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Daily Newsletter, Wednesday, 07/23/2003

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PremierInvestor.net Newsletter                Wednesday 07-23-2003
                                                    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:      Bernanke Does it Again

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)
=================================================================
     07-23-2003         High     Low     Volume Advance/Decline
DJIA     9194.24 + 35.79  9203.48  9102.28 1.59 bln    738/ 815
NASDAQ   1719.18 + 13.08  1720.04  1695.20 1.91 bln   1117/ 483
S&P 100   497.79 +  0.15   498.61   493.36   Totals   1855/1298
S&P 500   988.61 +  0.50   989.86   979.79
RUS 2000  466.14 +  2.14   466.15   460.52
DJ TRANS 2572.16 -  4.21  2578.82  2561.51
VIX        20.44 -  0.54    21.82    20.37
VXN        30.78 -  1.67    33.51    30.52
Total Volume 3,767M
Total UpVol  2,071M
Total DnVol  1,625M
52wk Highs     340
52wk Lows       37
TRIN          1.17
PUT/CALL      0.85
=================================================================

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

Bernanke Does it Again
by Jonathan Levinson

Today's session spent a great deal of energy determining what
traders believed the Fed will seek to do next, and closed on a
question mark.  That indecision caused a ferocious rally in
precious metal, with stocks and bonds adding tentative gains.

One year daily candle chart of the INDU



I've zoomed out to the yearly view of the indices to seek perspective.
The Dow has clearly stalled out within its up-phase, the oscillators
on sell signals from lower highs, while the Nasdaq appears to be
completing a healthy pullback within its bullish uptrend.  The
Stochastic and Macd oscillators are in mid-downphases, however, and
seem to imply that the 22 day EMA (green line), which has supported
each pullback, may not hold on the current test.

For a more detailed view of the daily and thirty minute charts of the
index futures, see tonight's Futures Wrap.


One year daily candle chart of the COMPX


The Energy Department announced today that crude inventories
dropped by 2.3 million barrels for the week ended July 18. Total
inventories are down year-over-year to 276.3 million barrels, an
11 percent decline. Gasoline inventories fell by 1.6 million
barrels to 207.8 million barrels in the latest week.
Surprisingly, analysts got it right for a change, with many
calling for the decline based on Hurricane Claudette's disruption
to oil production in the Gulf of Mexico.  The American Petroleum
Institute reported a drop of 700,000 barrels in crude stocks for
the week, considerably lower than the Energy Department's 2.3
million barrel decline.  The API reported a 1.1 million barrel
drop in gasoline supplies to 208.4 million barrels.  Crude
futures finished above their lows but under $30 per barrel.

The Mortgage Bankers Association (MBA) announced that seasonally-
adjusted demand for mortgage refinancings, the MBA refinancing
index, dropped 7.2% for the week ended July 17 following a 1.6%
drop the previous week.  Demand for loans with which to buy
homes, the Purchase index, dropped 1.1%. The average interest
rate for a 30-year fixed rate mortgage rose to 5.72% from 5.33%.
Given the sharp jump in treasury yields over the past week, it
was expected that refinancings would drop, but I find it
surprising that there wasn't more activity from late-comers who
might have been procrasting and jumped to get in when rates
began to climb.  This implies that the market for home loans may
be maxxed out.

I've updated the macro charts we've been following during the
past weeks.  The changes are minute for this past week, with the
MBA mortgage and refi indices giving the first and, I believe,
leading indication of a possible pullback in the money supply as
the origination of loans begins to recede.  As treasury bonds
continue to get sold, this trend should strengthen.  Mr.
Bernanke's speech, discussed below, asserts that the Fed will
fight this contractionary trend, much as it has been doing for
the past several years.

MZM chart


The zero-maturity money supply and the Fed's open market activity
maintained their steeply rising trends as the Fed continued to
add bank reserves, freeing up capital with which to purchase
securities in the open market.  Note that an increase in the
supply of anything lowers its per unit value, and so the
expansion of the money supply is at the expense of the value of
each dollar.  In this light, inflation may be seen as a "hidden"
tax.

Chart of overnight and term repurchase agreements (repos)


Bank prime loan rate



The effect of the inflation of the money supply and the purchase
by the Fed's member banks of treasury bonds has helped lower the
time-value of money, with the prime rate at a multidecade low,
although this 13 year time series doesn't fully capture it.


Chart of Total Consumer Credit


Consumer credit outstanding appears to have ticked up this week,
and it too remains at multi-decade highs, fueled by the record
low rates. I find it disconcerting that consumers have been
encouraged to take advantage of these low rates by taking on more
debt instead of refinancing and paying down their existing debt.
This legacy of the President and Mr. Greenspan may well come back
to haunt them.

The overall effectiveness of Mr. Greenspan's war against the
Kondratieff Winter and inflationary stimulation policies is
measured by the following charts, those which constitute the
bottom line for the broad citizenry subject to the Federal
Reserve's policies:

Chart of Unemployment Rate



Chart of US Bankruptcy Filings, unchanged from last week



Chart of State and Local Surplus or Deficit


Against this backdrop, Federal Reserve governor Ben Bernanke
addressed a speech at UCSD this morning.  True to form, Bernanke
broadcast what appear to me to be panic-type comments on the
Fed's part, and a wanton disregard for the US currency and all
those who save and invest prudently with it.  As mentioned in
last week's Wednesday market wrap, the effective rate of return
on short term treasuries is more than 1 percent below the CPI,
forcing our elderly and savers to put their capital at risk just
break even with cost of living increases.  Bernanke took it a
step further, saying that "We should be willing to cut the funds
rate to zero, should that prove necessary to provide the required
support to the economy."  Once again, the "pushing on a string"
analogy comes to mind.

A highlight:

"In any case, I hope we can agree that a substantial fall in
inflation at this stage has the potential to interfere with the
ongoing U.S. recovery, and that in conceivable--though remote
circumstances, a serious deflation could do significant economic
harm. Thus, avoiding a further substantial fall in inflation
should be a priority of monetary policy. To my mind, the central
import of the May 6 statement is that the Fed stands ready and
able to resist further declines in inflation; and--if inflation
does fall further--to ensure that the decline does not impede the
recovery in output and employment."

The full text of the speech is available at
http://www.federalreserve.gov/boarddocs/speeches/2003/20030723/default.htm


The Fed added a larger-than-usual 7B overnight repo, and for the
second time this week failed to announce it through its website
until several hours later than usual.  The number announced in
this morning's Market Monitor was obtained by calling the New
York Fed and asking for it.  This large open market operation,
with no expiries today, indicates a certain trepidation on the
part of the Fed. However, the inflationary words of Bernanke's
speech are ultimately bullish for paper assets, as he's implying
an increase in the supply of money with which to chase those
assets, and both bonds and stocks remained firm following his
speech.  Gold rallied explosively on the comments, as investors
fled to commodities which are not subject to arbitrary inflation
or proliferation, unlike dollars, treasuries, stocks and other
paper.

There was a plethora of corporate data released today.  AOL Time
Warner (AOL) reported $0.12 per share, beating expectations by 2
cents. Boeing (BA) lost $0.24 per share vs. expectations of a
0.43 per share loss.  Bell South (BLS) earned $0.52 per share,
beating by 2 cents.  Lucent (LU) met expectations, losing 7 cents
per share.  Eastman Kodak (EK) earned 60 cents, clobbering
expectations of 27 cents per share.  Kimberly Clark (KMB) beat by
a penny, earning $.82 per share.

After the bell, Qualcomm (QCOM) beat by 3 cents at 33 cents per
share.  AFLAC (AFL) earned 48 cents per share, beating by 3 cents.
Overture (OVER) beat by 6 cents, coming in at 12 cents per share,
and Veritas (VTAS) beat by 5 cents per share, reporting revenues
of 19 cents per share.  Electronic Arts (ERTS) blew out estimates
of 2 cents per share, earning 13 cents and increasing y-o-y profits
by 148%.  Symantec (SYMC) earned $0.45 per share, beating estimates
by 6 cents.

We have the following economic data due tomorrow:

               Report                   Briefing  Market  Prior
                                        Expects   Expects
Jul 24 8:30 AM Initial Claims 07/19 -   415K      415K    412K


For tomorrow, with a very light slate of economic data due, the
question mark on which today's equity session closed will
continue.  The comments made by Bernanke are obviously not
bullish for companies or the broader economy.  However, the
spring rallies in bonds and stocks were the result of a surge in
liquidity.  The big moves up in gold and silver were obvious, as
was the move down in the dollar.  The big unanswered question is
whether stocks have it in them to rally again from current
levels, and whether the Fed will do as much as Mr. Bernanke
implied today.  The mixed trading throughout the day will likely
carry over to tomorrow as the markets struggle to choose a
direction.

See you at the bell!




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

SGP     Schering-Plough            17.75     +0.78
ITU     Banco Itau (ADR)           35.68     +1.03
SHW     Sherwin-Williams Co        29.15     +1.02
CBE     Cooper Industries          42.89     +0.77
FL      Foot Locker Inc            14.98     +0.93
ICBC    Independence Cmmty Bk      32.32     +1.05

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

MU      Micron Technology          15.38     +1.08
RX      IMS Health Inc             19.00     +1.31
ENTG    Entegris Inc               15.11     +1.04
QLTI    QLT Inc                    15.39     +1.59
LII     Lennox Intl Inc            15.43     +2.34
VCLK    ValueClick Inc              7.52     +1.17

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

UNH     UnitedHealth Group         54.51     +1.68
NEM     Newmont Mining             35.28     +1.88
CNI     Canadian Natl Railway      50.07     +1.01
AL      Alcan Inc                  32.94     +1.64
FISV    Fiserv Inc                 38.90     +1.29
ETN     Eaton Corp                 85.90     +3.10
CECO    Career Education Corp      82.11     +9.13

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

CCU     Clear Channel Communication 39.49     -1.42
TEVA    Teva Pharmaceuticals        53.05     -1.54
XL      XL Capital                  77.09     -3.61
ACE     Ace Ltd                     31.70     -1.04
BRCM    Broadcom Corp               23.53     -3.00
DGX     Quest Diagnostic            58.33     -1.23

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

MKL     Markel Corp                263.25     -1.74






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Do not duplicate or redistribute in any form
PremierInvestor.net Newsletter                Wednesday 07-23-2003
                                                    section 2 of 2
Copyright ) 2003, All rights reserved.
Redistribution in any form is strictly prohibited.

The entire newsletter is best viewed in COURIER 10 for alignment
=================================================================

In section two:

Tech Stocks
  New Bullish Plays:     MU
  New Bearish Plays:     STX
  Bullish Play Updates:  PLNR
  Closed Bearish Plays:  YHOO

Active Trader (Non-tech)
  New Bullish Plays:     NEM
  Bullish Play Updates:  COH
  Bearish Play Updates:  BMS, HOV

High Risk/Reward
  Bullish Play Updates:  BEAS, SIRI


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

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

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


Micron Technology - MU - close: 15.38 change: +1.08 stop: 13.90

Company Description:
Micron is one of the world's leading makers of semiconductor
memory components.  Two-thirds of the companies revenues come
from dynamic random-access memory (DRAM), flash memory, and other
chips.  MU has added the newer Rambus DRAM and Synchronous DRAM
products to its line, and it is developing embedded memory for
the digital video and other markets.  The other third of the
company's sales come from Micron Electronics (61% owned by MU),
which makes PCs and laptop computers and offers Internet related
business services.

Why we like it:
The Semiconductor sector (SOX.X) has been key to the impressive
and extended rally in the Technology sector over the past few
months.  That trend looked to be in jeopardy on Monday, with the
SOX challenging the bottom of its 5-month ascending channel and
closing right on that lower channel line, just above the 50-dma.
Tuesday was a different story, with the bulls coming back with
enthusiasm and the SOX now looks to be setting up for another
challenge of the $400-410 resistance level that has turned back
the past two bullish advances.  While it hasn't necessarily been
the sector leader, MU started its own rebound a bit earlier on
the back of last Thursday's upgrade from UBS.  That helped to put
a floor under the stock near $13.25, just above the bottom of the
early July gap.  Finding resistance near $14.50 earlier in the
week, the stock finally got that push over resistance this
morning when the stock was upgraded by Soundview to Outperform
and put in a very strong showing.  After gapping up to $15, the
stock dipped back to nearly fill the gap and then surge higher to
close near its high with a 7.5% gain on volume that doubled the
ADV.

With volume like that supporting the breakout, this move looks
like it has room to run.  The PnF chart looks totally bullish
with another Buy signal and price now clearly through the bearish
resistance line.  The vertical count points to the $24 level as
the eventual target and with earnings not set to be released
until the middle of September, who knows.  Narrowing our focus a
bit though has us looking at the first upside objective as the
next resistance near $16.50, with an eventual target of $18,
which should represent strong resistance.  With price already
pressing the upper Bollinger band, we'd certainly prefer to enter
on the next pullback into the $14.50-14.75 area.  Aggressive
traders can enter on a breakout over $15.70, but need to be aware
of the risk of a near-term pullback due to the proximity of the
upper Bollinger band.  MU should now find strong support near
$14, reinforced by the 10-dma ($14.14), so we're setting our stop
at $13.90, just below Monday's intraday low of $13.95.

Annotated Chart of MU:


Picked on July 23rd at   $15.38
Change since picked       +0.00
Earnings Date            9/17/03 (unconfirmed)
Average Daily Volume =  10.9 mln





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



Seagate Tech. - STX - cls: 19.50 chg: -0.42 stop: 21.21

Company Description:
Seagate is the worldwide leader in the design, manufacturing and
marketing of hard disc drives for Enterprise, PC and Consumer
Electronics applications.  (Source: Company Press Release)

Why We Like It:
Have we lost our minds?  What are we doing recommending a short
on a stock that recently reached an all-time high, beat earnings,
and saw CSFB raise its 2004 earnings forecast?  On July 15, STX
reported Q4 $0.33/share earnings that came in at the high end of
revised-higher estimates of $0.30-.33/share, up from the year-ago
loss of $0.49/share.  The next day, CSFB raised its 2004 earnings
forecast.  STX climbed until July 16, when it printed a high-wave
candle that indicated indecision.  That candle proved predictive,
since STX has fallen ever since.


Raised estimates or not, STX investors ought to be undecided
about buying STX at the recent high.  This is a stock that traded
just below $8.00 in early February.  At last week's high, it
traded at levels almost 150 percent of its still-trending-lower
200-dma.  So, we haven't lost our minds and we don't expect STX
to spin all the way back to $8.00, but we do think it's time for
STX to pull back and regroup.  We intend to take advantage of
that regrouping if it occurs.

Technical considerations make us believe that's just what might
happen.  This week, STX fell below its newest and steepest nearly
parabolic ascending trendline.  Prices retested the trendline
Tuesday and fell away Wednesday, closing just below the 21-dma.
STX hasn't closed below its 21-dma since the middle of March, so
this marks a divergence.  RSI, stochastics and MACD all look
bearish.  Today's volume was bigger than average, too, supporting
the notion that profit-taking has set in.

To ensure that today's minimal close below the 21-dma wasn't a
trap, we're setting an entry TRIGGER below today's low of 19.35.
Our stop will be 21.21, just above that ascending trendline.
We'll watch carefully as SGT approaches $17.00, the site of the
rising 50-dma, as we will likely see our first serious bounce
attempt at that level.  We're targeting stronger support at
$16.00 and the descending 200-dma near $15.00 for our profit
targets.

Annotated Chart for STX:



Picked on July 23 at $19.50
Change since picked:  +0.00
Earnings Date:     07/15/03 (confirmed)
Average Daily Volume:   3.1 million





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

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

Planar Systems - PLNR - cls: 23.84 chg: +0.50 stop: 20.99

While PLNR didn't dip low enough to give us the hoped-for $22.00-
22.50 entry, it did cooperate by dipping near $23.00 on both
Tuesday and Wednesday.  That gives us a better risk/reward setup
with either the official 20.99 stop or the closer stop that we
suggested conservative traders might set.  We're cheered to see
that all week PLNR has closed above the 50 percent retracement of
Friday's big range.  That's a sign of strength.  The next sign we
want to see is a close above $24.00.

MACD strength shows that it's possible that we'll get that
breakout above $24.00.  Both RSI and 21(3)3 stochastics indicate
the possibility of more upside, too, although their evidence
isn't conclusive.  Since each approaches or already measures
levels that indicate overbought conditions, it's possible that
PLNR may need to regroup before breaking out above that next
resistance.

Today's 2.14 percent gain came on slightly greater-than-normal
volume, confirming strength.  Perhaps PLNR drew investor interest
yesterday when the company announced that it would launch a new
line of PE 15-, 17-, and 19-inch flat-panel monitors, hoping to
speed the acceptance of flat-panel monitors. The PE line is an
entry-level line.  Although PLNR is not a component of the XCI,
the Amex Computer Hardware Index, we do think a comparison of its
performance to the XCI's has merit, and PLNR outperformed the
XCI's 0.52 percent gain.

Annotated Chart for PLNR:



Picked on July 20 at $23.89
Change since picked:  -0.05
Earnings Date:     07/16/03 (confirmed)
Average Daily Volume:   174 thousand





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

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


Yahoo! Inc. - YHOO - close: 32.12 change: +0.87 stop: 32.75

In retrospect, it certainly looks like YHOO's break below both
$30 support and the 50-dma last Fridaywas a bear trap, as the
stock has been recovering steadily this week.  Positive reception
of AMZN's earnings today propelled the stock back over $32 and
with price breaking back into the broken channel, it appears our
stop will be in danger as early as tomorrow.  Rather than take
the risk, we'll admit the mistake, take our lumps and exit the
play tonight.  Traders willing to stick with the original game
plan will need to be disciplined about keeping their stops in
place.  On a pullback, we would look to use a dip back towards
$31 as an opportunity to exit at a more favorable level and look
for a better use for the capital.

Picked on July 20th at   $29.95
Change since picked       +2.17
Earnings Date           10/08/03 (unconfirmed)
Average Daily Volume =  13.1 mln






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

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

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


Newmont Mining - NEM - close: 35.28 change: +1.88 stop: 32.90

Company Description:
Newmont Mining Corporation is a holding company and is
principally engaged in gold mining.  As of the end of 2002, the
company had gold reserves of 86.9 million equity ounces and an
aggregate land position of approximately 63,000 square miles.
NEM has operations in North America, South America, Australia,
New Zealand, Indonesia, Uzbekistan and Turkey.  In 2002, the
company obtained more than 69% of its equity gold production from
politically and economically stable countries, namely the United
States, Canada and Australia.

Why we like it:
It doesn't seem to matter whether the concern is inflation or
deflation, it is nearly impossible to argue with the fact that
gold is well established in its bullish long-term trend and gold
stocks have been soaring again over the past week.  The largest
and strongest of gold stocks, NEM confirmed that bullishness on
Wednesday, by breaking out above the $35 level for the first time
since late 1997.  The actual level of the breakout appears to be
$34, as that resistance level has been holding the stock back
since the middle of June.  After breaking out to new 52-week
highs in early June, the stock has been consolidating that
breakout between $31-34 and confirmed its bullish state with
today's 5.6% gain.  Judging by the volume that accompanied
today's move (80% above the ADV), this is a strong breakout and
we're looking for the run to continue, possibly right into the
company's earnings report on August 5th.

The most recent dip to the 50-dma near $31 was met with solid
buying, providing yet another measure of the stock's strength.
With gold prices significantly higher than a year ago and
production costs remaining fixed, investors appear to be looking
for a positive report from the company when it releases earnings.
And with gold prices on the rise again, odds are good for
positive future guidance.  Judging by the strength of today's
bullish move, investors are getting aboard for a good old
fashioned momentum run into the event.  While there is some mild
resistance near $36, if the increasing volume is any indication,
NEM may just blast right on through, bringing our $39 target into
view as a tangible pre-earnings goal.  While momentum traders can
certainly consider entries on a push through Wednesday's $35.30
intraday high, we'd prefer to see a pullback and rebound from the
$33.50-34.00 area, confirming old resistance as new support, as
well as filling in today's gap.  Place stops initially at $32.90,
which is just below Monday's intraday low of $32.93.

Annotated Chart of NEM:



Picked on July 20th at   $35.28
Change since picked       +0.00
Earnings Date            8/05/03 (unconfirmed)
Average Daily Volume =  4.17 mln





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

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


Coach Inc. - COH - cls: 53.63 chg: -0.20 stop: 51.99

While COH trades almost a dollar higher than it did at last
Friday's close, we can't exactly call COH's action a ramping up
into its earnings release.  Tuesday and Wednesday, COH printed
small-bodied red candles indicative of indecision.  The low
volume verified that indecision.  Once again, the stock
underperformed the retail index, with the RLX gaining 0.68
percent Wednesday while COH retreated 0.37 percent.

Still, COH maintains its most aggressive rising trendline and the
support offered by its rising 30-dma, currently at 52.16.  It's
still printing higher highs and higher lows.  The 21(3)3
stochastics rise and the rolling-over RSI doesn't have far to
travel before it hits its own supporting trendline.  We suggest
watching that supporting RSI trendline as an RSI violation of its
trendline could predict or confirm a COH violation of its own
trendline.

While we had suggested last week that aggressive traders might
set an alternative stop just below the 50-dma, currently at
50.39, the quick approach of the earnings on July 29 and the
continued underperformance of COH in relationship to the retail
index lead us to conclude that honoring the 51.99 stop is
probably the best idea for all traders.  We would not suggest new
entries at this time.

Annotated Chart for COH:


Picked on July 13 at $55.33
Change since picked:  -1.70
Earnings Date:     07/29/03 (confirmed)
Average Daily Volume:   966 thousand




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


Bemis Company - BMS - close: 43.45 change: -0.05 stop: 43.90*new*

Oops!  We missed the fact that BMS was slated to release earnings
this morning and neglected to drop the play last night.
Fortunately, even beating earnings by 2 cents wasn't enough to do
anything but allow the stock to continue consolidating in the
$43-44 area.  Over the past several days, BMS has been trading
sideways, while daily Stochastics have been rising and that's a
bearish sign.  Note also the way the 10-dma ($43.59) presented
solid resistance to today's rebound attempt.  If this is all the
bounce the bulls can muster after the sharp fall from the $48.50
area, then another rollover and breakdown seems in order.  But
with positive earnings under its belt, we see no reason to take
an undue amount of risk and we're going to get aggressive with
our stop, lowering it to $43.90, just above the intraday highs
for the past 7 sessions.  With the possibility of a post-earnings
bounce, we need to be careful of new entries here, instead
waiting for a break below $42.75 (just under yesterday's intraday
low) before adding new positions.  Remember there's the
possibility of some support near $42 enroute to our final
destination at $40.

Picked on July 9th at    $45.18
Change since picked       -1.73
Earnings Date          07/23/03 (confirmed)
Average Daily Volume =    267 K




---


Hovnanian Ent. - HOV - close: 51.59 change: -0.51 stop: 55.10

A moderate rise in Treasury yields wasn't enough to produce
another positive day in the Housing sector, and the $DJUSHB index
slipped fractionally lower on Wednesday after a failed attempt at
the open to reclaim the $430 level.  Old support is starting to
act as new resistance and that's a boon to our bearish HOV play,
which slid fractionally lower on the day as well.  The stock has
been finding resistance this week near $53.  Should the rollover
continue, then we'll be looking for a breakdown under $50 to take
the play down towards our eventual target in the $45-46 area.
We've been advising to look for entries on failed rallies in the
$53.50-54.00 area and so far that strategy seems to be working
all right, as the lower Bollinger band falls away, making room
for more downside directly ahead.  If looking for a new entry on
renewed weakness, wait for the $50 level to be broken first.
Should HOV do an about face on us, the $54 level will be the
first test.  A breakout over that level will suggest that the
downtrend is over, so conservative traders may want to tighten
stops to just above that level.  We're leaving our stop in place
at $55.10 as we still want to leave room for HOV to move before
continuing its downward trek.

Picked on July 16th at   $54.25
Change since picked       -2.66
Earnings Date           08/27/03 (unconfirmed)
Average Daily Volume =  1.01 mln






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

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

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


BEA Systems - BEAS - close: 12.86 change: -0.07 stop: 11.75*new*

Another day and another test of the $13 resistance level has us
still feeling pretty good about our BEAS play.  While it would be
nice to see a rally above that resistance level actually stick,
it is encouraging to see that weakness has been limited as well.
Investors seem to be having a hard time making up their minds
which way to jump with all the breaking news events so far this
week, but the fact that they haven't panicked, has us thinking
the bullish sentiment is still very much intact.  BEAS doesn't
report earnings until August 14th, so there's still plenty of
time for the bulls to work their magic.  Intraday dips that find
buyers above $12.25, preferably above the 10-dma (now at $12.41)
look attractive for new entries.  Momentum traders will need to
wait for the break over $13.30 before jumping aboard.  Note that
we're continuing to inch our stop up just below the 20-dma and it
is now set at $11.75.

Picked on July 20th at   $12.79
Change since picked       +0.07
Earnings Date            8/14/03 (confirmed)
Average Daily Volume =  10.9 mln






---


Sirius Satellite - SIRI - cls: 1.63 chg: -0.04 stop: 1.60

Sirius Satellite Radio's reception dimmed today, at least if we
measure that reception by the number of investors buying SIRI
stock.  Wednesday's volume proved to be less than half the
average.  SIRI's price dimmed, too, sinking within one cent of
our stop.  Even fewer investors tuned in to competitor XM
Satellite Radio Holdings (XMSR) although XMSR announced good news
this week.  Its radio capability will soon be available on
Toyota's 2004 Camry Solara Coupe.  The conditions that dimmed
SIRI's reception affected XMSR's, too, with its volume less than
40 percent the average daily volume and with price flat.

After breaking out of its bull flag early this month, SIRI failed
to achieve a new high.  That failure set up a potential bearish
right triangle with the horizontal support line at our $1.60
stop.  In an even more disturbing development, SIRI closed below
its 50-dma on Tuesday and again on Wednesday, with the last close
below this average occurring in April.

We wouldn't be surprised to be stopped out of this play as early
as tomorrow, but MACD and the 21(3)3 stochastics offer the barest
whisper of hope.  Both appear to be trying to flatten and resist
further declines.  If SIRI should bounce from the $1.60 support,
a failure to move above the recent $1.86 high should be a signal
to exit the play on strength.  We would not suggest new long
entries at this time.

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

Annotated chart of SIRI:


Picked on  July 2 at  1.78
Change since picked: -0.15
Earnings Date:    08/06/03 (confirmed)
Average Daily Volume:   71 million





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