PremierInvestor.net Newsletter Tuesday 12-16-2003 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: New Dow High, Ho, Ho, Ho! Watch List: MO, FD, GD, COF and more! Market Sentiment: Blue Chips Cheer the CPI ================================================================= MARKET WRAP (view in courier font for table alignment) ================================================================= 12-16-2003 High Low Volume Advance/Decline DJIA 10129.59 +106.70 10137.63 10023.34 1.84 bln 1892/1361 NASDAQ 1924.29 + 6.00 1927.09 1901.66 1.81 bln 1577/1670 S&P 100 534.75 + 4.28 535.17 530.47 Totals 3469/3031 S&P 500 1075.13 + 7.09 1075.94 1068.04 W5000 10441.40 + 56.20 10447.74 10366.46 RUS 2000 537.74 + 2.49 537.77 529.44 DJ TRANS 2967.28 + 16.50 2970.44 2942.01 VIX 15.93 - 1.30 17.45 15.90 VXO (VIX-O)15.70 - 1.21 17.11 15.60 VXN 26.15 - 0.92 27.59 25.88 Total Volume 3,949M Total UpVol 2,286M Total DnVol 1,597M 52wk Highs 347 52wk Lows 36 TRIN 0.88 NAZTRIN 0.85 PUT/CALL 0.68 ================================================================= =========== Market Wrap =========== New Dow High, Ho, Ho, Ho! Great economic reports did what Saddam's capture could not. The Dow set a new closing 52-week high and came within two points of breaking yesterday's spike high. It definitely did not hurt to have the Saddam news clear out all the resistance between 10,000 and 10,140 and pave the way for today's gain. Maybe Osama will volunteer to surrender and clear the next resistance all the way to 10,250. Now that would be a holiday treat. Dow Chart Nasdaq Chart The morning reports began with the Consumer Price Index and more evidence the Fed may be on the right track with their no inflation in sight position. The headline number fell -0.2% and well below the estimates for a small increase. The core rate fell -0.1% and pushed the trailing 12-month number to a 38 year low of only 1.1%. The -3.0% drop in energy prices helped to offset the continued rise in food prices. We are exporting more food than normal due to the mad cow problems in other countries and that extra demand is continuing to raise our prices at home. Used car prices are falling through the floor with another -2.3% drop. Those new car deals are flooding the market with older models and dealers are having to give them away. The headline number would have been even lower except for a sharp rise in college tuition. Bet your glad to hear that. The main reason for the drop in produced goods prices remains the excess capacity. Prices down and production up, what a perfect world. That is what traders thought when the Industrial Production number blew out at +0.9% compared to estimates for only a +0.4% gain. The two prior months were also revised upward. The +0.9% jump in the headline number was the strongest gain since 1999. Suddenly there is a real recovery underway and traders celebrated. Capacity Utilization also jumped to 75.7% from 75.1% and suggests a significant jump in demand and the highest rate in more than a year. (these numbers do not move fast) Production has now risen for five of the last six months. If you remember exports were up +$500 million last week which indicates the global picture is improving and that production is showing up here. Adding to the positive economic picture was yet another upside surprise in Housing Starts. Single-family homes set another record with overall housing starts hitting an annualized 2.07 million units. October numbers were also revised upward. Since housing impacts dozens of other industries like lumber, roofing, appliances and electrical components to name just a few, this is a very good view of the potential fourth quarter GDP. The dip in mortgage rates back down to decent levels again is spurring one more building cycle. Homes started in Nov will be completed in the spring and just in time for the buying cycle to begin again. With $165 billion in tax stimulus scheduled to hit in the first quarter you can bet there will be buyers waiting. The only obstruction to this process could be a Fed rate hike in March. This is the last meeting they can safely raise the rates before the election. The Fed is not stupid and they recognize this and the psychological impact it will have on home buyers. I doubt they will be anxious to trip up the consumer just before the summer doldrums appear. This inventory buildup is poised to give the economy another quarter (Q2) of improvement. The morning started off rocky despite the great economics with more negative retail news. Wal-Mart warned yesterday that sales would be at the low end of plan and gave traders a clue that December was not going to set any records. Target followed up with a warning that sales were slowing as well. Today Sears was downgraded due to reported heavy discounting and slowing sales. Reports surfaced that high dollar toys, really high dollar like Harley Davidson motor cycles, snowmobiles and ATVs were down between -5% to -9%. Pier One said sales were not going well and would be down -4% to -8% for December. This retail hiccup gave investors a headache despite the positive economic news. Add to this headache a Merrill downgrade of the chip sector on valuation concerns and it is not surprising the Nasdaq was the weaker performer. The Dow roared out of the gate despite an earnings warning from HON. The company guided down for 2003 and 2004 saying higher employee costs would hurt performance. HON dropped significantly at the open but only held the Dow back for a couple minutes. HON immediately recovered all its losses but then shed them again as the volume picked up. The Nasdaq did not fare so well due to the chip downgrade and fell from the start to come very close to support at 1900 before recovering to close up for the day. In reality the Dow reached back and plucked the Nasdaq from danger with its +100 point gain. Dow 10084 remained resistance most of the day with the Nasdaq and Russell holding the Dow back. Once that resistance broke everyone joined the party. That party came to a halt at 10137.64, less than 2 points from Monday's Saddam spike high. Had that Saddam spike not cleared out significant resistance to that level today and probably this week would have looked a lot different. If you remember last Friday we closed right below resistance at 10050 and internals were turning weaker. The outlook for this week was a move higher but nothing impressive. The Saddam spike cleared the way for better gains than we could have made on our own. If you look at the market internals and charts of the major indexes you will see a troubling divergence. On December 2nd the Russell-2000 hit its high for the year. On Dec 3rd the Nasdaq hit 2000 and both indexes immediately headed lower. From that day forward the OEX (top 100 blue chips) and the Dow started moving higher. Why? The answer is right in plain sight. Portfolio managers know there is a profit taking dip coming in January. Despite knowing there is trouble ahead they do not want to go into the year end in cash. They still have to be invested so those year end statements and advertising literature looks impressive. The way to do this is rotate out of the small caps and techs and into blue chips. They can get out of the most volatile stocks early and into the highly liquid stocks in advance of the decline. Who would not want to own a fund with IBM, MMM, GE, UTX, CAT, KO, MO and PG in it when most are at 52-week highs? This allows the funds to dress up their statements and still participate in any further market gains with their flight to quality. Once January begins they can be poised to exit those highly liquid blue chips in a heartbeat without much risk. Exiting $10 million in IBM is only a downtick on the chart but exiting $10 million in a low volume small cap is a major blow to the price. Anyone notice NTE today? Or YRK, GWW or INFY? These low volume stocks got seriously whacked on the slightest bit of news but they were just those leaders where the incentive to exit and take profits was accelerated by events. Multiply that by many of the small caps and you get the picture. Funds want to be in something liquid in January, not something that will drop -10% if five funds decide to exit at once. Russell-2000 Chart Nasdaq Chart Dow Chart OEX Chart With the Dow closing at a new 52-week high the obvious question is what now? There are 5.5 trading days before Christmas and another 3.5 days before January. The odds are very strong that there will be major profit taking by the second week of January. We are counting on that in the Top 50 Stocks for 2004 renewal special. We are targeting specific entry points on key stocks for January to produce the most gains for the first quarter. Now if everyone but the retail traders knows there will be profit taking in January once the 2003 tax year and calendar year ends then why should the Dow go higher? The Dow "should" continue to see gains due to the rotation out of small caps and into blue chips as I described above. Funds want to be invested for year end statements AND they are expecting the historical pop on Jan-5th from year end retirement contributions. TrimTabs.com is estimating over $10 billion in inflows between Dec-29th and Jan-9th. This cash bonanza will provide one last bounce and the volume needed to exit gracefully. For historical reference I checked the highs for January for the last six years. In Jan-2003 the high for the month was set on the 8th trading day. In 2002 the high was set on the 4th day, 2001 the 3rd, 2000 the 9th, 1999 the 5th and 1998 the 2nd day. The average high for all six years was made on the 5th day. That targets Jan-7th for 2004 but we have had a bigger gain in 2003 than any of the other prior years. This would suggest an earlier exit for less risk. Personally I am targeting the 5th or 6th for the January high. I got sidetracked on the short-term topic. Yes, I think we will see a higher Dow between now and year end despite the rotation we are seeing in the small caps. How much higher? There is significant resistance beginning at 10,200 to 10,300. That would be my target range for the next three weeks. If we get to 10200 I am going short and I am doubling down at 10250 and backing up the truck at 10300. My only question is where will the cheating start? We are not the only ones that can look at a historical chart and count. With 9,000 mutual funds and thousands of mini-funds and hedge funds there has got to be some with enough profits that they want to beat the pack to the door. Once this cheating starts it may be difficult for the rest to maintain discipline until January. To complicate things we have the elusive Santa rally. This is probably the most abused and over used term mentioned in holiday trading. The official Santa rally timeframe is considered to be the last five trading days of December and the first two days of the new year. Those seven days have averaged a +1.5% gain in the S&P since 1950. Even at these levels, S&P 1075, that +1.5% is a whopping +16 points. Not exactly a banner week. Retail traders hear the term Santa Claus rally and conjure up visions of strong gains and a prosperous new year. As I have outlined above the real result of the Santa Rally is to line up the sheep for the slaughter. I do not intend to be a sheep and hope you feel the same way. The VXO closed at 15.70 today. That is a low not seen since November 1996 in pre-Internet trading days. When sentiment is that lopsidedly bullish the danger is very real. I know you have heard it before because we have been flirting with 16.0 for over a month. It is off the scale for the reasons mentioned above. The VXO is calculated on the OEX, the top 100 blue chip, most highly liquid stocks. Sound familiar? There are no material economic reports for Wednesday and it will be left up to earnings warnings or news reports to move the market. The strong gain today could give traders another opportunity to lighten up but the more likely prospect will be just holding the high ground. Every dip today was met with decent volume and the same is probably true for Wednesday. Regardless of what happens tomorrow or the rest of the week we are trading on a tight wire at these rarified levels. Everyone has high hopes for the end of the year but there is always the chance for a bolt of lightning out of a blue sky that changes the picture instantly. Party on but be prepared to hit the exits if the punchbowl suddenly runs dry. Time is growing short for the end of year renewal special. Our goal is to have the Top 50 Stocks for 2004 in your hands before the holidays. They will be mailed by priority mail on Monday Dec-22nd so you can have the entire holiday period to review it and plan your trades. TIMING IS CRITICAL. Do not delay. We based the entry points for each of the stocks on the expected January dip. Don't miss out on this opportunity to profit. Full details below. 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 --------------------------------- Altria Group - MO - close: 54.21 change: +0.85 WHAT TO WATCH: There seems to be no end in sight for this rally in the Tobacco stocks and MO is now creeping above strong resistance at $54. With investors favoring large and stable stocks heading into the end of the year, MO looks like it could make a run at its 2002 highs near $58. A dip back to the $52-53 area will make for the best entry, with stops placed just under the $50 mark. --- Federated Department Stores - FD - close: 44.27 change: +1.05 WHAT TO WATCH: Looking for a Retail rebound? In contrast to the rest of the Retail index, shares of FD found strong support near $42.50 on Tuesday, setting up an aggressive rebound play. Look for entries on another rebound from above $42 and target a move back up towards the 50-dma. Use a tight stop at $41.50. --- General Dynamics - GD - close: 85.67 change: +1.35 WHAT TO WATCH: throughout the past several months, shares of GD have been consolidating just below major resistance near $87 while building a bullish wedge. Look for a breakout over $87 to confirm the pattern and enter looking for a quick move towards the next level of resistance near $95. --- Capital One Financial - COF - close: 56.50 change: +1.04 WHAT TO WATCH: If there is going to be a Santa Claus rally, it is likely to be led by the Financials. COF is giving us a nice entry setup too, as the stock has pulled back right to strong support in the $55-56 area and begun its rebound. Each apparent breakdown below support in recent months has found solid support near this level, so it makes sense to try playing the rebound one more time. Target entries as near to support as possible and look for a rally back near the $60 level at the 50-dma. =================== On the RADAR Screen =================== BBY $49.52 - Retail stocks have fallen out of favor with investors in a big way this week and BBY has now broken down solidly out of its rising channel and below the 100-dma. With earnings tomorrow, look for some near-term volatility, but a failed rebound back near the $52 level could be just the thing for a nice bearish entry heading into the end of the year. CTAS $45.99 - Following the November breakout above the top of its rising channel, CTAS has been basing just above that channel. But Tuesday saw a break and close back inside the channel and with earnings due out tomorrow, it looks like the stock is shaping up for a directional move. Given the strong rally over the past several months, we're looking for a downside play. A break below $45.50 should get the ball rolling, with CTAS making its way towards the bottom of its channel near $42. BAC $77.50 - Another Financial stock attempting to get a rally going, BAC pushed through solid resistance at $77 on Tuesday and with renewed strength in the Banking index (BKX.X), BAC looks like it could make a run towards strong resistance at $82. Pullbacks near $76-77 will afford the best entry. =============================== Market Sentiment =============================== Blue Chips Cheer the CPI - J. Brown The big event today was the Consumer Price Index (CPI) for November. The price for consumer goods dropped 0.2 percent in November, which marked the biggest drop since April. The big headline today was the drop in the "core rate" of inflation, which discounts the volatile food and energy prices. November's "core" rate fell 0.1 percent for the first drop since December 1982. Obviously inflation is NOT an issue right now and the market's cheered. With no visible signs of inflation the Federal Reserve will be content to sit on their hands. If we can make it past the March FOMC meeting the markets could have clear sailing until the first quarter of 2005 before we have to worry about interest rate hikes. Contributing to the strong economic news was an improving industrial production rate, which grew 0.9 percent. This was the best improvement in four years. To make it a Tuesday trifecta of positive economic news the utilization numbers were also positive with a rise from 75.1 to 75.1. The strong economic data overshadowed a couple of earnings warnings but it doesn't take a rocket scientist to notice the NASDAQ under performing the DJIA the last couple of days. Investors seem less inclined to buy the dip in some of 2003's high flyers and instead are moving into big cap blue chip names. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 10139 52-week Low : 7416 Current : 10129 Moving Averages: (Simple) 10-dma: 9968 50-dma: 9789 200-dma: 9112 S&P 500 ($SPX) 52-week High: 1082 52-week Low : 788 Current : 1075 Moving Averages: (Simple) 10-dma: 1067 50-dma: 1050 200-dma: 979 Nasdaq-100 ($NDX) 52-week High: 1453 52-week Low : 795 Current : 1403 Moving Averages: (Simple) 10-dma: 1408 50-dma: 1409 200-dma: 1253 ----------------------------------------------------------------- As predicted last week, the VXO has hit a new low, closing at 15.70. The VIX and VXN also remain near their lows. CBOE Market Volatility Index (VIX) = 15.93 -1.30 CBOE Mkt Volatility old VIX (VXO) = 15.69 -1.22 Nasdaq Volatility Index (VXN) = 26.15 -0.92 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.68 814,131 556,412 Equity Only 0.50 634,957 315,241 OEX 1.21 37,667 45,663 QQQ 1.08 47,889 51,482 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 74.1 + 0 Bull Confirmed NASDAQ-100 68.0 + 1 Bear Confirmed Dow Indust. 80.0 + 0 Bull Correction S&P 500 80.8 + 0 Bull Confirmed S&P 100 81.0 + 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: 0.94 10-dma: 1.14 21-dma: 1.12 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 1687 1510 Decliners 1174 1573 New Highs 169 115 New Lows 13 15 Up Volume 1091M 930M Down Vol. 678M 843M Total Vol. 1815M 1786M M = millions ----------------------------------------------------------------- Commitments Of Traders Report: 12/09/03 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 There is just a hint of bearishness in the Commercials who have upped their short positions. Right on cue the small traders have increased their long positions but to a greater extent. Commercials Long Short Net % Of OI 11/11/03 389,965 415,259 (25,294) (3.1%) 11/18/03 393,893 414,442 (20,549) (2.5%) 12/02/03 394,531 414,223 (19,692) (2.4%) 12/09/03 396,882 420,859 (23,977) (2.9%) 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 11/11/03 136,072 74,249 61,823 29.4% 11/18/03 147,842 80,047 67,795 29.7% 12/02/03 154,788 85,776 69,012 28.7% 12/09/03 172,178 99,484 72,694 26.8% 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 spread is narrowing between longs and shorts in the commercials. The opposite is happening in small traders' positions with longs surging more than 20K contracts. Commercials Long Short Net % Of OI 11/11/03 249,864 258,503 ( 8,639) ( 1.7%) 11/18/03 249,286 264,083 (14,797) ( 2.9%) 12/02/03 283,199 268,833 14,366 2.6% 12/09/03 294,006 288,385 5,621 1.0% 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 11/11/03 94,649 51,815 42,834 29.2% 11/18/03 95,119 61,975 33,144 21.1% 12/02/03 119,555 77,609 41,946 21.3% 12/09/03 142,173 76,171 66,002 30.2% Most bearish reading of the year: (77,385) - 09/02/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 There is a similar surge in commercial positions for the NDX as seen in the S&P futures. Small traders also increased long and shorts but leaning heavily on new longs. Commercials Long Short Net % of OI 11/11/03 35,889 49,201 (13,312) (15.6%) 11/18/03 35,608 49,689 (14,081) (16.5%) 12/02/03 35,569 48,552 (12,983) (15.4%) 12/09/03 39,612 51,443 (11,831) (13.0%) 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 11/11/03 26,212 10,730 15,482 41.9% 11/18/03 32,034 10,356 21,678 51.3% 12/02/03 21,594 9,429 12,165 39.2% 12/09/03 25,842 10,228 15,614 43.3% 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 There is little to report for DJ futures by commercial traders but small traders have significantly increased their short positions. Commercials Long Short Net % of OI 11/11/03 20,209 11,660 8,549 26.8% 11/18/03 20,746 11,080 9,666 30.4% 12/02/03 21,128 12,379 8,749 26.1% 12/09/03 20,378 11,934 8,444 26.1% 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 11/11/03 6,105 8,201 (2,096) (14.7%) 11/18/03 5,655 8,607 (2,952) (20.7%) 12/02/03 6,667 9,302 (2,635) (16.5%) 12/09/03 6,858 12,006 (5,148) (27.3%) 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. 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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PremierInvestor.net Newsletter Tuesday 12-16-2003 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: Is It For Real? Stop Adjustments: SIRI, SLAB, DLTR, NTES, UTEK Stock Split: HOV 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 ) =============== Netease.com - NTES - close: 37.85 change: -1.15 stop: 41.80*new* Company Description: NetEase.com, Inc. is a leading China-based Internet technology company that pioneered the development of applications, services and other technologies for the Internet in China. Our online communities and personalized premium services have established a large and stable user base for the NetEase Web sites which are operated by our affiliate. As of September 30, 2003 we had approximately 144 million accumulated registered accounts, and our average daily page views for the month ended September 30, 2003 exceeded 329 million. (Source: Company Press Release.) Why we like it: With the 200-dma and the 50 percent rally retracement to provide support, NTES climbed laboriously toward next resistance, but no one wanted to help it along. Volume proved less than half average daily volume. Other Chinese Internet-related stocks SINA, SOHU, and ZICA gained Thursday and Friday, but NTES printed a small- bodied candle, closing lower. SINA, SOHU, and ZICA each face resistance just overhead, too, with SINA and SOHU each printing a doji or small-bodied candle on Friday. NTES has not yet triggered this play by falling through Wednesday's $38.24 low. We want to remind readers, too, of the 50 percent rally retracement at about $36.40, a level at which we expect to see a strong bounce attempt. Some traders might want to wait for a drop through that important retracement level before entering. Why This is our Play of the Day After falling to the 200-dma (now at $39.00) last week, NTES really tried to put in a credible rebound. The post-Saddam capture rally was the best the bulls could manage, but after gapping up near $41.75 yesterday morning, the stock headed back down, once again coming to rest on the 200-dma. This time there was no bounce though, as price sliced through that average on Tuesday, making it the first close under the 200-dma ever. There does seem to be a lack of conviction on the breakdown though, as volume ran just over half the ADV on the past two days. Failed rebounds below $41 and especially below the 200-dma can be used for new entries, while momentum traders can still use a break to new lows as an entry. With this breakdown, it should now be safe to lower our stop to $41.80, just above yesterday's intraday high and well above the 10-dma at $40.78. Annotated Chart of NTES: Picked on December 10th at $38.96 Change since picked: -1.11 Earnings Date: 1/27/04 (unconfirmed) Average Daily Volume: 4.31 mln ================================================================= Stop Loss Adjustments ================================================================= SIRI - long Adjust from $2.05 up to $2.10 SLAB - short Adjust from $46.75 down to $46.00 DLTR - short Adjust from $30.90 down to $30.25 NTES - short Adjust from $43.01 down to $41.80 UTEK - short Adjust from $28.00 down to $27.50 ================================================================= Stock Splits ================================================================= Announcements ------------- HOV Constructs a 2-for-1 Split During today's trading session, Hovnanian Enterprises Inc (NYSE:HOV) announced that its Board of Directors has approved a 2- for-1 stock split of its common shares outstanding. The Board is seeking shareholder approval at its annual meeting, which is expected to take place on March 5th, 2004. The stock split is expected to take place in March, if approved. Shares of HOV have tripled over the past year and the 2:1 split will double the number of shares outstanding to just over 60 million. About the company: Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, Chairman, is headquartered in Red Bank, New Jersey. The Company is one of the nation's largest homebuilders with operations in Arizona, California, Florida, Maryland, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian, Washington Homes, Goodman Homes, Matzel & Mumford, Diamond Homes, Westminster Homes, Fortis Homes, Forecast Homes, Parkside Homes, Brighton Homes, Parkwood Builders, Summit Homes, Great Western Homes and Windward Homes. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes. (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 WFC Wells Fargo & Co 57.15 +1.07 SC Shell Transport & Trading 41.76 +0.65 GSK GlaxoSmithKline 45.23 +0.53 RD Royal Dutch 48.75 +0.81 CVX ChevronTexaco 80.70 +1.75 MWD Morgan Stanley 57.92 +0.79 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- CVG Convergys Corp 16.47 +1.30 ATVI Activision Inc 16.48 +1.44 ACO Amcol Intl Corp 17.49 +1.24 IPSU Imperial Sugar Co 14.08 +1.88 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- UTX United Technologies 93.52 +1.97 CAT Caterpillar 81.02 +2.50 LEH Lehman Brothers 74.56 +2.16 MUR Murphy Oil Corp 63.49 +1.57 SKE Spinnaker Exploration 30.64 +1.23 NX Quanex Corp 43.50 +1.15 MTLM Metal Management 32.98 +1.79 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- BBY Best Buy Co 49.52 -3.05 CMX Caremark Rx 25.01 -1.26 FDO Family Dollar Stores 32.65 -1.07 DOX Amdocs Ltd 22.00 -3.27 ADVP AdvancePCS 51.90 -3.35 SNDK SanDisk Corp 55.25 -5.61 GWW W.W.Grainger Inc 44.80 -3.80 CTSCH Cognizant Tech 42.70 -2.18 PIR Pier 1 Imports 20.72 -1.79 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- IRF Intl Rectifier Corp 47.55 -1.21 SHI Shanghai Petrochemical 34.40 -1.39 PII Polaris Industries 86.20 -3.80 TASR TASER Intl 83.00 -3.00 LSTR Landstar System 37.19 -1.57 ================================================================= 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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