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Daily Newsletter, Tuesday, 07/01/2003

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PremierInvestor.net Newsletter                 Tuesday 07-01-2003
                                                   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:      180 Point Rebound
Watch List:       NVDA, ALTR, BRCM, CTXS and more!
Market Sentiment: Timeframes

=================================================================
MARKET WRAP  (view in courier font for table alignment)
=================================================================
      07-01-2003           High     Low     Volume Advance/Decline
DJIA     9040.95 + 55.50  9050.82  8871.20 1.75 bln   1918/1246
NASDAQ   1640.06 + 17.30  1641.77  1598.92 1.68 bln   1656/1565
S&P 100   494.90 +  4.51   495.46   484.41   Totals   3574/2811
S&P 500   982.31 +  7.81   983.26   962.10
W5000    9409.81 + 66.90  9416.50  9227.55
RUS 2000  449.17 +  0.80   449.24   441.22
DJ TRANS 2416.30 +  3.40  2421.03  2370.58
VIX        21.29 -  0.33    23.11    21.18
VXN        30.22 -  1.01    32.46    30.02
Total Volume 3,715M
Total UpVol  2,440M
Total DnVol  1,216M
52wk Highs  324
52wk Lows    26
TRIN       1.15
PUT/CALL   0.96
=================================================================

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

180 Point Rebound

If you just looked at the closing numbers you would get a very
wrong impression of the day's activity. The Dow's closing gain
of a mere +55 was decent but that was nearly +180 points off the
morning lows. Bad news abounded from ISM, Construction Spending
and auto sales but the bulls were not going to be deterred.

Dow Chart - Daily


Nasdaq Chart - Daily


The day started off negative with the Chain Store sales which
fell -0.5% shocking analysts. This was the largest drop in months
and negated the +0.6% gains from last week. With the sun out in
the north east consumers went back outside to play and avoided
the stores for anything other than seasonal merchandise. Strong
sales of swimwear did little for overall store sales. Most
retailers are just trying to hang on until the tax cut checks
begin appearing in the mail box of consumers. Those and the lower
withholding will help put additional cash in store registers.
Unemployment is still holding back gains in year over year sales.

Good news for those consumers came from the Challenger Layoff
Report today, which showed the lowest number of announced layoffs
since November 2000. Only 59,715 job layoffs were announced in
June and the second monthly drop. This is only slightly above
the rate which employers announced during the boom years of the
1990s. Challenger was very bullish about the coming prospects
for the second half and said this was the first really positive
signs of a recovering economy. For the first half of 2003 there
were 630,532 announced layoffs.

The excitement was tempered by the ISM results. The ISM for June
was a serous disappointment when it came in at 49.8 compared to
the consensus of 51.0. While it did not reach the consensus it
did barely eek out a gain over last months 49.4. Traders were
not excited and the market tanked on the news to dip under 8900
before recovering. While the headline number was indicative of
a continuing decline in the economy there were some rays of
hope. New Orders, Production and Employment rose and inventories
dropped. If production is increasing and inventories are
dropping then it would not take much to deduce a potential
pickup in demand. This is only conjecture but traders were ready
to grab at any straw when trading below 8900. New export orders
jumped to 54.4 from 50.8 and the highest level since February.

Construction Spending came in at -1.7% compared to estimates of
+0.4%. This also surprised analysts especially when April was
revised down from -0.3% to -0.7% as well. That makes this month's
drop -2.1% from the previously announced April numbers. This is
a huge number and it is the third consecutive monthly decline.
This was the largest drop in spending in over a year. Private
construction dropped -1.7% and public works construction -1.8%.
The public sector may have topped out with state and local
governments scrambling to raise taxes and cut services just to
break even. There are no funds to expand in all but the rarest
of cases.

Economics were not the only market movers today. JPM cut estimates
on GE for 2004 to become the lowest estimate at $1.66 for the
full year. The consensus is $1.74. AMAT was weak after rumors
made the rounds speculating on an earnings warning. There is
concern that they were scrambling to make the end of the quarter
and weak chip sales in June were causing another delay in chip
equipment orders. IDC also added to this overhanging gloom with
comments that they would be revising their estimates of global
PC sales down from the current +2% for the year. They said the
lack of a tech rebound and the SARS scare was continuing to
depress the tech sector.

There were also several mentions of technical sell signals being
generated by weak performance in several Dow components. Those
components were DD, EK, XOM, IBM, IP, GE, JNJ and PG. Also,
cyclicals like CAT, IP and WY, to name only a few, were weak
on a decreasing outlook for a second half recovery. Copper
prices, a raw component in almost every electronic component
and electrical device sold, has been dropping. This indicates
there is no demand for copper and projects a weak cycle for
manufacturers and retailers. Even the bulletproof homebuilders
started the day off in the cellar.

Traders feared the vehicle sales numbers would fall off the cliff
after the close after Ford announced a -7.7% drop in sales for
June. When the AutoData was finally released it showed an adjusted
rate of 16.4 million units, up slightly from the May numbers of
16.1 million units. Removing the seasonal adjustment and sales
dropped -4.3% overall. In the brand wars GMC rose +18%, Cadillac
dropped -17%, Oldsmobile fell -33%, Pontiac -8.6%, Saturn -20%
and SAAB rose +6.7%. Ford -6.6%, Mercury -36%, Lincoln +5%,
Jaguar -4%, Volvo rose +22% and Land Rover -16%. Jeep +2%, Dodge
+6%, Chrysler +9%, Mercedes +6.7%, except that the M-class SUV
dropped -33%. Nissan rose +22% and Infinity +43%. You could make
a case that expensive cars were slipping but Porsche rose +27%.
It is not an apples to apples comparison since Porsche only sold
around 5000 cars. BMW sold nearly 25,000 vehicles for an +11%
increase. While the headline numbers show gains across all the
car companies there are clearly some mixed results in the details.
The incentives are continuing and car makers are still holding
to a hopeful outlook for the second half.

The most positive news today came from the financial sector.
A 96-year-old judge threw out a class action case against
Merrill Lynch. Investors had sued to recover losses which they
said were due to tainted advice. The judge said investors were
too naove and handed the big broker a win that could impact all
the other class action suits currently in progress. He also said
the ruling would apply to suits against MWD, GS and CSFB. The
financial sector cheered with billions in potential liability
possibly lifted from their shoulders. Citigroup gained +1.01,
GS +2.10, MWD +1.44, LEH +1.25 and BSC +1.28. These gains are
impressive only when you realize they were rebounds from
significant early morning losses. These rebounds started exactly
at 12:45 and you could easily point to an intraday Dow chart and
see the beginning of the afternoon rally on the announcement.

When the market jumped initially the news was not attributed to
the court decision and shorts tried to jump back in at a higher
level but the deck was stacked against them. Not only did the
financials spark the market but bonds began to sell off once
again and early retirement cash was being put to work. Don't
buck the bulls on the first day of July. The first day of July
has been up 13 of the last 14 years including today. The influx
of retirement cash and late buying by index funds, who missed the
cutoff on the rebalancing, help to power the July bounce. Today
historically begins a bullish ten day period despite July being
the start of the worst four months of the year.

If the markets are going to rally they got the best possible
start on Tuesday. The Dow dropped back to support at 8900,
actually slightly below stronger support at 8950 but either way
the weak holders were flushed at the open. The Nasdaq dropped
back to very strong support at 1600 and rebounded strongly to
close at 1640 and right in the middle of its trading range.
Make no mistake. The economic news was bad regardless of how
you spin it. There were positive internals but it came in below
expectations. There were earnings warnings and downgrades to
major estimates. There were repeated references to a second half
recovery being weaker than expected or even AWOL one more time.
Still the market rallied and rallied strongly bouncing +180
points off its lows. It is not a rally. It is just a one-day
reversal but coming at the beginning of the strongest week in
July it has all the earmarks of a potential bullish move.

I suggested on Sunday to buy any dip above S&P 950 and the
S&P bottomed at 962 on Tuesday before rebounding to close at
982. Now we are in that confirmation stage. If we go up from
here I would continue to remain long. I would use 960 as my
stop loss. A drop under 960 for the rest of the week would be
very negative and could break the historical July trend. Even
if the market continues to rise we need to remember this is
only a trading rally and not the next leg in a new bull market.
Just like the first week of July is normally bullish the last
two weeks of July are normally bearish. We will begin to see
a flood of earnings and there are some serious concerns that
they will not be good. The concern is that the earnings gains
have come from continued cost savings and job cuts and not from
top line sales. This will be key this cycle. If there is no
sales growth and no improved guidance then the fears of a
fourth year with no second half recovery will soar. We are
approaching a very critical period in the market. The next two
weeks will be key to direction and many feel that even decent
earnings and guidance will not be enough to justify the gains
from the last four months.

The July trends I have been discussing did not occur overnight.
They have been created by innumerable cycles of hoping for a
strong second half, even during boom years. The summer quarter
is known for its tech depression cycle. That cycle comes from
the earnings guidance in the July reporting. Tech companies
look at the 2Q results, at orders for the 3Q and typically
revise guidance for the rest of the year. They trade the first
half of the year on hope and the last half on reality. That
reality is about to appear, good or bad. The key this year is
"will it be good enough" not just will it be good. The Nasdaq
is up +48% from the October lows. That is not a good year, it
is a good couple of years. How good will earnings have to be to
sustain a continued rally from here? If the ISM had blown the
doors off at 55 or 60 and showed a strong surge in orders then
we could expect another quarter on hope. Instead it showed a
continued economic decline.

The rest of the week, both days, have serious economic reports.
Wednesday has Factory Orders and Mortgage Applications but
Thursday is the killer. Nonfarm Payrolls, ISM Services and
Jobless Claims. This could make or break the July trend. If
the Jobless Claims come in under 400K and the Nonfarm Payrolls
show any improvement over May then we could be ok for another
week. In April jobs were revised to zero loss and in May the
number came in at only -17,000. This was significantly better
than the -151,000 and -121,000 the prior two months. Could we
be in for a positive jobs report? Could be. The official
consensus is for a gain of +1,000 jobs. Nothing like hedging
your bets and not going out on a limb. That sets us up for a
potential surprise in either direction. The bottom line is a
potentially rocky road ahead but one that is typically bullish
due to retirement cash flowing into funds. Once that cash tapers
off the outlook could change substantially.

Enter Very Passively, Exit Very Aggressively!

Jim Brown


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

NVIDIA Corp. - NVDA - close: 23.85 change: +0.94

WHAT TO WATCH: After succumbing to some much needed profit
taking, the Semiconductor stocks look like they are ready to run
after the recent rebound from the bottom of the 5-month rising
channel.  NVDA has been one of the stronger Chip stocks in recent
months and we're looking for a continuation of that pattern of
relative strength.  The stock has recently found strong support
near $22.50 so another dip and rebound from above $23 looks good
for new entries.




---

Altera Corp. - ALTR - close: 16.91 change: +0.48

WHAT TO WATCH: Another encouraging chart pattern from the Chip
sector is provided by ALTR, as the pullback from its recent highs
came to a halt near strong support at $16, and it looks like the
rebound is well under way.  Look for upside continuation to lead
to another test and possibly a breakout at $20.




---

Broadcom Corp. - BRCM - close: 25.74 change: +0.83

WHAT TO WATCH: While the SOX has really pulled back from its
recent highs, BRCM has held up very well and appears to be
showing signs of relative strength.  Holding support near $24 is
encouraging, as is Tuesday's close back over the 20-dma.  Use a
continuation of Tuesday's strength above $25.80 to enter new
positions ahead of another assault on the $28-29 resistance area.




---

Citrix Systems - CTXS - close: 21.66 change: +1.30

WHAT TO WATCH: Now that's a strong rebound!  After dipping below
$20 again this morning, shares of CTXS really caught a bid,
rising more than 6% by day's end on strong volume.  Ending right
on the 20-dma, the stock is set to provide a solid entry
opportunity with continuation through that level.  Once above
$22, a renewed assault on recent resistance near $24 will be the
bulls' objective.





===================
On the RADAR Screen
===================

XMSR $12.40 - Looking for some excitement?  Then XMSR may just be
your sort of play.  There's been a lot of volatility lately, but
after some very strong data on new subscribers was released on
Tuesday the stock surged by more than 12% and looks poised for a
big breakout.  Should the stock break its early June high of
$13.28, momentum traders will be targeting $15 and possibly
$16.50.

SNDK $41.62 - No end in sight?  Bears are sitting in stunned
disbelief, as shares of SNDK continue to charge to new highs on
almost a daily basis.  The bullish price target from the PnF
chart is way up in the $70s, so it looks like there is still
plenty of room to run.  This week we've already seen a solid
rebound from the bottom of the 10-week ascending channel and
we're looking for another run to the top of the channel, now at
$46.  Look for a breakout above yesterday's high ($42.20) to
facilitate new momentum entries.

NANO $8.28 - This market certainly isn't lacking for breakouts
and NANO gave us a powerful one already this week.  Volume has
been running at four times the ADV the past two days and
Tuesday's session saw a breakout to new 11- month highs and it
looks like a continuation above today's intraday high could lead
to a test of $10.50-11.00.  In case you haven't guessed, NANO
manufactures components for the Semiconductor industry.




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

Timeframes
- Jon Levinson

Those of you who follow the live action in the Market Monitor and
Futures Monitor and trade the market intraday are aware of the
flightiness of the shorter period charts and indicators.  My
primary trading window is based on 3 minute candles, though I
often switch to a 50-tick view as well to change perspective.

This focus has evolved to fit my own trading style, which has
evolved to fit my personality and its numerous psychoses and
idiosyncrasies.  Under most circumstances, the oscillators
indicators I follow on that timeframe allow me to see and react
to the trade setups that serve me best.

Other times, they do not, such as today.  As I type, my useless
26-3-18 stochastics are flatlined above the 80 level on this 3
minute chart, as the longer cycles within which it is nested push
higher.  Like your kids' face smushed against the side window as
you drive along a highway rotary, pulling maximum G's, my little
2.6 hour cycle oscillator is smushed against the bottom of the
longer cycles which bottomed just after 10AM.

2 lessons:  watch the oscillators on longer timeframes to
contextualize the timeframe that you're trading, and always use
stops. I was sloppy with the one but not with the other today.
In reviewing the data below, keep in mind that it's end-of-day
data, and will fit best with your daily candle charts.


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

Market Averages

DJIA ($INDU)

52-week High:  9410
52-week Low :  7197
Current     :  9041

Moving Averages:
(Simple)

 10-dma: 9096
 50-dma: 8808
200-dma: 8381

S&P 500 ($SPX)

52-week High:  993
52-week Low :  768
Current     :  982

Moving Averages:
(Simple)

 10-dma:  986
 50-dma:  956
200-dma:  893

Nasdaq-100 ($NDX)

52-week High: 1266
52-week Low :  795
Current     : 1217

Moving Averages:
(Simple)

 10-dma: 1212
 50-dma: 1170
200-dma: 1043


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


The rebound in the broader markets today reinforces the feeling
that bulls are still in control for now.  This had the VXN falling
another 3.2% just above the 30 level and fast approaching its all
time lows.  The VIX remains pegged near the bottom of its sideways
channel between 21 and 24.

CBOE Market Volatility Index (VIX) = 21.29 -0.33
Nasdaq-100 Volatility Index  (VXN) = 30.22 -1.01

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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.96        474,338       456,893
Equity Only    0.90        340,986       307,233
OEX            0.85         26,004        22,128
QQQ            3.13         21,594        67,647

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

Bullish Percent Data

           Current   Change   Status
NYSE          70.9    + 0     Bull Confirmed
NASDAQ-100    74.0    - 2     Bull Correction
Dow Indust.   83.3    + 0     Bull Confirmed
S&P 500       77.6    - 1     Bull Confirmed
S&P 100       81.0    + 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  1.33
10-Day Arms Index  1.33
21-Day Arms Index  1.21
55-Day Arms Index  1.13


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

            -NYSE-   -NASDAQ-
Advancers    1708      1636
Decliners    1113      1417

New Highs     116       132
New Lows        6        14

Up Volume   1047M     1136M
Down Vol.    659M      505M

Total Vol.  1728M     1671M

M = millions


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


Commitments Of Traders Report: 06/24/03

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

After last week's quadruple witching Friday rolled around,
we witnessed a HUGE collapse in outstanding positions in both
longs and shorts almost across the board.  For the full S&P 500
contacts, the commercial long positions dropped 114 thousand to
405K and the shorts dropped 52 thousand to 447 K.  This produced
the first bearish net negative (more shorts than longs) in quite
a while.

Small traders saw significant drops of 42K in longs to just
159 thousand and 98K short positions evaporated to leave 85K.
This produced a very strong net long position.  Which is exactly
how these COT reports are traditionally read.

The Small Traders always tend to do the opposite of the "smart
money" or Commercials.  Unfortunately, it is the commercials
who tend to be correct most of the time, and they're newly
bearish on the S&P.


Commercials   Long      Short      Net     % Of OI
06/03/03      438,228   422,722    15,506     1.8%
06/10/03      456,967   455,024     1,943     0.2%
06/17/03      519,887   501,401    18,486     1.8%
06/24/03      405,382   447,526   (42,144)   (4.9%)

Most bearish reading of the year: (111,956) -  3/06/02
Most bullish reading of the year:   18,486  -  6/17/03

Small Traders Long      Short      Net     % of OI
06/03/03      169,650   167,172     2,478     0.7%
06/10/03      199,356   185,403    13,953     3.6%
06/17/03      202,040   184,028    18,012     4.6%
06/24/03      159,405    85,182    74,223    30.3%

Most bearish reading of the year:  (1,657)- 5/27/03
Most bullish reading of the year: 114,510 - 3/26/02


E-MINI S&P 500

The same scenario took place in the S&P 500 e-mini contracts.
There were massive drops in outstanding positions.  Commercial
traders dropped 156 thousand long positions and 459 thousand
short positions.  This drastic reduction has produced the most
bullish reading of the year for the e-minis.

As expected, the small traders took the opposite role and
produced the most bearish reading.  This was due to a massive
reduction in outstanding long positions of 382K versus a drop
of just 26K in small traders' aggregate shorts.


Commercials   Long      Short      Net     % Of OI
06/03/03      267,680   512,648   (244,968)  (31.4%)
06/10/03      270,359   543,221   (272,862)  (33.5%)
06/17/03      306,279   661,114   (354,835)  (36.6%)
06/24/03      150,208   201,724    (51,516)  (14.6%)

Most bearish reading of the year: (354,835)  - 06/17/03
Most bullish reading of the year: (222,875)  - 04/01/03

Small Traders Long      Short      Net     % of OI
06/03/03      470,655    58,420   412,235    77.9%
06/10/03      498,999    49,689   449,310    81.9%
06/17/03      466,837    70,609   396,228    73.7%
06/24/03       84,081    44,347    39,734    30.9%

Most bearish reading of the year:  39,734   - 06/24/03
Most bullish reading of the year: 449,310   - 06/10/03


NASDAQ-100

The same disappearing act of outstanding positions occurred
in the NDX 100 futures as well.  Commercials dropped some 32K
in long positions and 18K in short positions but this left
them with their most bearish position in quite some time.

Small traders, reacting in lock step mirror image, produced
their most bullish net long position with a major drop in
outstanding shorts.


Commercials   Long      Short      Net     % of OI
06/03/03       42,232     43,217      (985)  (1.2%)
06/10/03       42,877     45,793    (2,916)  (3.3%)
06/17/03       60,964     65,561    (4,597)  (3.6%)
06/24/03       28,780     47,425   (18,645) (24.4%)

Most bearish reading of the year: (18,645) -  6/24/03
Most bullish reading of the year:   9,068  - 06/11/02

Small Traders  Long     Short      Net     % of OI
06/03/03       11,407     9,092     2,315    11.3%
06/10/03       14,759     7,761     6,998    31.1%
06/17/03       29,400    23,232     6,168    11.7%
06/24/03       24,519     7,064    17,455    55.2%

Most bearish reading of the year: (10,769) - 06/11/02
Most bullish reading of the year:  19,088  - 01/21/02

DOW JONES INDUSTRIAL

Small traders of the DJIA futures didn't do much other
than reduce a good number of outstanding positions but it
was the commercials who cut a number of shorts that produced
a new relative high in outstanding longs.


Commercials   Long      Short      Net     % of OI
06/03/03       19,480    15,282    4,198      12.1%
06/10/03       17,368    15,263    2,105       6.5%
06/17/03       20,625    18,593    2,032       5.1%
06/24/03       19,373    11,565    7,808      25.2%

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
06/03/03        7,948     9,353    (1,405)   ( 8.1%)
06/10/03        7,968     8,316    (  348)   ( 2.1%)
06/17/03        9,092     9,398    (  306)   ( 1.6%)
06/24/03        5,950     7,442    (1.492)   (11.1%)

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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Copyright ) 2003  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter                 Tuesday 07-01-2003
                                                   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
=================================================================

Play of the Day:  Another Breakout

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)


=================================================================
Play-of-the-Day  (bullish)
===============

Altria Group - MO - close: 46.19 change: +0.75 stop: 43.50*new*

Company Description:
Altria Group, Inc., formerly Philip Morris Companies Inc., is a
holding company and the parent company of Philip Companies Inc.
The company's wholly owned subsidiaries, Philip Morris USA, Philip
Morris International and its majority-owned (84.2%) subsidiary,
Kraft Foods Inc. are engaged in the manufacture and sale of
various consumer products, including cigarettes, foods and
beverages.  The company changed its name from Philip Morris
Companies to Altria Group in January 2003.

Why we like it:
Getting a boost from some bullish comments out of Smith Barney on
Friday morning, shares of MO managed to surge through the $46
level early in the day.  But with the rest of the market failing
to go along for the ride, MO lost the "Big Mo" and fell back to
end the day just over $45.  Stepping back and looking at the daily
chart, we can see another reason for the afternoon pullback, as
the early surge pushed the stock through the top of its 6-week
ascending channel and a drop back into that channel is not
unexpected.  The bottom of the channel is just over $43 now, with
the 20-dma creeping up to $43.50.  A continuation of the Friday
afternoon weakness could set us up for another favorable entry
early next week on a rebound from above the $43.50 level, most
likely near $44.  Intraday support seems to be building just below
$44 and another strong rebound from that area would help to
confirm that.  Because of the way MO has been pulling back after
each push to a new high, chasing the stock higher with momentum
entries does not appear to be a profitable strategy.  Buy the
dips.  As long as MO remains in this ascending channel, we want to
keep our stop set just below the bottom of the channel.  Raise
stops ever so slightly to $42.75.

Why This is our Play of the Day
Continuing to show their appetite for dividend-paying stocks,
investors have been gobbling up shares of MO again this week,
driving the stock to a new multi-month high, and its first close
over $46 since last September.  The stock ended Tuesday's session
right at the top of the channel we've been monitoring for the past
couple weeks and also just off the high of the day.  But since its
reaction low of $41 on 6/13, MO has been building a slightly
steeper ascending channel (not shown), the top of which will
intersect our initial target of $47.50 by early next week.
Tuesday's close just over $46 is right in the middle of that
secondary channel, and continued strength tomorrow can be used for
new entries above $46.30.  Traders looking for a more conservative
entry will want to watch for another dip near $45 (the bottom of
the newer channel), which is the site of former resistance, now
turned support.  Note the multiple converging points of support
just below $44 on the chart below, which give us the freedom to
raise our stop to $43.50.

Annotated Chart of MO:


Picked on June 18th at  $44.24
Change since picked      +1.95
Earnings Date          07/17/03 (unconfirmed)
Average Daily Volume = 12.9 mln


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

BBT     BB&T Corp                  35.01     +0.71
GFI     Gold Fields LTD (ADR)      12.76     +0.58
BGG     Briggs & Stratton Corp     51.10     +0.60
ELBO    Electronics Boutique       23.94     +1.00
ASCA    Ameristar Casinos Inc      22.35     +1.01
ALLE    Allegiant Bancorp Inc      21.00     +0.80

---------------------------------------
Breakout to Upside (Stocks $5 to $20)
---------------------------------------

WDC     Western Digital Corp       11.89     +1.59
HIL     DotHill Systems            14.24     +1.14
DTAS    Digitas Inc                 6.14     +1.13
STAA    Staar Surgical             13.62     +2.05
REFR    Research Frontiers         15.77     +1.79
NUTR    Nutraceutical Intl         12.55     +1.80

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------

HIT     Hitachi Ltd                45.45     +3.15
MRVL    Marvell Technology         36.50     +2.15
NCR     NCR Corp                   27.13     +1.51
CME     Chicago Mercantile Exch    74.57     +4.94
NATI    National Instruments       39.16     +1.21
ZLC     Zale Corp                  45.90     +5.90
RHD     R.H.Donnelley Corp         38.25     +1.78

-------------------------------------------
Breakout to Downside (Stocks over $20)
-------------------------------------------

PPG     PPG Industries             49.69     -1.05
SPW     SPX Corp                   41.61     -2.45
NCEN    New Century Financial      40.78     -2.66
CERN    Cerner Corp                21.78     -1.02
AXE     Anixter Intl               21.96     -1.47
PLMD    Polymedica                 37.39     -8.47

-----------------------------------------
Recently Overbought With Bearish Signals (Stocks over $20)
-------------------------------------------

ABCO    Advisory Board              39.10     -1.16
CBM     Cambrex Corp                22.13     -0.89





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