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Daily Newsletter, Monday, 11/03/2003

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PremierInvestor.net Newsletter                 Monday 11-03-2003
                                                  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:      November Opens Strong

Play of the Day:  So Close

===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
     11-03-2003            High     Low     Volume Advance/Decline
DJIA     9858.46 + 57.34  9896.16  9802.38 1.66 bln   1979/ 854
NASDAQ   1967.70 + 35.49  1969.26  1941.31 2.06 bln   2107/1035
S&P 100   524.01 +  4.03   525.42   519.98   Totals   4086/1889
S&P 500  1059.02 +  8.31  1061.42  1050.71
RUS 2000  537.84 +  9.62   537.84   528.22
DJ TRANS 2940.73 + 27.62  2947.79  2913.81
VIX        16.55 +  0.45    16.70    16.22
VXO        17.01 -  0.14    17.43    16.72
VXN        25.38 +  0.49    25.95    25.15
Total Volume 4,163M
Total UpVol  3,129M
Total DnVol    991M
52wk Highs    1167
52wk Lows       19
TRIN          0.71
PUT/CALL      0.63
===============================================================

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

November Opens Strong
by James Brown

It was another busy Monday with the bulls once again in control.
As the mutual fund scandal claimed another victim, this time at
Putnam Investments, Wall Street chose to ignore the news and
focus on positive economic data.  The ISM report beat economists'
estimates and turned in its best pace since January 2000.
Cementing the positive mood was a strong showing for business
construction that also turned in its best numbers in a year.  The
icing on the cake was Sunday's chip sales numbers, which were the
strongest in 13 years.  At the end of the day the tech-heavy
NASDAQ closed at 21-month highs.  The S&P 500 and the DJIA closed
at 17-month highs.

U.S. markets got a big boost from their overseas counterparts.
The Japanese NIKKEI may have stumbled 135 points to 10,559 but
its Hong Kong neighbor the Hang Seng index added 196 points to
close at 12,386.  Across the Atlantic were gains in the British
FTSE, up 1.05% to 4332.  Meanwhile the Germans lead the charge
with a 2.42% gain in the DAX.  The Dow Jones Industrials Average
closed up 57 points at 9858, almost breaking 9900 intraday.  The
NASDAQ Composite added 35.49 points or 1.83% to close at 1967.
The S&P 500 added more than 8 points to follow through on
Friday's close above technical resistance at 1050.  The SPX
closed at 1059.

Today's biggest gainers were in technology lead by the
Semiconductor index (SOX) and followed by stocks in Networking,
Internet and Hardware sectors.  Non-technology winners were heavy
in homebuilders and the broker-dealer sectors.  Selling was
concentrated in gold stocks, oil services and the healthcare
sector.  Market internals were very bullish.  Advancing issues
whipped decliners almost 20 to 8 on the NYSE and 21 to 10 on the
NASDAQ.  New Highs soared to 817 versus new lows of just 16.  Up
volume was very bullish coming in at three times down volume on
both exchanges.

Chart of the DJIA:


Chart of the NASDAQ COMPX:



The big economic event for the day was the ISM index.  Released
at 10:00 AM ET the ISM manufacturing index rose to 57 percent,
beating estimates of 55.4 percent and jumping 3.3 percent from
September's reading.  October was the fourth consecutive month of
gains.  Readings above the 50 mark indicate that business was
improving or holding steady.  October's reading at 57 is the best
pace since January 2000.  Manufacturers have seen business
improving due to the need to refill low customer inventories.
October's reading put customer inventories falling to 39 percent,
a record low only matched by May 2002.  Investors cheered the new
orders component, which rose to 64.3 percent in October from 60.4
percent in September.  This is the best pace since June 1994.
Optimists also noted the strong jump and nine-year high in the
export component, which rose to 59.6 up from 52.9 in September.
Overall it was a very strong report and yet another stepping
stone the markets needed to hear to keep the momentum alive.
With inventories so low the manufacturing sector should be
humming throughout the rest of 2003 as they race to replenish the
country's inventories.

Bulls also cheered the positive construction spending numbers
that came out today.  Construction spending rolled out at +1.3
percent versus estimates for a gain of just +0.4%.  Economists
noted that private non-residential building construction rose
2.5%, which is the biggest gain in a year.

Today's biggest winners were in the chip sector as the SOX index
rose 3.87% and closed at levels not seen since May 2002.  The
rally was fueled by a 6.5% jump in global chip sales for
September, according to the Semiconductor Industry Association
(SIA).  The rise in sales was the biggest monthly improvement
since 1990.  The SIA also said quarterly revenues soared more
than 17 percent to $43.3 billion compared to a year ago.
Technology bulls will be looking for more good news from the SIA
when the industry group releases its long-term outlook for 2003
through 2006.

Nowadays we can't have a Monday without some merger news and
today was no different.  Chips stocks also got a boost from news
that Conexant Systems (CNXT), a broadband chip producer, would
buy GlobespanVirata (GSPN).  GSPN shareholders will get almost
1.2 shares of CNXT for each share of Globespan, which at Friday's
prices valued GSPN at a 14% premium.  There was also merger news
in the energy sector.  Exelon (EXC), a Chicago-based energy
company, announced it would buy Illinois Power from Dynegy (DYN)
for $425 million.  Both EXC and DYN rose higher on the news.

Bulls were definitely in control on this first trading day for
November but not everything closed in the green.  The strong
economic numbers in the ISM boosted the dollar and suddenly
traders felt less inclined to buy gold as a safety hedge.  The
U.S. dollar surged to one-month highs against the euro and the
yen.  Meanwhile December gold futures dropped $7.50 to close at
$377.10 an ounce.  The XAU gold & silver index fell 2.13%.  All
together these influences sent bonds lower and the yield on the
10-year note jumped to 4.36%.

Oddly enough the markets seemed to ignore the growing mutual fund
fiasco.  The growing firestorm over fraud charges for illegal
trading forced Putnam Investments to fire CEO Lawrence Lasser,
who lead the company for 18 years.  Lasser was one of the highest
paid industry professionals earning more than $160 million over
the past six years.  NY State Attorney General Elliot Spitzer
said the bloodletting isn't over.  At a Senate subcommittee on
financial management the high-profile prosecutor called the
mutual fund industry a "cesspool" and suggests that funds should
surrender all fees that were collected while these illegal
trading abuses were being practiced.

Normally the first three to five days of the month are bullish as
mutual funds put new money to work and this can be exceptionally
true in November as they begin a new fiscal year.  The breakout
to new highs on the $INDU, NASDAQ and the technical breakout over
1050 on the S&P 500 should have bears running scared again.  It
wouldn't surprise us to see sellers just step back and wait for
the Dow to hit 10,000 and the NASDAQ to hit 2,000 before
attempting to short these round-number psychological resistance
levels.  The impulse to short these levels may be compounded by
the new lows we are witnessing in the VXO.  The combination will
likely be too much for bears to resist, even in their current
state of pain.  The next couple of days could prove interesting.



===============
Play-of-the-Day  ( BEARISH )
===============

Bunge Limited - BG - close: 27.06 change: -0.04 stop: 28.60

Company Description:
Bunge Limited is an integrated, global agribusiness and food
company operating in the farm-to-consumer food chain, which ranges
from raw materials, such as grains and fertilizers, to retail food
products, such as flour and margarine.  The company has primary
operations in North America, Brazil, Argentina and Europe and
worldwide distribution capabilities.  Bunge conducts its
operations in three divisions: agribusiness, fertilizer and food
products. The agribusiness division consists of three business
lines: grain origination, oilseed processing and international
marketing. The company's fertilizer division is comprised of
nutrients and retail operations. The food products division
consists of four business lines: edible oil products, wheat
milling and bakery products, soy ingredients and corn products.


Why we like it:
Investors weren't impressed when BG guided earnings estimates
lower in mid-September, from $0.85-0.90 to $0.75-0.80, a reduction
of 10 cents per share.  The disappointment was reflected in the
9/16 gap down from just above $30 to $28.50, followed by a
continued slid as low as $27.  Following that big move, BG
consolidated for nearly 6 weeks in the $27.25-28.50 area until the
company reported its actual earnings on Thursday morning.  The
actual results came in at 88 cents, or 3 cents above the bottom of
the original guidance.  While that was good for an initial bounce,
traders seem to have re-evaluated overnight and decided to sell
the stock on Friday.  Whether it is due to a lack of confidence in
management to actually do their job, or a perception that
expectations are being managed, investors seem to have made up
their mind to sell the stock.  Friday's selling volume came in at
nearly triple the ADV and only a short-covering bounce at the end
of the day saved it from closing at its intraday low.

Resistance now looks quite solid in the $28.25-28.50 area, with
support at $27 beginning to weaken.  Remember that big downward
move on 9/16?  The intraday low was $27.00, and last Friday's
intraday low was $26.91, so support does seem to be cracking.
With the breakdown already underway, we're content to enter either
on a failed rebound below $28.50 or on a break below $26.80
support.  There may be some mild support found near $26, but our
target of $24 looks quite achievable.  Place stops initially at
$29, just above the intraday high from 9/16.

Why This is our Play of the Day
It looked like an ideal setup with BG coming to rest last Friday
just above major support.  This morning's weak open in the face of
the broad market strength looked like the recipe for a breakdown,
but alas it wasn't to be.  The bulls successfully defended
Friday's $26.91 intraday low and BG ended with a tiny fractional
loss on the day.  For such a tiny move, why are we listing it as
our Play of the Day?  Because the setup for a breakdown move looks
just as good as it did on Friday.  The best entry strategy still
looks like a breakdown under $26.80.  More aggressive traders can
still look for a failed rebound under $28.50 for a better entry
point.  Once support gives way, we're looking for a fairly swift
decline to $26 where the first hint of a rebound should appear.
The strength of that rebound will provide insight as to the
likelihood of a continuation down to our $24 target.


Annotated Chart of BG:




Picked on November 2nd at $27.10
Change since picked        +0.00
Earnings Date            1/29/04 (unconfirmed)
Average Daily Volume =     451 K




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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

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Copyright ) 2003  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter                  Monday 11-03-2003
                                                   section 2 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
=================================================================

Closed Play:  JCOM

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)


==================================================================
High Risk/High Reward plays
==================================================================

CLOSED PLAYS
------------

  Closed Bearish Play
  -------------------

j2 Global Comms - JCOM - cls: 31.16 chng: +2.78 stop: 31.75

So much for that classic breakdown!  JCOM gave us the breakdown
under $29 last Friday and then the bear-trap snapped shut this
morning with the stock gapping higher and tacking on nearly 10%
by the end of the day.  All it took to motivate the bulls into
today's euphoric ramp was the company reaffirming their outlook
for Q4 and FY04.  While the stock did close back under our stop,
we can't ignore that the early bullish move had JCOM trading well
above that point, leaving us no choice but to drop it.  And who
would want to hold onto it after such a strong reversal of last
Friday's breakdown.  The point is clear that the bulls haven't
lost their nerve yet.

Picked on October 29th at $30.00
Change since picked        +1.16
Earnings Date            1/19/04 (unconfirmed)
Average Daily Volume =  1.73 mln







==================================================================
  Trading Ideas
==================

CEO     Cnooc Ltd (ADR)            39.60    +1.95
ITU     Banco Itau S A (ADR)       42.24    +1.39
ZION    Zions Bancorporation       62.21    +0.91
FTN     First Tennessee Natl Cp    46.60    +1.24


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

PMCS    PMC-Sierra Inc             19.99    +1.82
VNT     Compania Aanonima Nac Tel  16.18    +1.22
FMT     Fremont General Corp       18.10    +1.47
WFII    Wireless Facilities Inc    18.44    +1.29
AKAM    Akamai Technologies Inc     9.31    +1.41


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

EXC     Exelon Corporation         65.05    +1.60
SNP     China Petro & Chem (ADS)   34.15    +1.36
LEH     Lehman Bros Hldg Inc       74.05    +2.05
K       Kellogg Co                 34.90    +1.77
AMX     America Movil              25.00    +1.20
WIT     Wipro Ltd (ADS)            39.20    +2.90
MBT     Mobile Telsys Ojsc (ADS)   82.05    +4.56


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

CG      Carolina Group             24.80    -0.25
GALN    Galen Holdings Plc (ADR)   49.79    -0.76
MOH     Molina Healthcare Inc      26.00    -1.90


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

AET     Aetna Inc New              55.99    -1.42
CNQ     Canadian Natural Res Ltd   41.30    -1.21
JBLU    Jetblue Airways Corp       54.26    -3.41
CVH     Coventry Health Care Inc   53.64    -1.11
ELBO    Electronics Boutique Hld   23.25    -5.17



=================================================================
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 2003  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.

DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

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