Option Investor

Daily Newsletter, Thursday, 03/04/2004

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PremierInvestor.net Newsletter                 Thursday 03-04-2004
                                                    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:      Inline Guidance?
Market Sentiment: One Word: Cautious
Watch List:       AUO, PHS, CLE, WEBX

MARKET WRAP  (view in courier font for table alignment)
      03-04-2004           High     Low     Volume   Adv/Dcl
DJIA    10588.00 -  5.10 10603.25 10562.74 1.59 bln 1980/1227
NASDAQ   2055.11 + 21.80  2055.12  2031.84 1.80 bln 2091/1055
S&P 100   568.32 +  1.81   568.70   566.16   Totals 4071/2282
S&P 500  1154.87 +  3.84  1154.97  1149.81
W5000   11288.38 + 50.10 11288.44 11226.22
SOX       508.70 +  8.20   508.78   500.55
RUS 2000  598.38 +  7.06   598.39   589.52
DJ TRANS 2884.62 -  3.30  2888.27  2864.78
VIX        14.40 -  0.15    14.50    14.19
VXO (VIX-O)14.71 +  0.01    14.99    14.57
VXN        22.50 -  0.59    23.30    22.38
Total Volume 3,664M
Total UpVol  2,450M
Total DnVol  1,028M
Total Adv  4599
Total Dcl  2593
52wk Highs  591
52wk Lows     9
TRIN       0.96
PUT/CALL   0.71

Market Wrap

Inline Guidance?

After a day of mixed markets, sweaty palms and tension so
strong you could smell it, Intel lowered its guidance ever
so slightly. The initial reaction was negative until the
spin doctors hit the airwaves and the damage was muted. The
markets, except for the Dow, had ended the days at the highs
on expectations of good news. Was it good enough to keep
them there?

Dow Chart - Daily

Nasdaq Chart - Daily

Economically it was a strong day that helped build the
tension in front of the Intel news. The retail same store
sales for February came in at +6.7% and that was the
strongest gain since records were first kept in Nov-2000
according to Thompson First Call. The gain was attributed
to tax rebates, weather and strong discounting. This trend
should continue for the next three months as tax refunds
hit mailboxes across the country. Good spring weather would
also help the change of seasonal merchandise. Wal-Mart said
same store sales rose +6.2% and raised its guidance for
March to 4-6% from 3-5%. Its total sales from all stores
rose +14%.

Jobless Claims fell to 345,000 and a drop of -7,000 from
the prior week. The prior week was revised upward to 352K.
39 states reported a decrease in claims for the week. Claims
trending under 350K per week have historically been followed
by job growth in the +150K per month range. That was the
historical trend before three million jobs per year were
outsourced overseas. We do not know what new level will be
required to produce sustained U.S. job growth.

The final Q4 productivity was revised downward to +2.6% and
was slightly less than expectations but still strong. You
might remember the Q3 productivity was a very strong +9.5%.
The final productivity for the year was +4.4%. There was a
strong revision to the hourly compensation to +1.4%. This
was significantly higher than the +0.5% initial number. The
increase in compensation is surprising due to the higher
competition for available jobs and the current reduction
in benefits trend. Despite the bear market or maybe because
of layoffs prompted by it the last two years of productivity
growth were the strongest on record since the government
began keeping records in 1940. Ironic since it also
contained some of the largest job losses in recent history.
But, fewer workers is what raises productivity. Using that
analogy corporations could fire everyone and raise their
productivity to 100%. Be tough finding consumers to buy
your products with everyone unemployed. Obviously I say
this in jest lest anyone take it wrongly.

Factory Orders for January fell -0.5% and slightly more
than the estimates at -0.3% but the trend for increased
capital spending is still up. The orders have been
alternating up/down almost each month for all of 2003
and the minor drop after a +2.1% jump in December was
nothing to worry about. December's numbers were revised
up making the net change for January nearly flat. The
biggest problem with the report was a -2.3% decline in
durable goods but the non-durable continued to climb
+1.6%. Much of the overall decline came from the
transportation component which fell -10.3% but that
component is normally discounted due to big swings. While
the factory orders are showing overall uptrend improvement
the gains are not as wide as analyst's would like. It
suggests the recovery is narrower then previously
expected and it will take a stronger surge going forward
to keep the recovery on track. Analysts fear the narrow
breadth could easily crumble if conditions stagnated even

In stock news the mouse house fired half of Michael Eisner
and took away his Chairman duties. He remains CEO of Disney.
They gave the job to a career board sitter Senator Mitchell
who coincidently had nearly as large a no confidence vote
(23%) as Eisner. Not being a DIS stockholder I have no
opinion other than image is considerably important to stock
prices. If 43% of the stockholders basically voted to cut
Eisner then what is the board thinking by replacing him
with somebody else they don't like? Why does Eisner need
this aggravation? Take the money and run and let the
peasants have a new king.

Dell Chairman and CEO Michael Dell must have seen the
writing on the wall and he beat the rabble to the punch
by resigning as CEO and appointing the President of Dell,
Kevin Rollins, as CEO. Unfortunately Dell stockholders
were not impressed and wanted Michael as the CEO and the
stock fell on the news. Personally, if I were Michael I
would give up both jobs and find a beach somewhere. He
has turned a $1000 investment into an $85B company. Time
to retire a hero Michael. Don't wait for the stockholders
to give you a no vote when the next recession appears.
(like they would really do that - grin) Dell has created
more millionaires than almost any other company in history
except maybe Microsoft. Michael Dell is following in the
footsteps of Bill Gates who also stepped aside to let
other run the company and give himself more time to be
the visionary.

The big news after the bell was the Intel mid quarter update.
Intel lowered their revenue estimates from a range of $7.9B
to $8.5B to a range of $8.0B to $8.2B. That is .3 knocked
off the top side and only .1 added to the bottom. To be
fair this is not a big deal but the dueling analysts were
trying to out spin each other after the bell. Various
spinsters were pointing out that Intel usually revises to
the high side of the range and a low side revision suggests
that business was lighter than expected. Duh! Lighter
because Intel has various ways to "account" for revenue
that would allow them to adjust to the center of the range
if they could. The idea here is that the best they could
manage was lighter than expected. The positive analysts
were pointing out that Intel was only a "rounding error"
away from their midpoint and it was confirmation that the
business was still strong. The phrase you will probably
hear the most tomorrow is "sales consistent with the lower
end of normal seasonal patterns" with the emphasis on the
word lower. Traders always want to hear that sales are
coming in at the high end of estimates. Intel initially
fell on the news but recovered somewhat later in the
session. Considering the bullish tilt to the tech stocks
during normal hours and seeing the futures recover in
after hours I am not seeing any major impact to Friday's
market. We still have a lot of darkness before morning and
we did close near the highs. I suspect the Employment
Report will take the spotlight more than the Intel news.

The Intel weakness had been predicted by several analysts.
There is apparently a short term glut of notebooks and
the Banc America analyst today said it should only last
2-3 months. That glut came in a quarter that is not
normally known for tech strength so it is being mostly
ignored. HPQ also warned that things were not as hot
in tech land as most expected when they said they were
only seeing a +1% to +2% gain in IT spending for 2004.
The Nasdaq has been listless and range bound for the
last month as these factors have been digested.

Flextronics also provided an update after the close and
it left its forecast unchanged. They affirmed estimates
of 9-11 cents and analysts are already expecting 11 cents.
Could be a challenge there. FLEX traded down slightly in
after hours.

The next major hurdle is the Employment Report tomorrow
morning. We finally saw some headline grabbing today with
estimates well above the +125,000 consensus estimate. Those
trying to grab the spotlight included Brian Wesbury a guest
on CNBC who predicted +210,000 jobs. Steve Liesman then
jumped out in front of the crowd with a size does matter
+250,000 estimate in one spot and then declined to quote
a number in another. Later an analyst on one of the later
stock TV sound bites went all the way to 310,000. I did
not catch his name. Thus it has begun. After a great deal
of calm leading up to the event the expectations are
finally being driven into a reporting frenzy. Fortunately
this did not happen far enough in advance to build these
expectations into the market. As it stands I think we
are neutral and anything over +75K will be seen with some
relief and anything over +125K could be greeted warmly.
Anything under 75K should be seen progressively negative
the closer to zero it gets.

We have not had any Fedspeak about jobs this week. That
worries me. In the recent past they actually went on the
attack and talked up/down jobs with a full court press
that was sometimes contrary to the actual numbers in
order to juice the markets when the actual numbers were
announced. It was deathly quiet this week. Either the
numbers do not need any makeup to improve the reception
or they are laying low after the Greenspan attack on
social security and the dollar had adverse results on
the markets.

While techs were surging on Thursday the Dow was dormant
for the entire day. It traded in a very narrow 40 point
range and despite several tries was never able to hold
over 10600 for more than a couple minutes. Except for
the Monday bounce the Dow has been locked in a range
from 10550 to 10650 and it is holding just under the
midline at 10600. Trying to paint a technical picture
of the Dow one would only need a piece of paper and a
straight edge. Other than the Monday bounce absolutely
nothing is happening. The one bright point is the ever
rising 50dma currently at 10546. With current strong
support at 10550 the addition of the 50dma support
should make that level tough to break without a major
Jobs failure.

Dow Chart - 45 min

The Nasdaq surprised everyone with a rise ahead of the
Intel news and a gain of +21 points. The index rebounded
from an early morning dip to 2031 and closed at 2053.
There was a battle at 2050 most of the afternoon but
short covering before the close finally broke the
deadlock.  The high on Tuesday before Greenspan tanked
the markets was 2064. The rally this afternoon was a
relief considering the -45 point drop from those highs
to yesterday's lows. The Nasdaq rebounded to close right
below the 50dma once again at 2059. That average is
proving to be significant resistance.

After the bell today there was news from Intel, FLEX,
HLTH, TIVO and SBL. SBL, a tech stock that trades on the
NYSE missed earnings by -2 cents and dropped -$2 in after
hours. While not a Nasdaq stock it is still a tech.
Intel was trading down about -60 cents, FLEX about -30
cents and AMAT -50 cents. HLTH and TIVO were up about
+70 cents each. The net impact to the Nasdaq at the open
should be a small negative bias and probably generate
some profit taking from today's gains. Considering it
closed on the upside of its recent range it is in no
apparent danger.

In advance of the Intel news the SOX rebounded off its
support at 500 and turned in a +1.62% gain to close
at 508. This should be high enough that any Intel/FLEX
impact should fade before the 500 level is reached.
(keyword = should)

The Russell blew out, literally. The Russell moved over
its Tuesday high and the highs for February at 597 to
close at 598.38. This is only three points from the
January highs and five points from an all time closing
high and a very strong performance. We are likely to get
some pullback at the open from the tech news but I view
any dip here as a buying opportunity. The Russell-2000
Ishares (IWN) broke out to a new all time high at 173.00.

Russell-2000 Chart - Daily

The Wilshire-5000 moved within 18 points of a post 9/11
high and being the broadest measure of the markets still
suggests the bullish undertone is continuing. Taken with
the Russell strength this is a clear signal that bears
should take to heart. The Dow is the current dog and
the most narrow of indexes. 18 Dow stocks failed to
close in positive territory today. Considering the
rally in small caps the Dow components could be
suffering from the same rotation that sent it to the
10750 highs at the beginning of February. Money that
went to the safety of big caps then is fleeing back
to small caps as we move into the time for an April
earnings run to begin.

Internals were surprisingly strong today with advancers
beating decliners nearly 2:1 and volume heavily weighted
to the advancers. New highs are surging again and new
lows are almost nonexistent.

In late news tonight the Banking Index BKX is splitting
10:1. The Philadelphia Stock Exchange announced today
that the index currently at 1017.77 was being split
to improve liquidity of the instrument and make it
more attractive to a diverse set of investors. The
index is up nearly 50% in the last year and outperformed
the S&P for the last four years. The BKX is comprised
of 24 national and regional money center banks. The
BKX is also optionable. The split is scheduled for
March 22nd.

For Friday our fate is tied to the Employment report
and there is nothing we can do about it. Assuming the
numbers are moderately decent I would continue to buy
the dips in small cap techs as they have been the hot
rods of late. Let the morning volatility fade and
check the market direction before entering tomorrow.
Remember, if the news is bad you can always wait for
Monday and avoid the weekend event risk and let
emotions die down. Cash is a position.

Enter Passively, Exit Aggressively.

Jim Brown

Market Sentiment

One Word: Cautious
- J. Brown

Investor sentiment can be summed up in one word: cautious.  The
markets traded mostly sideways on Thursday despite the general
bounce across most sector indices.  The strong buying in
homebuilders was encouraging and even Internets got in on the
buying spree with news from Ask Jeeves.  Yet the real focus today
was on Intel and its after hours mid-quarter report.  Jim goes
into much more detail in his wrap but the guidance from Intel
sounds pretty bearish as they guided to the lower end of their
range.  Even so Intel was trading slightly higher after hours but
this is not likely to last.

Normally the Intel guidance would probably sink the semiconductor
sector (SOX) tomorrow, which in turn would be a heavy weight
around the NASDAQ's neck and impede any rally attempts.  However,
the February non-farm payrolls report could overshadow Intel's
guidance.  Right now economists are estimating that the economy
added 125,000 new jobs last month, which is a gain from January's
112,000.  If the report fails to meet or beat this number it
could be a very dour day in stocks tomorrow.  Fortunately, the
ISM index and the ISM services index, both released earlier this
week, showed that their employment component was expanding.  This
growth in employment has given the markets a silent hope for a
positive number tomorrow.

However, even if we win we could lose.  There has been talk all
week that if the jobs number is too big it will spark renewed
fears of a rate cut sooner than expected.  Here's the logic: a
super jobs number will confirm that the economy is heating up and
with commodities soaring the Fed may raise rates sooner than
expected to curb inflation even though they continue to deny
inflation is a potential problem.  Opponents to this train of
thought believe that it would take several months of super strong
job growth to push the Fed's hand, which seems more reasonable
especially during an election year.  However, that may not be
enough to keep traders from over-reacting to short-term moves.

Internals today were pretty bullish but none of it matters if the
jobs number doesn't deliver.  Everybody hold their breath and
cross their fingers.  I'd rather deal with a short-term reaction
to a positive number than the damage that might occur from
another big miss.


Market Averages


52-week High: 10753
52-week Low :  7416
Current     : 10588

Moving Averages:

 10-dma: 10601
 50-dma: 10546
200-dma:  9708

S&P 500 ($SPX)

52-week High: 1158
52-week Low :  788
Current     : 1154

Moving Averages:

 10-dma: 1146
 50-dma: 1133
200-dma: 1044

Nasdaq-100 ($NDX)

52-week High: 1559
52-week Low :  946
Current     : 1481

Moving Averages:

 10-dma: 1473
 50-dma: 1494
200-dma: 1363


Much like the larger indices the volatility indices traded in a
very tight range as investors wait for the Intel report after the
close and the Jobs report tomorrow morning.

CBOE Market Volatility Index (VIX) = 14.40 -0.15
CBOE Mkt Volatility old VIX  (VXO) = 14.71 +0.10
Nasdaq Volatility Index (VXN)      = 22.50 -0.59


          Put/Call Ratio  Call Volume   Put Volume

Total          0.71        669,444       475,721
Equity Only    0.60        547,185       326,334
OEX            1.87         13,694        25,554
QQQ            3.85         11,476        44,198


Bullish Percent Data

           Current   Change   Status
NYSE          75.8    + 0     Bull Confirmed
NASDAQ-100    60.0    - 1     Bear Confirmed
Dow Indust.   86.7    + 0     Bull Confirmed
S&P 500       85.8    + 0     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: 1.05
10-dma: 1.10
21-dma: 1.03
55-dma: 0.99

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


Market Internals

            -NYSE-   -NASDAQ-
Advancers    1795      2025
Decliners    1035      1004

New Highs     300       209
New Lows        5         5

Up Volume    978M     1216M
Down Vol.    519M      459M

Total Vol.  1551M     1781M
M = millions


Commitments Of Traders Report: 02/24/04

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

No change for commercial traders.  They remain hedged either
direction.  Small traders haven't made many changes either
and remain bullish.

Commercials   Long      Short      Net     % Of OI
02/03/04      411,920   414,596    (2,676)   (0.3%)
02/10/04      412,217   414,044    (1,827)   (0.2%)
02/17/04      416,148   415,278       870     0.0%
02/24/04      417,490   416,502       988     0.0%

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
02/03/04      141,465    81,926    59,539    26.7%
02/10/04      143,496    80,362    63,134    28.2%
02/17/04      141,533    84,227    57,306    25.3%
02/24/04      141,559    85,171    56,388    24.9%

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

We're seeing a lot more action in the e-minis than the large
contracts above.  Commercial traders are bearish but have
become slightly less so over the last week.  As is typical
the small traders moved the opposite direction and while bullish
became less so.

Commercials   Long      Short      Net     % Of OI
02/03/04      280,519   346,042    (65,523)  (10.5%)
02/10/04      297,601   356,630    (59,029)  ( 9.0%)
02/17/04      296,313   371,703    (75,390)  (11.3%)
02/24/04      320,425   387,255    (66,830)  ( 9.4%)

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
02/03/04     133,293     55,476    77,817    41.2%
02/10/04     110,480     58,428    52,052    30.8%
02/17/04     144,014     64,391    79,623    38.2%
02/24/04     129,894     63,524    66,370    34.3%

Most bearish reading of the year: (77,385)  - 09/02/03
Most bullish reading of the year: 449,310   - 06/10/03


Not much change for the commercial traders in the NDX futures
this week but we are seeing a change in the small traders'
positions.  There appears to be a bullish reversal with a large
shift from shorts to longs.  Of course a contrarian will note
that the small trader is normally wrong so this could be a
bearish development for the markets.

Commercials   Long      Short      Net     % of OI
02/03/04       43,600     41,441     2,159    2.5%
02/10/04       44,406     40,439     3,967    4.7%
02/17/04       46,104     40,385     5,719    6.6%
02/24/04       47,266     40,452     6,814    7.8%

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
02/03/04        8,907    13,729    (4,822)  (21.3%)
02/10/04        9,906    13,018    (3,112)  (13.6%)
02/17/04        9,630    12,338    (2,708)  (12.3%)
02/24/04       12,388     7,310     5,078    25.8%

Most bearish reading of the year: (10,769) - 06/11/02
Most bullish reading of the year:  19,088  - 01/21/02


Hmm... commercial traders have become more bullish on the
Dow in the last week.  Not much change from the little guys.

Commercials   Long      Short      Net     % of OI
02/03/04       17,765     9,619    8,146      29.7%
02/10/04       21,764    11,974    9,790      29.0%
02/17/04       24,451    12,907   11,544      30.9%
02/24/04       27,176    13,918   13,258      32.3%

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
02/03/04        6,352    13,113   (6,761)   (34.7%)
02/10/04        6,267    14,220   (7,953)   (38.8%)
02/17/04        6,768    15,623   (8,855)   (39.5%)
02/24/04        6,509    14,919   (8,410)   (39.2%)

Most bearish reading of the year: (10,136) - 12/16/03
Most bullish reading of the year:   8,523  -  8/26/03



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.


AU Optronics Corp. - AUO - close: 18.85 change: +1.13

WHAT TO WATCH: Following its breakout over $16 late last month,
shares of AUO have been on fire and staged an impressive move on
Thursday, closing above $18 for the first time.  We're expecting
the recent bullish trend to continue, so a mild pullback near the
$17.50 support level can be used for entry.  Momentum traders can
even consider chasing the stock higher, as it could very likely
continue to rise without a real pullback.


Pacificare Health Systems Inc - PHS - close: 37.68 change: +0.52

WHAT TO WATCH: In case you missed it, the HMO index broke out to
another new all-time high on Thursday, so it should come as no
great surprise that similar price action is being found in
individual stocks in the sector.  PHS broke out above $36 on
Monday, and rather than pull back to fill the gap, price is
pushing higher, delivering another breakout today, ending one
penny below its IPO high from late 1999.  A breakout over that
level looks like it has room to run, so use a trigger of $37.75,
today's high.


Claire's Stores Inc - CLE - close: 21.40 change: +1.20

WHAT TO WATCH: Not to be left out of the bullish party, Retail
stocks are on the move again, with the RLX index reaching over
the $400 level earlier this week and holding near that level in
preparation for another upward thrust.  CLE finished its
consolidation following the early December drop and broke out
today, confirming the double bottom formation.  A pullback to
test the $20.75-21.00 area as new support will provide the best
entry opportunity. Target a rally up to test the December highs
near $23.50


Webex Communications Inc. - WEBX - close: 29.20 change: +2.89

WHAT TO WATCH: Looking for a high-volume breakout play?  Look no
further than shares of WEBX, as the stock blasted higher to the
tune of nearly 11% today on volume that more than tripled the
daily average.  That's probably too much of a gain to chase right
now, but a pullback to confirm new support near $27 would make
for a great entry ahead of a continued bullish run towards $30
and then $35.


On the RADAR Screen

LECO $27.63 - The longer a consolidation that precedes a
breakout, the stronger the breakout.  LECO has been stuck under
the $26 resistance level since early November, and today's
breakout came on very strong volume.  A pullback to confirm new
support at old resistance would provide a solid entry ahead of a
continued bullish move towards strong resistance at $30.

IDXC $36.21 - Although extended on the weekly chart, IDXC has
built a nice consolidation pattern near its recent highs over the
past few weeks and looks ready to break out once again.  Use a
trigger at $36.75 and target the $40 level.

HDWR $25.49 - With Technology stocks showing new life, HDWR found
some serious buying interest on Thursday, breaking out over $25
on very strong volume.  Momentum entries over the day's high look
favorable, but so does a pullback to confirm support near $24.00.
Target the $28 level and use a stop just under the 50-dma.

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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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Copyright ) 2003  PremierInvestor.net. and
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Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter                 Thursday 03-04-2004
                                                    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:  LIN, SPF
Play Updates:      LIN, VRTS
Closed Plays:      ARA, ANN
Stock Splits:      DWCH, TACT

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

LIN, raise stop to 35.45
 - prepare to exit at 36.25

SPF, raise stop to 52.00

Play Updates

Linen N Things - LIN - close: 35.94 chg: +0.24 stop: 35.45*new*

The rally in retail has been very strong and LIN is helping lead
the way with another new high at 36.01.  When we originally
listed LIN our goal was a move to the $35-36 range.  LIN has
exceeded our expectations with the early run to $35.00 and now
this second run to $36.00.  Traders should be planning their
exits or raising their stops.  In Wednesday's Premier Investor
Newsletter we listed an official exit point at $36.25.  Should
LIN trade there (or above) we'll close the play.  However, we
don't want to sacrifice the current gains so we're raising our
stop loss to $35.45.  We are not suggesting new positions this
close to our target.

Picked on February 08 at $31.64
Gain since picked:       + 4.30
Earnings Date          02/04/04 (confirmed)
Average Daily Volume:       557 thousand


VRTS, no change in stop at 32.50

 We do urge caution.  VRTS was upgraded by Merrill Lynch today
 based on valuation and gave it a $38 price target.  We were
 triggered yesterday on the breakdown under $30.00 and the close
 over its 10-dma today makes us nervous. Conservative investors
 may feel better waiting to see if VRTS rolls over under the
 $32.00 level or even waiting for it to close under the $30.00
 mark again before considering new positions.  Our stop remains
 just above VRTS' decline 21-dma.

Closed Plays

Aracruz Celulose Sa - ARA - close: 37.90 chg: +0.89 stop: 34.50

It may be time to take the money and run.  In Wednesday's Premier
Investor newsletter we listed an exit price of $37.75.  Shares of
ARA did even better with a run to $37.98 today.  The stock still
looks poised for additional gains and some traders may not want
to close their positions.  If this sounds like you we highly
suggest you raise your stop loss  above our 34.50 to protect
yourself.  We are going to exit at our previously announced
profit target of $37.75.

Picked on February 15 at $34.11
Gain since picked:       + 3.79
Earnings Date          01/13/04 (confirmed)
Average Daily Volume:       323 thousand


AnnTaylor Stores - ANN - cls: 45.03 chg: -0.02 stop: 43.50

In our Monday Premier Investor newsletter we raised our stop loss
to $43.50.  That proved to be unfortunate timing as Prudential
downgraded the stock to neutral on Wednesday morning and shares
gapped down to $43.75.  Shares of ANN faded to $43.30, below our
stop, before bouncing.  Another analyst at First Albany defended
ANN by reiterating their "buy" rating on the stock but it was too
late for us.  Following up with today's news we're surprised that
ANN didn't make stronger gains after announcing that February
same-store sales rose 15.3%.  We're closing the play at our stop
of 43.50.

Picked on February 08 at $42.68
Gain since picked:       + 2.35
Earnings Date          03/09/04 (confirmed)
Average Daily Volume:       790 thousand

Stock Splits


DWCH announces a 2-for-1 split

This morning before the opening bell Datawatch Corp (NASDAQ:DWCH)
announced that its Board of Directors had approved a 2-for-1 stock

The split will take place as a stock dividend payable or
distributed on April 8th, 2004 to shareholders on record as of
March 19th.

About the company:
Datawatch Corporation helps organizations easily access, store,
distribute, transform and analyze information throughout the
enterprise. From report management and analytics to data
transformation and Internet presentment, Datawatch Corporation
provides solutions that allow organizations to fully integrate and
leverage their existing sources of information. Datawatch products
are used in more than 20,000 companies, institutions and
government agencies worldwide.
 (Source: Company Press Release)


TACT prints up a 3-for-2 stock split

 After the closing bell this evening TransAct Technologies Inc
(NASDAQ:TACT) announced its Q4 earnings and a 3-for-2 stock split.

The split will be in the form of a 50% stock dividend.  The
dividend will be payable on April 2nd, 2004 to shareholders on
record as of March 17th.  Fractional shares will be paid in cash.
Post-split TACT will have 9.0 million shares outstanding.

About the company:
TransAct designs, develops, manufactures and markets transaction-
based printers under the ITHACA. and MAGNETEC. names. In addition,
the Company markets related consumables, spare parts and service.
The Company's printers are used worldwide to provide receipts,
tickets, coupons, register journals and other documents. TransAct
focuses on two core markets: point-of-sale (POS) and gaming and
lottery. TransAct sells its products to original equipment
manufacturers, value-added resellers and selected distributors, as
well as directly to end-users. The Company's product distribution
spans across the Americas, Europe, the Middle East, Africa, the
Caribbean Islands and the South Pacific.
 (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

MWD     Morgan Stanley             61.89     +0.65
CFC     Countrywide Financial      92.64     +0.54
MEL     Mellon Financial Corp      33.66     +0.56
COF     Capital One                73.40     +2.10
FPL     FPL Group Inc              67.19     +0.86
YUM     Yum! Brands                38.10     +0.55

Breakout to Upside (Stocks $5 to $20)

LGND    Ligand Pharmaceuticals     19.32     +1.03
LAB     Labranche & Co Inc         12.10     +1.42
CEGE    Cell Genesys Inc           15.93     +1.08
PLMO    Palmone Inc                12.70     +1.40
KIRK    Kirkland's Stores          16.84     +1.62
BXG     Bluegreen Corp             11.27     +1.02

Breakout to Upside (Stocks over $20)

MER     Merrill Lynch              64.23     +2.13
GS      Goldman Sachs             108.52     +2.01
AT      Alltel Corp                52.75     +0.97
DB      Deutsche Bank              93.25     +5.57
CHS     Chico's FAS Inc            46.60     +2.40
GTK     GTech Holdings             62.07     +2.10
IMCL    Imclone Systems            46.40     +2.52

Breakout to Downside (Stocks over $20)

NOC     Northrop Gruman            97.70     -1.80
ROST    Ross Stores Inc            29.74     -1.98
DP      Diagnostic Products        45.40     -2.94
FRED    Fred's Inc                 25.12     -2.88
KWK     Quicksilver Resources      36.96     -4.50
PDII    PDI Inc                    23.29     -3.08

Recently Overbought With Bearish Signals (Stocks over $20)

TBL     Timberland Co              60.80     -1.78
OFIX    Orthofix Intl N.V.         47.45     -2.05
ECA     Encana Corp                42.09     -0.71
PEG     Public Service Enterprises 46.35     -0.72
RJR     RJ Reynolds Tobacco        61.58     -1.54

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as an offer to buy or sell securities of any kind. The
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is possible at this or some subsequent date, the editors and
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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:


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Copyright 2003  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.


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