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Daily Newsletter, Wednesday, 05/26/2004

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PremierInvestor.net Newsletter                Wednesday 05-26-2004
                                                    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:  Tech Stays Positive
Watch List:   Day of Rest

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)
===============================================================
     05-26-2004            High     Low     Volume Advance/Decline
DJIA    10109.89 -  7.73 10128.77 10077.81 1.70 bln   1687/1144
NASDAQ   1976.15 + 11.50  1976.16  1957.58 1.57 bln   1794/1245
S&P 100   542.60 +  0.21   543.43   540.10   Totals   3481/2389
S&P 500  1114.94 +  1.89   1116.71 1109.91
RUS 2000  567.77 +  2.38   567.77   562.47
DJ TRANS 2939.92 + 74.56  2940.32  2911.62
VIX        15.97 +  0.01    16.30    15.78
VXO        16.15 +  0.24    17.06    15.95
VXN        21.63 -  0.41    22.53    21.56
Total Volume 3,635M
Total UpVol  2,457M
Total DnVol  1,115M
52wk Highs     140
52wk Lows       90
TRIN          0.70
PUT/CALL      1.01
===============================================================

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

Tech Stays Positive
by James Brown


The Dow Industrials may have ended in the red today but bulls can
still claim a victory.  After yesterday's big 159-point gain the
INDU only lost about 8 points due to weakness in SBC and VZ.  The
NASDAQ Composite posted its fourth straight gain and the S&P 500
index marked its fifth straight gain despite disappointing
economic data and renewed terror concerns.

The morning started out on a sour note when the government raised
concerns about the growing threat of terrorist actions on
American soil.  Fortunately, the 10:30 AM low proved to be the
low of the day and stocks slowly drifted higher throughout the
session.  Later in the afternoon Attorney General John Ashcroft
held a press conference and pointed out seven specific
individuals the government was looking for and asked citizens to
help.  What could be challenge for stocks this summer are the
number of high-profile events that could be targets for terrorist
actions.  On the list are the soon to be dedicated WWII memorial,
the G8 summit in Georgia, the Democratic convention in July and
the Republican convention in August, the Olympics in Athens, and
the November elections here at home.

Speaking of home the U.S. durable goods orders for April fell a
worse than expected 2.9% to $191.3 billion.  Economists had been
looking for a mild decline of 0.9% after February's 3.9% gain and
March's upwardly revised 5.7% jump.  The drop in durable goods in
April was the biggest slip in almost two years.  While the number
was disappointing Wall Street didn't seem too worried and won't
be unless there is a repeat in May.

The second biggest economic report out today was the April new
home sales.  Economists were expecting a dip from the record
highs near 1.239 million in March to 1.19 million in April
(annualized pace). The Commerce Department surprised the markets
with an 11.8% drop to 1.09 million homes.  This was the largest
one-month drop in a decade and immediately sent the home building
stocks lower.  The decline was fueled by significant slow downs
in the South with a 22% drop in sales and the West with a 9.4%
drop in sales.  Contributing to the decline was a strong rise in
30-year fixed rate mortgages to 6% and the price of homes hitting
new all-time highs.

Oil remained in the spotlight as well but confusing supply data
produced a volatile session for crude.  The Energy Department
released their supply numbers that showed no change in crude oil
stocks and a drop in gasoline stocks.  Yet shortly thereafter the
American Petroleum Institute released their supply numbers
showing a rise in crude and gasoline inventories.  Crude oil
futures ended lower on the session down 44 cents to $40.70 per
barrel.  Investors took it as a cue to do a little profit taking
in energy stocks and the OSX oil services index lost 1.72% while
the OIX oil index fell 0.74%.

Fortunately the volatile session for oil and our own
disappointing economic data didn't appear to have much impact on
global stock exchanges.  The Japanese NIKKEI jumped 189 points to
11,152 in response to our own rally yesterday.  European stocks
were mostly higher as well with gains for the English FTSE,
German DAX and French CAC.

Looking at a chart of the Dow Industrials you can see how
yesterday's big rally broke out of the recent consolidation phase
and above its simple 200-dma.   The good news is today's minor
decline held above the 200-dma and the 10,100 level.  A chart of
the NASDAQ looks encouraging too.  Yesterday's gain broke out
above its 200-dma and today's gain closed above its 50-dma.  The
tech-rich index is also above resistance at 1950 and 1970, which
leaves the next hurdle at the 2000 mark.

Chart of the Dow Industrials:



Chart of the NASDAQ Composite:



Overall market internals were bullish with advancing issues
running past decliners almost 17 to 11 on the NYSE and 3 to 2 on
the NASDAQ.  Up volume was 50% stronger than down volume on the
NYSE and nearly three times stronger than down volume on the
NASDAQ.  Money was flowing into tech, biotechs, some financials
and gold while investors were selling oil service stocks and home
builders.

The Dow probably would have closed in the green today if it
hadn't been for a one-two punch from VZ and SBC communication.
Verizon Communications (VZ) was the biggest drag on the Dow
Industrials with its 2.96% decline and SBC was close on its heels
with a 2.28% decline.  Both stocks are dropping due to rising
competition from the likes of Comcast.  Comcast Corp (CMCSA), the
nation's largest cable company, announced today that it would
offer 40 million households the opportunity to use VoIP or voice-
over-Internet protocol to make their phone calls through their
high-speed cable modems by 2006.  This is a huge threat to
traditional phone companies.

Another Dow component making headlines was Boeing (BA).  Last
year BA suffered from a scandal over its controversial leasing
deal for 100 Boeing refueling tankers.  Today the Pentagon
announced that it would postpone any decision on the $23.5
billion deal.  Defense Secretary Donald Rumsfeld has ordered two
new studies done on the project as the Pentagon considers other
options that might be less expensive.  A decision might be
reached in November but already some analysts feel that BA may
lose the deal and be forced to take a $300 million charge.
Shares of BA closed up 6 cents to $44.76.

Some of Wednesday's biggest movers were in the lucrative heart
stent industry.  We've seen a lot of news come out this week with
Medtronic's disappointing clinical trials data on Tuesday sending
shares of Boston Scientific (BSX) and rival Guidant (GDT) higher.
There was a reversal of fortunes for GDT today who announced they
were encountering some manufacturing challenges with its Champion
drug-coated stent and it may require a design change.  Such a
move would delay its filing for FDA approval and that's good news
for rival BSX with its Taxus drug-coated stent.  GDT fell 11% to
$53.71 while BSX rose 11% to $44.82.

Looking ahead to Thursday we have a handful of economic reports
to wade through.  On the list is the help wanted index, the
preliminary chain-deflator data, and the weekly initial jobless
claims but the biggest report tomorrow is the preliminary GDP
numbers.  Economists are expecting the first quarter of 2004 to
show the economy growing at 4.5% compared to 4.2% for the fourth
quarter of 2003.  This report will set the tone for the day and
probably the rest of the week.  What could be exciting is that
any moves tomorrow and Friday could be sharper than normal due to
extremely low volume.  We've had low volume the last couple of
weeks and it's only going to get worse as we head toward the long
weekend.  Trading will dry up quickly Thursday afternoon and
Friday is likely to be a ghost town with traders already gone for
the Memorial Day weekend.


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

Day of Rest

Brunswick Corp. - BC - close: 41.40 change: +0.79

WHAT TO WATCH: After a successful test of the 100-dma near $38
last week, shares of BC appear ready to take a run at their highs
from last month.  Support should now be found near the 50-dma, so
a dip near that average can be used for aggressive entries.  With
resistance looming near $42, more conservative traders will want
to see a breakout over that level before initiating new
positions.  Look for a rally back to test the April highs near
$44.




---

UTStarcom, Inc. - UTSI - close: 29.00 change: +0.16

WHAT TO WATCH: After spending nearly 4 months mired in a
persistently downward trend, shares of UTSI finally broke above
the top of the falling channel yesterday on a strong burst of
buying volume.  That breakout even carried the stock through its
50-dma and we're looking for upside continuation towards first
major resistance at $32.  The best entries will be found on a
pullback to test the top of the broken channel near $28 as new
support.  But more aggressive traders can play a breakout over
today's high, looking for a momentum run towards $32.  Watch out
for possible resistance near $30.50.




---

Maxim Integrated Prod. - MXIM - close: 50.00 change: -0.04

WHAT TO WATCH: Breaking out over the $470 resistance level on
yesterday's strong market action, the SOX looks headed back for a
retest of the $500 level.  MXIM is offering us a great setup to
play that rally, as the stock has risen right to key resistance
at $50 and is awaiting the push to get the next leg of the
rebound going.  Use a trigger over yesterday's high (using
continued SOX strength for confirmation) and target a rally back
to $54 or possibly even the January highs at $56.




---

Yahoo! Inc.. - YHOO - close: 30.11 change: -0.17

WHAT TO WATCH: We looked at YHOO earlier in the week as the
breakout over the $29 resistance level looked impressive.  The
strength of that move was underscored by yesterday's rally and
today's consolidation looks healthy, holding in the upper half of
yesterday's range.  Use a trigger over yesterday's $30.50 high
and target a rally towards strong resistance in the $34-35 area.




---


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

SYMC $45.01 - With the overall market turning higher this week,
SYMC stands out due to its lack of participation, actually
breaking below the late April lows in yesterday's session.  SYMC
has been particularly resilient in recent months during the broad
market weakness, so we need to target conservative entries if
we're going to play the downside.  Look for a rollover near the
50-dma to provide entry and target a downward move towards strong
support near $40.  Note that there's likely to be some support
found near the $44 level, from which the stock rebounded over the
past 2 sessions.

SMTC $24.69 - Helped along by the rebound in the SOX, yesterday
SMTC finally managed a bullish breakout of the neutral wedge
formation that has been building since the first of the year.
The stock tested the top of that broken wedge near $24 today and
then rallied very close to key resistance at $25.  Aggressive
traders can look to enter on another bounce from the $24 area,
while the conservative approach will be to wait for a breakout
over the $25 resistance.  Target a rally to the $27 area for a
retest of the January highs.


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

BAC     Bank of America Corp       82.82    +0.38
MO      Altria Group Inc           47.36    +0.71
HD      Home Depot Inc             35.40    +0.10
PTR     Petrochina Co Ltd (ADS)    47.31    +0.63
GSK     Glaxosmithkline Plc (ADR)  42.91    +0.16


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

TEN     Tenneco Automotive Inc     12.63    +0.56

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

AVE     Aventis                    78.13    +0.17
BSX     Boston Scientific Corp     42.91    +2.55
ZMH     Zimmer Holdings            84.64    +0.89
CNA     CNA Financial Corp         30.11    +0.74


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

WYE     Wyeth                      35.63    +0.98
WMGI    Wright Medical             31.80    +0.77


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

*****************************************************************
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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 05-26-2004
                                                    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)
  New Bullish plays:    AAI, SBUX
  Closed Bearish Plays: TARO

High Risk/Reward
  Closed Bullish Plays: MAGS

Stock Splits
  Announcements:       WCN


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

None


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

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


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

AirTran Holdings - AAI - close: 13.87 change: 0.21 stop: 12.75

Company Description:
AirTran Holdings, Inc. is a low-fare scheduled airline in the
United States.  The company operates scheduled airline service in
short-haul markets principally in the eastern United States,
primarily from its hub in Atlanta, Georgia.  As of March 1, 2004,
it operated 75 Boeing 717 (B717) aircraft making approximately
436 scheduled flights per day to 45 airports across the United
States, serving more than 60 communities in 21 states and the
District of Columbia.  AirTran also flies to the Bahamas.  The
company's products include competitive fares, advanced seat
assignment, business class, consumer driven automation such as
online check-in, Bye-Pass airport self-service kiosks and A-Plus
Rewards, the Company's customer loyalty programs. In January
2004, it announced that it will be the launch airline for XM
Satellite Radio, which the Company expects to deploy fleet-wide
beginning in August 2004.

Why we like it:
Fresh from the watch list, AAI is looking ready to make a break
higher, and we want to get ready for the move before it happens.
After building a messy H&S bottom for the past several months,
the stock broke above its down-sloping neckline late last week
with the move over the $13 level and the bullish market action
this week has pushed price right to horizontal resistance just
over $14.  Taking the measurement off of the H&S pattern, the
breakout over $13 should have a minimum of $2.50 upside following
the neckline break, which gives us an upside target of $15.50.
But looking at the chart, we can see that the more likely target
is going to be horizontal resistance at $16.  The PnF chart is
even more encouraging, with the move over $13.50 generating
another Buy signal and suggesting that the $18.50 bullish price
objective may be in play over the longer term.

Given the significance of the January high at $14.25, we want to
wait for a breakout over that level before playing.  So we'll set
an entry trigger at $14.30 and target look for a move towards the
$16 resistance level.  Aggressive traders can enter on the
initial breakout, while the more conservative approach will be to
wait for a subsequent pullback to test broken resistance at $13
as newfound support.  Realistically, we shouldn't see a dip that
low, as the bottom of Monday's gap and the 10-dma ($13.26) should
offer support in the $13.25 area.  We'll play this one with a
fairly tight stop at $12.75, just under the 20-dma ($12.80).  A
break back under that level would be a strong indication that the
breakout has failed.

Annotated Chart of AAI:



Picked on May 26th at       $14.15
Change since picked          +0.00
Earnings Date              4/27/04 (confirmed)
Average Daily Volume =    1.43 mln



---

Starbucks Corp. - SBUX - close: 39.67 change: +0.09 stop: 37.00

Company Description:
Starbucks Corporation purchases and roasts whole bean coffees and
sells them, along with fresh, rich-brewed coffees, Italian-style
espresso beverages, cold blended beverages, a variety of
complementary food items, coffee-related accessories and
equipment, a selection of premium teas and a line of compact
discs, primarily through company-operated retail stores.  As of
September 28, 2003, Starbucks operated a total of 4,546 retail
stores.  Starbucks sells coffee and tea products through other
channels, and, through certain of its equity investees, it also
produces and sells bottled Frappuccino and Starbucks DoubleShot
coffee drinks and a line of premium ice creams.  These non-retail
channels are collectively known as Specialty Operations.

Why we like it:
Following its strong rally from below the $25 level to almost
$40, beginning last June, shares of SBUX have been trying to
catch their breath over the past few months.  The stock has been
consolidating tin the $37-40 area since February, and it looks
like a breakout move could be close at hand.  While the PnF chart
still has a very bullish tone to it, there's no guidance to be
found there in terms of an upside target due to the fact that
that upside objective of $35.50 has long since been achieved.
Despite that view giving the impression of a stock that is rather
extended, SBUX hasn't showed much in the way of price weakness
and with the stock once again pressing against the top of the
consolidation zone, this is where we want to focus our attention
in anticipation of a breakout move.

Should SBUX break out like we expect, it should result in a solid
directional move.  Note that the last time the stock consolidated
for an extended period, the resulting upside break was good for a
rally from $33 up to about $39, or a $6 move.  We may not get
that much of a rally this time around because of a lack of broad
market strength to accompany the bullishness in SBUX,  That said,
we're going to target a $5 move in the stock, looking for a rise
to the $45 level.  Use a trigger at $40, with momentum entries
coming on the initial breakout and pullback entries being viable
on a subsequent pullback to test the $39 level as new-found
support.  We'll start with a liberal stop at $37, just under the
100-dma ($37.38) and just under the May 12th intraday low of
$37.03.

Annotated Chart of SBUX:



Picked on May 26th at       $39.67
Change since picked          +0.00
Earnings Date              7/21/04 (unconfirmed)
Average Daily Volume =    2.98 mln




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

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

Taro Pharmaceuticals - TARO - cls: 42.56 chg: +1.30 stop: 43.00

Ouch!  We've been stopped out of TARO on a two-day reversal.  The
play was looking pretty good on Monday when TARO traded below its
April lows and triggered us at $40.94.  Then Tuesday's widespread
rally occurred and TARO bounced strongly back to $41.26.  We had
lowered our stop to $43.00 on Monday evening so we were not yet
concerned.  Unfortunately, the rally continued on Wednesday
without any explanation.  The DRG drug index turned in a tepid
gain and there were no new headlines for TARO.  We suspect it may
have been short covering on the rebound back above $40.

Picked on May 24 at $40.94
Gain since picked:  + 1.62
Earnings Date     04/29/04 (confirmed)
Average Daily Volume:  485 thousand




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

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

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

Magal Security - MAGS - cls: 20.85 chng: +3.88 stop: 16.50

The explosive price action in shares of MAGS over the past few
sessions is precisely what we envisioned when we initially added
it to the play list.  It took a couple weeks of meandering near
support, but when the bulls decided to run, they got serious!
MAGS broke out over the top of its neutral wedge on Friday,
gapped strongly higher on Monday and then tested the top of that
gap yesterday before today's explosive 22% gain.  We were looking
for a move first to the 50-dma and then possibly to the $20 level
and we got both today.  Aggressive traders can hold on for more
gains, but we'd suggest a tight stop just under the 50-dma at
this point.  We're officially dropping the play tonight, as our
aggressive price target has been met.

Picked on May 5th at        $15.04
Change since picked          +5.81
Earnings Date              4/28/04 (confirmed)
Average Daily Volume =    2.52 mln





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

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

WCN announces a 3-for-2 stock split


This afternoon before the market's closing bell Waste Connections,
Inc. (NYSE:WCN) announced that its Board of Directors had approved
a 3-for-2 stock split of its common stock.

The split will take place as a 50% stock dividend payable on June
24th, 2004 to shareholders on record as of June 10th.


About the company:
Waste Connections, Inc. is an integrated solid waste services
company that provides solid waste collection, transfer, disposal
and recycling services in mostly secondary markets in the Western
and Southern U.S. The Company serves more than one million
commercial, residential and industrial customers from a network of
operations in 23 states. Waste Connections, Inc. was founded in
September 1997 and is headquartered in Folsom, California.
(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

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