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Daily Newsletter, Wednesday, 07/09/2003

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PremierInvestor.net Newsletter                Wednesday 07-09-2003
                                                    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:      Correction


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)
=================================================================
     07-09-2003           High     Low     Volume Advance/Decline
DJIA     9156.21 - 66.88  9229.11  9108.24 1.99 bln    974/ 988
NASDAQ   1747.46 +  1.00  1758.18  1735.30 2.17 bln   1385/ 742
S&P 100   503.63 -  2.71   508.25   501.73   Totals   1359/1730
S&P 500  1002.21 -  5.63  1010.43   998.17
RUS 2000  476.99 +  3.02   477.88   470.50
DJ TRANS 2562.41 -  2.71  2575.07  2552.50
VIX        21.03 -  0.37    22.22    20.88
VXN        33.22 -  0.27    34.06    32.60
Total Volume 4,415M
Total UpVol  2,436M
Total DnVol  1,902M
52wk Highs     872
52wk Lows       19
TRIN          0.88
PUT/CALL      0.72
=================================================================

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

Correction
Jonathan Levinson

The indices pulled back to their ascending trendlines today in a 
much anticipated and long-awaited correction.  Although there was 
an "impulsive" feel to the selling, the bounces came on schedule 
at the lower ascending trendlines.


30 minute 20 day candle chart of the INDU



30 minute 20 day candle chart of the COMPX



The Commerce Department announced that US wholesale inventories 
dropped 0.3% in May, following a decline in the same amount in 
April.  Wholesale sales dropped 0.5%.  The inventory-to-sales 
ratio remained at 1.24, just above its record low of 1.21 posted 
in March.  This negative economic news, a downside surprise 
against expectations of gains in both inventories and sales, 
sparked a selloff when it was released at 10AM, but within 
minutes it was bought on huge volume in the futures pits.

The American Petroleum Institute reported a 3.97 million barrel 
increase in crude inventories for the week just ended, while the 
Energy Department reported a mere 100,000 barrel gain. The API 
reported that gasoline inventories fell by 2.5 million barrels, 
while the Energy Department reported a gain of 500,000 barrels. 
Nothing like a disagreement on the facts.  Crude and heating oil 
futures both finished higher, with the market apparently ignoring 
both, judging that in any event, the data was bullish for these 
commodities.

The Mortgage Bankers Association (MBA) announced that seasonally-
adjusted demand for mortgage refinancings, the MBA refinancing 
index, dropped 21.3% for the week ended July 4.  Demand for loans 
with which to buy homes, the Purchase index, dropped 5.5%. The 
MBA's market index, an overall measure of mortgage activity, 
dropped 17.7%.  The average interest rate for a 30-year fixed 
rate mortgage rose to 5.37% from 5.23%.  Reports cited rising 
interest rates and a shortened holiday week.

For the past several weeks, I have been discussing the impact of 
money supply on the prices of paper assets.  This past week saw a 
slight downtick in the overall money supply as measured by the 
MZM money supply, coincident with the downtick in mortgage 
activity.

MZM chart


The previous week had seen a downtick in mortgage activity as 
well.  We also saw lower prices in equities and treasury bonds.  
While these data are coincident, I do not believe that they are 
coincidences.  My premise is that the overall levels of debt are 
directly correlated to overall levels of liquidity.  Debt is 
liquidity - the more debt, the more liquidity and hence, higher 
asset prices.  The reverse appears to be true as well, as we've 
seen in the downtick in mortgage activity, money supply, bond and 
stock prices.  Note that the Fed, whose ostensible mission is to 
promote stability in the financial markets, has been fighting 
this downtick in liquidity by dramatically increasing its levels 
of open market operations over the past weeks (see chart below).  
We track the Fed's daily open market operations in the Market 
Monitor, and my very first article on this website (in Traders 
Corner) attempts to explain how open market ops function.

Chart of overnight and term repurchase agreements (repos)


We have seen that despite the dramatic inflation of the money 
supply by the Fed, the money (or rather, the debt) has managed to 
miss commercial and industrial borrowers, flowing into the hands 
of individual borrowers instead.  The data shows that they have 
used this debt for the purchase of houses (mortgages), 
automobiles (auto loans and leases), and other consumer products 
(home equity loans, lines of credit and credit card debt). 

Chart of Real Estate Loans


Chart of Total Consumer Credit


Unfortunately, as the ongoing record-breaking current account 
deficit has been telling us, the bulk of the economic stimulus 
from the Fed's operations has been in foreign countries, and this 
is confirmed by the rising unemployment rate at home in the US.

Chart of Unemployment Rate


Lastly, the selling in treasuries since the Fed's last quarter-
point rate cut has caused a spike in yields. In light of the 
rising number of bankruptcies during the past year and the 45 
year low federal funds rate, I believe that the single greatest 
current danger to the economy is higher interest rates.  Given 
the Fed's strong words about its intention to keep rates down, I 
do not expect the selloff in treasuries to go much further. 

5 year weekly chart of the ten year note yield


The President named his remaining top treasury officials today, 
adding Susan Schwab, former dean of U. of Maryland, as deputy 
Treasury secretary and Kenneth Leet, former Goldman Sachs 
executive, to replace outgoing domestic finance undersecretary 
Peter Fisher.  Fisher is best known for having phased out the 
thirty year bond.  The new appointees join John Snow as Treasury 
secretary, Stephen Friedman as White House economic advisor and 
Gregory Mankiw as chairman of the council of economic advisors.

In corporate news, it was announced that the SEC has launched a 
formal probe of THC, sending a subpoena requesting documents 
relating to Medicare payments and other disclosures going back to 
May 1997.

LOGI got clocked today after warning that fiscal Q4 operating 
income would be between $7 million and $8 million, far below its 
its goal of $14 million. It cited weak demand and intense 
competition for decrease.

Techs got a lift in the afternoon after it was reported that
Gartner Group expects worldwide semiconductor capital spending 
to grow 7.9% in 2003 after dropping 38% percent in 2002.

After the bell, DNA beat estimates, reversing a loss from
Q2 2002 and announcing pro forma earnings of $163.5 million, or 
31 cents per share excluding special charges.  Estimates were for 
26 cents per share.

The much-anticipated YHOO earnings release was poorly received by 
the market, cratering QQQ afterhours to below 32 as of this 
writing and reversing a positive close by over one dollar for 
YHOO.  The company reported that Q2 earnings were  $50.8 million, 
or 8 cents per share, up from $16.48 million, or 3 cents per 
share, in Q2 2002. It missed its earnings projection of 9 cents 
per share by a penny.  

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

              Report                     Briefing  Market   Prior
                                         Expects   Expects
Jul 10 8:30 AM Export Prices ex-ag. Jun - NA       NA       -0.1%
Jul 10 8:30 AM Import Prices ex-oil Jun - NA       NA       -0.2%
Jul 10 8:30 AM Initial Claims 07/05 -     420K     420K      430K


For tomorrow, we can expect further tests of the bullish 
trendlines on the major indices.  I am very far from caring about 
YHOO's financial well-being one way or the other, but the action 
following its earnings release is relevant for the broader market 
as we approach earnings season.  Bulls have amassed fat profits 
this year, and the mighty Nasdaq is sitting near the top of a 
very steep ascending trendline as we head into earnings season at 
the start of the summer.  We had a small correction today.  A 
profit-taking event would have a distinctly deleterious effect on 
bull accounts, and for that reason, we should be attentive to the 
current support levels.  Bulls should set appropriate stops and 
be alert.  While the rally can certainly march higher, the risk-
reward balance has become lopsided, and it appears to me to favor 
the downside.



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

MAY     May Dept Stores            23.14     +0.72
CEPH    Cephalon Inc               46.77     +0.57
GTK     GTech Holdings             38.95     +0.71
PHS     Pacificare Health          54.41     +2.81
PII     Polaris Industries         66.06     +1.58
NCEN    New Century Financial      44.10     +1.10

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

SMTC    Semtech                    17.58     +1.45
CHINA   Chinadotcom                13.28     +1.68
PCLE    Pinnacle Systems           12.69     +1.11
TLRK    Tularik Inc                12.08     +1.10
PWAV    Powerwave Tech              8.75     +1.23
HELE    Helen of Troy              18.65     +3.23

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
INFY    Infosys Tech               56.50     +4.26
NSM     National Semiconductor     23.43     +2.64
NCR     NCR Corp                   32.25     +3.84
WC      Wellchoice Empire          30.50     +1.50
NAV     Navistar Intl Corp         36.85     +1.03
CCMP    Cabot Microelectronics     58.94     +1.83
KMT     Kennametal                 36.83     +1.36

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

MO      Altria Group               44.00     -2.77
KFT     Kraft Foods                31.32     -1.16
NAB     National Australia Bank   106.10     -3.62
STJ     Saint Jude Medical         53.25     -2.28
LOGI    Logitech Intl (ADR)        31.01     -9.98

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

MBT     Mobile Telesys             58.00     -4.10
FBC     Flagstar Bancorp           22.75     -1.68
WEG     Williams Energy Partners   47.66     -0.64






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c
PremierInvestor.net Newsletter                Wednesday 07-09-2003
                                                    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
  Bullish Play Updates:  AMZN, BRCM, SNPS, TSM

Active Trader (Non-tech)
  New Bearish Plays:     BMS
  Bullish Play Updates:  BGP, GTI
  Bearish Play Updates:  WFMI
  Closed Bullish Plays:  MO

High Risk/Reward
  New Bullish Plays:     EELN
  Bullish Play Updates:  SIGM, SIRI


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

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

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


Amazon.Com - AMZN - close: 40.50 chg: -0.01 - stop: 37.74*new*

That was quick.  AMZN hit our initial target of $39.90 today.  
We're setting our next target at $42.49 and plan to exit there 
once it has been reached. 

AMZN's story tonight may be less about AMZN and its performance 
and more about YHOO and its performance after reporting earnings 
Wednesday after the bell.  Although YHOO met earnings of 8 cents 
per share, some were optimistic that YHOO might report earnings 
at 9 cents per share, and the stock was trading down in after 
hours.  AMZN was getting hit, too, in after hours, trading down 
near 39.30 as this article went to press.  

After-hours trading is not always representative of trading seen 
during normal market hours, and AMZN's spectacular rise since our 
37.85 entry gives us plenty of cushion to see how AMZN reacts to 
YHOO's earnings announcement.  We're raising our official stop to 
37.74, just below the 10-dma at 37.75 and also just below our 
37.85 entry.  Conservative traders who want to ensure capturing 
some of this week's gains could exit ahead of that stop.  The 
hourly chart indicates that 38.19 might be an appropriate 
alternate stop for conservative traders.  

Oscillators maintain their series of higher lows, and the MACD 
still points to more upside for AMZN.  Competitor Barnes and 
Noble (BKS) staged its own breakout today, moving above 24, 
confirming this sector as one that's showing some promise.  The 
retail index $RLX did pull back today, but maintains its 330 
support, and the Philadelphia Internet Index $DOT.X also broke 
out above next resistance.  That breakout may be suspect, 
however, if YHOO stumbles tomorrow.

With a stop at 37.74 and a profit target of 42.49, it's difficult 
to determine new entries for this successful play.  Aggressive 
traders might consider an entry on a breakout above this week's 
40.83 high, but should then set a 39.79 stop rather than adhering 
to the current official stop.  This would be a high-risk 
position.

Annotated Chart for AMZN:


Picked on July 2 at   37.85
Change since picked:  +2.65
Earnings Date       7/22/03 (confirmed)
Average Daily Volume:   8.3 million



---


Broadcom Corp. - BRCM - cls: 29.10 chng: -0.42 stop: 26.50*new*

Our BRCM play started the week off with a bang, blasting through 
the descending trendline just over $27 with a gap up move on 
Monday morning and following through yesterday with the stock 
pushing to just shy of $30 resistance with an intraday high of 
$29.96.  After such a strong rally in so short a period of time, 
with yesterday's entire session taking place above the upper 
Bollinger band, it was a huge warning that some profit taking was 
close at hand.  That played out early today, with the stock 
dipping back to just above $28, filling yesterday's gap before a 
rebound that took BRCM back over $29 by the close.  The real 
story in the Chip sector on Wednesday was the fact that the SOX 
managed to close over $400 for the first time in over a year and 
follow-through on that move could usher in another strong upward 
wave in BRCM and other leading chip stocks.  There should now be 
strong support for the stock in the $27.00-27.50 area and any 
rebound from above that zone looks attractive for new positions.  
While a breakout over $30 may work for new momentum entries, that 
approach should be viewed as more aggressive due to the proximity 
of the upper Bollinger band at $29.21.  Raise stops to $26.50, 
which is below the recently broken descending trendline, the 10-
dma ($26.58) and last Thursday's intraday low.

Picked on July 2nd at    $27.16
Change since picked       +1.94
Earnings Date           07/22/03 (confirmed)
Average Daily Volume =  13.4 mln




---

Synopsis, Inc. - SNPS - cls: 64.39 chng: -0.70 stop: 62.25*new*

The big story in the NASDAQ on Wednesday was the Semiconductor 
index (SOX.X) managing its first close over $400 since last June.  
Our SNPS play had its breakout over the $64.25 trigger on Monday 
and over the past couple sessions, it has been consolidating 
above that level.  Traders looking for a reason why the stock 
wasn't able to immediately build on its breakout may want to look 
at the upper Bollinger band, which had flattened out just below 
$65.  The price action this week has once again started an 
expansion of the bands, and that should open the way for SNPS to 
move higher after the current consolidation runs its course.  
There should be strong support now in the $63.00-63.50 area 
(former resistance) and a dip and rebound from above that zone 
can be used for new entries.  Note that the 10-dma ($63.38) 
should reinforce that support zone.  Note that our stop has moved 
up to $62.25 tonight, which is just below the converged 20-dma 
($62.40) and 30-dma ($62.30).

Picked on June 25th at   $63.59
Change since picked       +0.80
Earnings Date          08/20/03 (unconfirmed)
Average Daily Volume = 1.54 mln




---

Taiwan Semi - TSM - close: 10.62 change: +0.14 stop: 9.99

Early Wednesday morning, a negative close appeared more likely 
than the positive one TSM achieved.  Although the Taiwanese 
government's decision to sell TSM ADR's (American depository 
receipts) to ease a budget deficit had been announced last week 
and mentioned in our TSM updates, the sale of the ADR's knocked 
TSM back to support on Tuesday.  The result wasn't discouraging, 
however.  The ADR's sold at a 0.7 percent discount to Tuesday's 
closing price, which demonstrated some demand for the ADR's.  A 
Bloomberg article noted that similar share sales often require a 
deeper 4 or 5 percent discount. 

In addition to this development this week, TSM also revealed June 
sales of $523 million and Q2 factory utilization of 86 percent.  
Prudential commented on TSM, speculating that September's factory 
utilization could grow to 90 percent.  Prudential repeated its 
buy rating and its 13.00 target.

We were pleased to see that today's bounce from support came on 
big volume.  TSM's 32 million shares measured four times its 
average daily volume.  The bounce hinged RSI up again just as it 
touched its ascending trendline.

That RSI hinge is tentative as yet, though, and other oscillator 
evidence proves less conclusive.  Tuesday's fall flattened the 
MACD in midrise.  Wednesday was an inside day, with the day's 
trading range encapsulated within Tuesday's range.  We hope to 
see an upside break of that inside day with a move over 
Wednesday's high, and expect that's the most likely outcome since 
many levels of support now converge just above our 10.30 stop.  
If the inside day breaks to the downside, however, our stop will 
take us out with a minimal loss.  Aggressive traders seeking a 
new entry might target a breakout above Tuesday's 10.77 high.

Annotated Chart for TSM:


Picked on June 13 at $10.66
Change since picked:  -0.04
Earnings Date      07/24/03 (unconfirmed)
Average Daily Volume: 7.7 million







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

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

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

Bemis Company - BMS - close: 45.18 change: -0.73 stop: 47.25

Company Description:
Bemis Company is a principal manufacturer of flexible packaging 
products and pressure-sensitive materials, selling to customers 
throughout the United States, Canada and Europe, with a growing 
presence in Asia Pacific, South America and Mexico.  the 
company's business activities are organized around its two 
business segments, Flexible Packaging and Pressure Sensitive 
Materials.  Products produced within the Flexible Packaging 
segment are high-barrier products, polyethylene products and 
paper products.  Products produced within the Pressure Sensitive 
Materials segment are printing products, decorative and sheet 
products and technical products.  The company's primary market 
for its products is the food industry.  Other markets include 
companies in the chemical, agribusiness, medical, pharmaceutical, 
personal care products, tissue, batteries, electronics, 
automotive construction and other consumer goods businesses.

Why we like it:
Just like everything else, shares of BMS caught a strong bounce 
with the rest of the market in the middle of March after finding 
strong support near $40.  After the March volatility subsided, 
the stock entered a solid ascending channel, in which is steadily 
pushed higher right into early July.  Throughout that period, the 
stock found consistent support on the pullbacks at the 50-dma 
(currently $46.51).  In what turned out to be a bull-trap, BMS 
broke out above the $48 resistance on Monday, closing at its best 
level since January, but then things turned ugly.  Yesterday 
morning before the open, the company guided below prior estimates 
for Q2, giving a revised estimate of $0.68-0.70 vs. consensus of 
$0.81.  The punishment was meted out swiftly with a large gap 
down move and further selling that drove the stock to close below 
$46, wiping out 6 weeks of gains.  In the process, BMS broke 
below the bottom of its channel, and closed below both the 30-dma 
($46.88) and the 50-dma.  Underscoring the significance of that 
drop, volume exceeded 1 million shares, or four times the ADV.  
That selling continued on Wednesday on still-heavy volume, 
driving the stock near the $45 support level.  With the broken 
channel, heavy selling volume over the past two days and the 
stock now back under its 50-dma, which is under the 200-dma, this 
looks like a bearish trend that is just getting started.

Be that as it may, chasing the stock lower may not be the best 
course of action, with today's close well below the lower 
Bollinger band.  Aggressive traders could consider entries on a 
breakdown under $45, but must be on the watch for an oversold 
rebound from possible support near $44.50.  The better approach 
appears to be to wait for that rebound and then look for a 
rollover below $47, which should now be very strong resistance.  
Being realistic, we may only see a rebound reach up to the 50-
dma, so we need to be somewhat flexible in the actual target 
level for new entries.  The point is that the best entry will 
come on the next failed rally, not on a breakdown below current 
levels.  While there is mild support to be found at both $44.50 
and $43, our initial target will be for a drop to the $42 area, 
which should be strong enough to elicit at least an oversold 
rebound.  Should the selling get carried away ahead of the 
company's 7/23 earnings report though, a drop to as low as $40 
could be in the cards.  We're initiating coverage with our stop 
set at $47.25, which is above all of the moving averages, 
including the 200-dma ($47.12).

Annotated Chart of BMS:


Picked on July 9th at    $45.18
Change since picked       +0.00
Earnings Date           07/23/03 (unconfirmed)
Average Daily Volume =  227 K






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

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

Borders Group - BGP - close: 18.49 change: -0.11 stop: 17.25

Our BGP play gave us the breakout we were waiting for right at 
the open on Monday, and despite a distinct weakening in the broad 
market over the past couple days, the stock is holding very near 
its recent highs.  Today's opening weakness dropped the stock 
back from the $18.60 area all the way down to $18.23, but the 
dip-buyers were lying in wait.  By the time the closing bell 
rang, BGP was once again trading near the $18.50 level and 
continuing to look strong.  We're still not wild about chasing 
the stock higher right now due to the proximity of the upper 
Bollinger band at $18.64, but intraday dips that find support 
above the $18.00 breakout level look good for new entries, 
especially with the 10-dma ($17.89) rising to provide additional 
support.  As mentioned in the initial writeup, BGP is likely to 
be a slow mover, so traders would be well-advised to wait for the 
next pullback to enter the play ahead of an expected bullish 
continuation up to the $19.50-20.00 area, where we'll be looking 
to exit the play at major resistance.  Raise stops to $17.40, 
which is right at the current level of the 20-dma and just below 
what should be very strong support at $17.50.

Picked on June 29th at   $17.54
Change since picked       +0.95
Earnings Date           08/19/03 (unconfirmed)
Average Daily Volume =    478 K




---

Graftech - GTI - close: 6.30 change: +0.05 stop: 5.59*new*

GTI leapt above one of our two triggers on Monday, traded back 
down to the upper trigger and then bounced higher again.  It's 
still above that 6.20 trigger, but we wish we were looking at big 
white candles hanging in space and not small red ones.  Still, we 
were cheered Wednesday when GTI reached down to test Monday's gap 
then sprang above that gap, doing so on volume that was more than 
twice the average volume.  Now that the gap is closed, we hope to 
see the MACD continue its upward movement, and for GTI to do so, 
too.

We wouldn't be surprised, however, to see GTI plumb that gap 
another day or so before it resumes its climb.  The 10-dma is 
rising strongly, curling up under GTI and reaching 5.76 today.  
Recognizing this rising support, we're raising our stop to 5.59.

Although GTI shot out several good-news press releases last week, 
news has been light this week.  We did note Tuesday that Morgan 
Stanley downgraded the European steel industry to in-line, saying 
that global steel production had grown faster than consumption 
had.  That perception doesn't match GTI's ability to raise prices 
on its products used in steel production, however.

Aggressive traders--the only type who should be playing this 
stock anyway--who are seeking a new entry might target a move 
over June's 6.44 high or another bounce anywhere above 6.00.

Annotated Chart for GTI:


Picked on  July 6 at  $6.06
Change since picked:  +0.24
Earnings Date:     07/24/03 (confirmed)
Average Daily Volume:  391 thousand




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


Whole Foods - WFMI - close: 47.31 chg: -0.24 stop: 48.51 

This week, BusinessWeek online featured two articles extolling 
the kinds of organic, wild, and artisan foods sold by Whole 
Foods, mentioning the grocer by name in both articles.  Still, 
WFMI fell Wednesday along with nearest competitor Wild Oats 
(OATS), larger chain grocery stories, and the retail index.  
Standard & Poor's commented Wednesday on the effect of Wal-Mart 
on the big chain grocers, raising the credit rating on Kroger 
(KR), lowering it on Albertson's (ABS), and adding Safeway (SWY) 
into the mix when S&P added a note that all three carried above-
average risk profiles.  That comment may have soured the sector.

Although WFMI closed down, it first made a close approach to our 
48.51 target.  After falling out of the bear flag and then 
trading down just below 46, WFMI spent this week testing the 
bottom of that bear flag.  The move turned the MACD up and 
produced another bullish kiss on the 21(3)3 stochastics, although 
MACD hasn't moved above signal and the stochastics haven't lifted 
out of the oversold zone.  RSI did turn up, finding support on 
its violated trendline, but Wednesday's action saw it hinging 
back down again.  That hinging-down RSI and the rising MACD tell 
different stories, but we hope today's close below the 10-dma 
tells the real story.  We wouldn't be surprised to see WFMI test 
the bottom of the bear flag another day or two before falling 
again.  Since support at 46 proved stronger than we expected, we 
would not suggest new entries at this time.  

Annotated Chart for WFMI:


Picked on June 13 at $49.44
Change since picked:  -2.13
Earnings Date      07/30/03 (unconfirmed)
Average Daily Volume: 1.6 million





============
CLOSED PLAYS
============

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


Altria Group - MO - close: 44.00 change: -2.77 stop: 44.25

While all good things must come to an end, we sure wish it hadn't 
happened so abruptly!  MO had been steadily working higher over 
the past few weeks and as of yesterday looked like it might 
actually take a run at $48 resistance.  But renewed litigation 
concerns reared their ugly head this morning as both Prudential 
and Morgan Stanley expressed concerns that an Illinois appellate 
panel will find that a lower court was out of line when he 
modified a $12 billion appeal bond to terms more favorable to the 
company.  Additionally, a news report raised the possibility of 
increased competition from a potential merger between RJR and 
BTI.  Those two factors were too much for MO bulls, and the stock 
cratered as low as $42.50 in the morning session before 
rebounding to $44 by the close.  No matter how you slice it, the 
play is a drop tonight as our stop was violated in the opening 30 
minutes of trade.

Picked on June 18th at  $44.24
Change since picked      -0.24
Earnings Date          07/17/03 (unconfirmed)
Average Daily Volume = 10.5 mln








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

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

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

E-LOAN - EELN - close: 6.46 change: +0.36 stop: 5.49 *new*

Company Description:
E-LOAN, Inc. is a consumer-direct lender and debt advisor 
dedicated to providing borrowers across the credit spectrum with 
a more enjoyable and affordable way to obtain home purchase, 
refinance, home equity and auto loans.  By making credit scores 
freely available to consumers and integrating them with a suite 
of sophisticated tools, E-LOAN is pioneering debt advice--helping 
consumers proactively manage their debt to lower their overall 
borrowing costs.  The company relentlessly advocates eliminating 
the dumb processes, fees, hassle, haggle and lack of transparency 
traditionally associated with the consumer loan experience.  E-
LOAN is passionate about consumers' financial privacy, and has 
implemented industry leading privacy practices and joined hands 
with consumer groups in an effort to enact strong consumer 
financial privacy protection laws.  (Source:  Company press 
release.)

Why We Like It:
We should be able to recognize this chart pattern in our sleep by 
now, and we can.  EELN traded down in a bull flag, touched its 
ascending trendline, and sprang up, breaking out of the bull 
flag.  It consolidated a day or so and then it sprang up again 
today, complete with volume more than 40 percent greater than 
average, a P&F buy signal, and a move above the P&F bearish 
resistance line.  

One financial guru warns that while companies such as E-LOAN 
should see the refinancing boom continue through the end of the 
year, the boom will eventually end.  We don't intend to hold this 
stock until the end of the year, so as long as the refinancing 
boom continues another few weeks, we'll be fine.  Since earnings 
are scheduled for July 24, we're targeting a brief play in EELN 
to avoid holding over the announcement.

Back in the middle of June, EELN raised Q2 and full year 2003 
targets, saying it expects 25-30 percent revenue growth in Q2.  
The good news didn't stop there, however, as E-LOAN was added to 
the Russell 2000 and 3000 indices.  Today, Jack Guttentag, 
Professor of Finance emeritus at the Wharton School of the 
University of Pennsylvania, named E-LOAN the first lender to meet 
his requirements for certification of Internet mortgage lenders.  

Although MACD has not yet completed its roll up into full bullish 
position, both RSI and stochastics are bullish.  Two entries are 
suggested:  a move over Wednesday's 6.62 high or a bounce from 
anywhere above 5.90.  With YHOO's earnings depressing Internet-
related stocks in after hours, we're guessing that the bounce 
from support will be the likely entry.  Our profit target will be 
8.49.

Annotated Chart for EELN:


Picked on  July 9 at $6.46
Change since picked: +0.00
Earnings Date:    07/24/03 (confirmed)
Average Daily Volume:  2.7 million





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

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

Sigma Designs - SIGM - cls: 12.54 chg: +0.56 stop: 10.89*new*  

We couldn't have charted this better if we'd penciled in the 
lines ourselves.  When we picked this play, we liked SIGM's 
story, but we liked the chart even better.  We noted the 
technical considerations, including the upside break of the bull 
flag and the bullish oscillators.  We also noted the bullish P&F 
chart.  They all predicted more upside, and that's exactly what 
we've gotten.  

There's nothing new to add to SIGM's story this week, but it's 
time to raise the stop.  We're raising it to 10.89, just below 
the 10-dma at 11.15 and the support at 10.90.  With gains in 
excess of 10 percent since our suggested entry, conservative 
traders might want to set a stop at 11.29, ensuring a profitable 
exit from the play.  

A move above 13.00 will create a new P&F buy signal for this 
SIGM, but with a target of $13.90, we're not suggesting new 
entries at this time.  
  
*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: +1.52
Earnings Date      5/27/03 (confirmed)
Average Daily Volume:  600 thousand



---

Sirius Satellite Radio - SIRI - cls: 1.84 chg: +0.07 stop: 1.60

SIRI's spreading the news--and the option for its Sirius 
Satellite Radio--across the range of all Infiniti models.  
Previously, Nissan offered the Sirius with only one model, 
although rival XM Satellite Radio Holdings (XMSR) had been 
offered across the Infiniti range.  

SIRI responded by bouncing from a low of 1.77 to a high of 1.88, 
closing in the middle at 1.84.  While we wish SIRI investors had 
responded with a bit more enthusiasm, with Wednesday's volume 
only half the average daily volume, we were glad to see SIRI 
spring up from above the 10-dma.  Stochastics and RSI turn firmly 
up and MACD has flattened its downswing, so SIRI appears ready to 
move to the upside.

Aggressive investors seeking new entries might target a move over 
Monday's 1.92 high, but that would not provide optimum 
risk/reward parameters since our profit target is in the 2.20-
2.40 range.  Aggressive traders seeking this entry might consider 
an alternative stop, perhaps at 1.72, just below the 1.73 10-dma.

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

Annotated Chart for SIRI:
 

Picked on July 02 at $ 1.77
Change since picked:  +0.06
Earnings Date      00/00/00 (unconfirmed)
Average Daily Volume:    71  million

 




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