PremierInvestor.net Newsletter Wednesday 09-17-2003 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: U.S. Markets Stall 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) ================================================================= 09-17-2003 High Low Volume Advance/Decline DJIA 9545.65 - 21.69 9594.43 9536.81 1.63 bln 1299/1507 NASDAQ 1883.10 - 4.15 1894.74 1876.24 1.88 bln 1498/1555 S&P 100 515.43 - 1.93 518.56 514.96 Totals 2797/3062 S&P 500 1025.97 - 3.35 1031.34 1024.53 RUS 2000 515.10 - 0.56 516.71 513.29 DJ TRANS 2761.20 - 12.18 2773.38 2757.84 VIX 19.62 + 0.31 20.14 19.47 VXN 31.75 + 0.09 32.51 31.17 Total Volume 3,867M Total UpVol 1,798M Total DnVol 1,962M 52wk Highs 648 52wk Lows 20 TRIN 1.02 PUT/CALL 0.74 ================================================================= =========== Market Wrap =========== U.S. Markets Stall by James Brown It was somewhat of a quiet day on Wall Street as U.S. stocks generally slipped lower amid fresh earnings warnings and a frenzy of news coverage over the beleaguered NYSE Chairman Richard Grasso. Investors could be merely pausing to catch their breath after Tuesday's afternoon rally but the general mood was cautious, especially considering profit warnings from Du Pont and the New York Times. The big story this evening is NYSE Chairman Dick Grasso's resignation. Grasso, 57, ends a 36-year career with the NYSE after disclosure of his $140 million deferred compensation lit a firestorm he and the NYSE board were unable to quench. Jim predicted that his days were numbered yesterday after pension fund managers from California, N. Carolina and New York all stepped forward yesterday calling for his head. Looking at the market action today the biggest event was the lack of follow through on yesterday's post-FOMC rally. The DJIA traded in a tight 80-point range and lost 21 points after a midday decline towards the 9450 level. The NASDAQ Composite also traded sideways in a 20-point range, failing twice at 1895 overhead before losing 4 points to close at 1883. Overall U.S. equity market losses were mild with Disk Drives, Hardware, Gold and Biotechs managing to close in the green. Meanwhile Asian exchanges added onto yesterday's big gains with another triple- digit rally for the NIKKEI to 10990 and a 68-point move to 11140 for the Hang Seng. European bourses were marginally lower. Market internals underscored the mellow profit taking with declining stocks outnumbering advancers 1507 to 1299 on the NYSE and 1555 to 1498 on the NASDAQ. Volume numbers were mixed with up volume edging past down volume 991M to 865M on the NASDAQ but losing 775M to 832M on the NYSE. Chart of the DJIA: Chart of the NASDAQ: Profit Warnings Putting the brakes on the rally were profit warnings from Du Pont, New York Times and Microchip. Last night, Microchip (MCHP) narrowed its Q2 revenue numbers to 2%-5% growth and said earnings would likely come in around 17 cents compared to estimates of 16- 18 cents. While not truly a warning, investors have been selling stocks that don't deliver on the improving outlook their share prices are based on. Shares of MCHP lost 3.3 percent, the second worst performer in the NASDAQ-100 behind Cintas (CTAS), -3.6 percent, who happens to be announcing earnings tomorrow morning before the bell. The New York Times (NYT) lost 3.7 percent and closed below support at $43 after warning Q3 earnings would be less than estimates blaming a weak advertising market. Those not familiar with the NYT may remember the disgrace over its reporter Jayson Blair, who was ousted for his plagiarism and fictional sources. Probably the most notable warning today was Du Pont's (DD). This Dow component lost 3.4 percent after stating that 2003 earnings would be at the low end of previous forecasts. The chemical conglomerate said business had not picked up yet but was hopeful about current signals pointing to a recovery in the fourth quarter. Tobacco on Fire Shares of tobacco stocks were hot today with both RJR and MO up double-digit percentage moves. Shares of Altria Group, previously known as Phillip Morris (MO), closed up 10.3% and helped prevent the DJIA's losses from being a lot worse than they could have been. MO gapped higher after the Illinois Surpreme Court decreased a bond set by a lower court from $12 billion to $6 billion. It's a tangled story but MO lost a fight over its "light" cigarettes marketing and a Madison County court levied a $10.1 billion judgment. The judge first told MO that it would have to post a $12 billion bond before it could appeal the judgment, a feat that would likely force MO into bankruptcy. Then after much negotiation the judge lowered the bond to just $6 billion. A higher court said this judge overstepped his bounds by lowered the bond amount and reset it to $12 billion. Thus, the Illinois Supreme Court decision was crucial for Altria Group and essentially gave it a new lease on life sans bankruptcy protection. Meanwhile rival tobacco company R.J.Reynolds (RJR) made big news after announcing it would cut 40 percent of its workforce, some 2600 jobs, to reduce $1 billion in expenses by the end of 2005. RJR also said it would refocus its marketing efforts on two of its four major brands, Camel and Salem, while taking a $340 million charge for the reduction efforts. The stock gapped up at the open and close higher by 13.6% above its simple 200-dma and its best close in over six months. Tomorrow Investors will have another round of economic reports to digest on Thursday with the weekly unemployment claims and the leading economic indicators. Economists are hoping for a decline in jobless claims from 422,000 to just 410,000. These reports tend to take on more and more meaning as Wall Street and Washington become painfully aware of the weakening labor market. Traders will also have to deal with potential volatility ahead of Friday's triple-witching option expiration. Also worth noting are a few earnings reports. Reporting tomorrow is 3Com, Bear Stearns, Nike, and Jabil Circuit. You may also want to keep an eye on your AOL stock. The AOL Time Warner board meets tomorrow and many on the street expect them to vote off its "AOL" prefix and revert its stock symbol back TWX. 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 COF Capital One Financial Cp 60.85 +0.85 STX Seagate Tech Hldgs 25.51 +0.56 CFC Countrywide Financial 75.19 +2.82 LTR Loews Corp 42.48 +1.36 OHP Oxford Health Plans Inc 38.60 +0.82 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- WDC Western Digital Corp 12.50 +1.02 AGIX Artherogenics Inc 18.20 +2.35 SERO Serologicals Corp 14.49 +1.12 ROXI Roxio Inc 10.46 +2.09 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- MO Alteria Group Inc 44.65 +4.19 CG Carolina Group 23.76 +1.27 FAST Fasternal Company 43.45 +1.22 RJR Reynolds Tobbaco Co 38.86 +4.67 ANF Abercrombie & Fitch Co 30.49 +1.10 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- DD Duponte E I Nemours & Co 42.47 -1.50 CEO Cnooc Ltd (ADR) 33.71 -1.60 NYT New York Times 42.87 -1.65 SNN Smith & Nephew Plc (ADS) 64.70 -1.18 FDS Factset Research Systems 46.98 -3.22 KROL Kroll Inc 21.80 -3.21 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- PCZ Petro-Canada 39.84 -0.33 DTE DTE Energy Co 36.08 -0.82 TMK Torchmark Corp 41.41 -0.48 KMR Kinder Morgan Mgmt Llc 37.60 -0.49 ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. PremierInvestor.net staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control. 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PremierInvestor.net Newsletter Wednesday 09-17-2003 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 Bullish Plays: ADBE Bullish Play Updates: FDC, RSAS Closed Bearish Plays: SNPS Active Trader (Non-tech) New Bullish Plays: ZMH Bullish Play Updates: PNRA, GOLD, WPI, TARO High Risk/Reward New Bullish Plays: GLW Bullish Play Updates: ORB, QCOM, TER Closed Bullish Plays: INSP Closed Bearish Plays: EASI, NIHD Stock Splits/Announcements Stock Splits: PCBK, MPR, MNRO ================================================================== Net Bulls (NB) Tech Stock section ================================================================== ========= NEW PLAYS ========= ----------------- New Bullish Plays ----------------- Adobe Systems - ADBE - close: 40.47 change: +0.65 stop: 37.75 Company Description: A long-time leader in desktop publishing software, ADBE provides graphic design, publishing, and imaging software for Web and print production. Offering a line of application software products for creating, distributing, and managing information of all types, the company generates nearly 75% of sales through publishing software products such as Photoshop, Illustrator, and PageMaker. Its Acrobat Reader, which uses portable document format (PDF) is popping up all over the Internet, as businesses shift from print to digital communications. In addition, ADBE licenses its industry standard technologies to major hardware manufacturers, software developers, and service providers, as well as offering integrated software solutions to businesses of all sizes. Why we like it: After rebounding back to critical resistance near $40 ahead of its most recent earnings report, shares of ADBE sold off pretty hard on September 10th, as investors were clearly concerned about being caught long in the face of bad news. The price plunged all the way back near the $36 level as profit taking took on a fever pitch heading into the close. All that panic was for naught though, as the company beat estimates by 3 cents and raised guidance for Q4 above consensus. The next morning, ADBE gapped up to $39 and traded over $40 before settling in near $39.50. Over the past several sessions, the stock has been working its way higher in a steady pattern of higher highs and higher lows. Today the stock broke out above $40 again and held its gains into the close, ending at a fresh 15-month high on volume about 30% over the ADV. This looks like a solid breakout with room to run, an opinion that is borne out by the PnF chart, which is on a Fresh Buy signal that gives a tentative bullish price target of $57. We aren't likely to see such a lofty target in the near-term, but ADBE definitely looks like it could move into the high $40s. There's some mild resistance near $42-43, at the site of the May 2002 highs, but once above $43.40, the stock ought to seek out next resistance in the $47-48 area. Price is currently pressing against the upper Bollinger band, so a mild pullback is certainly possible. Look to enter the play either on a dip and rebound from the $39.50-40.00 area or on a breakout over $40.70, just over today's intraday high. ADBE should have strong support in the $38.50-39.00 area, as $39 is the top of the post-earnings gap, which is backed up by both the 10-dma ($38.83) and the 20- dma ($38.57). We'll initially place our stop at $37.75, as a break below $38 would be a clearly ominous sign for the bulls. Annotated Chart of ADBE: Picked on September 17th at $40.47 Change since picked +0.00 Earnings Date 12/10/03 (unconfirmed) Average Daily Volume = 3.48 mln ============ PLAY UPDATES ============ -------------------- Bullish Play Updates -------------------- First Data Corp. - FDC - close: 41.08 change: -0.25 stop: 39.50 While it has certainly been frustrating to watch shares of FDC chop along between $40-42 for the past 2 weeks, it has been encouraging to see the stock avoid most of the weakness of the rest of the market. For 4 days, the bears beat on support just above $40, but it wouldn't crack. And now it looks like the bulls are taking another run at resistance just below $42. Traders looking for a pullback entry certainly got ample opportunity over the past week and now with the upper Bollinger band expanding upwards, it looks like there is room to the upside for those interested in a breakout entry. If that's your style, then look for a break above $41.80 as the trigger and target a move to the $44-45 area. We'll maintain our stop at $39.50 until FDC manages to close over $42. Picked on September 3rd at $41.01 Change since picked +0.07 Earnings Date 10/14/03 (unconfirmed) Average Daily Volume = 4.65 mln --- RSA Security - RSAS - close: 14.81 change: -0.30 stop: 13.50 Wasting no time, the bulls charged forward on Monday, propelling RSAS through the $14 barrier on a gap open move. There wasn't enough enthusiasm to hold the early highs (right at the top of the ascending channel) and the stock pulled back to close right at that $14 level. That action provided for the momentum entries on the initial breakout and Tuesday's open gave the dip buyers their shot, as the bought the dip near $14 and quickly propelled RSAS through Monday's highs. In fact, the charge didn't slow until price had topped the $15 level and RSAS closed above the top of its channel for the first time since last November. After yesterday's strong ramp, a bit of profit taking was due, and that's what we saw today, with the stock drifting down and coming to rest right at the top of the channel. A rebound from here could provide for aggressive entries enroute to the $16-17 area. Of course we can't rule out one more retracement to confirm support above $14, so we'll maintain our stop at $13.50, which is below both the bottom of Monday's gap ($13.65) and the 10-dma ($13.72). Picked on September 10th at $13.65 Change since picked +1.16 Earnings Date 10/16/03 (unconfirmed) Average Daily Volume = 607 K ============ CLOSED PLAYS ============ -------------------- Closed Bearish Plays -------------------- Synopsis, Inc. - SNPS - close: 67.29 change: +0.39 stop: 68.05 Last Friday's rebound from the early selloff turned out to be a warning of what was to come, although it didn't materialize immediately. Monday's attempted rebound was knocked right back below the 50-dma, but yesterday the bulls gained some serious traction, propelling shares of SNPS right into the $66-67 area, where we thought an entry point might be found. But the close at the high yesterday certainly didn't look encouraging. Our play's fate was sealed this morning, as the stock soared over $68 at the open, triggering our stop. Despite the close back near $67, we still feel better about closing out this play here, rather than hoping for a drop back under $64. If holding open positions, use any weakness on Thursday to navigate a more favorable exit from the play. Picked on September 10th at $64.13 Change since picked +3.16 Earnings Date 11/19/03 (unconfirmed) Average Daily Volume = 1.27 mln ================================================================== Stock Bottom / Active Trader (AT) section ================================================================== ========= NEW PLAYS ========= ----------------- New Bullish Plays ----------------- Zimmer Holdings - ZMH - close: 53.87 change: +1.20 - stop: 51.49 Company Description: Zimmer, based in Warsaw, Indiana, is a worldwide leader in the design, development, manufacture and marketing of reconstructive orthopaedic implants and trauma products. Orthopaedic reconstruction implants restore joint function lost due to disease or trauma in joints such as knees, hips, shoulders and elbows. Trauma products are devices used primarily to reattach or stabilize damaged bone and tissue to support the body's natural healing process. Zimmer manufactures and markets other products related to orthopaedic surgery. For the year 2002, the Company recorded worldwide revenues of $1.37 billion. Zimmer was founded in 1927 and has more than 3,600 employees worldwide. (Source: Company Press Release.) Why We Like It: Zimmer Holdings has been battling Smith & Nephew for Swiss orthopedics company Centerpulse, but it looks as if ZMH won out, with the deal likely to close October 2. Since ZMH announced its intentions, several analysts have upgraded the firm to a buy. Investors seem to have liked the deal, too, with ZMH climbing higher within its ascending channel during negotiations. ZMH currently trades near the $54.00 all-time high achieved earlier this month. It found support Wednesday from the midline of its rising channel and sprang back above the 10-dma. Volume was only average, so look for an expansion of volume as the $54.00 trigger is hit. We're going to keep tight reins on this play, as many of those analysts had $58-60 targets for ZMH. That's what we're targeting, too, but some firms might downgrade on valuation as ZMH approaches those levels. Currently, the play looks sound. Not only did ZMH gain, but SYK and PDCO, other medical device makers, also gained. Annotated Chart for ZMH: Picked on Sep 17 at 53.87 Change since picked: +0.00 Earnings Date: 07/23/03 (confirmed) Average Daily Volume: 2.2 million ============ PLAY UPDATES ============ -------------------- Bullish Play Updates -------------------- Panera Bread - PNRA - close: 46.21 change: -1.47 - stop: 44.65 Wednesday, Raymond James sliced PNRA's rating, downgrading it to an outperform rating from a strong buy. The firm cited PNRA's price, near the firm's $50.00 target. PNRA also presented at the Banc of America San Francisco Investment Conference on Wednesday, and the stock's decline perhaps had a bit of a sell-the-event flavor. Although the decline took PNRA below its 10-dma, the candle was a spinning top that indicated indecision, with the price holding up well after the downgrade. Since that candle was produced as PNRA declined, market participants appeared undecided about driving it lower. That's comforting for our bullish play. PNRA also remained above its 21-dma and above recent support near our stop. Although the stochastics and MACD threaten to roll over, neither has done so yet. RSI does hint at bearish divergence, and also has produced a RSI H&S. Watch the neckline of that RSI H&S for signs that PNRA may be headed toward steeper declines, perhaps down to the 21-dma. MACD also shows possible bearish divergence. New entries could still be sought on a bounce anywhere above $45.00, but first check that RSI H&S neckline. If RSI has punched through it and has not yet turned back up, it might be best to pass up the entry. Annotated Chart for PNRA: Picked on Sep 14 at 46.80 Change since picked: -0.59 Earnings Date: 08/07/03 (confirmed) Average Daily Volume: 497 thousand ---- Randgold - GOLD - close: 25.11 change: +0.67 - stop: 22.99 Monday, overall weakness in the market proved catching, with gold, the gold bugs index HUI, and GOLD all closing lower. By Wednesday, all three closed higher. GOLD climbed back above its long-term resistance line and may be breaking through shorter- term resistance, too. Volume proved heavier on Wednesday's climb than it had been during recent consolidation. RSI and stochastics turned back up, although MACD has yet to do so. Those seeking new entries could enter on a push above the August 29 high of $25.59. Annotated Chart for GOLD: Picked on Aug 24 at $23.40 Change since picked: +1.71 Earnings Date: 08/12/03 (confirmed) Average Daily Volume: 360 thousand ---- Watson Pharma. - WPI - cls: 45.00 chng: +0.53 - stop: 43.50*new* The WPI news department and executives have been as busy this week as they were last week. The company announced final FDA approval for the generic equivalent of Bristol-Myers Squibb's Serzone (R) in 100 mg, 150 mg, 200 mg, and 250 mg strengths. WPI will launch its equivalent in 2003. In addition, WPI execs will present at the Banc of America Securities Conference on Thursday at 3:00 PDT. WPI ramped up into that conference on Wednesday, but there's sometimes a tendency to sell the event, and play participants should be on guard for that possibility. We're raising our stop to $43.50, just below the 10-dma at $43.61. So far, however, there's no hint of weakness or a sell-the-event reaction. Indicators remain bullish. We wish volume had been stronger on the climb, however. With possible volatility surrounding that conference presentation, we would not suggest new entries at this time. Annotated Chart for WPI: Picked on Aug 27 at 40.74 Change since picked: +4.26 Earnings Date: 08/05/03 (confirmed) Average Daily Volume: 1.1 million --- Taro Pharm. - TARO - close: 57.66 change: +0.38 stop: 55.60*new* Continuing to march higher, it is hard to find anything about our TARO play that we don't like, except for the fact that volume continues to be on the light side. The pattern of higher lows got another installment on Wednesday, before TARO crept up to post another 2-month closing high over the $57.50 level. Considering that our target on the play was for a move into the $59-60 area, it is hard to justify new entries at this point, and it seems more prudent to be thinking about exit strategy. With only $2.35 to the top of our target range, we need to tighten our stop to keep the risk-reward ratio roughly 1:1 from here. That means a stop no more than $2.35 below the current price. Seeing as the intraday lows from Monday and Tuesday fell at $55.62 and $55.64, placing our stop just below that level makes technical sense. Raise stops to $55.60. On a rally into the $59-60 area, conservative traders should simply harvest profits into strength. Picked on September 10th at $54.65 Change since picked +3.01 Earnings Date 10/23/03 (unconfirmed) Average Daily Volume = 397 K ================================================================== HIGH RISK/HIGH REWARD (HR) section ================================================================== ========= NEW PLAYS ========= ----------------- New Bullish Plays ----------------- Corning, Inc. - GLW - cls: 9.35 chng: +0.11 - stop: 8.49 Company Description: Corning Incorporated is a global, diverse technology company that has been changing the world through research and technological innovation for more than 150 years. By integrating scientific discovery with market need, the company has developed leading positions in the telecommunications, information display, and advanced materials industries. The company is an industry leading manufacturer and supplier of optical fiber, cable systems and photonic components, for the telecommunications industry; and high-performance flat glass for television, information display and other communications industries. The company also develops advanced materials for scientific, semiconductor, environmental and ophthalmic markets. With more than 70 manufacturing locations, Corning employs approximately 22,000 employees worldwide. Its diverse portfolio of businesses is aligned under two major business sectors: Corning Optical Communications and Corning Technologies. Revenues for 2002 were $3.2 billion. (Source: Company Website.) Why We Like It: We've been watching GLW for a while, noting the way it's been trading up within an ascending regression channel. Wednesday, GLW found support at the midline of that regression channel and moved up, achieving a new 52-week high as it did so. We think GLW might be headed up toward the top of that channel again, and maybe up toward previous $11.60 resistance. The higher volume over the last two days supports that view. The indicators have turned back up in a bullish fashion, too. We expect some hesitation as GLW approaches round-number resistance near $10.00, but a study of the weekly chart revealed that GLW has already bypassed the strongest resistance. We're setting the $8.49 stop just under the rising 21-dma and setting a target of $11.50. What's been happening to drive GLW higher? The XTC, the North American Telecoms Index, has also been performing well, although it has not yet moved above its July high, but many developments appear specific to GLW. After its July earnings, several firms upgraded GLW to a buy or initiated coverage with a buy rating. More recently, GLW announced on Monday that it had sold a large percentage of its venture capital arm to Scrimitar Capital Partners, a Saudi Arabia-based company. We suggest entries at the current level or on a pullback and bounce anywhere above $8.60. We're not sure GLW investors are in the mood to give anyone those pullback entries, however. Annotated Chart for GLW: Picked on Sep 17 at $9.35 Change since picked: +0.00 Earnings Date: 07/21/03 (confirmed) Average Daily Volume: 6.8 million ============ PLAY UPDATES ============ -------------------- Bullish Play Updates -------------------- Orbital Sciences - ORB - cls: 9.41 chng: +0.00 - stop: 8.84*new* The DFI, the Amex Defense Index, lost 0.49 percent Wednesday, dragging down many defense-related issues. While ORB closed flat, its pattern was different. It produced a small-bodied white candle that rose from the day's opening. We noticed, too, that volume was strong as ORB climbed off its lows, with a high- volume spike at the end of the day. ORB appears to be consolidating as it usually does before climbing inside its ascending channel. Near the end of its consolidation, ORB often dips for a couple of days, and that may happen this time, too. ORB usually finds support on those dips at either its 21-dma, shown in blue on the chart, or its 30-dma, not shown. We've placed our new stop at $8.84, just below the 30-dma. Those seeking a new entry could enter on a bounce from anywhere above $9.00. Annotated Chart for ORB: Picked on Sep 3 at $9.18 Change since picked: +0.23 Earnings Date: 07/22/03 (confirmed) Average Daily Volume: 347 thousand ---- Qualcomm - QCOM - close: 44.24 change: -0.65 - stop: 41.95 Monday, Morgan Stanley analyst Mark Edelstone issued a statement on the chip sectors, and also continued his recommendation of QCOM as one of his "global best ideas." The stock gained 1.47 percent. Tuesday, QCOM muddied the outlook with a statement deemed "mixed" by commentators. Q4 and FY04 results should be at the high end of the range the company set in July, but some analysts were already expecting QCOM to report at the high end of the range. Sales of 23 million new subscriber units in the CDMA product will be slightly below the previously estimated 25 million units, but the average reported price increased. The company expects shipments of MSM phone chips to come in at the middle of the previously forecast number, but expects an increase in the shipments in the coming quarter. Commentators might have called the outlook mixed, but investors didn't react that way, sending the stock above $44.00 on strong volume. Wednesday, the stock paused, drifting down but holding above the 50 percent retracement of Tuesday's big gains. Volume proved lighter on Wednesday's pullback than on earlier gains. Perhaps the profit-taking mood was eased by a William Blair upgrade of QCOM to an outperform rating from a previous market perform rating. New entries can be found on a bounce from anywhere above $43.00. Perhaps confirm strength in the XTC, the North American Telecoms Index. Annotated Chart for QCOM: Picked on Aug 27 at 41.00 Change since picked: +3.24 Earnings Date: 07/23/03 (confirmed) Average Daily Volume: 10 million --- Teradyne Inc. - TER - close: 21.36 change: +0.13 stop: 19.95*new* TER has been performing quite nicely over the past week, culminating with yesterday's breakout to a new 52-week closing high at $21.23. Wednesday's session certainly started out on a positive note, with the stock surging as high as $21.85 as the SOX once again probed above the $460 level. But the bulls couldn't maintain momentum and both the SOX and TER fell back at the end of the day. TER still managed to close in the green, with a 0.6% gain and is looking strong. That said, we want to protect against the possibility of a sharp round of selling, so we're raising our stop to $19.95 tonight, which is below both the 10-dma ($20.43) and the intraday lows from earlier in the week. Aggressive traders can consider new entries on a successful rebound from the 10-dma on an intraday pullback, looking for next resistance in the $22.50-23.00 area. We're still looking for an ultimate upside target of $25, which could be achieved rather quickly if the SOX actually manages to finally break free of resistance in the $460-470 area.. Picked on September 3rd at $20.11 Change since picked +1.25 Earnings Date 10/14/03 (unconfirmed) Average Daily Volume = 2.81 mln ============ CLOSED PLAYS ============ -------------------- Closed Bullish Plays -------------------- InfoSpace.com - INSP - cls: 20.20 chng: -0.02 - stop: 18.50 Are we crazy? Why are we closing a play that's performing so well, just after the stock has moved above the critical $20.00 level? The answer lies in the shape of INSP's daily candle, with its long upper shadow and small body identifying it as a possible reversal signal. INSP has been charging up the chart rather quickly, without pausing to pull back. We think it's time for that pullback. Wednesday's daily candle may be signaling that it's time for that pullback. Of course, INSP has signaled potential pullbacks several times during the course of its rally from August lows, so it's possible that it will continue to charge up the chart. We notice that while the YIH, the Internet Infrastructure HOLDRS Index, and the XIS, the Industry Standard 100 Internet Index, also produced candles that can signal a reversal, they did so from within a consolidation zone, which negates some of the bearishness of their signals. INSP's chart also sports a still-bullish MACD. However, we've met our original first target, and think that Wednesday's candle may be signaling that it's time for us to collect the 17.5 percent profit collected since this play was initiated. For those who elect to stay in the play or even add new positions on a breakout, confirm that volume continues to expand with the breakouts. Consider raising your stop just below the 10-dma at $18.94. Picked on Sep 7 at $17.19 Change since picked: +3.01 Earnings Date: 07/30/03 (confirmed) Average Daily Volume: 347 thousand -------------------- Closed Bearish Plays -------------------- Engineered Sup. Sys. - EASI - cls: 60.96 chng: +0.78 - stp: 63.59 After TAMSCO, a wholly owned EASI subsidiary, announced on Tuesday that it had received a $.16 million six-month task order to sustain the technical documentation needed by the Air Force's C-130 aircraft fleet, EASI began gaining. Wednesday, it popped above the 10-dma and above a 50 percent retracement of the recent decline. Although the volume was less than half the average daily volume, as would be typical of a bear-flag climb, RSI and stochastics both attempt to turn up again. This isn't acting like the typical bear flag climb, and we think it's best to close the play. There's still a chance that EASI will roll beneath the previous high, creating a lower high and confirming the bearishness that the previous decline had hinted was possible. There's still little support beneath EASI and a drop beneath the 9/11 low could get things started to the downside again. In the rampant bullishness that's taken over the markets lately, however, it seems judicious to close underperforming bearish plays early. Picked on Sep 10 at $58.82 Change since picked: +2.35 Earnings Date: 08/26/03 (confirmed) Average Daily Volume: 228 thousand ---- NII Holdings - NIHD - cls: 60.05 change: +0.44 - stop: 64.25 While it's possible that this bearish play will go on to perform admirably, we've elected to close it after noticing some tentative bullish signs. After dropping steeply, NIHD consolidates, but we've been watching the indicators as it does so, and they're showing disturbing early bullish tendencies. RSI has turned up and the stochastics and MACD both show a tendency to flatten after their own steep falls. In the current bullish climate, it seems prudent to pay attention to those potential bullish signs, early and tentative as they are. We also balance these observations with the notation that both the 10-dma and 21-dma's now cluster just overhead, and that NIHD's tentative rise on Wednesday did not even test these averages, now crossing between $61.11 and $61.62. Traders who elect to stay in the play might set a stop just above those clustered MA's. Picked on Sep 10 at $60.69 Change since picked: -0.65 Earnings Date: 07/30/03 (confirmed) Average Daily Volume: 183 thousand ================================================================== STOCK SPLITS/ANNOUNCEMENTS ================================================================== PCBK banks on a 4-for-3 stock split During today's session, Pacific Continental Corporation's (NASDAQ:PCBK) Board of Directors declared a 4-for-3 stock split of its common shares. The payable date on the stock split is October 15th, 2003 to shareholders on record September 30th. Partial shares will be paid in cash based on the September 30th closing price. After the split the company will have approximately 6.7 million shares. This is PCBK's first stock split since 2001 and has declared five stock splits since 1992. About the company: Pacific Continental Bank is the operating subsidiary of Pacific Continental Corporation. The bank delivers its highly personalized services through eleven banking offices in western Oregon including Eugene and Portland, the state's two largest markets. Pacific Continental targets the deposit and lending needs of community-based businesses, professional service groups and not- for-profit organizations. The Better Business Bureau of Oregon and Southwest Washington named Pacific Continental its "Business of the Year" during 2002. Pacific Continental Bank continues to receive recognition for its corporate culture and work environment. Oregon Business magazine's annual survey ranked Pacific Continental as the top rated bank to work for and Families in Good Company awarded the bank with its Quality Seal Award for employee flexibility in the workplace. More information on Pacific Continental and its services including online and electronic banking can be found at www.therightbank.com. (Source: Company Press Release) --- MPR declares a 4-for-3 stock split and dividend increase Before today's opening bell, Met-Pro Corporation's (NYSE:MPR) Board of Directors declared a 4-for-3 stock split of its common shares. In addition to the stock split MPR's Board of Directors has announced a 7.4% cash dividend increase. The payable date on the stock split is October 15th, 2003 to shareholders on record October 1st. The quarterly dividend increase is payable December 10th, 2003, to shareholders on record November 28th. This is MPR's first stock split since 1996. About the company: Met-Pro Corporation, Harleysville, Pennsylvania, manufactures and sells product recovery and pollution control equipment for purification of air and liquids and fluid handling equipment for corrosive, abrasive and high temperature liquids. With ten divisions and five subsidiaries, the company, established in 1966, provides products to residential, commercial, industrial and municipal markets that include, but are not limited to, pharmaceuticals, chemicals, petrochemicals, water and aquariums. For more information, please visit www.met-pro.com. (Source: Company Press Release) --- MNRO services shareholders with a 3-for-2 stock split Before today's opening bell, Monro Muffler Brake Inc's (NASDAQ:MNRO) Board of Directors declared a 3-for-2 stock split of its common shares. The payable date on the stock split is October 31st, 2003 to shareholders on record October 21st. This is MNRO's first stock split since their 21-for-20 split in 98. About the company: Monro Muffler Brake operates a chain of stores providing automotive undercar repair and tire services in the United States, operating under the brand names of Monro Muffler Brake and Service, Speedy Auto Service by Monro, Kimmel Tires - Auto Service and Tread Quarters Discount Tires. The Company currently operates 562 stores and has 18 dealer locations in New York, Pennsylvania, Ohio, Connecticut, Massachusetts, West Virginia, Virginia, Maryland, Vermont, New Hampshire, New Jersey, North Carolina, South Carolina, Indiana, Rhode Island, Delaware and Michigan. Monro's stores provide a full range of services for exhaust systems, brake systems, steering and suspension systems, tires and many vehicle maintenance services. (Source: Company Press Release) ================================================================= 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. 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