Option Investor
Newsletter

Daily Newsletter, Monday, 02/09/2004

HAVING TROUBLE PRINTING?
Printer friendly version
PremierInvestor.net Newsletter          Weekend Edition 02-09-2004
                                                    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:  Stocks Drift Mildly Lower
Watch List:   ICOS, EMN, FLIR, DO

===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
     02-09-2004            High     Low     Volume Advance/Decline
DJIA    10579.03 - 14.00 10618.51 10564.44 1.59 bln   1567/1288
NASDAQ   2060.57 -  3.44  2074.27  2060.44 1.73 bln   1716/1395
S&P 100   563.72 -  2.34   566.53   563.26   Totals   3283/2683
S&P 500  1139.81 -  2.95  1144.46  1139.21
RUS 2000  585.49 +  1.42   588.03   583.58
DJ TRANS 2903.66 +  9.30  2913.51  2891.29
VIX        16.39 +  0.39    16.82    16.12
VXO        15.77 -  0.21    16.47    15.65
VXN        25.21 +  0.54    25.87    25.20
Total Volume 3,647M
Total UpVol  1,806M
Total DnVol  1,794M
52wk Highs     579
52wk Lows       11
TRIN          1.16
PUT/CALL      0.71
===============================================================

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

Stocks Drift Mildly Lower
by James Brown

Monday turned out to be a session of mild profit taking after
Friday's big rally.  The earnings parade is starting to dwindle
and this week's economic reports are due out on Thursday and
Friday.  This doesn't give investors much news to trade on and
many believe the markets will churn sideways ahead of Greenspan's
appearances before congress this week.  There was a $4 billion
technology merger announced but it wasn't enough to inspire a
rally in the NASDAQ.  The tech-heavy index lost less than four
points to close at 2060.  The S&P 500 lost less than three points
to close at 1139 and the DJIA dropped 14 points to close at
10,579.

Foreign markets were generally positive after the G7 meeting.
Global finance ministers agreed that "excess volatility" was
unhealthy for the markets but their statement did not suggest any
policy intervention and the meeting closed with the current
agreement to keep currency markets "flexible".  Some analysts
interpreted the G7 statement regarding volatility and "disorderly
movement" as "undesirable for market growth" as an okay for Japan
to continue its intervention policies.  Japan sold a record 20
trillion yen last year and another 7 trillion yen just last month
in an effort to slow the yen's rise against the dollar, which
makes Japanese goods more expensive overseas and specifically in
the U.S.  The G7 news to keep currency markets flexible sent the
dollar lower again and the Japanese NIKKEI index lost 58 points
to close at 10,402.  Surprisingly the Chinese Hang Seng rose 267
points to 13,576.  Meanwhile a Dow Jones news story reported that
EU finance ministers met this afternoon in Brussels in talks to
discuss "all possible ways" to slow the euro's rise.  The dollar
bounced higher on this news and the English FTSE, the German DAX
and the French CAC 40 indices all rallied into the close.

Closer to home investors took some money off the table in
semiconductors, drug stocks and airlines.  The networking index
also took a hit after shares of Juniper networks fell 11% today,
but more on that in a bit.  Those stocks that garnered the most
buying interest today were gold & silver, natural gas, oil
services and oil issues.  The XAU rallied on a $3.70 gain in gold
futures.  Natural gas stocks rallied on bump in gas prices and
news that Ferrellgas Partners (FGP) would buy Blue Rhino (RINO)
for $340 million, or $17 per share, in cash.  Oil and oil
services stocks were higher on a 35 cent jump in crude oil to
$32.83 a barrel and positive analyst comments.  Drilling demand
has been growing around the world due to energy demand picking up
as the global economy recovers.  Oil stocks could move again
tomorrow as OPEC ministers meet in Algeria to discuss their
current quotas but most industry watchers expect them to remain
unchanged.  The 11-member cartel controls about 40 percent of the
planet's oil supplies.

U.S. market internals were mixed and reflected the sideways churn
witnessed throughout much of the session.  The NYSE reported
nearly 15 advancing stocks for every 13 decliners.  On the NASDAQ
it was almost the same picture with 17 winners for every 14
losers.  Down volume edged past up volume on the NASDAQ but it
was reversed on the NYSE with up volume outpacing down.  Overall
it was a very low volume session.  Part of the problem was a
technical glitch that prevented trading of stocks and ETFs on the
American Stock Exchange until 12:30 PM ET.

One of the big news stories today was the $4 billion acquisition
announced by Juniper Networks (JNPR) for NetScreen Technologies
(NSCN).  JNPR is offering 1.404 shares of its own stock for each
share of NSCN.  As of Friday's closing price for JNPR that would
be a 57% premium for NSCN.  While many felt that this may be a
high price to pay for NSCN, a company who's products make
networks more secure, most agreed it was a good strategic move to
broaden JNPR's portfolio of products and compete more directly
with its larger rival Cisco Systems (CSCO).  JNPR dropped 11% to
$26.18 on the news and NSCN soared 36% to $35.94.  Shares of CSCO
closed down 7 cents to $24.67.

Monday also brought more M&A news as PeopleSoft's Board of
Directors once again unanimously rejected Oracle's takeover bid,
after ORCL raised their offer to $26 per share last week.
Meanwhile rumors that Vodafone (VOD) was considering a bid for
AT&T Wireless (AWE) was confirmed today.  Cingular Wireless had
been the frontrunner as Wall Street speculates over who might bid
for AWE.  Should VOD end up being high bidder it would have to
sell its 45% stake in Verizon Wireless.

On the earnings front the House that Diller built appears to be
firing on all cylinders.  Better known as InterActive Corp and
previously known as USA Interactive, the growing Internet empire
run by Barry Diller reported earnings this morning that beat Wall
Street's estimates by 6 cents.  IACI owns Hotels.com,
Hotwire.com, Expedia.com, Match.com, uDate.com, LendingTree.com,
the HomeShoppingNetwork (HSN) and Home Shopping Europe as well as
Ticketmaster (Ticketmaser.com).  The fourth quarter numbers
showed net profits at 29 cents a share and revenues soaring
almost 36% to $1.8 billion, both of which surpassed analyst
estimates.  The stock rose 3.4% to $33.04.

In other news U.S. poultry-related stocks traded lower after
Japan, Malaysia, Singapore and S. Korea announced bans on
imported chicken from the U.S. after word spread of a bird flu
outbreak in Delaware.  The state has already killed 12,000
chickens in an effort to stop the spread of the disease and
officials say this strain is different than the avian flu
currently spreading in several Asian countries believed to be
responsible for 18 (human) deaths.  Stocks trading lower on the
news are PPC, SAFM, and TSN.

Two of the Dow's better performers today were Coca-Cola Co (KO)
and Disney (DIS).  Shares of KO hit new 16-month highs, breaking
out over resistance at $51.00, after an analyst with Goldman
Sachs reiterated their "out perform" rating and suggested that
other firms' estimates could be too low.  Goldman's KO analyst
believes that a strong January in Japan could boost KO's up
coming earnings report due out Wednesday, February 11th before
the market open.  Consensus estimates for KO are 44 cents a
share.

Disney also announces earnings on February 11th but reports after
the closing bell.  Yet today's story was not about DIS' earnings
or analyst estimates, currently pegged at 23 cents a share, but
the ongoing feud between Roy Disney and ally Stanley Gold and
their fight with Disney's board and CEO Michael Eisner.  Roy and
Stanley have been turning up the heat on their efforts to get rid
of Esiner in anticipation of the March 3rd annual shareholder
meeting for Disney (the company) where Eisner and three other
board members are expected to be reelected.  In its defense the
Board of Directors sent a letter to shareholders defending Eisner
and to "set the record straight".  Both Roy Disney and Stanley
Gold are former board members of DIS and the letter states that
both of them "... fail to tell you they voted to approve, and in
some cases championed, the very business decisions they now
condemn."  One agency reports that the letter to shareholders
states the board's belief that DIS' earnings should grow 30
percent in 2004.  Credit Suisse First Boston would agree that
conditions are bullish for DIS and one of its analyst suggest
that DIS could trade above the $30 level by the end of the year.
In unrelated news DIS announced a deal with Microsoft (MSFT) to
deliver digital content to consumers' homes and portable media
players.  Shares of DIS closed up 1.79% to $23.77.

Without any immediate economic reports and investors' tendency to
sit on their hands before any Greenspan meeting we're going to
see a lot more company-specific movement and probably less market
movement.  Tomorrow we'll hear earnings reports from Viacom Inc
(VIA) and the Marriott (HMT) before the opening bell.  This week
also brings us earnings from Dell (DELL) who is expected to
announce after the closing bell on Thursday.  In the meantime
brush up on your Greenspeak for Alan's first of two congressional
appearances is Wednesday.


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

Icos Corporation - ICOS - close: 40.08 change: +1.33

WHAT TO WATCH: Last week's break below the 200-dma had ICOS
looking like a solid bearish candidate, but the bulls have been
busy since then.  With today's rebound back over the 200-dma, we
could be witnessing an effective bear trap.  Use a trigger over
the 50-dma, and target a quick move back to $45 as the trapped
bears run to cover.

Chart=


---

Eastman Chemical Company - EMN - close: 41.24 change: +0.98

WHAT TO WATCH: EMN has been spending the past several weeks
consolidating its rally from the $32 level and after the late
January rebound from the 50-dma and today's breakout to a new 52-
week high, the stock looks ready to run again.  Use a trigger
over today's high and target a continued rally to the $45-46
resistance area.

Chart=


---

Flir Systems Inc. - FLIR - close: 40.36 change: +0.86

WHAT TO WATCH: The day of its earnings announcement saw a fair
amount of volatility in shares of FLIR, but the stock has since
regained its footing and looks headed higher.  Use a trigger of
$40.50 (just over the January highs) and target a slow and steady
rally to the $45 level.  Note, when FLIR trades over $40.50, it
will be at new all-time highs

Chart=


---

Diamond Offshore Drilling, Inc. - DO - close: 23.08 change: +0.60

WHAT TO WATCH: Drilling stocks were one area of strength on
Monday and shares of DO gushed higher by 2.67% to close just
below recent resistance.  A breakout through $24.50 should pave
the way for a rally to the $27.50 resistance level, which is just
under the 200-week moving average.  Wait for the breakout before
playing.

Chart=


---

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

PVN $13.69 - Although the stock couldn't deliver when we played
it a couple weeks ago, PVN looks like it is making another try at
a breakout.  Note today's intraday push through the $14 level,
which marks its best level since late 2001.  Use a trigger over
today's high and target the $18 level.

DLTR $33.34 - Showing steady improvement since bottoming in mid-
December, shares of DLTR look ready for another upward surge.
The stock has been consolidating in a healthy manner for the past
several weeks and came to rest just below resistance.  Use a
trigger of $34 and target a move back to the $37 area.  Note the
possibility of resistance near $35, which means we should see
some consolidation near that level before continuing higher.

MRX $39.16 - After pulling back to find support just above the
20-dma, MRX broke out on Monday and looks poised for further
gains.  Use a trigger over $39.25 and target a move to the $45
area.


=================================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to remove@PremierInvestor.net
=================================================================
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 advertising@PremierInvestor.net.

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


Copyright 2004  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter                   Monday 02-09-2004
                                                    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:   GSS
Closed Plays:        None
Split Announcement:  SSNC


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
==================================================================

GSS - long
Adjust from $5.00 up to $5.50


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


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

  Closed Bearish Plays
  --------------------

None


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

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

SSNC announces a 3-for-2 stock split

Before today's opening bell SS&C Technologies, Inc. (NASDAQ:SSNC)
announced that its Board of Directors had approved a 3-for-2 stock
split to take place in the form of a stock dividend.  The board
also announced that its semi-annual cash dividend would be raised
5%.

The 3:2 stock split will be payable on March 5th, 2004 to
shareholders on record as of February 20th.  Post-split SSNC will
have approximately 18.6 million shares outstanding.

The semi-annual cash dividend will be raised to 7 cents per share
and will be paid on a post-split basis.  The payable date for the
cash dividend will be March 24th, 2004 to shareholders on record
as of March 10th.


About the company:
SS&C delivers investment and financial management software and
related services focused exclusively on the financial services
industry. With a global client base that manages over $4 trillion
in assets, each of the products in SS&C's suite of highly
specialized solutions is in the top tier of competitive offerings
in the marketplace. By leveraging expertise in common investment
business functions, SS&C cost-effectively serves clients in the
different industry segments, including: 1) commercial lending, 2)
financial institutions, 3) hedge funds and family offices, 4)
insurance entities and pension funds, 5) institutional asset
management, 6) municipal finance and 7) real estate property
management. (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

TOT     Total Sa (ADS)             91.70    +1.97
SC      Shell Transport & Trading  39.76    +0.61
RD      Royal Dutch Petrol         47.53    +0.96
PTR     Petrochina Co Ltd          51.66    +1.45
BP      BP Plc                     48.40    +0.80
BCS     Barclays Plc (ADR)         39.10    +0.89


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

PNX     Phoenix Companies          13.88    +1.14
DCGN    Decode Genetics Inc        12.37    +1.04


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

KO      Coca-Cola Co               52.40    +1.41
HBC     HSBC Holdings Plc          80.21    +1.43
UBS     UBS Ag Ord. Shares         75.03    +1.40
IACI    Interactivecorp            33.04    +1.09
MHP     Mcgraw-Hill Companies      78.11    +1.44


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

JNPR    Juniper Networks           26.18    -3.29
CI      Cigna Corp                 54.85    -1.70
DNY     R.R. Donnelley & Sons Co   29.18    -2.06
RDY     Dr Reddys Labs             28.17    -1.88
PETC    Petco Animal Supplies      30.95    -1.64


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

NONE


=================================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to remove@PremierInvestor.net
=================================================================
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 advertising@PremierInvestor.net.

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

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.

To ensure you continue to receive email from Option Investor please add "support@optioninvestor.com"

Option Investor Inc
PO Box 630350
Littleton, CO 80163

E-Mail Format Newsletter Archives