Option Investor
Newsletter

Daily Newsletter, Wednesday, 09/10/2003

HAVING TROUBLE PRINTING?
Printer friendly version
PremierInvestor.net Newsletter                Wednesday 09-10-2003
                                                    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:      A Somber Mood

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)
=================================================================
     09-10-2003            High     Low     Volume Advance/Decline
DJIA     9420.46 - 86.74  9504.95  9400.38 1.87 bln    867/1981
NASDAQ   1823.81 - 49.62  1859.21  1823.81 1.99 bln    765/2309
S&P 100   508.77 -  5.15   513.92   508.08   Totals   1632/4290
S&P 500  1010.92 - 12.25  1023.17  1009.74
RUS 2000  501.76 - 11.81   501.73   501.76
DJ TRANS 2705.27 - 26.92  2734.85  2704.05
VIX        21.26 +  1.58    21.34    20.21
VXN        33.16 +  2.78    33.38    31.52
Total Volume 4,375M
Total UpVol    716M
Total DnVol  3,613M
52wk Highs     317
52wk Lows       13
TRIN          2.18
PUT/CALL      1.00
=================================================================

===========
Market Wrap
===========


A Somber Mood
by James Brown

The weather over Wall Street began to darken yesterday afternoon.
By the opening bell on Wednesday the clouds had turned stormy and
investors turned sour on stocks and fled to the safety of bonds.
The dip became a full-fledged rout after a new tape from Osama
Bin-Laden aired over the Al-Jazeera network.  The downpour of
selling puddled in technology issues but the profit taking was
market wide with only the DRG.X drug index and the UTY.X utility
index escaping to close in the green.

Overseas markets shared the mood with losses in Asia and European
bourses.  The Hang Seng led the pack with a 236-point drop to
10,810.  U.S. exchanges witnessed internals turn bearish on the
eve of the 9/11 attacks.  Declining stocks washed away advancing
issues almost 20 to 8 on the NYSE and 23 to 7 on the NASDAQ.
Down volume flooded over up volume by 4-to-1 on the NYSE and 6.5-
to-1 on the NASDAQ.  New highs evaporated to a measly 126 while
new lows clocked in at eleven.

Chart of the S&P 500:


Chart of the DJIA:


Chart of the NASDAQ Composite:



Semiconductor stocks lead the markets lower with a 5.3 percent
drop in the SOX index.  The trouble began yesterday after the
market close.  Texas Instruments (TXN) and Xilinx (XLNX) gave
their mid-quarter updates and investors choose to sell the news.
TXN's forecast was for a 6.3% jump in Q3 sales but traders were
probably hoping for more of a blowout akin to Intel's +17%
forecast at their mid-quarter update last week.  TXN also guided
to the upper end of their revenue range but that wasn't enough
for Wall Street.  XLNX merely reaffirmed previous estimates.
Investors felt that this news was already priced into the stocks
and chose to take some off the table.  TXN lost 7.5% and XLNX
dropped 5.6%.  A downgrade of Micron Technology (MU) by SoundView
to a "neutral" didn't help matters.  MU lost more than 9 percent.

OptionInvestor.com has been cautious the last couple of weeks and
told reader to expect the upgrade parade by honey-tongued
analysts to slowly turn bitter as valuation concerns became the
new trend.  We've certainly seen that new trend begin and with
Wall Street still sliding into earnings warning season it could
get worse.  Meanwhile we could be left to hear brokerages talk
out of both sides of their mouth.  Case in point: Smith Barney's
networking analyst downgraded Nortel Networks and Juniper
Networks while upgrading higher price targets on Cisco Systems,
Foundry Networks and Extreme Networks.  Then again maybe Smith
Barney is just trying to separate the wheat from the chaff.

Trading tomorrow is expected to be subdued due to the 9/11
anniversary but we can still expect some economic reports.
Before the opening bell we'll hear the latest weekly jobless
claims.  Economists are hoping for a decline towards the 400,000
level from last week's 413,000.  Also before the open the August
export/import prices will come out and the July trade balance
figures will be announced.

Tomorrow's two-year anniversary of the 9/11/2001 terrorist
attacks will have most U.S. exchanges all observing moments of
silence to remember the fallen.  The NYSE, NASDAQ and AMEX will
observe four separate one-minute breaks.  The moments of silence
will occur at:

8:46 a.m. ET - The first plane, American Airlines flight 11,
               hit the North Tower.

9:03 a.m. ET - The second plane, United flight 175,
               hit the South Tower.

9:59 a.m. ET - The South Tower fell.

10:29 a.m. ET - The North Tower fell.


While the markets may be active, we do not want to forget the
9:43 a.m. ET crash of American Airlines Flight 77 into the
Pentagon.

Our prayers still go out to the families and individuals who are
dealing with the vacancy and emptiness of lost loved ones.


=================
  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

COF     Capital One Financial Cp   58.91     +2.86


---------------------------------------
Breakout to Upside (Stocks $5 to $20)
---------------------------------------

AH      Armor Holdings Inc         17.32     +1.26


---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------

AVE     Aventis                    54.07     +1.16
ATN     Action Performance Cos     24.70     +1.45


-------------------------------------------
Breakout to Downside (Stocks over $20)
-------------------------------------------

WM      Washington Mutual Inc      37.19     -1.67
TXN     Texas Instruments Inc      23.43     -1.90
PHG     Koninklijke Phillips Elec  23.68     -1.33
NCC     National City Corp         30.30     -1.51
HON     Honeywell Int              28.09     -1.02
OMC     Omnicore Group Inc         78.12     -2.15
WY      Weyerhaeuser Co            58.84     -3.00
GDW     Golden West Financial      84.80     -3.21
DVN     Devon Energy Corp          51.02     -1.63
ADBE    Adobe Systems Inc          36.39     -1.64
UVN     Univision Communications   34.33     -2.42
CF      Charter One Financial      30.50     -1.27
CMA     Comerica Inc               47.46     -1.12
VNO     Vornado Realty Trust       46.73     -1.07
SFA     Scientific-Atlantica Inc   33.86     -3.16
MGG     MGM Mirage Inc             35.05     -1.32
ITT     ITT Industries Inc IN      60.97     -1.40
FTN     First Tennessee National   38.97     -2.00
RSH     Radioshack Corp            28.06     -1.26


-----------------------------------------
Recently Overbought With Bearish Signals (Stocks over $20)
-------------------------------------------

WFC     Wells Fargo & Co New       50.04     -0.95
INTC    Intel Corp                 27.66     -1.13
TXN     Texas Instruments          23.42     -1.90
USB     US Bancorp                 23.66     -0.34
FOX     Fox Entertainment Group    31.30     -0.95
CHA     China Telecom              27.17     -1.58
APD     Air Products & Chemicals   47.14     -0.81
PFG     Principal Financial Group  31.21     -1.02



=================================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to Contact Support
=================================================================
DISCLAIMER
=================================================================

This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

*****************************************************************
ADVERTISING INFORMATION

For more information on advertising in PremierInvestor.net
Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

*****************************************************************

Copyright (c) 2003 PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form
PremierInvestor.net Newsletter                Wednesday 09-10-2003
                                                    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
=================================================================

Tech Stocks
  New Bearish Plays:     SNPS
  Bullish Play Updates:  FDC
  Closed Bullish Plays:  COHU

Active Trader (Non-tech)
  New Bullish Plays:     TARO
  Bullish Play Updates:  GOLD, WPI
  Closed Bullish Plays:  CC
  Closed Bearish Plays:  ABC

High Risk/Reward
  New Bearish Plays:     EASI, NIHD
  Bullish Play Updates:  INSP, ORB, QCOM, TER

==================================================================
Net Bulls (NB) Tech Stock section
==================================================================

=========
NEW PLAYS
=========

  -----------------
  New Bearish Plays
  -----------------

Synopsis, Inc. - SNPS - close: 64.13 change: -2.66 stop: 68.05

Company Description:
Synopsis is a supplier of electronic design automation software
to the global electronics industry.  The company's products are
used by designers of integrated circuits (ICs), including system-
on-a-chip ICs, and the electronic products (such as computers,
cell phones, and internet routers) that use such ICs to automate
significant portions of their chip design process.  SNPS'
products offer its customers the opportunity to design ICs that
are optimized for speed, area, power consumption and production
cost, while reducing overall design time.

Why we like it:
After being numbed into a near coma state over the past few
weeks, traders were treated to some real action in the market on
Wednesday, with the Semiconductor index (SOX.X) getting pummeled
to the tune of a 5.3% loss as some serious profit taking came to
Wall Street.  The selling was broad-based too, with few stocks in
the sector able to avoid the carnage.  After tracing a double top
just below $70 over the past month, the stock had already been
starting to show some weakness relative to the SOX, drifting
lower over the past week.  But today's nearly 4% slide sealed the
deal, with SNPS giving a fresh PnF sell signal as it briefly
dipped below the $64 support.  That gives us a tentative bearish
vertical count of $58 to work with, which coincides nicely with
the strong support at $58-59 from June and July.  Speaking of
support, SNPS has some right here in the $63-64 area, so a near-
term rebound is certainly a possibility.  But with strong
resistance now in the $66-67 area, any rebound should be short
lived.

Adding some more juice to the mix, SNPS is due to split its
shares 2-for-1 on September 23rd.  This seems a bit early for
traders to be jumping ship, but as the split date nears, we could
see traders sell the stock to avoid the typical post-split
depression.  That's certainly what transpired in the last few
days leading up to EBAY's recent split.  The best setup for
entries into the play will likely come on a failed rally in the
$66-67 area, as broken support now becomes resistance.
Reinforcing this resistance level are the 10-dma ($67.65) and 20-
dma ($67.43), both of which are now curling over and coming down
to meet the stock.  Another reason to be so cautious about
chasing the stock lower until it has a chance to consolidate
today's big drop is that price closed well below the lower
Bollinger band ($64.83) and we need to allow some time for the
bands to expand, making room for that continued downward move.
Set stops initially at $68.05, which is just above yesterday's
intraday high.

Annotated Chart of SNPS:


Picked on September 10th at  $64.13
Change since picked           +0.00
Earnings Date              11/19/03 (unconfirmed)
Average Daily Volume =     1.23 mln



============
PLAY UPDATES
============

  --------------------
  Bullish Play Updates
  --------------------


First Data Corp. - FDC - close: 40.39 change: -0.98 stop: 39.50

We were afraid this might happen, especially after the past two
sessions where FDC was unable to hold above the $41.50
resistance.  With a bit of weakness creeping into the broad
market, FDC couldn't help but slide lower as well, losing more
than 2.3% and retracing nearly all its gains since the breakout
last week.  This is where we'll find out whether we're being
given another chance to enter to the long side or if that
breakout was just a bull trap.  Look for a rebound from above the
$40 level (aided by the 10-dma at $40.12) as an opportunity to
add new longs, but keep stops set at $39.50.  A break below that
level would constitute a fall back into the pre-breakout zone, as
well as a fall under the 20-dma and the 50-dma.  Traders looking
to enter on strength will still need to wait for a breakout over
$42.

Picked on September 3rd at  $41.01
Change since picked          -0.62
Earnings Date             10/16/03 (unconfirmed)
Average Daily Volume =    4.53 mln




============
CLOSED PLAYS
============

  --------------------
  Closed Bullish Plays
  --------------------

Cohu, Inc. - COHU - close: 21.33 change: -1.28 - stop: 21.40

Credit Suisse First Boston raised IBM's recommendation to an
outperform rating from its previous neutral, and the techs soared
on Monday.  COHU didn't benefit.  Tuesday, COHU printed a doji
just above its 10-dma, and then Wednesday's trade printed a
bearish candle that violated our stop near the end of the trading
day.

COHU's 5.35 percent drop matched the SOX's 5.32 percent drop.
The SOX also violated its 10-dma and recent support just above
443.  It looks as if it's time for some profit-taking in the SOX
and any semi-related stocks.  MACD, RSI, and stochastics confirm
the bearish short-term outlook for COHU

Picked on Aug 24 at  21.80
Change since picked: -0.47
Earnings Date:    07/26/03 (confirmed)
Average Daily Volume:  154 thousand




==================================================================
Stock Bottom / Active Trader (AT) section
==================================================================

=========
NEW PLAYS
=========

  -----------------
  New Bullish Plays
  -----------------


Taro Pharm. - TARO - close: 54.65 change: +1.19 stop: 51.00

Company Description:
Taro Pharmaceuticals Industries is principally engaged in the
production, research and development and marketing of
pharmaceutical products.  The Israeli company operates in Israel
and through Israeli, North American and European subsidiaries.
TARO manufactures, markets and distributes OTC and prescription
pharmaceuticals, offering topical corticosteroids and antifungal
cream products.

Why we like it:
It was hard to find any pocket of strength in the market on
Wednesday, as the broad market's rounded out the most concerted
2-day selloff we've seen in many weeks.  But shares of TARO put
in a stellar performance, adding 2.22% to cap off a nice 3-day
rally that has now propelled the stock higher by nearly $4.  In
the process, the bulls managed to deliver a breakout over the $54
resistance and the 50-dma ($53.65) in one fell swoop.  When TARO
trades $55, it will put the stock back on a PnF Buy signal and
that should produce a tentative bullish price target of $64, and
if achieved, that would put TARO at fresh all-time highs.  But
before contemplating any such lofty goals, the bulls will first
have to reach the $59-60 area, the site of the June/July highs
and our initial target.

With price coming to rest just below the upper Bollinger band on
Wednesday, TARO may have a bit of a challenge pushing immediately
higher, but aggressive momentum traders can certainly play on a
breakout over $55, which will give that PnF Buy signal.  The more
conservative approach will be to buy a pullback to support, as
the rebound should provide a springboard through the $55 level.
A mild pullback to the 50-dma is one entry possibility, while a
more attractive entry may be possible on a dip back to the
$52.50-53.00 area, delineated by the 10-dma ($52.95) and the 20-
dma ($52.43).  The ascending trendline connecting the early
August and early September lows should hold as final support on
any serious pullback, so setting our stop just below there at $51
should keep us safely in the play.  Look for strengthening volume
to confirm the stock's bullish intentions, along with a continued
rebound in the Pharmaceutical index (DRG.X).

Annotated Chart of TARO:


Picked on September 10th at  $54.65
Change since picked           +0.00
Earnings Date              10/23/03 (unconfirmed)
Average Daily Volume =        386 K


============
PLAY UPDATES
============

  --------------------
  Bullish Play Updates
  --------------------


Randgold - GOLD - close: 24.31  change: -0.72  - stop: 22.70

After ending last week with a chart that gave conflicting
signals, GOLD found support at its ascending regression channel
and moved up again.  Wednesday, the weakness in the markets
seemed to catch all equities, including those in the HUI, the
gold bugs index.  Both GOLD and the HUI opened near the day's
highs and then fell as the afternoon downdraft swept through the
markets.  Gold also fell during the day, closing just above $380.

We see conflicting signals on GOLD's chart. It maintains a rather
steep ascending trendline. The moving averages climb steeply
beneath GOLD's current price.  Price oscillates around a
trendline that had been in place for many months, establishing
that former resistance as support.  This looks like
consolidation, except for Wednesday's bearish engulfing candle.
That worries us.

Oscillators flatten, not giving many clues as to final direction.
It's possible that those oscillators will drift down, relieving
overbought pressure while GOLD consolidates near the current
level or below, near stronger support.  With both the 10-dma and
the 21-dma rising below the current price and our stop, GOLD
should find support above that stop.  We do note, however, that
while stochastics and RSI flatten, they may be setting up a
series of lower highs, a potential signal that price will weaken,
too.

Those seeking a new entry might get an opportunity to buy on a
pullback and bounce from above $23.00, but check first to be sure
that $180 support has held on the HUI.

Annotated Chart for GOLD:


Picked on Aug 24 at  23.40
Change since picked: +0.91
Earnings Date:    08/12/03 (confirmed)
Average Daily Volume:  360 thousand



----

Watson Pharma. - WPI - cls: 43.52 chng: -0.81 - stop: 41.49*new*

WPI had a big day Monday.  The company presented at the Bear
Stearns Healthcare Conference.  The company also gained FDA
approval for a generic form of the Percocet pain reliever
manufactured by Endo Pharmaceuticals.  The company announced that
it would launch the generic version by late 2003.  In response,
the stock gained 7.24 percent Monday.

Tuesday started out pretty well, too.  MSDW raised WPI to
equalweight.  Perhaps equalweight wasn't strong enough, however,
because WPI pulled back, and continued the pullback Wednesday.  A
pullback was inevitable, and this one hasn't yet retraced even
half Monday's big gains, a bullish sign if that support continues
to hold.  So far, support has held above the July high, too.

MACD continues to curve up, although both RSI and stochastics
look less bullish.  The 10-dma climbs above our new stop at
$41.49. We notice that the $DRG, the pharmaceutical index,
performs well, too.  Under these conditions, new entries could be
sought on a pullback and bounce from anywhere above $42.40.

Annotated Chart for WPI:


Picked on Aug 27 at  40.74
Change since picked: +2.78
Earnings Date:    08/05/03 (confirmed)
Average Daily Volume:  1.1 million





============
CLOSED PLAYS
============

  --------------------
  Closed Bullish Plays
  --------------------

Circuit City - CC - close: 9.95 change: -0.24 - stop: 9.85

Ouch.  Along with WMT and BBY, CC received a downgrade early this
week.  Sanford Bernstein downgraded the stock to a market perform
rating from its previous outperform, citing valuation concerns.
Noting that CC was recovering, the analyst also said that the
stock had already discounted a substantial portion of the value
gained from that recovery.

Wednesday CC came within four cents of our stop.  The $RLX showed
weakness, too, falling beneath recent support.  Although the $RLX
may find support at $340, CC set its earnings release for
September 17.  That gives it too little time to recover before
the earnings release, and we're closing the play now.

Picked on Aug 31 at $10.43
Change since picked: -0.48
Earnings Date:    09/17/03 (confirmed)
Average Daily Volume:  2.8 million




  --------------------
  Closed Bearish Plays
  --------------------

AmerisourceBergen - ABC - close: 58.05 change: +0.93 stop: 57.50

That's what we get for being greedy and going for the gusto.  ABC
came within 60 cents of hitting our profit target last Friday and
we opted to hold out for one more push down.  Alas, it wasn't to
be, and the stock rebounded smartly on Monday and then continued
to march higher right into today's close, which fell just short
of the converged 20-dma and 200-dma.  But that was above our
$57.50 stop and we're out of the play for a modest gain.  The
action over the past few days should be a reminder that when
we're sitting on a nearly 10% gain, right above important
support, we ought to just take it.  All positions should now be
closed, especially with buying volume starting to pick up.

Picked on August 10th at  $60.00
Change since picked        -1.95
Earnings Date           10/23/03 (unconfirmed)
Average Daily Volume =  1.41 mln




==================================================================
HIGH RISK/HIGH REWARD (HR) section
==================================================================

=========
NEW PLAYS
=========

  -----------------
  New Bearish Plays
  -----------------


Engineered Sup. Sys. - EASI - cls: 58.82 chng: -2.95 - stp: 63.59

Company Description:
Engineered Support Systems, Inc. is a diversified supplier of
high-tech, integrated military electronics, support equipment and
logistics services for all branches of America's armed forces and
certain foreign militaries.  The Company also serves a variety of
commercial customers.  (Source:  Company Press Release.)

Why We Like It:
Tuesday, EASI announced that BA had awarded it a contract valued
at $1.6 million plus options that would add an additional $0.5
million.  The contract is for a Synthetic Instrument Measurement
Unit (SIMU) and includes work to be performed over an 11-month
period.  The SIMU combines six classical instruments into one and
the company believes it will set the standard for test
measurement equipment in its field.

Perhaps the contract amount disappointed, because AG Edwards
downgraded the stock to a hold from a buy.  Investors reacted by
sending the stock down 4.78 percent on slightly higher-than-
average volume.  The DFI.X, the defense index, cooperated by
declining, too.

EASI has a gap to fill.  The stock gapped up on its earnings and
then rose vertically without stopping to build support.
Wednesday's decline took it below the 10-dma, and the next strong
support appears to be at the top of that gap.  Last week's candle
was also a larger-than-normal candle, and candlestick theory
suggests that support might be found at the midpoint of such
candles.  That support would be found at $52.00, so that's where
we're setting our profit target.  We've set our stop at $63.59,
just above Monday's high.

One caution concerns the low average daily volume, making this an
aggressive play.  Another caution shows up when examining the P&F
chart.  EASI remains on a P&F buy signal and it has not yet
achieved the $71.00 target from the first buy signal.  It has,
however, reversed into an "O" column, and the P&F chart also
demonstrates the lack of near support.  Entries can be found at
the current level or on a bounce and rollover anywhere under
$61.00.

Annotated Chart for EASI:


Picked on Sep 10 at  $58.82
Change since picked:  -0.00
Earnings Date:    08/26/03 (confirmed)
Average Daily Volume:  228 thousand



----

NII Holdings - NIHD - close: 60.69  change: -3.31 - stop: 66.75

Company Description:
NII Holdings, Inc., a publicly held company based in Reston, Va.,
is a leading provider of mobile communications for business
customers in Latin America. NII Holdings, Inc., has operations in
Argentina, Brazil, Mexico and Peru, offering a fully integrated
wireless communications tool with digital cellular service,
text/numeric paging, wireless Internet access and Nextel Direct
Connect(SM) service, a digital two-way radio feature. NII
Holdings, Inc., trades on the NASDAQ market under the symbol
NIHD.

Why We Like It:
We don't know whether it was Argentina's default of its payment
to the IMF, Nokia's warning about soft sales of mobile phones, or
NIHD's decision to sell $100 million in convertible notes, but
something hit the stock hard.  On Wednesday, NIHD dropped 5.17
percent, closing beneath its 10-dma for the first time since
early August.

NIHD is on a P&F buy signal, but has reversed into an "O" column
and there's only air below the current level, down to about
$52.00.  MACD lines made a bearish cross, and the RSI headed down
long ago.  The 21(3)3 stochastics have turned down, and appear to
be ready to roll down out of territory signaling oversold
conditions.

Still, the light average daily volume and the P&F buy signal make
this a high-risk play.  We hope it will also be a high-reward
one, sinking to our $52.00 target.  Enter on a move below $60.00
or on a bounce and rollover anywhere below $63.50.

Annotated Chart for NIHD:


Picked on Sep 10 at  $60.69
Change since picked:  -0.00
Earnings Date:    07/30/03 (confirmed)
Average Daily Volume:  183 thousand




============
PLAY UPDATES
============

  --------------------
  Bullish Play Updates
  --------------------

InfoSpace.com - INSP - close: 18.90  change: -0.35 - stop: 17.00

Tuesday, INSP hit our stated first target of $19.50, so
conservative traders have probably already happily taken profits.
MACD confirmed the breakout, and continues to look strong.

Monday, INSP announced that the company would return to its roots
as a yellow page and white page directory, and would rework its
site as a destination for yellow pages.  The company intends to
attract local advertising dollars, a potential $14 billion pot.
The company decided to focus on the yellow pages and white pages
when it calculated that 85 percent of its traffic went to those
pages.  Investors liked the idea, and INSP added 6.81 percent on
more than double the daily average.

Tuesday continued those gains, but Wednesday INSP printed an
inside-day candle or harami.  That candle rests on the support
offered by regression channel INSP formerly occupied.  That
inside day offers traders both a new possible entry and a new
possible exit.  While we're keeping our official exit at $17.00,
traders familiar with inside-day formations might elect to exit
if INSP drops below Tuesday's $18.46 low, although it might be a
good idea to give the downside test a little leeway to ensure
that any drop was not a trap.  New entries could be sought on a
move above Tuesday's high.

One caution exists for those considering new entries, however.
The YIH, the Internet Infrastructure HOLDRS Index, and XIS, the
Industry Standard 100 Internet Index, two indices of which INSP
is a component, dropped sharply on Wednesday.  Before considering
new entries, confirm that these two indices have regained their
footing.

Annotated Chart for INSP:


Picked on Sep 7 at  $17.19
Change since picked: +1.71
Earnings Date:    07/30/03 (confirmed)
Average Daily Volume:  347 thousand



----

Orbital Sciences - ORB - close: 9.05  change: -0.15 - stop: 8.49

After last week's announcements of new contracts, ORB's press
department has been quiet this week.  We were interested in the
reaction of the defense-related stocks after President Bush's
speech Sunday night.  Whether impacted by his speech or not, both
ORB and the $DFI.X, the Amex Defense Index, climbed Monday.

Both retreated on Wednesday, however.  ORB's retreat looks like
nothing more than oscillation within its ascending regression
channel.  The 10- and 21-dma's rise to support price.  Even with
Wednesday's decline, MACD tries to peek above the descending
trendline that has been capping its highs.

We do note, however, that the $DFI.X closed beneath its 10-dma,
so traders might also keep a watchful eye on this index,
especially those traders considering new entries.  Those new
entries can be found on a pullback and bounce from above $9.00.

Annotated Chart for ORB:


Picked on Sep 3 at   $9.18
Change since picked: +0.17
Earnings Date:    07/22/03 (confirmed)
Average Daily Volume:  347 thousand



----

Qualcomm - QCOM - close: 40.62  change: -1.20 - stop: 39.99

Monday, QCOM charged up the chart.  Tuesday, Nokia raised its
earnings target, but the CFO commented that phone prices would
soften in the current quarter.  The effect of that announcement
was heard throughout Europe, when bourses turned down.  It was
also felt by QCOM.  Although the stock held above its 10-dma
Tuesday, it could not do so Wednesday, and closed below that
average for the first time since early August.

The XTC, the North American Telecommunications Index, also felt
the effect and also closed below its 10-dma on Wednesday.  $520
support held on the XTC, but it's possible that this index might
retreat as low as $500 if the $520 support fails.  Such a retreat
might also carry QCOM down, perhaps as low as $40.00, although we
hope to see that round-number support to hold, especially as it's
also the neckline of QCOM's inverse H&S.

Those seeking new entries could target a pullback and bounce from
above $40.00, but they should also be aware of the possibility
that QCOM could be setting up a possible regular H&S with a
neckline near $40.00.  If QCOM hits that level and moves up,
profits should be guarded near the $41.50 possible right-shoulder
level.  Verify that the XTC has found support, too, before
considering new entries.

Annotated Chart for QCOM:



Picked on Aug 27 at  41.00
Change since picked: -0.38
Earnings Date:    07/23/03 (confirmed)
Average Daily Volume: 	10 million



---

Teradyne Inc. - TER - close: 19.71 change: -1.32 stop: 17.89

After all the bullish action in the Semiconductor index (SOX.X)
over the past few weeks, Wednesday's 5.3% selloff was a rude
awakening to the bulls.  The SOX plunged below possible support
at $455 and then $444 to close at its lowest level since 8/26.
After its nearly vertical ramp of the prior 5 sessions, it wasn't
surprising to see the profit taking hit shares of TER as well,
but the more than 6% slide left behind an ugly looking candle on
the daily chart.  If last week's breakout was the real deal, then
TER should find solid support near $19, which should be further
supported by the 10-dma ($18.99).  A rebound from above that
level looks good for new entries, although the dip probably
shouldn't be bought if the SOX is continuing to fall.  If the SOX
breaks below $435, then it will probably continue down to its 50-
dma near $408, and that would have a strong negative impact on
our play.  Keep stops set at $17.89 for now.

Picked on September 3rd at  $20.11
Change since picked          -0.40
Earnings Date             10/14/03 (unconfirmed)
Average Daily Volume =    2.88 mln





=================================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to Contact Support
=================================================================
DISCLAIMER
=================================================================

This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

*****************************************************************
ADVERTISING INFORMATION

For more information on advertising in PremierInvestor.net
Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

*****************************************************************

Copyright (c) 2003  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.

DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

To ensure you continue to receive email from Option Investor please add "support@optioninvestor.com"

Option Investor Inc
PO Box 630350
Littleton, CO 80163

E-Mail Format Newsletter Archives