PremierInvestor.net Newsletter Thursday 08-07-2003 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: Competition Terminated Watch List: WMB, HAS, PMCS, BLL and more! Market Sentiment: Option Market Warning ================================================================= MARKET WRAP (view in courier font for table alignment) ================================================================= 08-07-2003 High Low Volume Advance/Decline DJIA 9126.45 + 64.70 9135.00 9031.14 1.59 bln 1968/1224 NASDAQ 1652.18 - 0.50 1658.43 1641.74 1.60 bln 1470/1697 S&P 100 491.76 + 3.63 492.20 486.45 Totals 3438/2921 S&P 500 974.12 + 7.04 974.89 963.82 W5000 9362.38 + 54.90 9365.90 9276.22 RUS 2000 453.77 - 0.14 454.22 449.97 DJ TRANS 2550.77 + 17.00 2551.68 2529.73 VIX 21.89 - 1.41 23.57 21.73 VXN 34.02 - 0.40 35.83 33.98 Total Volume 3,406M Total UpVol 1,714M Total DnVol 1,638M 52wk Highs 164 52wk Lows 59 TRIN 1.12 NAZTRIN 1.39 PUT/CALL 1.02 ================================================================= =========== Market Wrap =========== Competition Terminated Arnold announced his candidacy for governor of California and previously announced candidates began dropping out in droves. Traders not in California could have cared less. The media panic and rush to document every word and deed done by the Running Man drowned out some pretty positive market news. The intraday market action was positively dead and the major markets traded well below their recent volumes. Yawn. Dow Chart - Daily Nasdaq Chart - Daily S&P Chart - Daily Wilshire 5000 Chart - Daily The morning started off well with Chain Store Sales for July soaring +4.3%, well over expectations. The good news was across the board with several major retailers raising guidance for the quarter. This was the strongest advance in 13 months. The good news was due to sales from heavy discounting, the first wave of tax rebate checks and warmer weather after a soggy May/June. Department stores posted their first gain in same store sales since November 2001. The hot weather prompted strong sales of seasonal summer products with July being the 12th warmest on record. WMT, FD, BBY, ANN and GPS all raised earnings guidance on the better than expected news. July is the month that all retailers try to dump the summer merchandise in preparation for the shift to fall and back to school specials. It appears the hot weather produced more sales than the tax checks since the first wave began delivering on July-25th and would have had limited impact at the register. This sets up August as a banner month with all reports that back to school sales have started off with a bang. Adding to the premarket excitement was another drop in Jobless Claims to 390,000 and the third consecutive week under 400K. This was the last week of adjustment to offset expected auto maker retooling layoffs. Next week we are on our own again and with the +72,000 spike in continuing claims it is evident that getting a job is still tough and getting tougher. Also, in two weeks the summer vacation season will be over and many more unemployed workers will get back the business of finding a job. Temp workers will find themselves unemployed again with the vacationing full timers back at work. The key week in my opinion is the week ending September 12th. The first full, post summer week should be a key indicator for the real health of the job market. Hurting the job market was the surging Productivity, which came in today at +5.7% and well over estimates of +4.6%. The big gains came from a sharp drop in hours worked and higher output. This gain was more than twice the +2.1% in the first quarter. Overall hours worked dropped -2.7% but manufacturing hours worked dropped -6.1%. This huge drop in hours skewed the headline number and while some traders took it as a positive others did not. The reason hours worked dropped so significantly is due to continued layoffs and less product demand. Employers continue to be pressed to reduce costs and much of those costs savings come from layoffs. Manufacturing output declined despite the gain in the headline numbers. It will be interesting to see what revisions are made to this productivity number next month. Wholesale Inventories remained flat in June after two months of declines. The only real rise in the components was a rise in automobile inventories. That could be disturbing as it indicates sales are slowing as the model year comes to a close. Sales for all products did rise but not enough to make a material change in the numbers. Consumer Credit shocked analysts by dropping -$400 million when they had expected a gain of +$6-$7 billion. Suddenly consumers are not pulling that plastic out to pay for purchases. Considering the sharp rise in retail sales this number poses some confusion to analysts. It is unlikely the consumer suddenly decided to pay cash just when interest rates were putting a stop to the refinancing bonanza. It is also possible this drop could be in response to the record number of refinancings over the last two months and the resulting payoff of high interest credit cards with the proceeds. This number tends to be very volatile and is subject to monthly revisions. The market reacted calmly to the announcement due to the confusion numbers. Other than Arnold the big news of the day was the last auction of treasury notes which went as expected. This was a relief for the markets which were afraid the demand for bonds had dried up. The bid-to-cover for the 10-year notes came in at 2.0 which means there were bids for twice as many bonds as there were bonds offered. The price went at 4.36% yield and only .01% less than the market rate just before the auction. Once it was completed the bond markets flip flopped on both sides of the price and yields finished negative for the day at 4.22% as traders decided maybe the worst was over and bought bonds. As I sat and pondered this today it occurred to me that much of the panic in the bond market could have been caused by the 26 primary dealers who took down the majority of the $60 billion in notes this week. If you knew that you were going to have to eat $60 billion of product six weeks in advance it would certainly behoove you to drive that price as far from the record highs as possible. You are not going to make a lot of money buying $60 billion in bonds at 45 year highs. Could they really drive bonds down to where they could afford to absorb that much inventory? Absolutely. If the major dealers simply withdrew their bids then the weight of the market would do the rest. It happens in the market every day. Once the panic begins all they have to do is watch and continue to lowball the bids to make sure it does not recover. Meanwhile the rest of the consumer market has seen a record rise in rates over the last six weeks as a result. Prior to June 30th there was only one 25-point move in interest rates in a single day over the last three years. There was eight of those moves in the last three weeks. This is unprecedented and a 100-year storm in the bond market according to Franklin Raines, CEO of Fannie Mae. 30-year mortgage rates rose to 6.34% today after hitting 5.25% six weeks ago. Fannie Mae came under attack today with a news article claiming FNM had suffered huge losses due to the bond crash because they had taken undue interest risks. The stock opened down sharply but recovered intraday after FNM denied the allegations. FNM sold $2 billion in 3-year notes on Thursday. Do you think they could be plugging holes in their cash flow from the 100-year storm? Earnings for the major financial stocks for the 3Q are going to be real exciting as we see who took a hit and who didn't. The markets wandered higher after an early morning dip or maybe I should say the Dow wandered higher. The Nasdaq was weak all day and spent only a brief period in positive territory. The markets expected a positive conclusion to the three day bond auction but were nervous before the results were announced at 1:PM. The fear was a weak auction which would indicate more bond sales and higher rates ahead. When the auction was over the indexes breathed a sigh of relief and rallied to resistance only to be knocked back by selling once again. As we approached the Consumer Credit at 3:PM the bears managed to push the Dow back below 9100 for the last time. Seven times the Dow crossed 9100 today before finally ending at 9126. The Nasdaq managed to get back to flat at the close but techs are still suffering from the Cisco hangover. The Nasdaq is well under 1700 at 1653 and down more than 100 points from the 1757 high last Thursday. Earnings after the close today did little to provide hope for tomorrow despite some decent results. The results from PIXR and NVDA were mixed with PIXR soaring on the Finding Nemo film and NVDA warning on flat margins and increasing expenses. With PIXR seen as a cyclical event and one not likely to be repeated next quarter the futures were trading down slightly in after hours. All in all for the first week in August the markets have held up extremely well. The Dow refuses to break 9000 and 9100 has turned into the mother of all price magnets. As long as this trend holds the end of quarter rebound could start from a nice comfortable level. Should the trend fail and the Dow break 9000 it could get ugly fast. Traders are always encouraged when volume accompanies an up move. That was not the case today. It was simply a matter of the path of least resistance and a little short covering after the bond auction failed to tank the market. Volume on the NYSE was only 1.3 billion and 1.6 billion for the Nasdaq. Dow downtrend chart - 30 min The markets closed at serious resistance and it might be difficult to move up in the morning without some help from Asia and Europe. The Dow has strong resistance at 9130 and closed at 9126. The Nasdaq has strong resistance at 1650 and it closed just over that level at 1653. The S&P has strong resistance at 975 and it closed at 974.30. All of these indexes are poised to either explode or implode at the open. There are no economic reports on Friday and the markets will be left to find their own level. Considering how they have ignored good news lately they may be better off on their own. We have retraced +89 Dow points of the -149 lost on Tuesday and the oversold conditions have eased considerably. However, we are still down -235 points from last Thursday's high of 9361. The two-week trend is still down until we move back above 9200. Friday may not hold the answer to the mystery as volume should be the lightest of the summer with no catalyst to spark a move. Could be a good day for Saddam to surrender. 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 --------------------------------- Williams Companies - WMB - close: 7.02 change: +0.30 WHAT TO WATCH: Launching higher in its second day of strong gains, WMB finally broke out of the descending channel (bull flag) in which it has been trapped since early June. Look for entry on a dip to test the top of that flag near $6.75 or else wait for a break above Thursday's high. While resistance will be found near the 50-dma, continued strong buying should have the June highs near $9 in play. --- Hasbro Inc. - HAS - close: 19.07 change: +0.30 WHAT TO WATCH: When we last looked at shares of HAS, we were looking for a breakout over the $18.50 level and it was nice to see the stock cooperate, running up to the $19.20 area. Well, after a brief pullback, it looks like an encore performance is setting up. Look for a breakout over $19.25 and target a near- term move to $21. --- PMC-Sierra - PMCS - close: 10.49 change: -0.32 WHAT TO WATCH: Sitting right on the neckline, PMCS is about to give a nice breakdown from its Head & Shoulders pattern that has been forming since early June. Look for a break of $10.35 to trigger entry and target a downside objective of $8, which is just above the 200-dma. --- Ball Corp. - BLL - close: 48.86 change: +0.36 WHAT TO WATCH: BLL's launch off its July lows was a tough play to catch, but more timid bulls are getting a second chance The stock has pulled back from the 200-dma, and is consolidating just above $47 support. Entries here should work up to the 200-dma, and a breakout above that important level could have the bulls targeting $54. =================== On the RADAR Screen =================== RSH $25.62 - The bullishness found in shares of BBY today certainly didn't spill over into the other electronics retailers, as RSH continued its slide below the 50-dma, putting it right on the cusp of a H&S breakdown. Look for a break of the neckline at $25.25 and target a move down to the $22.50-23.00 support area. ADP $37.42 - It isn't exciting, but ADP is certainly consistent. Ignoring the gyrations in the broad market, the stock has been steadily marching higher in a tight-range ascending channel and appears ready to break higher again. A break above $38 could inject some excitement into the stock though, uncorking a short- term move up to $40. AMD $7.56 - It may be the weak little brother of Chip giant INTC, but AMD is trying to put in a bullish move here after basing above both its 50-dma and 200-dma for most of the past month. Look for a break above $7.75 to set off a rally with a likely near-term target of $8.50 and potential for a move above $9.00. =============================== Market Sentiment =============================== Option Market Warning Jonathan Levinson Today's session opened lower and saw traders fearful of an anticipated decline. Yesterday's close was very bearish for the Nasdaq as well as the S&P, and all but the shortest cycle indicators were warning bulls of impending downside. Predictably, the put to call ratio shot higher from its first readings, as did the VIX. The CBOE p/c ratio started at 1.04 and spiked to 1.29 for the second half hour of trading, drifting down to a low of .95 in the afternoon before bouncing anew. The VIX, meanwhile, opened flat in the 23.50 area, and sunk lower throughout the session. We observed in the futures monitor that the opening put to call ratio was too high for bears' comfort, and reiterated the warning with the 1.29 print. Looking at the chart of the VIX, it appears that sellers of puts were willing to part with their contracts for decreasing amounts of premium as the session progressed. While these secondary indicators are not certain because of the wide range of options strategies available, it appears that put writers were dumping puts at an increasing rate throughout the session. If there is such as thing as "smart" money, which is seriously open to debate, it was making bullish bets throughout the duration of the session, and increasingly so as the session wore on. Regardless of the economic news or chart patterns, such action intraday is a clear warning from the options market for bears to tighten their stops, and bulls to look for possible entries. As we approach options expiration week next week, options will become an increasingly important driver of underlying price. While one can debate whether derivative instruments which move the markets are truly derivatives or not, smart traders will be keeping a watchful eye on the different option volatility and volume indicators in the upcoming sessions. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 9361 52-week Low : 7197 Current : 9126 Moving Averages: (Simple) 10-dma: 9175 50-dma: 9111 200-dma: 8544 S&P 500 ($SPX) 52-week High: 1015 52-week Low : 768 Current : 974 Moving Averages: (Simple) 10-dma: 983 50-dma: 987 200-dma: 912 Nasdaq-100 ($NDX) 52-week High: 1316 52-week Low : 795 Current : 1217 Moving Averages: (Simple) 10-dma: 1256 50-dma: 1239 200-dma: 1094 ----------------------------------------------------------------- As Jon pointed out in his commentary above, the VIX and VXN appear to be acting rather oddly. The big move down from Wednesday's high in the VIX would make one think there was a large rally in the market to necessitate such a reduction in investor concern. We saw no such rally. Remember, the VIX tends to go up as the markets fall and vice versa. CBOE Market Volatility Index (VIX) = 21.89 -1.41 Nasdaq-100 Volatility Index (VXN) = 34.02 -0.40 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 1.02 530,986 542,475 Equity Only 0.91 405,949 369,369 OEX 0.90 27,394 24,674 QQQ 4.45 23,708 105,511 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 67.7 - 1 Bull Confirmed NASDAQ-100 66.0 - 4 BEAR CONFIRMED Dow Indust. 80.0 + 0 Bull Correction S&P 500 73.4 - 1 Bull Correction S&P 100 80.0 - 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 1.16 10-Day Arms Index 1.06 21-Day Arms Index 1.05 55-Day Arms Index 1.10 Extreme readings above 1.5 are bullish, and readings below .85 are bearish. These signals don't occur often and tend be early, but when they do, they can signal significant market turning points. ----------------------------------------------------------------- Market Internals -NYSE- -NASDAQ- Advancers 1708 1414 Decliners 1103 1598 New Highs 48 81 New Lows 15 12 Up Volume 983M 591M Down Vol. 599M 1016M Total Vol. 1603M 1634M M = millions ----------------------------------------------------------------- Commitments Of Traders Report: 07/29/03 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 Still looking at a lack of major change in the large S&P futures contracts. Commercial traders and small traders have yet to make any big moves lately. Commercials Long Short Net % Of OI 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%) 07/29/03 405,429 445,114 (39,685) (4.7%) 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 07/08/03 152,239 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% 07/29/03 155,216 73,030 82,186 36.0% 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 Quite the opposite of the large S&P futures above, we're seeing some big differences in the e-mini positions. Commercial traders have turned very bullish while the small traders is increasing their net bearish positions. These are new milestones for both. Commercials Long Short Net % Of OI 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% 07/29/03 272,659 216,166 56,493 11.6% Most bearish reading of the year: (354,835) - 06/17/03 Most bullish reading of the year: 56,493 - 07/29/03 Small Traders Long Short Net % of OI 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%) 07/29/03 44,437 93,144 (48,707) (35.4%) Most bearish reading of the year: (48,707) - 07/29/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 There is very little change in positions for either the small trader or the commercials. Commercials Long Short Net % of OI 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%) 07/29/03 31,456 50,294 (18,838) (23.0%) 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 07/08/03 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% 07/29/03 25,691 7,810 17,881 53.4% 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 It's the same story here. Maybe it's the summer doldrums that's leaving the size of futures positions in a very sideways trend. Commercials Long Short Net % of OI 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% 07/29/03 23,696 9,572 14,124 42.5% 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 07/08/03 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%) 07/29/03 5,744 11,601 (5,857) (33.8%) 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. Please read our disclaimer at: http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html ***************************************************************** ADVERTISING INFORMATION For more information on advertising in PremierInvestor.net Newsletter, or any Premier Investor Network newsletter please contact Contact Support. ***************************************************************** Copyright ) 2003 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter Thursday 08-07-2003 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: All Aboard! Closed Plays: ALTR, CTAS, BEAS Split Announcements: JCOM, PSUN, UTSI, COH 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 ) =============== Newmont Mining - NEM - close: 36.95 change: +0.07 stop: 35.15 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: Gold bugs rejoice! While there wasn't much life in the price of the yellow metal on Wednesday, with the August futures contract ending at $350, our NEM play caught a very strong rebound from the 10-dma ($35.92), ending the day at $36.88, a new 5-year high. We've been looking for entries either on a bounce from just above $35 or on a breakout through last week's intraday high of $36.90. So far, this week has provided both, with Monday's intraday low of $35.29 and today's intraday high of $37.00. Volume was on the high side as well, confirming the strength of the breakout, and once over $37, NEM should be able to make steady progress towards our $39 target. Traders still looking for new entries will want to look for either another rebound from the 10-dma or a clean break above $37. Raise stops to $31.15, just below the bottom of the recent consolidation pattern. Why This is our Play of the Day While the rest of the market can't make up its mind whether to rally or fall, the action in the Gold sector is looking pretty healthy. The Amex Gold Bugs index (HUI.X) is threatening to break out to new highs, the price of gold is holding above strong support, and our NEM play is flirting with a breakout of its own. The past 2 days have seen the stock trading at or above the $37 level at some point during the day and traders who entered on that breakout should be well-positioned for the expected rise. Those waiting for a pullback to support above $36 before playing (specifically at the 10-dma) may get their chance as well. Once the stock closes above $37, it is likely to pick up steam and achieve our $39 target in relatively short order. Buy the breakout over $37 (or today's $37.12 intraday high if you prefer) or a rebound from above the 10-dma, as it looks like this train is about to leave the station. Annotated Chart of NEM: Picked on July 23rd at $35.28 Change since picked +1.67 Earnings Date 7/31/03 (confirmed) Average Daily Volume = 4.47 mln ================================================================= Closed Plays ================================================================= Tech Stock ---------- -------------------- Closed Bullish Plays -------------------- Altera Corp. - ALTR - close: 18.40 change: -0.49 stop: 18.69 We shoulda have closed this play yesterday. Better yet, we coulda set a trigger one cent higher, and the play never woulda triggered. Monday, ALTR moved to a day's and week's high of 20.05, triggering our play before dropping through the rest of the week. Wednesday, it climbed as high as $19.05 before dropping through the rest of the day, hitting our stop within fifteen minutes of the open. Although the $SOX hit support and bounced slightly into the close, ALTR never even made that effort, closing near the day's low of $18.29. It looks as if it's headed down to test next support between $17.75-18.00. If that support fails to hold, $16.00 appears to be next. Picked on August 3 at 19.75 Change since picked: -1.35 Earnings Date: 07/22/03 (confirmed) Average Daily Volume: 8.2 million Active Trader ------------- -------------------- Closed Bullish Plays -------------------- Cintas Corp. - CTAS - close: 39.13 change: +0.20 stop: 38.50 Chalk it up to bad timing, poor stop placement or just poor selection, our CTAS play just never worked out for us and after our stop was hit today, it is time to pull the plug. In actuality, you could have made money on the play if you bought the breakout over $40 last Thursday and quickly exited when the stock rolled over just below $42. But that's not a claim we can make. With resistance once again appearing near $40 and today's violation of the $38.50 level, we just don't feel good about sitting around waiting for CTAS to come back to life and charge through resistance. We'll take our fractional loss and then scare up some fresh candidates for the weekend. Picked on July 30th at $39.90 Change since picked -0.77 Earnings Date 10/14/03 (unconfirmed) Average Daily Volume = 1.19 mln High Risk/Reward ---------------- -------------------- Closed Bullish Plays -------------------- BEA Systems - BEAS - close: 12.76 change: -0.13 stop: 12.74 For all its gyrating around over the past 3 weeks, we've got to admit being pretty disappointed with our BEAS play. Oh sure, it actually ran as high as $13.78, and there were numerous opportunities for traders to harvest some minor gains above the $13.50 level, but we really thought a breakout over $14 was in the cards. With the stock closing under $13 for the second day in a row and closing under the 20-dma for the first time in a month, we want to take our leave of BEAS. So perhaps it is a blessing in disguise that we were stopped out today, saving us another day of watching the stock bleed lower. Picked on July 20th at $12.79 Change since picked -0.03 Earnings Date 8/14/03 (confirmed) Average Daily Volume = 10.6 mln ================================================================= Stock Split Announcements ================================================================= JCOM messages shareholders on a 2-for-1 stock split Before today's opening bell, J2 Global Communication Inc's (NASDAQ:JCOM) Board of Directors announced a 2-for-1 stock split of the company's common shares. The company's stock split will be payable on August 29th, 2003, to shareholders on record as of August 18th. The stock is up 180% over the past year. This split will increase JCOM's shares to approximately 22.8 million. This is JCOM's first split since the first quarter of 2001. About the company: Founded in 1995, j2 Global Communications, Inc., provides outsourced, value-added messaging and communications services to more than five million customers around the world. j2 Global's network spans more than 1,000 cities in 19 countries on five continents. The Company offers its patented services and software through three distinct sales channels: Web, Corporate and Licensed Services, and markets those services under the j2., eFax., jConnect., jFax., Consensus(TM), Hotsend., PaperMaster., Protofax. and Documagix. brands. As of June 30, 2003, j2 Global had achieved 25 consecutive quarters of revenue growth and six consecutive quarters of positive earnings. For more information about j2 Global, please visit www.j2global.com . (Source: Company Press Release) --- PSUN racks up another 3-for-2 stock split Before today's opening bell, Pacific Sunwear of California Inc's (NASDAQ:PSUN) Board of Directors declared a 3-for-2 stock split of the company's common shares. The company's stock split will be payable on September 5th, 2003, to shareholders on record as of August 25th. The stock is up 180% from its October 2002 lows. This split will increase PSUN's shares to approximately 77.3 million. This will be PSUN's third 3:2 stock split since the middle of 1999. About the company: Pacific Sunwear is a leading specialty retailer of everyday casual apparel, accessories and footwear designed to meet the needs of active teens and young adults. As of Aug. 2, 2003, the company operated 650 PacSun stores, 75 PacSun outlet stores and 114 d.e.m.o. stores for a total of 839 stores in 49 states and Puerto Rico. PacSun's Web site address is www.pacsun.com. (Source: Company Press Release) --- UTSI wires shareholders a proposal of a 2-for-1 stock split Minutes before the opening bell, UTStarcom Inc's (NASDAQ:UTSI) Board of Directors talk of plans to pursue a 2-for-1 stock split of the company's common shares. The company's said the stock split would be in the form of a stock dividend, should shareholders approve of the split. Since being listed on the NASDAQ in 2000, the company has yet to split its stock. About the company: Founded in 1991 and headquartered in Alameda, California, UTStarcom is a leading global provider of wireless and wireline access and IP switching solutions. The company designs, manufactures, sells, and installs an integrated suite of future- ready access network and next-generation switching solutions. We enable wireless and wireline operators in fast-growth markets worldwide to offer voice, data, and Internet access services rapidly and cost effectively by utilizing their existing infrastructure. UTStarcom's products provide a seamless migration from wireline to wireless, from narrowband to broadband, and from circuit- to packet-based networks by employing "Next Generation Network Technology. Now." The company's customers include public telecommunications service providers that operate wireless and wireline voice and data networks in rapidly growing communications markets around the world. (Source: Company Press Release) --- COH bags another 2-for-1 stock split Minutes after the closing bell, Coach Inc's (NYSE:COH) Board of Directors declared a 2-for-1 stock split of the company's common shares. The stock split will take the form of a special dividend, where each shareholder will get one share of the company's common stock for every share outstanding. The company's stock split will be payable on October 1st, 2003, to shareholders on record as of September 17th. This stock split will increase COH's shares to 183 million. This is COH's first stock split since the middle of last year. About the company: Coach, with headquarters in New York, is a leading American marketer of fine accessories and gifts for women and men, including handbags, women's and men's small leathergoods, business cases, weekend and travel accessories, footwear, watches, outerwear, jewelry, sunwear, furniture and related accessories. Coach is sold worldwide through Coach stores, select department stores and specialty stores, through the Coach catalogue in the U.S. by calling 1-800-223-8647 and through Coach's website at www.coach.com. Coach's shares are traded on The New York Stock Exchange under the symbol COH. (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 RD Royal Dutch Petrol 44.62 +1.12 KRB MBNA Corp 22.82 +0.82 ECA Encana Corp 36.39 +1.27 BR Burlington Resources 49.03 +1.59 APA Apache Corp 65.15 +2.25 FD Federated Dept Stores 40.59 +1.74 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- THC Tenet Healthcare 14.57 +1.52 MSS Measurement Specialities 9.46 +1.46 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- WMT Wal-Mart Stores 57.00 +1.26 HIG Hartford Fncl Srvcs 53.40 +2.66 BBY Best Buy Co 46.49 +5.81 PSA Public Storage Inc 37.00 +1.21 HU Hudson United 40.14 +1.26 ANN Ann Taylor Stores 30.85 +1.55 STRA Strayer Education 89.08 +1.02 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- LMT Lockheed Martin 49.70 -1.20 LTR Loews Corp 42.72 -2.99 CNA CNA Financial 22.65 -2.02 CG Carolina Group 21.80 -3.26 RJR RJ Reynolds 33.14 -1.21 MIK Michaels Stores 35.31 -1.77 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- GISX Global Imaging Systems 24.04 -0.60 ================================================================= 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. Please read our disclaimer at: http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html ***************************************************************** ADVERTISING INFORMATION For more information on advertising in PremierInvestor.net Newsletter, or any Premier Investor Network newsletter please contact Contact Support. ***************************************************************** Copyright 2003 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form.
Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.
Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.
To ensure you continue to receive email from Option Investor please add "email@example.com"
Option Investor Inc