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 ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. PremierInvestor.net staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control. Please read our disclaimer at: http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html ***************************************************************** ADVERTISING INFORMATION For more information on advertising in PremierInvestor.net Newsletter, or any Premier Investor Network newsletter please contact Contact Support. ***************************************************************** Copyright (c) 2003 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form
PremierInvestor.net Newsletter Wednesday 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 ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. PremierInvestor.net staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control. Please read our disclaimer at: http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html ***************************************************************** ADVERTISING INFORMATION For more information on advertising in PremierInvestor.net Newsletter, or any Premier Investor Network newsletter please contact Contact Support. ***************************************************************** Copyright (c) 2003 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form.
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