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 slightly. 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. (optionable) 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 Editor =============================== 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 DJIA ($INDU) 52-week High: 10753 52-week Low : 7416 Current : 10588 Moving Averages: (Simple) 10-dma: 10601 50-dma: 10546 200-dma: 9708 S&P 500 ($SPX) 52-week High: 1158 52-week Low : 788 Current : 1154 Moving Averages: (Simple) 10-dma: 1146 50-dma: 1133 200-dma: 1044 Nasdaq-100 ($NDX) 52-week High: 1559 52-week Low : 946 Current : 1481 Moving Averages: (Simple) 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 points. ----------------------------------------------------------------- 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 NASDAQ-100 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 DOW JONES INDUSTRIAL 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 ----------------------------------------------------------------- ================================================================== 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 --------------------------------- 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. ================================================================= 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 ) 2003 PremierInvestor.net. and The Premier Investor Network. 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 ================================================================= Announcements ------------- 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 split. 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 ================================================================= 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 2003 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form.
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 "email@example.com"
Option Investor Inc