PremierInvestor.net Newsletter Thursday 04-22-2004 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: Size Matters Market Sentiment: Fearless! Watch List: CHKP, TLAB, PETM, SON ================================================================= MARKET WRAP (view in courier font for table alignment) ================================================================= 04-22-2004 High Low Volume Adv/Dcl DJIA 10461.20 +143.90 10496.61 10292.28 2.21 bln 2437/ 834 NASDAQ 2032.91 + 37.30 2035.39 1991.47 2.14 bln 2105/1061 S&P 100 555.24 + 6.04 556.76 547.24 Totals 4542/1895 S&P 500 1139.93 + 15.84 1142.77 1121.92 W5000 11154.54 +160.20 11174.70 10978.22 SOX 480.48 + 1.70 485.81 468.09 RUS 2000 593.24 + 10.02 593.67 582.28 DJ TRANS 3006.96 + 52.50 3007.01 2948.54 VIX 14.61 - 0.99 15.98 13.86 VXO (VIX-O)14.59 - 1.07 16.36 14.17 VXN 21.35 - 1.47 22.94 20.94 Total Volume 4,748M Total UpVol 3,604M Total DnVol 1,107M Total Adv 5101 Total Dcl 2198 52wk Highs 337 52wk Lows 152 NasTRIN 0.78 TRIN 0.76 PUT/CALL 0.63 ================================================================= =========== Market Wrap =========== Size Matters by Jim Brown It appears that size and quality does matter when it comes to earnings and Thursday was a banner day for quality results. Good news was breaking out all over and analysts were pounding the table about the new bull market. Is it a new bull market or just a lot of bull? Dow Chart - Daily Nasdaq Chart - Daily Wilshire-5000 Chart - Daily According to market reporters earnings suddenly rocketed to the forefront and considering the economics today it was about time. Jobless Claims fell slightly to 353,000 but that marks the second week over the 350K level. That level is used as a benchmark for adding or deleting real jobs from the market. The prior week was revised up to 362K. Analysts are still blaming the seasonal adjustments for Easter as the reason for the jump. The March PPI surprised to the upside with a +0.5% jump and well over estimates of +0.2%. Core prices rose at a slower rate of +0.2% for those of you that don't use food or energy. A +1.5% jump in food prices was the main reason for the headline bounce. For the first quarter finished goods have already risen +5.1% and although much of that was due to energy it is still a warning sign for the Fed that inflation is knocking on the door. The Chicago Fed National Activity Index (CFNAI) dropped to 17 in March from 47 in February. This was the seventh consecutive month of expansion but the lowest month since October. The +308,000 jobs created in March added +0.09 to the headline number and it was only the fourth positive contribution by employment in the last four years. The CFNAI is seen as confirmation that the economy is still growing but the drop in the expansion rate is troubling. If rates rise soon the housing sector will slow and that could push the numbers back into negative territory very quickly. By far the best report of the day was the Monthly Mass Layoffs which showed that there were only 920 mass layoffs in March that impacted 92,554 workers. This the second consecutive month under 100,000 and bodes very well for the coming Jobs report. If jobless claims remain low as well as layoffs then we can assume companies have reached their minimum level of employment and could be ramping up again soon. Manufacturing still accounted for the largest number of layoffs with one third of the total. Strong earnings as we have been seeing this week would also make companies more comfortable about maintaining payrolls and adding additional workers. According to the bobble head reporters on stock TV economics were not the motivating force today. According to them the earnings picture finally took the lead and positive comments from numerous companies combined together to produce a rebound back to a two week high. Rate fears that were blamed for the Tuesday decline were forgotten and entire two day hiccup was erased. When we discuss these things you should always remember that nearly 50% of our daily trading is done by computer programs launched by funds and institutions. This is up from a little over 20% just a couple years ago. These programs come and go daily with some buying and some selling. As long as they are balanced there is no material impact to the market. When we suddenly get several large programs that move in the same direction without any offsetting activity we get a major market event. This is what happened on Tuesday and again today. On Tuesday at approximately 2:30 we saw several sell programs triggered and the selling was blamed on Greenspan comments. With Alan Greenspan scheduled to speak again the next morning nobody was ready to buy the dip. More sell stops were hit and the drop accelerated. The selling was not especially heavy for the entire day, only for the duration of the sell programs. Volume was only moderate at 4.2B shares across all markets. The market had been moving higher that morning but fear of Greenspan was prompting some underlying profit taking all day. The sell programs just accelerated the event. It was not a watershed day. It was simply a reaction event made worse by the lack of buyers. Traders were concerned it would carry over into Wednesday but Greenspan said nothing new and it turned into a false alarm. The exact reverse occurred today. The market opened down and we bounced along the 10300 level for about an hour. At 10:30 a strong buy program triggered taking us to new highs for the day. Once those highs were made new programs appeared and we raced to just over the 10400 level where we rested for a couple hours. Shorts without stops were caught off guard and were forced to bite the bullet in increasing numbers when there was no immediate sell off. At 1:25 those shorts hoping for an end of day retracement were surprised when another strong buy program appeared to push us within 13 points of 10500. Short covering held us there and we closed with little or no selling. Dow Chart - 30 min Advance-decline Chart (programs) Despite the numbers on the board it was not a blowout. The volume was strong at 4.8B shares across the board but up volume was only 3:1 over down volume. Advancers only beat decliners by little more than 2:1. It was simply a day where the buy programs outnumbered sell programs and it was helped by positive earnings chatter. On the chart above you can see the marked moves where large programs pushed the indexes around. A plus/minus change in the A/D line of 1000 issues in a single 30 min period in the middle of the day is not created by retail buying and selling. Advance-decline - Chart (normal) I chose today to elaborate on the program activity because the TV announcers were tripping all over themselves trying to explain how the bullish earnings news had prompted this massive buying. Surprise, the news today was no different than the news on any other day this week. The rate picture is still the same. In fact Bernanke spoke today and said the Fed was in policy transition mode, indicating the Fed was preparing to raise rates. Nobody blinked. Wayne Angel, a prior Fed governor, was on TV saying he thought +50 points in May would be the right move. Nobody blinked. There were multiple terror events around the world and a train wreck in Korea potentially killing 3000 people and the markets did not blink. The markets go up and down based on money flows into funds and asset allocation by major institutions. Retail traders simply go along for the ride. Those pulling the trigger on those buy programs probably did so because of the long term outlook as earnings continue to beat expectations. That part is true. If a fund is sitting on a large pile of cash and the Tuesday crash and Wednesday speech failed to break support at 10300 then why not take advantage of the best buying opportunity over the last month? It does not even take guts or conviction. Index funds have to invest the money and the best market timing they can do is buy the dips whenever possible. Does that mean the rally was false? Does it mean we are not going to see any summer doldrums? No to both questions. It means nothing except some shorts got squeezed. You cannot make market decisions based on single day events. Granted it was a bullish event but it was just one day. It was a very bullish day for sentiment. Company after company raised guidance and made glowing statements about the future. Comments from Caterpillar were repeated almost hourly day. The company CEO said "it appears the world's economy will have one of the strongest, broadest recoveries in years." CAT raised its profit outlook to +65% to +70% growth from the prior forecast of +40%. That was just an example of similar comments from dozens of companies. Thursday was the heaviest earnings schedule for the April cycle with 70 S&P 500 companies reporting along with hundreds of others. After the close we got several high profile reports including MSFT, AMZN, AMGN, BRCM, GLW, MCHP, XLNX and PSFT. Microsoft blew away estimates of 28 cents with profits of 34 cents and Microsoft was uncharacteristically bullish in its comments. CFO John Connors said 2004 has been a great year and we see a very bright future for the company and its shareholders. It did not announce plans for its $56B in cash but did say it will announce some news before the companies analyst meeting in July. Many expect a larger dividend, possibly a one time cash disbursement and some acquisition plans. The resolution of numerous antitrust cases recently has reduced the need to hoard cash. The company said it saw broad based demand and solid execution across all segments. They said demand increased in servers, PCs and in overall technology spending. The MSN division also returned to profit status and Xbox sales rose +30%. Life is good at Microsoft today. The stock jumped nearly $2 in after hours trading. They also raised estimates for the current quarter. They raised estimates for PC growth for the rest of the year but lowered estimates for 2005. Amazon posted its third straight quarterly profit with earnings of 26 cents compared to a loss of -3 cents in the same quarter last year. Revenue jumped +41%. Amazon beat analyst estimates but the stock fell after the news. AMZN still forecasts a profit for the coming quarter but the guidance left some confused and suggested earnings could decline on lower margins. Considering AMZN has stretched its profits to quarters where it has always had losses and sales are continuing to increase it is evident the business model is working well and the short term volatility should pass. Amazon is getting into the search engine business and keyword click sales. That is a pure profit effort and their billions of page views will capitalize on that space. Broadcom beat the street by two cents but the good news was the upgraded guidance. BRCM said earnings in the current quarter should increase by +10%. They said bookings had been very strong into April and they were seeing broad increases in demand. They bragged about the strength in the broadband market and claimed it was their fastest growing segment. XLNX, another chipmaker posted earnings of 36 cents against estimates of 25 cents and raised guidance going forward. This is getting to be a repeating pattern. Those beating are leading the pack and raising estimates while a few stragglers are still catching up. It is a stock by stock problem related to product mix but the chip sector is definitely improving. Other chips reporting tonight included IDTI +1, MCHP +2, TQNT +1, VTSS inline, MCRL inline, MSCC +1. Corning beat estimates of five cents with an eight-cent gain and raised guidance. They said demand for liquid crystal display panels remained very strong. They did say they did not see telecom recovering until 2005. They said LCD sales grew +16% for the quarter and demand was growing faster than expected. These are just some of the positive reports seen today but the overall picture continues to be strong. American Express said travel fees rose +23% for the quarter as Americans suddenly increased their rate of travel. Sabre raised their estimates as well saying bookings were climbing quickly. Starwood Hotels said business travel had increased faster than their expectations in just the last couple months. Credit card companies are posting strong profits and saying debtors are making payments faster and weak credits are decreasing. Maytag said orders were increasing to the point where materials shortages were becoming a problem. Norfolk Southern said rail shipments were growing strongly. UPS said package growth across all segments was strong with international shipments especially strong. Ryland Homes said new orders were the highest in company history at nearly 5,000 homes. They also closed a record 3,000+ homes in the first quarter. The strength in the home marketplace bodes well for the entire economy as we move into the spring buying season. Yes, earnings are great, the economy is growing and everyone has accepted that rate hikes are on the way. What is wrong with this picture? Nothing and that scares me. Bad things tend to happen when all the news is good. The Dow ran back to begin testing its April resistance and that test could come as early as tomorrow. 10550 has been tested five times in April and failed each time. A breakout there could attract more buyers who were planning on waiting out the summer doldrums. The Nasdaq has the same resistance hurdle at 2070 and while it had a strong +37 point run today it is still well below that level. The tech news after the bell has failed to really juice the futures with the S&P +3 and the Nasdaq +12. Not big numbers considering the number of positive surprises. The problem we have to face is not something we can point to and wait for the announcement. It is not terror, rates or rising economy. It is expectations. All the good news is already priced into the market and investors will have to decide if they want to buy at the highs while knowing that future quarters will not be this strong. Stranger things have happened and we will have to wait out the rest of April to see if that occurs. Today was the largest day of the cycle and we will start to see shorter list of earnings schedules beginning next week. Most of the big guys have already reported and the sterling numbers normally decline from here as the lower quality companies report later in the cycle. For Friday I would be very cautious about buying any bounce unless 10550/2070 is broken. With weekend event risk ahead the odds are slim we are going to make that break tomorrow. If it is going to happen I would bet on a Monday attempt. I would instead look at buying any dip in anticipation of any potential gains next week. We are far from out of the woods but that may be daylight just up ahead. Is it a new bull market or just a lot of bull? We will know soon. Enter Passively, Exit Aggressively. Jim Brown Editor =============================== Market Sentiment =============================== Fearless! - J. Brown Stocks soared on Thursday when for one brief moment investors ignored their interest rate fears, the violence in Iraq and concerns over the Presidential election to focus on the trainload of positive earnings reports. Okay, I may be exaggerating a bit but Alan's soothing words on Wednesday appeared to do the job or investors finally came to their senses and realized that a bump or two in interest rates wouldn't kill the economy. It didn't hurt to have outstanding profit numbers from the likes of Caterpillar (CAT), a Dow-component, and EBAY. The profits continued to soar with a strong report from MSFT and AMZN after the close, although AMZN was trading lower on the news. Normally we tend to see profit taking after a big move like today and facing the weekend it wouldn't surprise us a bit to see traders taking money off the table since there is always an event risk of some new terrorist attack. However, MSFT's news could keep the tech sector in the green and potentially push the NASDAQ toward resistance at 2050-2075. Market internals were very bullish. Advancing stocks tackled decliners 22 to 6 on the NYSE and 2 to 1 on the NASDAQ. Up volume swamped down volume 17 to 5 on the NYSE and 3 to 1 on the NASDAQ. Total volume was very strong. The volatility indices collapsed back toward their lows indicating almost zero investor fear! ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 10753 52-week Low : 8263 Current : 10461 Moving Averages: (Simple) 10-dma: 10409 50-dma: 10433 200-dma: 9935 S&P 500 ($SPX) 52-week High: 1163 52-week Low : 886 Current : 1139 Moving Averages: (Simple) 10-dma: 1132 50-dma: 1133 200-dma: 1069 Nasdaq-100 ($NDX) 52-week High: 1559 52-week Low : 1072 Current : 1485 Moving Averages: (Simple) 10-dma: 1468 50-dma: 1456 200-dma: 1404 ----------------------------------------------------------------- Volatility has completely collapses. Alan Greenspan has helped soothed the markets' fears over rates and now investors can focus on earnings. CBOE Market Volatility Index (VIX) = 14.61 -0.99 CBOE Mkt Volatility old VIX (VXO) = 14.65 -1.01 Nasdaq Volatility Index (VXN) = 21.35 -1.47 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.63 977,611 617,591 Equity Only 0.54 800,523 430,109 OEX 1.05 25,119 26,499 QQQ 3.18 31,920 101,593 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 77.8 - 1 Bull Confirmed NASDAQ-100 56.0 + 2 Bear Correction Dow Indust. 83.3 - 7 Bear CONFIRMED S&P 500 75.4 + 0 Bear Confirmed S&P 100 77.0 - 2 Bull Correction Bullish percent measures the number of stocks in an index currently trading on a buy signal on their point and figure chart. Readings above 70 are considered overbought, and readings below 30 are considered oversold. Bull Confirmed - Aggressively long Bull Alert - Cautiously long Bull Correction - Pause or pullback in upward trend Bear Alert - Take defensive action if long Bear Confirmed - High risk if long, good conditions for shorting Bear Correction - Pause or rebound in downtrend ----------------------------------------------------------------- ! Sorry! There are not ARMS/TRIN moving average numbers today. Errors with our data provider prevented us from providing trustworthy material. Extreme readings above 1.5 are bullish, and readings below .85 are bearish. These signals don't occur often and tend be early, but when they do, they can signal significant market turning points. ----------------------------------------------------------------- Market Internals -NYSE- -NASDAQ- Advancers 2197 2040 Decliners 635 1054 New Highs 166 141 New Lows 60 26 Up Volume 1746M 1514M Down Vol. 467M 569M Total Vol. 2218M 2113M M = millions ----------------------------------------------------------------- Commitments Of Traders Report: 04/12/04 Weekly COT report discloses positions held by small specs and commercial traders of index futures contracts at the Chicago Mercantile Exchange and Chicago Board of Trade. COT data can be found at www.cftc.gov. Small specs are the general trading public with commercials being financial institutions. Commercials are historically on the correct side of future trend changes while small specs tend to be wrong. S&P 500 We continue to see little change in commercial traders' positions. Small traders are adding to positions and remain bullish although there is a decent jump in new shorts. Commercials Long Short Net % Of OI 03/23/04 401,456 418,732 (17,273) (2.1%) 03/30/04 407,987 420,624 (12,673) (1.5%) 04/06/04 409,429 419,471 (10,042) (1.2%) 04/12/04 412,827 419,910 ( 7,083) (0.9%) Most bearish reading of the year: (111,956) - 3/06/02 Most bullish reading of the year: 23,977 - 12/09/03 Small Traders Long Short Net % of OI 03/23/04 130,648 89,943 40,705 18.5% 03/30/04 130,112 81,937 48,175 22.7% 04/06/04 130,262 80,174 50,088 23.8% 04/12/04 135,840 89,090 46,750 20.8% Most bearish reading of the year: (1,657)- 5/27/03 Most bullish reading of the year: 114,510 - 3/26/02 E-MINI S&P 500 Commercials have reduced the long positions and added to their shorts, which is bearish for the markets. Small traders remain net long and have increased their bullish positions significantly. Commercials Long Short Net % Of OI 03/23/04 268,647 294,930 (26,283) ( 4.7%) 03/30/04 265,492 305,797 (40,305) ( 7.1%) 04/06/04 270,904 328,862 (57,958) ( 9.7%) 04/12/04 261,889 341,163 (79,274) (13.1%) Most bearish reading of the year: (354,835) - 06/17/03 Most bullish reading of the year: 133,299 - 09/02/03 Small Traders Long Short Net % of OI 03/23/04 131,879 59,210 72,669 38.0% 03/30/04 123,494 59,550 63,944 35.0% 04/06/04 148,737 46,235 102,502 52.6% 04/12/04 172,473 52,274 120,199 53.5% Most bearish reading of the year: (77,385) - 09/02/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 Almost no change in commercial traders' positions here. The same can be said for small traders. Commercials Long Short Net % of OI 03/23/04 52,014 34,017 17,997 20.9% 03/30/04 52,749 67,967 (15,218) (12.6%) 04/06/04 54,862 34,762 20,100 22.4% 04/12/04 54,144 34,432 19,712 22.3% Most bearish reading of the year: (21,858) - 08/26/03 Most bullish reading of the year: 13,386 - 03/16/04 Small Traders Long Short Net % of OI 03/23/04 9,884 12,887 (3,003) (13.2%) 03/30/04 8,928 16,551 (7,623) (30.0%) 04/06/04 7,971 20,721 (12,750) (44.4%) 04/12/04 8,297 20,746 (12,449) (42.9%) Most bearish reading of the year: (10,769) - 06/11/02 Most bullish reading of the year: 19,088 - 01/21/02 DOW JONES INDUSTRIAL Still no change in commercial traders' positions here either. It's an even race between longs and shorts. Small traders have actually grown more bearish. Commercials Long Short Net % of OI 03/23/04 23,048 22,119 929 2.1% 03/30/04 23,642 22,180 1,462 3.2% 04/06/04 23,101 22,108 993 2.2% 04/12/04 23,501 22,748 753 1.6% Most bearish reading of the year: (8,322) - 1/16/01 Most bullish reading of the year: 15,135 - 10/16/01 Small Traders Long Short Net % of OI 03/23/04 8,344 6,734 1,610 10.7% 03/30/04 7,020 6,711 309 2.3% 04/06/04 7,316 8,085 (769) (5.0%) 04/12/04 6,136 7,450 (1,314) (9.7%) Most bearish reading of the year: (12,106) - 3/09/04 Most bullish reading of the year: 8,523 - 8/26/03 ----------------------------------------------------------------- ================================================================== 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 --------------------------------- Check Point Software - CHKP - close: 24.81 change: +0.84 WHAT TO WATCH: Showing their approval for the company's earnings report earlier this week investors have sent shares of CHKP soaring over the past 3 days and today they finally managed the strong breakout over the $24 resistance level. That puts the stock at it best level in 2 years and based on the strong volume accompanying the move, we're expecting it to continue. Target next resistance in the $28-29 area. --- Tellabs, Inc. - TLAB - close: 9.73 change: +0.17 WHAT TO WATCH: Yesterday's earnings report was just what the doctor ordered to break TLAB out of its descending trend of lower highs. With the move through both the descending trendline and the 50-dma on strong volume, the stock looks destined for a move back to the $10.50 level and possibly a retest of the January highs over $11. The best entries will come on a slight pullback to test support at the broken trendline and the 50-dma. --- PETsMART Inc. - PETM - close: 28.03 change: +0.57 WHAT TO WATCH: Since bottoming near the $22 level and completing its consolidation back in December, shares of PETM have been steadily working their way higher and are close to breaking out to new all-time highs. Use a trigger above $29 and target a move to the $32-33 area ahead of the company's May 20th earnings announcement. --- Sonoco Products - SON - close: 25.77 change: +1.01 WHAT TO WATCH: It's amazing what a positive earnings announcement can do. Releasing its quarterly report yesterday did wonders for the stock today, with a strong breakout through the $25.25 level that has been holding it back since the first of the year. This looks like a real breakout, coming on strong volume. Entries look good either near current levels or on a slight pullback near $25. Look for a rally to next resistance near $27.50. =================== On the RADAR Screen =================== TDW $29.05 - Investors heaved a huge sigh of relief this morning when TDW's earnings report came in in-line and that sent sthe stock soaring right to resistance at the 200-dma and 30-dma near $29. A breakout over that resistance should have the stock making a run at next resistance at the confluence of the 100-dma and 50-dma near $30.50, with a chance at a rally all the way back to stronger resistance near $32. ORLY $41.67 - ORLY has been building a bullish wedge for the past few months, consistently finding support near its 200-dma and it looks ready to break out of the pattern to the upside. It's probably too late for a pullback entry, so look to jump on board on a break above $42. Initial resistance comes in near $44-45 and then it's blue sky territory above. BCO $29.70 - Helped along by the positive market, BCO broke out to another all-time high today and it looks like the bullish trend still has some life in it. Entries look favorable on a breakout over $30 or a slight pullback near $28.50. Look for continued upside action ahead of the company's earnings report, expected in early May. ================================================================= 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. 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PremierInvestor.net Newsletter Thursday 04-22-2004 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 Adjustments: AAP Closed Plays: CSCO Stock Splits: DHR, HSY, IEX, ODFL 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 Adjustments ================================================================= AAP - short Adjust from $40.00 up to $41.00 ================================================================= Closed Plays ================================================================= Cisco Systems - CSCO - close: 22.48 change: -0.34 stop: 23.01 News on Wednesday that there was a flaw in CSCO's routers that could disable websites and disrupt Internet traffic produced a brief moment of weakness. Shares of CSCO dipped below support at its simple 200-dma, the $22.00 level and its March low to trigger us at $21.90. The low on Wednesday was 21.80. Unfortunately, but the close on Wednesday the markets were rebounding after Greenspan soothed Wall Street's interest rate fears. In Wednesday's newsletter we said that we had been triggered but suggested readers wait since it looked like a bear trap. Sure enough that trap was closed today with a 3.48% rally as the markets surged on earnings news. We were stopped out at $23.01. Picked on April 21 at $21.90 Gain since picked: + 1.25 Earnings Date 05/11/04 (unconfirmed) Average Daily Volume: 57 million ================================================================= Stock Splits ================================================================= Announcements ------------- DHR reports earnings and a 2-for-1 split Before Thursday's opening bell, Danaher Corp (NYSE:DHR) reported record Q1 earnings and a 2-for-1 stock split. The split, in the form of a stock dividend, will be payable on May 20th, 2004 to shareholders on record as of May 6th. The Board also declared its intention to double its cash dividend to $0.015 cents per share on a post-split basis. About the company: Danaher Corporation is a leading manufacturer of Process / Environmental Controls and Tools and Components (source: company press release) --- HSY sweetens earnings with a 2-for-1 split Before Thursday's opening bell, Hershey Foods Corp (NYSE:HSY) announced Q1 earnings and a 2-for-1 stock split. The Board of Directors approved a 2-for-1 split in the form of a 100% stock dividend. This dividend is payable on June 15th, 2004 to shareholders on record as of May 25th. About the company: Hershey Foods Corporation is the leading North American manufacturer of quality chocolate and non-chocolate confectionery and chocolate-related grocery products. Some of the company's most popular products include Hershey's. chocolate and chocolate with almonds bars, Hershey's. Kisses. brand chocolates, Reese's. peanut butter cups, Jolly Rancher. and Twizzlers. candies, Hershey's. cocoa, and Hershey's. syrup. The company also is a market leader in the gum and mint category with such well-known brands as Ice Breakers., Breath Savers., and Bubble Yum.. (source: company press release) --- IEX reports earnings and a 3-for-2 split This morning before the opening bell, IDEX Corp (NYSE:IEX) reported Q1 earnings and a 3-for-2 stock split. The Board of Directors approved the 3-for-2 split in the form of a 50% stock dividend. This dividend is payable on May 28th, 2004 to shareholders on record as of May 14th. Fractional shares will be paid in cash. The Board also approved a 29% jump in the company's regular cash dividend to 18 cents per share (or 12 cents post-split). The cash dividend is payable in July. About the company: IDEX Corporation is a manufacturer of proprietary pumps and metering products, dispensing equipment, and other engineered products with leading positions in niche markets. Its products are sold to a wide range of industries throughout the world. (source: company press release) --- ODFL reports earnings and a 3-for-2 split This morning before the opening bell, Old Dominion Freight Line, Inc. (NASDAQ:ODFL) announced record Q1 earnings, raised its 2004 guidance, and declared a 3-for-2 stock split. The Board of Directors approved the 3-for-2 stock split in the form of a 50% stock dividend. This dividend is payable on May 20th, 2004 to shareholders on record as of May 6th. Post-split ODFL should have close to 24 million shares outstanding. About the company: Old Dominion Freight Line, Inc. is a less-than-truckload multi- regional motor carrier providing one to five day service among five regions in the United States and next-day and second-day service within these regions. Through its four product groups, OD- Domestic, OD-Expedited, OD-Global and OD-Technology, the Company offers an array of innovative products and services that provide direct service to 40 states within the Southeast, South Central, Northeast, Midwest and West regions of the country, including 28 states within which it provides full-state coverage. In addition, through marketing and carrier relationships, Old Dominion provides service to and from the remaining 10 states as well as international services around the globe. (source: company press release) ================== 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 PTR Petrochina Co Ltd 46.28 +1.74 NTT Nippon Tel & Tel 27.67 +1.02 CVX ChevronTexaco 91.73 +1.86 JPM JP Morgan 38.49 +0.81 C Citigroup 49.67 +0.53 SBC SBC Communications 25.37 +0.60 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- LYO Lyondell Chemical Co 17.33 +1.27 URI United Rentals Inc 19.84 +2.99 DRTE Dendrite Intl Inc 19.50 +1.45 WAB Wabtec 16.20 +1.22 EPIC Epicor Software 15.30 +2.82 PLXT PLX Technology 14.10 +1.21 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- TM Toyota Motor Corp 76.36 +2.60 MOT Motorola 20.70 +1.40 EBAY eBay Inc 82.59 +7.81 ERICY Lm Ericsson Telephone 32.25 +1.28 ITW Illinois Tool Works 89.31 +3.81 SYK Stryker Corp 100.35 +1.70 AMZN Amazon.com 48.86 +3.14 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- KLAC KLA-Tencor 46.14 -2.18 LUK Leucadia National 50.56 -2.44 RBK Reebok Intl Ltd 37.96 -4.01 CCMP Cabot Microelectronics 33.36 -4.20 CNMD Conmed Corp 27.14 -3.01 ATMI ATMI Inc 24.50 -1.03 HTCH Hutchinson Technology 25.60 -1.29 MAGS Magal Security Systems 25.06 -3.57 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- IGT Intl Game Technology 44.18 -2.40 ================================================================= 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. 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