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Daily Newsletter, Monday, 06/07/2004

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PremierInvestor.net Newsletter                   Monday 06-07-2004
                                                    section 1 of 2
Copyright (c) 2004, All rights reserved.
Redistribution in any form is strictly prohibited.

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

In section one:

Market Wrap:  Bulls Stampede Pushing NASDAQ Over 2000
Watch List:   Chips, Housing And Software

===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
     06-07-2004            High     Low     Volume Advance/Decline
DJIA    10391.08 +148.26 10391.15 10243.31 1.45 bln   2331/ 516
NASDAQ   2020.62 + 42.00  2020.62  1991.42 1.46 bln   2181/ 874
S&P 100   555.69 +  8.61   555.69   547.08   Totals   4512/1390
S&P 500  1140.42 + 17.92  1140.54 1122.50
RUS 2000  578.90 + 11.15   578.91   567.75
DJ TRANS 3040.11 + 49.16  3040.15  2992.55
VIX        15.39 -  1.39    16.70    15.33
VXO        14.67 -  1.84    15.87    14.61
VXN        22.65 -  1.19    24.21    22.52
Total Volume 3,339M
Total UpVol  2,886M
Total DnVol    404M
52wk Highs     244
52wk Lows       64
TRIN          0.38
PUT/CALL      0.85
===============================================================

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

Bulls Stampede Pushing NASDAQ Over 2000
by James Brown

Stocks were off to a strong start this morning but not before
Wall Street honored the passing of President Reagan with two
minutes of silence.  The rally slowed a bit during the lunchtime
lull but picked up speed again heading into the afternoon.
Analysts are pointing to the renewed confidence in the U.S.
economic expansion, the pull back in crude oil prices and OPEC's
promise to pump more, and the positive numbers from last Friday's
non-farm payrolls report as the fuel for Monday's global market
rally.

Asian stock exchanges witnessed a big rally in equities with the
Japanese NIKKEI adding 311 or 2.8% to close at 11,439. It was the
NIKKEI's largest one-day percentage in six months.  The Hong Kong
Hang Seng index followed with a 304-point gain to close at
12,326.  The South Korea and Taiwan exchanges also turned in big
moves with 3.68% gains for the session.  European stocks shadowed
their Asian counterparts and closed in the green.  The German DAX
jumped 1.4% and broke through resistance at the 4000 level.  The
English FTSE added 37 points to close at 4491 and the French CAC
rose 23 points to close at 3722.

Here at home the rally was very broad-based with the BTK biotech
index as the lone sector closing in the red.  Investors were
pouring money into interest-rate sensitive and growth sectors
like homebuilders and tech stocks.  The DJUSHB home construction
index soared 5.24% to breakout over the 600 level and its simple
50 and 100-dma's.  There were plenty of new five-week highs
mirroring the gains in the major indices and several sectors
broke out over significant resistance.  The DFI defense index and
the RLX retail index hit new all-time highs.

The 3.67% rally to 487.93 in the SOX semiconductor index is
important because the chip sector tends to lead the NASDAQ higher
or lower.  Today's gain in the SOX put it just over its simple
200-dma but still under resistance at the 490 level and its
simple 100-dma.  Any follow through tomorrow would be good news
for tech stocks.  Hopefully, investors will choose to interpret
Texas Instrument's (TXN) mid-quarter update in a positive light.
TXN held its conference call after the bell tonight and gave a
modestly up beat forecast.  The chipmaker narrowed its revenue
forecasts from $3.09-$3.33 billion to $3.17-to-$3.29 billion.
Earnings per share are expected to come in at 24 to 26 cents per
share.  Last year TXN earned 7 cents per share on $2.34 billion
for the second quarter.  This year analysts are expecting 25
cents on $3.21 billion.

Chart of the SOX semiconductor index:



The 1.64% jump in the Dow Jones Transportation index (TRAN) is
important because traditional Dow Theory believes that we can't
have a meaningful rally in the Industrials without participation
by the transports.  The recent drop in oil plays an important
part in the Transports strength.  The July crude oil contracts
did trade lower on Monday and broke support at $38.00 a barrel
before rebounding in the afternoon to close up 17 cents at
$38.66.

Chart of the Dow Jones Transportation index:



Market internals were very bullish.  Advancing stocks flattened
declining stocks 23 to 5 on the NYSE and almost 22 to 9 on the
NASDAQ.  Up volume was more than 11 times down volume on the NYSE
and up volume was six times down volume on the NASDAQ.  These are
very big ratios and a positive sign for the bulls.
Unfortunately, overall volume for the session was still somewhat
light at less than 3 billion shares for both exchanges.

Thankfully the technical picture has improved.  The Dow Jones
Industrials' 148-point gain is a breakout over the 10,300 level
and its simple 100-dma.  The Dow is right at its descending
trendline of resistance from February and poised to breakout
above 10,400.  In the weekend wrap Jim outlined the 2000 and 2020
levels on the NASDAQ as crucial levels of resistance.  Today's
2.12% gain is a major breakout over the 2000 level, its simple
100-dma and its descending trendline of resistance.  Plus the
NASDAQ managed to close just over the 2020 mark.  This should put
bears on the defensive and give the NASDAQ room to run toward
2050.  Jim also listed the 1130 mark on the S&P 500 as an
important level to watch.  Monday's 1.59% gain to 1140 is a
convincing breakout and should give bulls a chance to run toward
the 1150 level of resistance.

Chart of the Dow Jones Industrials:



Chart of the NASDAQ Composite:



Chart of the S&P 500 Index:



What should really encourage traders is the fact that a Reuters'
story reported a new threat by Al-Qaeda to use U.S. based
passenger jets to strike at U.S. targets yet the markets hardly
seemed to acknowledge it.

Speaking of airplanes, Dow-component Boeing Inc (BA) made
headlines and a 52-week high (+2.6%) after reporting that
Singapore Airlines is considering an order to buy 50 planes from
either BA or its rival Airbus.  Company officials also announced
over the weekend that orders for their new 7E7 model could top
200 planes by the end of 2004.  Meanwhile Lehman Brothers
upgraded the stock from "equal-weight" to an "over weight" and
raised their long-term price target on Boeing.

Dow-components General Motors (GM) and Home Depot (HD) also made
headlines with their new push into China.  Actually, GM's
presence in China isn't new.  The company plans to spend $3
billion to double its manufacturing ability in China in an effort
to capitalize on the phenomenal growth in car sales.  Industry
experts already label China as the fastest growing market and
expect China to become the second largest market for vehicle
sales this year.  Meanwhile HD announced its plans to expand into
China but failed to say when their first store would open or how
many stores it was planning to build in China.

Biotech stocks were getting a lot of press today due to the
massive American Society of Clinical Oncology conference (ASCO)
in New Orleans this week.  Unfortunately for many biotech firms
investors seemed to be selling the news.  The BTK biotech index
was the only sector-specific index to close in the red on Monday.
Bucking the trend was Imclone Systems (IMCL), which added 12.2%
to close at $81.38, a new four-year high and a breakout over
resistance at $80.  Shares of IMCL soared on another round of
positive news for its Erbitux treatment and an upgrade from Smith
Barney from a "hold" to a "buy".  Traders shrugged off
disappointing news that IMCL's Phase III trials for its small
cell lung cancer treatment failed to hit the study's primary
goals.

It wouldn't be a Monday without some merger news.  Last Friday
shares of Mandalay Resort Group (MBG) soared from $54.62 to
$60.27 on what many believed was the company's outstanding
earnings report.  The company did announce earnings on Thursday
night and beat estimates by 18 cents.  Yet now many suspect there
was a leak of the upcoming merger announcement.  Late Friday
night MGM Mirage (MGG) issued a press release with its bid to buy
MBG for $7.65 billion, which includes MBG's $2.8 billion in debt.
The unsolicited $68 per share bid would make the combined company
the largest casino-gambling operation on the planet with ten
casinos on the Las Vegas strip, 33,000 hotel rooms and 2.5
million square feet of convention space.  Surprise,
surprise...shares of MBG soared to $72.80 before drifting back to
close at $70.23 (+16.5%) on Monday indicating that Wall Street
believes the bid is too low.  MBG's management said they would
evaluate the offer.

Most of today's news was focused on a tribute to America's 40th
president Ronald W. Reagan.  Reagan passed away on Saturday at 93
years of age after a ten-year battle with Alzheimer's disease.
To honor the former two-term president Friday has been chosen as
a national day of mourning.  Reagan's body will be flown to
Washington D.C. for the first state funeral in over three
decades.  Security will be very high with numerous world leaders
flying into the country to pay their respects.  Reagan is to
receive full military honors while current President Bush gives a
eulogy for Reagan.  Non-essential government services will be
closed on Friday and the financial markets have also elected to
close on Friday in honor of the president.  The Labor Department
has chosen to move its May PPI index release from Friday morning
to Thursday afternoon at 3:00 P.M. ET.  Meanwhile the Senate
Banking Committee has rescheduled Alan Greenspan's confirmation
hearing for his fifth term as Federal Reserve Chairman from
Thursday, June 10th to Tuesday, June 15th.

We will still hear from Greenspan this week as he speaks tomorrow
at the International Monetary Conference.  We'll also hear from
Fed governor Hoening tomorrow.  Tuesday will launch the three-day
G8 summit in Georgia with leaders from Britain, Canada, France,
Germany, Italy, Japan, Russia and the U.S.  Talks are set to
focus on the global economy, oil prices, rebuilding Iraq and
violence in the mid-east.


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

Chips, Housing And Software

Check Point Software - CHKP - close: 25.60 change: +1.18

WHAT TO WATCH: Looking bullish over the past week, CHKP suddenly
looks much stronger after today's nearly 5% advance on the back
of the strong performance from the Software sector.  Ending just
below the late April highs, the stock is poised for a strong
breakout that will push it to fresh 2-year highs.  Use a trigger
at $25.75 and then look for a move back towards strong resistance
at $30.




---

Cree, Inc. - CREE - close: 23.09 change: +0.77

WHAT TO WATCH: Although the bulls couldn't get the job done last
week, CREE still looks like a compelling breakout candidate and
after today's strong gain, the stock is just below that key
breakout trigger at $23.50.  Optimum entries will come on a
breakout move, with an upside target in the $26-27 area.  More
conservative traders can look for a pullback entry near $22.50,
but only after the initial move through that trigger.




---

Semtech Corp. - SMTC - close: 25.05 change: +0.72

WHAT TO WATCH: Recently when SMTC broke over its multi-month
descending trendline, we suggested bullish entries looked
favorable on a dip back to test that broken trendline and the
stock delivered just the test we were looking for late last week.
With the strong rebound over the past couple sessions, the stock
looks ready to offer another favorable entry point on a breakout
through horizontal resistance.  Use a trigger at $25.50 and
target a move to the site of the January highs near $27.50.




---

Cabot Microelectronics Corp. - CCMP - close: 31.11 change: +0.62

WHAT TO WATCH: After being the poster child for weakness in the
Semiconductor sector for most of this year, it looks like CCMP is
finally ready to break out of its bearish trend.  Use a trigger
over the $31.75 resistance level and target a rally back to the
$35 level, near the bottom of the gap down from late April.
Watch for potential resistance at the 50-dma near $34.





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

BRCM $43.44 - Helped along by the strong rally in the Chip sector
on Monday, BRCM is setting up for a breakout through key
resistance near $44.  Use a trigger over that level for entry and
target an initial move to the 200-week moving average just over
$48.  More conservative traders may want to wait for a push
through the January peak at $45 before entering.

LLTC $39.29 - Although the last rally attempt was turned back
right at the 200-dma, shares of LLTC look like they want to make
another attempt at a breakout through that measure of resistance
following today's strong rally.  Use a trigger over $40 and then
look for a rally into the $43.00-43.50 area.


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

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

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

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

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

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


Copyright 2004  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.





PremierInvestor.net Newsletter                   Monday 06-07-2004
                                                    section 2 of 2
Copyright (c) 2004, All rights reserved.
Redistribution in any form is strictly prohibited.

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

Stop Loss Updates:   None


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


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

None


==================================================================
  Trading Ideas
==================

This section contains stocks that meet criteria which may make
them of interest to long and short side traders.  These are not
recommendations, nor have they been reviewed by PremierInvestor
editors for investment potential.  However, each of them has
technical and fundamental characteristics that make them worthy
of further review by traders and investors looking for fresh ideas.
New stocks will appear daily following the market close.

Value Plays With Bullish Signals
---------------------------------
Ticker  Company Name               Close     Change

XOM     Exxon Mobil Corporation    44.00    +0.63
C       Citigroup                  47.53    +0.98
TOT     Total Sa (ADS)             97.60    +1.65
FTE     France Telecom (ADS)       25.31    +0.82
SC      Shell Transport & Telecom  44.58    +0.71
RD      Royal Dutch Petrol         51.15    +0.83


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

EDS     Electronic Data Systems    17.45    +1.17
TSRA    Tessera Technologies Inc   18.55    +1.94
KFY     Korn Ferry International   15.98    +1.40


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

TM      Toyota Motor Corp (ADS)    76.71    +2.15
BA      Boeing Co                  48.13    +1.23
VOLVY   AB Volvo (ADR)             36.19    +1.73
RTRSY   Reuters Group Plc (ADR)    42.00    +1.15
HET     Harrah's Entertainment     53.69    +1.27


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

DNA     Genetech Inc               57.25    -2.36
OSIP    OSI Pharmaceuticals Inc    75.20    -3.33
ONXX    Onyx Pharmaceuticals       40.68    -2.46
CBI     Chicago Bridge & Iron Nv   24.91    -2.06
WEBX    Webex Communications       22.11    -2.44


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

APPX    AMER Pharmaceuticals Ptnrs 33.41    -0.62


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

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

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

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

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

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

Copyright 2004  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.





DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

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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