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Daily Newsletter, Wednesday, 06/02/2004

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PremierInvestor.net Newsletter                Wednesday 06-02-2004
                                                    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:  Bluechips Rally on Oil's Weakness
Watch List:   Bifurcation

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)
===============================================================
     06-02-2004            High     Low     Volume Advance/Decline
DJIA    10262.97 + 60.32 10288.81 10197.06 1.52 bln   1695/1120
NASDAQ   1988.98 -  1.79  1998.32  1978.71 1.50 bln   1560/1450
S&P 100   547.58 +  2.47   549.22   544.40   Totals   3255/2570
S&P 500  1124.99 +  3.79   1128.10 1118.64
RUS 2000  573.56 +  1.07   574.81   570.76
DJ TRANS 3001.85 + 38.35  3005.00  2962.92
VIX        16.08 -  0.22    16.70    15.95
VXO        16.24 -  0.43    16.87    15.00
VXN        22.61 +  0.04    23.17    22.19
Total Volume 3,395M
Total UpVol  1,730M
Total DnVol  1,551M
52wk Highs     218
52wk Lows       63
TRIN          1.15
PUT/CALL      0.91
===============================================================

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

Bluechips Rally on Oil's Weakness
by James Brown

Positive comments from Saudi Arabia's Oil Minister a day before
OPEC's official meeting in Beirut sent crude to a 5.6% decline,
its biggest drop in six months.  This gave the Dow Industrials a
lift but the tech-heavy NASDAQ slipped into the red for the first
time in eight sessions.

Memorial day is the unofficial start of summer and the markets
wasted no time slipping into their summer doldrums.  Volume
continues to be low with many traders either still on vacation or
sitting on the sidelines ahead of Friday's non-farm payrolls
report.  Market internals were generally flat but bulls won the
day. The NYSE reported 17 advancers for every 11 decliners.  On
the NASDAQ it was almost a dead heat at 15 to 14, advancers over
decliners.  Up volume was only marginally above down volume on
both exchanges.

The first half of the trading day was mostly sideways chop but an
afternoon rally pushed the Industrials through resistance at
10,220 outlined in yesterday's wrap.  The same can be said for
the S&P 500 index, which drifted lower into lunchtime but then
rallied past resistance at 1122.  The action in the NASDAQ
composite followed a similar pattern and the COMPX tested
resistance at 2000 with an intraday high of 1998 before fading in
the last hour.  At the end of the day the Dow added 60 points to
10,262.  The NASDAQ lost less than two points to close at 1988
and the S&P 500 inched up less than four points to 1124.99.
Overseas the Japanese NIKKEI slipped 54 points to 11,242.  The
Chinese Hang Seng climbed 96 points to 12,201.  Across the
Atlantic the German DAX rose 24 points to 3,888.  The French CAC
followed with a 21-point gain to 3646 and the London FTSE close
nearly unchanged at 4,442.

Concerns over crude oil prices and supplies continued to hog the
spotlight.  The recent attack in Saudi over the weekend sent
crude prices to their all-time high on Tuesday to more than $42 a
barrel.  Industry experts say the markets are pricing in a fear
premium of $8 to $12 a barrel due to concerns that terrorist
might disrupt supply lines.  Fortunately, Ali al-Naimi, Saudi's
Oil Minister, told the press that Saudi Arabia (and OPEC) will
continue to target a $22-$28 price per barrel for oil.  There had
been some speculation that OPEC might be raising their target
price, which has been fuel to the fire under oil's rally.

World markets are already concerned that the current record highs
for oil is beginning to choke off the best economic recovery the
globe has seen in twenty years.  Today's drop back under the
psychological $40 a barrel level helped ease nervous traders.
Crude's decline may have been sharper than normal due to a small
but growing expectation that several OPEC ministers will push to
temporarily suspend the current quota system altogether as a
signal to the markets that they are taking serious action.  Of
course the move may be largely ceremonial as most of the cartel's
members are already cheating above their current quotas and
pumping oil at or near their full capacity.

The drop in oil prices gave the airlines and transportation
stocks a boost today.  The XAL airline index rallied 4.27% with a
strong rebound from its 52 level sending it back toward its May
highs.  The Dow Transports also turned in a big move adding 38
points to breakout and close over the 3000 level for the first
time in more than a month.  Traditional Dow theory suggests we
can't have a sustained market rally without participation by the
transports and this has been underlying support for the
Industrials.

Impacting the NASDAQ has been the SOX semiconductor index.
Investors are cautious over the upcoming Intel mid-quarter update
on Thursday night and shares of Intel fell 1.12% to $28.01 today.
Currently the unofficial word on the street is expecting Intel to
guide to the lower end of their previously forecasted range.
This is undermining strength in the SOX, which fell 2.25%.  The
SOX tried to rebound from its lows this afternoon but it failed
under the 480 level and odds are it will test previous resistance
at 470 soon.  It is a commonly held belief that the semiconductor
sector leads the NASDAQ.  Should Intel disappoint it will be a
major drag on tech stocks just as the NASDAQ tries to breakout
over resistance at the 2000 level.

Speaking of resistance the trendline of lower highs for the
NASDAQ is just over the 2000 mark as is its simple 100-dma and
both will make it that much tougher for the NASDAQ to breakout.
Meanwhile the Dow Industrials has broken out above the 10,220
level and its 40 & 50-dma's.  This is very impressive but its
trendline of lower highs (and top of its descending channel) is
near the 10,400 level and near its simple 100-dma.

Chart of the Dow Industrials:



Chart of the NASDAQ Composite:



Chart of the S&P 500 Index:



Wednesday's only "economic" reports were the auto and truck sales
numbers.  According to reports U.S. vehicle sales rose 3.4% in
May despite rising prices at the pump.   General Motors (GM)
reported its best month ever with sales up 2.8% over last May.
DaimlerChrysler turned in a 1.3% jump in sales while Ford said
sales slipped 2.8%.  Ford (F) continued to see strong sales of
its F-series trucks but overall sales slipped due to very steep
comparisons to last year's big numbers.

Many of the stock-specific headlines today were made by ALTH, BA,
HD, and NT.  Allos Therapeutics (ALTH) was a huge winner with a
44% jump in its share price to $2.82 after the FDA issued a
surprise approval for its RSR13 treatment.  The "approvable"
letter was a surprise because the FDA advisory panel had
suggested the drug not be approved due to concerns over the
patient make up of ALTH's trials.  RSR13 is being given
conditional approval for patients with cancer that originates in
the chest and spreads to the brain but the company will need to
complete another round of Phase III trials.

Dow-component Boeing Inc (BA) was a winner today, hitting new
two-year highs, after announcing that Air New Zealand had ordered
10 new plans worth $851 million.  BA also got a boost from a
Merrill Lynch analyst who suggested that BA could benefit from
higher oil prices.  Surging fuel costs could force the airline
industry to upgrade their aging fleet to BA's new more fuel-
efficient models sooner rather than later.  Boeing added 1.87% to
close at $46.47.

Dow-component Home Depot (HD) was an early drag on the
Industrials after a Bank of America analyst downgraded the stock
from a "buy" to a "neutral".  The concern centered on slowing
traffic patterns and a potential slow down in the housing market
and refinancings due to higher rates.  The historically low
interest rates and refi boom have lead to a huge increase in home
improvements but now with higher rates looming ahead of us the
do-it-yourself crowd may not be quite so ready to tap into their
equity.  This morning the Mortgage Bankers Association reported
that applications for loans slipped 1.2% last week with refi's
falling 6.6%.

Meanwhile Canadian telecom giant Nortel Networks (NT) fell more
than 6% to $3.83.  The company said it was still not ready to
issue new financials for the last three years.  The stock has
fallen sharply from its February highs near $8.50 due to its
ongoing accounting scandal.

Looking ahead to tomorrow we'll hear a small number of economic
reports.  Before the opening bell will be the initial weekly
jobless claims.  After the open we'll get the factory orders for
April and the ISM services index for May.  Yet the real focus
will be on Intel's mid-quarter update after the closing bell and
Friday's non-farm payrolls report.  If the jobs number comes in
too strong many believe the Fed will feel forced to raise rates
at its June 29-30th meeting.


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

Bifurcation

Southwest Airlines - LUV - close: 15.73 change: +0.37

WHAT TO WATCH: Despite the persistent rise in fuel costs, Airline
stocks have been acting quite well as we head into the heavy
travel season.  LUV now appears to be finding solid support near
broken resistance at $15.25 and today's strong rise suggests a
breakout is coming.  Aggressive entries can be taken on another
dip near the 10-dma, while the more conservative approach will be
to wait for a break above dual resistance at $16 and the 200-dma.
There will be resistance found near $16.50 and then $17.50, but
the longer term target is $18 at the PnF bearish resistance line.




---

Arbitron Inc. - ARB - close: 39.45 change: -0.05

WHAT TO WATCH: After finally stabilizing just above $36, shares
of ARB have risen through the 50-dma and are currently
challenging the multi-month descending trendline near $39.50.
Just above that level is the 200-dma and a break over that
average looks like a good trigger point for bullish entries.  Use
an initial target at $42 resistance, with the possibility of a
rise into the $44-45 area to challenge the January highs.




---

Amer. Eagle Outfitters, Inc. - AEOS - close: 29.01 change: -0.10

WHAT TO WATCH: After dropping back from its April highs, AEOS is
finding new strength, along with the rest of the Retail sector.
Near-term the stock appears to be struggling with the $29-30
resistance level, but a breakout over $30 should pave the way for
a push up to $35 resistance.  Aggressive traders can enter on a
dip back near $28, with the more conservative approach being a
breakout entry over $30.




---

Western Wireless Corp. - WWCA - close: 28.31 change: -0.21

WHAT TO WATCH: On the daily chart, shares of WWCA may seem a bit
extended here, as the stock has already broken out over the $27
resistance level.  But looking at the longer-term view, we can
see the significance of the $30 resistance level and a breakout
over that point should lead to a run first to $33.50 and then the
$35-36 area.  Aggressive traders can buy a successful dip and
rebound from $27, while the more conservative approach will be to
wait for a move above $30.




---


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

GPS $24.47 - There's no question that CR has been looking very
strong over the past week, with the stock rising through $23.50
resistance.  While it may look a bit extended in the near-term,
the weekly chart shows the stock still riding right in the middle
of its rising channel.  A brief pullback to test support near
$23.50 would be the ideal entry point.  Target the top of the
rising channel near $26.

ASKJ $42.86 - The rally in Internet stocks yesterday was not lost
on ASKJ, with the stock pressing through the $42 level and
strengthening its fresh PnF Buy signal.  With the stock between
support ($40) and resistance ($44) we aren't wild about new
entries at this juncture.  But either a pullback to test support
or a breakout through resistance can be used for new bullish
entry points.  Note that the upside target from the PnF chart is
$58, but we'd suggest targeting a move to the $50 level.

LFUS $40.83 - Continuing with its solid bullish trend of the past
year, LFUS broke above the $40 level on strong volume yesterday
and we're betting on upside continuation towards the $45 level.
But the best entry point will come on a dip back to test broken
resistance near $39.50-40.00 as new support.


==================
  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
TOT     Total Sa (ADS)             95.12    +1.04
MRK     Merck & Co                 48.36    +1.06
HBC     HSBC Holdings Plc          74.95    +0.92
PTR     Petrochina Co Ltd (ADS)    48.24    +0.74
CVX     Chevrontexaco Corp         91.30    +0.90
COP     Conocophillips             75.21    +1.88


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

ZRAN    Zoran Corp                 18.58    +1.01
LRW     Labor Ready Inc            13.85    +1.68
SERO    Serologicals Corp          19.39    +2.26
SNX     Synnex Corp                18.50    +1.46
CHIC    Charlotte Russe Hldg Inc   19.61    +1.12


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

AMZN    Amazon.Com Inc             50.23    +1.73
SU      Suncor Energy              24.66    +1.01
CMX     Caremark Rx Inc            32.90    +1.70
DGX     Quest Diagnostics Inc      87.70    +1.55
CVH     Coventry Health Care Inc   48.47    +2.39


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

CME     Chicago Mrcntile Exchnge  122.01    -7.19
STC     Stewart Info Services Cp   32.70    -1.45


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

LEH     Lehman Bros Hldg Inc       74.43    -1.22
AUO     AU Optronics Corp          20.42    -0.94
AVCT    Avocent Corporation        33.32    -0.95
UFPI    Universal Forest Prodcts   28.90    -0.38


=================================================================
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 06-02-2004
                                                    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:  IGT, NOVL

Net Bulls (Tech Stocks)
  New Bearish Plays:    ISIL


Active Trader (Non-tech Stocks)
  New Bullish plays:    JBLU


Stock Splits
  Announcements:       None


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

IGT - non-tech long play
Today's 3% gain and breakout over $40.00 is good news
but IGT still needs to breakout above its 40-dma.  We are
going to RAISE our stop loss from $37.85 to $38.45.

---

NOVL - high risk short play
NOVL continues to sink so we're going to lower our
stop loss from $9.91 to $9.51.


==================================================================
Net Bulls (NB) Tech Stock section
==================================================================

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


  New Bearish Plays
  -----------------

Intersil Corp. - ISIL - close: 20.65 change: -0.54 stop: 22.00

Company Description:
Intersil Corporation is a global designer and manufacturer of
high-performance analog semiconductors and a supplier of power
management solutions for all computing platforms.  The company's
portfolio primarily addresses four markets: power management,
optical storage (CD and DVD recordable), flat-panel displays and
wireless networking.  Products are organized into three product
groups: power management, Elantec and standard analog, wireless
networking and automotive.

Why we like it:
Over the past several months, shares of ISIL have been tracing
out a pattern of lower highs and lower lows, working down the
chart in a broad descending channel.  The stock finally found
some support just over 2 weeks ago near the $18 level as price
finally tapped the lower channel line.  ISIL rebounded smartly
along with the rest of the Chip sector, but with investors
growing wary ahead of INTC's mid-quarter update, the
Semiconductor index (SOX.X) has not been behaving well this week,
losing 2.25% today to close right on the key $475 support level.
Should this support fail, we can expect the index to fall back
towards the $440 level that provided support a couple weeks ago.
ISIL looks like an ideal way to play that expected decline, as
the stock appears to be weakening in its descending channel.  The
most recent rally attempt failed right at the top of the channel
and once again we can see the stock rolling over from its
descending upper channel line.  At the same time, daily
oscillators are rolling bearish, adding to the picture that
suggests a return to support in the near future.

Turning to the PnF chart, we can see that ISIL is still in a
bearish configuration, with the recent rebound to $21 having just
relieved the oversold condition.  The PnF downside objective of
$17 is still intact.  While an argument can certainly be made for
a drop to that strong level of support, we're going to be a bit
more conservative and target a move to $18 for a retest of the
lows from last month.  Look for another failure near the
descending channel line ($21.30) and the 50-dma ($21.16) to set
up the optimum entry point.  Traders looking to enter on renewed
weakness will wait for a break back under the $20 level before
playing.  Note that the mid-quarter update from INTC could have a
material impact on the play and conservative traders may want to
wait until after that event (after the close on Thursday) before
taking a position.  We'll use a tight stop on this play at $22,
which is comfortably above the intraday highs towards the end of
last week.

Annotated Chart of ISIL:



Picked on June 2nd at       $20.65
Change since picked          +0.00
Earnings Date              4/21/04 (unconfirmed)
Average Daily Volume =    2.36 mln


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

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


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

JetBlue Airways - JBLU - close: 29.42 change: +1.14 stop: 26.50

Company Description:
JetBlue Airways Corporation is a low-fare, low-cost passenger
airline that serves point-to-point routes between 22 destinations
in 11 states and Puerto Rico.  The company focuses on serving
underserved markets and/or large metropolitan areas that have
high average fares.  It has a geographically diversified flight
schedule that includes both short-haul and long-haul routes.
JetBlue commenced service in February 2000 and established its
primary base of operations at New York's John F. Kennedy
International Airport.  On August 28, 2001, it began service at
its West Coast base of operations, Los Angeles' Long Beach
Municipal Airport. In early 2004, JetBlue launched service from
Logan International Airport in Boston to five cities with a total
of 11 daily departures. As of February 11, 2004, it operated 222
weekday flights, including 108 weekday flights between the
Northeast and Florida, 66 weekday flights between the East Coast
and western United States and 48 weekday short-haul flights.

Why we like it:
After being pummeled lower from its October highs near $46, JBLU
has been busy building a new base over the past several months
and it looks like a breakout could be just around the corner.
The stock has been building a pattern of higher lows over the
past couple months, with horizontal resistance at $30 being
tested on a more frequent basis.  Turning to look at the PnF
chart, we can clearly see that the supply/demand dynamic has
shifted squarely in favor of the bulls.  The break over $26 in
early April put the PnF chart on a new Buy signal and the current
vertical count is $43, giving the stock lots of room to run to
the upside.  Just moving through $30 isn't going to be enough to
tempt us into breakout entries though, as the 200-dma ($30.59)
will be an additional obstacle.

With the PnF chart in our favor and the healthy appearance of the
daily chart, we're going to pass on using a trigger for this
play, leaving the door open to buying any near-term intraday
dips.  Pullback entries look favorable on a rebound from above
the $27.50 level, as the 20-dma ($27.65) should provide solid
support.  Traders that would prefer to enter on continued
strength should be careful, waiting for a breakout over the 200-
dma before playing.  We're looking for an initial move to the $34
resistance level, with an outside chance of a continued push into
the $36-37 area.  Note the rising trendline on the chart below,
which is just under the 50-dma ($26.69).  That gives us a high
degree of confidence in placing our initial stop at $26.50.

Annotated Chart of JBLU:



Picked on June 2nd at       $29.42
Change since picked          +0.00
Earnings Date              4/22/04 (confirmed)
Average Daily Volume =    1.87 mln



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

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

None


=================================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to Contact Support
=================================================================
DISCLAIMER
=================================================================

This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

*****************************************************************
ADVERTISING INFORMATION

For more information on advertising in PremierInvestor.net
Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

*****************************************************************

Copyright (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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