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Daily Newsletter, Tuesday, 11/25/2003

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PremierInvestor.net Newsletter                 Tuesday 11-25-2003
                                                   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:      Bulls Back In Control
Watch List:       JCOM, IR, LEA, WYE and more!
Market Sentiment: Markets Hold Their Gains


=================================================================
MARKET WRAP  (view in courier font for table alignment)
=================================================================
      11-25-2003           High     Low     Volume Advance/Decline
DJIA     9763.94 + 16.20  9795.21  9723.79 1.65 bln   2112/1099
NASDAQ   1943.04 -  4.10  1956.20  1942.02 1.81 bln   1918/1358
S&P 100   519.54 +  0.23   521.74   517.97   Totals   4030/2457
S&P 500  1053.89 +  1.81  1058.05  1049.31
W5000   10300.96 + 29.20 10336.42 10250.62
RUS 2000  543.18 +  3.67   544.33   539.17
DJ TRANS 2923.32 + 24.30  2931.87  2888.99
VIX        16.71 -  0.73    17.87    16.40
VXO (VIX-O)16.29 -  0.86    17.25    15.96
VXN        25.99 -  1.08    27.33    25.55
Total Volume 3,722M
Total UpVol  2,327M
Total DnVol  1,263M
52wk Highs  695
52wk Lows    25
TRIN       0.87
NAZTRIN    1.16
PUT/CALL   0.63
=================================================================

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

Bulls Back In Control

Chalk up another bullish day for the broader markets and one
more day within striking range of the 52-week highs. While
the Nasdaq did finish in negative territory due to a sell
program at the close it was still a bullish day to retain
most of the gains from Monday. Using the broader averages
the markets have stretched their winning streak into two
days and there are two historically bullish days still ahead.

Dow Chart


Nasdaq Chart



The economic reports for the day began with another blowout
GDP estimate which was revised up to +8.2% for the 3Q. The
estimate was for a revision to +8% so traders were pleased.
The futures spiked to morning highs on the news but the
news was quickly sold. That high lasted until the 3:PM
bounce as traders consolidated gains from yesterday. The
GDP number showed a growth rate at a 20-year high and it
is not surprising that there was a murmur of disbelief on
the trading floor. While the numbers indicate a veritable
explosion in the economy the anecdotal evidence from those
companies that just reported earnings would suggest that
the real economy grew at a much slower rate.

The majority of the gains in today's number were related to
a better than expected gain in inventory levels to -$14.1
billion from -$25.8 billion. Corporate profits rose +11.8%.
The main supporter of the economy is still the consumer and
Q3 saw a jump of +26.5% in durable-goods consumption that
was funded by the tax rebates. This consisted largely of
strong auto sales. We already know that auto sales have
slacked off in the 4Q as well as retail sales. The good
news is that business investment is picking up and we
could be seeing the rotation from consumer to business
for economic support. The +11.8% jump in corporate profits
was the strongest jump since 1985. The biggest problem
with the upgrade in the Q3-GDP is the ratcheting up of
the 4Q expectations. With numbers hitting 20 year highs
for Q3 almost any number for Q4 is going to be a let down.

Consumers are still buying the economic recovery story with
the Consumer Sentiment number jumping to 91.7 for November
from 81.7 in October. This was well over the estimates for
a gain to 85.0. This really caught traders off guard and
they did not know how to react to it. The initial spike
ran into strong selling resistance just like earlier GDP.
This was the highest sentiment reading since Sept-2002.
Current conditions jumped from 67.7 to 80.1 but the number
of consumers planning on buying a new car or home shrank.
Overall the sentiment number was very positive considering
the growing terror threats and the worsening conditions in
Iraq. Existing home sales dropped -5% in October to 6.35
million units on an annual basis. While this was a big drop
it was from a record breaking pace. The major factor was
the jump in interest rates. Homebuilders are still
predicting strong sales of new homes through 2005 so it
remains to be seen if this is the start of a new trend or
just a pause to survey the economic landscape.

Also adding to the positive attitude was another gain in
the NY-NAPM report to 227.3 from 226.4. While this was not
a huge jump it was the third consecutive gain. The gain in
the headline number was remarkable considering that the
manufacturing component which fell to 54.4 from 90.0 in
October. Current conditions also fell to 51.9 from 58.2.
The overall numbers may show continued expansion but there
were cracks in the foundation. This is what traders fear
the ISM will show next week.

They will not have to wait until next week to get a glimpse
of the current conditions. Because of the Thanksgiving
holiday the economic calendar for the rest of the week has
been accelerated into Wednesday. There are twelve major
reports on Wednesday morning.

7:00 Mortgage Applications
8:30 Jobless Claims
8:30 Consumer Comfort Index
8:30 Durable Goods
8:30 Personal Income
9:45 Consumer Sentiment
10:00 Chicago PMI
10:00 Help Wanted Index
10:00 New Home Sales
10:00 Monthly Mass Layoffs
10:30 ECRI Weekly Leading Index
12:00 Fed Beige Book

The mutual fund scandal chalked up another first today.
Regulators issued a death penalty sentence to Security
Trust Company for illegal trading. STC is a Phoenix based
trust bank and they let hedge funds trade as late as 9:PM
for the 4:PM price. The reason they received the death
sentence was the way they did it. They clearly knew it was
wrong and engineered a way to hide the trades as retirement
plan contributions. They allowed Canary Capital Partners
to trade in up to 400 mutual funds and generated profits
for Canary of over $85 million. They also worked a deal to
get a cut of the profits from Canary to handle the illegal
trades. Security Trust is a custodian for more than 2500
retirement plans with more than $13 billion in assets. The
regulators told them to close the doors by March 31st 2004,
which would give investors time to move to another firm.

Putman reported that investors withdrew $9 billion from
their firm last week and that was the biggest withdrawal
period so far. That brings the total withdrawals to over
$30 billion since Oct-31st. The next report will be on
Dec-1st. If the acceleration continues this could put
additional pressure on the market. The closing of Security
Trust may create additional fear among investors that they
could get caught in a fund in trouble and lose money. While
this is extremely remote investor psychological sentiment
is very fragile. While most are not old enough to remember
runs on banks they have repeatedly heard horror stories
now more fiction than fact about how investors were wiped
out. This could accelerate the run on mutual funds now in
trouble with regulators. While there is no shortage of
money for funds it is the rotation that could hurt stocks.
There is definitely plenty of money available to float the
markets. According to ICI the total inflows year to date
were $123 billion compared to net outflows at the same
period in 2002 of -$26 billion. Small wonder the market
is near its highs again.

SSB cut chip stocks and chip makers yesterday based on
valuation claiming they were up +92% year to date. NVLS
countered that over valuation with their earnings claiming
that their 4Q bookings were up +25% and well above their
prior +5% to +10% estimates. They claimed that the
recovery was for real and not a head fake. Still, the
Nasdaq struggled today and then led the sell off at the
close.

The Dow opened positive on the GDP news but quickly fell
into negative territory. It ran back into positive territory
on the Consumer Sentiment news but was immediately hit with
selling and again fell back into negative territory. The
buyers stepped in once again and managed to break the 9750
resistance again before lunch but could not hold it. Not
until 2:PM did the Dow manage to creep over that strong
resistance level and make an assault into the close. A buy
program coupled with some short covering powered the Dow
to 9795 and only a handful of points away from 9800 but
the bulls could not hold it. The Nasdaq followed the same
pattern around 1950 resistance and managed to touch 1956
before the sell trigger was pulled.

That sell trigger was the VXO. (old VIX) In the Market
Monitor we had been watching the VXO slide all day as
the bullish internals built to the afternoon climax. We
had been betting that the VXO could break to a new five
year low below 16.0 before the close. That happened at
exactly 3:35 PM. That is exactly when the sell program
was triggered that sent the averages plummeting before
the close. The Dow dropped -30 points from 9790 to 9760
and the Nasdaq from 1954 to 1942.

Now the question for tomorrow is why? Is there a deeper
problem confronting us or was it just a program driven
sell based on the extremely low levels of the VXO. Based
on the timing of the VXO tick I am pretty confident the
drop was a sell program triggered by the VXO at 16.00.
This is an extreme level of bullishness and one where
a sell off is almost guaranteed. It is the equivalent of
everyone on the Staten Island ferry not only standing on
the same side of the boat but leaning over the rail as
well.

The problem is what happens in the morning. There are
not typically any major program trades in the last 30
min of trading. This sets up the potential for another
volley at the open on Wednesday. Adding to the confusion
are the twelve economic reports at the open or shortly
thereafter. The day before Thanksgiving is typically
bullish the sentiment building up to this event was fairly
bullish as well. Internals were strong with 2:1 advancing
volume to declining volume and new 52-week highs nearing
700 again. We have had two days of strong internals and
that relief rally may be getting tired.

In my opinion the stage is set. On Sunday I told you to
expect a relief rally this week if there were no terror
events over the weekend. That rally was right on schedule.
I told you that the rebound would run into resistance
beginning around 9725 and we hit that level at 10:15 on
Monday and could not get above it until just before
Monday's close. We still struggled between 9725 and 9750
most of Tuesday. Now that we have broken out of that
range we are facing even stronger resistance at 9800-9820.

The major pressure on the markets last week was due to
the terror warnings. No attack over the weekend prompted
the relief rally. However, every piece of positive news
that spiked the market attracted strong selling pressure.
Tonight as I type this the airwaves are being bombarded
with warning after warning about a new terrorist threat
for the Thanksgiving period. They are talking about
chemical and biological threats being imminent and that
ties in with the Al-Queada boast that they are planning
an attack that will kill up to 100,000 Americans.

I could see a scenario where good economic news Wednesday
morning would spike the markets back to near the 9800
level and that bounce would attract some serious selling.
Mutual funds are still under pressure. There are strong
terror alerts on every channel. The markets are near their
highs and there is a long weekend ahead of us. With the
heaviest travel and shopping days of the year beginning
tomorrow there is a perceived amount of increased risk
for civilians whether it is real or not. We have been
fortunate that they have not chosen to strike again in
the U.S. but we all know the clock is ticking. While
the markets are normally bullish on either side of
Thanksgiving these are not normal times. They sold the
news today and I am betting they will sell it again
tomorrow.

Nothing fundamental has changed and until the economic
reports say so the markets should continue to trend up.
If we do see some cautionary profit taking on Wednesday
it should just be profit taking and not a change in the
trend. Institutional investors with huge profits are just
trying to get to the year end without taking a hit. As
long as the outlook remains overall positive we should
be ok. If we had any negative reports tomorrow I do not
think it would matter. They might help spark some profit
taking that would not have occurred on a positive report
but investors are optimistic. They will believe the first
couple of bad reports are just blips in an uptrend and
continue to buy the dips. So that leaves us with the
terror wild card again and this close to the highs it
could promote extra caution. I suggest you do the same.
Watch for a spike at the open on good news and snug up
your stops. Then sit back and relax and start thinking
about aunt Martha's turkey or who is going to win the
football game and let the markets take care of themselves.
Enjoy your Thanksgiving and we will start our diet next
week.

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
---------------------------------


j2 Global Communications - JCOM - close: 28.28 change: +2.39

WHAT TO WATCH: It wasn't that long ago that we were playing JCOM
to the downside, but over the past couple weeks the stock has
been building a nice base just above strong support at $25.
Today's 9% rebound feels a bit too big to chase higher, but it
does look encouraging to see the stock finally break above its 6-
week descending trendline.  A dip and rebound from above the 10-
dma should make for a solid entry, with a stop placed just below
$25.  Target an initial move back to $32, with an outside chance
of a stronger move up to challenge the 50-dma, now at $35.47.




---

Ingersoll Rand - IR - close: 61.86 change: +1.42

WHAT TO WATCH: Remember a few weeks back when we were playing IR
to the upside, waiting for that elusive breakout?  Well, it
finally arrived today, with the stock managing a 2.34% gain on
above-average volume.  We could see a near-term pullback to
confirm support now near $60, but IR has the looks of a stock
that is ready to charge higher.  Last week's rebound from the
bottom of the rising channel and the 50-dma should carry through
and take the stock back into the upper half of the channel.
Momentum entries can be taken on a move through $62.15 (just over
today's intraday high), initially targeting $64 and possibly a
rise to the top of the channel at $66.



---

Lear Corp. - LEA - close: 59.95 change: +1.15

WHAT TO WATCH: Speaking of breakouts, LEA really delivered today,
clearing a month's worth of resistance enroute to a nearly 2%
gain.  While the stock may not advance at the rapid rate seen
over the past two sessions, a push above today's high looks to
have high odds of testing the October highs just above $63.
Enter on the breakout and take a quick targeted exit when those
highs are reached.




---

Wyeth - WYE - close: 37.75 change: -1.10

WHAT TO WATCH: In marked contrast to the rest of the market, the
Pharmaceutical index (DRG.X) is having a hard time making any
upward progress.  Within this weak sector, WYE is really setting
itself apart by drilling down to fresh 7-month lows on increasing
volume.  While the stock is now sitting on potential support, it
looks like the $34 level is the real bearish target.  Failed
bounces below the $40 level will make for the best entries into
this well established downtrend.





===================
On the RADAR Screen
===================

MME $61.25 - Rather than being turned back by resistance just
over $61, MME plowed right on through on Tuesday, helped by the
strength in shares of UNH.  The two stocks are now linked due to
the planned merger and the strength in both stocks on a fairly
quiet day in the market hints at further upside to come.  A dip
and rebound from the $59.50-60.00 area will make for the best
entries, with the $64-65 area looking like a viable upside
target.

TIN $56.57 - Benefiting from the renewed bullishness in Housing
stocks, TIN has started the week out well.  Moving to a new 52-
week high on Tuesday, the stock appears destined to test the $60
resistance level.  New positions on a dip and rebound from above
the $55 level make the most sense, although momentum traders
should be able to make breakout entries work with a stop just
under the 20-dma.

BOL $49.84 - How's your vision?  The bulls are seeing green and
on Tuesday drove shares of the eyecare company to the highest
level since early 2001.  The rebound that began on Friday is
partially due to the settlement of a patent infringement suit,
but with the trade at new multi-year highs today, the breakout is
taking on a life of its own.  Look for a continued rally to next
resistance near $53-54.



===============================
Market Sentiment
===============================


Markets Hold Their Gains
- J. Brown

The U.S. stock markets held their gains today after an incredible
rally on Monday.  For some just holding its gains may be a let
down, especially after the favorable economic reports out this
morning.  However, for many professional traders just hoping to
end the year at current levels today could be viewed as a
victory.

The big numbers today were not coming from the NYSE and the
NASDAQ but from the Commerce Department.  The GDP growth for last
quarter was revised up to 8.2%, a full percentage point above the
preliminary reading of 7.2%.  This is absolutely incredible and
the fastest growth rate since the first quarter of 1984.  Another
"economic" number blowing past estimates was the November
Consumer Confidence figures.  Analysts had been looking for a
reading at 85.0.  November confidence numbers came in at 91.7.
This is great news for the economy and Wall Street and it bodes
very well for this coming holiday shopping season, which is
estimated to be the best since 1999.

Overall the market internals were bullish with advancing stocks
outpacing decliners 19 to 9 on the NYSE and 18 to 12 on the
NASDAQ.  Up volume beat down volume and new highs continued to
surge despite some minor profit taking.  But not everything was
bullish.  The volatility indices continue to crash.  The VXO (the
old VIX) broke under the 16.00 level intraday and closed at 16.29
for the first time in years.  This blinking, flashing, buzzing
warning light is starting to sound like a police siren.  Traders
should be very careful.  The volatility indices don't drop this
low very often and are usually strong clues to a change in market
direction.  There's nothing to stop the indices from hitting even
lower lows but investors should keep an eye on it and the major
indices.  It's definitely a warning to tighten stops and
reconsider new long positions.

Tomorrow will be all about the flood of economic reports.  Those
still working on Wall Street and not en route to family for the
holidays will be focusing on the Michigan Consumer Sentiment
numbers and the Chicago Purchasing Managers survey.  Additional
reports scheduled to announce are Initial jobless claims, October
Personal Income and Spending, October Durable Goods orders,
October Help Wanted Index, October New Home Sales, and the Beige
book.

Happy Thanksgiving!



-----------------------------------------------------------------

Market Averages

DJIA ($INDU)

52-week High:  9903
52-week Low :  7197
Current     :  9763

Moving Averages:
(Simple)

 10-dma: 9724
 50-dma: 9666
200-dma: 8968

S&P 500 ($SPX)

52-week High: 1063
52-week Low :  768
Current     : 1053

Moving Averages:
(Simple)

 10-dma: 1046
 50-dma: 1037
200-dma:  963

Nasdaq-100 ($NDX)

52-week High: 1453
52-week Low :  795
Current     : 1411

Moving Averages:
(Simple)

 10-dma: 1399
 50-dma: 1392
200-dma: 1223


-----------------------------------------------------------------

It's been a LONG time since the VXO (old VIX) traded under the 16
level and that occurred today as the volatility continued to
crash.  This observation was a key factor for some veteran
traders to cover or tighten stops.  This screams market turning
point but it could go lower, which it seems to have developed a
habit of doing.

CBOE Market Volatility Index (VIX) = 16.71 -0.73
CBOE Mkt Volatility old VIX  (VXO) = 16.29 -0.86
Nasdaq Volatility Index (VXN)      = 25.99 -1.08


-----------------------------------------------------------------

          Put/Call Ratio  Call Volume   Put Volume

Total          0.62        688,827       430,183
Equity Only    0.48        549,189       263,896
OEX            1.25         19,658        24,570
QQQ            2.45         18,220        44,603


-----------------------------------------------------------------

Bullish Percent Data

           Current   Change   Status
NYSE          72.7    + 0     Bull Confirmed
NASDAQ-100    72.0    + 4     Bear Correction
Dow Indust.   80.0    + 0     Bull Correction
S&P 500       79.4    + 1     Bull Confirmed
S&P 100       78.0    + 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: 0.94
10-dma: 1.22
21-dma: 1.14
55-dma: 1.15


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    1927      1845
Decliners     906      1262

New Highs     243       223
New Lows       13        13

Up Volume   1140M     1072M
Down Vol.    472M      718M

Total Vol.  1626M     1826M
M = millions


-----------------------------------------------------------------

Commitments Of Traders Report: 11/18/03

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

Will it never end?  The commercial traders refuse to move any
positions or make any more big bets in the full S&P futures
contracts.  They've been oscillating in the current range for
weeks.  Small traders have bumped up both their short and long
positions but they remain relatively equidistance from each other.


Commercials   Long      Short      Net     % Of OI
10/28/03      391,596   412,498   (20,902)   (2.6%)
11/04/03      391,079   415,136   (24,057)   (3.0%)
11/11/03      389,965   415,259   (25,294)   (3.1%)
11/18/03      393,893   414,442   (20,549)   (2.5%)

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
10/28/03      137,791    76,791    61,000    28.4%
11/04/03      137,829    78,206    59,623    27.6%
11/11/03      136,072    74,249    61,823    29.4%
11/18/03      147,842    80,047    67,795    29.7%

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

The e-minis are seeing some action.  Commercials upped their
short positions but not by too much.  Small traders also
raised their short positions by 10K contracts (almost 20% of
outstanding shorts).


Commercials   Long      Short      Net     % Of OI
10/28/03      220,171   260,644    (40,473)  ( 8.4%)
11/04/03      242,409   270,785    (28,376)  ( 5.5%)
11/11/03      249,864   258,503    ( 8,639)  ( 1.7%)
11/18/03      249,286   264,083    (14,797)  ( 2.9%)

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
10/28/03      123,569    59,742    63,827    34.8%
11/04/03      135,525    63,006    72,519    36.5%
11/11/03       94,649    51,815    42,834    29.2%
11/18/03       95,119    61,975    33,144    21.1%

Most bearish reading of the year: (77,385)  - 09/02/03
Most bullish reading of the year: 449,310   - 06/10/03


NASDAQ-100

Commercial traders are still stuck in limbo with outstanding
longs and shorts in NDX futures barely budging the last few
weeks.  Meanwhile small traders have turned more bullish with
a nice jump in outstanding long positions.


Commercials   Long      Short      Net     % of OI
10/28/03       36,168     46,272   (10,104) (12.3%)
11/04/03       34,159     48,293   (14,134) (17.1%)
11/11/03       35,889     49,201   (13,312) (15.6%)
11/18/03       35,608     49,689   (14,081) (16.5%)

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
10/28/03       21,640     8,830    12,810    42.0%
11/04/03       24,132     9,703    14,429    42.6%
11/11/03       26,212    10,730    15,482    41.9%
11/18/03       32,034    10,356    21,678    51.3%

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

Ditto here as well...commercials are not making any new big
bets and keeping the number of long and short contracts
relatively unchanged.  Small traders appeared to have scaled
back on longs and inched up their shorts.


Commercials   Long      Short      Net     % of OI
10/28/03       20,504    11,366    9,138      28.7%
11/04/03       21,756    11,903    9,853      29.3%
11/11/03       20,209    11,660    8,549      26.8%
11/18/03       20,746    11,080    9,666      30.4%

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
10/28/03        5,295     8,864   (3,569)   (25.2%)
11/04/03        5,099     9,160   (4,061)   (28.5%)
11/11/03        6,105     8,201   (2,096)   (14.7%)
11/18/03        5,655     8,607   (2,952)   (20.7%)

Most bearish reading of the year:  (8,777) - 10/12/01
Most bullish reading of the year:   8,523  -  8/26/03



-----------------------------------------------------------------




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Copyright ) 2003  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter                 Tuesday 11-25-2003
                                                   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:  Breakout, Consolidate, Breakout

Stop Loss Adjustments:     FLIR

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  (bullish)
===============

FLIR Systems - FLIR - close: 34.70 change: +0.87 stop: 32.00*new*

Company Description:
FLIR is engaged in the design, manufacture and marketing of
thermal imaging and stabilized camera systems for a wide variety
of commercial, industrial and government applications.  The
company's products are divided into two categories, which include
the thermography products and imaging products.  In the
Thermography division, FLIR manufactures products that are sold to
commercial, industrial, research and machine vision customers. For
industrial customers, FLIR has developed thermography systems that
feature accurate temperature measurement, storage and analysis.
The Imaging division caters to military, law enforcement,
surveillance and security customers.

Why we like it:
It is amazing after all the bullish action in recent months, but
even when the broad market is undergoing a bout of profit taking,
there are still stocks trading not only at 52-week highs, but all-
time highs!  FLIR had a rough patch from August-late October
before launching sharply higher in response to the company's
strong earnings report, reaffirmation of Q4 estimates and
announcement of the acquisition of Indigo Systems.  Since then,
FLIR has been consolidating in a broad range between $30-33,
resting up for the next move.  That move got started on Friday,
with the stock breaking out to the upside and closing at a new
all-time high.  The recent trade at $33 generated another PnF Buy
signal and along with the current bullish vertical count of $40,
points to more bullish action ahead.

There should now be firm support near $32, as that former
resistance switches sides.  Not only that, but the 10-dma ($32.18)
and 20-dma ($31.94) have converged at that level and are moving
higher.  That means a pullback and bounce from near $32 can be
used for new entries.  We're hesitant to recommend momentum
entries at this point, as price ended solidly above the upper
Bollinger band on Friday, which suggests at least a mild pullback
before FLIR continues significantly higher.  We'll keep our eye
out for a bullish run that can take the stock up to that $40 price
target, but we'll use a less aggressive target of $38 for the
play.  Set stops initially at $31, just below the 11/13 low.

Why This is our Play of the Day
Breaking out to new all-time highs last Friday was enough to
finally push FLIR onto our bullish playlist and after just one day
of consolidation yesterday, the stock followed through with
another breakout to another new high on Tuesday.  The stock's 2.5%
gain was all the more impressive given the lackluster trade across
the broad markets and we could very easily see new highs again
this week.  Aggressive traders got a nice entry point this morning
on the early (and fleeting) dip to just below $33 before the
steady climb to close near the high of the day.  Successive dips
and rebounds from $33.50 or even as low as $33 should make for
additional solid entries into the play.  With price well above the
upper Bollinger band ($33.35) new entries on another breakout seem
a bit too aggressive right here.  Buy the dips and then ride the
stock to new highs, looking for an eventual target of $38.  Our
stop rises to $32 tonight, just below the $32.25 support and the
20-dma ($32.23).

Annotated Chart of FLIR:



Picked on November 23rd at  $33.90
Change since picked          +0.00
Earnings Date              1/21/03 (unconfirmed)
Average Daily Volume =       422 K



=================================================================
Stop Loss Adjustments
=================================================================


FLIR - long
Adjust from $31.00 up to $32.00




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

BCS     Barclays Plc (ADR)         34.90     +0.60
MWD     Morgan Stanley             55.13     +0.90
ONE     Bank One                   43.45     +0.52
GCI     Gannett Co Inc             86.69     +0.89
PNC     PNC Financial              54.36     +0.54
MHP     McGraw-Hill Companies      68.50     +0.83

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

MMR     McMoran Exploration         17.90     +1.40
DSCO    Discovery Labs               8.09     +1.31
HDTV    Spatialight Inc              5.99     +1.04

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

STI     Suntrust Banks Inc          71.55     +1.19
ITW     Illinois Tool Works         78.22     +2.84
NKE     Nike Inc                    67.17     +2.50
PX      Praxair Inc                 72.15     +3.31
SUN     Sunoco Inc                  47.65     +1.10
IVX     IVAX Corp                   21.60     +1.03
STZ     Constellation Brands        34.00     +1.30

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

WYE     Wyeth                       37.75     -1.10
WM      Washington Mutual           44.99     -1.56
GD      General Dynamics            79.94     -1.06
AGN     Allergan Inc                71.76     -2.24
BSC     Bear Stearns                71.53     -2.10
ICBC    Independence Community      36.75     -1.99

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

. None..



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presented. All investors should consult a qualified professional
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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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