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Daily Newsletter, Wednesday, 03/24/2004

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PremierInvestor.net Newsletter                Wednesday 03-24-2004
                                                    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 Meander Midweek
Watch List:   GNSS, TEN, SOHU, GTK

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)
===============================================================
     03-24-2004            High     Low     Volume Advance/Decline
DJIA    10048.23 - 15.41 10108.15 10007.49 1.81 bln    944/1850
NASDAQ   1909.48 +  7.68  1922.51  1896.91 1.81 bln   1385/1646
S&P 100   534.49 -  0.66   537.95   532.00   Totals   2329/3496
S&P 500  1091.33 -  2.62  1098.39  1087.06 
RUS 2000  557.63 -  3.29   562.26   556.13
DJ TRANS 2761.83 -  1.29  2772.29  2743.46
VIX        19.81 -  0.86    20.83    19.45
VXO        20.49 +  0.04    21.34    19.85
VXN        26.06 -  0.78    26.97    25.77
Total Volume 4,085M
Total UpVol  1,842M
Total DnVol  2,153M
52wk Highs     178
52wk Lows       48
TRIN          1.25
PUT/CALL      0.88
===============================================================

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

Markets Meander Midweek
by James Brown

Stocks seesawed sideways on Wednesday as the major averages 
tested support only to see the rebound fail in the afternoon 
hours.  The Dow Industrials and the S&P 500 index both posted 
their fifth loss in a row while the NASDAQ managed to end its 
losing streak with a bounce in the semiconductor sector.  
Rotation seemed to be the agenda for the session as investors 
took money out of oil services, gold, natural gas and broker-
dealers while buying semiconductors, software and hardware 
issues.  

The more optimistic of the market pundits were calling for a 
bottom in the NASDAQ while the less sanguine commentators reduced 
today's bounce to nothing more than mild short covering.  
Wednesday's economic data was positive but it failed to produce 
any lasting results against the new backdrop of terrorism fears.  
This morning French police reported finding a bomb under the 
Paris to Basel, Switzerland railroad.  Meanwhile in the Mid East 
the U.S. closed their embassy in the United Arab Emirates (UAE) 
under new threats of violence.  

Global markets were mixed.  The Japanese NIKKEI jumped nearly 84 
points to 11,364 while the Chinese Hang Seng rallied almost 90 
points to 12,678.  European stocks were mostly down with the 
French CAC index suffering the worst declines compared to Germany 
and Britain.  Commodities were making news as gold pulled back 
for the first time in eight sessions as the U.S. dollar turned in 
a strong day.  Gold futures closed down $2.60 to $417.40 an 
ounce.  

Crude oil was also a major story after both the American 
Petroleum Institute and the Department of Energy both reported a 
significant build up in oil supplies last week.  Crude oil 
futures dropped 44 cents to $37.01 a barrel but well off its lows 
of the session at $36.65.  The pull back had no affect on 
gasoline prices, which hit a new all-time (average) high of $1.74 
a gallon.  Some industry experts are predicting fuel prices near 
$3.00 a gallon as we approach the summer driving season.  The 
pull back in oil fed the profit taking in the oil and oil service 
stocks but the trend is still up for crude oil futures.  OPEC is 
still considering its previously announced April production cuts 
and talk is growing that we'll see $40-42 per barrel prices.

Looking more closely at the major averages you'll see the Dow, 
The S&P 500 and the NASDAQ Composite all churning sideways the 
last three sessions but with a trend of lower highs.  
Fortunately, the Dow is holding support at the 10,000 mark while 
the NASDAQ is holding support at the 1900 level.  The bad news is 
that short-term technicals for both look weak again.  Meanwhile 
the S&P 500 is churning sideways under old support at 1100 and 
the longer it stays here the more 1100 becomes resistance.  

Chart of the Dow Industrials:

 

Chart of the NASDAQ Composite:

 

Chart of the S&P 500:

 

Some of the trader talk this morning was focused on concerns that 
the economic recovery was in jeopardy even though the Durable 
Goods order and the New Home Sales numbers were positive.  
Durable goods are products made to last at least three years.  
The Commerce Department reported that February's durable goods 
rose a better than expected 2.5% above estimates for 1.7%.  This 
seemed especially bullish considering that January's numbers were 
revised lower to a 2.7% decline.  Driving the gains were strong 
improvements in aircraft, computers and motor vehicles.  

Homebuilders are living up to their word that business is good.  
The New Homes Sales numbers raced to a 5.8% gain in February to 
an annualized rate of 1.16 million units.  This surpasses the old 
high of 1.09 million units.  I suspect we'll see this number run 
even higher as the weather continues to improve.  The good news 
here is that new homes are big boost to the economy as consumers 
buy new furnishings and appliances.  The historically low 
interest and mortgage rates should keep this trend in place and 
underpin the economic rebound.  

Speaking of a rebound we might see one in shares of Microsoft 
soon.  As previously announced the EU antitrust commission 
officially declared its fine of $612 million against MSFT for its 
monopolistic-style of business.  The $612 million or 497 million 
euro fine is less than the maximum the EU could have levied, 
which was just over $3 billion but still qualifies as the largest 
fine like this ever levied.  MSFT plans to appeal the fine and 
the decision that would impose restrictions on how MSFT can do 
business in the EU including sharing their code so that rivals 
can make competing applications.  Industry experts say the appeal 
will tie up the decision in the court system for four to five 
years.  More importantly for investors analysts believe that 
MSFT, who has been sitting on close to $53 billion in cash and 
adding to its hoard at close to $1 billion per quarter, can 
finally make a decision about what to do with all that money.  
That's not to say that MSFT is out of the legal woods just yet 
but many are expecting MSFT to announce a major stock buyback 
and/or a huge one-time cash dividend.  One of Goldman Sach's 
analysts speculated that MSFT could declare a one-time cash 
dividend in the $10 to $20 billion range.  That's anywhere from 
92 cents to $1.84 a share compared to the current dividend of 16 
cents annually.  Shares of MSFT, which have been weak for 9 weeks 
straight, bounced higher by more than 1 percent but remain in its 
current downtrend.  

One of the most important developments on Wednesday occurred 
after the closing bell.  Applied Materials (AMAT), the world's 
biggest producer of semiconductor equipment, held its annual 
meeting.  AMAT's CFO told analysts that the chip sector recovery 
was still in the "early stages not the later stages" of 
development.  AMAT said they see a huge opportunity in the flat-
panel market for TV and monitor screens.  This positive sentiment 
for the LCD market was echoed by Corning (GLW) earlier today.  
AMAT also announced a three-year $3 billion stock buy back 
program.  This is great news that could really boost the nascent 
rebound in the chip stocks tomorrow.  Today's bounce in the SOX 
back above the simple 200-dma is a good start but to see some 
follow through tomorrow would be pretty encouraging and lend some 
much needed strength to any NASDAQ rally attempt.  

Micron Technology (MU), another chipmaker, announced its earnings 
after the close today.  Analysts were looking for a loss of 6 
cents a share compared to a loss of 64 cents a share last year.  
MU turned in a loss of 4 cents but fell short of consensus 
revenues estimates at $1 billion for the quarter.  While the 
stock traded lower after hours we've come to expect a "sell the 
news" reaction.  More importantly is MU's earnings performance, 
which might help set the mood for the April earnings season.  
We've already heard from dozens of companies that have pre-
announced positive earnings but it may actually take the onset of 
earnings season to jog investors out of the current market 
malaise.  

Tomorrow brings the weekly initial jobless claims data.  
Estimates are suggesting a small uptick in claims from last 
week's 336,000.  We'll also hear the latest and final GDP 
revision for the fourth quarter but no one expects any change 
from the previous reading at 4.1%.  Thursday morning also brings 
the February existing home sales numbers, which economists have 
predicted to rise to 6.12 million units.  News junkies can also 
look for the Help Wanted index to be announced.  I don't expect 
any of these to be market movers and Wall Street may continue to 
ignore all the economic data until the April 2nd non-farm 
payrolls job report a week from this Friday.  However, I would 
keep my ears open for any positive comments from Nokia's annual 
shareholder meeting being held tomorrow after the close.  


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

Genesis Microchip Inc. - GNSS - close: 14.33 change: +0.11

WHAT TO WATCH: The trend in shares of GNSS is looking grim, as it 
has been one steady decline since the stock topped out above $22 
in mid-January.  Having now fallen below the 200-dma and strong 
support near $16, we can expect that level to offer stiff 
resistance on any rebound attempts.  The SOX rebound today is 
giving a bit of a lift to the stock, but conviction is lacking.  
Ideal entries will come on a rollover below the 200-dma, while 
more aggressive traders can look to enter on a break below 
$13.90, taking out this week's support level.  Target a drop to 
support in the $11-12 area.




---

Tenneco Auto Inc. - TEN - close: 11.18 change: -0.34

WHAT TO WATCH: Pressured by the falling market, TEN has had a 
rough ride over the past few weeks, falling back from its highs 
above $14.  This week has seen a concerted effort to defend 
support at $11, but with the break of the 50-dma, that attempt 
appears destined to failure.  Aggressive traders can enter on a 
failed bounce below the 50-dma, while the more conservative 
approach will be to wait for the break under $11.  Target a drop 
to $10 support and use a tight stop.




---

Sohu.com Inc. - SOHU - close: 22.86 change: -0.67

WHAT TO WATCH: After an impressive rally in early 2003, Chinese 
Internet stocks are starting to deflate in spectacular fashion.  
SOHU traced out a pattern of declining tops before breaking down 
under the 200-dma last month and it has continued to deteriorate 
over the past several weeks.  The recent break under the $25 
level broke the last vestige of support and that level should now 
be firm resistance.  Failed rallies below that level look good 
for aggressive bearish entries, with a breakdown under $22.40 
ushering in the next downward leg.  Target an initial drop to 
$20, with a likely extension down to the $18 level, at the top of 
the May 2003 gap.




---

Gtech Holdings Corp. - GTK - close: 57.92 change: +1.34

WHAT TO WATCH: While the recent bout of selling in the broad 
market has hit all sectors hard, some stocks are actually 
starting to rebound smartly.  GTK is one such stock, as it is 
seeing a strong bounce from the $55 support level, with price 
rallying right back through the 50-dma on strong volume.  Near-
term pullbacks to the 50-dma near $57 look good for bullish 
entries ahead of a push back to test the highs from earlier this 
month near $62.  Use a stop just under $55.




---

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

MGG $44.81 - Flexing its muscles, casino stock MGG is surging 
strongly higher today after finding support near $43 earlier in 
the week and the strength of the rebound suggests a breakout to 
new highs could be in the works.  Wait for a breakout above the 
early March highs at $45.85 before playing and target a move to 
$50.

ZRAN $16.31 - This isn't the first critical support test for 
shares of ZRAN, as the stock has been consistently bouncing from 
the long-term rising trendline, currently at $16.  but the 
bounces have been growing weaker and this is the first time in 
over a year where the trendline has been broken.  Aggressive 
bulls can buy this bounce looking for a run back to resistance 
near $19.  But with the poor price action in the broad market, a 
breakdown seems the more likely resolution.  Use a trigger under 
Monday's low ($15.60) and target support near $14.  

OTEX $27.37 - After breaking the 50-dma on Monday, shares of OTEX 
are trying to rebound, but on anemic volume.  This looks like a 
great setup for a bearish play, with strong resistance just 
overhead near $28.  Use a rollover for bearish entries, targeting 
a drop to strong support near $24.  Note that the PnF chart is 
bearish with a price target of $21.

SSTI $10.97 - SSTI had been holding at support near $11.50 for 
more than 2 months before the breakdown that occurred on Monday.  
Buyers are trying to put in a bounce from the $10.50 level, but 
this looks like the recipe for a bearish play when this rebound 
fails, with $11.50 now likely to be very strong resistance.  
Target a drop to next support near $9.50


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

NTT     Noppon Tel & Tel (ADS)     26.85    +1.61
MTF     Mitsubishi Tokyo Finl Grp   9.71    +0.58
LMT     Lockheed Martin Corp       45.60    +0.70
GD      General Dynamics Corp      87.32    +1.22
CI      Cigna Corp                 57.08    +0.96
MYL     Mylan Laboratories Inc     23.34    +0.97


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

NOVL    Novell Inc                 10.63    +1.17
CTB     Cooper Tire & Rubber Co    19.79    +1.23
EAGL    EGL Incorporated           17.42    +1.02


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

IGT     Intl Game Technology       44.17    +2.71
ROK     Rockwell Automation Inc    32.08    +1.05
VFC     VF Corp                    45.59    +2.77
CHRW    C.H. Robinson Worldwide    40.58    +1.44
GTK     Gtech Holdings Corp        57.92    +1.34
ENDP    Endo Pharmaceuticals Hld   22.68    +2.55
STN     Station Casinos Inc        42.70    +3.60


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

AVE     Aventis                    75.36    -2.85
MWD     Morgan Stanley             55.90    -1.56
UN      Unilever N.V.              65.75    -1.78
SLB     Schlumberger Ltd           61.08    -1.06
GS      Goldman Sachs Group Inc    99.24    -2.15
WPPGY   WPP Group Plc (ADR)        48.64    -1.39


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

HMA     Health Management Assoc    21.78    -0.48

=================================================================
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send email to Contact Support
=================================================================
DISCLAIMER
=================================================================

This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

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

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

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

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


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



PremierInvestor.net Newsletter                Wednesday 03-24-2004
                                                    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:  IGT
Stock Splits
  Announcements:        CRED


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

IGT - long
Adjust from $38.00 up to $41.25


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

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

CRED announces 3-for-2 stock split

About 90 minutes before Wednesday's opening bell CREDO Petroleum 
Corp (NASDAQ:CRED) announced that its Board of Directors had 
approved a 3-for-2 stock split of its common shares.  

The payable date will be April 20th, 2004 for shareholders on 
record as of April 5th.  CRED will trade ex-dividend (at its split 
adjusted price) on April 21st.  CRED will have more than 6.0 
million shares after the stock split.

About the company:
CREDO Petroleum Corporation is a publicly traded independent 
energy company headquartered in Denver, Colorado. The company is 
engaged in the exploration for and the acquisition, development 
and marketing of natural gas and crude oil in the Mid-Continent 
and Rocky Mountain regions. (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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