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Daily Newsletter, Wednesday, 03/17/2004

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PremierInvestor.net Newsletter                Wednesday 03-17-2004
                                                    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:  Markets Blossom Green on St. Patrick's Day
Watch List:   RSG, GNTX, LUK, AMB

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)


===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
     03-17-2004            High     Low     Volume Advance/Decline
DJIA    10300.30 +115.63 10326.52 10184.30 1.85 bln   2247/ 623
NASDAQ   1976.76 + 33.67  1980.31  1956.52 1.67 bln   2294/ 765
S&P 100   551.48 +  5.92   552.64   545.56   Totals   4541/1388
S&P 500  1123.75 + 13.05  1125.76  1110.70
RUS 2000  578.57 + 11.93   578.92   566.64
DJ TRANS 2847.65 + 59.30  2855.61  2790.04
VIX        18.11 -  2.23    19.55    17.95
VXO        18.14 -  2.57    19.73    18.07
VXN        24.75 -  2.59    27.31    24.50
Total Volume 3,878M
Total UpVol  3,192M
Total DnVol    631M
52wk Highs     257
52wk Lows       25
TRIN          0.74
PUT/CALL      0.81
===============================================================

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

Markets Blossom Green on St. Patrick's Day
by James Brown

Stocks sprinted higher for the second day in a row buoyed by tame
inflation data and positive earnings reports.  The rally was very
widespread with 27 of the 30 Dow components closing higher.
Buying was very strong in technology stocks, airlines and oil
services.  The only sectors trading lower were the DRG drug index
and the DJUSHB home construction index.  Bullish sentiment was
strong enough to shake off news of the Mount Lebanon hotel
bombing in downtown Baghdad, which hit the wires mid-afternoon.

Global markets traded higher as well.  The Japanese NIKKEI added
194 points to close at 11,436.  The Hang Seng stepped up 43
points to 12,975.  The British FTSE jumped almost 28 points to
4456.  Meanwhile the German DAX and the French CAC both soared
with 1.9% gains.  The bombing news sent gold futures to $4.50
gain to end at $407.10 an ounce.

Market internals for the U.S. exchanges were very bullish but
less than stellar volume casts doubt on the true strength of the
rebound.  Advancing stocks rushed past decliners 22 to 6 on the
NYSE and 23 to 8 on the NASDAQ.  Up volume was an impressive 4.4-
to-1 winner over down volume on the NYSE and 5.2-to-1 gainer on
the NASDAQ but these readers don't compare to the extremely
bearish readers we witnessed on Monday when down volume was 9-to-
1 and 10-to-1 respectively.  Overall volume hit 1.85 billion on
the NYSE and 1.675 billion on the NASDAQ.

There has been a lot of talk this week about market volatility
and investors shuffling positions ahead of this Friday's
quadruple-witching expiration where index options, equity
options, index futures and single-stock futures all expire.  This
could explain some of the rebound.  However, we shouldn't forget
that the Dow and S&P 500 both traded near their 5% correction
levels while the NASDAQ hit a 10% pull back from its highs.
There are a lot of investors, both big and small, that have been
waiting for just such an event and are using the recent weakness
to buy the dip.

The Dow Industrials closed right at the 10,300 level and has
broken the very minor trend of lower highs. The next challenge
for the bulls is to push the Dow through its simple 10-dma at
10,342 as well as overhead resistance at 10,400 and 10,500.  I
believe that the 10,500 level could be the real battle.  A failed
rally at that level will look like a huge entry point to short
the market.  Fortunately, we do have the April earnings season
just around the corner and the recent trend of positive pre-
announcements could still inspire an earnings run.

Chart of the Dow Industrials:



The rebound in the NASDAQ looks less convincing.  The simple 10-
dma will be short-term resistance here too but the Composite also
has minor resistance at the 1982 level.  The real challenge here
may be the 2000 level and the host of moving averages still above
it.  It's a common belief that the semiconductor sector (SOX)
tends to lead the NASDAQ higher or lower.  If the SOX can keep
the rally going then the NASDAQ should be able to challenge the
top of its new descending channel.  Unfortunately, the SOX has
its own challenges to deal with.

Chart of the NASDAQ Composite:



Chart of the Semiconductor Index (SOX):



The major economic report out today was the CPI.  Economists were
looking for a 0.3% rise in February and the headline number
matched expectations.  The core CPI, which excludes the more
volatile food and energy components, jumped 0.2%, which was above
estimates for a 0.1% gain.  Energy prices have been on the rise
and the energy component for February rose 1.7%.  Investors were
happy with these numbers because it soothed fears that the
expanding global economy had not yet sparked a dangerous rise in
inflation.   This follows yesterday's statement from the Federal
Reserve who said the risks of inflation and deflation were almost
equal.

The same cannot be said for the risk of higher oil prices.  Crude
oil closed above $38 a barrel for the first time in 13 years.
Oil saw intraday spikes to $39.99 last year during the Iraq war
and it spiked to $41.15 during the 1991 Iraq war but the last
time crude oil closed this high was September 27th, 1990 at
$39.54 a barrel.  Recent reports have begun to show a trend of
falling supplies for crude oil and gasoline here in the states.
Demand continues to grow and we are approaching the summer
driving season, which will not allow for any slack to rebuild our
stockpiles.  The markets are concerned that OPEC may follow
through on their previously forecasted production cuts in April.
Combine concerns that Venezuela is threatening to cut its supply
to the U.S. and many are forecasting oil to hit $40 a barrel or
higher.  Now most industry experts don't really believe that
Venezuela will follow through on such threats since they need the
money but it doesn't help the situation.

Speaking of needing the money the drop in mortgage rates has re-
ignited the refinancing boom.  The Mortgage Bankers Association
of America reported that mortgage applications rose 25.6% last
week to their highest levels since July 2003.  The increase in
applications for home purchases was only 5.6% but the increase
for refi's jumped 39.7%.  Major mortgage lenders like BAC, CFC,
WFC and WM didn't move much on the news but then these stocks
didn't suffer very badly during the recent sell-off.

One of Wednesday's headliners was Bear Stearns (BSC).  The Wall
Street broker-dealer reported earnings this morning that beat
estimates by 57 cents.  Analysts had been looking for $2.00 per
share and BSC reported profits of $361.1 million or $2.57/share.
Revenues jumped from $1.5 billion to $1.7 billion for the
quarter.  This news follows Lehman Brothers (LEH) earnings report
yesterday who reported earnings of $2.21 versus estimates of
$1.66 per share.  Tomorrow we'll hear from Morgan Stanley (MWD)
who is expected to earn 96 cents per share.

Boosting the Dow Transport index to a 2% gain was a very
promising earnings report from Fedex Corp (FDX).  FDX reported
its Q3 earnings this morning of 71 cents per share, which was 5
cents above estimates.  Revenues jumped 9.3% to $6.06 billion and
were boosted by its recent $2.4 billion acquisition of Kinko's.
The delivery company raised its estimates for the current quarter
to $1.15-1.25 per share placing it above average analyst
estimates at $1.16.  The stock soared 4.61% and broke out above
resistance at the $70.00 level.

Internet stocks were the best performing group today.  The INX's
4.1% gain out did the 3.39% bounce in the XAL airlines index.
Driving those gains in the Internets was Yahoo! (YHOO).  The
stock vaulted to a 5.35% gain on big volume after First Albany
and Smith Barney upgraded the stock.  First Albany raised YHOO
from a "neutral" to a "buy" and inched up its price target from
$47 to $48.  Smith Barney was more bullish and raised its price
target from $50 to $60 while lifting its rating from "hold" to a
"buy".

Lately option expiration Friday's have been rather mellow.  That
means that if we're going to see any more volatility related to
investors restructuring positions ahead of expiration then
tomorrow is the day.  Adding to the excitement will be the long-
awaited January PPI report.  This was scheduled to be released
back in February but has been delayed as the government dealt
with various data conversion "difficulties".   They still haven't
told us when to expect the February PPI index but look for
January's tomorrow morning before the bell.  We'll also get the
weekly initial jobless claims, the February leading indicator
numbers and the Philly Fed manufacturing survey.


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

Republic Services, Inc. - RSG - close: 27.01 change: +0.49

WHAT TO WATCH: Continually driving to new highs over the past
year, RSG did it again in early February, cresting the $26.25
level.  Since then, the stock has been putting in a series of
higher lows, with rallies capped at $27, with the 50-dma
providing backup support.  Today's close over $27 looks like the
beginning of a breakout and momentum entries over today's high
look favorable.  Target a rally to the $30 level.




---

Gentex Corp. - GNTX - close: 41.35 change: +0.58

WHAT TO WATCH: It looks like the profit taking in shares of GNTX
may finally be over, as the stock continued the rebound that
began last Friday and pushed over near term resistance near $41.
This is still an aggressive play, as the rebound has lacked
volume, but the stock does appear to be on the mend.  Entries
near current levels look favorable for a rally back towards the
$44-45 area.  Keep a tight reign on this one though, as the 50-
dma and 100-dma could represent resistance in the $42.00-42.50
area.




---

Leucadia National Corp. - LUK - close: 52.01 change: +1.23

WHAT TO WATCH: Shares of LUK have been on a tear since early
October, ramping sharply higher, consolidating and then repeating
the process.  The more significant pullbacks have found support
just above the 50-dma and we saw that average come into play as
support earlier this week before today's solid rally.  With
oscillators turning north, this looks like a good point to step
into new bullish positions ahead of a breakout to new highs above
the $54 level.  Use a stop just under the 50-dma.




---

AMB Properties Corp. - AMB - close: 36.07 change: +0.93

WHAT TO WATCH: It is amazing how often the 50-dma comes into play
in extended bullish moves and AMB is another stock using this
average as key support on the pullbacks.  Just yesterday, the
stock fell within pennies of its 50-dma and then surged strongly
higher today.  Another dip near the 50-dma would make for a more
favorable entry point, but there's nothing wrong with entries
near current levels.  More conservative traders may want to wait
for a breakout over $37 (which would be a new high) before
playing.  Set stops just under the 50-dma.




---

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

LNT $26.43 - Ready for a breakout play?  Energy and Utility
stocks have been looking strong during the latest downturn in the
overall market and LNT is no exception.  The stock rose to a new
recent closing high today and looks like it could continue that
breakout into the end of the week.  Use a trigger over $26.50 and
look for a rally towards strong resistance near $30.

NOI $29.39 - Oil stocks continue to be in favor with traders and
NOI flexed its muscles this week, holding firmly above support at
the 30-dma and bouncing strongly today.  Look for a continued
rally to challenge the recent highs near $31 and then break out,
with the $34 resistance level being a viable target.

GXP $34.88 - Are you noticing the theme?  Bulls are hungry for
energy stocks and GXP looks poised for the next leg up to new
highs.  The stock has been consolidating in a tight pattern for
the past several weeks, with resistance waiting at the February
high of $35.69.  Use a trigger over that level and target a rally
to the $40 area.


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

C       Citigroup                  50.82    +0.83
ONE     Bank One Corp              55.06    +1.22
NTT     Nippon Tel & Tel (ADS)     24.82    +0.67
MO      Altria Group Inc           54.78    +0.81
MER     Merrill Lynch & Co         61.18    +1.01
HD      Home Depot Inc             36.50    +0.64


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

ELN     Elan Corp Plc              18.65    +1.77
PLXS    Plexus Corp                18.10    +1.26

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

UPS     United Parcel Service B    69.47    +1.40
YHOO    Yahoo! Inc                 44.85    +2.28
GCI     Gannett Co Inc             89.24    +3.18
STT     State Street Corp          53.46    +1.45
FDX     Fedex Corp                 71.59    +3.16
OMC     Omnicom Group Inc          78.00    +2.77


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

LEN     Lennar Corp CI A           53.75    -2.26
CHS     Chico's Fas Inc            43.91    -2.16
PKZ     Petrokazakhstan Inc        27.73    -1.78


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

None


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

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

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


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





PremierInvestor.net Newsletter                Wednesday 03-17-2004
                                                    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
=================================================================

In section two:

Stop Loss Adjustments:  R (triggered)

Net Bulls (Tech Stocks)
  Closed Bearish Plays: NVLS

Active Trader (Non-tech Stocks)
  New Bullish plays:    IGT
  New Bearish Plays:    PRX


Stock Splits
  Announcements:       SHFL


==================================================================
Stop Loss Adjustments
==================================================================

R, no change in stop loss at $36.49
 but today's breakout over $38.00 has
 triggered the play.


==================================================================
Net Bulls (NB) Tech Stock section
==================================================================

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

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

Novellus Systems - NVLS - close: 31.03 change: +0.40 stop: 34.00

After two weeks, we've lost patience with our bearish play on
NVLS, as it came to rest today just pennies from where we
initiated coverage.  If the stock was going to deliver a decent
downside move, then the SOX weakness over the past couple weeks
certainly should have been sufficient to push NVLS into the
expected decline.  Instead, price fell to the $30 level, found
solid support there and appears to be in the early stages of a
rebound, even though it appears weak.  NVLS may still deliver
that downside move, but it clearly isn't showing any inclination
to do that.  Rather than keeping waiting and hoping, let's free
up the capital to put to work on more promising plays.

Picked on March 3rd at      $31.15
Change since picked          -0.12
Earnings Date              1/26/04 (confirmed)
Average Daily Volume =    6.57 mln





==================================================================
Active Trader (AT) Non-Tech Stock section
==================================================================

---------
New Plays
---------


  New Bullish Plays
  -----------------

Intl Game Tech - IGT - close: 41.82 change: +0.94 stop: 38.00

Company Description:
IGT is a manufacturer of computerized casino gaming products and
an operator of proprietary gaming systems.  The company serves
the casino gaming industry in the United States as well as
manufacturing gaming products in the United Kingdom and through a
third party manufacturer in Japan.  IGT provides gaming products
in every significant legalized gaming jurisdiction in the world.

Why we like it:
There may not be a strong PC replacement cycle in progress, but
there must be a replacement cycle underway in the gaming
industry.  Continued brisk demand for its various game units has
kept shares of IGT steadily marching to new all-time highs
throughout much of the past year.  The 4-1 split last summer
produced a minor blip and then the stock renewed its upward
march, gaining more than $15 per share since the split.  After
consolidating just under the $38.50 resistance level for several
weeks earlier this year, IGT broke out on heavy volume in early
March, with buyers motivated by a combination of a favorable
court ruling for Indian Casinos and upgrades from both JP Morgan
and Smith Barney Citigroup.  That surge took IGT all the way to
the $43 area before some profit taking set in, allowing for a
healthy pull back to the $40 level.  Finding support at the 20-
dma, IGT is on the move again and with today's test of the $42
level, it looks like new highs may be just around the corner.

Each pullback in IGT over the past few months has found reliable
support just above the 50-dma (currently $38.10) and based on
this week's rebound off the 20-dma ($40.12), we could be
witnessing a strengthening of the bullish trend.  A dip back near
the 20-dma would represent a great entry into the play, although
more conservative traders may want to wait for a fresh breakout
to new highs (over $43.11) before jumping aboard.  IGT's PnF
chart is strongly bullish, but since the stock has already
exceeded its bullish price target (by a great deal), we won't get
any help in determining upside objectives from that source.
We'll set an initial target of $47 and then re-evaluate as that
target draws near.  Set stops initially at $38, just under the
50-dma.

Annotated Chart of IGT:



Picked on March 17th at     $41.82
Change since picked          +0.00
Earnings Date              4/22/04 (unconfirmed)
Average Daily Volume =    2.03 mln



  New Bearish Plays
  -----------------

Pharm. Resources - PRX - close: 57.83 change: -1.17 stop: 62.00

Company Description:
Pharmaceutical Resources, Inc. is a holding company that, through
its principal subsidiary, is in the business of developing,
manufacturing and distributing a broad line of generic drugs in
the United States.  In addition, the company develops and
manufactures, in small quantities, complex synthetic active
pharmaceutical ingredients through its subsidiary, FineTech
Laboratories, Ltd., based in Haifa, Israel, and sells a limited
number of mature brand name drugs through an agreement with
Bristol Myers Squibb.  PRX operates primarily through its wholly
owned subsidiary, Par Pharmaceutical, Inc. (Par), a manufacturer
and distributor of generic drugs.  Par markets 69 products,
representing various dosage strengths for 25 drugs that are
manufactured by the company, and 87 additional products,
representing various dosage strengths for 34 drugs that are
manufactured for it by other companies.  Par holds ANDAs
(abbreviated new drug applications) for the drugs it
manufactures.

Why we like it:
There's no denying that the bulls had quite a party with PRX last
year, as the stock rose from $30 in early January to as high as
$75 by early December.  But it looks like the stock is having to
pay the piper now, as it has been mired in a nasty downward trend
since breaking key support near $64.  Since then, the stock has
really been consolidating in a sideways channel, with a top being
found near $64 and a bottom just above $57 as the stock has tried
to reclaim the 200-dma ($61.75) as support.  The stock slipped
below that average last week and making matters worse for the
bulls, the 50-dma ($61.03) fell below the 200-dma earlier this
week.  Diverging from the strength seen in the rest of the market
today, PRX fell sharply on rising volume and is close to breaking
below the bottom of the past 2 months trading range.

Although it looks bearish, the PnF chart is actually on a Buy
signal due to the failed rally just above $64 in early March.
Since we don't want to buck the supply/demand dynamic depicted on
the PnF chart, we're going to use an entry trigger at $57.  That
will force the stock to both break the bottom of its recent range
and generate a new PnF Sell signal before we take a position.
The initial break of $57 looks like a great entry point, but more
conservative traders may want to try catching a subsequent failed
bounce below what should then be strong resistance in the $59-60
area.  To give the stock some room to maneuver in case the
breakdown doesn't arrive right away, we're setting a fairly wide
stop at $62, just over the 200-dma.  Once triggered though, we'll
lower that stop to just above the 50-dma, which should be out of
the way of any rebound short of a trend reversal.

Annotated Chart of PRX:



Picked on March 17th at     $57.83
Change since picked          +0.00
Earnings Date              2/26/04 (confirmed)
Average Daily Volume =       693 K



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

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

SHFL deals up a 3-for-2 stock split

Just after lunchtime on Wednesday Shuffle Master, Inc.
(NASDAQ:SHFL) announced that its Board of Directors declared a 3-
for-2 stock split at the company's annual shareholder meeting.

The split will be payable on April 16th, 2004 to shareholders on
record as of April 5th.  Fractional shares will be paid in cash.

About the company:
Shuffle Master, Inc. is a gaming supply company specializing in
providing its casino customers Utility Products, including
automatic card shufflers, to improve their productivity and
security, and Entertainment Products, including proprietary table
games and Table Master(TM) games to expand their gaming
entertainment content. The Company is included in the S&P Smallcap
600 Index. (source: company press release)


=================================================================
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 (c) 2004  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.






DISCLAIMER

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

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

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