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Daily Newsletter, Wednesday, 10/15/2003

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PremierInvestor.net Newsletter                Wednesday 10-15-2003
                                                    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:      Pulmonary Edema

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)
=================================================================
     10-15-2003            High     Low     Volume Advance/Decline
DJIA     9803.05 -  9.93  9850.01  9764.46 1.81 bln   1094/1717
NASDAQ   1939.10 -  4.09  1966.87  1933.03 2.00 bln   1254/1803
S&P 100   522.14 -  1.16   525.90   520.16   Totals   2348/3520
S&P 500  1046.76 -  2.72  1053.79  1043.15
RUS 2000  527.35 -  4.49   534.25   526.48
DJ TRANS 2863.64 - 18.02  2891.43  2853.65
VIX        17.69 +  0.32    17.96    16.98
VXN        26.77 +  0.28    27.44    26.66
Total Volume 4,184M
Total UpVol  1,663M
Total DnVol  2,412M
52wk Highs     993
52wk Lows       14
TRIN          1.10
PUT/CALL      0.67
=================================================================

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


Pulmonary Edema
Jonathan Levinson

The markets found the air a little rare this morning, with the
Dow reaching a 16 month high at 9850, the Nasdaq a 21 month high
at 1954 and the S&P 500 a 16 month high at 1054 shortly after the
open.  The indices failed from there, closing the day slightly in
the red on larger than average volume at 1.47B NYSE shares and
2.04B Nasdaq shares.

1 year daily COMPX


The one year daily chart of the COMPX reveals a rising wedge off
the March lows, with the daily oscillators growing toppy but
still well within their upphases.  Today’s opening high felt like
a weak blowoff top.  The end of a cycle phase often results in
one last burst in the cycle’s direction before the reversal, a
last gasp of sorts.  The opening move might or might not have
been the terminal move on the 10 day stochastic.  It didn’t feel
as cataclysmic as one might have expected, but in any event we
won’t know until the oscillator turns, followed by the laggier
Macd for confirmation.

The bear wedge has plenty of support below, with a potential
target of 1260.

20 day 30 minute COMPX


The 30 minute chart of the COMPX shows this morning’s spike high
and the failed breakout above what is another potential wedge.
As you can imagine, I’m beginning to see wedges everywhere, and
I’m not particularly confident in this one.  Nevertheless, 1940
was an important juncture, and it failed just after 2PM.  The
oscillators on this shorter timeframe are on sell signals, aiming
for 1925 support, followed by heavier support in the 1905 area.

1 year daily INDU


The INDU broke above its daily wedge resistance line, closing
just above 9803 despite a 1.50% loss from GE.  The strength in
the Dow compared with the weakness in GE over the past week has
been astounding, and today was another example of it.  That said,
the INDU has support at 9800, and bears should sleep with one eye
open until 9350 has been taken out.  Until then, it remains in a
confirmed uptrend, despite the bearish chart patterns and topping
oscillators.

20 day 30 minute INDU


The 30 minute INDU reveals far less technical damage than that on
the COMPX chart.   Lower trendline support held, and the
oscillator downphase is far less pronounced than on the COMPX.
That said, support is close below at 9775, and GE was tripping
over itself all through the session.  Tomorrow will be a critical
day, with further downside suggested by the ongoing-but-uncertain
30 minute oscillator downphase.

The closing bounce was not strong enough to turn the indices
positive, but it did improve breadth considerably.  The VXO, the
OEX volatility index, actually closed negative at 19.26.  In
addition to the toppy daily oscillators and potentially bearish
chart patterns above, the VIX has been in historically low
territory.  Rather than describe it, I’ve attached a chart of the
VIX with the corresponding SPX chart above it to provide a
clearer picture of the relationship between these two indices:

5 year monthly chart of the SPX and VIX




Before you run out and short everything with a symbol, recall
that the VIX symbol was reassigned this month, what was formerly
the VIX is now known as the VXO.  The VXO has not touched the 17
level this year, and has yet to dip below 19.  Nevertheless,
there remains clear evidence of a bear market in fear, with the
SPX at a lower high.

In economic news today, the Mortgage Bankers Association (MBA)
announced this morning that seasonally-adjusted demand for
mortgage refinancings, the MBA refi index, dropped 22.1% for the
past week, despite mortgage rates holding steady with a 0.2 bp
increase to 5.81% for a thirty fixed.  Demand for loans with
which to buy homes, the Purchase index, fell 18.6% to its lowest
level since the week ended April 25. The Application index
dropped 20.5% for the week.

The New York Fed released New York’s Empire State Manufacturing
Index for October was released at 8:30AM, showing substantial
improvement over September’s results. The Empire State Index rose
to a record 33.7 from 18.4 in September, blowing out forecasts
for a decline.  New orders rose from September’s 13 to 34.8 in
October.  Shipments rose to 25.3 from 17.0.  Employment readings
were also stronger, with the number of employees up to its
highest reading in over one year at 10.78, compared with -.92 in
September.  The Index also reflected increased optimism going
forward, rising to 66.72 from 58.79.   The release of this report
caused the euphoric bull frenzy / terrified bear panic, along
with an initial selloff treasuries.

Also released at 8:30 was the Commerce Department’s September
Retail Sales report.   U.S. seasonally adjusted retail sales fell
0.2 percent in September, the first decrease since April.  Auto
sales posted their biggest decline since February, falling 1.6
percent.  Retail sales ex autos rose 0.3 percent, the lowest
reading since May 2003.  Notwithstanding the weak retail sales
numbers, the August retail sales figure was revised upward to a
1.2 percent rise from the 0.6 percent originally reported. It
appear that this revision dominated traders’ attention, at least
until the 9:30 bell.

Wednesday is the day we usually receive the weekly inventory
reports for oil products from the Energy Department and the
American Petroleum Institute, but these releases were delayed
until tomorrow because of Columbus Day.  Analysts expect
inventories for crude to increase by 1.6M barrels, gasoline to
decline by 1.1M barrels, and distillate to decline by 1M barrels.

Marketwatch reported that Treasury Secretary John Snow told
interviewers that California Governor-elect Arnold Schwarzenegger
should not expect Federal assistance in addressing the state’s
budget crisis.  Schwarzenegger  is slated to speak with the
President tomorrow. "I'm sure we'll listen to him, but you know
California's problems are basically California's own problems. I
think California is going to have to solve its own problems
rather than turn to the Treasury of the United States."
California constitutes the world’s fifth largest economy.

In that same interview, Mr. Snow predicted growth in GDP for Q3
of "4% plus", and for Q4 "around 4%".

The Fed Beige Book was released at 2PM, with the Fed reporting
economic expansion in 10 out of 12 economic districts.  Boston
and Cleveland reported “mixed but steady levels of economic
activity. "  In the Fed’s inimitable words, "Overall, both wages
and prices of finished goods and services remained relatively
stable, though there were scattered reports of business input
cost pressures."  Sounds like cost-push inflation to me.

The report indicated strength in consumer spending but weakness
in auto sales, this latter confirmed by the various earnings
reports and the retail sales report released today.  The report
noted that labor markets "remain generally slack", but noted some
signs of pickup in select districts.  Overall, the markets
greeted the report with a yawn, and the afternoon selloff
commenced a few minutes thereafter.

GM reported 3Q income of $425 million or 79 cents per share on
$44B in sales. This compares with a net loss of $804 million or
$1.42 per share for Q3 2002.  CEO Rick Wagoner made upbeat
comments, citing the "accelerating" US economy and "enthusiastic
response to GM’s new products", although one might wonder whether
he was referring to its automotive or financial products.  It was
widely reported that GMAC’s operations carried GM through this
earnings report.

SNDK reported Q3 revenues higher by 99% at $281.4 million and net
income of $50.6 million, up from $11.3 million in Q3 2002.   The
company raised its 2003 revenue forecast from a projected $950
million  to "exceed $1 billion."  Earnings were 60 cents per
share, blowing out expectations of 15 cents.  GENZ beat estimates
by 3 cents on revenue of $437 million, stating that it expects to
beat full-year earnings and revenue guidance as well.  SEBL met
expectations with a net loss of 12 cents per share, or 3 cents
excluding charges.

After the bell, AAPL announced ESP of 12 cents, beating estimates
of .07.  QLGC matched estimates of .35, as did IBM at 1.02 per
share.  NFLX came in at 19 cents vs. estimates of .10.  IBM got
hammered for more than 2% following the release of its report
after the bell, despite its stating that it intends to hire
10,000 next year.  Revenue was 350M below the consensus estimate
of $21.85B.  As of this writing, the conference call was ongoing,
with no guidance given as of yet.

We have the following economic data due tomorrow:


               Report                   Briefing  Market    Prior
                                        Expects   Expects
Oct 16 8:30 AM Business Inventories Aug - 0.0%    -0.1%     -0.1%
Oct 16 8:30 AM Core CPI Sep -             0.1%     0.1%      0.1%
Oct 16 8:30 AM CPI Sep -                  0.2%     0.2%      0.3%
Oct 16 8:30 AM Initial Claims 10/11 -     390K     385K      382K
Oct 16 9:15 AM Capacity Utilization Sep - 74.8%   74.8%     74.6%
Oct 16 9:15 AM Industrial Production Sep - 0.4%    0.4%      0.1%
Oct 16 12:00 PM Philadelphia Fed Oct -     17.0    15.6      14.6

While the indices remain in an uptrend, the bulls had a clear
shot at a breakaway gap.  That failure encouraged bears, but the
indices remain far from a breakdown.  With opex Friday
approaching, there’s the chance that prices will begin to
gravitate toward the nearest strike prices and hold there.
Caution is urged in both directions as the markets reach ever
closer toward the apex of their respective wedges.  If a break
doesn’t come this week, I expect Monday of next week to be very
exciting indeed.



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

GCI     Gannett Co Inc             82.85    +1.93
NXTL    Nextel Comm A              22.12    +0.53
JCI     Johnson Controls Inc      106.63    +1.70
MGA     Magna Internat Inc         80.74    +1.82
ITT     ITT Industries Inc         64.05    +1.72


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

CMOS    Credence Systems Corp      15.46     +1.43
USG     USG Corp                   17.82    +1.45
PKTR    Packeteer Inc              16.02    +1.31
MDTL    Medis Technologies Ltd     11.57    +1.02


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

SYK     Stryker Corp               78.92    +1.27
FRX     Forest Laboratories        49.97    +2.16
GENZ    Genzyme Corp               51.58    +1.59
STJ     Saint Jude Medical Inc     57.40    +3.70
RYAAY   Ryanair Hldgs Plc (ADR)    49.93    +1.68


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

HDI     Harley-Davidson Inc        49.15    -3.30
DVN     Devon Energy Corp          46.45    -1.35
APOL    Apollo Group Inc CI A      62.50    -2.80
HNP     Huaneng Power Intl Inc     58.50    -3.00
MEDI    Medimmune Inc              30.45    -1.50


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

EDP     EDP Electricidade De Por   23.03    -0.47
TSS     Total System Services      27.24    -1.68
CTL     Centurytel Inc             34.91    -0.34
PPP     Pogo Producing Co          45.19    -2.47
RDC     Rowan Companies Inc        24.16    -1.62



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Do not duplicate or redistribute in any form
PremierInvestor.net Newsletter                Wednesday 10-15-2003
                                                    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
  Bearish Play Updates:  HTCH

Active Trader (Non-tech)
  Bullish Play Updates:  DISH, TYC
  Bearish Play Updates:  DLTR, MMC

High Risk/Reward
  New Bullish Plays:     MPS
  New Bearish Plays:     GILD
  Bullish Play Updates:  SNE
  Bearish Play Updates:  BEV


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

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

  --------------------
  Bearish Play Updates
  --------------------


Hutchinson Tech. - HTCH - close: 33.42 change: -0.14 stop: 34.75

Ugh!  We're still looking for some weakness in HTCH but with the
market's recent strength it's been a test of patience.  We
continue to suggest that traders wait for a move below the $31.50
level.  This would put HTCH below support at $32.00 and its
simple 50-dma.  Until we see it break the 50-dma we'd probably
refrain from opening any new bearish positions. There has been
little news and very low volume.

Annotated Chart:


Picked on October 8th at  $32.20
Change since picked        +1.22
Earnings Date           11/03/03 (confirmed)
Average Daily Volume =     503 K





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

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

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

EchoStar - DISH - close: 39.82 change: -0.08 - stop: 38.10

With Wednesday being the deadline for the submission of bids for
the auction of bankrupt Loral Space and Communication's assets,
the battle heated up.  Creditors filed a paper with the court,
objecting to the sale of some assets to Intelsat.  Those
creditors said that DISH might not have made its final offer for
Loral's assets and they wanted that bid considered.

DISH has trended sideways while these decisions are made, unable
to rise but not dropping seriously, either.  While it's trending
sideways, RSI and stochastics have been declining.  We find it
encouraging that DISH has held support and that volume has
decreased while those oscillators begin a downward phase.

The 21-dma (in blue on the chart) has been providing support,
with DISH bouncing from that average both Tuesday and Wednesday.
Long-term, however, the 30-dma has proven more important, and
that average now crosses just over $39.00 and well above our
$38.10 stop.  We've noticed that DISH tends to consolidate
sideways for a while and then drop a day or two before bouncing
from the 30-dma and the bottom of its ascending channel.  That
may happen again.  If it does, new entries can be found on
bounces from the 30-dma.  Those who prefer momentum entries might
wait for an upside break of $41.00, the intraday highs from
September.

Annotated Chart for DISH:


Picked on Oct 03 at  39.95
Change since picked: -0.13
Earnings Date:    08/13/03 (confirmed)
Average Daily Volume:  2.2 million



----

TYCO - TYC - close: 21.90 change: -0.05 - stop: 20.79*new*

Although press releases with TYC in the headline still tended to
center on Kozlowski's trial, one press release this week noted
that the US Court of Appeals for the Ninth Circuit affirmed a $24
million judgment against Bourns, Inc., with that judgment in
favor of TYCO Electronics.  Bourns manufactures electronic
components, and the suit involved misappropriated trade secrets
and interference with employee contracts.  It was filed by
Raychem, predating TYCO Electronics' purchase of Raychem.

TYC also announced that it was hiring Trammell Crow (TCC) to help
the company develop a plan to cut its real estate costs.  The
company also announced a $4 million deal awarded to one of its
units, Tyco Healthcare Group.

While these developments occurred, TYC consolidated beneath the
$22.00 resistance.  Wednesday's drop on big volume looked
worrisome, but a study of the intraday chart showed a huge volume
spike early in the day when TYC was moving up toward $22.00.  The
majority of the day's volume occurred on that move.  Other
indicators proved inconclusive, as stochastics begin to trend in
overbought territory, MACD flattens, and RSI tries to turn down.
The downturn in RSI may be troublesome, however, as it's turning
down from a lower high while price is making an equal high.  That
could be bearish divergence if the RSI rollover continues.

New entries can still be sought on pullbacks and bounces from
above $21.25, while those who prefer to enter on momentum can
wait for a breakout above this week's $22.09 high.

Annotated Chart for TYC:


Picked on Sep 21 at  21.90
Change since picked: +0.00
Earnings Date:    11/04/03 (confirmed)
Average Daily Volume:    8 million



  --------------------
  Bearish Play Updates
  --------------------

Dollar Tree Stores - DLTR - close: 36.22   change: -0.16 - stop:
35.76

Retail sales figures released Wednesday morning showed retail
sales down 0.2 percent versus the expected 0.1 percent drop.  Ex-
autos, those sales rose 0.3 percent against an expectation of a
0.4 percent rise.  The S&P Retail Index, the RLX, dropped 0.17
percent, with DLTR's 0.44 percent decline showing DLTR trumping
the RLX's decline.

DLTR started the day by opening above the 50-dma, but it had
fallen below that average by the close. Volume was just under 800
thousand shares, far below DLTR's average daily volume.  A check
of intraday volume patterns did show volume the highest on the
candles moving up, however, contrary to what is desired in a
possible bearish play.

This DLTR play has not triggered.  Instead, DLTR moved up,
climbing above the descending trendline marked on chart.  We
suspect it may be climbing to form another right shoulder in its
potential H&S formation, but it's possible that DLTR had been
declining in a bull flag formation instead and is now breaking
out.  That possibility led us to use the trigger on this play.
However, if DLTR moves above $38.00, we will withdraw the play,
especially since earnings approach.  Those considering an entry
should keep the 10/23 earnings date in mind and plan for a quick
exit, too.

Annotated Chart for DLTR:


Picked on Oct 08 at   34.36
Change since picked:  +1.86
Earnings Date:    10/23/03 (confirmed)
Average Daily Volume:  1.6 million



---

Marsh & McLennan - MMC - cls: 48.10 chg: +0.15 stop: 49.50

We continue to wait on weakness for the MMC short.  The stock is
still producing a nice trend of lower highs but has yet to trade
at or below our TRIGGER price of $47.35.  More aggressive traders
can try and gauge entries on failed rallies at the simple 30-dma
(like today) or the simple 50-dma still overhead.  Unfortunately,
time may be running out.  We have yet to confirm an earnings date
for MMC but it could be coming up next week and we hate to be
surprised, especially given the general trend of better than
expected results.  Of course we're not triggered yet so we're
still on the sidelines.

Annotated Chart for MMC:


Picked on October Xth at  $xx.xx
Change since picked        -0.00
Earnings Date           10/21/03 (unconfirmed)
Average Daily Volume =  1.79 mln





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

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

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

MPS Group INC. - MPS - close: 10.40 change: +0.31 - stop: 9.49

Company Description:
MPS Group is a leading provider of staffing, consulting, and
solutions in the disciplines of information technology, finance
and accounting, law, engineering, and healthcare.  MPS Group
delivers its services to government entities and businesses in
virtually all industries throughout the United States, Canada,
the United Kingdom, and Europe.  A Fortune 1000 company with
headquarters in Jacksonville, Florida, MPS Group trades on the
New York Stock Exchange.  (Source: Company Press Release.)

Why We Like It:
MPS launched itself over $10.00 Wednesday, accompanied by
stronger-than-average volume.  On a P&F triple-top-breakout buy
signal, it's got an upside target of $11.50. So far.  MPS has not
yet had a three-box reversal since creating that signal, so the
$11.50 figure may not be its final target.

We'll take $11.50 if offered, however, as that's a hefty
percentage gain from the current $10.40 price.  The daily chart
shows consolidation near $10.00 for almost two months, so that
$10.00 level should now provide strong support as MPS begins an
earnings run into the October 28 reporting date.  We're setting a
tight stop at $9.49.  An ideal entry would be a pullback and
bounce from $10.10, but that pullback may not be offered.  We're
setting our profit target at that $11.50 mark.

Annotated Chart for MPS:


Picked on Oct 15 at $10.40
Change since picked: +0.00
Earnings Date:    10/28/03 (confirmed)
Average Daily Volume:  466 thousand




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

Gilead Sciences - GILD - close: 59.52 change: -1.82 - stop: 62.01

Company Description:
Gilead Sciences is a biopharmaceutical company that discovers,
develops and commercializes therapeutics to advance the care of
patients suffering from life-threatening diseases worldwide. The
company has seven marketed products and focuses its research and
clinical programs on anti-infectives. Headquartered in Foster
City, CA, Gilead has operations in the United States, Europe and
Australia.

Why We Like It:
Known for HIV drug Viread, considered by some to be one of the
best on the market, GILD also recently achieved approvals for
another HIV drug and a hepatitis B drug.  The company also has
other drugs in the pipeline, and reported its first profit last
year.  When it rose this month, it bounced so far that it created
a low pole reversal signal, with the new X column climbing above
the midpoint of the long O column that preceded it.  So why are
we considering it for a bearish play?

From February to July, GILD doubled its price.  It climbed all
the way to $70, and has tested $70 three times, each time failing
to move above that level.  When it last tested $70, it fell so
steeply that it created that P&F sell signal.  Since then, GILD
moved up, retracing half that drop from $70.00 to below $55.00,
but it can't seem to get past July's gap or the midpoint of its
previous decline.  Wednesday, it fell below $60.00 again, and we
think it may be headed back to $55.00 ahead of its October 28
reporting date.  We note that each succeeding MACD high has been
lower than the previous high, and MACD currently appears to be
flattening beneath signal.  RSI has already rolled.

Because GILD created that low pole reversal signal, it's possible
that we're seeing a bull flag pullback, but several chart
characteristics make that seem unlikely.  That series of lower
MACD highs is one of those chart characteristics.  Another is
that the pullback from $70.00 has assumed a widening pattern of
lower highs and lower lows in comparison to GILD's previous
trading pattern.  Bull flags usually trade in a tight pattern of
lower highs and lower lows in comparison to the previous trading
pattern.

We're setting a trigger on a move below Wednesday's low.
Wednesday's retreat stopped at the bottom of the July gap, so a
move below that level will also mean that GILD has fallen below
possible gap support.  Aggressive traders could also consider a
bounce up to and roll down from below $62.00, but make sure that
MACD remains below signal before any such entry is considered.

Annotated Chart for GILD:


Picked on Oct 15 at  59.58
Change since picked: -0.13
Earnings Date:    10/28/03 (confirmed)
Average Daily Volume:  4.3 million




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

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

Sony CP ADR - SNE - close: 36.20 change: -0.30 - stop: 34.49

When we first listed this play, we included currency issues as
one of the reasons for its inclusion in the high-risk section.
Those currency issues hit SNE this week ahead of President Bush's
visit to Japan.  President Bush is expected to ask the Bank of
Japan ministers to lessen their intervention in the currency
markets.  If that happens and the yen strengthens, SNE and other
Japanese exporters might suffer.

On Wednesday, Ericsson(ERICY) and Sony (SNE) announced that their
mobile phone joint venture posted a Q3 gain and saw an increase
in sales.  The company saw a 42% year-over-year increase in units
shipped.  The company mentioned that the Japanese business had
performed strongly.  Amid all that positive news, however, was
news that a larger proportion of lower-priced models in the
current product mix will make it difficult for the company to
repeat this quarter's level of profitability.  This week, Sony
also introduced its new VAIO all-in-one desktop with an included
wireless keyboard and mouse.

While SNE declined, it also found support at its linked 10-, 21-,
and 30-dma's.  It has so far remained above the gap from early
September, a gap that has since been filled.  SNE's consolidation
begins to look like a symmetrical triangle, a consolidation
pattern that usually breaks in the same direction in which the
stock was headed before the consolidation began.  That means the
likely break will be to the upside.  Those seeking new entries
could enter on a break above the descending top of the triangle.
A break below the ascending bottom of that trendline would likely
predict a fall toward the bottom of SNE's ascending channel. If
the symmetrical triangle breaks to the downside, we would advise
caution with pullback-and-bounce entries.

Annotated Chart for SNE:


Picked on Oct 10 at $36.59
Change since picked: -0.39
Earnings Date:    10/23/03 (confirmed)
Average Daily Volume:  1.2 billion




  --------------------
  Bearish Play Updates
  --------------------

Beverly Ent. - BEV - close: 5.40 change: -0.02 stop: 6.12

Whoa!  It's been three days since we opened the play on BEV and
there's been plenty of volatility.  The stock surged higher on
Monday offering a great entry point for anyone brave enough to
take it.  Then shares gapped down on Tuesday with a one-two punch
in the headlines.  Monday after the market's close BEV announced
it would be issuing $100 million convertible notes.  These can be
converted into shares of BEV at the holder's option, so investors
probably weren't excited about potential dilution of the stock.
The second punch was news on Tuesday that BEV had received a
subpeona from the Feds who were looking into their MK Medical
unit's billing practices.  It seems that this California unit may
have been "overpaid" by the state and federal agencies.  BEV has
already allocated $18 million in reserves to handle any
corrections but did state the actual amount may exceed this
level.  Honestly, we're surprised BEV hasn't broken the $5.00
level already.  Volume was huge on Tuesday with 5.3 million
shares.  Traders may have noticed that today's trading stalled
right underneath the $5.50 level before fading into the
afternoon.  That could be good news for bearish traders like
ourselves.

Annotated Chart of BEV:


Picked on October 12th at $ 5.38
Change since picked        +0.02
Earnings Date           11/11/03 (confirmed)
Average Daily Volume =       996 thousand





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