PremierInvestor.net Newsletter Thursday 08-21-2003 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: Five Year High Watch List: SYMC, VSEA, DHI, MMC and more! Market Sentiment: Bear Market in Fear ================================================================= MARKET WRAP (view in courier font for table alignment) ================================================================= 08-21-2003 High Low Volume Advance/Decline DJIA 9423.68 + 26.20 9481.44 9391.89 1.71 bln 2020/1170 NASDAQ 1777.55 + 17.00 1783.64 1762.97 1.71 bln 2060/1191 S&P 100 502.04 + 0.15 505.90 500.57 Totals 4080/2361 S&P 500 1003.27 + 2.97 1009.53 999.33 W5000 8715.26 + 44.00 9757.90 9671.31 RUS 2000 494.82 + 5.36 494.82 489.46 DJ TRANS 2681.65 + 19.80 2685.17 2659.34 VIX 19.53 - 0.18 20.56 19.38 VXN 28.28 + 0.64 29.13 27.33 Total Volume 3,690M Total UpVol 2,577M Total DnVol 1,017M 52wk Highs 815 52wk Lows 56 TRIN 0.81 NAZTRIN 0.67 PUT/CALL 0.69 ================================================================= =========== Market Wrap =========== Five Year High Believe it or not but it has only been a week since the power went out in the Northeast and the markets set new highs today. Not five year highs but new highs. The Philly Fed was the high stepper that blew away numbers for the last five years but the markets did not match its performance. However, if the economics keep up this rate it will not be long before the markets catch up. Dow Chart Nasdaq Chart Starting the morning off positively was a Jobless Claims number that surprised some traders. There were only 386,000 new claims registered for the week that included the blackout. Does that give you a clue where I am headed? The prior week was revised up to 403,000 but nobody seemed to care about the old news. Nobody seemed to consider the 54 million people without power on Friday who were unable to apply for benefits. Those same people were probably more interested in keeping everything in the freezer from spoiling instead finding the unemployment office. Getting gas to go to downtown was also a challenge. The Labor Dept said that the states with the biggest claims were not in the Northeast and therefore they did not expect a major revision. Ok, while I do not think we will see a major revision over 400,000 for this week I would be concerned that next week could be a shocker. Still we will not begin to see the real picture until the week after Labor day when the real work begins. Vacations will be over, summer help back to school and the last quarter push for holiday money begins. The 4-week moving average fell to 394,250 and the lowest level since Feb. Also providing a boost to the markets was the Leading Indicators for July which came in at +0.4% and the fourth consecutive month of gains. This was inline with estimates. Five of the ten components rose which was slightly less than the 8-of-10 in May. The Conference Board even went so far as to compare the current performance with late 2001 when the index bounced and then failed to hold as the economy fell back again. This was an unusual step for the Board to suggest that there was a downside potential. They stress the index shows an economy poised to rebound but that rebound is far from certain. This less than cheerful outlook was completely ignored once the Philly Fed hit the wires. The Philadelphia Fed Survey exploded past estimates of +10 with a very strong +22.1. This is completely unheard of to see such a bounce in manufacturing conditions in one month. The index jumped to a five year high and internal components were strong. Shipments rose to 16.3 from 9.1, New orders 14.6 from 10.4 and six month outlook to 62 from 56.9. Not rising were the average work week at 4.7 from 5.1 and employees to -8.7 from +0.8. Also surprising was the jump in prices paid to 16.0 from -6.5. Obviously the jump in manufacturing has not been enough to translate into new jobs with capacity utilization at 75%. Inventories remained low at 6.4 and show no confidence in future demand. The bad news bulls did not know how to react to the good news and after the initial spike the markets trended lower the rest of the day. This was surprising when you consider tech stocks got some help from Craig Barrett the CEO of Intel. He said it was too early to call it a recovery but they were seeing some buying "here and there." He qualified specifically with "We're not seeing a big upgrade cycle and we're not seeing IT budgets being raised." Still techs raced higher at the open and closed at a new 52-week high of 1777. The semiconductor sector found the most excitement and raced to a new high at 435 and a +13 point gain. Over the last ten days the SOX has climbed from 366 to 435 and nearly a +19% gain. Helping to power this gain was a report that the capacity of chip factories had risen to 85.9% utilization for the period ending in June. This is a new high since the 64% bottom in the 3Q-2001. This has been the worst slump in the 50-year history and analysts suggest the capex dam could burst next year if the trend continues. Much of the increase in utilization has come from the closing of plants do to the glut. The survivors are now poised to rebound out of the slump and back into boom time. All they need is demand. Considering most chip companies are expecting 3Q demand to be less than previously expected it would appear somebody is wrong. Also providing some sentiment gains before the open was the news that Chemical Ali had been captured in Iraq. He was number five on the most wanted list. He had initially been thought to have died in a bombing of his palace but recent intelligence had brought him back to life and pointed out his location. The continued discovery of Iraqi top-level fugitives due to tips from informers suggests the noose around Saddam is getting tighter on a daily basis. He is said to be moving every four hours and that alone exposes him to many more eyes than hiding in a basement somewhere. Financial instruments were credited with some of the market gains. The dollar rose to a four-month high with a +2% gain over the Euro and some analysts were crediting stock gains to the dollar strength. Did I miss something? I thought the majority of blue chips actually hit earnings estimates last quarter based on the benefits of a falling dollar. Our products are cheaper and the currency translations produced extra profit. AMZN for instance said they made $54 million in currency exchange due to the weak dollar. With the dollar at a four-month high it would seem to me that benefit has expired. Bonds came under pressure today with yields rising on the 10-year note to 4.49% and right back at the key 4.5% level that tends to bleed money from equities. Financial stocks, which had been strong, sold off from the opening high on worries that a bond failure is still lurking in the darkness and we could begin to see some earnings warnings soon from bond losses. Bonds also took a hit after the minutes of the June FOMC were released. There was considerable discussion about using alternative means to provide stimulus if they ran out of rate cuts. However, the general consensus of opinion was no alternative methods were necessary and that took the pressure off bonds. If they feel the Fed is powerless or gutless when it comes to taking future aggressive steps then there is nothing to keep rates low. It was also learned that 3 of the 12 Fed banks wanted to cut rates by 50 points instead of 25. The minutes provided a look at a very confused Fed that was puzzled about the lack of growth and going to do nothing in the foreseeable future to add more stimulus. Parry was eventually the lone dissenter on the vote to cut only 25 points. His recent publicized appearances echoed his comments in the minutes that he has not yet seen any evidence that a recovery is really underway. This is not a bullish picture being painted by the group. Also hitting new highs was gasoline with a +9.5% move and a move not seen in 19 years. With refineries running at over 95% capacity and no reduction in summer demand the prices keep moving higher. This is going to translate into lower profits for shipping companies, airlines and any company that spends a lot of money on transportation. The consumer may also be finding less money in their pocket from that reduced tax withholding with the addition of the price hikes. Commuters are going to be less bullish when the sentiment surveys hit them and I would bet those numbers take another energy hit. Some well-known drug stocks took a hit starting with Pfizer. Their estimates were cut due to generic concerns for two of their well known products Lipitor and Viagra. PFE fell to $29.75 and a new five-month low. SGP warned after the close that 2004 earnings would be less than 2003 and they were cutting 1000 jobs. They also cut their dividend from 17 cents to 5.5 cents. Prior to the cut SGP was in the top 10% of high yielding S&P companies. The stock went out at $16.50 and the announcement was made after trading was closed. The Dow came within 2 points of closing at a new 52-week high but did make a new intraday high at 9481. It was not a boring day for the Dow with the spike to nearly 9500 at the open. About 11:00 AM a large sell order in the S&P futures pushed the Dow to its low of 9391, almost -100 points off the high and were it not for the Philly Fed blowout the results could have been much different. Those numbers calmed the bearish sentiment at the time but never completely cured it. The Nasdaq blasted off to a new 52-week high at 1783 but ran into a dead end and was not able to break 1780 the rest of the day. The Nasdaq run has been amazing and it is up +76 points for the week mostly on the strength of the semi stocks. Despite the indexes finishing off the highs there were 815 new 52-week highs and only 56 new lows. Friday should be a tossup. There is so much bullishness the bears are afraid to short. Those holding stocks with strong profits are afraid to sell. It is a catch-22. Current shorts are trying to cover but nobody holding wants to sell. It is a bullish scenario made in heaven, as long as it lasts. The daily new highs continue to fuel new interest in buying but the low volume is keeping new buyers on the sideline. Traders are holding their collective breath and hoping for a pullback to enter. Professional traders are extremely confused by the lack of a summer sell off. When the market continues to go up when it should be going down all the rules go out the window. Everyone but Abby Joseph Cohen thinks stocks will have a tough time hitting the aggressive earnings estimates in light of the weak demand. Abby raised her estimates for 2003 and 2004 in light of the solid growth in the first half of the year. Abby is definitely reading from a different playbook than many others. The only economic reports on Friday are the ECRI Weekly Leading Indicators and Internet Commerce Sales. Neither has any real market impact. YHOO, EBAY and AMZN could be impacted depending on the Internet Sales numbers but it is not a broad market mover. With large gains and extreme levels for the week it will be interesting to see if we get a bout of profit taking or another round of panic buying by the shorts. We have had some big Fridays in recent months in both directions. Until the actual selling begins on strong volume I would continue to dance until the music stops. Once it does stop the race for sideline chairs could be frantic. If August and September are the two worst months of the year and this is the bad news than I can't wait for the good months that follow. But then we still have September and October in our path. Enter Very Passively, Exit Very Aggressively! Jim Brown Editor ================================================================== 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 --------------------------------- Symantec Corp. - SYMC - close: 53.22 change: +2.88 WHAT TO WATCH: After being stymied by the $50 resistance level since early June, shares of SYMC finally broke out earlier this week and put an exclamation point on the move today with a 5.7% advance on volume that nearly doubled the ADV. We're not normally in the habit of chasing such large moves and we aren't recommending chasing the stock higher. But a pullback into the $50-51 area should provide a strong entry point for a run towards the PnF bullish price target of $62. --- Varian Semiconductor Equip. - VSEA - close: 39.66 change: +2.67 WHAT TO WATCH: We've had our eye on shares of VSEA over the past week, as the stock looked like it wanted to try a breakout over strong resistance in the $36-37 area. Well, with the strength in the SOX, the bulls managed that breakout today, and on strong volume. While it looks like there may be some resistance near $40, VSEA looks like it has room to run up to $45. Look for a pullback to test $37 as newfound support to provide the best entry. --- D.R. Horton - DHI - close: 31.72 change: +1.47 WHAT TO WATCH: They're back! That's right, the Housing sector seems to have shaken off its concerns about rising interest rates, and the $DJUSHB index pushed higher to the tune of 2% on Thursday. That was nothing compared to DHI's 4.85% gain, as the stock is clearly leading the sector higher for a test of the June highs. Well ahead of its peers, DHI looks to break out above that level ($32.30) and with a PnF bullish price target in the ozone ($64) the stock looks like it definitely has room to run on a breakout. That said, DHI looks a bit extended in the near- term, and we'd prefer a mild pullback near $30 to provide for a better entry. --- Marsh Mclennan - MMC - close: 49.46 change: -1.27 WHAT TO WATCH: Just to prove we haven't gone totally bullish, we've got a downside play as well. MMC has been tracing out a series of lower highs since the middle of June and just began rolling over again over the past few days. With the descending trendline connecting those highs and the 50-dma aligned just above $51, any failed rebound below that level ought to provide an excellent entry point ahead of a continued decline. Target the 200-dma initially, with the possibility of further decline to $45, the site of the PnF bullish support line. --- =================== On the RADAR Screen =================== ATK $50.05 - Despite steady bullish action in the Defense index (DFI.X), shares of ATK have been consistently underperforming and got a shove further downhill on Thursday with a pre-market downgrade from JP Morgan. While the stock did manage to rebound from its intraday lows, there's now strong resistance in the $51- 52 area at the 3-week descending trendline. Target entries on a rollover from that area and look for a resumption of the downtrend to carry the stock down towards the $43-45 area, where support was found in March. KKD $47.50 - Only aggressive bears need apply here. Fresh off a new all-time high, shares of KKD are looking a bit top-heavy and today's sharp drop on heavy volume seems to indicate solid downside potential. We're eyeing a drop back into the $42-44 support area, which should be further supported by the rising 50- dma. A failed rebound in the $48-49 area would provide the best entry, although momentum traders could do well by targeting a break of the $46.65 level, which provided support this morning. PIXR $71.51 - Shooting to another all-time high on Thursday, PIXR has been absolutely amazing in its rise over the past year. With strong volume supporting this breakout again and a new PnF Buy signal along with a bullish price target of $86, this star looks like it could go far. A pullback to retest support in the $69-70 area will provide the best entry setup. =============================== Market Sentiment =============================== Bear Market in Fear Jonathan Levinson The put to call ratio and the option volatility or "fear" indices advanced slightly today as equities tried for new rally highs, round-tripping on the Dow and S&P while adding 17 on the Nasdaq. Fear remains exceptionally, awe-inspiringly low in the markets. One can only wonder as to why. The NDX volatility index, the QQV collapsed to an all-time low of 20 last week, and has managed to rise 20% to 24.04 as of today's close. To put that in context, the range for 2002 was 30.23 to 64.31, with the 30.23 coinciding with the QQQ's March top. Seeing the QQV trade below the S&P volatility index, the VIX, was a sight to behold last week, but few noticed. Premium on QQQ options remains very low. The amount of premium for which a seller of contracts is willing to settle remains very low. The key appears to be that options are being aggressively sold. If so, then this points to increasing levels of speculation and hedging by option writers, generally thought to be the "smart" money. As a small trader, the message I take from this is that the markets are growing more dangerous, as the increasing amount of leveraged speculation virtually guarantees sudden swings and "corrections" when the derivatives tail wags the underlying dog. Option premiums haven't tended to stay low for long during recent years, and the QQV and VXN have just days ago printed all-time record lows. Whether this action is screaming "buy!" or "sell!" for the equity indices remains an open question. Following the trend of recent years, I'm inclined to err to the "sell" side, and err I have. Either way, the message for bullish and bearish traders is that volatility is low, it hasn't tended to stay that way for long, and caution is warranted on either side of the trade. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 9481 52-week Low : 7197 Current : 9424 Moving Averages: (Simple) 10-dma: 9328 50-dma: 9182 200-dma: 8588 S&P 500 ($SPX) 52-week High: 1015 52-week Low : 768 Current : 1003 Moving Averages: (Simple) 10-dma: 989 50-dma: 990 200-dma: 917 Nasdaq-100 ($NDX) 52-week High: 1319 52-week Low : 795 Current : 1315 Moving Averages: (Simple) 10-dma: 1262 50-dma: 1251 200-dma: 1108 ----------------------------------------------------------------- The VIX remains pegged under the 20 level while the VXN could be producing an "oversold" bounce, if that can occur in such an index. CBOE Market Volatility Index (VIX) = 19.53 -0.18 Nasdaq Volatility Index (VXN) = 28.28 +0.64 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.62 509,982 316,318 Equity Only 0.49 450,740 220,436 OEX 1.29 7,903 10,166 QQQ 3.02 12,773 38,539 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 70.0 + 0 Bull Confirmed NASDAQ-100 72.0 + 4 Bear Correction Dow Indust. 80.0 + 0 Bull Correction S&P 500 76.8 + 1 Bull Correction S&P 100 84.0 + 2 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 0.91 10-Day Arms Index 0.89 21-Day Arms Index 1.00 55-Day Arms Index 1.08 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 1856 2001 Decliners 967 1088 New Highs 228 254 New Lows 17 9 Up Volume 1112M 1259M Down Vol. 533M 402M Total Vol. 1702M 1701M M = millions ----------------------------------------------------------------- Commitments Of Traders Report: 08/12/03 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 Commercials added slightly to their long positions in the S&P, whilesmall traders maintained their positions, adding a net 761 contracts for the week. Commercials Long Short Net % Of OI 07/22/03 411,206 442,131 (30,925) (3.6%) 07/29/03 405,429 445,114 (39,685) (4.7%) 08/05/03 395,633 450,988 (55,353) (6.5%) 08/12/03 399,414 456,767 (57,353) (6.7%) 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 07/22/03 155,891 76,466 79,425 34.2% 07/29/03 155,216 73,030 82,186 36.0% 08/05/03 159,971 72,951 87,020 37.4% 08/12/03 158,821 71,040 87,781 38.2% 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 Commercials added heavily to their long positions in the e-mini, posting their most bullish reading of the year, while small traders added further to their short positions. Commercials Long Short Net % Of OI 07/22/03 249,392 249,386 6 0.0% 07/29/03 272,659 216,166 56,493 11.6% 08/05/03 310,662 249,004 61,658 11.0% 08/12/03 306,014 217,233 88,781 17.0% Most bearish reading of the year: (354,835) - 06/17/03 Most bullish reading of the year: 88,781 - 08/12/03 Small Traders Long Short Net % of OI 07/22/03 45,945 76,071 (30,126) (24.7%) 07/29/03 44,437 93,144 (48,707) (35.4%) 08/05/03 56,663 95,919 (39,256) (25.7%) 08/12/03 62,534 106,403 (43,869) (26.0% Most bearish reading of the year: (48,707) - 07/29/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 Commercials and small traders moved in the same direction on the NDX, as commercials lightened up slightly on their short positions, while small traders added to their longs. Commercials Long Short Net % of OI 07/22/03 32,502 48,139 (15,637) (19.4%) 07/29/03 31,456 50,294 (18,838) (23.0%) 08/05/03 32,813 52,383 (19,570) (23.0%) 08/12/03 34,374 53,015 (18,641) (21.3%) 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 07/22/03 27,321 8,844 18,477 51.1% 07/29/03 25,691 7,810 17,881 53.4% 08/05/03 22,188 7,783 14,405 48.1% 08/12/03 23,957 7,871 16,086 50.5% 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 Commercials added slightly to their long positions on the Dow, but the move was sufficient to post a new bullish high for the year, close to reaching the October 2001 high of 15,135 contracts. Small traders added more substantially to their shorts. Commercials Long Short Net % of OI 07/22/03 22,198 8,176 14,022 46.2% 07/29/03 23,696 9,572 14,124 42.5% 08/05/03 23,981 9,264 14,717 44.3% 08/12/03 24,942 9,878 15,064 43.3% 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 07/22/03 6,110 10,898 (4,788) (28.2%) 07/29/03 5,744 11,601 (5,857) (33.8%) 08/05/03 5,716 10,422 (4,706) (29.2%) 08/12/03 6,933 13,248 (6,315) (31.3%) 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. 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PremierInvestor.net Newsletter Thursday 08-21-2003 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: Surging Semi Closed Plays: SOHU Stop-Loss Adjustments: IRF, LSI Stock Split Announcements: CBAN 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 ) =============== LSI Logic - LSI - close: 11.26 change: +0.45 stop: 10.10*new* Company Description: LSI Logic Corporation (NYSE: LSI) is a leading designer and manufacturer of communications, consumer and storage semiconductors for applications that access, interconnect and store data, voice and video. In addition, the company supplies storage network solutions for the enterprise. (Source: Company Press Release) Why we like it: A 14 percent climb in a week: we wish all our plays performed so well. LSI tacked on another 3.44 percent on Wednesday despite a 0.66 percent decline in the $SOX. We also note that the gains were made on 7.2 million shares, significantly above LSI's typical 4.4 million shares per day. The LSI media department did its part in supporting those gains, announcing a new chipset and other developments. In addition, LSI called for the redemption of 4.25 percent convertible notes due in 2004. While we're happy about the gains made in LSI, we wish the SOX had participated. Wednesday, the SOX printed a small-bodied candle at the top of the previous day's candle. That pattern could be the beginning of a reversal signal or a more bullish "p" accumulation pattern. We vote for the second possibility. Our stop at $9.50 protects us and we'll keep a watch on the SOX, but conservative traders might want to take at least partial profit if LSI continues to climb while the SOX starts a decline. Since LSI has risen so near our $12.00 target, we would not suggest new momentum entries at this level, but entries on a pullback and bounce anywhere above $10.00 might be appropriate. Why This is our Play of the Day Clearly the primary cause behind the strength in the NASDAQ this week has been the near-vertical rise in the Semiconductor sector (SOX.X). Once the bulls managed to push through the $410 resistance on Monday, they haven't looked back, and the SOX tacked on another 3% to its gains on Thursday, closing at another new 52-week high. Our LSI play got its own boost on Monday from the Smith Barney Citigroup upgrade, and that vaulted the stock through resistance near $9.65. Since then, buying volume has been strong, and amazingly, the stock is now up more than 19% since from our pick price of $9.46 just last week. Hopefully, it is clear that we need to now shift our focus to maximizing gains in the play, rather than searching for new entries. As you can see on the chart below, the next resistance level to contend with is $12, where conservative traders might look to book some gains. Aggressive traders can really go for the gusto and hold out for a continued rally up near $13, which should be very strong resistance. If LSI trades the $13 level, we'll be closing the play without question, booking a nice gain. Judging by the heavy volume on Thursday (more than double the ADV), LSI looks like it could continue marching higher, but only if it continues to have the support of a bullish SOX. Just to be safe, we're raising our stop to $10.10, which is just below yesterday's intraday low and very near the center line of the ascending channel. For traders not willing to take that much risk, we would recommend harvesting some gains near Thursday's close or on a break back under $10.60, which would represent a break back inside the ascending channel. Annotated Chart of LSI: Picked on August 13th at $9.46 Change since picked: +1.80 Earnings Date: 07/23/03 (confirmed) Average Daily Volume: 4.71 mln ================================================================= Closed Plays ================================================================= High Risk/High Reward --------------------- -------------------- Closed Bearish Plays -------------------- SOHU.com - SOHU - close: 32.55 change: -0.65 stop: 34.30 Thursday opened with Chinese Internet stock SINA's symbol crawling across the bottom of the CNBC screen. That's when we knew our play was in trouble. We were right. SOHU opened above our $34.30 stop. What's frustrating, however, is that SOHU dropped through the next hour, and then again at the end of the day, never again touching the day's high, our stop, or even $34.00. Turned away by the 21-dma at $34.16 and the 50-dma at $34.50, SOHU printed a red candle known as a belt-hold. It's a red candle with no upper shadow, printed during an advance. It can be a reversal signal. Indicator evidence is mixed, with MACD making a bullish touch, but not yet moving up through zero, with RSI hooking down slightly while in an up phase, and stochastics flattening slightly while also in an up phase. It's possible that SOHU will continue rounding down into a right shoulder, but the indicators don't yet predict that outcome. We do note that today's volume was strong as SOHU sold off. In retrospect, we perhaps should have kept a stop just above the June 17 high, but if the recent tech strength continues, we may be glad for the lower stop. Picked on August 6 at 32.27 Change since picked: +0.26 Earnings Date: 07/23/03 (confirmed) Average Daily Volume: 4.6 million ========================= Stop-Loss Adjustments ========================= IRF – Raise from $33.60 up to $34.75 LSI – Raise from $9.50 up to $10.10 ========================= Stock Split Announcements ========================= CBAN announces a 5-for-4 stock split Before the opening bell, Colony Bankcorp Inc's (NASDAQ:CBAN) Board of Directors declared a 5-for-4 stock split of its common shares. The stock split will be payable on September 15th, 2003 to shareholders on record as of September 1st. After the split the company will have approximately 5.7 million shares outstanding. This is the CBAN's first stock split since the 1999. About the company: Colony Bankcorp, Inc. is a multi-bank holding company headquartered in Fitzgerald, Georgia, and has seven banking subsidiaries with twenty-two locations in the Central and South Georgia cities of Fitzgerald, Warner Robins, Ashburn, Leesburg, Cordele, Albany, Sylvester, Tifton, Moultrie, Douglas, Broxton, Eastman, Chester, Soperton, Rochelle, Pitts, Quitman and Valdosta, Georgia. The banking subsidiaries include Colony Bank of Fitzgerald, Colony Bank Ashburn, Colony Bank Wilcox, Colony Bank of Dodge County, Colony Bank Worth, Colony Bank Southeast and Colony Bank Quitman, FSB. Total consolidated assets of the company approximate $825 million. (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 GCI Gannett Co 78.50 +0.81 GDW Golden West Financial 87.00 +0.83 CEG Constellation Energy 35.32 +1.02 PBG Pepsi Bottling Group 23.46 +0.63 DHI D.R.Horton Inc 31.72 +1.47 TMO Thermo Electron Corp 23.12 +0.56 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- AVT Avnet Inc 16.95 +1.30 SMTC Semtech Corp 18.58 +1.23 HAIN Hain Celestial Group 19.88 +1.02 ARDI At Road Inc 15.10 +1.10 INFA Infomatica Corp 8.60 +1.05 POZN Pozen Inc 15.00 +2.77 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- NOC Northrop Gruman 97.11 +2.89 CHIR Chiron Corp 50.97 +2.08 SYMC Symantec Corp 53.22 +2.88 MYL Mylan Labs 37.45 +1.50 JCP J.C. Penney 20.12 +1.53 CBE Cooper Industries 48.94 +1.58 PIXR Pixar 71.51 +3.56 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- DB Deutsche Bank Ag 59.25 -1.15 ATK Alliant Tech Systems 50.05 -2.04 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- KKD Krispy Kreme Doughnuts 47.50 -1.42 MMC Marsh & Mclennan 49.46 -1.27 ================================================================= 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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