PremierInvestor.net Newsletter Wednesday 10-22-2003 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: Drug-Induced Decline 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) ================================================================= 10-22-2003 High Low Volume Advance/Decline DJIA 9598.24 -149.40 9742.05 9580.24 2.07 bln 766/2055 NASDAQ 1898.07 - 42.83 1923.33 1897.36 1.71 bln 752/2338 S&P 100 521.76 - 8.36 521.76 512.36 Totals 1518/4393 S&P 500 1030.36 - 15.67 1076.03 1028.39 RUS 2000 513.15 - 12.38 525.53 513.15 DJ TRANS 2818.01 - 46.85 2863.90 2817.44 VIX 17.67 + 1.12 17.98 17.10 VXO 19.00 + 1.18 19.59 18.49 VXN 25.68 + 1.33 25.87 25.04 Total Volume 4,136M Total UpVol 3,094M Total DnVol 990M 52wk Highs 332 52wk Lows 32 TRIN 1.51 PUT/CALL 0.98 ================================================================= =========== Market Wrap =========== Drug-Induced Decline by James Brown It proved to be a tough day for bulls on Wall Street. Major averages lead a broad-based decline with disappointing earnings results from three Dow components and a number of drug stocks. Meanwhile a strong decline in the U.S. dollar, despite Secretary Snow's attempt to bolster the currency, sent investors into the safety of bonds and gold. December gold futures rose $4.80 to close at $386.80 an ounce. By the closing bell the DJIA had lost nearly 150 points (1.53%), the NASDAQ Composite lost almost 43 points (-2.2%) and the S&P 500 dropped more than 15 points (-1.49%). Only two out of dozens of major sector indices were green, specifically the XAU gold & silver index and the UTY utility index and then both were only up fractionally. Foreign exchanges were little help today. Asian stocks were lower with the Japanese NIKKEI losing almost 142 points (-1.29%) to 10,889. The dollar's drop to 1.089 against the yen a likely culprit. European equities fared worse. With the euro rising to 1.182 against the dollar the English FTSE lost 1.53% and the German DAX dropped 2.5%. U.S. markets dropped quickly at the open and volume was rather modest by midday. Unfortunately, the sell-off picked up steam as we rolled into the closing bell and the final volume numbers were heftier than expected indicating some conviction by the sellers. The market internals were bearish as one would expect. Declining stocks out numbered advancing stocks 20 to 7 on the NYSE and 23 to 7 on the NASDAQ. Down volume was better than three times up volume on both exchanges. Overall volume tipped two billion shares on the NYSE and 1.7 billion on the NASDAQ. Professional traders were not worried by the decline. Given the strong run up into the Q3 earnings season some profit taking was expected. Many are looking for a good pull back to gauge potential new entries heading into the fourth quarter. Chart of DJIA: Chart of NASDAQ: It has been weeks since we've seen a triple-digit loss in the DJIA. Only three components managed to close in the green today; those were MCD, MMM and SBC. Leading the decliners were MRK, JPM and DD. It was not a coincident that all three reported their earnings today. Dow component DuPont (DD) reported a loss of 88 cents a share but if you exclude a $1 billion asset write-down then earnings appear to be 13 cents, which were 2 cents above estimates. The company did reaffirm its full year outlook for $1.60 a share, which is in line with analysts but investor's sold the news. After consolidating for a month under its 200-dma the stock hit a new relative low with a 4.27% loss on strong volume of 8.4 million shares. Fellow Dow component and second largest bank in the U.S. is J.P.Morgan (JPM) who announced Q3 earnings of 78 cents a share. Today's result beat estimates by 2 cents but the company's revenues of $7.53 billion were significantly under analyst estimates of $8.6 billion. Shares fell 4.6% to its simple 50-dma and led both the BKX and BIX banking indices lower. The largest drag on the DJIA was drug company Merck & Co (MRK). Not only did MRK miss estimates of 85 cents by 2 cents but they missed the revenue number and guided lower. The drug titan also announced it would cut 4400 jobs and launch a new distribution program to U.S. wholesalers. The stock gapped lower and closed down 6.5% to a new 52-week low. MRK wasn't the only drug company to disappoint today. Schering- Plough (SGP) announced a Q3 loss of 18 cents with sales falling 16% to $2 billion. The company blamed a drop in sales for its Claritin allergy drug and its Intron hepatitis treatment. Wyeth (WYE) also reported a Q3 loss. Formerly American Home Products Corp, the New Jersey-based Wyeth blamed litigation charges and increased reserves to handle diet drug fen-phen claims for the 32 cent per share loss. Excluding charges WYE's income would have been 65 cents a share. Investors sold the news and WYE hit its 200-dma by mid afternoon but rebounded off its low for a 5.45% loss. The biggest drug maker on the planet, Pfizer (PFE) also reported Q3 earnings today. The drug giant earned 47 cents a share, which is 3 cents better than estimates but only if you discount the acquisition charges related to its Pharmacia merger. Probably more important was PFE's fourth-quarter guidance, which they lowered from 54 cents a share to 51 cents. The standout drug maker to report today was GlaxoSmithKline (GSK). Britain's GSK said profits were up 20 percent for the quarter but told analysts that exchange rates could eat up 4 to 5 percent. At the end of the day the DRG drug index had lost 3.26% to close under support at 310 and its simple 200-dma. Another major story today was in the Disk Drive sector. Seagate Technology (STX) reported earnings that were 4 cents better than expected with net income rising to 40 cents a share on revenues that rose 10% for the quarter. Why then did the stock plummet almost 25% to $22.28, dragging the entire sector down with it? Directly affecting investor sentiment for the stock was news that STX had amended a lock-up agreement that would now allow insiders to immediately sell more than 20 million shares instead of a previous date in early 2004. Secondly, the company disclosed that the SEC had asked for copies of all analyst reports for the last 2.5 years. That's generally not a good thing either. This one-two punch hit the DDX for a 7% loss. Major losers in the sector besides STX were HTCH (-8.65%), STK (-13.6%) and MXO (-16.99%). I could go on with more earnings news but the focus was on the earnings misses not the successes. Of the nearly 250 companies in the S&P 500 that have already reported for the season, 65 percent of them have beaten estimates. Thomson Financial is reporting that corporate profits have risen an average of 18.6 percent, which is better than the pre-season estimates for a jump in the 16 percent range. That certainly sounds like success to me and traders are just cashing in on the good news to take some profits off the table. Now it looks like we'll be seeing a repeat of today's action given some of the after hours news. Chip stock KLA-Tencor (KLAC) reported earnings after the close with net income at 18 cents or 1 cent better than the estimates. The bad news was revenues fell more than 15% and the company is guiding lower for the December quarter. Looking ahead KLAC says next quarter could be in the 18 to 19 cent range while analysts had been looking for 23 cents a share. KLAC expects next quarter revenues to be in the $320-325 million area, below consensus of $348 million. KLAC management said some key sales contracts failed to close in September and that customers are still cautious about the rest of 2003. They hope that the general optimism for next year (2004) will start to turn into sales but the proof may be in the post-Christmas pudding (Q1 '04). Shares were down about $4 in after hours and the entire chip sector is bound to react negatively to the conference call. A heavy SOX is not going to benefit a NASDAQ that closed under the 1900 level and the next stop for the Composite could be the simple 50-dma near 1850. Tomorrow the earnings parade will continue and the major announcement on the books is Microsoft (MSFT) who announces after the close. MSFT management tends to be cautious and their conference calls almost always tend to be disappointing (to manage our expectations for next quarter). However, should they surprise us with an upbeat call then the mood could change. Don't look now but that signal in the VXO (old VIX) yesterday is getting some market confirmation today! ================= 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 RY Royal Bank of Canada 49.75 +0.73 SRCI Sicor Inc 24.20 +3.41 RYL Ryland Group Inc. 84.40 +0.85 IPCR IPC Holdings Ltd 37.00 +1.01 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- TUP Tupperware Corp 15.32 +1.01 ISSX Internet Security System 17.01 +2.54 HDWR Headwaters Inc 17.41 +1.82 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- WM Washington Mutual Inc 41.77 +1.30 BLS Bellsouth Corp 25.00 +1.22 CNI Canadian Natl Railway 57.93 +1.73 DGX Quest Diagnostics Inc 63.99 +1.19 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- MRK Merck & Co 45.72 -3.19 JPM JP Morgan Chase & Co 34.98 -1.69 AMGN Amgen Inc 60.30 -3.35 WYE Wyeth 43.30 -2.50 SLB Schlumberger Ltd 47.95 -3.41 FRE Freddie Mac 57.03 -1.50 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- NSANY Nissan Motor Co Ltd (ADR) 23.19 -0.42 TYC Tyco Intl Ltd New 21.45 -0.57 ING ING Groep Nv 20.25 -0.47 HIT Hitachi Ltd 58.47 -3.08 AMZN Amazon.Com Inc 54.03 -5.32 ================================================================= 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 10-22-2003 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: FDS, TTWO Active Trader (Non-tech) New Bullish Plays: IGT New Bearish Plays: MGAM, MHK Bullish Play Updates: DISH, TYC High Risk/Reward New Bearish Plays: HLTH Bullish Play Updates: MPS Bearish Play Updates: GILD Closed Bullish Plays: SNE Closed Bullish Plays: BEV Stock Splits/Announcements: ERTS, SYMC ================================================================== Net Bulls (NB) Tech Stock section ================================================================== ============ PLAY UPDATES ============ -------------------- Bearish Play Updates -------------------- Factset Research - FDS - close: 44.05 change: -0.43 stop: 46.01 FDS offered the bounce-and-rollover entry we hoped to see this week, with a bounce up toward the 21-dma and a rollover from there. With MACD lines separating and turning down, it may also offer the momentum entry on a drop below $43.00. A trade below $43.00 will also create a new P&F sell signal. Although we wish FDS had declined more steeply during Wednesday's market selloff, we have noticed some encouraging signs in this bearish play. Volume dropped as FDS headed up to test that 21- dma. That's a reassuring sign. RSI continues to turn down along a trendline of lower highs. Stochastics are less conclusive, however, showing a tendency to hook up again from a higher low. If that happens, FDS may attempt another bounce. New entries could still be sought on a rollover beneath the 21-dma as well as on that breakdown through $43.00. Annotated Chart for FDS: Picked on Oct 17 at 43.65 Change since picked: +0.40 Earnings Date: 09/16/03 (confirmed) Average Daily Volume: 393 thousand --- Take-Two Interactive - TTWO - cls: 38.43 chg: -1.56 stop: 40.90*new* It looks like we may have caught a top in shares of TTWO, as this aggressive bearish play is definitely moving in our favor. After last Friday's downdraft, the stock found support just below $39 and rebounded on Tuesday to close just under $40. That bounce turned out to be a great entry, as TTWO gapped down today and proceeded lower into the close, shedding nearly 4% by the end of the day. So far, it is just normal profit taking after running to new all-time highs recently. But we could be looking at a sell-the news event in the wake of competitor ERTS' earnings report after the close. ERTS is trading down nearly $5 after beating estimates, guiding higher and announcing a stock split. That definitely looks like selling the news. TTWO is trading down in sympathy, currently at $37.00 in the afterhours session vs. its $38.43 regular session close. There's some pretty decent support in the $36-37 area and a near-term rebound would not be surprising. Conservative traders may look to harvest some near- term gains on a rebound from that area. Our next viable shot at a solid entry point is likely to come from a failed rebound in the $38.50-39.00 area. Lower stops to $40.90, which is just above yesterday's intraday high. Picked on October 19th at $39.34 Change since picked -0.91 Earnings Date 09/03/03 (confirmed) Average Daily Volume = 1.08 mln ================================================================== Stock Bottom / Active Trader (AT) section ================================================================== ========= NEW PLAYS ========= ----------------- New Bullish Plays ----------------- INTL Game Tech - IGT - close: 31.00 change: -0.42 stop: 28.79 Company Description: IGT (www.IGT.com) is a world leader in the design, development and manufacture of microprocessor-based gaming and lottery products and software systems in all jurisdictions where gaming and lotteries are legal. (Source: Company Press Release.) Why We Like It: IGT came to the attention of several of our writers on Wednesday. It trades on a P&F triple top breakout signal with an upside target of $37.00, but its bar chart also offers hints of possible strength. Last week, IGT achieved an all-time high. It pulled back, and then Tuesday of this week achieved a new all-time closing high. Wednesday, IGT offered a glimpse into an ideal bullish entry. IGT printed an inside-day candle. Many might be familiar with inside-day candle entries. A bullish entry could be found on a move above the previous day's high. We're setting a $31.50 trigger for this play, in keeping with an inside-day entry. We're setting a first target of $35.00, although retaining that P&F $37.00 as a possible second target. Our initial stop will be $28.79, but conservative traders might keep that inside-day technique in mind and set stops just below Tuesday's low, perhaps at the 10-dma. The recent new highs were achieved as IGT announced that it had received a large order from Harrah's Entertainment (HET). HET plans to buy 11,000 of IGT's coinless gaming machines. HET's decision confirmed IGT's strength, with one headline reading "IGT Hits Cashless Jackpot." Annotated Chart for IGT: Picked on Oct 03 at 31.00 Change since picked: +0.00 Earnings Date: 11/4/03 (confirmed) Average Daily Volume: 2.7 million ----------------- New Bullish Plays ----------------- Multimedia Games - MGAM - close: 35.34 change: +0.16 stop: 38.75 Company Description: Multimedia Games, Inc. is a supplier to the Native American gaming market of both interactive electronic games and the electronic player stations (EPS) on which the company's games are played. The Company delivers Class II games to its customers through a telecommunications network, Betnet, which links EPS located both within and among Class II gaming facilities, enabling players to compete against one another in the same game to win pooled prizes. Multimedia Games designs and develops software, content, networks and systems that provide its customers with comprehensive gaming systems. The Company has focused its development and marketing efforts on Class II gaming systems and Class III video lottery systems for use by Native American tribes throughout the United States. Why we like it: Following a near-vertical rise in late September and early October, MGAM finally ran out of steam at $42 after tagging a fresh all-time high. Kicking off the current downdraft was CIBC downgrading the stock to Sector Perform last Friday. While the price reaction was muted on Friday, the selling really picked up steam yesterday, with $38 support giving way on big volume. While today's action had the stock holding firm at $35 support, the intraday action looks pretty ominous with a sharp drop at the close. The PnF chart hasn't given a Sell signal yet, but it has just issued a High Pole Warning due to the sharp rise and subsequent reversal. A trade at $33 would give that PnF Sell signal and generate a tentative bearish price target of $23, which just happens to be the site of the bullish support line. Isn't it interesting that the top of the late-September gap is right at $33? We're going to advocate jumping the gun a bit here in anticipation of that breakdown coming in the next couple weeks leading up to earnings on November 10th. A failed rebound in the $36.50-37.00 area would make for an ideal entry point ahead of the anticipated breakdown. With potential support near $34, a momentum entry below $35 carries more risk than we're normally comfortable with, although that might just work. We'll initially target a drop to $30 at the bottom of that gap, using an initial stop at $38.75, which is above yesterday's high, as well as the 10-dma ($38.72). Annotated Chart of MGAM: Picked on October 22nd at $35.34 Change since picked +0.00 Earnings Date 11/10/03 (unconfirmed) Average Daily Volume = 486 K --- Mohawk Industries - MHK - close: 68.92 change: -1.08 stop: 72.50 Company Description: Mohawk Industries and its subsidiaries, are producers of floorcovering products for residential and commercial applications in the United States. The company is the second largest carpet and rug manufacturer, and a manufacturer, marketer and distributor of ceramic tile and natural stone. Through its carpet and rug business, MHK designs, manufactures and markets carpet and rugs in a broad range of colors, textures and patterns and is a producer of woven and tufted broadloom carpet and rugs, principally for residential applications. Why we like it: Beating earnings estimates last week wasn't enough to keep shares of MHK on the rise. On the contrary, the stock has reversed sharply from the $75 resistance level and has been plunging lower on strong volume. It wasn't the earnings that investors focuses on, it was the company's lowered guidance. MHK plunged nearly $5 last Friday, finding support at $70, which held throughout Monday and Tuesday. But with the broad market finally cracking to the downside today, MHK plunged through that support and now looks destined for $65 support and possibly lower levels after that. Yesterday's trade at $70 generated a fresh PnF Sell signal and today's downward continuation lengthened the bearish vertical count to $62. We'll err on the side of caution and look for a decline to solid support at $65 as our profit target. Ideally, we would have liked to initiate the play prior to the break below $70, but that wasn't possible. The good part about coming in after the support break is that we already have confirmed weakness to work with. A rebound that fails in the $70.00-70.50 area would be a nearly perfect entry point. Of course, a break below today's low ($68.86) looks like a solid entry point as well. There is some chart support near $67.50, but that should only slow the descent, not reverse it. We're initially setting our stop at $72.50, which is above the top of Monday's failed rebound, as well as the 50-dma (currently $72.31). Annotated Chart of MHK: Picked on October 22nd at $68.92 Change since picked +0.00 Earnings Date 1/15/04 (unconfirmed) Average Daily Volume = 411 K ============ PLAY UPDATES ============ -------------------- Bullish Play Updates -------------------- EchoStar - DISH - close: 39.00 change: -0.35 stop: 38.10 The waiting is over. DISH was once again left standing at the altar when the court awarded Loral's satellite sales to DirecTV. Three state attorneys appeared before the U.S. bankruptcy court making the dispositions, warning of competition concerns if DISH were awarded the satellite sales. The move was a blow to DISH's hopes. This week, DISH showed the effects of the disappointment, dropping below the 21- and 30-dma's. The decline stopped just short of our $38.10 stop. We don't like the big volume this week or the bearish oscillators and we would have liked to have seen a close over the 30-dma. However, that decline also stopped on the bottom support of the ascending regression channel, with Wednesday's candle bouncing from that support. Because of that bounce, we're willing to hold onto the play, looking for a bounce back above those moving averages and back toward the recent highs. If DISH continues to move up from here, it will have completed another higher low. Some might consider new entries at this level, but the high volume during the recent declines and the bearish oscillators make those entries high risk. Conservative traders might wait for that momentum entry on a move above $41.00. Annotated Chart for DISH: Picked on Oct 03 at 39.95 Change since picked: -0.95 Earnings Date: 08/13/03 (confirmed) Average Daily Volume: 2.2 million --- TYCO - TYC - close: 21.45 change: -0.57 stop: 20.99 Wednesday, a Tyco Electronics business unit secured a $15 million contract with the City of Milwaukee, but most news continues to center on the trial of ex-CEO Kozlowski. Wednesday's market weakness affected TYC strongly and quickly, however, with TYC opening just above our stop. TYC bounced, but it could not hold onto all the gains and retreated by the end of the day. The stock closed above its ascending trendline and the 30-dma, but not the 21-dma. A study of an intraday chart shows that the biggest volume spikes occurred on red candles, a troubling discovery. Since TYC bounced from above the trendline and the 50-dma, we're going to keep the play open, but we would not advise new entries at this time. Annotated Chart for TYC: Picked on Sep 21 at 21.90 Change since picked: -0.45 Earnings Date: 11/04/03 (confirmed) Average Daily Volume: 8 million ================================================================== HIGH RISK/HIGH REWARD (HR) section ================================================================== ========= NEW PLAYS ========= ----------------- New Bearish Plays ----------------- WebMD Corp - HLTH - close: 7.79 change: -0.19 stop: 9.51 Wednesday brought big news for WebMD investors. The company said it would buy Medifax-EDI, a privately held company. It will pay $280 million, including debt it will assume. Some analysts believe WebMD is paying too much, with one analyst calling the fee a "king's ransom" in a Reuters article. WebMD dropped on the news, closing at a level not seen since mid- November, 2002. While that action was satisfying, we're puzzled that the drop was not steeper, especially on a day when markets declined and both the INX.X, the CBOE Internet Index, and the HMO.X, the Morgan Stanley Healthcare Index, declined. WebMD clings to the midline resistance of its descending regression channel, not yet dropping away as we expected it to do once it reached a critical level. WebMD's chart shows that it does sometimes drop precipitously toward the bottom of its channel. Those seeking a new entry might consider a bounce and rollover from anywhere under $8.00, or could enter on a momentum push below Wednesday's low. We're still targeting $6.50. Annotated Chart for HLTH: Picked on Oct 17 at $7.93 Change since picked: -0.14 Earnings Date: 11/06/03 (confirmed) Average Daily Volume: 4.9 million ============ PLAY UPDATES ============ -------------------- Bullish Play Updates -------------------- MPS Group INC. - MPS - close: 10.17 change: -0.03 stop: 9.49 An MPS unit began its presentation to the National Association of Computer Consultant Businesses conference in Dallas on Wednesday, with that conference continuing through Friday. Beeline is the human capital solutions business unit of MPS group, and a Beeline VP will participate as a panel speaker. As we mentioned last week, however, we're not sure how much the Beeline presentation impacts MPS's trading pattern. We were pleased to see that MPS did not follow through on the weakness suggested by Friday's bearish candle. All this week, MPS has consolidated just above $10.00 as the moving averages rise up to provide support. Wednesday, MPS closed a penny above the rising 10-dma. More significant to MPS's trading pattern, however, are the 30- and 50-dma's, now at $9.80 (black on the chart) and $9.67 (pink on the chart) respectively. We wouldn't be surprised to see MPS retreat to those moving averages. However, it battled $10.00 resistance for two months, establishing it as a significant level. This week's consolidation just above that level shows MPS establishing it as support. Oscillator evidence remains mixed, as is often true during consolidation. Pullbacks and bounces from above the 30-dma would provide entries, and momentum entries could be sought on a volume-confirmed move through last week's high. Annotated Chart for MPS: Picked on Oct 15 at $10.40 Change since picked: -0.23 Earnings Date: 10/28/03 (confirmed) Average Daily Volume: 466 thousand -------------------- Bearish Play Updates -------------------- Gilead Sciences - GILD - close: 58.33 change: -1.67 stop: 60.51 Volatility has been the name of the game in shares of GILD over the past week and the rebound from the $57 area on Monday looked like the bulls were stepping in to buy the dip. Wednesday's session was another story altogether, with the Biotechnology index (BTK.X) getting slammed for more than a 4% loss. GILD dropped very near that $57 level again, but the bulls bought the dip (although with less conviction) in the afternoon, resulting in a close near the middle of the day's range. We're still looking for a breakdown ahead of earnings next Tuesday and we've got some clear action points for new entries. Another failed bounce below $60 should work for aggressive traders, with the breakdown under $57 looking like a viable momentum entry. There may be some mild support found near $56 and then again at $55, which is the site of the PnF bullish support line. But if that breaks, then our target of $50 looks like a logical destination. Picked on October 15th at $59.58 Change since picked: -1.25 Earnings Date: 10/28/03 (confirmed) Average Daily Volume: 3.60 mln ============ CLOSED PLAYS ============ -------------------- Closed Bullish Plays -------------------- Sony CP ADR - SNE - close: 37.15 change: -0.81 stop: 35.49 With Sony due to report earnings Thursday, it's time to close this play. In fact, with those earnings being reported in the overnight session in Japan, this play probably should have been closed Tuesday night. Although Sony retreated Wednesday, it held up well during the Nikkei's decline this week and even during Wednesday's decline in U.S. markets. It maintained a steep rising trendline within its rising regression channel. Wednesday's retreat sent it down to test its 10-dma, but it closed above that moving average. If overnight weakness in the Nikkei or Sony's earnings report produces weakness, SNE is likely to pull back to the 30-dma or perhaps to the 50-dma, currently at $35.01 and just below our stop. That's also near the bottom support of the rising regression channel, so if Sony should open near that level, aggressive traders might watch for a bounce back to the 30-dma for an exit on strength. With KLAC warning in after hours and tech stocks likely to be pressured tomorrow, waiting for a bounce on which to exit might prove risky, however. Picked on Oct 10 at $36.59 Change since picked: +0.56 Earnings Date: 10/23/03 (confirmed) Average Daily Volume: 1.2 million -------------------- Closed Bearish Plays -------------------- Beverly Ent. - BEV - close: 5.49 change: -0.09 stop: 6.12 Compared to the price action in shares of BEV, watching grass grow could be considered an aerobic activity. Over the past couple weeks, there have been several opportunities for the stock to break down, but it just hasn't happened, as the bulls continue to defend the 100-dma (currently $5.34). Wednesday's major downdraft in the broad market should have seen BEV trading sharply lower, but instead the stock traded in a tight range above support. We're dropping coverage of BEV tonight for lack of performance. The stock may still get it in gear and break down, but we've run out of patience with so many other more active plays to choose from. Picked on October 12th at $32.20 Change since picked +0.11 Earnings Date 11/03/03 (confirmed) Average Daily Volume = 1.12 mln ================================================================== STOCK SPLITS/ANNOUNCEMENTS ================================================================== ERTS gets interactive with a 2-for-1 stock split After today's closing bell, Electronic Art's (NASDAQ:ERTS) Board of Directors declared a 2-for-1 stock split of its common shares in conjunction with its earnings announcement. The payable date on the stock split is November 17th, 2003 to shareholders on record November 3rd. This will be ERTS' fourth stock split in the company's history. About the company: Electronic Arts, headquartered in Redwood City, Calif., is the world's leading interactive entertainment software company. Founded in 1982, Electronic Arts posted revenues of $2.5 billion for fiscal 2003. The company develops, publishes, and distributes interactive software worldwide for video game systems, personal computers and the Internet. Electronic Arts markets its products under three brand names: EA SPORTS(TM), EA GAMES(TM), and EA SPORTS BIG(TM). EA's homepage and online game site is www.ea.com. More information about EA's products and full text of press releases can be found on the Internet at http://info.ea.com. (Source: Company press release) --- SYMC secures a 2-for-1 stock split for its shareholders After today's closing bell, Symantec Corp's (NASDAQ:SYMC) Board of Directors declared a 2-for-1 stock split of its common shares in conjunction with their Q3 earnings announcement. The payable date on the stock split is November 19th, 2003 to shareholders on record November 5th. This 2:1 split will increase shares outstanding to 308 million. About the company: Symantec, the world leader in Internet security technology, provides a broad range of content and network security software and appliance solutions to individuals, enterprises and service providers. The company is a leading provider of client, gateway and server security solutions for virus protection, firewall and virtual private network, vulnerability management, intrusion detection, Internet content and e-mail filtering, remote management technologies and security services to enterprises and service providers around the world. Symantec's Norton brand of consumer security products is a leader in worldwide retail sales and industry awards. Headquartered in Cupertino, Calif., Symantec has worldwide operations in 36 countries. For more information, please visit www.symantec.com. (Source: Company press release) ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. 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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