PremierInvestor.net Newsletter Tuesday 01-20-2004 section 1 of 2 Copyright (c) 2004, 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: Guidance? Watch List: ELBO, VRSN, PDII, STCR Market Sentiment: Stronger Than Expected ================================================================= MARKET WRAP (view in courier font for table alignment) ================================================================= 01-20-2004 High Low Volume Advance/Decline DJIA 10528.66 - 71.90 10616.96 10519.49 2.28 bln 2026/1240 NASDAQ 2147.98 + 7.50 2149.85 2130.20 2.62 bln 2158/1144 S&P 100 563.75 - 0.97 565.95 562.55 Totals 4184/2384 S&P 500 1138.77 - 1.06 1142.93 1135.40 W5000 11131.32 + 15.30 11151.60 11082.78 RUS 2000 597.98 + 7.57 597.98 590.16 DJ TRANS 3020.00 - 16.30 3036.46 3006.03 VIX 15.21 + 0.21 16.13 15.09 VXO (VIX-O)14.91 - 0.36 15.83 14.91 VXN 20.49 + 0.25 22.13 20.26 Total Volume 5,234M Total UpVol 3,384M Total DnVol 1,802M 52wk Highs 1341 52wk Lows 12 TRIN 0.98 NAZTRIN 1.21 PUT/CALL 0.60 ================================================================= =========== Market Wrap =========== Guidance? It was all about guidance as the bluest of blue chips began presenting their earnings. However, good news did not buy much in the way of investor appreciation as strong earners were pounded when good results fell short of overly optimistic expectations. Dow Chart Nasdaq Chart It was a slow day economically with the NAHB Housing Market Index the only regular hours report. The headline number at 68 was less than consensus at 69 and less than the 70 from both December and November. Slower sales continue to depress the market despite the optimistic outlooks by the builders. With the economy recovering, interest rates low and inventory levels still light the conditions are ripe for a spring sales explosion but the winter weather has put sales in the deep freeze. This would suggest a continued neutral rate decision by the Fed next week could be the green light for another run for the builders as investors buy the dip in advance of the spring thaw. The worst thing that could happen for the home builders would not be what you would expect. A surge in the 4Q GDP, due out next week, that would suggest the recovery is really catching fire could actually push real interest rates up despite a Fed on hold. Rising economies can support higher rates but those same rates could slow home sales. Seems contrary to common sense but that is real life. More buyers can afford homes in a roaring economy but they have to pay more for the privilege. MMM reported earnings with sales that reached an all time high. They beat estimates by a penny and the shares soared to an all time high of $86.20 before taking a significant hit of over -$5.00 for the day. Analysts found no fault with the earnings with margins at 20% and sales up +14% from last year. MMM also raised its guidance for the quarter and the year. Unfortunately that raised guidance was still at the low end of the consensus range. Expectations for an earnings blowout and improved guidance were just too high it appears. Dow component UTX reported earnings that beat the street by +3 cents on a +19% increase in 4Q sales and guided inline with prior estimates for 2004. UTX lost -2.70 in early trading. Several analysts suggested UTX was over valued at its current PE of 18 based on the lack of an upgrade in guidance. UTX is expected to earn between $5.00 to $5.30 for 2004. Analysts were disappointed UTX only beat by +3 cents given the weakness of the dollar. Guess they were looking for something more in the IBM/GE range of currency translation gains. Another Dow component, GM, posted very strong earnings of +$2.13 per share and profits of $1.01 billion. A strong performance by GMAC helped the automaker. They also posted a very strong outlook for 2004 and expects to take market share from competitors with new models. GM spent an average of $3,589 in incentives per car in December. GM also said its -$18 billion pension fund problem had been completely erased thanks to the market gains and a debt offering. This takes a very big negative away from the GM stock. GM was trading down on the news at the close. Citigroup announced profits that nearly doubled last years results and raised their dividend +14%. Citigroup posted earnings of $4.76 billion or 91 cents per share. Analysts had expected 90 cents. Strong growth in credit card revenue came from 145 million card accounts. Citigroup said volume was strong and they were looking to grow the business by acquisitions where possible. Nothing wrong with this report but C finished negative for the day. INTC closed in on its lows for the month near $32 and suggested investors were not excited about their record earnings last week. We know it sold off on the less than hoped for guidance and so far that selling has not slowed. Five Dow components, excellent earnings from all on strong sales improvements. Inline or better guidance for them all yet all the stock prices tanked. This suggests what we all feared that the buyers are saying great but not great enough. Investors were quick to take profits when there was not a short covering rush like we saw in Juniper last week. The only stock not seeing a sell the earnings result was IBM which three days after announcing mediocre results was up another +1.78 on Tuesday. The reason was an announcement they were adding +15,000 workers. While that sounds like a prelude to a wave of new jobs when the Non Farm Payrolls are released in two weeks it was not as positive as it seemed on the surface. Only 4500 of those jobs will be in the U.S. The remainder of those 15,000 jobs will be in India and China. They did reiterate that they were bullish on the IT market for 2004 and these hiring's would put IBM at the highest employment level (330,000) since 1991 high of 340,000. IBM will save $168 million a year by hiring those programmers overseas. IBM said a programmer with 3-5 years of experience will cost them $12.50 an hour in China where that same programmer in the states costs them $56 an hour including benefits. If this outsourcing continues unabated would you care to speculate on what a programmer in the states will be making five years from now? Way less than $56. I know programmers in Denver that were making enormous amounts of money five years ago that are working in Taco Bell now or have been unemployed for nearly a year because the IT job market has collapsed. IBM is using that cheap labor to mount an assault on MSFT. They announced on Monday they were launching a new program to help millions of customers migrate from Windows to Linux. Linux is the fastest growing operating system for servers in the world and IBM wants to keep it that way. Microsoft is going to stop supporting Windows-NT by the end of 2004 and IBM is charging ahead with a plan to capture those millions of users. Microsoft software has continued to get more expensive and IBM sees this as an opportunity to take market share. IBM will offer multiple upgrade paths and offer classes on how to migrate. They are making these tools available to their 90,000 partners worldwide as they begin their push. MSFT was up +30 cents on the news despite the announcement from the Justice Dept that MSFT had failed to fulfill a key part of the antitrust settlement. MSFT will announce earnings on Thursday and this could be a shift out of those already announced and into a coming announcer. Buy the rumor, sell the news. The markets surged to new highs at the open once again but the Dow was unable to hold those opening levels. The January rally has been fueled by near record amounts of cash flowing into the markets. According to TrimTabs $8.6 billion in new cash came into equity funds for the fist nine days of January. The small cap techs are by far the biggest recipient of the cash. The Russell led the major indexes all day as traders scrambled to find something worth buying with hopes of big gains in 2004. Goldman Sachs reported the results of a CIO survey just completed where 32% of managers expected their IT spending to rise in 2004. Of that 32% the expected rise in spending was only estimated to be +1.5%. This is very low and does not suggest the bullish investor sentiment has carried through to the IT sector. Less than 1/3 expect gains and those gains are expected to be very small. Still 58% of those surveyed expected spending to be flat with the 4Q and that is an implied increase since the 1Q is normally weak. Not exactly a strong reason to invest in techs that are up in many cases more than +100% from 2003 lows. Merrill released a study late last week suggesting that 2004 would actually see a decline in IT services and spending in consulting services. After the close we saw earnings from AMD, MOT, PMCS, SAMN and RFMD among others. Motorola beat estimates by +4 cents with a +17 cent headline number. Cell phone sales fell -3% because of delays in getting camera phones and other new products to market in quantity. The did see a +64% jump in orders during the quarter. Unfortunately the profit margin on their phones is only 4% compared to 20% for competitor Nokia. They raised guidance to 5-7 cents for Q1 and analysts were expecting +5 cents. MOT traded down slightly in after hours despite the good results. AMD blew the doors off with its first profit in more than two years on strong 4Q demand for memory and computer chips. AMD said the gains were seasonal and the 1Q would be flat to down. They still expect to post a profit for the 1Q but after that it becomes dicey again. They said flash memory had been strong in the 4Q but pricing pressure and demand would make it flat in the 1Q. This was the same guidance Intel gave on flash memory. AMD was up early on the news but traded down as the after hours session ended. RFMD took a hit in after hours after beating estimates by +3 cents but then guiding down for Q1. The company was still upbeat but a pause in demand will push estimated Q1 earnings down to only +2 to +4 cents. Analysts had been expecting +7 cents. PMCS beat the street by a penny and said they were still expecting a strong 2004. They did use the "if" word in their guidance saying "if current trends continue" but then that is always the implied scenario. PMCS traded down slightly after the announcement. SANM turned in a profit and reversed a prior loss but the street was not happy with the results. Guidance was inline with estimates but given the expectations for the sector analysts were hoping for more. The consensus after the guidance was that SANM was benefiting from a restocking cycle and not new orders for an increase in IT spending. David MacGregor, a research analyst for Longbow said he surveys three dozen or so board companies each month and he saw only a little evidence of inventory buildup from companies like SANM. Techs got a very late gift after the close. The Semi Book-to-Bill came in at 1.20 and a high not seen in many months. This would suggest a sharp increase in orders and more confirmation that the 4Q was strong. This is a December number but one that should negate any negatives from some of the earning questions tonight. The futures did not react to the B-t-B announcement but it does not come out until the after hours stock session closes so reaction is normally muted until the next day. After the flurry of tech earnings after the close the futures fell slightly. This could have been due to the less than stellar guidance from some or just fear of the president. The State of the Union speech tonight offers numerous chances for a few misplaced comments to tank various sectors depending on the initiatives mentioned. The drug and health care sector are a favorite with comments about lowering the cost of healthcare suggesting profits for those companies will be lower. The energy sector could be volatile should any sweeping suggestions appear. Oil hit $36 a barrel today so I expect that to be on the hit list somewhere. The speech tends to hit every possible campaign target so nothing is sacred. Getting out of the way in advance with your profits is not a bad idea. This is also a very high profile event where all the heads of government are gathered in one place. This would be a terrorists dream target although probably the toughest possible target considering the security. This could have provided even more reasons for taking some profits off the table. The markets were far stronger today than the closing indexes suggest. The Dow lost -71 based on drops in HON, UTX, MMM, CAT, INTC and several others. Gains in IBM failed to prevent the dip. The -$5 drop in MMM was a major drag on the index. However, that Dow drop was mostly based on those five stocks. It was not a broad based decline. The Nasdaq closed at a new high near 2150 and the Russell gained a whopping +7.57. The S&P was flat. However the internals tell the real story. Volume ended strong at 5.23 billion across all exchanges. Considering the almost complete lack of volume intraday this is amazing and could have been option related. The A/D line was nearly 2:1 in favor of advancers despite the negative indexes. The new 52-week highs hit a three month high at 1341. This was not a negative day. The only qualifier was the strange volume, which was very heavy at the open and the close and flat intraday. This suggests that volume was squaring of exercised option positions. The key will be the volume and direction on Wednesday. Earnings are appearing faster than popped corn in a hot skillet and there is plenty of reasons to trade. If the volume continues tomorrow and displays the same positive patterns then the outlook is good. Lately volume has been increasing almost daily but we are still stalled under 10600 on the Dow and 1161 on the S&P. The Nasdaq and Russell are in breakout mode and not looking back. Eventually the blue chips have to join the party or the party is going to fade. This is the week for it to happen and Microsoft's earnings on Thursday could be the pivotal point. The speech is about to start and the next 90 minutes will also be critical for the week. Let's hope the market likes it! Enter Passively, Exit Aggressively. Jim Brown Editor ================================================================== 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 --------------------------------- Electronics Boutique Corp. - ELBO - close: 25.70 change: +0.40 WHAT TO WATCH: ELBO couldn't quite manage a break through the top of its October gap earlier this month, but the mild pullback since then is finding strong support near $25, the site of the 200-dma. This looks like a low-risk entry point for another run at the $27.50-28.00 resistance area, with the potential for a breakout this time, bringing the $30-31 area into play --- Verisign Inc. - VRSN - close: 20.93 change: +1.21 WHAT TO WATCH: Breaking out over $17.50 in early January, shares of VRSN haven't looked back since. Tuesday's session brought another breakout, this time over $20, which had defined the top for most of last week. It's aggressive to chase it higher, but the stock looks like it could make a run at major resistance in the $24-25 area ahead of its January 29th earnings report. --- PDI Inc. - PDII - close: 23.95 change: -0.98 WHAT TO WATCH: Look out below! PDII broke down under the $25 support level on Tuesday on strong volume and it looks like a test of the 200-dma may be in the cards. There's some potential support near $22.50 and then it could be a swift trip down the chart. Best entries will be found on a failed bounce below $25, although aggressive traders may want to wait for a break below today's low before playing. --- Starcraft Corp. - STCR - close: 22.30 change: -0.72 WHAT TO WATCH: Shares of STCR have been in "sell the news" mode over the past week after the company gave optimistic guidance for 2004. First breaking the 200-dma, the stock has continued to drop on above-average volume. A near-term bounce could be due, but once that fails, STCR looks destined for next solid support in the $19-20 area. --- =================== On the RADAR Screen =================== SYXI $11.60 - Semiconductor stocks are still looking strong, and SYXI proved its worth by breaking out to new recent highs on Tuesday. This puts the stock on the cusp of a major breakout, with the $15 level a viable target. Trigger entries above today's high, but watch for possible resistance near $12.50, the site of the 2002 highs. FRNT $11.50 - Still trading in a protracted downtrend, shares of FRNT appear to be rolling over just below the 10-dma, with strong resistance just overhead at the 200-dma. A failed rally will provide the best entry below that strong resistance, ahead of a drop to next solid support near $10. LUV $15.13 - Pardon us for picking on the airlines today, but LUV looks even better for a downside play than FRNT, as the stock broke to new multi-month lows today. Trigger entries on a break of $15 and target a drop to the $12.50 area. FLEX $17.39 - Breaking out above $16 in early January, shares of FLEX appear to have finished consolidating that move and today staged a nice breakout over $17. Look for entries on a dip and rebound from $17, confirming it as new support. Target a rally towards $20 resistance. =============================== Market Sentiment =============================== Stronger Than Expected - J. Brown The major averages don't tell the whole story. The Dow Jones was strongly red on the session after components MMM and HON both took some big hits. Meanwhile the NASDAQ managed another new high closing at levels not seen in 30 months. The strong market internals underline the strength not shown in the closing prices. Advancers pushed past decliners 18 to 10 on the NYSE and 2 to 1 on the NASDAQ. Up volume was twice down volume on both exchanges. The selling was heaviest in the retail sector as the RLX dropped 1 percent after failing at the 380 level twice in the last three trading days. More sector indices were positive than negative and leading the way were the oil services stocks with the OSX up 4.7 percent. It's probably not a coincidence that crude oil futures rose 87 cents to $34.87 a barrel. The XAU gold & silver index also posted a strong bounce, up 2.44 percent as gold futures soared nearly $6 towards $413 an ounce. As expected many of the XAU components followed suit but it remains to be seen if this is a buy the dip opportunity or just an oversold bounce. The XNG natural gas index also produced a decent session with a 3 percent gain following El Paso corp. who jumped 15% after Barron's highlighted the stock over the weekend. Oddly enough the NWX networking index saw no profit taking after Friday's big surge due to Juniper Network's incredible earnings report. Of course we'll hear from Lucent tomorrow and Nortel Networks in a few days and investors are probably just waiting to hear what these to networking giants have to say about their Q1 guidance. Keep an eye on the DFI and DFX defense indices. General Dynamics leads off the defense sector's parade of earnings tomorrow and we'll continue to hear from the group over the next several sessions. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 10616 52-week Low : 7416 Current : 10528 Moving Averages: (Simple) 10-dma: 10536 50-dma: 10086 200-dma: 9365 S&P 500 ($SPX) 52-week High: 1142 52-week Low : 788 Current : 1138 Moving Averages: (Simple) 10-dma: 1129 50-dma: 1081 200-dma: 1008 Nasdaq-100 ($NDX) 52-week High: 1559 52-week Low : 795 Current : 1552 Moving Averages: (Simple) 10-dma: 1530 50-dma: 1444 200-dma: 1302 ----------------------------------------------------------------- In spite of some market weakness earlier today the volatility indices remain near their lows. CBOE Market Volatility Index (VIX) = 15.21 +0.21 CBOE Mkt Volatility old VIX (VXO) = 14.95 -0.32 Nasdaq Volatility Index (VXN) = 20.49 +0.25 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.60 1,126,135 673,994 Equity Only 0.52 994,208 513,167 OEX 1.32 14,469 19,115 QQQ 4.75 24,131 114,718 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 77.9 + 0 Bull Confirmed NASDAQ-100 81.0 + 0 Bull Confirmed Dow Indust. 86.7 + 0 Bull Confirmed S&P 500 87.8 + 0 Bull Confirmed S&P 100 85.0 + 0 Bull Confirmed 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: 0.89 10-dma: 0.97 21-dma: 0.91 55-dma: 1.03 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 1804 2082 Decliners 1078 1042 New Highs 344 442 New Lows 6 3 Up Volume 1475M 1684M Down Vol. 710M 859M Total Vol. 2197M 2561M M = millions ----------------------------------------------------------------- Commitments Of Traders Report: 01/13/04 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 We don't have much more to report on for commercial traders this week other than slightly increased positions on both sides of the fence. Small traders followed suit. Commercials Long Short Net % Of OI 12/16/03 448,103 460,670 12,567 1.4% 12/22/03 400,066 405,240 (5,174) (0.6%) 01/06/04 403,721 408,729 (5,008) (0.6%) 01/13/04 405,558 411,361 (5,803) (0.7%) Most bearish reading of the year: (111,956) - 3/06/02 Most bullish reading of the year: 23,977 - 12/09/03 Small Traders Long Short Net % of OI 12/16/03 172,947 113,704 59,243 20.7% 12/22/03 147,537 81,596 65,941 28.8% 01/06/04 142,844 83,518 59,326 26.2 01/13/04 149,057 90,571 58,486 24.4% 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 more action than the full contracts represented above. Commercial traders added more than 20K contracts to both longs and shorts but they remain net bearish. Small traders were more enthusiastic with a large increase in long positions, outpacing the increase in short positions. Contrarians might view this as a bearish development. Commercials Long Short Net % Of OI 12/16/03 330,273 361,316 (31,043) (4.5%) 12/22/03 128,801 213,021 (84,220) (24.6%) 01/06/04 175,489 240,865 (65,376) (15.7%) 01/13/04 196,858 263,845 (66,987) (14.5%) Most bearish reading of the year: (354,835) - 06/17/03 Most bullish reading of the year: 133,299 - 09/02/03 Small Traders Long Short Net % of OI 12/16/03 177,193 73,694 103,499 41.3% 12/22/03 125,248 43,482 81,766 48.5% 01/06/04 139,433 51,909 87,524 45.7% 01/13/04 191,241 62,711 128,530 50.6% Most bearish reading of the year: (77,385) - 09/02/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 Ho-hum...commercial traders are still asleep at the wheel in the NDX futures. Meanwhile small traders have reduced their outstanding shorts. Commercials Long Short Net % of OI 12/16/03 61,343 73,153 (11,810) ( 8.8% 12/22/03 40,277 36,452 3,825 5.0% 01/06/04 42,892 37,801 5,091 6.3% 01/13/04 41,829 38,547 3,282 4.1% Most bearish reading of the year: (21,858) - 08/26/03 Most bullish reading of the year: 9,068 - 06/11/02 Small Traders Long Short Net % of OI 12/16/03 28,676 15,197 13,479 30.7% 12/22/03 22,656 14,544 8,112 21.8% 01/06/04 8,035 17,911 ( 9,876) (38.1%) 01/13/04 9,705 12,539 ( 2,834) (12.7%) 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 isn't much to report in the DJ futures either. It looks like commercials are just shuffling money around but the net result was a slightly more bullish stance on the Dow. In mirror-like precision small traders have slowly become more bearihs. Commercials Long Short Net % of OI 12/16/03 23,509 13,880 9,629 25.8% 12/22/03 14,088 9,998 4,090 17.0% 01/06/04 15,697 9,497 6,200 24.6% 01/13/04 16,501 8,724 7,777 30.8% 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 12/16/03 9,497 19,633 (10,136) (34.8%) 12/22/03 6,915 8,983 ( 2,068) (13.0%) 01/06/04 5,713 8,105 ( 2,392) (17.3%) 01/13/04 6,496 9,970 ( 3,474) (21.1%) Most bearish reading of the year: (10,136) - 12/16/03 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 01-20-2004 section 2 of 2 Copyright (c) 2004, All rights reserved. Redistribution in any form is strictly prohibited. The entire newsletter is best viewed in COURIER 10 for alignment ================================================================= Stop Adjustments: ORB, SPIL Closed Plays: MXO Stock Splits: OVTI 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) ================================================================= Stop Loss Adjustments ================================================================= ORB - long Adjust from $12.25 up to $12.60 --- SPIL - tech stock long Adjust from $5.59 up to $5.69 ================================================================= Closed Plays ================================================================= Maxtor Corp - MXO - close: 12.31 change: +0.33 stop: 11.68 As previously discussed we are closing the MXO play per Tuesday's closing price. Shares had continued their bounce from Thursday's low and reclaimed the $12.00 mark. The good news is that MXO looks poised for a strong breakout above the $12.50 level. The bad news is that rival Seagate Technologies (STX) announced earnings after the bell tonight and missed. That could weigh on shares of MXO tomorrow. Of course the real event is MXO's own earnings report tomorrow after the close of trading. Picked on Jan 4th at $11.68 Gain since picked: +0.63 Earnings Date 01/21/04 (confirmed) Average Daily Volume: 4.5 million ================================================================= Stock Splits ================================================================= Announcements ------------- OVTI focuses on a 2-for-1 split Early this morning OmniVision Technologies, Inc. (NASDAQ:OVTI) announced that its Board of Directors had approved a 2-for-1 stock split to be paid as a stock dividend. The payable date for the stock split or distribution date is February 17th, 2004. The shareholder record date is January 30th. This is OVTI's first stock split. About the company: OmniVision Technologies designs, develops and markets high performance, highly integrated and cost efficient semiconductor image sensor devices. Our main product, an image sensing device called the CameraChip(TM), is used to capture an image in a wide variety of consumer and commercial mass-market applications including digital still cameras, cell phones and video game consoles. OmniVision believes that its highly integrated CameraChips enable device manufacturers to build camera products that are smaller, less complex and more reliable, cost less, and consume less power than cameras using either traditional CCDs or multiple-chip CMOS image sensors. OmniVision believes that it supplies one of the most highly integrated single-chip CMOS image sensor solutions available today. OmniVision's CameraChips are currently used in a number of consumer and commercial applications such as digital still and video cameras, cell phones, personal digital assistants, personal computer cameras, toys and games, including interactive video games, and security surveillance cameras. (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 CHL China Mobile Ltd 17.81 +0.81 SC Shell Transport & Trading 40.36 +0.54 CVX ChevronTexaco 86.03 +1.31 BAC Bank of America 80.07 +1.05 BAY Bayer Aktien 31.94 +1.17 IMO Imperial Oil Ltd 48.17 +2.41 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- THC Tenet Healthcare 18.20 +1.26 AMTD Ameritrade Holding 17.26 +1.89 EP El Paso Corp 9.67 +1.27 NITE Knight Trading Group 16.85 +1.25 PWER Power-One Inc 14.26 +1.37 OPWV Openwave Systems 16.84 +1.61 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- IBM Intl Business Machines 97.10 +1.78 PKX Posco 36.98 +3.17 AET Aetna Inc 71.97 +2.07 MERQ Mercury Interactive 54.00 +2.30 CHKP Check Point Software 21.61 +1.66 BCR C.R.Bard 88.93 +1.83 VRSN Verisign Inc 20.93 +1.21 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- MMM 3M Co 80.41 -5.07 ITW Illinois Tool Works 81.05 -3.48 INFY Infosys Tech 88.50 -2.00 PH Parker Hannifin 57.77 -2.92 SRCL Stericycle Inc 43.45 -1.51 ASVI A.S.V. Inc 27.84 -2.52 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- SI Siemens Aktien 83.98 -1.12 NTLI NTL Inc 68.02 -3.28 TGI Triumph Group Inc 37.25 -1.45 WFMI Whole Foods Market 68.45 -1.47 VTR Ventas 23.16 -0.17 CBI Chicago Bridge & Iron 29.90 -0.32 BFAM Bright Horizons 44.68 -1.42 ================================================================= 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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