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Daily Newsletter, Wednesday, 09/24/2003

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PremierInvestor.net Newsletter                Wednesday 09-24-2003
                                                    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
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In section one:
--------------

Market Wrap:      Selloff

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)
=================================================================
     09-24-2003            High     Low     Volume Advance/Decline
DJIA     9425.23 -150.81  9592.67  9423.54 1.86 bln    890/1951
NASDAQ   1843.70 - 58.02  1904.13  1843.43 2.17 bln    933/2176
S&P 100   505.46 - 10.66   516.67   505.23   Totals   1823/4127
S&P 500  1009.38 - 19.65  1029.83  1008.93
RUS 2000  507.86 - 11.50   519.85   507.86
DJ TRANS 2745.93 - 54.45  2802.74  2745.63
VIX        21.22 +  1.75    21.26    19.44
VXN        29.36 +  2.38    29.36    27.21
Total Volume 4,367M
Total UpVol    752M
Total DnVol  3,567M
52wk Highs     586
52wk Lows       15
TRIN          0.84
PUT/CALL      0.88
=================================================================

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


Selloff
Jonathan Levinson

Traders decided to do some selling today, and sell they did, with the
major stock averages printing bearish engulfing days as bonds and
precious metals advanced.  The volatility indices all rose, with the
“new” VIX (based on the S&P 500) breaking 20 for the first time since
its inception days ago.

Volume exceeded that of the past several days, with the Nasdaq
trading 2.17B shares and the NYSE 1.73B.  The TRIN.NQ closed at
2.04, the highest level I’ve seen in what seems like a very long
time, months on closing basis, and the TRIN 2.32.  The 58 point
drop on the COMPX to 1843.69 was verging on a sellathon, the INDU
–150 to 9425.

For all that, the technical damage on the daily chart was not
major, but the bearish engulfing to close at the day lows bodes
ill for tomorrow’s open.  As can be seen on the 1 year daily
chart of the COMPX below, any further selling from here could
touch off a bear wedge breakdown, projecting potentially to the
March lows.

1 year daily COMPX


On both the Nasdaq and the Dow, the daily chart oscillators are
lined up to the downside, and appear to be completing what could
prove to be a major top for the markets.

6 month daily INDU


On the Dow, the bear wedge projects again to the March lows on a
maximum fulfilment, in this case at 7400.

20 day 30 minute COMPX


Notwithstanding the immensely bearish finish, bulls were sent
home with a measure of hope in the form of a bullish descending
wedge.  The Nasdaq blew right through it on either a formation
failure or a throwunder, while the Dow managed to hold within it.
If the bottomy 30 minute chart oscillators combine with this
pattern tomorrow morning, we could see a bounce potentially to
the day highs.  I don’t think we will, but this is the message on
the 30 minute charts.

20 day 30 minute INDU


Today is an opportune day to briefly review sentiment and some of
the fundamentals beneath the economy and the markets:

Chart of Yale Crash Confidence Index


The Yale School of Management has been compiling the above data
for the past 14 years, which measures the percentage of both
individual and institutional investors who believe that there is
no immediate risk of a stock market crash.  The higher the
reading, the higher the confidence in the health of the stock
market.  Note how confidence has risen since September 11, 2001.

On further reflection, one might conclude that the above chart
depicts the growth of confidence in the Fed since September 11,
2001, as a precipitous market plunge was dramatically reversed by
short term liquidity operations during the weeks and months that
followed the tragic day.  Note also that confidence has been
rising with the markets during 2003.  Despite the fact that
markets which are overpriced tend to crash more readily than
those which are underpriced, this sentiment gauge reveals
confidence rising alongside price.

Viewed another way, here’s a four year chart of the VIX, commonly
referred to by option traders as the “fear” index.  Once again,
we see evidence of a bear market in fear:

4 year weekly chart of the VIX


Is this confidence in the Fed and the health of the markets
justified?  Let’s look “under the hood” at some of the broader
trends during this period.  First, we have the money supply
(MZM), depicting the inflationary effects of the Fed’s work since
1990.

Chart of MZM


During the same period, the Fed Funds rate, which, though not
captured in this more recent time series, is at a 45 year low.

Federal funds rate


The Fed has been aggressively lowering interest rates and
increasing the supply of dollars.  The proliferation of this new
“hot” money has resulted in an impressive rise in consumer
credit.  I believe that current levels represent alltime highs.

Consumer credit


It appears, further, that US consumers have used this money to
import goods and services from abroad, encouraging foreign
economies but not their own.

Balance of Payments


The Fed’s efforts appeared to be having a stimulative effect on
employment until 2001, at which point unemployment began to rise
steeply.  The pullback in unemployment that pundits have been
cheering during the past months is better contextualized by the
time series below.



Lastly, evidence that the current levels of services enjoyed by
the citizenry are becoming increasingly unsustainable, with the
level of overall government deficit in a breakout.

Government defit


The net picture is one in which the Federal Reserve has been
aggressively increasing the supply of dollars and lowering the
carrying cost of those dollars, ostensibly to stimulate the US
economy.  What has resulted is a bubble in consumer credit,
accompanied by bubbles in stocks (Nasdaq 5000), real estate
prices (ongoing), consumer credit (ongoing) and imports
(ongoing).  The rise in unemployment and the record government
deficit levels, as well as the record personal bankruptcy levels
(not shown) are a compelling rebuttal of the Fed’s thinking to
date.  Unfortunately, the Fed’s response appears to have been an
acceleration of the process- witness Governor Bernanke’s no-
holds-barred “printing press” comments.

In view of the foregoing, while stock market crashes are indeed
low-probability events, I see little reason for an increase of
confidence in the unlikelihood of one’s occurring.  On the other
hand, while the Fed appears to be unable to cure the problems it
claims to address, the aggressive increase in liquidity could
well reinforce the price of the markets even as their underlying
value drops.

In economic news today, the Mortgage Bankers Association (MBA)
announced this morning that seasonally-adjusted demand for
mortgage refinancings, the MBA refi index, dropped 0.4%% for the
past week, despite the decline in mortgage rates from 5.91% to
5.85 for a thirty fixed.  Demand for loans with which to buy
homes, the Purchase index, fell 7% to 402.1 from the previous
week’s 432.4. The Application index fell 3.7% for the week to
699.6.

Early in the session, it was reported that OPEC had agreed to
restrict output by 900,000 barrels per day to 24.5M barrels per
day.  Marketwatch reported that the move “comes as a complete
surprise to the oil markets,” as the cartel was expected to keep
levels unchanged. John Person, head financial analyst at Infinity
Brokerage Services, was reported to have called it a "shocking
and yet disturbing decision."

Being unfamiliar with John Person and “Infinity Brokerage
Services”, I can only guess why he or his firm would find it
shocking or disturbing, given that oil prices have fallen during
recent months.  Note further that Bernanke, Snow and others have
been preaching a further devaluation of the dollar, and the
charts I’ve attached above bear this out.  With a greater supply
of dollars and recent lower prices for oil, it is absolutely
beyond me how any person or bucket shop in intellectual good
faith could possibly find it “shocking” or “disturbing” or “a
complete surprise” that oil producers are unwilling or unable to
sell as much oil at those lower prices in less valuable dollars.
Go figure.

In other news, the Energy Department reported that crude
inventories rose by 1.5M barrels in the week ended Sept. 19.
Gasoline inventories rose by 1.5 million barrels as well, and
distillate supplies fell by 100,000 barrels.  The American
Petroleum Institute confirmed an 800,000 barrel rise in crude
inventories to total 282.9 million barrels.

It was an otherwise quiet day news-wise, with DELL announcing a
$500M army contract and FLEX getting smoked for 5.18% on news of
a $934M jury award against it.  We have the following economic
data due tomorrow:

               Report                   Briefing  Market    Prior
                                        Expects   Expects
Sep 25 8:30 AM Durable Orders Aug -       1.5%    0.5%      1.0%
Sep 25 8:30 AM Initial Claims 09/20 -     410K    400K      399K
Sep 25 10:00 AM Existing Home Sales Aug - 5.95M   6.05M     6.12M
Sep 25 10:00 AM Help-Wanted Index Aug -   39      39        38
Sep 25 10:00 AM New Home Sales Aug -      1120K   1120K     1165K

Given today’s strong selloff, traders are left in a precarious
position.  Bears need to keep stops close above, while bulls are
either getting stopped out or are close.  The 30 minute
formations and oscillators portend a possible bounce within the
confines of the early stages of a long-awaited daily cycle
downphase.  The bounce should not carry very high, if it comes at
all.  While the oscillators do not tend to trend or get pinned in
oversold territory, the close at the day lows on higher volume
sets up conditions more conducive for such to occur.  The tide
could well be turning against the bulls, and if so, there should
be plenty of downside left.  Plan your trades and wait for your
entries.



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

APA     Apache Corp                69.09   +0.99
BR      Burlington Resources Inc   48.46   +1.19
TLK     P T Telekom Indonesia      13.73   +0.72
POG     Patina Oil & Gas           36.52   +0.52
ATN     Action Performance Cos     26.69   +1.84
MTLM    Metal Management           19.08   +0.58


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

BLDP    Ballard Power Systems Inc  14.59   +1.01
AMI     Alaris Medical Systems Inc 17.96   +1.01
FCEL    Fuelcell Energy Inc        13.28   +2.13
ENER    Energy Coversion Devices   18.45   +1.45
VXGN    Vaxgen Inc                 14.00   +1.45


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

FRX     Forest laboratories Inc    51.68   +2.95
RIG     Transocean Inc             20.07   +1.07
LEN     Lennar Corp CI A           75.94   +1.81
MUR     Murphy Oil Corp            59.72   +2.23
WFT     Weatherford Intl Ltd       38.50   +1.25
NE      Noble Corp                 33.98   +1.16


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

TEF     Telefonica SA              35.21   -1.27
NVS     Novartis AG (ADS)          38.40   -1.37
AMGN    Amgen Inc                  65.85   -2.73
SI      Siemens Aktien             59.44   -1.87
AIG     American Intl Group        58.00   -1.78
FTE     France Telecom (ADS)       23.51   -1.23
EON     E.On Ag (ADS)              48.60   -1.65
DNA     Genentech Inc              82.93   -4.47
GS      Goldman Sachs Group Inc    85.82   -3.24
DB      Deutsche Back AG           61.72   -2.45
DD      Dupont E I Nemours & Co    40.18   -1.36
DCX     Daimlerchrysler AG         35.75   -1.48
KSS     Kohl's Corp                53.21   -2.17


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

STI     Suntrust Banks Inc         60.80   -1.19
ETN     Eaton Corp                 91.31   -2.02
PRX     Pharmaceutical Resources   65.75   -3.24
TR      Tootsie Roll Industries    31.47   -0.48
BBDA    Bank if Bermuda Ltd (THE)  39.80   -1.03
MOGN    MGI Pharma Inc             39.00   -3.03



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PremierInvestor.net Newsletter                Wednesday 09-24-2003
                                                    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:     UTSI
  Bullish Play Updates:  ADBE
  Closed Bullish Plays:  FDC

Active Trader (Non-tech)
  New Bullish Plays:     FMX
  Bullish Play Updates:  TYC, ZMH
  Closed Bullish Plays:  TARO

High Risk/Reward
  New Bullish Plays:     DRTE
  Bullish Play Updates:  GLW, ORB, QCOM
  Closed Bullish Plays:  ABGX, TER

Stock Splits/Announcements
  Stock Splits:          UNTD


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

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

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


UTStarcom, Inc. - UTSI - close: 35.08 change: +0.02 stop: 38.50

Company Description:
UTStarcom, Inc. is a global provider of wireless and wireline
access and Internet protocol (IP) switching solutions.  The
company designs, manufactures, sells and installs an integrated
suite of future-ready access network and next-generation
switching solutions.  It enables wireless and wireline operators
in fast-growth markets worldwide to offer voice, data and
Internet access services rapidly and cost effectively by
utilizing their existing infrastructure.  UTSI's products provide
a seamless migration from wireline to wireless, from narrowband
to broadband and from circuit- to packet-based networks by
employing next-generation network technology.

Why we like it:
Technology stocks have been on fire lately, as though we're right
back in 1999.  But the party had to come to an end sometime, and
this week seems as good a time as any.  Actually, UTSI began to
weaken in early September, with the first downdraft culminating
with a weak rebound from the $34 level.  That rebound ran its
course and the stock rolled over just below $38.50 and based on
the past two days closing at the low of the day and selling
volume on the rise, it looks like another downward move is in the
offing.  The PnF chart has already cast its vote with a big Sell
signal in early September that now gives us a bearish price
target of $24.  That may be a bit aggressive with the bullish
support line at $25, but a drop to next support at $30 and
possibly to the 200-dma near $28 certainly seems likely.  Note
that a trade at $34 would reinforce the bearish picture with
another PnF Sell signal.

We'll use a trigger at $34.99 and advocate a couple of possible
entry strategies.  A breakdown below the trigger can be used for
aggressive entries, while those with a more patient approach can
wait for a successive rebound and rollover below the $36-37
resistance area.  The recent consolidation/rebound found a local
high at $38.45, so our stop will initially be placed at $38.50.
A rally through that level would be a clear sign that we are
premature in looking for a substantial breakdown.  More
conservative momentum traders may want to wait for a drop through
the $34 level and that new PnF Sell signal before playing.  Our
initial target will be for a move down to the $30 support level,
with an outside chance of continuation down to the 200-dma,
currently $27.88.

Annotated Chart of UTSI:


Picked on September 24th at  $35.08
Change since picked           +0.00
Earnings Date              10/23/03 (unconfirmed)
Average Daily Volume =     3.47 mln



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

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


Adobe Systems - ADBE - close: 40.51 change: -0.95 stop: 39.25

Profit taking ramped back up on Wednesday, and as one of the
recent leaders to the upside, the Software index (GSO.X) was
susceptible to some hefty profit-taking.  That certainly
described the day's activity, as the GSO shed nearly 3.5%,
keeping pace with the 3.5% loss in the overall NASDAQ-100.  In
light of the sector action, it is no surprise to have once again
seen ADBE reverse from the $41.50 resistance level, but it is
encouraging to see the stock hold above $40 and keep its losses
to only 2.3%.  Note how the 10-dma (currently $40.35) once again
provided intraday support.  The $39.50-40.00 area is key support,
and intraday dips and rebounds from that region can be used for
new entries.  Note that we're keeping our stop (currently $39.25)
just below the 20-dma ($39.40) as a break below that average will
likely spell the end of this bullish move.  Traders looking to
enter on strength will want to wait for ADBE to push above
$41.75, with renewed strength from the GSO index before playing.
If entering on the breakout, remember that next resistance shows
up in the $43.00-43.50 area.

Picked on September 17th at  $40.47
Change since picked           +0.04
Earnings Date              12/10/03 (unconfirmed)
Average Daily Volume =     3.08 mln




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

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

First Data Corp. - FDC - cls: 41.54 chng: -1.48 stop: 41.05

Everything was looking splendid in our bullish FMC play, as the
stock was steadily moving higher and nearing our initial target
at $44.  But Wednesday's round of profit taking seems to have
caught more than a few bulls by surprise. FDC got hit for a 3.4%
decline, wiping out all the gains from earlier in the week and
bringing the stock right back to the point where it ended last
Thursday.  Such a large reversal does not look healthy,
especially with a close right on the low of the day.  Rather than
risk more downside, we're going to exit the play tonight near
break even and look for something better to replace it.

Picked on September 3rd at  $41.01
Change since picked          +0.53
Earnings Date             10/14/03 (unconfirmed)
Average Daily Volume =    4.59 mln





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

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

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

Femsa Fomento - FMX - close: 38.46 change: +0.60 - stop: 36.59

Company Description:
FEMSA is Latin America's largest beverage company in terms of
sales. Founded in 1890 and headquartered in Monterrey, Mexico,
FEMSA is strategically comprised of and operates by means of the
following subsidiaries: FEMSA Cerveza, which produces,
distributes and exports various brands of beer such as Tecate,
Carta Blanca, Superior, Sol, XX Lager, Dos Equis, and Bohemia;
Coca-Cola FEMSA, the largest bottler for The Coca-Cola Co. in
Latin America, which produces and distributes carbonated
beverages such as Coca-Cola, Coca-Cola Light, Fanta, Sprite, and
Quatro; and the Strategic Businesses Division, which groups the
packaging (FEMSA Empaques) and retail (FEMSA Comercio)
operations, and whose main objective is to offer strategic
competitive advantages to the beverage subsidiaries. (Source:
Company Press Release.)

Why We Like It:
Sporting a P&F buy signal with an upside target of $65.00, FMX
currently trades in an "O" column, but we think it's ready to
move up to the "X" list.  Back in July, Deutsche Bank must have
thought so, too, because Deutsche Bank started it as a buy.

Of course, those who bought FMX back in July had to wait a while,
as it's been consolidating since then in a range from $36-38.00,
but Wednesday, FMX broke above that consolidation band.  It did
so on 2.5 time average daily volume.  Although light congestion
shows up at the current level and we can expect some hesitation
as FMX approaches round-number resistance at $40.00, we think
it's ready to take on recent highs above $42.00 again, and this
time, it's supported by a host of grouped moving averages just
beneath its current level.  It based for much of the last couple
of months just above its 200-dma, too, establishing that level as
firm support.

It was probably not a coincidence that FMX turned back at $38.76
Wednesday, as it has also had a previous $38.80 high in early
August, and this level was briefly important during December
2002, also.  Set a trigger on a move above today's high and set a
stop just below the 200-dma, with the stop at $36.59.

Annotated Chart for FMX:


Picked on Sep 24 at  38.46
Change since picked: +0.00
Earnings Date:    07/28/03 (confirmed)
Average Daily Volume:  299 thousand




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

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

TYCO Intl. - TYC - close: 21.15 change: -0.70 - stop: 19.99

Thanks to market weakness, TYC may give traders the pullback
entry we suggested last week, but we're reserving judgment now.
While we don't like the look of Wednesday's bearish engulfing
candle, we did expect a pullback to fill the gap from last week.
We do note that Wednesday's candle filled the gap but did not
fall below it, a first encouraging sign.  It also closed above
the rising 10 and 21-dma's, another encouraging sign.  It has not
violated the rising trendline, a third encouraging sign.

Although RSI and stochastics turn down, they and MACD all
maintain their rising trendlines.  To help verify a pullback-and-
bounce entry as valid, watch how RSI behaves as it approaches its
rising trendline.  An RSI break of its trendline might signal a
need to step aside until TYC steadies.  If RSI instead bounces
from its own trendline as TYC bounces from anywhere above $20.50,
the bounce entry has extra confirmation.

News Wednesday centered on TYC's choice of James Harman as VP of
advertising and branding, a move meant to help TYC rebuild its
image.  Harman moves to TYC from GE, where he served as manager
of corporate advertising.

Annotated Chart for TYC:


Picked on Sep 21 at  21.90
Change since picked: -0.75
Earnings Date:    07/29/03 (confirmed)
Average Daily Volume:    8 million



----

Zimmer Holdings - ZMH - close: 55.79 change: +0.18 - stop: 53.00

We worried last week when ZMH hit our trigger, but without an
expansion of volume.  We needn't have worried.  As we had
expected it would do when we first listed the play, ZMH found
support at the midline of its regression channel and charged up
toward the top of that regression channel.  Wednesday, it even
pierced the channel.  By the end of the day, however, it had
fallen back, closing near the low of the day and printing a
gravestone doji.

That candlestick formation can be a reversal signal, but we would
have expected a reversal after ZMH hit the top of the channel.
Lately, reversals have ended at the midline of the rising
channel, but we wouldn't be surprised to find the former
resistance level at $54.00 now providing support.  Volume has
been picking up as ZMH climbs, now confirming the upside
momentum.

Today, Merrill Lynch reported that the weak dollar might help
medical technology stocks such as ZMH.  Although ZMH gained, many
of the other stocks mentioned in the report--BSX, SYK, EW--got
caught in the downdraft in the markets.  We think they'll be the
first to rebound and were pleased that ZMH managed a gain.

We're leaving our stop at $53.00, but conservative traders
worried that ZMH might retrace all the way to the bottom of the
regression channel might set a stop just beneath the midline of
the channel instead.  We would normally suggest that traders
watch for an RSI violation of its rising trendline, except that
the trendline has risen so high that it's due to be violated on
even the slightest oscillation.  We're not sure how meaningful
such a trendline violation will be, but we've marked the
trendline anyway.

Traders looking for a new entry on this medical-device company
might target a pullback and bounce from anywhere above $54.00,
but all traders should be aware that ZMH now approaches the $58-
60 target many analysts hold on the stock.

Annotated Chart for ZMH:


Picked on Sep 17 at   53.87
Change since picked:  +1.92
Earnings Date:    07/23/03 (confirmed)
Average Daily Volume:  2.2 million




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

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


Taro Pharm. - TARO - close: 57.17 change: -1.54 stop: 57.00

After nearly a week of banging against the $59 resistance level,
shares of TARO finally lost their battle with the bears and
succumbed to a round of profit taking.  The 2.6% loss engulfed
the price action of the prior 5 days, and it looks like this play
is over.  Volume picked up significantly, daily Stochastics have
now dropped sharply out of overbought and the reversal came just
below known resistance at $59.  In case there was any question,
the stock tapped our aggressive $57 stop during the day as well,
confirming our decision to harvest the modest gains accrued.
TARO gave us a nice ride up the chart, but just fell a little bit
shy of our ultimate goal.

Picked on September 10th at  $54.65
Change since picked           +2.52
Earnings Date              10/23/03 (unconfirmed)
Average Daily Volume =        331 K





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

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

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


Dendrite Int'l - DRTE - close: 15.55 change: +0.26 stop: 13.60

Company Description:
Dendrite International provides multiple sales and marketing
solutions and related services to life sciences clients.  The
company was originally established to provide sales force
automation solutions for the pharmaceutical industry.  In 2002,
the company further expanded its offerings to include knowledge-
based, technology-driven solutions that increase the
effectiveness of sales, marketing and clinical processes for
pharmaceutical and other life sciences clients.  These include
customer relationship management solutions, information
management, business intelligence and analytics, and commercial
operations management.

Why we like it:
Days of strong profit taking in the broad market are particularly
useful, as they help to separate the strong bullish plays from
those that are just riding on the coattails of the rest of the
market.  Wednesday was just such a day with most stocks and
sectors ending in the red.  Not so with our new bullish play on
DRTE.  The Business Software company has been doing a good job of
keeping Wall Street happy, with earnings continuing to come in at
or ahead of analyst estimates.  That has enabled the stock to
build a solid rising channel over the past 10 months, while price
has nearly tripled.  After consolidating sideways for much of the
past 6 weeks, DRTE put in a solid rebound from its 50-dma
($13.79) a week ago and has really broken out with style (and
volume) this week.  Both of the past two days have seen the stock
closing at levels not seen since March 2001, and it looks like
there is more in store.

A pullback to confirm support in the $14.50-15.00 area would make
for an ideal entry setup ahead of the expected breakout through
$16.  More conservative traders may want to wait for the breakout
before playing.  Once clear of that resistance, bulls will be
setting their sights on resistance near $18.50 and then $20.
We're not looking for a quick move higher, as DRTE should
continue to work higher in its ascending channel, the bottom of
which is currently $13.75, with the top at $16.35.  Look for
entries in the lower half of the channel and harvest near-term
gains near the top of the channel.  We're initially setting our
stop at $13.60, just below the bottom of the channel and the 50-
dma ($13.79).

Annotated Chart of DRTE:


Picked on September 24th at  $15.55
Change since picked           +0.00
Earnings Date              10/23/03 (unconfirmed)
Average Daily Volume =        177 K




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

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

Corning, Inc. - GLW - cls: 9.43 change: -0.08 - stop: 8.98

Although GLW spent this week retreating from recent highs, it
trades safely within its rising regression channel.  It has
retraced less than 50 percent of the most recent rise that began
September 11.  Volume, although above the daily average, measures
far less than it did during GLW's rise the end of last week.

Wednesday's decline in the small caps, as depicted by $SML.X,
matched that of the S&P 500.  Each dropped about 1.9 percent, but
GLW maintained a smaller 0.84 percent loss.  No news surfaced to
explain the decline.  It appears attributable to the expected
pullback at the top of the rising channel and round-number
resistance at $10.00, combined with the general market weakness.

Conservative traders might set stops at their entry levels, or at
the rising midline or 10-dma, currently at $9.28.  Aggressive
traders might find new entries on a bounce from the current level
or from anywhere above that rising 10-dma.

Annotated Chart for GLW:


Picked on Sep 17 at   $9.35
Change since picked:  +0.08
Earnings Date:    07/21/03 (confirmed)
Average Daily Volume:  6.8 million



----

Orbital Sciences - ORB - cls: 9.51  chng: -0.14 - stop: 8.99

Tuesday, ORB announced another contract, this one a $14 million
contract with the U.S. Army's Space and Missile Defense Command
in Huntsville, AL.  ORB will supply launch vehicle design,
payload interface development in conjunction with two national
laboratories, and vehicle integration and launch services for the
CCCM-1 and CMP programs.  However, the $DFI, the defense index,
fell steeply, indicating the weakness in the defense-related
stocks.  Although ORB struggled against that weakness at the
first of the week, printing doji instead of the bearish candles
being printed by the DFI, ORB finally succumbed and printed a
small red candle Wednesday.  The stock closed just below its 10-
dma, but remained above its more-important 30-dma.  That moving
average now trends just above the bottom support of the rising
regression channel.

While we're still concerned that ORB did not print a higher high
before beginning the latest consolidation pattern, all-in-all,
we're pleased to see how well ORB held up in relationship to
other defense-related stocks.  Volume drops as ORB consolidates,
also reassuring.  Oscillator evidence remains mixed, with RSI and
stochastics turning down but remaining within the patterns
they've established as ORB trends.  Our stop remains just below
the rising 30-dma, currently at $9.12.  A bounce from this moving
average still appears to be a solid entry.  Conservative traders
might raise stops to $9.09, just below that rising trendline.

Annotated Chart for ORB:


Picked on Sep 3 at   $9.18
Change since picked: +0.33
Earnings Date:    07/22/03 (confirmed)
Average Daily Volume:  347 thousand



----

Qualcomm - QCOM - close: 43.52 change: -1.26 - stop: 42.75

QCOM and TXN are squabbling over a cross-license agreement that
allowed TXN to use QCOM's patented CMA technology in wireless
communications chips.  QCOM sued TXN first, and this week TXN
countersued.  Both stocks declined in price, although it's
difficult to tell whether the declines had anything to do with
the suit or were the result of general tech weakness.  The XTC,
the North American Telecommunications Index, fell 1.89 percent,
and the COMPX fell more than 3 percent.

QCOM dropped to the bottom of its ascending regression channel,
falling just beneath the 10-dma for the first time since
September 10, when it was also testing the bottom of its
regression channel.  At the time of that last dip to the channel
support, indicators look much as they do now, with MACD lines
touching, RSI turning down out of levels indicating overbought
conditions, and stochastics doing so, too.  Volume had been
dropping during that consolidation, too.  Precedent exists, then,
for QCOM to begin the next ascent toward the top of that channel,
even with these indicators looking somewhat bearish, and that's
what we hope happens now.

We also realize, however, that the channel rises rather steeply,
and QCOM will probably break out of that channel at some point.
Otherwise, it will reach its fabled bubble target!  If it breaks
out of that channel now and begins a decline, our $42.75 stop
will take us out of the play soon after that breakdown occurs.
New entries could still be sought on a bounce from above $43.00,
but since Wednesday's candle was a bearish candle that may
indicate more downside, verify strength in the $XTC first.
Consider waiting until QCOM retraces at least 50 percent of
Wednesday's drop to enter as further verification of renewed
strength.

Annotated Chart for QCOM:


Picked on Aug 27 at  41.00
Change since picked: +4.05
Earnings Date:    07/23/03 (confirmed)
Average Daily Volume: 	10 million




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

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

Abgenix Inc. - ABGX - close: 14.75 change: -0.81 stop: 14.60

Predicated on a breakout to new 52-week highs and a breakout in
the Biotechnology index (BTK.X), our ABGX play never worked one
bit.  Starting with Monday's drop back under $16, the stock
hasn't been able to catch a break and once again ended at its low
of the day on Wednesday after shedding more than 5%.  Our $14.60
stop hasn't been hit yet, but based on the poor price action, it
will be surprising if it isn't hit on Thursday.  ABGX never went
in our favor and we're going to pull the plug tonight, chalking
it up as a clearly failed play.

Picked on September 17th at  $16.58
Change since picked           -1.83
Earnings Date              10/21/03 (unconfirmed)
Average Daily Volume =     1.51 mln



---

Teradyne Inc. - TER - close: 20.52 change: -1.35 stop: 20.50

Hindsight being what it is, we obviously should have closed our
TER play last Friday when it ended at the $22 level after
retracing a large portion of its intraday gain.  The early part
of the week saw TER trying to hold near that level despite the
weakening of the Semiconductor index (SOX.X).  But today's 4.7%
slid in the SOX was just too much and TER played catch up in a
big way, losing more than 6% and ending just above our $20.50
stop, after briefly trading below it.  Adhering to our
discipline, we have to drop the play tonight, and even if our
stop hadn't been hit, we'd still want to exit after such a sharp
one-day fall.

Picked on September 3rd at  $20.11
Change since picked          +0.41
Earnings Date             10/14/03 (unconfirmed)
Average Daily Volume =    2.95 mln





==================================================================
STOCK SPLITS/ANNOUNCEMENTS
==================================================================


UNTD gets back online with a 3-for-2 stock split

Before today's opening bell, United Online's (NASDAQ:UNTD) 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 14th.  UNTD currently has 43.4
million shares.

This is UNTD's first split since their 1-for-5 reverse split in
September of 2001.

About the company:
United Online, Inc. (NasdaqNM:UNTD - News) is a leading provider
of value-priced Internet services through its NetZero, Juno and
BlueLight Internet consumer brands. The company's standard
services are offered at less than half the standard monthly
prices of its major competitors and are available in more than
6,500 cities across the United States and in Canada. The company
is headquartered in Westlake Village, CA, with offices in New
York City, San Francisco and Hyderabad, India. For more
information about United Online and its Internet access services,
please visit http://www.untd.com.
(Source: Company Press Release)



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