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Daily Newsletter, Monday, 09/15/2003

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PremierInvestor.net Newsletter                 Monday 09-15-2003
                                                  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:      Isabel Swirls Closer
Play of the Day:  What Weakness?

===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
      09-15-2003           High     Low     Volume   Adv/Dcl
DJIA     9448.81 - 22.74  9490.91  9436.60 1.91 bln 1414/1443
NASDAQ   1845.70 -  9.33  1861.81  1843.79 1.81 bln 1828/1256
S&P 100   509.96 -  2.34   512.81   509.49   Totals 3242/2699
S&P 500  1014.81 -  3.82  1019.79  1013.59
W5000    9842.92 - 34.39  9891.25  9835.68
RUS 2000  507.64 -  1.42   511.95   507.47
DJ TRANS 2735.60 -  2.62  2742.66  2729.23
VIX        20.54 +  0.29    21.44    20.25
VXN        32.93 +  0.25    34.01    32.90
52wk Highs  286
52wk Lows    23
PUT/CALL   0.66
===============================================================

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


Isabel Swirls Closer
by James Brown

Stocks were weaker on Monday as Wall Street tried to anticipate
Hurricane Isabel's arrival while dealing with fears that tech
stocks may be overvalued.  Combine the usual concern/excitement
in front of the FOMC's meeting on interest rates tomorrow with
Friday's triple-witching option expiration and the moves today
were rather shallow.  The lion's share of losses were in the tech
sector despite a few key upgrades and positive comments for the
semiconductor industry again.

Overseas exchanges were mostly positive.  The English FTSE 100
and the German DAX both closed in the green.  The Hong Kong Hang
Seng exchange added 109 points to close at 10,992.  The Japanese
NIKKEI index jumped 166 points to 10,712.  U.S. index losses were
mild with the Dow Jones Industrials down 22.74 points to 9448;
the NASAQ Composite lost just over 9 points to 1845 and the S&P
500 dropped just under 4 points to 1014.  Market internals for
U.S. exchanges were negative. Declining stocks beat advancers by
15 to 12 on the NYSE and 16 to 14 on the NASDAQ.  Down volume
also rushed past up volume by 859M to 500M on the NYSE and 863M
to 562M on the NASDAQ.

Chart of the DJIA:


Chart of the NASDAQ:


Monday's Economic Reports

It was a busy day for economic reports which turned out generally
positive but investors chose to ignore them for the most part.
The Federal Reserve released the August Industrial Production
numbers which showed a +0.1 percent increase in August but it was
below consensus estimates for +0.3 percent.  This was the first
back-to-back gain since February for the industrial production
numbers.  The Fed's production report showed Manufacturing output
slipped 0.1 percent in August after three months of gains.
Utilities production rose 1.9 percent and mining output gained
0.2 percent.  The overall capacity utilization numbers was
virtually unchanged at 74.6 percent.  Technology investors will
find it interesting to note that the Fed's report showed high-
tech production rising 2.3 percent.  Inside the technology
group's improvement was a 2.6 percent growth in semiconductors, a
2 percent growth for computers and a 1.9 percent jump in
communication equipment.  This was the biggest improvement for
technology output since September 2000.

The second biggest report out today was produced by the Buffalo
branch of the Federal Reserve Bank of New York.  This was the New
York Factory index.  Values greater than zero for this localized
index represent improving business conditions and economists were
looking for a rise to 14.  The September number was a blow out as
it jumped to 18.4 from 9.98 in August.  Today's report marked the
fifth straight monthly gain for the New York area.

Hurricane Isabel

One of the big stories of the day and potentially the biggest
story of the week is Hurricane Isabel, which is quickly
approaching the east coast.  Isabel's winds have slowed a bit but
they are still pushing 140 miles an hour.  That's just below what
it needs to be a Category 5 storm, the highest classification for
the most devastating storms.  Isabel is expected to hit land
between Wednesday morning and Thursday morning.  Wall Street
analysts were quickly trying to compute which insurers had the
most exposure to this natural disaster.

Most were pointing fingers at AllState (ALL) as the insurance
company with the most to lose should Isabel really hit the coast
hard.  Insurance stocks as a group lost ground ahead of the storm
but most analyst believe that if the damages are high enough it
will give the industry license to raise their premiums, which
will translate into higher stock prices.  Goldman Sachs estimated
that if Isabel's damage rang in less than $5 billion then
premiums would not likely rise.  Should the damage fall between
$5 and $10 billion then insurance companies would probably take
advantage of the storm to raise premiums.  Goldman said that if
Isabel's fury creates more than $10 billion in damages then
almost every insurer with exposure to the area would probably
miss their Q3 estimates.  As a comparison hurricane Hugo, a
Category 4 storm, hit S. Carolina in 1989 and caused $7 billion
in damages.  It was only three years later, in 1992, that
Category 5 storm Andrew became the most expensive natural
disaster in U.S. history causing $25 billion in damages.

Believe it or not but Isabel actually helped lift the DJIA from
falling even father as component Home Depot (HD) rose +3.76
percent.  Rival homebuilding supplier Lowes Corp (LOW) also
jumped +2.4% as investors bid up the two retailers as the east
coast begins boarding up their windows and stocking up on
batteries and flashlights.

Boston Scientific Soars

In a much anticipated industry conference in Washington, Boston
Scientific reported on their latest findings regarding the Taxus
drug-eluding stent with more than 1300 patients in the study.
The results were extremely positive.  Not only did BSX's Taxus
stent significantly outperform the bare-metal stent's performance
numbers but they beat rival Johnson-and-Johnson's (JNJ) Cypher
stent.  Shares of BSX and partner Angio Pharmaceuticals (ANPI)
have risen sharply in the last several months on investors'
expectation that the FDA would approve the Taxus stent for the
U.S. markets.  Currently, JNJ is the only company selling a drug
eluding stent in the U.S. and BSX is going to be stiff
competition.  The BSX stent is already outselling the JNJ stents
in overseas markets and BSX just recently got approval to market
the Taxus stent in Canada.

Shares of BSX were halted for most of the session as the results
of the study were not released to the public until 2:00 PM ET.
Once BSX began trading shares vaulted $4.62 or +7.5% to $66.05
and drug partner ANPI jumped $5.85 or more than 13 percent to a
new high $49.72.  Shares of JNJ lost just 79 cents or 1.5% to
$50.84.  Today's news was a big event for the industry but BSX's
path down the stent-paved yellow brick road is not without its
struggles.  Both BSX and JNJ are awaiting a Federal court's
decision on JNJ's request to prevent BSX from marketing and
developing its drug-eluding stent in the U.S.  Wall Street
doesn't expect JNJ to win the decision but both companies will be
in patent-infringement litigation in a fight for the stent
market.  JNJ is already preparing for the competition by lowering
the prices on its Cypher stents last week.  The legal issues are
not impeding BSX's enthusiasm and the company raised their Q3
guidance from $810-840 in sales and earnings of 24-28 cents to
$855-865 million in sales and 28-30 cents per share.

Analyst Comments

Investors have grown accustomed to a parade of analyst comments
on Monday mornings and today was no different.  Some of the
comments making headlines today were from Merrill Lynch.  Merrill
(MER) upgraded the semiconductor sector's growth figures for 2004
and upgraded shares of equipment makers Applied Materials (AMAT)
and Kulicke and Soffa (KLIC) from "neutral" to "buy".  Morgan
Stanley (MWD) also chimed in with positive comments on the chip
sector citing improved industry fundamentals and rising revenue
expectations of 4-to-7 percent growth in Q3 and Q4.  While this
is obviously positive news for the chip sector, the SOX slipped
1.88 percent on the session.  One has to wonder if there are any
analysts out there who have not upgraded the chip sector on
improving fundamentals?

Goldman Sachs was also making headlines with its latest IT
spending survey.  The most recent survey was taken mid to late
August and the numbers were not encouraging.  Information
technology spending for 2003 is likely to come in at zero percent
growth or worse despite the improvement in the U.S. economy.
Goldman continues to see the recovery being postponed and expects
growth to come in just under 4 percent for 2004.

Noteworthy calls were also made by UBS who upgraded IBM from
"neutral" to "buy".  UBS believes that IBM's chip business and
server division will improve.  Gosh, after the previous upgrades
for IBM the last couple of months is there any business that
analysts don't think will improve for IBM?  Talk about high
expectations.  Slashing some expectations was Smith Barney who
cut Apple Computer (AAPL) and Hewlett Packard (HPQ) with
valuation downgrades.  Smith was kinder to the homebuilders with
an upgrade for Toll Brothers (TOL) and KB Home (KBH) to "buy"
from "in-line".  J.P. Morgan happens to agree on TOL and upgraded
the stock from "neutral" to "overweight".  Shares of TOL rose
more than 3.6 percent and the DJUSHB homebuilders index was one
of the few indices that closed in the green today.

Tomorrow

Tuesday's big event will be the FOMC meeting on interest rates.
At the last meeting on August 12th the FOMC chose to keep
interest rates at a 45-year low of 1 percent.  No one is
expecting them to make any changes but the focus will be on what
they have to say about the economic recovery.  Expect their
statement to reflect on the incredible rate of productivity and
the concerns over slow growth in the labor markets.  Economists
will also be waiting for the CPI and Core CPI numbers out
tomorrow.  Meanwhile Wednesday will have Housing starts, building
permits and the semiconductor book-to-bill ratio on Wednesday
night.  Don't expect a lot of big moves in the market ahead of
the Fed's decision on interest rates and watch those stop losses!




===============
Play-of-the-Day  ( BULLISH )
===============


Qualcomm - QCOM - close: 43.45  change: +0.63 stop: 40.50*new*

Company Description:
Based on its proprietary CDMA technology, QCOM is engaged in
developing and delivering digital wireless communications
services.  The company's business areas include integrated CDMA
chipsets and system software and technology licensing.  QCOM owns
patents that are essential to all of the CDMA wireless
telecommunications standards that have been adopted or proposed
for adoption by the worldwide standards-setting bodies.
Currently, QCOM has licensed its CDMA patent portfolio to more
than 80 telecommunications equipment manufacturers around the
world.

Why we like it:
Friday, Merrill upgraded QCOM to a buy rating, and the stock
opened sharply higher.  We were pleased to see that QCOM held
onto almost all of the day's gains into the close, closing only
slightly off the $42.95 high of the day.  The effect of Nokia's
disappointing guidance was left far behind.

Merrill's analyst believes that QCOM will find a new market in
the third generation of GSM, Global System for Mobile
communications, markets. Investors approved, too, with QCOM's
Friday gains made on 50 percent higher-than-average volume.  QCOM
closed just above the December 2 close, although not above the
December 2 intraday high.  We think it's ready to tackle that
intraday high next, and then climb toward the March, 2002 high of
$44.65.

Traders seeking a new entry could target a push above $43.00 or a
pullback and bounce from above $41.50.

Why This is our Play of the Day
Light volume drift was the story of the day in the broad markets
on Monday, and even the relatively strong NASDAQ succumbed,
drifting lower throughout the session to end with a 9-point loss
on very light volume.  Against that backdrop, QCOM's bullish
showing looks even stronger, as the stock surged nearly 1.5%
higher, notching its second consecutive new 52-week high.
Underscoring the significance of the move, volume exceeded
Friday's strong showing and by the closing bell the stock had
posted its best volume since August 26th.  This simply makes the
case stronger for a continued bullish move and the next test for
the bulls will be when the stock encounters the March 2002 highs
near $44.50.  With daily Stochastics turning northwards again, we
may just witness a breakout and run straight to the next level of
resistance near $46.  But with price pressing against the upper
Bollinger band and an unfilled gap from Friday's session, we're
betting on a brief pullback before another breakout.  Look for a
rebound from the top of that gap ($42) or from the bottom of the
gap ($41) to provide for the next solid entry point.  After this
breakout, QCOM should not fall below the bottom of the gap or the
20-dma ($40.59), so we're raising our stop to $40.50 tonight.

Annotated Chart of QCOM:


Picked on August 27th at  $41.00
Change since picked        +2.45
Earnings Date           11/03/03 (unconfirmed)
Average Daily Volume =  25.6 mln



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

*****************************************************************
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Newsletter, or any Premier Investor Network newsletter please
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Copyright ) 2003  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter                  Monday 09-15-2003
                                                   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
=================================================================

Stop Loss Updates:   QCOM, RSAS, TER, NIHD

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)


=================================================================
Stop Loss Adjustments
=================================================================


QCOM - Raise from $39.99 up to $40.50

RSAS - Raise from $12.25 up to $12.50

TER –  Raise from $18.35 up to $18.50

NIHD – Lower from $64.25 down to $63.75


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

DRL     Doral Financial            44.98     +1.63
JCI     Johnson Controls Inc       99.68     +0.68
TOL     Toll Brothers Inc          30.86     +1.10
MME     Mid-Atlantic Med Service   51.60     +0.92
TTC     Toro Co                    46.80     +0.80

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

THOR    Thoratec Corp              18.20     +1.37
CRA     Applera-Celera Genomics    12.00     +1.09
BONZ    Interpore Intl             19.92     +1.11
LSCP    Laserscope                 11.08     +1.02

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

BSX     Boston Scientific          66.02     +4.62
ANPI    Angio Pharmaceuticals      49.70     +5.85
SIVB    Silicon Valley Bancshares  30.32     +2.07
AGP     Amerigroup                 45.13     +3.13
SBTV    SBS Broadcasting           25.95     +1.74
SCHN    Schnitzer Steel            31.38     +2.08
ELK     Elkcorp                    25.58     +1.08

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

XL      XL Capital Ltd            72.83     -1.97
MTG     MGIC Investment           54.09     -1.45
MAN     Manpower                  37.03     -1.78
KRON    Kronos Inc                53.55     -1.78
TRMS    Trimeris                  33.05     -3.22
SRDX    Surmodics Inc             30.20     -3.39

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

. None ..



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

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

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

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

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

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

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

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.

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