PremierInvestor.net Newsletter Tuesday 12-02-2003 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: Like Moths to a Flame Watch List: WMT, ELBO, TEVA, LH and more! Market Sentiment: Treading Water ================================================================= MARKET WRAP (view in courier font for table alignment) ================================================================= 12-02-2003 High Low Volume Advance/Decline DJIA 9853.64 - 45.40 9900.45 9837.27 1.77 bln 1582/1608 NASDAQ 1980.07 - 9.80 1996.08 1978.23 1.78 bln 1580/1696 S&P 100 524.71 - 1.89 527.02 523.85 Totals 3162/3304 S&P 500 1066.62 - 3.50 1071.22 1065.22 W5000 10441.68 - 29.40 10492.66 10432.96 RUS 2000 553.60 - 0.99 557.42 553.28 DJ TRANS 2936.36 - 25.20 2964.24 2935.45 VIX 16.27 - 0.50 16.89 16.17 VXO (VIX-O)16.42 + 0.45 16.90 15.99 VXN 26.72 + 0.43 26.94 25.81 Total Volume 3,824M Total UpVol 1,496M Total DnVol 2,270M 52wk Highs 1106 52wk Lows 23 TRIN 1.31 NAZTRIN 1.33 PUT/CALL 0.71 ================================================================= =========== Market Wrap =========== Like Moths to a Flame The bulls gravitated to overhead resistance at 9900/2000 again and like moths dodging a flame they were careful to stay just out of touch. The Dow just nicked the 9000 level by .45 of a point right at the open and then wandered lower but within reach the rest of the day. The Nasdaq traded less than four points from 2000 before getting its wings singed by a sell program that could have been triggered by a proximity fuse. Dow Chart Nasdaq Chart The day started out on a bad note after the weekly Retail Sales dropped -0.1% despite two of the strongest sales days of the year. Not a good sign in my opinion. There were all kinds of excuses about weather, inventory shelving and competition but the bottom line was weaker than expected sales. All the smoke about the improved employment picture suddenly cleared and analysts saw that the change of 200,000 jobs over the last couple months did little to give consumers cash to buy gifts. Yes, the trend has changed but not strong enough to produced a new wave of broad based employment. Consumers are still hoarding cash. While the news reports were full of early bird specials on Friday the rest of the weekend was tame in comparison. 31% of consumers surveyed said they were going to spend less this year. Only 22% said they were going to spend more. 35% said they were going to wait until the last two weeks of the holiday season. Wal-Mart fell to a new five-month low of 53.02 on the disappointing news. That employment picture continued to improve with the November Challenger Layoff report showing a drop of 40% in the numbers from October. In November there were 99,452 job cuts announced compared to 171,870 in October. This was encouraging but the number was still well above the 60-70,000 levels from last summer. The elevated levels still show that companies are trying to cut costs rather than staff up for the recovery. We will get another look at employment on Friday with the November Jobs report. The estimate is for a gain of +140,000 jobs compared to +126,000 in October. This will be a critical report. If the number falls but remains positive it may not be disastrous but a negative number would be a disaster. Also, we need to watch for a revision of the number from last month. The November whisper number is nearing +200,000 and is way out of line in my opinion. This is setting us up for a serious disappointment. If we get a blowout number then the FOMC meeting on Tuesday will be a major market event. A strong jump in jobs would insure a removal of the "considerable period" statement and possibly a change in the bias to tightening. A drop in the number of jobs to +50K or so would keep the recovery on a tentative basis and the Fed may feel more comfortable in leaving things alone. This is a critical report and the outcome will directly impact the Tuesday Fed meeting. This puts the markets on notice that things could change quickly and could stimulate some cautionary selling. The Auto Sales data was mostly positive today with only Ford posting negative numbers for the month. GM posted a +22% gain in overall sales and +30% gain in trucks. DCX showed a minor +3% gain with Nissan up +15%. Ford fell -2% for the period. Cadillac was a strong GM performer with a whopping 40% gain. GM raised production targets by 10,000 units for the quarter. Incentives are also creeping up with the average expected to be +$4000 in December. The automakers were mostly optimistic about coming quarters and are looking forward to strong sales in the 1Q boosted by the next $150 billion in tax stimulus to consumers. Another fund was hit with charges today but unlike the others vowed to fight the charges. Invesco Funds said they had done nothing wrong despite the charges levied on them for late trading and market timing. The war of words flew both directions all day and Invesco posted a strongly worded rebuttal on their website. They said they had done nothing wrong and the charges will be "vigorously contested". They claim they never participated in late trading and that their market timing trades were permissible and not contrary to the best interests of the shareholders. The Dollar plunged again on the currency markets and with the drop in the dollar came the rise in gold to a high of $407 and a close at 404.80. All commodities continue to rise on the recovery hopes and in some cases terror threats. Oil rose over $30 a barrel once again after a three day dip under that technical level. Cold weather also helped jack up oil prices but new terror threats continue to put strain on potential availability of future supplies. The markets today were very cautious. The initial Dow tick to 9900 triggered some light selling that pushed the index back to support at 9850 and it spent the rest of the day between 9850-9890. Well within striking distance of 9000 but maintaining a cautious distance away. The Nasdaq struggled to within 4 points of 2000 around 2:PM and after lingering in the area for about 15 min a very strong sell program triggered that knocked it back to just above 1980. What I believe we are seeing is fear of round numbers. That is fear of round number targets. Nasdaq 2000 is obviously a target that has been in trader sights since Jan-2002 when we dipped below that level. After nearly two years the Nasdaq is drawing back to that now strong resistance and there are a lot of investors that will be very happy to just get out alive when that number is reached again. They have been holding for this event to get even for two years. The last rebound over 2000 came on Dec-5th 2001 from the post 9/11 Nasdaq low of 1387. Euphoria was high and techs were soaring. They traded in the 2000 range for a little over a month before slipping back below 2K on Jan-15th. Traders were sure it was just a profit taking dip from the +600 point bounce and many held their positions until it was too late or too expensive to exit. Now two years later and after a dip to 1100 they are almost back to where they started. With memories of a +50% bounce failing at 2000 in 2002 they are probably plenty of fears of the current +81% bounce to 2000 in 2003 failing as well. Many funds have accumulated huge profits with this bounce and they are probably very worried that somebody will blink before Dec-31st and start a cascade of profit taking. I have speculated that a touch of 2000 would trigger some sell programs from profit takers. When the Nasdaq stalled only 4 points away from 2000 for about 15 min this afternoon I suspect the pressure was too much to bear for whomever pulled the trigger on the big program. If you have been waiting for months for that target to be hit and your bonus is riding on your funds performance then cheating by four points makes sense to me. Did that relieve the performance anxiety for the next touch of that level? I doubt it. The same thing has been happening at Dow 9900 but not in the same volume. The big programs are probably waiting for D10K and as long as we linger in in the 9850-9900 range they may not decide to adjust the triggers. The danger here is a perceived lack of progress. We have been stopped dead at 9900 on every attempt since November 3rd. 9900 is the down trend resistance since Jan 2000 and very strong resistance. However this is December and typically the second strongest month of the year. The economy is exploding according to most economic reports and investors are throwing money at mutual funds despite the scandals. This scenario is setting the markets up for massive end of year confusion. Retail investors are buying and institutional investors, hedge funds and mutual funds are trapped in high flying stocks with no easy way out. With cash flowing into funds in near record amounts it is tough to justify selling winners. It is tougher to find a place to put the new money. Hedge funds may have large profits but are paid on year end results. They do not want to sell now unless they have to. What we have is a confluence of major buying pressure and major selling pressure with the calendar counting down to the year end deadline. This has caused stagnation at the 52-week highs. There is not enough buying pressure to push us over 9900/2000 top. They are happy to buy the dip but they do not want to buy the top. The market is perceived as fully priced despite the exploding numbers. It is fully priced because the market expected the economy to recover. It expected double digit earnings growth in the 3Q and 4Q because all the analysts had been predicting it since January. It was the 3rd year they predicted it but that is another story. You could make a case for a stronger than expected gain due to the GDP but very few traders believe that number anyway. This leaves us in serious confusion. Over the last 50 years the S&P has gained an average of +1% in December. Last year the S&P lost -6%, -80 points in December. The high for the month was set on 12/2. In Dec-2001 the high was set on 12/5 and then the S&P dropped -60 points into the middle of the month. In 2001 the high was set on the 11th and the S&P dropped -136 points by the holidays. The bottom line here is that we have a recent historical trend that suggests the high for the month could be set early and then portfolio rebalancing, year end profit taking, etc puts pressure on the market. We definitely have profits to take. To be fair the prior three years for comparison were all bear market years. Somehow when traders look back to see prior seasonal patterns they tend to overlook the bigger trend. While that bigger trend would work in favor of the analysts when just looking a the prior three Decembers there is a bigger trend that works against us. That is the downtrend from Jan-2000. It intersects at Dow 9900 and is serious resistance. Dow Weekly Chart I would also note that three of the last four Januarys have seen significant losses. 2003, nearly -900 points off its highs, 2002, nearly -800, 2001, -550. 2000 had two separate drops in January of -600 and -1050 points. A very volatile month. I have gone to great lengths to paint the picture for the next six weeks. We have rebounded +80% on the Nasdaq and +34% on the Dow. The rebound has stalled exactly at strong downtrend resistance. There is very strong overhead supply at D10K and N2K. Portfolio managers are looking at the recent January trends and thinking "how much longer should I hold" or "how much farther can we go?" In each case they are risking a lot with very little upside left. I say very little upside because any move over 9900 will draw the D10K sellers that are getting out early. In my previous commentaries I wrote that I expected a bounce to 9900 this week and then a slight sell off for a week or so, then a bounce into the holidays. That holiday bounce rarely reaches the prior highs for the month. I suggested that any breakout to 10,000 would be sold heavily. At present I am not seeing any catalyst to produce that breakout. We have ISM Services tomorrow but that is not a big report. After ISM Manufacturing the services number is assumed to be ok and traders look elsewhere. Friday is the big one with the Jobs Report. With the whisper number around +200K we could be disappointed. Add in the rate anxiety for next Tuesday and traders have more to worry about than they do to be excited about. The prediction for the rest of the week is high risk. We could move up but I think the bulls are starting to weaken. They have over indulged on good news for weeks and the Jobs Report is the desert. The harsh reality of the FOMC meeting could be the heart attack that shocks them awake and begins the slim down diet. I would love to see them get their second wind and race off into the holidays and bust through 10,000 like a marathon runner through the tape but that only sets up another "what now" scenario. I would suggest we don't get our hopes too high and not be surprised if December is disappointing. Keep the faith until the red candles begin to appear but keep one eye on the exit. 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 --------------------------------- Wal-Mart Stores - WMT - close: 53.02 change: -1.48 WHAT TO WATCH: As the bellwether for the Retail sector, WMT's weakness may be telling us something important. After a sharp drop from the $58 area in mid-November, the stock consolidated and then broke down again over the past two days and looks destined for major support in the $48-50 area. With solid support in the $51.50-53.00 area, chasing the stock lower isn't what would be termed a high-odds strategy. But another failed rebound below the 200-dma ($55.35) can be used for establishing bearish positions ahead of that decline down to major support. --- Electronics Boutique Holdings - ELBO - close: 22.83 change: -1.33 WHAT TO WATCH: The holiday shopping season may be underway, but shares of ELBO do not seem in a festive spirit. The stock is still under pressure from the reduced guidance issued a month ago and it appears ready to break under the consolidation zone that has been holding for the past few weeks. Trigger entries on a break below $22.40 and look for a decline down towards solid support in the $17-18 area. That is the reasonable measuring objective based on the premise that the early November drop (roughly $6) should be repeated once this consolidation breaks. --- Teva Pharmaceutical - TEVA - close: 61.33 change: +0.16 WHAT TO WATCH: After roughly 3 months of consolidation, shares of TEVA are on the move again. The initial bullish move came last week as the stock surged above the 3-month descending trendline and the buying pressure has continued this week, with the past two days seeing a concerted effort to push through resistance in the $61.50-62.00 area. So far, the bears have kept things in check, but a close over $62 should have the momentum players coming back. Technically, the stock has already broken out, as today's close represents a new all-time closing high. Based on the bullish PnF chart ($77 price target), TEVA still has room to run. --- Laboratory Corp. - LH - close: 36.80 change: +0.43 WHAT TO WATCH: After falling out of its rising channel back in August, LH build a solid base just above $28 leading up to the mid-October upside explosion. That bullish move took the stock back inside its rising channel and price action has been looking strong. Rising again on Tuesday, LH is poised just below its mid-November highs and looks ready to break out. If successful, the stock should make a run up towards solid resistance near $40, which is also the top of the channel. Use a trigger of $37 for entry and a stop of $35.50 (just below the bottom of the channel), targeting a move to $40. =================== On the RADAR Screen =================== BBY $58.52 - Instead of celebrating the positive economic news and a strong start to the holiday shopping season, investors have been selling shares of BBY and on strong volume. Monday's rally attempt was turned back right at the top of the rising channel and it looks like the beginning of a move back towards the bottom of the channel. This is clearly an aggressive bearish play, but if BBY breaks below the midline of its channel and strong support at $57.50, it would certainly make sense to play it to the downside for a retracement to the lower channel line at $52. Watch for potential support at the 50-dma, just over $55. APA $73.56 - After a second pullback to confirm support at the 50-dma, shares of APA have been charging sharply higher for the past several days, capping the move off on Tuesday with a breakout above $73 to new all-time highs. The stock has been trading in a broad ascending channel for over a year now and given the recent price strength, a run to the top of that channel (currently just over $76) seems reasonable. Consider momentum entries above $74 and pullback entries on a rebound from above $72 for a quick move towards that target. CTSH $48.40 - Even a die-hard bull would get a touch of vertigo looking at the weekly chart of CTSH, as the stock has nearly tripled since March. But the bulls keep pressing it higher in that persistent rising channel and once again managed a breakout to new all-time highs on Tuesday. Optimum entries will come on a pullback near $47 support, while momentum entries can be considered on a break into the upper half of the rising channel above $49. Target a quick gain to the upper channel line at $52. =============================== Market Sentiment =============================== Treading Water - J. Brown It was a relatively quiet day on Wall Street. There were no major economic reports. No corporate earnings and very little on the scandal front today. Stocks and major averages merely churned sideways as if digesting a portion of Monday's big gains. This is in essence another victory for the bulls. With such a clear lack of sellers it could instill even more confidence for investors. Technical fans will note that the ARMS index's 5-dma has dropped to a bearish reading of 0.81. Traditionally readings under 0.85 are bearish and indicate a market top is close by. Of course the real question now is will anyone take notice? Traders have been ignoring the VIX, another technical indicator, for months. Tomorrow brings the revised Q3 productivity numbers and the ISM services index. Both pale under the importance of Monday's ISM factory number and investors are probably looking ahead to Friday's employment report and next Tuesday's FOMC meeting. Trade carefully and watch those stops. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 9903 52-week Low : 7197 Current : 9853 Moving Averages: (Simple) 10-dma: 9665 50-dma: 8882 200-dma: 9740 S&P 500 ($SPX) 52-week High: 1071 52-week Low : 768 Current : 1066 Moving Averages: (Simple) 10-dma: 1050 50-dma: 1040 200-dma: 968 Nasdaq-100 ($NDX) 52-week High: 1453 52-week Low : 795 Current : 1431 Moving Averages: (Simple) 10-dma: 1403 50-dma: 1396 200-dma: 1232 ----------------------------------------------------------------- As the markets churned sideways so followed the volatility indices. There is little change and they all continue to urge caution for bullish investors. CBOE Market Volatility Index (VIX) = 16.27 -0.50 CBOE Mkt Volatility old VIX (VXO) = 16.42 +0.45 Nasdaq Volatility Index (VXN) = 26.72 +0.43 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.71 735,096 524,620 Equity Only 0.52 601,278 314,983 OEX 1.13 20,089 22,789 QQQ 1.11 21,419 46,036 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 73.8 + 1 Bull Confirmed NASDAQ-100 75.0 + 2 Bear Correction Dow Indust. 80.0 + 0 Bull Correction S&P 500 81.6 + 2 Bull Confirmed S&P 100 79.0 + 1 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: 0.81 10-dma: 1.11 21-dma: 1.11 55-dma: 1.14 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 1378 1467 Decliners 1436 1652 New Highs 536 408 New Lows 13 10 Up Volume 709M 408M Down Vol. 956M 10M Total Vol. 1689M 1771M 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 ----------------------------------------------------------------- ================================================================= 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 12-02-2003 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 ================================================================= Play of the Day: No Weakness Here Closed Play: MCK, STLD 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: 35.32 change: +0.35 stop: 32.65 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: Traders looking for some excitement on Friday had to be disappointed with FLIR's 63-cent range on volume that failed to even reach 100K. It was a throwaway consolidation session, leaving FLIR in much the same condition where we left it on Wednesday -- just below it's all-time high, but with daily Stochastics having been buried in overbought now for the past 7 sessions. It certainly feels like a bit of consolidation or even a mild pullback is due. The strongest near support appears to be near $33, although there is the potential for a dip and rebound at $33.50 or $34.00, both areas where the stock has consolidated on the way up. The 20-dma has now reached $32.50 and even on a sharp pullback, we're looking for that average to continue in its supportive role. So it appears safe to raise our stop to $32.40. Why This is our Play of the Day The broad market may have been rejected from resistance on Tuesday, but the same can't be said for FLIR, which finally broke out over the $35 resistance level, setting yet another 52-week high. We can't exactly call the volume convincing as it continues to run well below the ADV. But still price continues marching higher. Higher highs and higher lows have been the pattern and it doesn't show any sign of ending either. Intraday dips back near the 10-dma ($34.03) should serve as solid entry points into this bullish trend as FLIR continues to march up towards our $38 target. It won't set any speed records getting there, but sometimes slow and steady is a preferable mode of travel. Maintain stops at $32.65, just under last Tuesday's intraday low ($32.81) and the 20-dma ($32.89). Annotated Chart of FLIR: Picked on November 23rd at $33.90 Change since picked +1.42 Earnings Date 1/21/03 (unconfirmed) Average Daily Volume = 422 K ================================================================= Non-tech Active Trader section ================================================================= ============ Closed Plays ============ -------------------- Closed Bearish Plays -------------------- McKesson Corp. - MCK - close: 30.60 change: +0.77 stop: 30.30 Catching our attention just over a week ago, as it came down to test major support near $28, MCK looked like the ideal breakdown candidate, good for a nice $3-4 drop once that support gave way. The only problem is that the support never gave way, MCK's entry trigger was never satisfied and we watched with detached amazement as the stock steadily recovered through one apparent level of resistance after another. Tuesday's rally took the stock through strong resistance just over $30 and violated our stop. That removes the stock from consideration as a bearish trade candidate for now. We'll count ourselves lucky that the play never triggered and look for better candidates. Picked on November 23rd at $28.26 Change since picked +2.34 Earnings Date 1/22/03 (unconfirmed) Average Daily Volume = 1.71 mln ================================================================= High Risk/High Reward (HR) section ================================================================= ============ Closed Plays ============ -------------------- Closed Bullish Plays -------------------- Steel Dynamics - STLD - close: 19.75 change: -1.50 stop: $19.40 Although one writer opined that the ending of the steel tariffs was unlikely to hurt U.S. steelmakers, a McDonald Investments analyst had other concerns about the steelmakers. Mentioning low steel prices and higher scrap metal costs, he downgraded STLD and fellow steelmaker Nucor (NUE). Although STLD's downgrade was to a buy rating from the previous aggressive buy rating, perhaps some investors didn't linger to read that part. STLD dropped to a low of $19.23, triggering our stop before it bounced again. Despite that bounce, the day's action tugged RSI out of territory indicating overbought conditions and completed a bearish cross on both the stochastics and the MACD. Volume was above average, too, with the volume spikes occurring intraday as STLD dropped. STLD did bounce from above the 30-dma, not even dipping down to that important average, but today's action showed this high-risk play's vulnerability to the downside. We're closing the play. Picked on Nov 12 at 19.78 Change since picked: -0.03 Earnings Date: 10/22/03 (confirmed) Average Daily Volume: 359 thousand ================== 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 WYE Wyeth 39.96 +0.51 FNM Fannie Mae 70.16 +0.57 COP ConocoPhillips 58.70 +0.73 FRE Freddie Mac 55.31 +0.65 GCI Gannett Co 88.93 +0.66 APA Apache Corp 73.56 +0.77 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- QLTI QLT Inc 18.93 +2.10 TIWI Telesystem Intl Wireless 9.22 +1.07 ECLP Eclipsys Corp 13.03 +2.80 CENX Century Aluminum 18.71 +1.86 VTAL Vital Images Inc 19.51 +1.36 MALL PC Mall 15.27 +1.31 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- OMC Omnicom 84.02 +3.95 ACE Ace Ltd 38.32 +1.25 EL Estee Lauder Cos 39.71 +1.33 IMCL Imclone Systems 42.58 +2.89 EASI Engineered Support Sys 56.38 +1.84 USNA Usana Health Sciences 36.76 +2.86 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- WMT Wal-Mart 53.02 -1.48 FDO Family Dollar Stores 37.16 -1.44 DLTR Dollar Tree Stores 31.50 -1.25 FS Four Seasons Hotels 51.70 -1.90 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- BBY Best Buy Co 58.52 -2.35 MBT Mobile Telesys 77.81 -5.69 BREL Boireliance Corp 42.38 -2.23 ================================================================= 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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