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Daily Newsletter, Wednesday, 03/31/2004

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PremierInvestor.net Newsletter                Wednesday 03-31-2004
                                                    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:  Q1 Ends In The Red
Watch List:   AF, CLI, AMB, ISSX

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)
===============================================================
     03-31-2004            High     Low     Volume Advance/Decline
DJIA    10357.70 - 24.00 10401.70 10314.89 1.82 bln   1713/1107
NASDAQ   1994.22 -  6.41  2004.00  1985.04 1.85 bln   1683/1398
S&P 100   551.13 -  1.40   553.69   549.40   Totals   3396/2505
S&P 500  1126.21 - 14.41  1130.83  1121.46
RUS 2000  591.67 +  0.91   591.67   585.16
DJ TRANS 2895.43 + 11.79  2899.97  2863.53
VIX        16.74 +  0.46    16.96    16.23
VXO        16.59 +  0.60    16.90    16.19
VXN        23.76 +  0.58    24.03    23.49
Total Volume 4,154M
Total UpVol  1,844M
Total DnVol  2,152M
52wk Highs     468
52wk Lows       30
TRIN          1.19
PUT/CALL      1.31

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

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

Q1 Ends In The Red
by James Brown

The first quarter of 2004 has ended and the Dow Industrials and
the NASDAQ Composite both posted losses.  Disappointing economic
news, production cuts from OPEC, concerns over this Friday's jobs
report and new violence in Iraq were all factors in today's
declines.  The good news is that the declines were mild but
volume continues to be light indicating a lack of conviction
ahead of Thursday and Friday's economic reports.

Global exchanges were mixed as Asian stocks tracked higher
against European stocks, which slipped lower.  The dollar fell
strongly against the euro and hit new four-year lows against the
yen.  The Japanese policy change about not intervening between
the dollar/yen is starting to have an effect.  The U.S. markets
were volatile earlier in the session after rumors surfaced that
Federal Reserve Chairman Alan Greenspan was sick or had a heart
attack.  This is not a new ploy by those who would try and
manipulate the market lower as we've heard the Alan is sick card
before.  However, this time the Fed chose to come out and respond
saying Greenspan is fine, which is unusual since their normal
policy is not to comment on any rumors.

The U.S. markets ended the session mixed with only about half of
the major sector indices in the red.  Yet the tone of the session
felt weak as the Dow, NASDAQ and S&P 500 all closed lower.  The
Dow ended the first quarter of 2004 with a 1% loss while the
NASDAQ lost 0.6%.  This was the first quarterly loss in a year
for both indices.  Flexing its relative strength was the S&P 500,
which ended March up 1.3% YTD.  The last few sessions have been
pretty bullish for the markets as mutual funds finished their
end-of-quarter window dressing.  Today we began to see some un-
dressing and tech stocks were hit the hardest.  Investors were
rotating out of hardware stocks and disk drives/storage related
issues mainly due to QLogic's earnings warning.  Buying was
heaviest in the airlines, homebuilders and oil.

Market internals reflected the mixed market message as well.
Advancing stocks outnumbered decliners 17 to 11 on the NYSE and
almost 17 to 14 on the NASDAQ.  Yet down volume on the NASDAQ
rushed past up volume 11-to-7.  Bulls pulled ahead on the NYSE
but up volume narrowly beat down volume 9-to-8.  Volatility
indices ticked higher and the yield on the 10-year note dropped
to 3.837% as money sought safety ahead of Friday's economic
reports.

The good news is that the markets have managed to maintain their
gains from last week's lows.  The bad news is that we're short-
term overbought and with apprehension growing over Friday's
economic reports we're liable to see some profit taking between
now and then.  The battle for support resistance remains.  The
Dow is holding above minor support at the 10,325 level but the
NASDAQ is back under the 2000 mark.  Meanwhile the S&P 500 is
trading right at its minor support/resistance level of 1125.

Chart of the Dow Industrials:



Chart of the NASDAQ Composite:



Chart of the S&P 500 Index:



The Chicago PMI and the Factory Orders numbers were the two big
economic reports out today and both turned in disappointing
results.  Economists had been looking for the Chicago Purchasing
Managers Index to drop from 63.6 in February to 61.6 in March.
Unfortunately, the results were worse than expected at 57.6 and
marked the biggest drop since March 2001.  The glass-is-half-full
crowd will tell you that March is the 11th consecutive month of
economic expansion since any reading over 50 marks improvement or
expansion.  The real story here was the employment component,
which dropped from 54.8 to 49.2.  Factories may be expanding
output but they're certainly not hiring to meet demand and this
doesn't bode well for Friday's jobs report.  Manufacturing
payrolls have dropped for 43 months in a row and today's PMI
report suggests we're going to see 44 months.  The factory orders
for February were just as disappointing.  Economists were looking
for an increase of 1.7% but received an anemic 0.3% increase
instead.

The biggest economic event today wasn't a report at all but the
decision by OPEC to proceed with their previously announced plans
to curtail oil production by 1 million barrels a day starting
April 1st.  The markets have been speculating/fretting over this
decision for weeks and now that it's here the price of crude
actually drops 49 cents to $35.76 a barrel.  Maybe it's because
everyone knows that several of OPEC's member tend to cheat and
produce more than they are supposed to.  Or that if OPEC doesn't
cheat those countries not in the cartel will pump all they can
with crude oil at 13-year highs.  While this does look like a
sell-the-news reaction in crude I'm a bit surprised that we
didn't see more volatility intraday.  It was only a week ago that
the FBI warned of possible terrorist attacks on oil refineries in
Texas and this morning British Petroleum (BP) announced that
there was a fire in one of its refineries in Texas.  Fortunately,
they were quick to suggest the cause was not likely an act of
sabotage.

Speaking of fuel Qlogic Corp's (QLGC) earnings warning this
morning sent the stock to a 22.7% loss and sparked heavy selling
across the tech sectors.  QLGC now expects Q4 earnings at 36
cents a share on revenues of just $128 million versus analysts'
consensus estimates of 38 cents and $140 million for the quarter.
QLGC is a chipmaker that specializes in circuits for storage
devices and host bus adapters.  The company blamed a drop in
orders and the news dragged its rival Emulex (ELX) to a 6.5%
loss.

On a more positive note Americans still managed to feed their
desire for the latest techno gadgets and wide-screen T.V.'s in
spite of the rising prices at the pump.  Best Buy Co (BBY) and
rival Circuit City (CC) both announced earnings this morning and
the results were strong.  BBY, the larger of the two companies,
reported earnings that were 3 cents better than estimates at
$1.42 a share.  Revenues jumped from $6.99 billion to $8.45
billion and same-store sales soared 9.7%.  BBY stood by its
forecasts for 15 to 20% earnings growth for the year and said it
should be able to maintain same-store sales growth of 4-to-6%.
Meanwhile Circuit City remains firmly in BBY's shadow but appears
to have turned a corner as earnings came in at 46 cents a share,
well above estimates for 36 cents.  Revenues came in at $3.25
billion while same-store sales managed a positive increase of 1%.
CC has been in a very lengthy restructuring to make it more
profitable and more competitive and today they announced plans to
buy Canadian firm InterTan (ITN) for $284 million in cash and a
separate deal to buy the assets of MusicNow, a provider of
digital media.   The performance of both BBY and CC is great news
for the retailers and foreshadows what many are expecting to be a
positive earnings season.

Before the markets can focus on earnings we have to wade through
a crowd of economic reports.  They begin in earnest tomorrow.
According to Ford and GM the auto and truck sales numbers
tomorrow should be pretty strong.  We'll also get the weekly
initial jobless claims and the construction spending numbers.
Yet the big reports on Thursday will be the long overdue February
PPI report and the ISM Index.  However, even these two are
overshadowed by the non-farm payrolls report on Friday morning.
Economists are looking for 120,000-125,000 new jobs but the
employment component in this morning's Chicago PMI survey isn't a
good sign.

Considering our short-term overbought status and the opportunity
for investors to use any news as an excuse to take profits ahead
of the jobs number I'm not looking for a bullish day tomorrow.
Furthermore traders might want to prepare for what could be a
volatile day on Friday.  Even if the jobs numbers does come in
strong there is the argument that strong jobs growth is the last
and final component we've been waiting on for the economic
recovery and that means the Federal Reserve is one step closer to
raising rates.  Of course we expect the Fed to wait for several
months of strong jobs growth before raising rates but you know
how excitable the markets can be.


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

Astoria Financial Corp. - AF - close: 38.03 change: +0.60

WHAT TO WATCH: Yesterday's rebound was encouraging, but AF really
made a convincing move today, with its break above both the 8-
week descending trendline, as well as the 100-dma.  this should
enable the stock to return to the $40 level and quite possibly
retest the February highs near $42.  Entries look favorable
either on a pullback near the $37.50 level or on a breakout over
today's high.




---

Mack-Cali Realty Corp. - CLI - close: 44.91 change: +0.58

WHAT TO WATCH: The bull market in the housing sector is not
confined to the homebuilders, as the REITS have been on fire too.
CLI has been in a non-stop uptrend for the past year and broke
out to new highs again today.  A pullback near $44 can be used
for an entry point, as can a continued breakout over $45.  Look
for this rally to extend up towards the $50 level.




---

AMB Property Corp. - AMB - close: 37.17 change: +0.31

WHAT TO WATCH: Is there no end to this rally?  Shares of AMB
hardly flinched during the recent broad market downturn and the
bulls showed their dominance again today, breaking out to new
highs.  Current levels look favorable for new entries, although
more patient traders may be able to nab a better entry on a
pullback into the $36.50-37.00 area.  Target the $40 level above.




---

Internet Security Systems Inc - ISSX - close: 17.64 change: +0.26

WHAT TO WATCH: Believe it or not, we did manage to find a bearish
candidate, but it's an aggressive one.  ISSX was once again
rejected at its 3-month descending trendline and it looks like
another rollover could be in the works.  Consider new entries
near current levels or on a break back under the 50-dma.  Target
a drop back towards the 200-dma, just under $16.




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

ARW $25.46 - After building a convincing bottom formation near
$23, shares of ARW are back on the move to the upside.  Today's
session saw the stock break the past month's worth of resistance
and also clear the 50-dma.  This looks like a good point to step
aboard for the ride back up to test the recent highs near $28.

RCII $32.96 - There are a lot of disappointed bears out there
that have been attempting to short the breakdowns under the 200-
dma in RCII.  Each violation has been shallower and the bulls
have continued to buy the dips.  The last drop has the look of a
convincing rebound before a strong bullish move and the stock is
right back at strong resistance near $33.  Look for entries on a
solid breakout and then look for a run up to test and break the
highs near $35.

JBLU $25.25 - This definitely isn't for the timid, but JBLU
finally looks like it wants to break from its recent downtrend
and signs of bullish divergence are showing up in the
oscillators.  Not only that, but today's price action solidified
the breakout from the 4-month descending channel and it looks
like a return to the $28-29 area is in the works.


==================
  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                  51.86    -0.08
TOT     Total Sa (ADS)             92.14    +0.69
PTR     Petrochina Co Ltd (ADS)    51.08    +1.28
CVX     Chevrontexaco Corp         87.91    +0.83
BP      BP Plc                     51.15    +0.00
UN      Unilever N.V.              69.40    +0.90


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

WRNC    Warnaco Group Inc (the)    20.10    +0.10
PXLW    Pixelworks Incorporated    17.12    +0.16
BLTI    Biolase Technology         17.45    +0.20


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

PEP     Pepsico Inc                53.86    +0.58
MON     Monsanto Co                36.68    +0.54
FD      Federated Dept Stores      54.05    +0.13
SSP     E.W. Scripps Company      100.64    +0.37
NXY     Nexen Inc                  38.88    +0.12
POT     Potash Cp Saskatchewan     83.17    +0.28


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

DF      Dean Foods Company         33.42    -0.02
WFMI    Whole Foods Market Inc     74.69    +1.71
WPI     Watson Pharmaceuticals     42.85    +0.43
UTSI    Utstarcom Inc              28.80    -0.58


-----------------------------------------
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

*****************************************************************
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 03-31-2004
                                                    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:  PBG (see note), SIRI

Active Trader (Non-tech Stocks)
  New Bullish plays:    APA, FNF
  Closed Bullish Plays: SPF


Stock Splits
  Announcements:       OMTL (Announced Late Last Night)


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

PBG - active trader long play
 No actual change in our stop loss $28.44
 but PBG was TRIGGERED on the move above
 our TRIGGER at $30.05 today.

---

SIRI - long
Adjust from $2.75 up to $2.95


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

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

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

Apache Corp. - APA - close: 43.17 change: +0.21 stop: 40.00

Company Description:
Apache Corporation is an independent energy company that explores
for, develops and produces natural gas, crude oil and natural gas
liquids.  In North America, the company's exploration and
production interests are focused in the Gulf of Mexico, the Gulf
Coast, the Permian Basin, the Anadarko Basin and the Western
Sedimentary Basin of Canada.  Outside of North America, Apache
has exploration and production interests offshore western
Australia, offshore and onshore Egypt, offshore The People's
Republic of China and onshore Argentina, as well as exploration
interests in Poland.  As of December 31, 2002, APA had total
estimated proven reserves of 637 million barrels of crude oil,
condensate and natural gas liquids and 4.1 trillion cubic feet
(Tcf) of natural gas.  Combined, these total estimated proved
reserves are equivalent to 1.3 billion barrels of oil or 7.9 Tcf
of gas.

Why we like it:
We've had our eye on shares of APA for awhile now, as the stock
has continued to wedge itself up against resistance and appears
poised for a breakout.  The stock has been benefiting from the
persistent rise in energy costs and that trend doesn't appear
likely to reverse any time soon.  Since completing its pullback
in February, the stock has been building a pattern of higher lows
and the test of key resistance at $43.50 are becoming more
frequent and persistent.  Together with the trend of higher lows
over the past couple months, APA has built a convincing bullish
wedge and when the breakout over horizontal resistance at $43.50
arrives, it should unleash some decent follow through to the
upside.  Despite having already met its bullish price objective,
the PNF chart is giving a bullish view as well, and a breakout
over $44 will be a fresh Triple Top buy signal.

We'll use an entry trigger at $43.50, and momentum entries above
that level look quite favorable.  More conservative traders may
want to wait for the print at $44 before playing though, forcing
the PnF chart to give its blessing with the new Buy signal.  An
alternate approach would be to wait for a subsequent pullback and
rebound from the $42 area, confirming that level as new, higher
support.  Our upside target will be for a run at the $48 level
and possibly higher to the $50 area.  The rising trendline should
now offer strong support on any pullback, especially with the
additional support of the 50-dma at $40.74.  We'll set our stop
initially at $40.50.

Annotated Chart of APA:




Picked on March 17th at     $43.17
Change since picked          +0.00
Earnings Date              4/22/04 (unconfirmed)
Average Daily Volume =    2.34 mln



---

Fidelity Nat. Fin. - FNF - close: 39.60 change: +0.79 stop: 36.90

Company Description:
Fidelity National Financial, Inc. provides title insurance and
real estate-related services in the United States.  The company's
title insurance underwriters, Fidelity National Title, Chicago
Title, Ticor Title, Security Union Title and Alamo Title,
together issue all of its title insurance policies in 49 states,
the District of Columbia, Guam, Puerto Rico and the United States
Virgin Islands, as well as in Canada and Mexico.  FNF's escrow
and other title-related services and its real estate-related
products and services include collection and trust activities,
trustee's sales guarantees, recordings, reconveyances, property
appraisal, credit reporting, exchange intermediary services, real
estate tax services, home warranty insurance, foreclosure posting
and publishing, loan portfolio services, flood certification,
field services, property data and disclosure services, multiple
listing services, mortgage loan fulfillment services, flood
insurance and home owners insurance.

Why we like it:
Since reaching new all-time highs near $40 in early February,
shares of FNF have been consolidating near their highs in
preparation for another move higher.  After dipping just below
the 50-dma ($38.35) in early March, the stock has been
solidifying support at that average, while at the same time
continuing to keep testing resistance at $40.  This looks like
the setup for a bullish breakout and given the length of the
consolidation, the resulting breakout should carry some power.
Looking at the chart below, we can see how the stock is building
a bullish wedge and while we could see a bit more consolidation
before the breakout, we shouldn't see the rising trendline
violated if the breakout we're expecting is going to materialize.

We'll initiate the play with an entry trigger at $40.10, just
over the intraday high from earlier in the month.  Aggressive
traders can certainly enter on the initial breakout, while those
with a more conservative approach will want to wait for a
subsequent pullback to confirm support in the $39 area before
entering.  Once free of near-term resistance, FNF looks like it
could easily vault higher to the $45 level, so that will be our
upside target for the play.  Until we get the breakout, let's use
a liberal stop of $36.90, just under the mid-March intraday low.

Annotated Chart of FNF:



Picked on March 31st at     $39.60
Change since picked          +0.00
Earnings Date                  N/A
Average Daily Volume =       922 K




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

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

Standard Pacific - SPF - cls: 60.00 chg: +0.74 stop: 58.95

The homebuilders surged yesterday and SPF lead the way with a
$3.00 gain of its own coming within 10 cents of our exit price at
$59.50.  The rally continued today and SPF gapped open at $59.75
and ran to $61.60 before sliding into the close on profit taking.
We can close the play at $59.75 for a move of $7.44 (+14%).
Traders still in the play should be careful.  Today's move looks
like a blow-off top even though volume has been double the norm
during the last two sessions.  We're going to keep our eyes on
the group for another trading opportunity.

Picked on February 29 at $52.31
Gain since picked:       + 7.69
Earnings Date          02/04/04 (confirmed)
Average Daily Volume:       468 thousand




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

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

OMTL announces 2-for-1 split

Very late Tuesday Omtool, Ltd (NASDAQ:OMTL) announced that it had
raised another $3.6 million through the private placement of
300,000 shares of stock at $12.00 per share.  The company also
announced that its Board of Directors had approved a 2-for-1 stock
split of its common stock.

The split, effective in the form of a stock dividend, will be
payable on April 27th, 2004 to shareholders on record as of April
7th.

About the company:
Omtool provides enterprise document messaging applications that
streamline workflows, reduce costs and ensure secure, confidential
e-document exchange. Omtool accomplishes this by integrating with
industry-leading e-mail messaging, enterprise resource and
document management systems to add secure delivery and high volume
fax functionality to a company's existing communication
infrastructure. Because paper remains an integral part of many
business processes, Omtool also provides technology that
incorporates electronic delivery, security and billing
functionality into commonly used multifunction and scanning
devices. (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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