Option Investor

Daily Newsletter, Wednesday, 09/03/2003

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PremierInvestor.net Newsletter                Wednesday 09-03-2003
                                                    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:      New York Changes Name to Pamplona

Trading Ideas
  Value Plays With Bullish Signals
  Breakout to Upside (Stocks $5 to $20)
  Breakout to Upside (Stocks over $20)
  Breakout to Downside (Stocks over $20)
  Recently Overbought With Bearish Signals (Stocks over $20)

MARKET WRAP  (view in courier font for table alignment)
     09-03-2003            High     Low     Volume Advance/Decline
DJIA     9568.46 + 45.19  9597.38  9514.49 2.06 bln   1778/1061
NASDAQ   1852.90 + 11.42  1863.55  1846.51 2.32 bln   1777/1320
S&P 100   514.50 +  3.64   516.27   510.86   Totals   1736/1759
S&P 500  1026.27 +  4.28  1029.34  1021.99
RUS 2000  510.71 +  3.21   512.01   507.50
DJ TRANS 2761.47 + 15.63  2769.67  2745.28
VIX        20.43 +  0.48    20.89    19.94
VXN        31.19 +  1.13    31.32    29.98
Total Volume 4,689M
Total UpVol  3,016M
Total DnVol  1,594M
52wk Highs   1,189
52wk Lows       23
TRIN          0.97
PUT/CALL      0.64

Market Wrap

New York Changes Name to Pamplona
by James Brown

It was another busy day on Wall Street.  If you weren't running
with the bulls then you were probably trampled under their feet.
A second round of positive analyst comments and economic data
swept the markets to another set of new yearly highs.  Pundits
were eager to share their excitement over the return of volume to
the markets but skeptics thought it felt like smart money
unloading stocks to the uninitiated.  It's not very often that
the NASDAQ Composite, the Russell 2000 and the Wilshire 5000
index can all notch a six-day winning streak.  If the markets can
stretch the rally a couple of more days we may have to move the
Fiesta of San Fermin to New York.

Market internals continue to be positive but they have slipped
somewhat from Tuesday's torrid pace.  Advancing issues beat
decliners 17 to 10 on the NYSE and 17 to 13 on the NASDAQ.
Wednesday's new yearly highs hit 822 compared to just 13 new
lows.  One of the big factors that Wall Street analysts were
talking about today was the return of volume and the market's
ability to hold its gains.  The NYSE experienced its best volume
in six weeks with more than 2 billion shares traded.  The NASDAQ
saw the best volume since June with more than 2.3 billion shares.
Volume is normally accepted as a tool for the bulls but from the
looks of the doji candlestick on the NASDAQ today we could be
seeing some distribution, not new buying.

Overseas markets reacted strongly to the U.S. gains from Tuesday
and that helped set the mood again this morning at home.  The
English FTSE 100 added 57 points (+1.37%) to close at 4262.  The
German DAX added 80 points (+2.25%) to close at 3647.  The
Japanese NIKKEI rose 25 points to 10715 and the Hang Seng broke
above the 11,100 mark with a 162-point gain.  Meanwhile the U.S.
treasury markets seem to hover in anticipation of the Beige book
report out this afternoon.  The 10-year note and the 30-year note
remained close to yearly lows.

Chart of the Dow Jones Industrials

Chart of the S&P 500 index

Chart of the NASDAQ

Early this morning, prior to the opening bell, Credit Suisse
First Boston gave the broker-technology party new energy with
positive comments about the software sector.  CSFB raised their
outlook from "market weight" to "overweight" claiming their
belief that corporate discretionary spending will increase over
the next 12 months and this money would filter into the software
group.  As we commented on yesterday and CNBC did today, these
brokers are coming in awfully late with these upgrades but that
hasn't stopped the GSO software index from making new gains.  As
a matter of fact Microsoft (MSFT) was the biggest gainer in the
Industrials today with a 3.8% move on big volume of 109 million
shares.  Dumping more fuel on the tech fire was SG Cowen who
revealed that their most recent technology survey showed a decent
recovery in I.T. spending.  Unfortunately, the outlook wasn't
quite as rosy as their March survey and SG Cowen lowered its
earnings estimates for IBM and HPQ.  Speaking of IBM, Soundview
also raised their Q3 estimates for Big Blue.  This comes a day
after Dan Niles, with Lehman Brothers, offered positive comments
for Big Blue's service division.  Shares of IBM added 57 cents
after giving up most of the day's gains.

One of these biggest influences on the markets today were
comments from John Chambers, CEO of Cisco Systems (CSCO).  CSCO
is the world's largest maker of routers and networking equipment
so any up tick in I.T. spending is probably going to find its way
to CSCO.  Sure enough, John stated this morning that August sales
were better than expected but he quickly cautioned that the trend
may not carry over into September.  August is traditionally a
slow time for CSCO so investors cheered anyway and CSCO added 3.3
percent by the close with a breakout above the $20 mark.  Also
contributing to the networking/communication equipment fever were
shares of Nortel Networks (NT), which added 8.1 percent after
signing a $1 billion multi-year deal with Verizon Wireless.

The day was not without its economic reports.  This morning saw
the July construction numbers come out.  Economists had been
expecting a rise of 0.5 percent.  The Commerce Department
estimated that July's construction spending came in at +0.2
percent.  While less than the estimates it still put the
seasonally adjusted rate to its highest level since January.
This comes on the back of an upwardly revised +0.7 percent in
June (from +0.3 percent).  Higher mortgage rates in June and July
had little affect on residential construction, which rose 6.1
percent in July on a year-over-year basis.

Economists and bond traders were also waiting to hear the Beige
book report announced at 2:00 PM ET.  The report takes a survey
of economic conditions for the 12 Fed districts.  All but one
showed a pick up in business activity over the last two months.
The general trend was a rise in consumer spending and a firming
in the manufacturing sector, which we already knew from Tuesday's
ISM report.

The combination of positive comments from the likes of CSCO, the
outbreak of analyst upgrades and daily confirmation that the
economy really does seem to be improving has put the markets into
a momentum mode.  Many believe that valuations have become too
rich.  However, as is its modus operandi the stock market is
discounting future earnings growth.  Fears of being left behind
as the markets charge ahead could be fueling the recent run up.

Personally, I find it encouraging that Wall Street could mount a
follow through on Tuesday's big breakout.  The bad news is that I
suspect the rally could run out of steam pretty quickly.  The SOX
has failed to participate in the rally this week and actually
lost 2.68% by the close.  That's not supposed to happen with the
NASDAQ making new 17-month highs.  The drop in the semiconductor
index is suggesting that chips are due for more profit taking.
Jeff Bailey likes to point out that the chips usually lead the
markets higher and lower.  I also note that the financial sectors
were not really participating in the rally today either.  Both
the BKX and BIX closed with a gain but they were minor.  Only the
broker/dealer index has maintained any strength.

Another disturbing observation remains the bullish percent data.
Bullish percent data measures how many stocks are on a buy
signal.  Readings under 30 are typically oversold and a good time
to consider initiating longs while readings over 70 are typically
overbought and time to start liquidating longs and evaluating
bearish plays.  Both the S&P 100 (OEX) and the S&P 500 (SPX) are
at 5-year extremes.  The OEX bullish percent is at 87 (out of
100) and the SPX is at 80.

I am not suggesting that we close out our longs and load up on
puts but it should make traders very cautious about initiating
new bullish plays.  The "don't leave me behind" mentality could
keep investors buying the dips long after you or I run out of
money trying to short the top.  So what are traders to do?  The
trend is obviously up but the key to short-term trading is timing
and that requires patience to wait for the right entry point.

Keep in mind that with so many gains, any bad news could spark a
sharp drop as investors rush to lock in profits.  Tomorrow is
going to be another hectic day with the August ISM Services
index, July Factory Orders, the Q2 GDP revision and Intel's mid-
quarter update.

Watch those stop losses.

  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

AT      Alltel Corp                47.37     +0.99
MCK     Mckesson Corp              34.94     +1.01
JCP     J.C. Penney Company Inc    22.55     +0.57
MTG     Mgic Investments Corp      58.50     +0.84
BXP     Boston Properties Inc      44.25     +0.75
UIS     Unisys Corp                13.76     +0.63
CHKP    Check Point Software Tech  19.09     +1.00
BBI     Blockbuster Inc            21.78     +0.97

Breakout to Upside (Stocks $5 to $20)

BMC     BMC Software Inc           16.13     +1.20
AMR     AMR Corporation            12.73     +1.07
AAI     Airtran Holding            15.04     +1.07
ALGN    Align Tech Inc             12.53     +1.23
ZGEN    Zymogenetics Inc           15.49     +1.19
SGR     Shaw Group Inc (THE)       10.47     +1.72
RSYS    Radisys Corporation        19.38     +1.35

Breakout to Upside (Stocks over $20)

TM      Toyota Motor Corp (ADS)    58.52     +1.42
MSFT    Microsoft Corp             28.30     +1.04
SAP     SAP Ag (ADS)               34.06     +2.96
ACN     Accenture Ltd              23.41     +1.06
VRTS    Veritas Software Corp      36.08     +1.19
AVP     Avon Products Inc          66.74     +1.64
INTU    Intuit Inc                 47.84     +1.13

Breakout to Downside (Stocks over $20)

LLY     Eli Lilly & Company        62.10     -4.70
EON     E.On Ag (ADS)              50.33     -1.47
MEDI    Medimmune Inc              34.00     -1.58
CMX     Xaremark Rx Inc            23.30     -2.10
PBG     Pepsi Bottling Group Inc   21.90     -2.36
ESRX    Express Scripts Inc        60.72     -4.02
CRL     Charles River Labs Intl    31.50     -4.97

Recently Overbought With Bearish Signals (Stocks over $20)

MOH     Molina Healthcare Inc      22.22     -1.08

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Do not duplicate or redistribute in any form
PremierInvestor.net Newsletter                Wednesday 09-03-2003
                                                    section 2 of 2
Copyright ) 2003, All rights reserved.
Redistribution in any form is strictly prohibited.

The entire newsletter is best viewed in COURIER 10 for alignment

In section two:

Tech Stocks
  New Bullish Plays:     FDC
  Bullish Play Updates:  COHU

Active Trader (Non-tech)
  Bullish Play Updates:  CC, FMC, GOLD, WPI
  Bearish Play Updates:  ABC, C, STJ

High Risk/Reward
  New Bullish Plays:     ORB
  Bullish Play Updates:  QCOM, TWR

SplitTrader/Stock Splits
  Announcements:         ABVA

Net Bulls (NB) Tech Stock section


  New Bullish Plays

First Data Corp. - FDC - close: 41.01 change: +1.16 stop: 38.50

Company Description:
First Data Corporation operates in four business segments:
payment services, merchant services, card issuing services and
emerging payments.  The company provides money transfer, official
check, money order, electronic payment and stored-value card
services in its payment services segment.  In the merchant
services segment, FDC provides credit and debit card transaction
processing services on behalf of merchants, check verification
and guarantee services and also operates an ATM network.  In the
card issuing services segment, the company provides card issuing
and processing services for financial institutions issuing credit
and debit cards and to issuers of oil/fuel, retail/private-label,
stored-value and smart cards.  Finally, in the emerging payments
segment, the company provides mobile payments, government
payments and enterprise payment solutions.

Why we like it:
Reaching the site of its all-time highs near $45 in mid-June,
shares of FDC have had a rough time since then, sliding all the
way down to the 200-dma (just above $37) by early August.  Over
the past month, the stock has thrice tested that average and in
each instance found sufficient buying interest to provide a
bounce.  Over the past two days, the stock has seen a strong
resurgence of buying volume, running well above the ADV and price
has rebounded from just above $38 to $41.  Today's nearly 3% jump
is particularly encouraging, as it put FDC above both its
descending trendline ($40.30) from the June highs as well as the
50-dma ($39.94).  Looking at the trading pattern over the past
month, it is now clear that we have a confirmed double-bottom
near the $37.50 level, which was confirmed with today's positive
movement that moved price above the relative high ($40) between
the two dips in August.

The question now is how high FDC could rally from here.  It is
hard to ascertain anything meaningful (at least in the near-term)
from the PnF chart, as it is still on the Buy signal created by
the rally in May and June, and that bullish price target is $67.
We don't want to set any such lofty goals, but it does look like
the stock has a reasonable shot at retesting its June highs at
$45.  So we'll set that as our initial target, while keeping open
the possibility of a breakout over that level, market permitting.
The best case for new entries would be on a pullback and rebound
from the $40 level, confirming that prior resistance as new-found
support.  We're actually hesitant to recommend momentum entries
on further strength due to the fact that FDC is nearing some
resistance in the $41.50-42.00 area and with current price
actually above the upper Bollinger band.  Set initial stops at
$38.50, which is below both yesterday's intraday low ($38.58) and
the 20-dma ($38.81).

Annotated Chart of FDC:

Picked on September 3rd at  $41.01
Change since picked          +0.00
Earnings Date             10/16/03 (unconfirmed)
Average Daily Volume =    4.59 mln


  Bullish Play Updates

Cohu, Inc. - COHU - close: 23.03 change: +0.70 - stop: 21.40*new*

Despite a rash of semi or computer-related good news this week,
the SOX.X retreated.  Goldman Sachs' Laura Conigliaro upgraded
Dell (DELL) to overweight, noting growth prospects and valuation,
and Seagate Technology (STX) to outperform.  In addition, she
raised her rating on the enterprise hardware sector from its
previous neutral to outperform.  The Banc of America started
Intel (INTC), Advanced Micro Devices (AMD), and Micron Technology
(MU) at a buy rating.  The SIA announced Tuesday that July's
global chip sales amounted to $12.9 billion, up from June's $12.5
billion.  July global chip revenue was up 10.5% over the year-ago
revenue.  Wednesday saw more upgrades, but also saw the SOX.X
drop down to its 10-dma.

None of those reports specifically addressed COHU's business, but
it certainly sounded as if this manufacturer of semi test-
handling equipment ought to be benefiting from the upgrades and
good news.  Like the SOX, COHU printed a doji Tuesday, warning of
indecision, but we're glad to say that the indecision ended
Wednesday.  COHU charged up the chart.

We're raising our stop to $21.40, just below the steeply rising
10-dma and the ascending red trendline drawn on the chart.  Those
seeking new entries could enter on a pullback and bounce from
above $22.00.  We currently maintain our target of $26.00, but
conservative traders might set an alternative target just under

Volume increased Wednesday as COHU moved up and closed near the
day's high, a bullish sign.  Although most indicators have moved
into territory indicating overbought conditions, they haven't yet
flattened, much less turned down.  When they do, they might
indicate nothing more than consolidation or a slight pullback.

Annotated Chart for COHU:

Picked on Aug 24 at  21.80
Change since picked: +1.23
Earnings Date:    07/26/03 (confirmed)
Average Daily Volume:  154 thousand

Stock Bottom / Active Trader (AT) section


  Bullish Play Updates

Circuit City - CC - close: 10.78 change: +0.12 - stop: 9.85

We don't like the look of the two doji printed on CC's daily
chart Tuesday and Wednesday, but we were glad to see CC gain on a
day when the RLX dropped 0.21 percent and competitor Best Buy
(BBY) dropped 0.11 percent.  Although we didn't find a same-store
sales release for CC Wednesday, other retailers released same-
store figures with mixed results.  We do note, however, one news
item that will affect our play:  Circuit City set a tentative
earnings release of September 12, so we'll need to be out of the
play by early next week.

While CC printed those two doji in a row, both stochastics and
RSI turned up again.  The doji signal indecision: those
indicators signal anything but indecision.  They're bullish.
MACD lines also separated and curled up again.  On balance, then,
CC's chart does a fair job of selling a bullish case.  We set a
new stop earlier this week at $9.85, just below the sharply
rising 10-dma and Friday's gap.  New entries could be taken at
current levels or on a pullback and bounce above $10.00.
However, with earnings scheduled for next week and two
consecutive doji signaling a possible need for consolidation, new
entries may not offer favorable risk/reward parameters.

Annotated Chart for CC:

Picked on Aug 31 at $10.43
Change since picked: +0.33
Earnings Date:    09/12/03 (tentative)
Average Daily Volume:  2.8 million


FMC Corporation - FMC - close: 25.48 change: +0.26 stop: 24.00

Good things happen when preparedness meets opportunity, and our
FMC play appears to be a good example of that.  We initiated
coverage last weekend as the stock had risen to just below the
$25 resistance level and looked ready for a breakout.  We played
it cautiously with an entry trigger of $25.10, just over the
recent intraday highs and we didn't have to wait long for that
trigger to be tripped.  After an initial rejection just below
that level yesterday morning, the bullishness in the broad market
yesterday afternoon pushed the stock through that level on robust
volume, resulting in a close at $25.22.  Confirming that breakout
was both increasing volume and today's continuation to just below
the $25.50 level.  Intraday pullbacks near the 10-dma (currently
$24.70) look like good continuation entry points, while more
aggressive traders can enter on a continued rally through the
$25.60 level (just above today's intraday high).  Keep in mind
that we're initially targeting the $27.50 level, so for the
momentum traders out there, make sure to weigh risk vs. reward
before playing.  Note that our stop is currently set at $24.00,
as a break below there would require a break of both the 20-dma
and last week's intraday low ($24.06).

Picked on August 27th at  $24.89
Change since picked        +0.59
Earnings Date           10/28/03 (unconfirmed)
Average Daily Volume =     253 K


Randgold - GOLD - close: 23.25  change: -0.27  - stop: 21.49

Copper and iron mining companies performed well in Europe at the
beginning of the week as optimism about the economic recovery
fanned hopes for increasing demand for products used in
manufacturing.  The gold miners didn't respond the same, with
gold, the HUI, and GOLD all dropping.  Wednesday, GOLD continued
its decline, but it printed a doji that sprang up from an
ascending trendline.  Doji that come after a decline can be
reversal signals, and we hope that's what this one is, too.  We
would feel more hopeful if GOLD had closed above the 10-dma, but
it closed just beneath that average.  Meanwhile, the HUI, the
gold bugs index, also sprang up from support, with that support
being its 10-dma.

Both RSI and stochastics roll down out of territory indicating
overbought conditions, hinting that GOLD may have more
consolidating to do before it turns back up again.  We're not
sure about the need for consolidation, however.  A scan of GOLD's
chart shows a nearly identical configuration on August 26, when
GOLD came down to touch the lower trendline of the regression
channel, printing a doji, with RSI and stochastics rolling out of
overbought territory.  The next day, GOLD gapped up and started
the climb that popped it above the rising red trendline visible
on the chart.  With similar configurations present, GOLD could
repeat that performance.  Just in case it doesn't, we set our
stop at $21.99, just below the rising 21-dma.  New entries could
be found on a push above the rising red trendline, currently at
about $24.40, but $HUI strength should be confirmed before
considering such an entry.

Annotated Chart for GOLD:

Picked on Aug 24 at  23.40
Change since picked: -0.15
Earnings Date:    08/12/03 (confirmed)
Average Daily Volume:  360 thousand


Watson Pharma. - WPI - cls: 41.91  chng: +0.32 - stop: 39.99*new*

We couldn't be more pleased with the way WPI performs, with
candles chugging toward recent highs.  WPI announced Tuesday that
it would present at the Bear Stearns 16th Annual Healthcare
Conference on Monday, September 8, at 11:30 ET, and it appears
that investors expect WPI to make a good showing.  We'll have to
guard against a sell-the-news event, however, perhaps tightening
our stop again on Friday.

The DRG was down today, with a spot check of pharmaceutical
companies showing mixed performances.  Other companies producing
generic drugs also showed spotty performances, with FRX down and
IVX up on Wednesday.  IVX's climb might be attributable to its
submission of an NDA (new drug application) to the FDA for its
Easi-Breathe(R) inhaler rather than any specific sector strength.

In addition to those candles chugging toward recent highs, WPI's
daily chart also reveals that MACD has now crossed above zero,
with the lines separated and rising.  To balance MACD's strong
performance, however, the 21(3)3 stochastics gave a bearish kiss
from within territory indicating overbought conditions, although
they have not yet rolled.  RSI remains strong, not signaling a
pullback yet, but the stochastics may be providing an early
signal that WPI might see a day or two of consolidation.  We've
raised our official stop to $39.99, but an alternative and more
conservative stop might be $40.25, just below the rising 10-dma.

New entries could be found on a pullback and bounce anywhere
above $40.00.  Now that WPI moved through the July 28 intraday
high of $41.35, new entries could be considered at the current
level, but entrants from the current level should be aware of the
possible need to consolidate ahead of the July 9 intraday high of
$42.84 or the June 17 intraday high of $43.32. Entries at the
current level would not provide as much cushion if that
consolidation were to occur.

Annotated Chart for WPI:

Picked on Aug 27 at  40.74
Change since picked: +1.17
Earnings Date:    08/05/03 (confirmed)
Average Daily Volume:  1.1 million

  Bearish Play Updates

AmerisourceBergen - ABC - cls: 56.82 chng: -1.87 stop: 59.65*new*

There's no question that ABC's rebound off the $56 level had us
feeling a bit nervous, especially with the buying volume on
Thursday giving the two-day candle pattern the appearance of a
tweezer-bottom.  But with the stock's recent relative weakness,
it seemed a prudent move to let the play work, with our stop
resting just above the $60 level.  That is looking like a prudent
move after today's sharp reversal lower.  Tuesday's session
consisted of a gap higher that ran into stiff resistance at the
converged 10-dma (currently $58.37) and 200-dma (currently
$58.85), resulting in a nearly perfect doji candle.  Taken
together with today's gap down, yesterday's candle now looks like
a perfect island reversal (even though these normally come at
relative highs) and with daily Stochastics (5,3,3) hinging down
in a short-cycle reversal, we're feeling much more comfortable
with our bearish stance on the stock.  Our initial downside
target remains at $54, but to get there, ABC is going to need to
trade below $56 and decisively break below the PnF chart's
bullish support line.  It is hard to make a case for new
conservative entries at this level, but aggressive traders can
look to enter on a break under $56.  If taking that aggressive
stance, it should be done in anticipation of a decline down to
the $50 level, which is a more aggressive target than we had
initially been looking for.  Tonight we're tightening our stop to
$59.65, which is just above yesterday's intraday high, as well as
the 20-dma (currently $59.62).

Picked on August 10th at  $60.00
Change since picked        -3.18
Earnings Date           10/23/03 (unconfirmed)
Average Daily Volume =  1.39 mln


Citigroup, Inc. - C - close: 44.50 change: +0.32 stop: 45.00

Financial stocks have performed quite well this week, with the
Banking index (BKX.X) reaching up to the $885 level, right at the
level that provided resistance on the mid-August rally attempt.
The concern we have for our bearish play on C though is the way
the BKX has managed to move through its descending trendline from
the July highs, and this could be the beginning of a bullish
break from the triangle consolidation pattern of past 2 months.
C has certainly maintained its role of underperformance, but the
rally so far this week has brought that stock right to its
descending trendline at $44.50.  Today's intraday high of $44.85
had it looking like our $45 stop would be broken, but fortunately
there was a bit of a pullback into the close.  Right now, we
don't want to consider new entries unless C can roll over below
that trendline and break under that critical $42 level.  From the
looks of the daily chart, it looks like the bulls will win this
battle, so more conservative traders with open positions may just
want to cut their losses here and move on.

Picked on August 24th at  $43.10
Change since picked        +1.40
Earnings Date           10/13/03 (unconfirmed)
Average Daily Volume =  12.8 mln


St. Jude Medical - STJ - cls: 52.16 chng: +0.02 stop: 54.00*new*

If boredom had a symbol, then STJ would be it.  After that sharp
drop last week that first attracted us to the play, the stock has
been meandering in a very tight range.  In the past four days,
the total range has been from $51.40-52.61, with the $52 level
acting like a powerful price magnet.  This week, we're seeing
volume start to increase, but so far the increased interest has
been unable to push price in either direction from that magnet.
At this point, our preference is to abstain from new entries
unless the stock can break below $51.25.  On a breakdown, our
initial target will still be $49.25 (the target from the H&S
pattern), with a possible decline to the 200-dma at $48.  With
the moving averages all rolling lower, we can reduce our risk in
the play by lowering our stop to $54.00, which is just above the
50-dma (currently $53.98).

Picked on August 27th at  $51.80
Change since picked        +0.36
Earnings Date           10/15/03 (unconfirmed)
Average Daily Volume =  2.20 mln



  New Bullish Plays

Orbital Sciences - ORB - close: 9.18  change: +0.53 - stop: 38.49

Company Description:
Orbital develops and manufactures small space systems for
commercial, civil government and military customers. The
company's primary products are satellites and launch vehicles,
including low-orbit, geostationary and planetary spacecraft for
communications, remote sensing and scientific missions; ground-
and air-launched rockets that deliver satellites into orbit; and
missile defense boosters that are used as interceptor and target
vehicles. Orbital also offers space-related technical services to
government agencies and develops and builds satellite-based
transportation management systems for public transit agencies and
private vehicle fleet operators.  (Source: Company Press Release)

Why We Like It:
If we didn't know better, this defense-related stock's
performance might convince us we were still at war.  ORB's bar
chart impresses us, but its real strength shows up on the P&F
chart.  ORB sports a bullish P&F chart, with a buy signal, a
three-box pullback, and then a new buy signal.  Wednesday, it
created a new double-top breakout signal with its move above
$9.00.  It's above its bullish support line and P&F resistance at
$8.50.  The next P&F congestion begins at $11.00, but doesn't get
strong until $11.50, and that's going to be our target.  The
DFI.X, the American Defense Index, displays its own P&F buy
signal, an ascending triple top breakout.

ORB's bar chart displays a bullish posture, too.  Wednesday, ORB
broke out of a bull flag and roared upward, bypassing recent
resistance on volume that was almost three days the daily
average.  RSI turned up again from the middle of a downward move,
and stochastics and MACD both made new bullish kisses and
attempted to roll back up again.  Wednesday's push brought ORB
back above its 10-dma, currently at $8.90.

Traders considering this play must also consider the reason it's
in the high-risk section.  Although both the P&F and the weekly
chart show that $11.50-11.60 provides stronger historical
resistance than does $10.00, there's likely will be psychological
resistance to moving this stock back above that nice round
$10.00.  We expect ORB to either burst through this level and
build on recent gains, or attempt to rush through and be
repelled, needing to consolidate a bit longer.  Wednesday's rise
encompassed such a hefty percentage gain that the only viable
stop is also at a hefty percentage loss below the current price.

With the DFI showing strength, we suspect that part of ORB's
recent gains comes from strength in anything related to defense
spending, but ORB also has been busy reorganizing its executive
team.  Late in August, the company announced that it would begin
exchanging its 9 percent senior note exchange offers due in 2011
and sold in July 2003.  Earlier in August, the company had
successfully launched a missile defense boost vehicle.  This
vehicle is being developed and manufactured for the U.S. Missile
Defense Agency, and the launch represented the 25th consecutive
successful space mission over the previous 21 months.

Annotated Chart for ORB:

Picked on Sep 3 at   $9.18
Change since picked: +0.00
Earnings Date:    07/22/03 (confirmed)
Average Daily Volume:  347 thousand


  Bullish Play Updates

Qualcomm - QCOM - close: 40.37  change: -0.84 - stop: 38.49

Tuesday, China's Ministry of Information Industry, the country's
telecoms regulator, announced that 3G licenses should be
available by the end of the year.  Presumably, the Ministry will
first decide whether it will use the European standard advanced
by QCOM or a Chinese-developed standard.  The Ministry has not
always been clear about its plans.  In addition, Lehman lowered
the telecom sector to marketweight in their Strategy Growth

QCOM dipped on larger-than-average daily volume Tuesday although
the NWX, the networking index, and the XTC, the North American
Telecommunications Index, both gained.  Wednesday repeated the
pattern with QCOM printing an ominous bearish engulfing candle
not matched by the bullish patterns on those two indices.

We think QCOM pulls back to establish recent resistance as new
support, a normal occurrence.  QCOM is likely to find that
support at the confluence of the rising 10-dma and the neckline
of its inverse H&S, with those levels of support converging near
the psychologically important $40.00.  If that level does not
hold as support, next support is offered by historical
support/resistance and the rising 21-dma near $38.50.  We've
placed our stop just below this second tier of support.  New
entries could be found on a bounce from anywhere above $40.00.
If momentum entries are sought, look for a break above this
week's high.

Annotated Chart for QCOM:

Picked on Aug 27 at  41.00
Change since picked: -0.63
Earnings Date:    07/23/03 (confirmed)
Average Daily Volume: 	10 million


Tower Automotive - TWR - cls: 4.64 chng: +0.09 stop: 4.24*new*

Last Friday's bullish action was definitely a sign of things to
come, as TWR followed through with a powerful breakout on
Tuesday.  Starting with an initial dip to test support at the 10-
dma (now $4.27), the stock rebounded from the $4.25 level and
pushed as high as $4.59, before settling just a few pennies below
that level.  The bullish action continued on Wednesday, with the
stock moving through the $4.60 level and closing just a penny
below its intraday high.  Both days this week have seen strong
volume, and it looks like the bulls are intent on at least
testing our initial profit target of $4.80.  Conservative traders
should look to harvest gains when that level is reached, while
those willing to hold on a bit longer should exit at our final
target of $5.00.  TWR is already up more than 13% from our picked
price, so our focus now turns to protecting and maximizing gains.
Raise stops to $4.24, which is a penny below yesterday's intraday
low and is also below the 10-dma, which should provide solid
support on any intraday pullback.

Picked on August 10th at   $4.10
Change since picked        +0.54
Earnings Date           10/21/03 (unconfirmed)
Average Daily Volume =     539 K

Split Trader/Stock Splits


ABVA cashes in on a 3-for-2 stock split

Before today's opening bell, Alliance Bankshares Corporation's
(NASDAQ:ABVA) Board of Directors declared a 3-for-2 stock split of
its common shares.

The stock split will be payable on September 29th, 2003 to
shareholders on record as of September 17th.

This is ABVA's first split since being listed on the NASDAQ in

About the company:
Alliance Bankshares Corporation is a locally managed community
banking organization based in Northern Virginia. The independent
status of the organization allows the Bank's management to create
implement and maintain banking services with a level of
flexibility, creativity and discretion that is not possible with
larger institutions.
(Source: Company Press Release)

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