Option Investor

Daily Newsletter, Thursday, 08/21/2003

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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

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

Enter Very Passively, Exit Very Aggressively!

Jim Brown


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.


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


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


52-week High:  9481
52-week Low :  7197
Current     :  9424

Moving Averages:

 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:

 10-dma:  989
 50-dma:  990
200-dma:  917

Nasdaq-100 ($NDX)

52-week High: 1319
52-week Low :  795
Current     : 1315

Moving Averages:

 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


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


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


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


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Do not duplicate or redistribute in any form.
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

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

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

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