PremierInvestor.net Newsletter Thursday 07-31-2003 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: Oops Watch List: AVE, RIMM, ATH, CVS and more! Market Sentiment: Reversal day on good news ================================================================= MARKET WRAP (view in courier font for table alignment) ================================================================= 07-31-2003 High Low Volume Advance/Decline DJIA 9233.80 + 33.80 9361.40 9199.28 1.92 bln 1531/1708 NASDAQ 1735.02 + 14.10 1757.37 1728.34 1.79 bln 1869/1362 S&P 100 499.27 + 1.98 506.65 497.29 Totals 3400/3070 S&P 500 990.31 + 2.82 1004.59 987.49 W5000 9555.05 + 28.50 9673.12 9526.57 RUS 2000 476.02 + 3.22 478.80 472.80 DJ TRANS 2623.92 + 17.70 2653.23 2606.31 VIX 21.24 + 0.52 21.44 20.40 VXN 31.22 + 0.36 31.67 30.23 Total Volume 3,999M Total UpVol 2,628M Total DnVol 1,321M 52wk Highs 553 52wk Lows 73 TRIN 0.62 PUT/CALL 0.68 ================================================================= =========== Market Wrap =========== Oops The bulls were partying hard with a +160 point Dow gain and a new 52-week high when somebody tripped. Tripped a breaker, tripped over bags of money or tripped on a banana peel the results were the same. The lights went out and the party was quickly over. As if somebody yelled fire in a crowded theater the rush for the exits was fast and furious. When the smoke cleared the +160 point gain had turned into only +33 and the tone of the market was significantly different. Dow Chart Nasdaq Chart S&P Chart How we went from 100% bullish at the open to the crash at the close has probably got more than a few bulls scratching their heads tonight. The morning began with another drop in Jobless Claims to 388,000 and the second consecutive week under 400K. A trend, a trend, (visions of Tatu pointing to the plane on Fantasy Island) the bulls were shouting. Granted the first number started with a 3 instead of a 4 but not by much. Still the futures were spiking. The fact that the numbers were still adjusted for the cyclical auto layoffs was lost on everyone. Continuing claims increased to 3.65 million indicating that jobs are still hard to find regardless of the adjustments. The slam-dunk came in the form of the GDP at +2.4% for the 2Q. This was a full +1.0% over the estimates and the crowd went wild. Personal consumption rose +3.3% and non residential investment rose +6.9%. Yee-Haw! Bulls began to party and shorts began running for cover. The buying was sharp and quick and futures were quickly +8 and climbing. Bulls pointed to this report as signs of a real recovery in progress. Let's not forget that this was for the 2Q which began with a war. Remember the expected post war bounce in the economy? For about six weeks we saw a light spurt in buying in anticipation of a quick recovery. That recovery never came and we ended the quarter with an unbroken string of Jobless Claims over 400K for the entire quarter. Corporate earnings have already told us there was a bounce in April that slowly died into June. This is the evidence of that bounce. Much of the jump was due to a +7.5% increase in government spending. One of the best components was a decrease in inventories by $17.9 billion which should indicate a bounce in manufacturing soon. This assumes of course the goods were made in America and not imported. The Employment Cost Index came in slightly less than expected at +0.9% and provided yet another warm fuzzy feeling for traders. Costs are not rising and there is no inflation in wages. With nearly 9 million workers currently unemployed it would be tough to command a premium wage and signing bonuses are a thing of the past. Wage growth actually slowed in the 2Q which is detrimental to future consumer spending. The Help Wanted Index rose to 38 in June from 35 in May and was possibly the most bullish sign of an economic upturn. Ads for workers rose in all regions except East South Central. This was the first real improvement in months. 73% of the 51 newspapers surveyed showed ad traffic rising. While this is a positive turn the headline number of 38 is still an indication of a declining job market. The most bullish report of the day was the PMI report which came in at 55.9 compared to estimates of 53 and actual of 52.5 in June. While the GDP is seen as a lagging indicator the PMI is seen as a current trend and an acceleration of three consecutive positive months. May was the first positive month at 52.2 and June barely squeaked higher at 52.5. The huge jump in economic terms to nearly 56 was very positive. The market immediately rocketed to higher levels. New orders jumped to 61.7 from 54.8, backlog rose to 49.4 from 45.8 and employment rose to 46.0 from 43.8. Inventories showed a significant drop to 39.4 from 48.8 indicating a replenishment cycle in our future. The news orders at 61.7 was the highest reading since November 2002. This is the report for the Chicago region and traders hope the National ISM report on Friday follows suit. That hope suffered a setback with the NY-NAPM, which came in at 224.9 and the sixth consecutive monthly decline. The manufacturing conditions component dropped to 64.8 from 92.8 in June. This whopping decrease took the excitement out of the previous reports and cast a shadow over the ISM for Friday. Traders were left wondering if the ISM would follow the Chicago PMI or the NY-NAPM. Since the ISM is actually the old NAPM on a national basis it was a credible concern. Part of the strong selling at the close had to be due to the strong economic calendar for Friday. The previously mentioned ISM plus Nonfarm Payrolls, Construction Spending, Personal Income and Spending, Consumer Sentiment, Semiconductor Billings and July Auto sales. It will be a busy day. The ISM has been in negative territory since February and it is expected to jump +2 full points from 49.8 to 51.9. Plenty of opportunity for disappointment here. The Nonfarm Payrolls are expected to show a jump of +13,000 jobs with a whisper number of +25,000 jobs. Again, plenty of room for disappointment. Consumer Sentiment is expected to rise to 90.8. Worries are that it could follow the confidence earlier this week with a drop instead. The market drop today on a full deck of strongly bullish economic reports could be due to many reasons. Worry over the reports on Friday may have helped but were not likely the total reason. The best guess is interest rates. The 10-year yield reached 4.56% today after being only 3.07% just six weeks ago. This is a disaster in the bond market the likes of which have not been seen since 1994. Back then the bounce was not as bad but it had dire repercussions. Several major investment houses folded and Orange County California went bankrupt due to over leverage in the bond market. The rumor making the rounds today is that there are one or more big investment companies, maybe even FNM or FRE, in serious trouble. Major insurers announced this week they were canceling bankruptcy insurance for Merrill, Schwab and dozens of other institutions. The insurance policies, which protect investors over the $500K federal protection limit, have become too risky according to Travelers, AIG and Radian Group. Sign of the future? The rising rates, regardless of economic news, stock market movement or Fed commentary has everybody baffled. Bonds just keep going down and seldom pause for more than a few minutes during the day. Confounding the constant selling is a lack of money flowing into the stock market. Normally when bonds sell off a large portion of the money moves into stocks. It is not happening. Even given the large economic bounce at the open today the volume was still only average and the market breadth was terrible. On the NYSE decliners beat advancers by nearly +200 issues. New 52-week lows rose to levels not seen in months. Not only are the interest rates a problem for the market the 30-year fixed mortgage hit 6.14% today. Refinance applications have dropped -50% in the last four weeks. This is a major blow to the consumer supported economy. Like financial junkies we have been living off our equity for years and that equity just dried up faster than a busted drug dealer. The shock to the system will be strong and the tax cut/credit may not be able to take up the slack. This shock to the economy has traders talking of asset allocation programs again ONLY from stocks to bonds. Boy, talk about full circle. There were several rumors on the floor today about major institutions, fearing for the future and dumping stocks. It was not hard to find believers if you look at the major hits to the averages on a blowout bullish day. The Dow dropped -50 points on a sell program just after the open with bullish news floating all boats. It fell -60 points on another sell program right after the PMI was announced with a huge bullish jump. Clearly the programs were keyed in and waiting for the bullish news to break so they could sell into the heavy volume. The Dow dropped -70 points at 2:25 on a very strong sell program from the highs of the day. The last one came at 3:20 and knocked a full -100 points off the Dow in a very short period of time. Think about this a minute. On the most economically bullish day I can remember this year four monster sell programs knocked -280 points off the Dow for no apparent reason. There were plenty of buy programs as well but those were to be expected. Why are the big guys selling? What do they know that we don't? Did they find out Saddam has a dozen clones? Another factor, which should be considered, is the August record. In the last 15 years August has been the worst performing month for the Dow and S&P, period. With the big gains in stocks and the sell off in bonds I could see where institutions may want to asset allocate. They did it constantly on the way down when bonds were growing to the sky and with them in the cellar and August in front of us it would only be prudent to revise the ratios again. Personally I think the major reversal in the market today on the most bullish news in months is very negative. It could completely reverse again tomorrow and set another new high on good ISM and Jobs data but tonight I am skeptical. I was ready to join the bulls and party till January when the Dow hit a new high today but the breadth kept bothering me. The sell programs at the open bothered me. The rumors of a major fund collapse worry me the most. I remember losing money on the Russia default, the Brazil default, the Thailand default, Long Term Capital and a dozen smaller financial events over the last ten years. They all tend to appear just as the market is about to hit new highs. It must be a karma thing or the worlds biggest repeating coincidence. Either way Friday should be exciting and I am sure we can expect some serious volatility at the open. After that it is a coin toss on a summer Friday. Volume is likely to die by noon as traders head for the beach or the mountains to escape the heat. Look at the bright side. We have the three most volatile months of the year beginning tomorrow. If you can't make money trading over the next three months you should find another hobby. I get excited just thinking about it and I hope you do too. Enter Very Passively, Exit Very Aggressively! Jim Brown ================================================================== WATCH LIST ================================================================== The PremierInvestor.net watch list is not designed to be read as full fledged stock picks. Rather we would prefer to offer it as an extra tool in today's investor toolbox. Think of it as a radar screen with your own radar operator pointing out interesting developments, technical patterns or potential plays that you may or may not have seen on your own. Due to time constraints we do glance at the news but rarely do we have time to fully read pertinent news stories, due background research and other necessary screens that investors should do before making a decision. A common exercise is to read the entry, glance at the sector and other stocks in that industry and then compare what's happening in the stock to what's happening in the broader market indices. We hope you enjoy the Watch List and that it proves to be a useful tool for your own trading success. STOCKS WORTH WATCHING --------------------------------- Aventis - AVE - close: 49.85 change: -1.79 WHAT TO WATCH: Breakdown in progress! AVE gave a clear breakdown from its H&S top pattern on Thursday and looks vulnerable back down to major support near $42. A failed rebound below the 200- dma would provide the best entry point, although there's certainly nothing wrong with jumping onto the breakdown that has already begun. Target a move to $44. --- Research In Motion - RIMM - close: 24.08 change: +2.43 WHAT TO WATCH: Now that's a powerful reversal. After falling out of its ascending channel a couple weeks ago, RIMM was looking a bit bearish, but after today's high-volume rebound right back into that channel and a new 52-week high, it looks like full bull ahead. Entering on a dip and rebound from the $23.50 level presents less risk than chasing the stock higher. Target an initial move to resistance in the $26-27 area. --- Anthem Inc. - ATH - close: 75.51 change: -3.46 WHAT TO WATCH: ATH certainly isn't the picture of health, after getting pummeled on Thursday to the tune of more than 4% and falling right to major support near $75. Clearly, investors weren't happy with the company's earnings that beat estimates by "only" 6 cents. Upside guidance didn't help either. This could be the beginning of a major "sell the news" breakdown. Consider entering on a failed rebound near the broken 50-dma or wait for a break under today's intraday low before playing. --- CVS Corporation - CVS - close: 29.99 change: +1.04 WHAT TO WATCH: Following yesterday's solid earnings report, we were looking for some bullish action from CVS and apparently we weren't the only ones. Morgan Stanley upgraded the stock this morning and the resultant buying frenzy pushed the stock through major resistance on a gap move. Look to enter new bullish positions on a pullback and rebound from the bottom of the gap near $29, targeting a near-term move to $31 resistance. =================== On the RADAR Screen =================== AGN $80.48 - Don't look now, but AGN is battling its way back from its recent test of the 50-dma. Look for a break above $82 to clear the recent resistance and pave the way for a sharp rally higher as that would generate a triple-top PnF Buy signal. Next resistance is found in the $85-86 area. AMGN $69.43 - Consistency is the name of the game and AMGN has been delivering for months. Every touch of the 50-dma seems to produce another leg up the chart. While the latest dip didn't manage to get that low, the 30-dma (which has also been pivotal on this multi-month rally) did produce a bounce. Look for another dip near that moving average to set up an entry for another run at fresh 2-year highs. CME $73.65 - Can you feel the breakdown coming? CME just isn't looking very healthy, and Thursday's close just above the 7/21 intraday low and just under the 30-dma ($73.82) looks like the recipe for a momentum entry to the downside. Trigger entries on a drop under $73.50 and look for a near-term drop to the 50-dma, just below $70. =============================== Market Sentiment =============================== Reversal day on good news Jonathan Levinson Equities looked set to launch today, buoyed by excellent economic data before and immediately following the cash open. The indices were coiled within pennants, having printed inside days, and exploded higher as might have been expected. The TRIN and TRIN.NQ were buried at extreme low levels, and bulls were targeting the highs. What followed was a valuable lesson for traders. Price traded sideways along the top of a narrow range near the highs of the day, finding support close underneath. After a number of successful tests, the price broke south, bounced, and then dived sharply. My news ticker was still running stories about stocks rallying on positive economic data as the price plunged. The price of stocks, and stock indices, is determined by supply and demand. Outside influences, such as news stories or economic data, may impact the demand for that paper, but supply is another story. Those with the greatest quantity of that paper cannot sell to a thin market without collapsing the price, and so it's precisely during buying frenzies such as we saw today that the biggest sellers will be selling. As an older broker once told me, "When the fish are biting, feed them." Just as the markets rallied through the spring on abysmal economic and corporate data, it's possible that they will fall on positive data. Or, they may rally. Whether Joe Granville's "News is for suckers" line is true or not, I obey the charts and the indicators in attempting to suss out where the big players are seeking to go. Be it rumors, economic or earnings reports, let the charts and indicators guide your trades. This year has taught us that news is noise, and that supply and demand for the securities we trade is the final arbiter. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 9353 52-week Low : 7197 Current : 9233 Moving Averages: (Simple) 10-dma: 9194 50-dma: 9066 200-dma: 8523 S&P 500 ($SPX) 52-week High: 1015 52-week Low : 768 Current : 990 Moving Averages: (Simple) 10-dma: 989 50-dma: 983 200-dma: 910 Nasdaq-100 ($NDX) 52-week High: 1316 52-week Low : 795 Current : 1277 Moving Averages: (Simple) 10-dma: 1266 50-dma: 1230 200-dma: 1087 ----------------------------------------------------------------- After all the fuss earlier this week about the VIX finally hitting and closing under 20, we're still not seeing much movement in the markets. As we've always said, the VIX is more art than science and traders should acknowledge the signals when they occur and include them in their overall market evaluation. CBOE Market Volatility Index (VIX) = 21.24 +0.52 Nasdaq-100 Volatility Index (VXN) = 31.22 +0.36 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.68 646,507 437,626 Equity Only 0.55 476,800 263,649 OEX 0.98 38,368 37,903 QQQ 1.50 28,645 42,940 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 69.9 + 0 Bull Confirmed NASDAQ-100 75.0 + 0 Bull Confirmed Dow Indust. 83.3 - 3 Bull Confirmed S&P 500 77.8 + 0 Bull Correction S&P 100 83.0 - 1 Bull Confirmed Bullish percent measures the number of stocks in an index currently trading on a buy signal on their point and figure chart. Readings above 70 are considered overbought, and readings below 30 are considered oversold. Bull Confirmed - Aggressively long Bull Alert - Cautiously long Bull Correction - Pause or pullback in upward trend Bear Alert - Take defensive action if long Bear Confirmed - High risk if long, good conditions for shorting Bear Correction - Pause or rebound in downtrend ----------------------------------------------------------------- 5-Day Arms Index 0.95 10-Day Arms Index 0.94 21-Day Arms Index 0.97 55-Day Arms Index 1.11 Extreme readings above 1.5 are bullish, and readings below .85 are bearish. These signals don't occur often and tend be early, but when they do, they can signal significant market turning points. ----------------------------------------------------------------- Market Internals -NYSE- -NASDAQ- Advancers 1414 1828 Decliners 1443 1256 New Highs 114 165 New Lows 41 6 Up Volume 1087M 1321M Down Vol. 765M 477M Total Vol. 1908M 1816M M = millions ----------------------------------------------------------------- Commitments Of Traders Report: 07/22/03 Weekly COT report discloses positions held by small specs and commercial traders of index futures contracts at the Chicago Mercantile Exchange and Chicago Board of Trade. COT data can be found at www.cftc.gov. Small specs are the general trading public with commercials being financial institutions. Commercials are historically on the correct side of future trend changes while small specs tend to be wrong. S&P 500 Not much new for us to decipher in the full contracts of the S&P 500 futures. Commercials remain slightly next short and the small traders remains significantly net long, expecting the markets to rise. Commercials Long Short Net % Of OI 07/01/03 415,976 453,005 (37,029) (4.3%) 07/08/03 415,053 453,720 (38,667) (4.5%) 07/15/03 414,020 453,033 (39,013) (4.5%) 07/22/03 411,206 442,131 (30,925) (3.6%) Most bearish reading of the year: (111,956) - 3/06/02 Most bullish reading of the year: 18,486 - 6/17/03 Small Traders Long Short Net % of OI 07/01/03 150,232 75,937 74,295 32.8% 07/08/03 152,239 74,749 77,490 34.2% 07/15/03 148,716 70,279 78,437 35.8% 07/22/03 155,891 76,466 79,425 34.2% Most bearish reading of the year: (1,657)- 5/27/03 Most bullish reading of the year: 114,510 - 3/26/02 E-MINI S&P 500 In contrast to the full size S&P contracts above, the E-minis is showing a drastic change. Commercial traders have been moving from net short to net long the last four weeks and the longs have finally out numbered the shorts. Right on cue, the small traders have turned the most bearish they have been in months. Commercials Long Short Net % Of OI 07/01/03 175,893 216,993 (41,100) (10.5%) 07/08/03 192,815 224,124 (31,309) ( 7.5%) 07/15/03 214,274 218,765 ( 4,491) ( 1.0%) 07/22/03 249,392 249,386 6 0.0% Most bearish reading of the year: (354,835) - 06/17/03 Most bullish reading of the year: 6 - 07/22/03 Small Traders Long Short Net % of OI 07/01/03 57,639 67,449 (9,810) (7.8%) 07/08/03 56,394 72,090 (15,696) (12.2%) 07/15/03 45,372 54,654 (9,282) (9.3%) 07/22/03 45,945 76,071 (30,126) (24.7%) Most bearish reading of the year: (30,126) - 07/22/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 There is little change in the NDX futures by the commercial traders or small traders. Commercials Long Short Net % of OI 07/01/03 28,662 48,265 (19,603) (25.5%) 07/08/03 30,489 48,311 (17,822) (22.6%) 07/15/03 28,467 49,154 (20,687) (26.7%) 07/22/03 32,502 48,139 (15,637) (19.4%) Most bearish reading of the year: (20,687) - 07/15/03 Most bullish reading of the year: 9,068 - 06/11/02 Small Traders Long Short Net % of OI 07/01/03 26,777 8,498 18,279 51.8% 07/08/03 26,136 9,035 17,101 48.6% 07/15/03 26,489 8,004 18,485 53.6% 07/22/03 27,321 8,844 18,477 51.1% Most bearish reading of the year: (10,769) - 06/11/02 Most bullish reading of the year: 19,088 - 01/21/02 DOW JONES INDUSTRIAL Commercial traders are becoming even more bullish on the Industrials while small traders are slowing increasing their net short positions. Commercials Long Short Net % of OI 07/01/03 20,504 11,871 8,633 26.7% 07/08/03 20,752 11,860 8,892 27.3% 07/15/03 21,607 7,855 13,752 46.7% 07/22/03 22,198 8,176 14,022 46.2% Most bearish reading of the year: (8,322) - 1/16/01 Most bullish reading of the year: 15,135 - 10/16/01 Small Traders Long Short Net % of OI 07/01/03 5,799 6,822 (1,023) ( 8.1%) 07/08/03 5,005 8,093 (3,088) (23.6%) 07/15/03 5,475 9,717 (4,242) (27.9%) 07/22/03 6,110 10,898 (4,788) (28.2%) Most bearish reading of the year: (8,777) - 10/12/01 Most bullish reading of the year: 1,909 - 1/16/01 ----------------------------------------------------------------- ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. PremierInvestor.net staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control. 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PremierInvestor.net Newsletter Thursday 07-31-2003 section 2 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 ================================================================= Play of the Day: Same Song, Different Verse Split Announcements: EVG, MMSI Trading Ideas Value Plays With Bullish Signals Breakout to Upside (Stocks $5 to $20) Breakout to Upside (Stocks over $20) Breakout to Downside (Stocks over $20) Recently Overbought With Bearish Signals (Stocks over $20) ================================================================= Play-of-the-Day (bullish) =============== Hovnanian Ent. - HOV - close: 49.35 change: -1.78 stop: 51.50*new* Company Description: Hovnanian Enterprises constructs and markets single-family detached homes and attached condominium apartments and townhouses in more than 196 new home communities in New Jersey, Pennsylvania, New York, Maryland, North Carolina, Texas and California. The company offers a wide variety of homes that are designed to appeal to the full range of buyers, from first-time to luxury buyers. Additionally, HOV provides financial services, including mortgage banking and title services to the homebuilding operations customers. The company does not retain or service the mortgages it originates, but rather sells them and the related servicing rights to investors. Why we like it: Over the past week, the Dow Jones Home Construction index ($DJUSHB) has been gravitating to the $425 level as bond yields continue to hold near their 52-week highs. At the same time, our HOV play has continued to drift lazily lower. The 10-dma (now at $51.72) has been providing intraday resistance, while the stock continues to find intraday support just above $50. At this point, it looks like things could go either way, so we're erring on the side of caution and tightening our stop, while at the same time allowing for the expected breakdown to materialize and take us deeper into the profit zone. Our stop moves lower to $52.30 tonight, which is above both the 10-dma and yesterday's intraday high. Should HOV rally above that level, we'll want to take a quick exit, preserving a modest gain. The only way we want to consider new entries here is on a breakdown under $50, which should be good for a quick run down to our eventual $45-46 target area. Why This is our Play of the Day With bond yields soaring again shortly after the open this morning, the stage was set for weakness in stocks affected by rising rates, most notably the home builders. But after the group's resilience recently, it really wasn't any surprise to see the lack of an immediate reaction, especially with equities seeing some strong buying interest. The truth seemed to hit home by mid- afternoon though, and HOV picked up speed to the downside, finally puncturing the $50 support that has been propping it up since last Tuesday. the Dow Jones Home Construction index ($DJUSHB) felt the pain too, sliding to within striking distance of the critical $414-415 support area we've had our eye on. Should this support break, next support is found at $390 and such a bearish move in the $DJUSHB will only add further downside pressure to HOV, and it should have our $45-46 profit target coming into play in short order. Note that we've lowered our stop to $51.50, which is just above the 10-dma. If this breakdown is the real deal, then that level shouldn't be threatened again. Annotated Chart of HOV: Picked on July 9th at $54.25 Change since picked -4.90 Earnings Date 08/27/03 (unconfirmed) Average Daily Volume = 1.02 mln ================================================================= STOP LOSS UPDATES ================================================================= -Longs - BEAS - We're raising our stop loss to $12.50 CTAS - We're raising our stop loss to $38.50 -Shorts- HOV - We're lowering our stop loss to $51.50 ================================================================= Stock Split Announcements ================================================================= EVG develops a 2-for-1 split Prior to the opening bell this morning, Evergreen Resources, Inc. (NYSE: EVG) reported record Q2 earnings of $18.4 million and announced a 2-for-1 stock split. EVG's Board of Directors approved the split of its common stock for shareholders on record as of August 29th, 2003. The payable date for the split should be September 15th. Once the split is completed EVG should have about 39 million shares outstanding. This is the first stock split in over a decade for EVG. About the company: Evergreen Resources is an independent energy company engaged in the exploration, development, production, operation and acquisition of unconventional natural gas properties. Evergreen is one of the leading developers of coal bed methane reserves in the United States. Evergreen's current operations are principally focused on developing and expanding its coal bed methane project located in the Raton Basin in southern Colorado. Evergreen has also begun coal bed methane projects in Alaska and Kansas. (Source: Company Press Release) --- Merit Medical Offers 4-for-3 Stock Split Just before the opening bell this morning Merit Medical Systems Inc. (NASDAQ: MMSI) announced that its BoD had approved a 4-for-3 stock split of their common shares. The split will be payable on August 14th, 2003 to shareholders of record as of August 11th. Shareholders will receive one additional share for every three shares already held. Post split MMSI should have 19 million shares outstanding. The company last split their stock 5:4 both in 2001 and in 2002. About the company: Founded in 1987, Merit Medical Systems is a publicly traded company engaged in the development, manufacture and distribution of proprietary disposable medical products used in interventional and diagnostic procedures, particularly in cardiology and radiology. Merit serves client hospitals worldwide with a domestic and international sales force totaling approximately 74 individuals. Merit Medical employs approximately 1,200 individuals worldwide, with manufacturing facilities in South Jordan and Salt Lake City, Utah; Santa Clara, Calif.; Angleton, Texas; and Galway, Ireland. (Source: Company Press Release) ================== 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 RDN Radian Group 46.81 +2.20 LAF Lafarge North America 33.50 +0.60 MMS Maximus Inc 30.00 +0.93 UCI UICI 13.98 +0.75 PMI The PMI Group 33.13 +1.74 BAY Bayer Aktien 23.66 +0.55 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- HEPH Hollis-Eden Pharma 19.57 +1.17 CRAY Cray Inc 11.08 +1.38 MERX Merix Corp 10.65 +1.04 PWER Power-One Inc 10.59 +1.87 BCO Brink's Co 16.44 +1.20 REMC Remec Inc 9.61 +1.07 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- GNTX Gentex Corp 35.54 +1.54 KOSP KOS Pharmaceuticals 34.14 +7.13 UNTD United Online 31.38 +1.19 TUES Tuesday Morning 28.33 +1.23 PCAR Paccar Inc 77.24 +2.91 SFG Stancorp Fincl 55.80 +1.34 CHS Chico's FAS Inc 27.15 +1.58 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- QLGC QLogic Corp 42.10 -1.09 SFD Smithfield Foods 21.30 -1.45 IRM Iron Mountain 36.60 -2.55 MCK McKesson Corp 32.26 -2.10 CAH Cardinal Health 54.75 -9.71 ABC AmerisourceBergen 63.09 -2.95 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- FIC Fair Isaac 54.04 -4.81 OCR Omnicare Inc 33.97 -2.65 UNH UnitedHealth Group 52.09 -2.66 MICC Millicom Intl 33.42 -2.44 ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. PremierInvestor.net staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control. 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