shares moved above $50.00 on an
intraday basis before finishing with a loss.  ERTS looked like it
was going to duplicate that feat today when without warning
shares suddenly went vertical about a half-hour before the
closing bell.  We didn't see any news to explain this rapid
ascent.  In any case, Electronic Arts has confirmed their January
29th earnings release date.  This gives us a maximum of four
trading days to play the stock before the company announces.
Since we were never triggered, we're simply going to remove our
action point and close the play.  And while wouldn't be surprised
to see shares roll over from the 21-dma ($50.81), the powerful
late-day rally should definitely have bears concerned.

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





=================
  Trading Ideas
=================

This section contains stocks that meet criteria which may make
them of interest to long and short side traders.  These are not
recommendations, nor have they been reviewed by PremierInvestor
editors for investment potential.  However, each of them has
technical and fundamental characteristics that make them worthy
of further review by traders and investors looking for fresh ideas.
New stocks will appear daily following the market close.

Value Plays With Bullish Signals
---------------------------------
Ticker  Company Name               Close     Change

CFC     Countrywide Financial      54.07     +0.72
CBSS    Compass Bancshares         32.04     +0.58
LTD     Limited Brands             12.97     +0.52

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

TXN     Texas Instruments          16.12     +1.87
FFIV    F5 Networks                13.98     +1.87
MACR    Macromedia Inc             15.39     +2.68
ACN     Accenture Ltd              16.85     +1.19
PLCM    Polycom Inc                11.91     +1.36
EFII    Electronics For Imaging    17.84     +1.59

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

ANF     Abercrombie & Fitch        27.90     +1.29
CDWC    CDW Computer Centers       47.12     +3.11
CTX     Centex Corp                53.83     +1.32
SLAB    Silicon Laboratories       23.60     +1.11
RYL     Ryland Group               39.60     +2.63
MME     Mid-Atlantic Medical       34.21     +1.59
CAI     CACI International         37.35     +1.73
KRI     Knight-Ridder              67.29     +1.29
PGR     Progressive Corp           48.52     +1.69

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

ROST    Ross Stores                43.10     -1.06
CAT     Caterpillar                44.45     -1.62
WHR     Whirpool                   53.52     -1.61
SSP     E.W. Scripps               81.06     -2.48
AZO     Autozone Inc               61.10     -2.60
IR      Ingersoll-Rand             38.83     -2.53
TXT     Textron Inc                40.27     -1.72

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

LLY     Eli Lilly                  63.55     -1.40
CAH     Cardinal Health            58.00     -1.55
CCMP    Cabot Microelectronics     46.15     -1.31
BLS     BellSouth Corp             23.55     -1.73
LDR     Landauer Inc               36.01     -1.49
TTH     Telecom HOLDRS             25.33     -1.25




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