PremierInvestor.net Newsletter Thursday 01-29-2004 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: Buy The Dip? Watch List: VC, CEC, ROP, EASI Market Sentiment: Finicky Investors ================================================================= MARKET WRAP (view in courier font for table alignment) ================================================================= 01-29-2004 High Low Volume Advance/Decline DJIA 10510.29 + 41.90 10522.59 10417.85 2.43 bln 1171/2078 NASDAQ 2068.23 - 9.10 2087.33 2041.07 2.64 bln 1059/2131 S&P 100 563.10 + 3.61 563.33 557.36 Totals 2230/4209 S&P 500 1134.11 + 5.63 1134.39 1122.38 W5000 11045.72 + 28.80 11058.26 10932.72 RUS 2000 579.86 - 4.05 586.81 573.34 DJ TRANS 2971.99 + 4.30 2986.68 2948.35 VIX 17.14 + 0.36 17.66 16.79 VXO (VIX-O)17.11 + 0.01 18.01 16.93 VXN 25.20 + 0.04 26.24 25.05 Total Volume 5,521M Total UpVol 2,022M Total DnVol 3,415M Total Adv 2523 Total Dcl 4784 52wk Highs 271 52wk Lows 16 TRIN 0.85 NAZTRIN 0.90 PUT/CALL 0.80 ================================================================= =========== Market Wrap =========== Buy The Dip? Some traders bought the dip as the indexes neared critical support but there was no V bottom blast off as many had hoped. The low of the day came around 2:PM with alternating buy/sell programs fighting for control. Is this the bottom or better yet, is this the correction we needed? Dow Chart - Daily Nasdaq Chart - Daily The morning started off with another drop of -1,000 in the Jobless Claims but with the prior weeks number revised up +2,000 the net result was a rise. Regardless of how you add it up it was just one more week without any jump in the numbers. This was the third week in the 343,000 range and the four week moving average came in at 346,000. The total insured unemployment rate is down to 2.5% from the peak at 3.0% in late May. We are going in the right direction but we are not going very fast. Forty-seven states saw a drop in claims for last week. Florida had the largest gain in claims due to numerous layoffs. The Employment Cost Index jumped +0.7% for the 4Q but it was less than analysts had expected at +0.9%. Wages dropped but health care benefit costs rose. The drop in wages and the outsourcing of jobs is helping companies tack on additional earnings but slowly depressing real income. It is a good thing inflation is very low or the middle to lower income workers would really be suffering. Wages grew by only +2.9% for the year while employment costs rose +3.8%. Benefit costs rose +1.2% in the 4Q and +6.3% for the year. The Chicago Fed National Activity Index came in at only +0.13 for December and well below the +0.68 for November. That November number was revised upward from +0.55 and indicated a stronger bounce in the middle of the quarter and a fall off in December. Output components only added +0.05 to the index and well off the +0.54 contribution in November. Employment fell for the 11th straight month. Only 44 of the 85 components were positive for the period. One analyst said the headline number of +0.13 clearly showed that the economic recovery was gaining strength thanks to strong productivity growth. Sorry, I see a significant drop from November and a barely breakeven ratio on the components. It was the fourth consecutive positive month although it was only barely positive. Let's count our blessings and not worry over what could be in the future. The Help Wanted Index dropped one point to 38 but should not be considered a negative event. It has been holding the 37-38 range since June. The negative connotation would be due to the lack of a gain. If advertising for employees is not picking up then the Jobs report next Friday could also be flat. Analysts would love to have seen even a small jump over 40 to suggest a pickup in employment activity but they will have to wait for at least another month. If the economy is improving you would think employment advertising should be showing at least a minor increase. This always causes analysts to suspect the economic growth is not as robust as they hoped. Next Friday we get the answer. There is always the chance that consulting firms, internet job firms, search networks and the flood of unsolicited resumes are taking away the need for those advertisements. To confirm that thought process the Labor Turnover Survey also out today showed that layoffs are down -14% from year ago levels. Job openings have increased by +1.8% and new hires are up +3.1%. This was only the second month since the survey began in 2000 that there was a year over year increase in job openings. According to the JOLTS numbers the bottom in the labor market was in Aug/Sep 2003 and hiring has been increasing, although slowly, since then. The catch with this report is the reporting period. This is a November period and light years behind the market in terms of revelance. Traders want to know what happened last week not three months ago. This does suggest that data from other more current sources like the ISM surveys will continue to show improvement in hiring and that improvement will eventually end up in the JOLTS data. There is also the problem with the type of new jobs being created. New Wal-Mart's, Starbucks, Home Depots and new fast food restaurants are creating new jobs faster than the jobs report is showing. This suggests that we are seeing the cheapening of the work force. (no offense to those readers in those professions) I am merely drawing a conclusion that although jobs are being created they are not the jobs most people would be excited about. The FOMC minutes for December came out at 2:PM and they are credited with the afternoon drop in the market. Not the actual minutes but the fear of the minutes as the drop came between 1:15-1:45. The minutes clearly described why the Fed removed the considerable period statement this month. They viewed it as restricting their flexibility to respond to changing conditions. The minutes were also more bearish in tone with greater worries that inflation could ramp up at any time and they wanted to be prepared to take a preemptive strike if need be. The members also expressed concern for the rising budget deficit and the eventual impact on the economy. Several members argued to remove the statement in the December meeting suggesting they were getting ready to raise rates and needed to clear the table for the next series of rate hikes. Ugly thought! Instead of an immediate drop they added the phrase associating it with economic conditions to warn the markets there was a change coming. As we know from the past six weeks the markets ignored the warning. That market stance of burying its head in the sand brought the Fed no choice but to change the statement to plain language at this weeks meeting. So much for the soft landing. We didn't listen and they had to hit us harder. The members also expected the unemployment rate to drop over the coming quarters as a result of the rising economy. Now we can see why they were shocked when the December Jobs report was barely positive. In general they are not really worried about inflation and could still see a potential deflationary period ahead. They view the risk to each direction as now equal. They just wanted to be ready to react if the inflation monster won the battle and sprang from the bushes. With capacity utilization still at 75% the odds of impending inflation are very slim. Bonds finished flat for the day and after the ramp job yesterday it is amazing we did not see a sell off. It is even more amazing when you consider there is $80 billion in new supply coming to market through next week. The government has to fund that deficit and somebody will get the interest. The market reaction to the Fed news both in bonds and equities was over done in the opinion of most analysts. However, while nobody thinks they will raise rates soon it is the discounting process that we are seeing now. When the Fed was seen to be on hold until 2005 the markets had factored in that lack of change for the next 6-9 months. That is exactly what the markets are supposed to do. They factor earnings, rates and economic prosperity for 6-9 months in advance. A change in one prompts a change in the others. We need to also remember that rate hikes do not come one at a time. The Fed is not going to raise 1/4 point and then go dormant for a couple years. They raise for a reason and every rate adjustment takes 6-9 months to work its way through the markets. Normal cycles involve 3-5 rate changes over an 18-month period. So, the markets are not just factoring in a potential rate hike in May, which is the new target, but they are factoring in the entire rate hike cycle which could begin in May. See, it really is a trend change in progress. The good news is the reason for the hikes. If the Fed does hike rates in May it will be because the economy has exploded fast enough to generate inflation. Think about that. We are currently crawling along in terms of economic growth that we can see as in job creation. However earnings are exploding. We are seeing raised guidance by the majority of companies and the body language of the confessors is positive. They are not hunkered down behind their figurative podium in flak jackets when they announce. They are generally proud of the results and optimistic about the future. This is a complete change from just six months ago. The bottom line is that the growth has to expand significantly from even the current level to invoke a rate hike and at the present rate that may not happen anytime soon. The message to the markets should be don't get yourself in a tizzy because nothing fundamental really changed. However, there was a major change in the tone of the stock market. We have had three major distribution days so far this week. Strong volume with declining volume substantially higher than advancing volume. New 52-week highs on Thursday were 274 and a level not seen since October 24th. The semiconductor sector crashed to a support level not seen since early December. The SOX broke its 50 dma at 515 and came within two points of next support at 500. Considering chip stocks were up the strongest of any sector over the last few months it is no surprise they were the hardest hit. In fact the SOX lows on Thursday were more than -10% off the January highs. A REAL correction! SOX Chart - Daily The Russell also took it on the chin with a -5% drop back to 573.00 from its 601 high from Tuesday. A -5% drop in three days is a significant hit. Putting it in perspective the Dow barely blinked. We saw a drop back to 10417 intraday on Thursday and close enough to 10400 to call it a successful test of support for me. That was only a -2.7% drop from its 10705 high from Monday. The real damage came from the Nasdaq, which dropped -112 points from its 2152 high on Monday. I say real damage because that was a -5% drop on a highly visible index. Remember this is on mostly better than expected earnings. The afternoon rebound on Thursday was simply an oversold reaction in front of the GDP report and not necessarily a sign that the worst is over. Ok, now what? The key is the GDP report on Friday morning. It also helps that we have the NY-NAPM, Chicago-PMI and Consumer Sentiment at the same time. If I had to take an unbiased look at just the indexes and predict a direction without factoring in the bullish sentiment I would expect at least one more down day in our future and maybe several. None of the major indexes have even come close to their real support at the 50 dma except the SOX. The levels for the respective indexes are: Current - 50-dma 579 - 558 Russell 1094 - 1134 Spx 2068 - 2005 Nasdaq 10510 - 10208 Dow 11045 - 10661 Wilshire 5000 The SOX is the only major index of note to break its 50 dma during this sales event. Based on simple technical analysis and recent historical trends the major markets should all test that level. But, we still have to factor in the bullish sentiment and economic conditions. Basically the conditions are good and the sentiment is still off the wall bullish. The economic conditions will be tested over the next six trading days with a barrage of reports ending in the Nonfarm Payrolls next Friday. These reports will either push the rest of the undecided sellers off the fence or convince the dip buyers to go shopping for bargains. The GDP on Friday is the first big motivator. The real consensus estimate is about +5.2% with the whisper numbers still running around +6.5%. We have to assume the Fed knew the GDP numbers in advance and factored them into their statement. If the GDP was weaker than expected would they have wanted to roil the markets only to have them tank again two days later when the GDP was released. Stranger things have happened but I am not expecting it. If we do get a decent GDP I would expect the markets to react favorably. Friday is also month end and I would expect some window dressing from funds with excess cash on hand. I would expect that window dressing to trigger some short covering from those who profited from the drop. A bad GDP will just add fuel to the profit taking fire. Obviously this is all speculation and anything is possible. We are well off the highs but also well above normal support. That gives us plenty of room to wander without breaking any real support or resistance levels. We can remain range bound within a broad range until after the Jobs report next Friday. I would then expect the markets to go directional once again. While I could rationalize a touch of the 50 dma on all the averages I would be very surprised to see it. When you consider I have been looking for a -500 point Dow pullback since Jan-1st that should give you some idea of my current mindset. I can see us moving lower, I would just be surprised if it was that much lower given the current sentiment. I have said all along there was a buying opportunity in our future and this is it. About the only thing that could ruin it for me would be a massive negative surprise in the economic reports. I am betting against that possibility and went long on the dip today. 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 --------------------------------- Visteon Corporation - VC - close: 11.25 change: -0.36 WHAT TO WATCH: VC has had quite a run over the past couple months, and investors were only too happy to start taking profits following last week's earnings report. But things look like they may be turning more bearish with the stock threatening to break below the $10.75 level. Use that price as an entry trigger and target a drop to the 50-dma. --- CEC Entertainment Inc. - CEC - close: 47.32 change: +0.18 WHAT TO WATCH: After more than a month of testing the $46.75 support level, it looks like CEC is finally due for a breakdown. The last rebound attempt was firmly rejected from 50-dma resistance earlier this week and a break under today's low ($46.75) can be used to enter bearish positions, looking for a drop to fill in that series of gaps from mid-October. Initial support may be found in the $43.50 area, but if it breaks, the 200-dma just under $41 will be a viable target. --- Roper Industries Inc. - ROP - close: 48.95 change: -0.81 WHAT TO WATCH: After being firmly rejected at major resistance near $53, ROP has picked up some downside momentum this week, breaking the 50dma yesterday and getting a feeble bounce off the 100-dma today. If that average gives way, the real test will be $48 support. We want to play the downside on a break below $48, targeting next solid support near $44 or even a drop to the 200- dma. --- Engineered Support Systems - EASI - close: 48.91 change: -2.81 WHAT TO WATCH: After two failed attempts to get back over the 50- dma this week, shares of EASI are back on the defensive, falling sharply on Thursday on rising volume. That brings the stock right back to critical support just above $48. Use an entry trigger at $48 and target a drop to strong support at $40. =================== On the RADAR Screen =================== NVDA $24.00 - The recent weakness in the Semiconductor sector has pressured NVDA right back to strong support near $22, which it slipped below on Thursday. But this could be a good aggressive bullish entry, especially in light of the strong rebound this afternoon. Wait for a rally back over the 50-dma before playing and target a rally back to the $24-25 area. DIS $24.45 - It may not be exciting, but DIS continues to trade steadily higher in its rising channel that began last spring. The sharp dip this morning was eagerly bought on strong volume, as investors seem to have liked the "divorce" between the firm and Pixar. Another pullback and rebound from above the 50-dma looks good for new entries, as does a breakout over today's high, as it will have the stock back in the upper half of its rising channel. AMD $14.68 - If the Semiconductor sector continues to weaken, then AMD is about to have a nasty fall. Today's selling pushed the stock very close to critical support at $14 and only the late-day rebound saved it. Trigger entries on a break of that support and look for a fall back to the $12 level. =============================== Market Sentiment =============================== Finicky Investors - J. Brown Yesterday the markets crater because the Fed removes its "considerable period" language. Today the markets rally after the Fed releases its minutes from last month's meeting that suggest they were considering a removal of this language back in December. No one ever said the stock markets moved on logic but this time it might make sense. The news yesterday was a great "excuse" to take some profits off the table. However, investor sentiment turned bullish again as they realized that the Fed's comments confirm that the economy really is improving and that means strong corporate profits. Tech stocks lagged the afternoon rally today but almost every sector moved up off its lows. Several sectors (transports, disk drives, natural gas, and airlines) pulled back to their simple 50-dma and either held support there or bounced. The hardware sector (GHA) did lose ground today but continues to build what looks like a bullish flag consolidation pattern. The software sector (GSO) produced a nice "hammer" candlestick that might suggest a one-day bullish reversal. Probably the most watched tech sector index is the SOX, which closed under its simple 50-dma but remains above round-number support at 500. If I had to bet, I'd bet on a bounce here tomorrow unless some chip company issues an earnings warning before the open. Financials were strong today with the banking index (BKX) pulling back to previous resistance before bouncing from the 980 level. The strongest sector was the biotechs (BTK). The BTK index added 2.35%. I also note that the DRG drug index looks bullish with a nice bounce from its short-term moving averages. Normally when the markets turn volatile drug stocks are commonly seen as "safe havens" to park your money. Utilities were also higher as investors seem reluctant to sell these higher-yielding dividend stocks. Two more sectors performing well are insurance (IUX) and healthcare (HMO). Both have managed to maintain the majority of the gains with only a slight pull back. It is notable that the gold & silver index (XAU) was the worst performer with a 2.32% drop and a close under recent support at 96. It was no coincidence that gold futures fell more than $16 to close under the $400 level for the first time in weeks. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 10701 52-week Low : 7416 Current : 10510 Moving Averages: (Simple) 10-dma: 10578 50-dma: 10208 200-dma: 9458 S&P 500 ($SPX) 52-week High: 1155 52-week Low : 788 Current : 1134 Moving Averages: (Simple) 10-dma: 1140 50-dma: 1094 200-dma: 1017 Nasdaq-100 ($NDX) 52-week High: 1559 52-week Low : 795 Current : 1496 Moving Averages: (Simple) 10-dma: 1530 50-dma: 1457 200-dma: 1319 ----------------------------------------------------------------- Try as they might the volatility indices could not maintain any of their morning gains. The midday reversal suggests the rally might not be over yet for the markets. CBOE Market Volatility Index (VIX) = 17.14 +0.36 CBOE Mkt Volatility old VIX (VXO) = 17.11 +0.01 Nasdaq Volatility Index (VXN) = 25.20 +0.04 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.80 960,543 764,294 Equity Only 0.64 836,300 538,960 OEX 1.22 24,106 29,386 QQQ 1.74 56,817 98,948 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 77.1 - 1 Bull Confirmed NASDAQ-100 75.0 - 3 Bull Confirmed Dow Indust. 90.0 - 3 Bull Confirmed S&P 500 87.0 - 1 Bull Confirmed S&P 100 87.0 - 1 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: 1.01 10-dma: 0.92 21-dma: 0.95 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 1108 1085 Decliners 1752 2024 New Highs 166 113 New Lows 14 6 Up Volume 939M 793M Down Vol. 1378M 1811M Total Vol. 2369M 2611M M = millions ----------------------------------------------------------------- Commitments Of Traders Report: 01/23/04 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 Wow! We've seen a mild reversal in the commercial traders' positions. They've moved from mildly net short to mildly net long. That's an encouraging sign for more strength in the markets. Small traders have grown a bit more cynical with a slight increase in short positions but they remain net long. Commercials Long Short Net % Of OI 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%) 01/23/04 422,135 407,626 14,509 1.7% 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 12/22/03 147,537 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% 01/23/04 141,107 100,090 41,017 17.0% 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 Commercials are starting to up their bets on the e-minis with almost 40K new longs and 44K new shorts. Small traders in turn reduced their bets but remain net long. Commercials Long Short Net % Of OI 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%) 01/23/04 233,867 307,122 (73,255) (13.5%) 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 12/22/03 125,248 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% 01/23/04 187,270 57,196 130,074 53.2% 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 very little change in commercial traders' positions here and the same holds true for the small traders. Commercials Long Short Net % of OI 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% 01/23/04 42,823 39,442 3,381 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 12/22/03 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%) 01/23/04 9,180 11,371 ( 2,191) (10.7%) 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 Commercials are also hesitant to make any big changes to their net bullish stance on the Dow. Meanwhile small traders grow a little more bearish. Commercials Long Short Net % of OI 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% 01/23/04 16,403 9,252 7,151 27.9% 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 12/22/03 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%) 01/23/04 6,068 10,183 ( 4,115) (25.3%) 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. 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PremierInvestor.net Newsletter Thursday 01-29-2004 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: None Closed Plays: BLI, ORB Stock Splits: BMS, FWFC, SAFM, SJW 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 ================================================================= None ================================================================= Closed Plays ================================================================= =================================== Active Trader (AT) CLOSED LONG play =================================== -------------------- Closed Bullish Plays -------------------- Big Lots Inc - BLI - close: 14.22 chg: -0.37 stop: 14.30 Ouch! BLI has posted four down days in a row. This sell-off has broken support at its 200-dma as well as the $14.50 and $14.25 levels. The stock did dip toward its simple 50-dma this morning but there wasn't much enthusiasm in its bounce off the lows. We're stopped out at $14.30. While the stock looks short-term oversold and due for a bounce watch out for its daily oscillators, which have turned bearish. Picked on January 25 at $15.23 Gain since picked: - 1.01 Earnings Date 02/25/04 (unconfirmed) Average Daily Volume: 652 thousand ====================================== High Risk/Reward (HR) CLOSED LONG play ====================================== -------------------- Closed Bullish Plays -------------------- Orbital Sciences - ORB - cls: 12.62 chng: -0.63 stop: 12.50 There didn't seem to be any company-specific news to justify the selloff in ORB today, but that didn't change the fact that the stock lost nearly 5% on the day, tripping our $12.50 stop on the early plunge before the afternoon rebound arrived. That break of both the $12.75 support and the 20-dma looks bearish, and ORB will probably lose more ground before building a base for another launch. We'll keep our eye on the stock for another opportunity to play, but for now, we must drop it and move to the sidelines. Picked on January 11th at $12.90 Change since picked -0.28 Earnings Date N/A Average Daily Volume = 380 K ================================================================= Stock Splits ================================================================= Announcements ------------- BMS ships a 2-for-1 stock split A couple of hours after lunch Bemis Company (NYSE:BMS) announced that its Board of Directors had approved a 2-for-1 stock split and a 14% increase in its cash dividend. The quarterly cash dividend is being raised to 32 cents per share and is payable on March 1st, 2004 to shareholders on record as of February 17th. The cash dividend will be paid on a pre-split basis. The 2-for-1 stock split will take effect as a 100% stock dividend and is payable on March 1st, 2004 to shareholder on record as of February 17th. The split will increase the number of outstanding shares to 108 million and marks BMS' fifth stock split. About the company: Bemis Company is a major supplier of flexible packaging and pressure sensitive materials used by leading food, consumer products, manufacturing, and other companies worldwide. Founded in 1858, the Company reported 2003 sales of $2.6 billion, of which $2.1 billion was from the flexible packaging business segment and $0.5 million was from the pressure sensitive materials business segment. More than 75 percent of the Company's sales are packaging related. The primary market for Bemis' products is the food industry, which accounts for over 65 percent of sales. Other markets include consumer goods, medical, pharmaceutical, chemical, agribusiness, printing and graphic arts, and a variety of other industrial end uses. Bemis holds a strong position in many of the markets it serves and actively seeks new market segments where its technical skill and other capabilities provide a competitive advantage. Bemis' leadership position in the flexible packaging industry rests on a strong technical foundation in polymer chemistry, film extrusion, coating and laminating, printing and converting. Bemis' pressure sensitive materials business specializes in adhesive technologies. Based in Minneapolis, Minnesota, Bemis employs about 12,000 individuals in 53 manufacturing facilities in 10 countries around the world. (Source: Company Press Release) --- FWFC announces a 5-for-4 stock split A couple of hours after the market's close tonight First Washington FinancialCorp (NASDAQ:FWFC) announced that its Board of Directors had approved a 5-for-4 stock split. The split will be payable on March 1st, 2004 to shareholders on record as of February 16th. FWFC's Chairman said this was the 12th year in a row the company has declared a stock split (or stock dividend). About the company: First Washington FinancialCorp is the holding company for First Washington State Bank. The Bank maintains its headquarters in Windsor, New Jersey and has 15 banking offices located in Mercer, Monmouth and Ocean counties, New Jersey. In addition, the Company is a joint venture partner in Windsor Title Agency, LLP, a general title agency located in Lakewood, NJ. (Source: Company Press Release) --- SAFM scratches up a 3-for-2 split An hour before the closing bell Sanderson Farms, Inc. (NASDAQ:SAFM) announced that its Board of Directors had approved a 3-for-2 stock split of its common stock in the form of a 50% stock dividend. The distribution date will be February 26th, 2004 to shareholders on record as of February 10th. Fractional shares will be paid in cash. SAFM also announced a quarterly cash dividend of 12 cents per share payable on February 24th to shareholders on record as of February 10th. This will be paid on a pre-split basis. About the company: Sanderson Farms, Inc. is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and other prepared food items. (Source: Company Press Release) --- SJW Corp gushes with a 3-for-1 stock split Late this evening SJW Corp (AMEX:SJW) announced that its Board of Directors had approved a cash dividend increase and a 3-for-1 stock split of its common shares. The quarterly cash dividend will be 76.5 cents per share and payable on March 1st, 2004 to shareholders on record as of February 9th. The cash dividend will be paid on a pre-split basis. The 3-for-1 stock split will be payable on March 1st, 2004 for shareholders on record as of February 10th. After the split SJW will have approximately 9.1 million shares outstanding. About the company: SJW Corp. is a publicly traded holding company headquartered in San Jose, Calif. SJW Corp., through its subsidiary San Jose Water Company, provides water service to a population of approximately one million people in the City of San Jose and nearby communities. (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 57.84 +0.78 MWD Morgan Stanley 57.84 +0.78 MER Merrill Lynch 58.68 +0.57 KMB Kimberly Clark 59.00 +1.00 CAH Cardinal Health 64.00 +0.75 GDW Golden West Financial 102.94 +1.44 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- DCLK Doubleclick Inc 11.90 +1.56 IPXL Impax Labs 19.19 +1.68 BBX BankAtlantic Bancorp 16.53 +1.09 TEN Tenneco Automotive 11.21 +1.02 CNQR Concur Technologies 10.73 +1.51 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- PG Procter & Gamble Co 101.00 +2.38 WLP Wellpoint Health Network 104.36 +3.06 SBUX Starbucks Corp 36.48 +1.02 MHP McGraw-Hill Companies 75.64 +1.73 HDI Harley-Davidson Inc 50.35 +1.61 STJ Saint Jude Medical 71.75 +3.20 EL Estee Lauder 41.90 +1.99 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- STM STMicroelectronics 27.13 -1.16 ITW Illinois Tool Works 77.55 -2.11 GM General Motors 50.71 -1.75 CHA China Telecom 36.98 -1.72 CAT Caterpillar Inc 77.26 -2.36 VRTS Veritas Software 32.24 -4.23 IMO Imperial Oil Ltd 43.80 -1.80 TLM Talisman Energy 54.50 -2.54 CTL CenturyTel Inc 28.00 -3.30 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- GDT Guidant Corp 63.30 -1.95 AMX America Movil 31.04 -1.10 CFC Countrywide Financial 82.05 -1.70 HAR Harman Intl Industries 74.26 -3.64 DCX DaimlerChrysler 47.40 -0.96 FRO Frontline Ltd (ADR) 27.77 -1.70 SMMX Symyx Technologies 25.80 -0.97 ================================================================= 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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