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Daily Newsletter, Wednesday, 07/02/2003

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PremierInvestor.net Newsletter                Wednesday 07-02-2003
                                                    section 1 of 2
Copyright (c) 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:      Gap Up

Play of the Day:  Ever Forward Looking

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)

=================================================================
MARKET WRAP  (view in courier font for table alignment)
=================================================================
     07-02-2003           High     Low     Volume Advance/Decline
DJIA     9142.84 +101.89  9148.30  9043.54 1.75 bln   2497/ 720
NASDAQ   1678.73 + 38.60  1678.77  1648.13 1.87 bln   2354/ 874
S&P 100   500.74 +  5.84   500.86   494.90   Totals   4851/1594
S&P 500   993.75 + 11.43   993.78   982.32
RUS 2000  458.89 +  9.72   458.90   449.17
DJ TRANS 2433.27 + 16.97  2435.24  2414.41
VIX        21.14 -  0.15    21.74    16.38
VXN        31.05 +  0.83    31.21    30.25
Total Volume 7,245M
Total UpVol  5,424M
Total DnVol  1,821M
52wk Highs     586
52wk Lows       27
TRIN          0.79
PUT/CALL      0.77
=================================================================

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

Gap Up
- Jonathan Levinson

Today was a very bullish day for stocks, with the Nasdaq well on 
its way to challenging its year highs, the indices truncating 
their downphases with yesterdays bounces off their ascending 
trendlines and today's breakaway gaps to follow through.  The 
Nasdaq is often said to be the "leading" index, and quick 
comparison between the oscillators on the Nasdaq below and those 
on the Dow above looks quite bullish for the Dow.

Daily Chart of the INDU


Daily Chart of the COMPX


It was reported today that factory orders rose 0.4 percent in 
May, exceeding analysts expectations for no change over the April 
number of a revised 3.0 percent drop. Non-defense capital goods 
fell 0.8 percent, the second consecutive monthly decline.  
Excluding transportation, new orders for factory goods rose 0.8 
percent in the month, up from a 2.7 percent decline in April. 
Excluding defense, new orders for factory goods rose 0.8 percent 
in May, up from a 2.7 percent decline in April.

The Energy Department reported an unexpected 2.1 million barrel 
drop in U.S. crude reserves for the week ended June 27.  I have 
yet to see analysts not surprised by the week's data.  Total 
inventories are 282.1 million barrels, 11.5 percent lower than 
for this week in 2002.  Gasoline inventories dropped by 3.2 
million barrels to 205 million barrels, while distillate supplies 
stood rose 300,000 barrels to 109.7 million barrels total.  
Surprisingly, August crude closed lower by $.25 at $30.15.

The Mortgage Bankers Association (MBA) announced this morning 
that seasonally-adjusted demand for mortgage refinancings, the 
MBA refinancing index, rose 4.8 percent to 8,599.1 in the week 
ended June 27.  Demand for loans with which to buy homes, the 
Purchase index, rose 6.6 percent to 438.4. The MBA's market 
index, an overall measure of mortgage activity, rose 5.2 percent 
to 1,635.5.  The average contract interest rate for a 30-year 
fixed rate mortgage rose to 5.23%.  The MBA estimates that banks 
will make $3.3T worth of mortgage loans this year, blowing out 
last year's $2.5T record. New construction dropped .9% in May, 
however, the third consecutive month of decline.

After our discussion during weeks past concerning the mortgage 
data and the sources of liquidity for this year's simultaneous 
rallies in real estate, stocks, bonds, gold and other 
commodities, I've generated a series of charts to put the current 
economic environment in perspective.  I've relied on data 
published by the St-Louis Fed.
  
The first chart, which we’ve been following for several weeks, is 
the MZM, and is one measure commonly used to gauge the money 
supply. 

MZM chart


This 13 year chart speaks for itself- the supply of money has 
tripled during this period.

Chart of Fed Funds Rate


During the same time, the Fed Funds rate has dropped 
precipitously to its currenty 45 year low at 1.0%.  In other 
words, the cost of money to banks is at its lowest level in 
nearly half a century.  It was reported today that U.S. money 
market funds are now yielding a record low 0.58 percent on
average.

Chart of Commercial and Industrial Loans 


Despite the aggressive devaluation of money by Chairman 
Greenspan's Fed commencing in year 2000, loans to business and
industry have decreased in tandem with the Federal Funds rate 
during that time.  Where, then, has the money reflected in the 
skyrocketing MZM chart gone?

Chart of Real Estate Loans



Chart of Total Consumer Credit


It has been loaned to consumers in the form of home equity loans.  
For the sake of brevity, I have not reproduced a chart of the 
current account deficit, but we've been tracking its increases 
to record level after record level.  It appears that consumers 
have been borrowing in order to purchase homes and foreign goods 
in ever-increasing amounts.

Chart of Unemployement Rate:


Lastly, the effect of the lack of participation of business and 
industry in the Fed's tidal wave of liquidity is reflected in the 
climbing unemployment rate.

I've attached the foregoing charts because I find the current
economic context fascinating.  I also find the widespread 
predictions of a "second half recovery" difficult to reconcile 
with the picture that the above charts paint, though it does help 
us to understand what the Fed has been trying to accomplish, and 
its concerns with what it calls "dis-inflation".  An uptick in 
treasury yields increasing the effective interest rates 
applicable to borrowed money, could be disastrous, and for this 
reason I expect the Fed to do what's necessary to keep yields 
down, as Governor Bernanke has said it would. 

By the same token, I am not recommending running out and shorting
everything with a bid.  Fundamentals and technicals are two 
different worlds as this spring has taught us, and as leveraged 
speculators and investors, we must choose our time and our price 
judiciously.  The markets are littered with bears who had great 
ideas and poor timing.  As Keynes said, "The markets can remain 
irrational longer than you can remain solvent."  It's much easier 
to trade with the trend of your choice.  If you're bullish on the 
markets, then the above is the famed "wall of worry".  
Furthermore, the current situation is nothing new for the past 
several years since the beginning of this secular bear market, 
and arguably, it is always darkest before the dawn. 

In other news, it was announced on CNBC that the State of 
California has been placed on negative credit watch by Standard & 
Poors, but I was unable to find a link to the story anywhere on 
my wire or in the newsfeeds.  The newsday was mostly dominated by 
upgrades and downgrades, with relatively little hard news.  GLD 
announced that it was granted Food and Drug Administration 
approval for its new anti-HIV drug, Emtriva.  The International 
Olympic Committee announced that Vancouver, B.C. would be the 
host city of the 2010 Winter Olympics, beating Pyeongchang, South 
Korea. Much of the competition will take place at the nearby ski 
areas around Whistler and Blackcomb, and Intrawest, the developer 
and operator of Whistler, was up strongly on the news.   

For tomorrow, we have the following economic data due before the 
bell:

              Report                     Briefing  Market   Prior
                                         Expects   Expects
Jul 03 8:30 AM Average Workweek Jun -     33.8      33.8     33.7
Jul 03 8:30 AM Hourly Earnings Jun -      0.3%      0.2%     0.3%
Jul 03 8:30 AM Initial Claims 06/28 -     415K      412K     404K
Jul 03 8:30 AM Nonfarm Payrolls Jun -     -15K      Unch     -17K
Jul 03 8:30 AM Unemployment Rate Jun -    6.2%      6.2%     6.1%
Jul 03 10:00 AM Factory Orders May -      0.3%      0.0%    -2.9%
Jul 03 10:00 AM ISM Services Jun -        55.0      55.0     54.5

With a shortened trading session ahead of the 4th of July
weekend, I expect to see thin trading and the consequent wild 
volatility that such can cause, helped along by the above full 
slate of economic reports.  I expect any good news to be taken 
very bullishly by equities, on the heels of today's very strong 
session.  See you at the bell!



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

Amazon.Com - AMZN - cls: 37.85 chg: +0.60 - stop: 35.49  

Company Description:
Amazon.com, a Fortune 500 company based in Seattle, opened on the 
World Wide Web in July 1995 and today offers Earth's Biggest 
Selection. Amazon.com seeks to be Earth's most customer-centric 
company, where customers can find and discover anything they 
might want to buy online, and endeavors to offer its customers 
the lowest possible prices.  Amazon.com and other sellers list 
millions of unique new and used items in categories such as 
apparel and accessories, electronics, computers, kitchenware and 
housewares, books, music, DVDs, videos, cameras and photo items, 
toys, baby items and baby registry, software, computer and video 
games, cell phones and service, tools and hardware, magazine 
subscriptions and outdoor living items.  Amazon.com operates six 
Web sites:  www.amazon.com, www.amazon.co.uk, www.amazon.de, 
www.amazon.fr, www.amazon.co.jp, and www.amazon.ca.
(source: company press release)

Why We Like It:
Amazon was sued yesterday, but you'd never know it from the 
stock's performance today. Amazon gained 1.61 percent.  

Corbis Corp., a company owned by Microsoft, sued over the illegal 
sales of its images by third-party vendors that Amazon licenses 
to sell products in Amazon's zShops.  According to the lawsuit, 
these third-party vendors used Corbis images of movie stars to 
create posters and prints.  

Investors probably keyed in on another development related on 
AMZN rather than the suit.  Tuesday, the company announced that 
international sales were growing at a fast clip and that it 
expected those international sales to match U.S. sales by 2005.  
Although Amazon's international sites are not as profitable as 
the North American Amazon.com site, sales on those international 
sites grew 68 percent from the same period a year ago, with 
international sales now making up 32 percent of Amazon's total 
sales.  

Ever forward-looking, Amazon included in that press release 
information that it plans to run a digital music download service 
in the future.  Also this week, the company announced plans to 
launch an electronics section on its Amazon Japan site.

Investors must have approved.  Yesterday, AMZN finally inched 
over the top of a bullish right triangle.  Today, it gapped up, 
tested the support of the horizontal top line, and then moved up.  
Oscillators have seen higher lows, creating ascending trendlines 
supporting each.  

Entries could be made at the current level or at a pullback and 
bounce from 37.  Traders considering this play should be aware 
that today's volume was about 3/4 the average daily volume, 
rather than the large-volume breakout we would have preferred.  
Also, while AMZN's 1.61 percent gain swamped that of the RLX, the 
retailing index, it did not meet the gains of the XIS, the 
Industry Standard 100 Internet Index, up 2.72 percent, or the 
DOT, the Philadelphia Internet Index, up 2.33 percent.

Earnings are in three weeks, so we'll look to exit the position 
before then.  Our first target is 39.90, just under 40.  

Annotated Chart for AMZN:


Picked on July 2 at   37.85
Change since picked:  +0.00
Earnings Date       7/22/03 (confirmed)
Average Daily Volume:   8.3 million




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

FNM     Fannie Mae                 70.79     +1.51
MWD     Morgan Stanley             44.97     +0.78
NSANY   Nissan Motor Co            19.90     +0.94
ALL     Allstate Corp              37.75     +0.80
FON     Sprint Fon Group           15.56     +0.61
GPT     Greenpoint Financial       52.97     +1.30

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

NMR     Nomura Holdings Inc        14.33     +1.08
STX     Seagate Tech               19.62     +1.43
NTAP    Network Appliance          17.85     +1.18
FDRY    Foundry Networks           16.48     +1.23
AFC     Allmerica Financial        18.84     +1.10
NTBK    Net.Bank Inc               14.57     +1.09

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
NAB     National Australia Bank    115.45     +1.65
SNE     Sony Corp                   31.41     +2.18
HIT     Hitachi                     48.75     +3.30
SBUX    Starbucks Corp              26.97     +1.64
MBT     Mobile Telesys              62.45     +3.25
NYB     New York Community Banc     30.24     +1.18
DBD     Diebold Inc                 45.20     +2.63

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

WON     Westwood One Inc            32.55     -1.15
ETM     Entercom Communications     46.98     -1.38
CXR     Cox Radio Inc               21.90     -1.28
CERN    Cerner Corp                 20.08     -1.70

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

PTR     Petrochina Co Ltd           28.20     -1.61
TLM     Talisman Energy             44.50     -1.07



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PremierInvestor.net Newsletter                Wednesday 07-02-2003
                                                    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:

Tech Stocks
  New Bullish Plays:     AMZN, BRCM
  Bullish Play Updates:  SNPS, TSM

Active Trader (Non-tech)
  Bullish Play Updates:  MO, BGP
  Bearish Play Updates:  DHI, ROAD, WFMI

High Risk/Reward
  New Bullish Plays:     SIRI
  Bullish Play Updates:  SIGM
  Bearish Play Updates:  HGSI


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

=========
NEW PLAYS
=========

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


Amazon.Com - AMZN - cls: 37.85 chg: +0.60 - stop: 35.49  

Company Description:
Amazon.com, a Fortune 500 company based in Seattle, opened on the 
World Wide Web in July 1995 and today offers Earth's Biggest 
Selection. Amazon.com seeks to be Earth's most customer-centric 
company, where customers can find and discover anything they 
might want to buy online, and endeavors to offer its customers 
the lowest possible prices.  Amazon.com and other sellers list 
millions of unique new and used items in categories such as 
apparel and accessories, electronics, computers, kitchenware and 
housewares, books, music, DVDs, videos, cameras and photo items, 
toys, baby items and baby registry, software, computer and video 
games, cell phones and service, tools and hardware, magazine 
subscriptions and outdoor living items.  Amazon.com operates six 
Web sites:  www.amazon.com, www.amazon.co.uk, www.amazon.de, 
www.amazon.fr, www.amazon.co.jp, and www.amazon.ca.
(source: company press release)

Why We Like It:
Amazon was sued yesterday, but you'd never know it from the 
stock's performance today. Amazon gained 1.61 percent.  

Corbis Corp., a company owned by Microsoft, sued over the illegal 
sales of its images by third-party vendors that Amazon licenses 
to sell products in Amazon's zShops.  According to the lawsuit, 
these third-party vendors used Corbis images of movie stars to 
create posters and prints.  

Investors probably keyed in on another development related on 
AMZN rather than the suit.  Tuesday, the company announced that 
international sales were growing at a fast clip and that it 
expected those international sales to match U.S. sales by 2005.  
Although Amazon's international sites are not as profitable as 
the North American Amazon.com site, sales on those international 
sites grew 68 percent from the same period a year ago, with 
international sales now making up 32 percent of Amazon's total 
sales.  

Ever forward-looking, Amazon included in that press release 
information that it plans to run a digital music download service 
in the future.  Also this week, the company announced plans to 
launch an electronics section on its Amazon Japan site.

Investors must have approved.  Yesterday, AMZN finally inched 
over the top of a bullish right triangle.  Today, it gapped up, 
tested the support of the horizontal top line, and then moved up.  
Oscillators have seen higher lows, creating ascending trendlines 
supporting each.  

Entries could be made at the current level or at a pullback and 
bounce from 37.  Traders considering this play should be aware 
that today's volume was about 3/4 the average daily volume, 
rather than the large-volume breakout we would have preferred.  
Also, while AMZN's 1.61 percent gain swamped that of the RLX, the 
retailing index, it did not meet the gains of the XIS, the 
Industry Standard 100 Internet Index, up 2.72 percent, or the 
DOT, the Philadelphia Internet Index, up 2.33 percent.

Earnings are in three weeks, so we'll look to exit the position 
before then.  Our first target is 39.90, just under 40.  

Annotated Chart for AMZN:


Picked on July 2 at   37.85
Change since picked:  +0.00
Earnings Date       7/22/03 (confirmed)
Average Daily Volume:   8.3 million



---

Broadcom Corp. - BRCM - close: 27.16 change: +1.42 stop: 24.50

Company Description:
Sitting in the sweet spot between the Broadband and Semiconductor 
sectors, BRCM is a provider of highly integrated silicon 
solutions that enable broadband digital transmission of voice, 
video and data to and throughout the home and within the business 
enterprise.  These integrated circuits permit the cost-effective 
delivery of high-speed, high-bandwidth networking using existing 
communications infrastructures that were not originally designed 
for the transmission of broadband digital content.  Using 
proprietary technologies, the company designs, develops and 
supplies integrated circuits for several markets including 
digital cable set top boxes, cable modems, high-speed office 
networks, home networking, and digital subscriber lines.

Why we like it:
Things weren't looking too good for Semiconductor stocks 
yesterday morning, as the SOX index fell almost to critical 
support at $350 following some disappointing economic reports.  
In what has become a consistent pattern over the past few months 
though, the bulls bought the dip, driving the SOX back over $365 
by the end of the day.  The buying continued on Wednesday, with 
the SOX tacking on another 2.5% and reclaiming the $375 level in 
a convincing rebound from the bottom of the channel that began in 
early February.  There are several individual Chip stocks that 
are looking strong, but BRCM captured our attention due to its 
strong price performance recently, as well as the fact that it is 
very near an actionable level.  After pulling back from its early 
June high just over $23, BRCM traced out a bull flag pattern, 
with upper resistance defined by the descending trendline shown 
on the chart below.  Over the past two days, the stock caught a 
strong bounce from the $24 support level and today it ended just 
fractionally below the top of that bull flag pattern.  Adding to 
the bullish picture is the fact that volume declined during the 
price weakness, but it has been increasing again this week as the 
bulls once again flexed their muscles.

The descending trendline is currently at $27.30, just a couple 
pennies over today's intraday high of $27.28.  That gives us a 
clear action point, and we've set an entry trigger at $27.35.  
While there may be some mild resistance at the 6/06 and 6/19 
intraday highs, once BRCM clears that trendline, we're looking 
for a strong rally to carry up to the $30 level in the near-term.  
With earnings coming up in just 2 weeks, this will be a quick 
play, as we'll be looking to exit prior to earnings on July 16th.   
If the SOX can manage a close over $400 resistance, then the 
possibility exists for a move up towards strong resistance near 
$32.  If that level is reached, then we'll want to exit the play 
for a tidy gain.  Risk management is a bit tricky with this play 
due to the strong rebound over the past two days.  The logical 
place for a stop would be $23.75, just under yesterday's intraday 
low, but that is a bit wider than we're comfortable with.  
Instead, we're starting with our stop at $24.50, just below 
yesterday's opening price.  Once triggered, BRCM should not be 
able to challenge that level unless this rally attempt in the 
overall SOX fails completely.  As an additional confirmation, 
look for the SOX to continue its rally above $375 before playing.

Annotated Chart of BRCM:


Picked on July 2nd at    $27.16
Change since picked       +0.00
Earnings Date           07/16/03 (unconfirmed)
Average Daily Volume =  13.6 mln






============
PLAY UPDATES
============

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

Synopsis, Inc. - SNPS - cls: 63.32 chng: +0.88 stop: 60.50*new*

The bears took one more swipe at the Semiconductor sector (SOX.X) 
on Tuesday, but after the opening dip to just above $350 support, 
the bulls came charging back, propelling the SOX back over $365 
at the close.  Going along with the group, our SNPS play dipped 
just below $61 early in the day and then rebounded back over the 
20-dma at the close to end just below its high of the day.  The 
buying continued on Wednesday, with the SOX gaining another 2.5% 
and SNPS pushing as high as $63.75 before settling back just a 
bit at the close.  We're still looking for a move through $64.25 
to trigger entries into the play, as a breakout over that level 
should generate some solid follow-through to the upside, as it 
will put the stock into new multi-year high territory.  Once the 
breakout occurs, we'll be targeting a near-term move to the $68-
69 area.  We're adjusting our stop upwards to $60.50 tonight, 
which is just below yesterday's intraday low.

Picked on June 25th at   $63.59
Change since picked       -0.27
Earnings Date          08/20/03 (unconfirmed)
Average Daily Volume = 1.57 mln





---

Taiwan Semi - TSM - cls: 10.94 chg: +0.54 stop: 9.99*new*

Finally.  Now that the SOX stopped pressuring TSM, it was free to 
soar.  That's exactly what it did, climbing 5.19 percent today, 
far outperforming the SOX's 2.51 percent gain.  The 20 percent 
greater-than-average volume pleased us, too.

Over the weekend, we had been eyeballing a descending trendline 
that had formed off the early June highs, but TSM gapped above 
that trendline this morning, dropped down to test it, and then 
pushed back up, closing on the high of the day.  The SOX 
cooperated by climbing out of its bull flag.  That's the kind of 
action we want to see.

What's the news today?  Gains in Asian bourses, prodded by higher 
techs, helped get the day off to a good start.  Those gains in 
Asian semiconductors, including TSM, were helped by news that 
spot prices for the most popular chip rose for the first time in 
days.  In addition, a CNN Money article refers to a CIO Magazine 
survey of chief IT officers at 311 companies.  Of those that 
responded, 47.4 percent had either just replaced a significant 
number of PC's or were currently doing so.  

Now that TSM has cleared that descending trendline, we're raising 
our stop to 9.99.  With a first target just under 12.00, 
risk/reward would not be good for new entries on momentum.  
Aggressive traders can target a pullback to that descending 
trendline for new entries.

Annotated Chart for TSM:


Picked on June 13 at $10.66
Change since picked:  +0.28
Earnings Date      07/24/03 (unconfirmed)
Average Daily Volume: 7.7 million






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

============
PLAY UPDATES
============

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

Altria Group - MO - close: 46.59 change: +0.40 stop: 43.95*new*

Another day, and another new multi-month high is the result, as 
MO continues to find buyers at higher levels.  The stock is 
stretching the top of our original ascending channel, but as 
noted in yesterday's Play of the Day writeup, the stock appears 
to be building a new and steeper channel.  Wednesday's price 
action saw MO base above the center of that new channel 
(currently $46.30) and if broad market strength continues into 
the weekend, we may see our initial profit target of $47.50 
(currently the top of the channel) achieved ahead of the July 4th 
holiday.  We're not advocating new entries at current prices, but 
would suggest harvesting gains ahead of the weekend if MO manages 
to get near that $47.50 target.  The bottom of the new channel is 
now at $45, and an intraday dip and rebound from that area can be 
used for initiating new positions.  We've been focusing on the 
bottom of the original channel (now at $44.00) and the 20-dma 
($44.01) as our last line of defense on a sharper pullback, so it 
seems prudent to raise stops tonight to $43.95.

Picked on June 18th at  $44.24
Change since picked      +2.35
Earnings Date          07/17/03 (unconfirmed)
Average Daily Volume = 12.2 mln





---


Borders Group - BGP - close: 17.95 change: +0.18 stop: 16.55*new*

We expected slow and steady progress from our BGP play when we 
added it to the playlist last weekend and to be honest, it has 
performed better than expected so far.  So far this week, the 
stock has been tracing out a healthy pattern of higher lows and 
higher highs and as of Wednesday's close, is resting just below 
$18.00 resistance.  What is so impressive about the rise this 
week is the way BGP has consistently pressed the upper Bollinger 
band higher and it has been doing it on solid volume too.  While 
a breakout over $18 may seem a tempting entry point, we would 
advise caution due to the fact that the stock is right up against 
that Bollinger band.  A more prudent strategy at this point would 
be to target entries on a pullback near the $17.40-17.50 area, as 
we're looking for the 10-dma ($17.29) to provide solid support on 
any significant pullback.  Over the past 10-weeks, the stock has 
tested the 50-dma (currently $16.61) on two separate occasions, 
both times resulting in a strong rally.  So we're inching our 
stop up to $16.55 tonight, as a break of that level would 
indicate a distinct change of trend.

Picked on June 29th at   $17.54
Change since picked       +0.41
Earnings Date           08/19/03 (unconfirmed)
Average Daily Volume =    486 K






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

D.R. Horton - DHI - close: 28.85 change: +0.29 stop: 30.25

It looks like we picked a good target for our bearish play on the 
Housing sector, as the 1.69% rally in the Dow Jones Home 
Construction index ($DJUSHB) was only good for a 1% advance in 
DHI.  While the stock did manage to close near its high of the 
day, it is encouraging to the bears that the stock was unable to 
get back over $29, the support level that it violated on Monday.  
Yesterday's early dip to just above $27 did generate some buying 
and with the $DJUSHB moving back near the $451 resistance level, 
we do need to be aware of the possibility of a stronger rebound.  
But with broken support now acting as resistance, another 
rollover in the $29.00-29.50 area looks good for new entries 
ahead of an expected breakdown near the 50-dma (currently 
$26.75).  Given the strength of resistance now at $30, our $30.25 
stop should be sufficient to hold against anything but a strong 
bullish reversal.

Picked on June 25th at   $28.90
Change since picked       -0.05
Earnings Date          07/17/03 (confirmed)
Average Daily Volume = 1.40 mln





---


Roadway Corp - ROAD - cls: 29.55 chg: +0.58 stop: 30.01 

On Monday Computerworld named Roadway Express, a subsidiary of 
Roadway Corp, one of the top 100 workplaces for information 
technology professionals.  Because Computerworld factors in 
retention as well as benefits, diversity, career development, and 
training, that perhaps speaks of a well-run company.  

Nice as the compliment was, we don't think that's the reason 
behind ROAD's climb this week. ROAD set its earnings release for 
July 8, a day that's fast approaching.  We guess that profitable 
shorts decided to take profit ahead of that earnings 
announcement.  Volume has been decreasing ROAD climbs this week, 
so there's no volume confirmation of the increasing prices.

Today's rise stopped short of the 30.00 mark, but if shorts get 
squeezed too much, we wouldn't be surprised to see our stop hit 
tomorrow.  Although we still believe it's likely that ROAD will 
roll over again either at 30 or at our original stop of 32, 
that's a dangerous assumption ahead of an earnings release.  
We'll be closing the play this weekend, and conservative traders 
might elect to exit ahead of the 30.01 official stop.       

Annotated Chart for ROAD:


Picked on June 8th at 29.75
Change since picked:  -0.20
Earnings Date      07/15/03 (unconfirmed)
Average Daily Volume: 298 thousand



---

Whole Foods - WFMI - cls: 46.92 chg: -0.83 stop: 49.01*new* 

Now that's the way we like a play to work.  Last week, we 
mentioned the potential bear flag on WFMI's daily chart and our 
expectation that the flag would break to the downside.  That's 
exactly what happened.  Yesterday, WFMI pierced the bottom of the 
flag, but managed to cling to the bottom support.  Today, it 
couldn't maintain that support.  

WFMI dropped 1.74 percent on a day that the retail index $RLX 
gained 0.71 percent.  While closest competitor Wild Oats (OATS) 
also dropped, many bigger chain grocers such as Kroger (KR) and 
Safeway (SWY) outperformed the retail index to the upside.  WFMI 
also dropped on twice the average daily volume, further 
confirmation of the distaste investors have for the stock.  

Or was it?  When volume picks up too dramatically on a decline, 
investors may be accumulating.  We notice that WFMI's drop today 
stopped within pennies of the June 18 low and the early February 
highs.  Oscillators have turned down again and don't hint at a 
bounce, but that possibility always exists. 

We're lowering our stop to 49.01 so that we're sure to gather 
some profit from the play.  Because the 45 target is so near 
current levels, new entries would be risky, but aggressive 
traders could target a rollover under the violated bear flag 
anywhere below 48.  We would not suggest further entries on 
momentum breaks to the downside.

Annotated Chart for WFMI:


Picked on June 13 at $49.44
Change since picked:  -2.52
Earnings Date      07/30/03 (unconfirmed)
Average Daily Volume: 1.6 million






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

=========
NEW PLAYS
=========

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

Sirius Satellite Radio - SIRI - cls: 1.775 chg: +0.075 stop: 1.59

Company Description:
SIRIUS is the only satellite radio service bringing listeners 
more than 100 streams of the best music and entertainment coast-
to-coast. SIRIUS offers 60 music streams with no commercials, 
along with over 40 world-class sports, news and entertainment 
streams for a monthly subscription fee of only $12.95, with 
greater savings for upfront payments of multiple months or a year 
or more. Stream Jockeys create and deliver uncompromised music in 
virtually every genre to our listeners 24 hours a day. Satellite 
radio products bringing SIRIUS to listeners in the car, truck, 
home, RV and boat are manufactured by Kenwood, Panasonic, Clarion 
and Audiovox, and are available at major retailers including 
Circuit City, Best Buy, Car Toys, Good Guys, Tweeter, Ultimate 
Electronics, Sears and Crutchfield. SIRIUS is the leading OEM 
satellite radio provider, with exclusive partnerships with 
DaimlerChrysler, Ford and BMW. Automotive brands currently 
offering SIRIUS radios in select new car models include BMW, 
MINI, Chrysler, Dodge, Jeep®, Nissan, Infiniti and Mazda. 
Automotive brands that have announced plans to offer SIRIUS in 
select models include Ford, Lincoln, Mercury, Mercedes-Benz, 
Jaguar, Volvo, Audi, Volkswagen, Land Rover and Aston Martin.
(source: company press release)

Why We Like It:
America likes to root for the underdog and Sirius, named after 
the Dog Star, has become a serious underdog to XM Satellite 
Radio.  Shares of XMSR have been a huge winner for investors this 
year and shares surged again today after recently announcing that 
the company added another 209,000 subscribers in their second 
quarter.  This puts them over the 690,000-subscriber mark, which 
is nearly seven times the number of subscribers that SIRI has.

So why play SIRI over XMSR?  If you're a long-term investor, then 
XMSR appears to be the better play.  The challenge there is just 
finding the right entry point.  Currently the stock looks a 
little extended.  However, if you're a short-term trader, then 
the play might be SIRI.  Many times stocks can rally higher even 
when it is their competitor that's doing all the heavy lifting.  
In essence, SIRI can be "guilty" by association.  XMSR may be 
doing all the business, but investors may decide to speculate 
that SIRI could play catch up both in number of subscribers and 
then in share price.  

This play is certainly not without risk.  The company (SIRI) 
appears to be in desperate need of cash and they've been selling 
stock and debt as fast as they can.  We suspect that the recent 
weakness in June has been nothing more than profit taking after 
the stock's run up from 75 cents in April to almost $2.40 in 
early June (shares actually traded under 40 cents in March).  The 
last two weeks have seen buyers defend the stock above $1.60.  
Thus, we're going to start the play with a stop loss at $1.59.  
HOWEVER, we're going to use a TRIGGER at $1.81 to leg us into the 
play.  That way if bulls don't follow through on today's move, 
we're happy to sit on the sidelines.  If we are triggered at 
$1.81 or above, then our short-term target is a run to $2.20-to-
$2.40.  Fortunately, SIRI's point-and-figure chart is showing a 
strong double-top breakout from being seriously oversold.

REMEMBRE, this is an aggressive, high-risk play!

Annotated Chart for SIRI:
 

Picked on July 02 at $ 1.77
Change since picked:  +0.00
Earnings Date      00/00/00 (unconfirmed)
Average Daily Volume: 71  million

 




============
PLAY UPDATES
============

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

Sigma Designs - SIGM - cls: 11.21 chg: +0.01 - stop: 9.99  

SIGM was one of the companies added to the Russell 2000 this 
week, and it has spent the week digesting the gains made prior to 
its inclusion.  The 10-dma is rising, as is the 50-dma and the 
200-dma.  

We do note, however, that SIGM underperformed the Russell 2000 
today, with the Russell gaining 2.16 percent and SIGM only 0.09 
percent.  Also, yesterday's high wave pattern and today's doji 
speak of indecision, but that kind of decision is often typical 
of consolidation.  Oscillators have flattened while SIGM digests 
its recent gains.  

We're pleased to see SIGM digesting those gains above our stop 
and the rising 10-dma.  Those seeking a new entry might look for 
a pullback and bounce from that 10-dma or a move over yesterday's 
high at 11.62.  

*Disclosure* 
One of our research staff currently owns shares of SIGM.

Annotated Chart for SIGM:


Picked on June 27 at 11.02
Change since picked: +0.19
Earnings Date      5/27/03 (confirmed)
Average Daily Volume:  600 thousand




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

Human Genome Sciences - HGSI - cls: 12.62 chg: +0.22 stop: 13.55*new*

Relative weakness is still the name of the game with our HGSI 
play, as the stock has consistently been unable to capitalize on 
any strength in the Biotechnology index (BTK.X).  That weakness 
has built a solid wall below $13.50 over the past couple weeks 
and it is encouraging to see the stock unable to even manage a 
close over the 10-dma (currently $12.68).  Lower intraday highs 
over these past 2 weeks are reinforcing the pattern of weakness, 
and the only thing that gave the stock a lift on Wednesday is the 
fact that the BTK index staged a more than 4% advance.  Failed 
rallies below the 50-dma ($13.33) still look good for new 
entries, as we continue to target an eventual breakdown under 
$12.00 and then follow through down towards the $10.25 level near 
the 200-dma.  With the exception of the brief opening dip 
yesterday, support has been firm near $12.25, so traders looking 
for a momentum entry can still consider a volume-backed move 
below that level.  A note of caution though is that we wouldn't 
want to chase the stock lower unless we're also seeing weakness 
in the BTK index.  If the BTK rallies and holds above $350 going 
into the weekend, then we would advise caution, as it would 
introduce the possibility that sector strength could drag even 
this laggard higher.  Note that we've lowered our stop to $13.55 
tonight, as that is just above the stock's intraday highs since 
June 23rd.


Picked on June 18th at    $13.43
Change since picked        -0.81
Earnings Date           07/24/03 (unconfirmed)
Average Daily Volume =  3.05 mln







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