PremierInvestor.net Newsletter Tuesday 11-11-2003 section 1 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 ================================================================= In section one: Market Wrap: Pause to Reflect Watch List: CMCSK, RSAS, BBY, JDAS and more! Market Sentiment: Markets Slump Again ================================================================= MARKET WRAP (view in courier font for table alignment) ================================================================= 11-11-2003 High Low Volume Advance/Decline DJIA 9737.79 - 18.70 9761.20 9719.05 1.43 bln 1291/1892 NASDAQ 1930.75 - 10.90 1944.01 1923.50 1.63 bln 1088/2051 S&P 100 518.66 - 0.11 519.58 517.11 Totals 2379/3943 S&P 500 1046.57 - 0.54 1048.23 1043.46 W5000 10194.56 - 20.40 10221.12 10167.22 RUS 2000 528.57 - 4.64 533.42 526.76 DJ TRANS 2927.24 - 52.10 2963.76 2935.28 VIX 17.54 - 0.08 18.53 17.50 VXO (VIX-O)18.00 + 0.05 18.53 17.86 VXN 26.55 + 0.06 26.99 26.54 Total Volume 3,294M Total UpVol 1,116M Total DnVol 2,099M 52wk Highs 281 52wk Lows 25 TRIN 1.11 NAZTRIN 0.96 PUT/CALL 0.96 ================================================================= =========== Market Wrap =========== Pause to Reflect While the country paused to observe Veterans Day the markets paused to reflect on direction. Volume for the last two days has been very low with Monday failing to break three billion shares across all markets. There were no material economic reports and no material news. However, there was a material change in the market internals. Dow Chart Nasdaq Chart The only economic report was the weekly Chain Store Sales and the number showed a significant +1.2% bounce. This was the largest gain since +1.3% on Oct-4th but barely enough to recover the drain over the last four weeks. The cold weather finally appeared and drove shoppers to the stores to buy more seasonal clothing. However, the Bank of Tokyo lowered their estimates for the month to +4% from +5% based on the overall trend. Retailers are still expecting a strong holiday season but price competition is going to be tough. The price wars online have already started and profits are going to be hard to capture. Since the markets were not moved by the numbers there was another factor at work. The mutual fund cloud appears to be growing and that worry kept the normally bullish holiday in the negative column. According to Putman they suffered -$14 billion in mutual fund outflows last week. This was more than the -$10 billion previously reported and in addition to -$9 billion in withdrawals on other managed assets. This is a major hit to Putman in the range of about -5% of their fund assets. Typically some funds keep 2% to 3% of their assets in cash for redemptions and buying opportunities. This was about twice their cash held in reserve. Alliance funds also said they saw -$14 billion in withdrawals last week. A Morningstar spokesman said they had talked to several fund managers at Putman and they confirmed they were selling stock to raise cash. How they were selling differed among managers. Some were selling a "slice" or a percentage of everything in the portfolio and others were just liquidating stocks they no longer wished to hold. Since Putman is generally a large cap fund family you only need to look at GE or MSFT to see some selling pressure. Contrasting them with MMM and INTC you can see that the weaker of those are being dumped while the stronger earners are fairing better. It is not that GE and MSFT do not produce strong profits but they both had some qualifications in their earnings that caused analysts to expect less growth in the future. Plus, they are the biggest and most liquid large caps. Funds can get out easy and not ripple the market. Also, funds seeing a cash drain could continue to sell into any bounce to raise additional cash for future redemptions and to replenish their normal cash reserves. Adding to the fund problems were comments today that the founder of the Strong funds could be subject to criminal prosecution for market timing his own funds for friends and family. He created an additional $600,000 profits from the trades and has volunteered to repay anyone that was harmed by the process. What is harming investors is the constant stream of bad news about these funds under fire. The Gallup organization ran a poll in the last week of October and before the latest volley of bad news. They found that 51% of investors with money in funds would probably withdraw their money from any fund with problems. The bright side of this equation is these investors are pure stock investors and that money will be put back to work in other funds relatively quickly. Funds benefiting from the switch are Fidelity and Vanguard which have not been charged. Conflicting fund flow data also appeared today. AMG Data said that $24 billion flowed into funds in October. This was more than $17 billion that TrimTabs had estimated just last week. We have seen this in the past as each firm calculates the numbers differently. The numbers for November are sure to be even more confusing as investors shuffle record amounts of money into different funds. Another worry is that funds under attack or expected to come under attack could start looking at locking in their gains to produce strong year end ads in order to rebuild their image. This could produce selling into any bounce to try and maximize gains. Other worries are slipping through the markets. There is a persistent rumor that Greenspan could make a preemptive strike and raise rates 25 points at the December meeting. The move while miniscule would signal an end to the neutral bias and show that the Fed was ready to attack the coming inflation flu. Personally I think this is pure bull and not worth a honorable mention but it is making the rounds. The reason I do not expect any Fed action other than maybe a bias change or the removal of the "considerable period" clause from the statement is due to the lack of a recovery. Yes, I said it but it is not what you think. The official estimates for the 4Q GDP are hitting the wires again and they range from +3.9% to +4.0%. But the estimates for the 2004 GDP have been raised to +4.2%. You were expecting more? Forrester Research announced this week that IT spending for all of 2004 is only expected to grow +4%. They said they expect companies to remain cautious until the recovery is well under way. Once the rate hikes start there is likely to be a period of consolidation and hesitation until we see if the hikes kill the recovery. More bull since all recoveries are accompanied by higher rates but that is another story. What will slow the markets is ten year rates over 4.75%. This is the level where conservative funds can feel comfortable switching from risky stocks to safe bonds. The problem it appears is the validity of the GDP numbers for the 3Q. There are different trains of thought on why the GDP numbers were so high. The general consensus was pumping of autos at little or no profit to keep the pipelines moving and the continued activity in the housing sector. I suspect it may be a little more basic than that. If you remember the Retail Sales for September were +5.9% and everybody was bragging about how fast the consumer was ramping up. This followed a hot August pace at +5.1%. Most people do not realize that merchandise for the coming holidays must be ordered 3-6 months or even more in advance. The drop dead order date for most merchandise is the end of August or early September. With the lowest inventory to sales levels on record and a strong ramp in August and September the urge to order holiday merchandise was probably strong. How much of this holiday ordering impacted the 3Q GDP is unknown. What is known is that any holiday orders that contributed to the +7.2% GDP surge are now history. That merchandise is either in stores or will be in stores over the next week to take advantage of the Thanksgiving shopping spree. This means there could be a pause in orders and production for consumer goods until retailers see how the holiday season progresses. It could also mean that the November jobs report could show a loss of jobs once again. The true test will be the 4Q-GDP, which is not announced until late January. We also need to see if the job growth sticks or whether that was a one time bounce. We will see the Nov. Jobs on Dec-5th. With the next Fed meeting not until Dec-9th it is far too soon to start worrying about a preemptive rate hike. Anybody that thinks they know Greenspan's next move in advance is on drugs. While he will want to be on the lookout for the inflation flu it is not even a remote risk at present. He can do more to further the recovery by sitting on his hands than by trying to micromanage the bounce. He is widely credited with killing the last bubble so I doubt he wants to step in front of the canons again so soon. Despite the minor sell off of the last three days the market sentiment is still very bullish. Only today did the internals begin to show weakness but on holiday volume it would be tough to draw any conclusions. About the only fly in the long term ointment is the vast discrepancy between insider buying and insider selling. According to Thompson Financial there was only $52 million dollars of inside buying in October. This is not even a drop in the bucket much less bullish confirmation of the future economic outlook. They also show that insider selling was exploding with $59 of insider selling for every $1 of insider buying. This is the WORST ratio since records have been kept. (15 years) This is a long term sentiment indicator that has proven accurate in the past. A short-term indicator is the number of new highs/lows. The number of new highs topped out in the recent rally at +1172 on Nov-3rd. They eased off slightly and then rebounded to 1066 on Friday. Monday there were 600 and today 281. While this is a significant drop both Monday and Tuesday were very low volume days and are not statistically valid. Should the volume pick up on Wednesday as expected and the numbers continue to decline then it would be very negative. The VXO spent most of the day over 18 due to three days of light selling but fell back under 18 just before the close. Despite the selling there is still no fear in the markets. Earnings are still in progress with over 200 late reporters due out in the next three days. JCP fell today after announcing a -56% drop in earnings due to losses at its Eckerd Drug Store chain. ANF dropped -2.5% after the bell after announcing a drop in same store sales of -9% and warned that the 4Q sales could be flat. They guided analysts to 93 cents for the 4Q and that was less than the $1.00 that was expected. AMAT announces on Wednesday and WMT and Dell on Thursday. CSCO gave cautious comments at their shareholder meeting and said that customers remain extremely conservative despite the apparent recovery in progress. Chambers said this was the least "risk taking" environment he had ever seen. He also said he was only cautiously optimistic that the telecommunications sector was rebounding. Not a very cheerful overall outlook. Adding to the gloom was a serious drop, -303 points, in the Nikkei last night to punctuate a -1000 point drop in the last three weeks. To recap all the above we have verified selling in mutual funds, unverified rumors of a preemptive rate hike, heavy insider selling and disappointing results by JCP and ANF. CSCO appeared to be backing up slightly and the Nikkei is imploding. Despite all the bad news the Dow is only down -115 points in the last three sessions. The Nasdaq is down -46 points. This is hardly a sell off or even light profit taking. Now that the jobs report has passed traders appear to be just taking a breather. The two-day holiday and that is what it was if you look at the volume, was a chance for everyone to step back and look at the picture and decide what they are going to do over the next six weeks. Six weeks! That is all that is left in this year. Do they keep them and hope for the rally to continue or do they sell them and chalk up huge gains. Based on the minimal reaction to nearly $30 billion in fund withdrawals I would say the plan was to hold and hope for more. The next three days are going to be critical. Monday and Tuesday were throwaways due to the holiday. Friday was also in that category because of the job shock. Now all the news has been digested and the direction we take between now and Friday could be our direction for the rest of the year. The lack of material selling could be a leading indicator but there are very strong opinions on both sides. Watch the internals the rest of the week and hope for strong volume. The bulls need for the new highs to break 1000 again and the advance/decline volume needs to be better than 3:1 in favor of advancers. If we get that then we might get another chance at Dow 10,000. If we get 3:1 down volume on more than four billion shares then it may be time to step aside. Enter Very Passively, Exit Very Aggressively! Jim Brown ================================================================== WATCH LIST ================================================================== The PremierInvestor.net watch list is not designed to be read as full fledged stock picks. Rather we would prefer to offer it as an extra tool in today's investor toolbox. Think of it as a radar screen with your own radar operator pointing out interesting developments, technical patterns or potential plays that you may or may not have seen on your own. Due to time constraints we do glance at the news but rarely do we have time to fully read pertinent news stories, due background research and other necessary screens that investors should do before making a decision. A common exercise is to read the entry, glance at the sector and other stocks in that industry and then compare what's happening in the stock to what's happening in the broader market indices. We hope you enjoy the Watch List and that it proves to be a useful tool for your own trading success. STOCKS WORTH WATCHING --------------------------------- Comcast Corp. - CMCSK - close: 30.40 change: -0.87 WHAT TO WATCH: Today's news of a retail alliance between CMCSK and Staples did little for the bulls, as the stock went sharply the other way, losing 2.78% and coming to rest right at the 50- dma. Today's break of the ascending trendline does not bode well and could be the beginning of a move down to the $27-28 area. Ideal entries will come from a failed rebound near $31, although momentum entries below the 50-dma could work as well. --- RSA Security, Inc. - RSAS - close: 14.13 change: +1.21 WHAT TO WATCH: Since breaking down in mid-October following disappointment over earnings, shares of RSAS have been consolidating between $13-14. That range broke today, with the stock soaring nearly 10% higher on volume that more than doubled the ADV. It is notable that the intraday high was stopped at the confluence of the 30-dma and 50-dma. Upside continuation to the bottom of the gap just over $15 looks like a high-odds bet, although a better entry may come on a pullback and rebound from the $13.60-13.80 area. Should the stock really be getting started on a renewed bullish move, the $16.50 looks reasonable as a target. --- Best Buy Company - BBY - close: 59.50 change: +0.72 WHAT TO WATCH: With the middle of November, attention is shifting to the holiday season and BBY is poised to benefit nicely if consumers continue to be in a spending mood. The stock has been holding very near its all-time highs for the past couple weeks and looks poised for a breakout. Use a trigger at $60 and look for upside continuation to at least the $65 area. --- JDA Software Group - JDAS - close: 20.22 change: -0.36 WHAT TO WATCH: Technical setups don't get much better for the bears. JDAS had a huge gap up following its earnings report and then the stock stalled out near $22. This week, the stock has really tipped over and it probed below $20 and into the gap and looks poised for a real breakdown. Use a trigger of $19.80, just below today's low and use a target of $17.50, at the bottom of the gap. =================== On the RADAR Screen =================== MALL $11.95 - Ending right at critical resistance yesterday, shares of MALL took to the skies today with another nearly 10% advance. Normally we'd ignore a stock after such a large move, but this was such a strong break through major resistance that it just might be worth a high risk play. We wouldn't advocate chasing it higher, but a pullback and rebound from $11.00-11.25 looks playable for upside continuation to the next major resistance near $14. SY $19.83 - Can you say breakout? That's what SY delivered on Tuesday, with a nearly 7% advance on huge volume. We're not wild about chasing it higher, but a pullback to confirm support at old resistance near $19 looks like a great opportunity for entry. MGAM $44.85 - In the mood for a chase? MGAM has been on fire the past 3 days and judging by the huge volume, it isn't likely to slow down anytime soon. This week's breakout has MGAM setting new all-time highs and looks like a great momentum run in progress. Only very aggressive traders should consider chasing it higher though. The better approach would be to wait for a pullback and rebound from the $42 area. =============================== Market Sentiment =============================== Markets Slump Again - J. Brown It was a slow day on Wall Street with the bond markets closed for Veteran's Day but that didn't stop the current trend of profit taking from etching another decline in both the Dow and the NASDAQ averages. The morning got started with some earnings from several retailers. Overall the news was positive and Merrill Lynch upgraded half a dozen stocks to a "buy" up from "neutral". It was enough to push the RLX retail index into the green but this was one of the few sectors that managed to close positive. Drugs, Gold and chips saw meager bounces while the rest of the markets drifted lower. There was heavy selling in both the biotech and airlines sectors for back-to-back sessions. "Heavy" being a relative term for the airline index, which tends to move slowly, although it did close under its simple 50-dma. Meanwhile crude oil futures closed above $31, which may explain some of the weakness in airlines. Without any big economic news analysts and pundits turned to the interest rate discussion again. The argument takes various forms from when the FOMC may have to raise rates again (from Q2 of 2004 to early 2005) to a healthy economy naturally producing higher interest rates on its own via the bond market. Whatever your personal view it seems like idle chatter today as stocks experience some overdue selling and potentially setting up for the next leg higher. Yet somehow I don't think the selling is quite done yet. In the meantime the rest of Wall Street is eyeing the string of economic reports set to come out on Thursday and Friday of this week. As if we needed any more proof that the economy has finally turned the corner and on its way back to recovering. Friday is the big day with the PPI, Retail Sales, Production and Utilization and Michigan Sentiment numbers. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 9903 52-week Low : 7197 Current : 9737 Moving Averages: (Simple) 10-dma: 9804 50-dma: 9624 200-dma: 8881 S&P 500 ($SPX) 52-week High: 1062 52-week Low : 768 Current : 1046 Moving Averages: (Simple) 10-dma: 1051 50-dma: 1033 200-dma: 953 Nasdaq-100 ($NDX) 52-week High: 1453 52-week Low : 795 Current : 1409 Moving Averages: (Simple) 10-dma: 1426 50-dma: 1385 200-dma: 1203 ----------------------------------------------------------------- The recent market weakness has pushed the volatility indices higher but we're still near multi-year lows. CBOE Market Volatility Index (VIX) = 17.54 -0.08 CBOE Mkt Volatility old VIX (VXO) = 18.00 +0.05 Nasdaq Volatility Index (VXN) = 26.55 +0.06 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.96 537,257 514,414 Equity Only 0.73 447,950 326,768 OEX 0.64 24,273 15,499 QQQ 4.68 14,388 67,297 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 73.4 + 0 Bull Confirmed NASDAQ-100 71.0 - 4 Bear Confirmed Dow Indust. 83.3 + 0 Bull Correction S&P 500 80.6 + 0 Bull Confirmed S&P 100 80.0 + 0 Bull Correction Bullish percent measures the number of stocks in an index currently trading on a buy signal on their point and figure chart. Readings above 70 are considered overbought, and readings below 30 are considered oversold. Bull Confirmed - Aggressively long Bull Alert - Cautiously long Bull Correction - Pause or pullback in upward trend Bear Alert - Take defensive action if long Bear Confirmed - High risk if long, good conditions for shorting Bear Correction - Pause or rebound in downtrend ----------------------------------------------------------------- 5-dma: 1.19 10-dma: 1.03 21-dma: 1.08 55-dma: 1.10 Extreme readings above 1.5 are bullish, and readings below .85 are bearish. These signals don't occur often and tend be early, but when they do, they can signal significant market turning points. ----------------------------------------------------------------- Market Internals -NYSE- -NASDAQ- Advancers 1086 1073 Decliners 1713 1974 New Highs 195 237 New Lows 19 22 Up Volume 499M 546M Down Vol. 871M 1053M Total Vol. 1397M 1618M M = millions ----------------------------------------------------------------- Commitments Of Traders Report: 11/04/03 Weekly COT report discloses positions held by small specs and commercial traders of index futures contracts at the Chicago Mercantile Exchange and Chicago Board of Trade. COT data can be found at www.cftc.gov. Small specs are the general trading public with commercials being financial institutions. Commercials are historically on the correct side of future trend changes while small specs tend to be wrong. S&P 500 It's been a long week since last we looked at the COT data and we're still not seeing any big moves by the Commercial traders. The same holds true for small traders but they did reduce some of their short positions. Commercials Long Short Net % Of OI 10/14/03 391,972 410,299 (18,327) (2.3%) 10/21/03 394,176 411,246 (17,070) (2.1%) 10/28/03 391,596 412,498 (20,902) (2.6%) 11/04/03 391,079 415,136 (24,057) (3.0%) Most bearish reading of the year: (111,956) - 3/06/02 Most bullish reading of the year: 18,486 - 6/17/03 Small Traders Long Short Net % of OI 10/14/03 133,940 86,418 47,522 21.6% 10/21/03 136,643 88,290 48,343 21.5% 10/28/03 137,791 76,791 61,000 28.4% 11/04/03 137,829 78,206 59,623 27.6% Most bearish reading of the year: (1,657)- 5/27/03 Most bullish reading of the year: 114,510 - 3/26/02 E-MINI S&P 500 Hmm... we are seeing some movement in the e-minis. Commercials have upped their short positions by 24K contracts. Small Traders may have gotten the hint too. Short interest is up but the real change is the 45K drop in long contracts. Commercials Long Short Net % Of OI 10/14/03 221,897 233,066 (11,169) ( 2.5%) 10/21/03 226,985 236,906 ( 9,921) ( 2.2%) 10/28/03 220,171 260,644 (40,473) ( 8.4%) 11/04/03 242,409 270,785 (28,376) ( 5.5%) Most bearish reading of the year: (354,835) - 06/17/03 Most bullish reading of the year: 133,299 - 09/02/03 Small Traders Long Short Net % of OI 10/14/03 161,208 59,213 101,995 46.3% 10/21/03 168,236 56,564 111,672 49.7% 10/28/03 123,569 59,742 63,827 34.8% 11/04/03 135,525 63,006 72,519 36.5% Most bearish reading of the year: (77,385) - 09/02/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 This time it's the Small Traders making a move in the NDX futures. Long contracts are up nearly a third to more than 21K. Commercials are still comatose but the trend is growing slowly more bearish with a small bump in short positions. Commercials Long Short Net % of OI 10/14/03 34,639 41,880 ( 7,241) ( 9.5%) 10/21/03 36,314 43,305 ( 6,991) ( 8.8%) 10/28/03 36,168 46,272 (10,104) (12.3%) 11/04/03 34,159 48,293 (14,134) (17.1%) Most bearish reading of the year: (21,858) - 08/26/03 Most bullish reading of the year: 9,068 - 06/11/02 Small Traders Long Short Net % of OI 10/14/03 16,822 9,046 7,776 30.1% 10/21/03 16,917 9,750 7,167 26.9% 10/28/03 21,640 8,830 12,810 42.0% 11/04/03 24,132 9,703 14,429 42.6% Most bearish reading of the year: (10,769) - 06/11/02 Most bullish reading of the year: 19,088 - 01/21/02 DOW JONES INDUSTRIAL There is very little change here for the Small Trader but Commercial Traders have upped both their longs and their shorts. Commercials Long Short Net % of OI 10/14/03 16,595 9,433 7,162 27.5% 10/21/03 16,876 9,037 7,839 30.3% 10/28/03 20,504 11,366 9,138 28.7% 11/04/03 21,756 11,903 9,853 29.3% Most bearish reading of the year: (8,322) - 1/16/01 Most bullish reading of the year: 15,135 - 10/16/01 Small Traders Long Short Net % of OI 10/14/03 6,427 8,495 (2,068) (13.9%) 10/21/03 5,392 8,842 (3,450) (23.1%) 10/28/03 5,295 8,864 (3,569) (25.2%) 11/04/03 5,099 9,160 (4,061) (28.5%) Most bearish reading of the year: (8,777) - 10/12/01 Most bullish reading of the year: 8,523 - 8/26/03 ----------------------------------------------------------------- ================================================================= 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. 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PremierInvestor.net Newsletter Tuesday 11-11-2003 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 ================================================================= Play of the Day: One Last Chance Stop Loss Adjustments: FLML Stock Split Announcements: MRTN 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) ================================================================= Play-of-the-Day ( bearish ) =============== Maxtor Corp. - MXO - close: 10.87 change: -0.44 stop: 12.98 Company Description: Maxtor Corporation is a provider of hard disk drives for a variety of applications, including desktop computers, Intel-based servers, near-line storage systems and consumer electronics. The company's desktop products are marketed under the Fireball, DiamondMax and MaXLine brand names, and consist of 3.5-inch hard disk drives with storage capacities ranging from 20 to 300 gigabytes per platter and speeds of 5,400 RPM (revolutions per minute) and 7,200 RPM. The company also provides a line of high-end 3.5-inch hard disk drives for use in high-performance, storage-intensive applications such as workstations, enterprise servers and storage subsystems. These Intel-based server products are marketed under the Atlas brand name and provide storage capacities of 18.4 to 146.9 gigabytes at speeds of 10,000 RPM and 15,000 RPM. Why we like it: Despite the mild losses in the overall market on Friday, shares of MXO got clocked for a nearly 11% loss on volume that more than doubled the ADV. Interestingly, there was no company-specific or sector news to explain the severe drop. Nonetheless, the drop created some serious problems for the bulls and has the bears waking from hibernation. The first sign of trouble was the drop through the 50-dma ($12.97) and this is the first time the stock has been below that measure since early May. Next, MXO fell through the 10/23 low ($12.40) and finally, the trade at $12 created a fresh PnF Sell signal (the first in a year), with a tentative bearish price target of $9. Looking at the daily chart, the $9 level certainly does seem to be important, as it is the site of strong support, which will be reinforced by the rising 200-dma (currently $8.57). After such a large one-day drop, picking the right entry point is a real challenge. There's too much risk in chasing the stock lower, especially with price closing below the lower Bollinger band ($12.24). So we're going to take a different approach and use somewhat of a different trigger for the play. We're looking for a bounce early next week, similar to what was seen after the plunge on 10/22. Since this is the second big downdraft in just a few weeks, we're expecting the bounce to be weaker this time around. With the understanding that if MXO just continues to plunge, we'll miss out on the play, we're using a trigger on the expected bounce. When MXO bounces up to touch the 50-dma, there ought to be plenty of supply appearing, so we'll use a $13.00 trigger on the play. Aggressive traders can look to enter on a trade at that level, while the more conservative approach will be to wait for rejection from that price level. There is likely to be some support found first at $11.75, then $11 on the way to our $10 target. We might be pleasantly surprised by a continuation down towards the 200-dma, but we'll happily settle for a 20% move from Friday's closing price and a 30% move from our trigger. Once triggered, we'll use an initial stop of $14.25, which is safely above both last week's highs and the 20-dma ($14.02). Why This is our Play of the Day There's only one thing better than having a play move sharply in your favor and that is having the move take place AFTER you've gotten an opportunity for a solid entry. We got the first one with our MXO play, catching sight of the stock after Friday's sharp slide. Unfortunately, we gambled on a dead-cat bounce to provide entry and it never arrived. Since then, MXO has shed another 10.5% and is nearing initial support at $10. We're going to take one more shot at getting an entry on a failed rebound, but we're still not interested in chasing the stock lower. Look for a bounce to stall out in the $12.00-12.25 area to trigger the play to live status and we'll still target $10 to the downside. If MXO hits $10 before delivering the entry we're looking for, then we'll sadly drop it as a missed opportunity. Note that our stop has now moved down to $12.98, just above the 50-dma. Annotated Chart of MXO: Picked on November 9th at $12.15 Change since picked -1.28 Earnings Date 1/20/04 (unconfirmed) Average Daily Volume = 3.95 mln ================================================================= Stop Loss Adjustments ================================================================= FLML - short Adjust from $27.50 down to $26.25 ================================================================= Stock Split Announcements ================================================================= ANNOUNCEMENT ------------ MRTN announces its second stock split of the year Before today's opening bell, Marten Transport, Ltd. (NASDAQ:MRTN) announced that its Board of Directors has approved a 3-for-2 stock split of its common shares. The payable date for the stock split is set for December 5th, 2003 to shareholders on record November 21st. After the stock split MRTN will have approximately 13.7 million shares outstanding. This would be MRTN's 2nd stock split this year, and third stock split since being listed on the Nasdaq in 1986. About the company: Marten Transport, Ltd., with headquarters in Mondovi, Wis., strives to be the premier supplier of time- and temperature- sensitive truckload motor carrier services to customers nationwide. At the end of the third quarter, Marten operated a fleet of 2,193 tractors and 2,800 trailers, all 53-foot trailers. The company serves customers with more demanding delivery deadlines or those who ship products requiring modern temperature- controlled trailers to protect goods. The company's common stock is traded on The Nasdaq Stock Market under the symbol MRTN. (Source: Company Press Release) ================== 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 XL XL Capital Ltd 72.63 +2.06 DF Dean Foods 32.08 +0.73 NMGa Neiman Marcus 51.65 +0.98 MALL PC Mall Inc 11.95 +1.05 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- SY Sybase Inc 19.86 +1.33 SGMS Scientific Games 14.90 +1.50 RSAS RSA Security 14.13 +1.21 OO Oakley Inc 12.75 +1.83 TOO Too Inc 19.56 +1.26 CSTR Coinstar Inc 17.22 +1.70 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- MAR Marriott Intl Inc 46.41 +1.10 FD Federated Dept Stores 50.11 +1.61 TIF Tiffany & Co 48.78 +1.58 BJ BJ's Wholesale 27.05 +1.15 ZLC Zale Corp 55.02 +1.77 MGAM Multimedia Games 44.85 +1.87 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- DISH Echostar Communications 32.05 -4.75 INFY Infosys Technologies 82.36 -2.62 MYL Mylan Labs 21.85 -2.15 HAR Harman Intl 119.00 -6.20 PDX Pediatrix Medical 50.16 -3.52 CYD China Yuchai Intl Ltd 26.73 -5.75 ERES eResearch Tech 37.45 -1.75 USNA Usuana Health Science 32.05 -6.35 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- WLS William Lyon Homes 61.37 -1.06 JBSS John Sanfilippo & Son 36.17 -3.23 CRDN Ceradyne Inc 39.81 -3.94 ================================================================= 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. 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