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Daily Newsletter, Monday, 04/12/2004

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PremierInvestor.net Newsletter                   Monday 04-12-2004
                                                    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:  Stocks Rebound on Relief Rally
Watch List:   DHI, QLGC, TDW, LH


===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
     04-12-2004            High     Low     Volume Advance/Decline
DJIA    10515.56 + 73.53 10526.27 10443.81 1.37 bln   1500/1313
NASDAQ   2065.48 + 12.60  2069.45  2057.64 1.47 bln   1793/1318
S&P 100   559.49 +  3.37   560.10   556.12   Totals   3293/2631
S&P 500  1145.20 +  5.88  1147.29  1139.32
RUS 2000  599.65 +  1.77   603.04   597.88
DJ TRANS 2933.82 +  6.94  2945.79  2926.84
VIX        15.28 -  0.98    16.12    15.00
VXO        15.44 -  0.39    16.26    15.30
VXN        20.37 -  1.01    20.88    20.23
Total Volume 3,182M
Total UpVol  1,996M
Total DnVol  1,138M
52wk Highs     414
52wk Lows       57
TRIN          0.80
PUT/CALL      0.77
===============================================================

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

Stocks Rebound on Relief Rally
by James Brown

Stocks soared quickly higher at the open on Monday as investors
breathed a sigh of relief that the holiday-long weekend passed
without a terror-related incident.  This allowed traders to focus
on the Q1 earnings season, which is about to hit in force
starting tomorrow.  More than 700 companies are expected to
report this week.  Expectations for corporate profits to rise 17-
20% above last year's period have generated a bullish under
current for the markets.  However, some professional investors
are worried if the rebound from the March lows has already baked
in a strong earnings performance.

Money poured into energy stocks with the OIX oil index (+1.54%)
and the OSX oil services index (+2.42%) turning in today's best
gains.  Driving the move was a 70-cent jump to $37.84 a barrel in
crude oil futures. The International Energy Agency released their
latest forecast showing worldwide consumption of oil will rise
for the sixth consecutive month.  While that's not a surprise
given the U.S. economic rebound, expanding global economy and the
voracious appetite from China's red-hot economy the breakout over
resistance at $37 a barrel is a new 20-year high.  Airlines, who
suffer from higher fuel costs as crude rises, were understandably
lower today (XAL -1.21%).  Benefiting from the rise in oil were
refiners.  Dow component ExxonMobil (XOM) rose 2.1%,
ConocoPhillips (COP), the U.S.'s largest refiner, added 1.7% and
Valero Energy (VLO) soared 4.2%.  Meanwhile retail gas prices hit
another new all-time high at $1.786 a gallon.

Overall the U.S. stock markets were broadly higher with only a
few sectors posting minor losses.  The Dow Industrials added 73
points to break above what could have been resistance at 10,500.
The NASDAQ Composite rose just under 13 points to 2065 and the
S&P 500 added close to 6 points to 1145.  Unfortunately, market
internals were probably a little less bullish than I might have
expected.  Advancers outnumbered decliners 15 to 13 on the NYSE
and almost 18 to 13 on the NASDAQ.  Up volume was only 742
million versus 607 million in down volume on the NYSE.  The
NASDAQ turned in a stronger 10-to-4 ratio of up over down volume.
However, total volume was very light on both exchanges.

Chart of the Dow Industrials:



Chart of the NASDAQ Composite:



Chart of the S&P 500 Index:



Boosting the Industrials this morning was Dow component DuPont
(DD) who started the day by announcing plans to cut 6% of its
workforce or 3,500 jobs.  Investors applauded the news by sending
the stock higher 1.45%.  DD said the layoffs would result in a
restructuring charge for its second quarter earnings of 17 to 19
cents per share.  More than countering DD's positive influence on
the Dow was Disney's (DIS) 2% drop on comments from a Bank of
America analyst who expects that Comcast will drop its
unsolicited $54 billion bid to buy Disney.  Also limiting the
Dow's gains today was a 1% decline in Hewlett-Packard (HPQ) after
a Goldman Sachs analyst suggested investors sell the stock.  The
hardware company is seeing more and more competitive pressure in
its crucial printer and ink business from the likes of Dell.

This morning also brought earnings reports from the likes of
Gannett Corp (GCI) and the New York Times (NYT).  Both companies
announced a strong turnaround in March ad revenues with GCI
seeing 10% growth (+25% for its USA Today operations) and the NYT
reporting 8.6% ad growth.  For the first quarter GCI reported
earnings of $1.00 per share, which was inline with estimates.
The NYT managed to beat estimates by 2 cents with net income of
38 cents per share.

Raising earnings estimates was Kimberly-Clark (KMB) the well-
known maker of Huggies diapers and Kleenex brand facial tissues.
Their press release said the company expects Q1 earnings of 91
cents a share compared to previous estimates in the 85-87 cent
range.  Management cited strong "top-line growth, along with
success in reducing costs and a slightly lower effective tax
rate.  Net sales for the quarter increased approximately 10
percent to $3.8 billion."  The company also said its full year
numbers should be toward the high end of its $3.55-3.65 range but
they'll be forced to raise prices on some products to offset
rising raw materials.

One of the most closely watched sectors today was the
semiconductor industry.  The SOX added 0.67% and looks poised to
breakout over resistance at the 520 level if Intel issues some
good news at their earnings report Tuesday after the closing
bell.  Analysts expect Intel to report earnings of 27 cents per
share, which is nearly double the 14 cents from a year ago.  Of
course many on Wall Street are curious to see where Intel's
revenue number will fall.  Early last month Intel guided revenues
lower to the $8.0-8.2 billion range.  Hopefully Novellus Systems'
(NVLS) earnings report tonight is a positive sign for the
industry.  NVLS turned in earnings of 11 cents per share, which
beat consensus estimates of 10 cents and a nice improvement over
last year's 8 cents per share.  Revenues were better than
expected at $262.9 million for the quarter.  NVLS said shipments
soared 36% in the first quarter.  Furthermore the company guided
Q2 earnings higher to 18-20 cents compared to analysts' estimates
of 18 cents.

For some investors trading semiconductor stocks isn't exciting
enough.  No, the new thrill ride on Wall Street are small cap
security companies.  If you watching the MarketMonitor today you
already know about TBUS and MACE as Jeff Bailey kept us posted on
their 73% and 133% one-day gains.  However, you may not have
heard about IPIX's 51% gain, ICTS' 71% gain and ARTX's 14% gain.
Almost every single one of these small cap stocks, and I do mean
small cap, were trading near $2.00 in the last week to three
weeks but they've since exploded with 100%, 200% and 1000% gains
as investors search for ways to play the rise in "geo-political"
tensions.  I'm certainly not making any recommendations on how to
trade these.  Personally, I tend to enjoy the fireworks from the
sidelines where I can't get burned.

Tomorrow brings a couple of economic reports on top of the parade
of earnings announcements.  The business inventory numbers and
retail sales for March should be out before the opening bell.
We'll also hear earnings from Dow Jones (DJ), Dow component
Johnson and Johnson (JNJ), Merrill Lynch (MER), Pepsi Bottling
(PBG), State Street Bank (STT) and Infosys Technologies (INFY)
before the opening bell.

Overall the broad-based rally was encouraging and I expect to see
more of the same tomorrow.  Let's cross our fingers and hope that
Intel doesn't kill the momentum with any ill-placed comments in
their conference call on Tuesday night.


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

DR Horton, Inc. - DHI - close: 31.31 change: -0.61

WHAT TO WATCH: While it was a strongly negative day in the
Housing sector on Monday, some of the housing stocks look like
they could be setting up for a bullish play.  DHI is one of the
best, as it is coming down to test strong support near $30, just
under the 100-dma, which has yet to be broken on a closing basis.
Target entries on a successful test of the 100-dma and play for a
rebound back to the $34 level, which will likely provide solid
resistance.




---

QLogic Corp - QLGC - close: 31.75 change: -0.38

WHAT TO WATCH: The rate of decline has certainly slowed since the
first drop following QLGC's lowered Q4 forecast at the end of
March.  But the anemic oversold bounce looks like it is rolling
over and a break of the recent lows would open the door to
another significant drop.  Use a $31 entry trigger, just under
the recent lows and target a drop to the next solid support near
$20.  Use a tight stop just over $33.




---

Tidewater Inc. - TDW - close: 29.00 change: +0.55

WHAT TO WATCH: After consolidating just above key support for the
past few weeks, it looks like shares of TDW are finally ready to
make a bullish move.  Monday's surge took the stock right to the
edge of key resistance at the 200-dma and a break above there
will open the door for a run back towards strong resistance at
$31, also the site of the 50-dma.  Use a trigger above $29.10.




---

Laboratory Corp. - LH - close: 39.85 change: +0.48

WHAT TO WATCH: The past two months haven't been kind to LH
investors, with the sharp drop following the February highs.  But
it looks like their luck is about to change, as the stock made a
solid bounce off of the 100-dma and today solidified its break
above the 50-dma.  Use a trigger over $40 and target a run back
into the $43-44 area.




---

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

ISSX $19.17 - Security stocks of all stripes were strong again on
Monday and ISSX went along for the ride, gaining 2.78% and
further distancing itself from the recent downtrend.  Entries in
the $18.50-19.00 area look favorable for a rally back near the
January highs near $21.

ALVR $12.94 - After the sharp drop from the early March highs,
ALVR has been trying to build a new base on top of the 100-dma
for the past few weeks.  But the pattern looks more like an
oversold bounce prior to another leg down.  Use a trigger below
$11.90 and target a drop to strong support near $10, just over
the 200-dma.

AMSC $14.95 - We looked at AMSC last week following the breakout
over the 100-dma and the rally continues to look strong.  With
the 10-dma, 50-dma and 100-dma all converged just under $14, a
drop back to that area looks like a great opportunity for a
secondary bullish entry.  Upside potential still looks good to
the $16 and possibly $17 levels.


=================================================================
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                   Monday 04-12-2004
                                                    section 2 of 2
Copyright (c) 2004, All rights reserved.
Redistribution in any form is strictly prohibited.

The entire newsletter is best viewed in COURIER 10 for alignment
=================================================================

Stop Loss Updates:   FLIR, APA
Closed Plays:        PAAS


Trading Ideas
  Value Plays With Bullish Signals
  Breakout to Upside (Stocks $5 to $20)
  Breakout to Upside (Stocks over $20)
  Breakout to Downside (Stocks over $20)
  Recently Overbought With Bearish Signals (Stocks over $20)


==================================================================
Stop Loss Updates
==================================================================

FLIR - long
Adjust from $37.00 up to $38.90

APA - long
Adjust from $40.75 up to $41.75


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


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

Pan American Silver - PAAS - cls: 17.54 chng: -0.99 stop: 17.50

Despite continued consolidation near the recent highs for the
price of Silver on Monday, shares of PAAS got slammed lower at
the open and the stock continued to deteriorate right into the
closing bell, resulting in a more than 5% slide.  The intraday
low of $17.48 triggered our stop and with the stock now back in
the middle of its prior consolidation range, it is clearly time
to fold up shop on this failed bullish play.  Use any sort of
rebound on Tuesday to gain a more favorable exit.

Picked on April 1st at      $19.61
Change since picked          -2.07
Earnings Date                  N/A
Average Daily Volume =    1.31 mln





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

XOM     Exxon Mobil Corporation    43.11    +0.92
TOT     Total Sa (ADS)             95.59    +1.32
ONE     Bank One Corp              54.49    +0.13
CMCSK   Comcast Corp CI A Spcl     29.24    +0.47
CVX     Chevrontexaco Corp         91.47    +2.42
COP     Conocophillips             72.36    +2.69


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

SSTI    Silicon Storage Tech Inc   16.36    +2.35
SIMG    Silicon Image Inc          13.58    +0.93
FCEL    Fuelcell Energy Inc        16.66    +2.95
ABTL    Autobytel Inc              15.53    +1.29
KOMG    Komag Inc                  19.48    +0.40


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

ETM     Entercom Communications    48.09    +2.10
PCO     Premcor Inc                32.51    +1.52
CERN    Cerner Corp                47.25    +2.75
FLIR    FLIR Systems Inc           42.20    +2.93
ALGN    Align Tech Inc             22.43    +1.63


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

ABT     Abbott Laboratories        41.20    -1.99
ETR     Entergy Corp               56.98    -2.57
SPG     Simon Property Group       49.64    -3.71
EOP     Equity Office Prop Trust   25.78    -1.32
AEE     Ameren Corp                44.11    -1.59


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

D       Dominion Resources Inc     62.99    -1.72
NI      Nisource Inc               21.16    -0.42
PGL     Peoples Energy Corp        44.11    -0.97
PNM     ONM Resources Inc          29.70    -1.20
FLO     Flowers Foods Inc          25.62    -1.26


=================================================================
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.





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.

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