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Daily Newsletter, Wednesday, 04/07/2004

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PremierInvestor.net Newsletter                Wednesday 04-07-2004
                                                    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:  Earnings Worries Weigh On Wall Street
Watch List:   XTO, SOV, TXT, SRCL

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)
===============================================================
     04-07-2004            High     Low     Volume Advance/Decline
DJIA    10480.15 - 90.66 10569.26 10465.33 1.79 bln   1325/1492
NASDAQ   2050.24 -  9.66  2060.44  2038.74 1.76 bln   1528/1511
S&P 100   557.28 -  4.30   561.58   556.33   Totals   2853/3003
S&P 500  1140.53 -  7.63  1148.16  1138.41
RUS 2000  601.64 +  2.31   603.76   595.22
DJ TRANS 2954.47 - 20.31  2974.53  2933.60
VIX        15.76 +  0.44    16.36    15.34
VXO        15.46 +  0.97    16.01    15.19
VXN        21.99 -  0.24    22.65    21.81
Total Volume 3,964M
Total UpVol  2,217M
Total DnVol  1,684M
52wk Highs     325
52wk Lows       30
TRIN          1.84
PUT/CALL      0.70
===============================================================

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

Earnings Worries Weigh On Wall Street
by James Brown

Major stock indices traded lower on Wednesday due to concerns
that Q1 earnings may not meet expectations.  An earnings miss
from Dow component Alcoa (AA) last night and two high-profile
earnings warnings from tech stocks (Nokia and Seagate) in the
last two days are testing investors' resolve while giving weak-
willed traders an excuse to take profits.  Rising tensions in
Iraq with the heaviest fighting since the end of the war were
also weighing on Wall Street.

Global stocks markets were mixed and many trended lower but
losses were relatively mild.  The Japanese NIKKEI lost 60 points
but still managed to close over the 12,000 mark, a level it
achieved yesterday.  The Chinese Hang Seng added 33 points to
close at 12,920.  European stocks were generally lower with the
German DAX down 21 to 4001, the French CAC down 11 to 3734 and
the British FTSE down 4 to 4468.  The dollar was also weaker and
that helped a $3.80 rally in gold to $423.70 an ounce.  Crude oil
futures also turned in a big day adding $1.18 (3.4%) to $36.15 a
barrel.

U.S. markets opened the day in the red and sank for the first 90
minutes of trading as investors reacted to the Alcoa earnings
news and the Seagate earnings warning.  Alcoa was a major drag on
the Dow with a 5% loss to $34.65 after missing analyst estimates
by 2 cents despite beating the revenue estimates.  The good news
was that rising aluminum prices should boost their second quarter
numbers but traders sold the news anyway.  Seagate (STX) gapped
lower to open down 16% but rebounded almost the entire session to
end at $14.98 (only down 3.91%).  Their earnings warning last
night sparked a round of profit taking across the tech sector but
like STX most stocks pared their losses by the close.  If you
take a moment to look at the intraday charts on the Industrials,
S*P 500 and the NASDAQ you'll see that all three traded a good
chunk of their day in a very narrow range before spiking higher
in the last hour only to fade again.  There was speculation that
stocks were rebounding higher on news that Secretary of Defense
Donald Rumsfeld would hold a 3:30 PM afternoon press conference.
When that press conference failed to deliver any good news on the
situation in Iraq the markets faded again.

Chart of the Dow Industrials:



Chart of the NASDAQ Composite:



Chart of the S&P 500 Index:




There were a few economic reports out this morning but nothing
market moving.  Influencing the already weak mortgage lenders was
the Mortgage Bankers Association of America survey of weekly loan
applications.  This weekly survey dropped 7.2% due to a 15%
plunge in refinancing applications, which really isn't that
surprising since the rates on a 30-year fixed mortgage jumped
from 5.49% to 5.75% last week.  The two larger reports were the
consumer credit numbers and the import/export prices.  The
Federal Reserve said that consumer credit jumped $4.2 billion in
February to $2.02 trillion but this was below economists'
expectations for a $7.4 billion gain.  March's import prices
climbed 0.9% but if you exclude oil imports the jump was only
0.2%.  This marked the fifth consecutive gain for import prices.
The Labor Department reported that export prices also rose 0.9%
in March.

Aside from the early morning weakness it turned out to be a slow
day.  Volume was light and will get even lighter tomorrow as more
traders leave early to take advantage of the three-day weekend.
Market internals were mixed.  Advancing stocks fell behind
decliners 13 to 15 on the NYSE and it was a dead heat at 15 to 15
on the NASDAQ.  Down volume was almost twice up volume on the
NYSE but bulls managed to push ahead on the NASDAQ with up volume
of 880 million versus 791 million in down volume.  Selling was
heaviest in the airlines, cyclicals and retail stocks.  .

Making headlines during the trading session were HPQ, KMG, TASR
and WMT.  Hewlett-Packard (HPQ) won some negative comments from
Prudential who reduced their earnings estimates and lowered their
price target a dollar to $25 based on weakness in the computer
market.  Kerr-McGee (KMG) made headlines when it announced the
acquisition of Westport Resources (WRC) for $2.5 billion in
stock.  TASER Intl (TASR) can't seem to help but make headlines
as the stock soared another 6.27% and breached the $100 level
after announcing another 2:1 split yesterday.  TASR closed at
$98.04.  Meanwhile Wal-Mart (WMT) slipped just over a dollar to
$57.98 after citizens in Inglewood, CA voted down WMT's proposal
to build one of their mega-sized supercenters in their town.

After hours was when the real excitement began.  A handful of
high-profile earnings reports all beat estimates and in the
euphoria we had three new 2-for-1 split announcements.  Starting
the earnings parade this evening was biotech firm Genentech
(DNA).  Second only to Amgen in the biotech world, DNA reported
earnings of 38 cents per share (ex-items) versus estimates of 32
cents.  Revenues soared 30% to $975.1 million and profits were
boosted by strong sales of its Avastin drug.  Its board also
declared a 2-for-1 stock split that is subject to shareholder
approval at their April 16th annual shareholder meeting.

This news was followed by earnings from Research In Motion
(RIMM).  The company reported that demand for its BlackBerry
wireless handhelds sent sales soaring.  Revenues jumped almost
37% to $210.6 million, which was above consensus estimates.  Net
income, accounting for its litigation provision and tax recovery,
hit 56 cents a share surpassing analyst expectations by 6 cents.
RIMM's management also raised their estimates on the next
quarter.  On top of it all they announced another 2-for-1 split
payable in June.  In spite of all this good news traders chose to
hit the sell button and RIMM was trading lower after hours.

The real after-hours headliner was Internet giant Yahoo! Inc.
(YHOO).  Analysts were expecting YHOO's earnings to hit 11 cents
a share, up from 8 cents a year ago.  YHOO reported a headline
number of 14 cents but looking deeper net income was closer to 13
cents or $101.2 million for the quarter.  This is a 116%
improvement over last year's profit number.  Furthermore YHOO
raised its 2004 profit estimates from $420-480 million to $575-
625 million while bumping its yearly sales estimates from $2.12-
2.25 billion to more than $2.41 billion.  The icing on the cake
was a 2-for-1 stock split announcement payable on May 11th.

This trio of positive earnings announcements should be more than
enough to juice the markets into a pre-holiday rally.  Yet if
that wasn't enough DELL jumped on the bandwagon and raised its
revenue numbers after the bell tonight too.  The No 2 computer
maker upped its quarterly revenue estimates from $11.2 billion to
$11.4 billion while leaving estimates at 28 cents per share.  The
Stock Traders Almanac says that the Thursday before Good Friday
has been up five years in a row.  With this sort of positive
earnings news I think odds are good that we'll see the trend hit
six years in a row.

I believe that tonight's positive earnings news should wash away
any bitter aftertaste left by the Alcoa miss and the Nokia and
Seagate earnings warning.  Our only worries now should be a
disastrous earnings miss Thursday morning from General Electric
but I don't believe that's going to happen with the U.S. economy
doing so well.  We'll also see earnings from Abbott Labs (ABT),
Rite Aid (RAD) and SunTrust Banks (STI) tomorrow morning.

Before I close remember that volume should be very light tomorrow
ahead of the market holiday on Friday.  Extremely light volume
tends to exaggerate moves both directions.  While I expect the
market to be up tomorrow the rising tensions in Iraq have caught
the market's attention.  The larger issue is how America
perceives the conflict and how it affects President Bush's
reelection.  However, the specter of a long weekend (and the
Easter holiday weekend at that) could curb investors' enthusiasm
to hold stocks while we battle Muslim extremists half a world
away.  This could set us up for a strong opening tomorrow morning
only to see it fade later in the session.  More importantly let's
keep our men and women in uniform in our prayers!


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

XTO Energy, Inc. - XTO - close: 25.76 change: +0.52

WHAT TO WATCH: As earnings season gets underway, traders need to
be more nimble in their trading, avoiding holding over an
earnings announcement. XTO is poised for a breakout over $26, but
the fuse is short, with the company set to release its quarterly
results on April 20th.  Use a trigger over the March high at
$26.02 and target a quick move to the $28 area.  Use a tight stop
at $24.75, just under the 10-dma, 20-dma and 30-dma.




---

Sovereign Bancorp - SOV - close: 20.97 change: +0.30

WHAT TO WATCH: Shares of SOV have been in a pronounced bearish
trend for the past couple months, and that action has brought the
stock right down to strong support at the 200-dma.  After
bouncing from that average twice in the past couple weeks, SOV
looks poised for a rally into earnings on April 20th.  The
proximity of that report means any bullish move will have to
happen quickly though.  Entries near current levels look
favorable, targeting a quick move up to the $22-23 resistance
area.  Use a tight stop just under the 200-dma.




---

Textron Inc. - TXT - close: 52.93 change: -1.20

WHAT TO WATCH: Ready for a quickie?  Shares of TXT rolled over
right at resistance on Wednesday, where the 50-dma, 100-dma and
the descending trendline of the past few months converge near
$54.  This looks like a nice setup for a bearish play, where
we're looking for a breakdown under the $50 level to extend
towards $48 support.  Unfortunately, earnings are close (4/22),
so any continued bearish move will have to unfold quickly.




---

Stericycle Inc. - SRCL - close: 49.74 change: +0.41

WHAT TO WATCH: Shares of SRCL have been stymied at the $50 level
for the past several months and the stock made an attempt to
scale that level on Wednesday.  A renewed push over that level
can be used for bullish entries, but we need to be on the lookout
for resistance near the $52 level that served as resistance last
October.  Once clear of that obstacle, SRCL will be at new all-
time highs and be free to move towards its PnF price target of
$62.  Note that earnings are scheduled for release on April 28th.




---

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

MKTW $12.45 - It certainly looks like the recent surge over $14
was a blowoff top for MKTW and that view was confirmed by the
sharp selloff today, as the stock crashed through the 50-dma on
heavy volume.  There's some potential support near $11.75-12.00
and then it is a long was down to next support at the 200-dma
below $10.  Use a trigger under $11.75.  Note that earnings are
scheduled for April 28th.

PETM $28.59 - As a late reporter for earnings, PETM appears to be
giving us a solid opportunity for a bullish play on a breakout.
The rally of the past two days has the stock testing its all-time
highs and a breakout over today's $29 high looks like a good
entry trigger.  Target a rally into the $32-33 area.  Note that
earnings are not set for release until May 20th.

AMSC $14.35 - With energy prices holding near their highs,
alternate energy stocks are finding renewed interest from
investors.  AMSC has been rebounding from its March lows lately
and today solidified its breakout over the 50-dma.  A continued
rally should see the stock moving up to test strong resistance
near $16, with potential for a move to $17.


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

GSK     Glaxosmithkline Plc (ADR)  41.56    +0.91
CVX     Chevrontexaco Corp         89.75    +0.70
DEO     Diageo Plc (ADS)           54.74    +1.00
UN      Unilever N.V.              69.01    +0.64
NAB     National Australia Bank   119.79    +0.64
FITB    Fifth Third Bancorp        55.49    +0.91


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

SSTI    Silicon Storage Tech Inc   15.28    +1.27
NABI    NABI Biopharmaceuticals    17.15    +1.11
WLT     Walter Industries Inc      13.25    +1.04
OATS    Wild Oats Markets Inc      14.70    +1.28
DHB     DHB Industries Inc          8.70    +1.05


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

CF      Charter One Financial      36.66    +1.26
NYT     New York Times Co The      46.50    +1.05
LFC     China Life Insurance       26.88    +2.05
WRC     Westport Resources Corp    34.20    +1.15
IIT     Indonesian Satellite Cp    24.12    +1.39


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

MBT     Mobile Telesys OJSC (ADS) 130.01    -5.59
JCI     Johnson Controls Inc       56.78    -3.30
WIT     Wipro Ltd (ADS)            41.44    -2.64
ABK     Ambac Financial Group      72.65    -1.48
KMG     Kerr-Mcgee Corp            49.41    -2.10


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

BLS     Bellsouth Corp             26.76    -0.60
MBI     MBIA Inc                   62.97    -0.94
WL      Wilmighton Trust Corp      37.36    -0.64
SFG     Stancorp Financial         65.11    -1.63
TTC     Toro Co                    61.00    -1.38


=================================================================
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 04-07-2004
                                                    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:  None

Active Trader (Non-tech Stocks)
  Closed Bearish Plays: PRX

High Risk/Reward
  Closed Bullish Plays: SIRI

Stock Splits
  Announcements:       DNA, RIMM, SMTB, YHOO


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

None


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


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


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

Pharm. Resources - PRX - cls: 61.20 chng: +3.90 stop: 59.70

Just as expected, PRX tipped over just below key resistance
yesterday and it looked like the next drop towards support was
underway.  We always need to be prepared for the impact of an
exogenous event though and that's precisely what occurred to
bring a swift and painful end to the play.  PRX received FDA
approval for its Hepatitis C drug, a generic version of Rebetol,
and the stock exploded higher at the open.  After hitting an
intraday high near $62, PRX weakened a bit before consolidating
above $61 for the remainder of the session.  With our stop
smashed on the opening tick, clearly the play is a drop tonight.

Picked on March 17th at     $57.83
Change since picked          +3.37
Earnings Date              2/26/04 (confirmed)
Average Daily Volume =       730 K





==================================================================
High Risk/Reward (HR) Stock section
==================================================================


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

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

Sirius Sat. Radio - SIRI - cls: 4.02 chng: +0.13 stop: 3.40

SIRI has been a great performer for us this time around, as the
breakout over resistance seemed to get the ball rolling and it
has been a straight up affair ever since.  We were looking for a
run to the $4.00 level as our desired exit point and today we got
that and more as the stock ran as high as $4.17, before running
into selling pressure near the early January highs and falling
back to close just over $4.00.  Aggressive traders could hold
onto their positions, looking for a breakout to new recent highs,
but with a 24% gain from our picked price, we're not going to be
greedy.  If you do opt to hold for more upside, stops should be
kept tight.  If a breakout does occur, look to exit the play on
the first sign of weakness near the $5.00 level.

Picked on March 28th at      $3.24
Change since picked          +0.78
Earnings Date                  N/A
Average Daily Volume =    63.9 mln





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

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

DNA announces a 2-for-1 split with earnings


Right at the closing bell Genentech announced its Q1 2004 earnings
results with a 28% increase in sales.   In addition to its
earnings management declared a 2-for-1 stock split of its common
shares.

However the split is subject to shareholder approval for an
increase of the company's authorized shares at the next
shareholder meeting on April 16th, 2004.  Management will then
decide on a payable date.

About the company:
Genentech is a leading biotechnology company that discovers,
develops, manufactures, and commercializes biotherapeutics for
significant unmet medical needs. Eighteen of the currently
approved biotechnology products originated from or are based on
Genentech science. Genentech manufactures and commercializes 13
biotechnology products in the United States. The company has
headquarters in South San Francisco, California (source: company
press release)

---

RIMM announces 2-for-1 split with earnings

 After today's closing bell Research In Motion Ltd (NASDAQ:RIMM)
announced its Q4 and FY04 earnings along with a 2-for-1 stock
split of its common shares.

The 2-for-1 stock split will take effect as a 100% stock dividend.
The dividend is payable on June 4th, 2004 to shareholders on
record as of May 27th.  Post-split RIMM should have close to 184.8
million shares outstanding.

About the company:
Research In Motion is a leading designer, manufacturer and
marketer of innovative wireless solutions for the worldwide mobile
communications market. Through the development of integrated
hardware, software and services that support multiple wireless
network standards, RIM provides platforms and solutions for
seamless access to time-sensitive information including email,
phone, SMS messaging, Internet and intranet-based applications.
RIM technology also enables a broad array of third party
developers and manufacturers to enhance their products and
services with wireless connectivity. RIM's portfolio of award-
winning products, services and embedded technologies are used by
thousands of organizations around the world and include the
BlackBerry. wireless platform, the RIM Wireless Handheld(TM)
product line, software development tools, radio-modems and
software/hardware licensing agreements. Founded in 1984 and based
in Waterloo, Ontario, RIM operates offices in North America,
Europe and Asia Pacific. (source: company press release)


---

SMTB cashes in with a 2-for-1 split

 Late this morning Smithtown Bancorp announced that its Board of
Directors had approved a 2-for-1 stock split.

The split is subject to shareholder approval at the annual
shareholder meeting on April 20th, 2004 where they will vote to
increase the number of authorized shares.

The payable date will be May 7th to shareholders on record as of
April 23rd.


About the company:
Smithtown Bancorp is the publicly-held holding company for Bank of
Smithtown. Bank of Smithtown is a 95 year-old community bank which
operates ten offices, primarily along the north shore of Suffolk
County in the communities of Smithtown, Commack, Hauppauge, Kings
Park, Northport, Centereach, Lake Grove, East Setauket, Rocky
Point and Wading River.  (source: company press release)


---

YHOO announces 2-for-1 split with earnings

About 30 minutes after tonight's closing bell Yahoo! Inc
(NASDAQ:YHOO) announced its Q1 2004 earnings and a 2-for-1 stock
split.

Earnings were strong.  Revenues jumped to $758 million versus $283
million a year ago.

YHOO's Board of Directors declared a 2-for-1 stock split of all
outstanding shares payable on May 11th, 2004 to shareholders on
record as of April 26th.

About the company:
Yahoo! Inc. headquartered in Sunnyvale, Calif., is a leading
provider of comprehensive online products and services to
consumers and businesses worldwide. Yahoo! is the No. 1 Internet
brand globally and the most trafficked Internet destination
worldwide. (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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