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PremierInvestor.net Newsletter                   Monday 02-02-2004
                                                    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:  Did The Market See Its Shadow?
Watch List:   KKD, FRNT, RFMD, ANF

===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
     02-02-2004            High     Low     Volume Advance/Decline
DJIA    10499.18 + 11.11 10568.96 10434.67 1.96 bln   1526/1461
NASDAQ   2063.15 -  3.00  2085.49  2053.79 1.90 bln   1319/1639
S&P 100   562.76 +  2.45   566.42   558.69   Totals   2845/3100
S&P 500  1135.26 +  4.13  1142.58  1127.87
RUS 2000  580.54 -  0.22   585.07   576.03
DJ TRANS 2968.02 - 17.93  2892.40  2856.28
VIX        17.11 +  0.48    17.56    16.67
VXO        16.87 -  0.18    17.19    16.04
VXN        25.81 +  0.75    26.38    25.22
Total Volume 4,296M
Total UpVol  2,052M
Total DnVol  2,079M
52wk Highs     498
52wk Lows       11
TRIN          0.87
PUT/CALL      0.72
===============================================================

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

Did The Market See Its Shadow?
by James Brown

Saying that stocks were mixed today would be an understatement.
A day after the Super Bowl investors seemed undecided on which
direction to take the market.  As a result the major averages
oscillated both directions.  As is typically the case the
Industrials, the NASDAQ Composite and the S&P 500 index all
posted similar moves.  The early morning strength looked more
like a continuation of Friday's afternoon bounce.  Unfortunately,
that strength didn't last and stocks quickly faded before finding
a bottom just before 11:00 a.m.  A quick rebound launched a
strong rally that stalled mid-afternoon.  Traders began to take
money off the table again and the last hour drift suddenly became
a sharp drop in the market's last thirty minutes.

Contributing to the market volatility was mixed economic data.
The reports were generally positive but the numbers missed
expectations.  Not helping were mixed to down markets overseas.
Britain's FTSE dropped 9 points to 4381 while the German DAX
gained 13 to 4071.  The Japanese NIKKEI lost less than 7 points
to close at 10,776 but the Chinese Hang Seng fell 289 points to
12,999.  It could be concerns over the Avian flu or it could be
just profit taking but the Hang Seng has dropped more than 750
points in the last seven sessions.

Speaking of the avian flu, which has now spread to more than 10
Asian countries, the XAL airlines index dropped more than 1.88%
and marked its third loss in four sessions.  Investors could be
concerned that this new outbreak will dramatically cut back on
air travel to the region.  China has already killed 23 million
chickens in an attempt to stop the flu's advance.  Unfortunately,
the virus may be mutating.  The U.N.'s health agency reported
yesterday that two sisters in Vietnam died from the deadly virus
after potentially contracting it from their brother.  This would
be the first human-to-human transmission if confirmed.  Currently
the W.H.O. is claiming there is no pandemic in Asia and their
level of concern has not risen with just 12 deaths being
attributed to the avian flu.  Also weighing on the airlines was
news of at least three flights being cancelled over the weekend
due to terrorist threats.  British Airways and Air France had
flights from Europe to the U.S. cancelled on Saturday while
Continental Airlines had one flight from Washington D.C. to
Houston cancelled on Sunday.

Evidence of equities' mixed movements today can be seen in the
market's internals.  The NYSE reported 15 winners for every 13
losers while the NASDAQ witnessed advancing stocks falling behind
decliners almost 15 to 16.  Up volume on the NYSE outnumbered
down volume but it was just the opposite on the NASDAQ.  Market
pundits claimed that Monday's low volume exacerbated the moves in
the indices.  In the futures market we saw crude oil rocket
higher with a $1.93 jump to $34.98 a barrel while gold futures
slipped $3.60 to $399.30 an ounce.  Stock sectors that saw the
heaviest buying pressure were insurance, defense, biotechs and
drug stocks.

Insurance stocks were up on anticipation of stronger earnings.
Several companies in the sector are due to announce this week.  A
few of them announced tonight.  Everest RE Group (RE) missed
earnings by 7 cents despite Q4 profits more than doubling.  AFLAC
(AFL) reported earnings that were inline and announced a 30
million share buyback.  Nationwide Financial Services (NFS)
reported earnings that beat estimates by 8 cents (estimates were
71 cents).  The Principal Financial Group (PFG) sprinted past
earnings estimates of 31 cents with net income hitting 46 cents a
share in spite of a write down that lowered income from last
year's numbers.

Defense stocks were higher due to an increase for defense
spending in the just released White House budget plan.  Biotechs
were higher lead by a strong day for Amgen (AMGN) and news that
Chiron (CHIR) had launched a new clinical trial for its latest
HIV/AIDS treatment.  The DRG drug index hit a new relative high
after Pfizer (PFE), the largest drug company on the planet by
market cap, announced that the FDA had approved two new drugs.
The new hypertension/cholesterol treatment, named Caduet,
combines their cholesterol fighting treatment Lipitor with
Norvasc for high blood pressure.  The second new drug is Spiriva,
developed by Germany's Boehringer Ingelheim and co-marketed by
Pfizer.  Spiriva is designed to treat Chronic Obstructive
Pulmonary Disorder (COPD), which affects millions of smokers.
Analysts believe both drugs can eventually top $1 billion and
potentially reach $2 billion in annual sales each.  Shares of PFE
broke out above resistance at $37.00 to a new 52-week high.

Also in the news was SBC Communications (SBC) who announced a
rise in DSL prices.  Both Bank of America and Goldman Sachs
offered positive comments on this news.  Meanwhile speculation
that SBC might bid on AT&T Wireless (AWE) appears to be cooling.
Shares of SBC rose 3.8%.  The lead front runner for an AWE
acquisition seems to be Cingular.  Ford also made the news with a
"sell" rating from Deutsche Bank, who downgraded the stock from a
"hold".  Last week we noted the rollover in shares of General
Motors (GM) and today's downgrade for rival Ford sent Dow
component GM even lower.

Of course the biggest news story of the day, aside from the
halftime show "incident", was the ISM index.  After two quarters
of strong GDP growth the Institute for Supply Management's
factory index reached 20-year highs as manufacturers geared up to
replace low inventories and meet rising demand.  January's ISM
number hit 63.6.  This passed December's 63.4 but missed
economists' expectations for 64.  Readings above 50 indicate
economic growth and this was the eighth month in a row the index
came in above 50 and the third consecutive reading above 60.  The
last time the ISM was this strong was back in December 1983,
which read 69.9.

Looking deeper into the ISM factory index's components we see
that the new orders index, a major factor of growth, slipped from
73.1 to 71.1.  The production index rose from 69.2 to 71.1,
another 20-year high dating back to December 1983.  The order
backlog index slipped from 61 to 60.5 and the new export orders
index fell from 60 to 57.5.  The employment index also slipped to
52.9 from 53.5, but marked its third month in a row over 50 (a
sign of expansion).  Today's ISM number corresponds with last
Friday's GDP number.  Both fell below expectations but together
they confirm steady growth.

The ISM wasn't the only economic report out this morning.
Investors also had to digest the December construction spending
numbers, which rose 0.4%.  This was below the 0.7% growth
expected.  Making this potentially troublesome was November's
downward revision from 1.2% to 0.5% growth.  The Commerce
Department also announced that real disposable personal incomes
were flat while wages slipped for the first time in over a year.

On a more positive note the Semiconductor Industry Association
(SIA) once again reiterated their belief that chip sales would
grow nearly 20 percent in 2004.  Meanwhile the World
Semiconductor Trade Statistics group reported that global chip
sales did rise 18.3% in 2003.  Unfortunately, this wasn't enough
to keep the chip stocks in the green and the SOX semiconductor
index slipped lower in the afternoon sell-off.

Tomorrow will be interesting.  Nearly two thirds of the S&P 500
have reported their December quarterly earnings and this week
we'll hear from another 75 companies.  The big tech stock to
report this week is Cisco Systems (CSCO).  CSCO is due to report
after the bell on Tuesday with estimates set at 17 cents per
share.  The stock had traded strongly higher midday on Monday but
gains slipped to just 1.9% amid the afternoon pull back.
Expectations are pretty strong for CSCO, especially given the
blow out numbers and guidance from rivals Juniper and Nortel
Networks.

It will also be interesting to see it the semiconductor index
(SOX) can hold support at the 500 level.  Many people believe the
SOX tends to lead the NASDAQ.  If that's true then tomorrow may
be a down day.  After the bell tonight I heard a note that
Goldman Sachs was downgrading the chip sector to "neutral".
Unfortunately, I was unable to confirm this announcement.

We still have a week full of economic news with the next major
report on Wednesday with the ISM services index.  Friday is the
big event with the non-farm payrolls report.  Currently Bloomberg
is reporting an average estimate of about 165,000 jobs being
created in January.  Let's hope it doesn't disappoint this time
or we may be in store for a stock market freeze.  In the mean
time button up those coats.  Punxsutawney Phil, the most famous
groundhog prognosticator, saw his shadow today indicating six
more weeks of winter.


==================================================================
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
---------------------------------

Krispy Kreme Doughnuts - KKD - close: 35.12 change: -0.52

WHAT TO WATCH: The fad seems to be wearing off in the wake of the
Atkins diet popularity and KKD has been in a persistent downtrend
since early November.  The last bounce attempt failed miserably
below the 50-dma and KKD is now threatening to break below $35
for the first time since last June.  Use a trigger under support
and target a drop to $32 or perhaps even to stronger support at
$30.




---

Frontier Airlines - FRNT - close: 9.28 change: -0.48

WHAT TO WATCH: We pointed out the weakness in FRNT a couple weeks
ago, looking for a rollover and break to new recent lows.  That
played out nicely and with the stock being further pressured by
breakdowns in both the XAL index and the Dow Transports, FRNT
looks headed for stronger support down in the $7.50 area.  Even
last Friday's earnings report couldn't provide support with the
stock coming to rest on Monday near new multi-month lows.  Use a
trigger under today's close and target $7.50.




---

RF Micro Devices Inc. - RFMD - close: 9.24 change: -0.25

WHAT TO WATCH: Investors clearly didn't like what they heard from
RFMD's earnings report on 1/21 and they've been hitting the sell
button ever since.  Critical support at $9 appears in danger of
breaking and if it does, the stock could be headed down to strong
support near $7.00.  Along the way, there's the potential for
support at the 200-dma and then again near $8.00, but if the
$9.00 level is traded, then a PnF Sell signal will be issued,
inviting a drop all the way to $5.50.  Use a trigger at $9.00 and
target a drop to $7.00




---

Abercrombie & Fitch - ANF - close: 26.56 change: +0.66

WHAT TO WATCH: It has been a pretty dismal couple months for ANF
investors, as the stock has continued to languish after
December's rash of downgrades.  But optimism is clearly building
for a better report on February 17th, as the stock broke above
the bottom of that December gap on Monday on rising volume.  Use
an entry trigger above today's high and target a rally up to the
200-dma.




---

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

JDAS $15.25 - The initial excitement over JDAS' earnings report
failed right at the 50-dma and since then the stock has been
trending steadily downwards.  In early January, the 200-dma
provided support, but if it fails this time, it could be a quick
trip down to next support in the vicinity of $13.50.  Use a
trigger under the 200-dma and then watch for potential support at
$14.50 on the way to that $13.50 target.

GSS $5.37 - Strength in the US Dollar has continued to pressure
the price of gold and gold stocks in the wake of last week's FOMC
meeting.  GSS is at a critical level here, resting just above
strong support at $5.00.  A break below that level looks like a
good point to enter a quick bearish play, looking for a drop to
the 200-dma at $4.18.

AFFX $31.95 - Voting with their wallets, investors have shown
their approval for AFFX's earnings report late last week,
delivering a strong breakout over the $30 resistance level and
price is continuing to rise on solid volume.  Aggressive traders
can chase the stock higher from here, looking for a continued
rally to resistance in the $35-36 area.


=================================================================
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.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

*****************************************************************
ADVERTISING INFORMATION

For more information on advertising in PremierInvestor.net
Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

*****************************************************************


Copyright 2004  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter                   Monday 02-02-2004
                                                    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 Loss Updates:   None
Closed Plays:        SPIL
Split Announcement:  MGAM


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 Updates
==================================================================

None


==================================================================
Closed Plays
==================================================================

TECH STOCKS
-----------

Closed Bullish Plays
--------------------

Siliconware Precision - SPIL - cls: 5.86 chg: -0.21 stop: 5.90

As we suspected the big move on Friday may have been a top.
Shares of SPIL quickly traded under the $6.00 level this morning.
While finding support at 5.90 and trading between 5.90-6.00 most
of the day, the late day sell-off, especially in the SOX, was too
much for SPIL.  We are stopped out at $5.90.  Congratulations to
readers who exited at our initial profit target of $6.50-6.60 on
Friday.

Picked on January 18 at $ 6.02
Gain since picked:      - 0.16
Earnings Date         02/12/04 (unconfirmed)
Average Daily Volume:      1.7 million




==================================================================
Stock Splits
==================================================================

Announcements
-------------

Multimedia Games designs a 2-for-1 stock split

During today's trading session, Multimedia Games Inc (NASDAQ:MGAM)
announced that its Board of Directors has approved a 2-for-1 stock
split of its common shares outstanding.  The announcement comes
after the company's shareholders just approved a proposal to
increase the number of authorized common shares from 25 million to
75 million.  The split will take place as a stock dividend.

The payable date for the stock split is set for February 27th,
2004 to shareholders on record as of February 16th.  MGAM will
have approximately 27.0 million shares, on a post split basis.

About the company:
Multimedia Games, Inc. is the leading supplier of interactive
electronic games and player stations to the rapidly growing Native
American gaming market. The Company's games are delivered through a
telecommunications network that links its player stations with one
another both within and among gaming facilities. Multimedia Games
designs and develops networks, software and content that provide its
customers with comprehensive gaming systems. The Company also offers
systems and products for the growing racino, charity and commercial
bingo markets. The Company's ongoing development and marketing efforts
focus on new Class II gaming systems and products, Class III video
lottery systems for use by Native American tribes throughout the
United States, and products for charity bingo opportunities.
Additional information may be found at www.multimediagames.com.
(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

SBC     SBC Communications Inc     26.46    +0.96
FNM     Fannie Mae                 77.71    +0.61
VZ      Verizon Communications     37.50    +0.64
FRE     Freddie Mac                63.00    +0.58
BMY     Bristol-Myers Squibb Co    28.57    +0.52


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

ANDW    Andrew Corp                18.15    +1.01
GNTA    Genta Incorporated         13.82    +1.06


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

AVE     Aventis                    78.10    +1.75
MDT     Medtronic Inc              50.65    +1.43
TRB     Tribune Co                 52.63    +1.44
BDX     Becton Dickinson           46.20    +1.14
ATH     Anthem Inc                 83.33    +1.55
HSY     Hershey Foods Corp         76.53    +1.02


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

HBC     HSBC Holdings Plc          75.95    -1.65
ACS     Affiliated Computer Svc    51.18    -4.27
ROK     Rockwell Automation Inc    31.26    -1.31
RYAAY    Ryanair Hldgs Plc (ADR)   33.00    -2.00


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

SIAL    Sigma-Aldrich Corp         57.92    -0.66
UCBH    UCBH Holdings Inc          39.47    -0.39


=================================================================
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.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

*****************************************************************
ADVERTISING INFORMATION

For more information on advertising in PremierInvestor.net
Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

*****************************************************************

Copyright 2004  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.

DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

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