PremierInvestor.net Newsletter Thursday 06-17-2004 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: One to Go Market Sentiment: The Waiting Game Watch List: Waiting For Expiration ================================================================= MARKET WRAP (view in courier font for table alignment) ================================================================= 06-17-2004 High Low Volume Advance/Decline DJIA 10377.52 - 2.06 10390.01 10338.13 1.57 bln 1670/1108 NASDAQ 1983.67 - 14.56 1993.93 1976.25 1.46 bln 1199/1811 S&P 100 552.60 - 0.83 553.63 550.62 Totals 2869/2919 S&P 500 1132.60 - 1.51 1133.56 1126.88 RUS 2000 569.57 - 0.50 571.16 565.21 DJ TRANS 3059.99 + 0.75 3062.53 6032.32 VIX 15.15 + 0.36 15.58 15.00 VXO 15.06 + 0.40 15.97 14.87 VXN 21.33 + 0.94 21.75 20.77 Total Volume 3,321M Total UpVol 1,345M Total DnVol 1,908M 52wk Highs 214 52wk Lows 131 TRIN 1.38 PUT/CALL 0.79 ================================================================= =========== Market Wrap =========== One to Go Linda Piazza One day remains in this option-expiration week. Only one more day of boredom remains before markets break out of their recently established consolidation patterns. At least, that's the hope many market watchers express. Muted reactions to economic numbers characterized Thursday's trading, with markets drifting down or up according to the latest release in a day punctuated by scattered releases. Only on the Nasdaq and some other tech-heavy indices did the drifts take the indices far from the flat-line levels. The Dow closed lower by 2.06 points or 0.02 percent, the Nasdaq by 14.56 points or 0.73 percent, the Russell 2000 by 0.50 points or 0.09 percent, and the S&P 500 by 1.53 points or 0.13 percent. Some hints of another boring day on the markets occurred pre- market. Futures showed little reaction to overnight news that might have been market moving only a week or two earlier. The day dawned with news of a car bombing in Iraq, with that bomb killing dozens and wounding more than 100. As the June 30 hand- off date approaches, violence escalates as had been anticipated, but the level of Thursday's carnage proved particularly disturbing. In addition, recent explosions have stopped oil exports from Iraq, requiring repairs of blasted pipelines in both the north and south of Iraq. Crude oil prices rose pre-market, with European and U.K. oil majors rising and crude-sensitive sectors such as airlines sinking. June 30 looms important for another reason, too, of course, with a two-day FOMC meeting concluding that day. Exacerbating the worries of market watchers during the pre-opening hours was a Swiss central bank decision to hike rates and further warnings by central bank members in England and other countries. In the U.K., May's retail sales rose a higher-than-expected 0.8 percent, increasing expectations for yet-another rate hike by the Bank of England. Economic numbers released in the U.S. before the market open fanned worries about the pace of rate hikes in the U.S. Our economic calendar included the release of initial claims and PPI at 8:30, May's leading indicators at 10:00, natural gas inventories at 10:30, and June's Philadelphia Fed number at noon, but it was PPI that garnered the most attention early in the day. PPI came in at a hotter-than-expected 0.8 percent higher due to soaring food and energy costs. Core PPI, excluding those costs, rose more than expected, too, to 0.3 percent against an expectation of a 0.2 percent rise. Crude goods rose 2.8 percent, with core crude goods falling 3.8 percent. May's wholesale prices climbed 5 percent, indicating that producers have been able to increase prices to offset costs. Intermediate goods prices climbed 1.1 percent and 0.9 percent, excluding food and energy. Gasoline prices contributed to the higher PPI. While one article trumpeted the news that "Wholesale Inflation Leaps on Higher Producer Prices," raising the specter of Greenspan and company ratcheting up rates at a faster-than-wanted pace, other commentators calmly noted that PPI tends to be more volatile than CPI. Markets also had to deal with the pre-market release of the jobless claims number, balancing that stronger-than-expected PPI against good news in the employment sector. With last week's claims number rising to a seven-week high and the prior week's revised upward, attention focused on that claims number. The expectation for the four-week average ranged from 330K-346K, depending on the source. The actual number fell somewhere near the middle of that range, at 336,000. Articles mentioned that increased demand encouraged U.S. companies to hold on to workers. First-time claims fell 15,000 from a revised-lower 351,000 (revised from 352,000). The four-week average dropped to 343,250, easing away from that 350,000 level that many consider the benchmark. Some point to the federal holiday last week for President Reagan's funeral as a major reason for the decrease in claims, the second week in a row that has contained a federal holiday. Next week, much attention should focus on the claims number. Before the release of the 8:30 numbers, S&P futures had been holding steady and slightly higher than at Wednesday's close, from about 1132.75 to 1134, but they dipped lower to support near 1132 after the release. The dip wasn't extreme, and it was predictive of the market open, also a dip that wasn't extreme, although the Nasdaq did open almost five points lower. Indices opening near Wednesday's close didn't maintain those near flat- line levels long, however, with markets slipping lower into the 10:00 release of May's leading indicators. Market pundits characterize the leading indicators index as a closely watched number, and it appeared to cheer market watchers, with the SPX, Dow, Russell, and Nasdaq all steadying immediately after the release of that number and then climbing off their lows. After our markets opened, European markets had followed our markets lower after PPI and had steadied immediately after the release of the leading indicators and then drifted up into the European close, following the same pattern the U.S. markets this morning. The FTSE 100 and CAC 40 closed near flat-line levels, up 0.05 percent and 0.10 percent, respectively, but the DAX fell harder after PPI than did the other two, and it closed lower by 0.44 percent. Expectations for May's leading indicators ranged from a rise of 0.3-0.4 percent, with the prior month's release seeing a rise of 0.1 percent. Leading indicators actually rose a higher-than- predicted 0.5 percent, with one headline noting that eight of the ten U.S. leading indicators rose. Consumer confidence and stock prices were the two leading indicators that dropped. An increase in factory hours and a rise in money supply prompted some of the gains. Then began the next set of economic releases. Natural gas inventories rose 94 BCF, according to the Department of Energy, but that number appeared to produce no reaction at all. Expectations for June's Philadelphia Fed Index had ranged from 25.3-28.00, with the market consensus being 26.4, according to one article. The number was actually a higher-than-expected 28.9, rising above May's 23.8. The prices-paid component dropped to 51.9 against May's 59.6. As Jonathan Levinson noted at the time on the Monitor, markets showed little reaction at first to the Philadelphia Fed Index, perhaps still ruminating over the previous releases and their implications. Most markets then drifted slightly lower, wafted along on a gentle, languorous current. They tried to climb again, too, but late-day trading was characterized by a dampening of any moves higher or lower, with most indices finding a preferred level and sticking to that level into the close. Breadth proved mixed, with adv/dec ratios at 19:14 for the NYSE and 12:19 for the Nasdaq. Up volume outnumbered down volume by a healthy margin on the NYSE, too, with down volume more than double up volume on the Nasdaq. Weakness in semi stocks and a Jabil-induced weakness in electronic manufacturers pressured the tech-laden Nasdaq all day. Flextronics (FLEX) and Celestica (CLS) fell along with JBL, although Solectron (SLR) managed a nearly flat close ahead of its after-hours earnings report. Across the markets, other weak sectors included biotechs, networkers, securities broker/dealers, and computer storage companies, but a surprising number of sectors closed in the green. Many stocks closing higher were in the oil-service, utility, and natural-gas sectors, but gainers also included the homebuilders and healthcare stocks. Studying a list of sector decliners and gainers, some might consider the trading to have been mostly defensive. Stocks in the news included Jabil (JBL), of course, closing lower by 3.56 points or 12.69 percent after the warning about Q4. CSCO traded lower by 0.52 points or 2.18 percent after announcing that it would buy the intellectual property, most of the engineering teams and certain assets from Procket Networks, a privately owned company. JDA Software (JDAS) announced its own acquisition, of QRS Corp. (QRSI), a retail-industry software maker. Although JDAS opened lower and traded lower after the opening, it rebounded and closed higher by 0.32 points or 2.61 percent. Other scheduled economic releases included the money supply figure. Recently, some economists and other market watchers have been scrutinizing the money supply figures, expressing the opinion that money supply has been expanding at an abnormally fast pace. Many concluded that the Fed had taken an unusually accommodative stance. However, you'll notice that you don't find the figures for money supply in this article. That's because I've recently come across articles by Mark Hulbert, with those articles expounding on some of the reasons why we might not be able to trust the money supply numbers. Those reasons include the Fed's tendency to seasonally adjust those numbers even many years after their first release. Recently, the Fed revised the seasonally adjusted data for 1998, for example. Hulbert also mentioned a couple of ways that the errors could affect the money supply number, including the as-yet-unproved possibility, proposed by Madeline Schnapp of TrimTabs, that banks could be erroneously entering figures for risky items into one measure of money supply that has displayed that abnormally high pace of expansion. I don't know about you, but I don't have the experience to sort through data sets that may be in error when first released and then adjusted for the next six years and come to any sound conclusion, so you won't find an erudite discussion on money supply in an article I've written. Another economic release scheduled for after hours was the semi book-to-bill number. Late last week and early this week saw several analysts recommend that clients lighten up on their semi related stocks, with Deutsche Bank and UBS being two of those analysts. Clients have apparently taken that advice to heart, along with a number of their investing friends, because the SOX headed south all week, rolling back down into the descending regression channel that has contained its prices this year. Stochastics rolled down into a full bear roll, and the SOX confirmed a double-top formation, setting up a downside target near 437. Not benefiting Thursday's trading was memory-chip maker SimpleTech's (STEC) lowering of revenue estimates on Wednesday. Semi.org had not yet released the semi book-to-bill number as this article was submitted, so I was not able to include that number in this article, but semi-related stocks throughout the globe could certainly use some help tonight, with our SOX perching on important support. Annotated Daily Chart of the SOX: As James Brown pointed out on the Market Monitor today, MACD created a new sell signal. The histogram is now negative, but that sell signal was created from above the signal line, and the MACD has not completely rolled down through that line. I find this an iffy time when watching MACD, because as it's on the verge of rolling down through that signal line, it sometimes turns right back up again. This might be a particularly important point since the SOX ended the day on possible mid- channel support, just above the March low. A positive or even a buy-the-(negative)-news reaction to the book-to-bill number could see beaten-down semiconductor stocks attempt to rise. If so, the 30-dma has proven particularly important to watch over the last month, with that average now marking the approximate confirmation level of the double-top formation. With that confirmed double top formation, complete with bearish divergence as the second top was formed, the expectation would be that the SOX will again find resistance, perhaps near either the 30- or the 50-dma's. Expectations or not, in-place trend or not, price action should always be the guide. A move above the 200-dma would signal that the SOX might be ready to break out of that descending regression channel. A negative reaction to the book-to-bill number could be followed by a further drop, confirmed by a move below 452.75-453.00. The expectation then would be that the SOX would fall down through its regression channel toward that 437-438 downside target predicted by the double-top formation. Traders should note intervening support before that target could be reached, however. A SOX decline would create more pressure on the Nasdaq, of course. With tomorrow being opex Friday, I would caution against placing large bets on any position, however, as the day could produce false moves that are not particularly amenable to technical analysis. The Nasdaq's chart displays some troubling signs, too. Annotated Daily Chart of the Nasdaq: That potential head-and-shoulders formation just under resistance pinpoints possible weakness, especially when coupled with the rolling-down RSI. Bullish traders prefer to see a measured pullback in the form of a flag formed from a tight pattern of lower highs and lower lows, a bull flag. However, neither stochastics nor MACD has fully committed to the downside, and the Nasdaq has stubbornly maintained levels above the 200-dma, so we can't assume that H&S formation will ever be confirmed. Watch that 200-dma for signs that the Nasdaq might be confirming that H&S, rolling down toward the 1930 support again. A move up through 2000 and then above last week's high would be a sign that the Nasdaq is unexpectedly breaking to the upside out of its bearish right triangle. These formations typically break to the downside, but "typically" is not synonymous with "always." The Russell 2000 chart displays its own possible H&S, with the Russell 2000 not yet ready to roll over into that right shoulder and perhaps never ready to do so. That possible right shoulder forms at the 50 percent retracement of the decline from the April 5 high to the May 17 low, and has a descending neckline that roughly conforms to the 30-dma. Annotated Daily Chart of the Russell 2000: Oscillators do not yet commit to a direction. It's possible to micro-analyze every nuance of each of the oscillators and discover bearish price/RSI divergence as the possible head was formed, but all we can say with certainty is that the Russell 2000 remains trapped between its 200-dma and 100-dma. It's positioned about midway between support and resistance and displays a potentially bearish formation that has yet to be confirmed. A break much above 572 negates the potential H&S, while a break below the 200-dma confirms it. Until either of those events occurs, we can't determine much else. The Dow's chart displays indecision, too, with the daily candle a doji at resistance for the second day in a row. Annotated Daily Chart of the Dow: Although I haven't included the channel on this chart, it's also possible to characterize the Dow as trading lower since February within a descending regression channel, with the top of that channel described by the top red trendline on the chart above. As other writers have noted, the Dow clings to that upper trendline, not able to move above it and not willing to fall below it. Oscillators show inconclusive evidence. Stochastics and RSI poise on the verge of tipping over into bearish rolls or else trending while the Dow begins a directional move higher. Nothing on this chart signals that the Dow will head one direction more strongly than the other, with the obvious exception of an expectation that an index trading in a well- formed descending regression channel might continue to trade lower within that channel. Since the weekly view shows oscillators still trending up but showing the slightest tendency to hook over, the possibility remains that this big regression channel has been nothing more serious than a bull flag on the weekly chart. The SPX can also be characterized as trading lower within a descending regression channel, although its channel formed beginning in early March. Annotated Daily Chart of the SPX: As is also true of the OEX, the SPX's pullback on the daily chart since early June could be variously characterized as a bull flag (if you're a bull) or a broadening formation (if you're not so bullish). This week, that formerly broadening formation has narrowed into a tighter range, however, with a top at about 1136.50 and a bottom at about the board-flat 100-dma, with further support below at the 50-dma. RSI begins to look more bearish here, but stochastics kicked back up again, giving a mixed outlook that goes perfectly with the flattening MACD. Weekly oscillators look similar to the Dow's: RSI and stochastics headed higher, but showing a slight tendency to hook down. After-hours earnings did little to clarify the situation. They included reports by Adobe (ADBE), Red Hat (RHAT) and Solectron (SLR), with ADBE and RHAT both trading lower, and SLR headed higher. RHAT's revenue missed expectations, and the stock had headed lower by 9 percent as this report was prepared. ADBE had dropped more than 2 percent. Economic reports due Friday include only the 8:30 release of the Q1 current account figure, with the previous number at -$127.5 billion, and with expectations firming up for a deficit of -$140.0 billion, but ranging from $139.5-141.3 billion. If markets are going to move, they'll probably be prodded by something other than economic numbers. The often-seen tendency for an option expiration Friday is for markets to clamp down late in the morning and attempt to maintain equilibrium until the market close, a tendency that may be exacerbated by the upcoming FOMC meeting and transfer of power in Iraq, with both events now two weeks away. While I would not be surprised to see that trend continued tomorrow, be watchful of the crude prices. While lowered gasoline prices this week and building inventories over the last couple of weeks might have reassured markets, crude futures flamed up toward the $39.00/barrel level Thursday. That, coupled with the higher- than-expected PPI, could start a fire that eats through some support levels. The Dow Jones Transportation Index, often a leading indicator for the Dow, created a doji at the top of a rise in Thursday's trading, and Dow bulls don't want to see it turn down Friday, pressured by rising crude prices. However, some possibilities for at least a modest rise exist. Tech traders should watch the SOX's reaction to the semi book-to- bill number. Although several chart attributes suggest that the SOX has room to fall, it's deeply oversold on a 30-minute basis, and it may just see an oversold bounce unless the number disappoints in a big way. If a directional move gets underway, market watchers want to see the various indices make a concerted effort to move the same direction, rather than have the tech- related indices moving in opposition to the others, for example. If markets could all head the right direction, perhaps market watchers won't even have one more day of boring trade but will find something to excite them tomorrow. I'm not counting on that to happen, but just open to the possibility. Be careful, keeping the trend of many opex weeks in mind as you make decisions about entering positions. After the opening volatility, moves that appear to be promising may get damped down almost as soon as they get started, especially if there's no volume behind the move. =============================== Market Sentiment =============================== The Waiting Game - J. Brown Welcome to the waiting game. The Producer Price Index (PPI) showed that inflation at the wholesale level ticked higher than expected but stocks really didn't react to the news. That's because the markets feel relatively confident that the FOMC will only raise rates by 1/4 point on June 30th. The only thing left to do now is wait for the June 30th meeting to pass. In the mean time investors will be reacting to what will surely be a string of bad news as we approach the Iraq handover of power. There was news out this morning that terrorists drove a car bomb into a crowd of Iraqis looking for work in the new government military. The explosion killed 35 people and injured more than 100. The real unfortunate thing here is that we're likely to here more of these reports as we approach the deadline. The combination of waiting for the interest rate decision and rising violence in Iraq will likely to keep a lid on the stock market. Not helping matters today was an earnings warning from Jabil Circuit (JBL) last night. JBL slipped more than 12% but it drug the SOX semiconductor index down with it. The SOX fell more than 3.3% breaking minor support at 460. The next test for the SOX is the 450 level. The NASDAQ will have a hard time trying to mount a rally without support from the semiconductor sector. Earnings season is quickly approaching but there is still a threat that we may see more earnings warnings. Plus, the markets may be back to its old tricks of looking for the whisper number. Software maker Adobe Systems (ADBE) reported earnings of 44 cents per share. This was 2 cents above estimates and significantly better than last year's 27 cents yet the stock fell lower in after hours trading in spite of guiding higher for the next quarter. Traders need to keep an eye on crude oil again. Oil futures rallied $1.16 to $38.81 a barrel. Bulls can shop the energy stocks for potential plays. Overall the market internals were mixed. Advancers beat decliners almost 17 to 11 on the NYSE but lost 12 to 18 on the NASDAQ. Volume continues to be light. I continue to watch the volatility indices. The VIX/VXO/VXN all bounced today but they remain near their lows, which could also be a roadblock to any new rally of significance. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 10753 52-week Low : 8871 Current : 10377 Moving Averages: (Simple) 10-dma: 10351 50-dma: 10261 200-dma: 10121 S&P 500 ($SPX) 52-week High: 1163 52-week Low : 962 Current : 1132 Moving Averages: (Simple) 10-dma: 1131 50-dma: 1119 200-dma: 1093 Nasdaq-100 ($NDX) 52-week High: 1559 52-week Low : 1180 Current : 1464 Moving Averages: (Simple) 10-dma: 1472 50-dma: 1448 200-dma: 1436 ----------------------------------------------------------------- CBOE Market Volatility Index (VIX) = 15.15 +0.36 CBOE Mkt Volatility old VIX (VXO) = 15.06 +0.40 Nasdaq Volatility Index (VXN) = 21.33 +0.94 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.79 818,546 647,093 Equity Only 0.63 604,920 383,811 OEX 1.01 37,221 37,547 QQQ 5.43 14,854 80,593 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 65.4 + 0 Bear Confirmed NASDAQ-100 42.0 + 3 BULL ALERT Dow Indust. 70.0 + 0 Bear Confirmed S&P 500 63.2 + 0 Bear Confirmed S&P 100 63.0 + 0 Bear Confirmed 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 ----------------------------------------------------------------- 5-dma: 1.02 10-dma: 0.98 21-dma: 0.92 55-dma: 1.03 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 1670 1199 Decliners 1108 1811 New Highs 135 72 New Lows 57 55 Up Volume 854M 413M Down Vol. 671M 1024M Total Vol. 1572M 1458M M = millions ----------------------------------------------------------------- Commitments Of Traders Report: 06/08/04 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 Commercial trades are turning more bearish with an increase in short positions while pulling a little bit of money out of their longs. Small traders have increased their positions in both longs and shorts but continue to remain net bullish. Commercials Long Short Net % Of OI 05/18/04 394,352 423,258 (28,906) (3.5%) 05/25/04 400,713 420,764 (20,051) (2.4%) 06/01/04 406,665 421,681 (15,016) (1.8%) 06/08/04 397,294 452,904 (55,610) (6.5%) 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 05/18/04 139,647 74,597 65,050 30.4% 05/25/04 136,086 79,060 57,026 26.5% 06/01/04 137,100 79,583 57,517 26.5% 06/08/04 158,373 92,794 65,579 26.1% 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 Hmm... could the commercial traders be trying to tell us something? Both their large S&P futures positions and their S&P e-minis positions have turned net short or bearish. As would be expected the small traders is walking the other way and has significantly beefed up their longs. Commercials Long Short Net % Of OI 05/18/04 390,484 357,157 33,327 4.5% 05/25/04 353,722 336,406 17,316 2.5% 06/01/04 325,865 325,274 591 0.0% 06/08/04 367,191 409,246 (42,055) (5.4%) 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 05/18/04 62,216 87,269 25,053 16.8% 05/25/04 91,515 100,759 ( 9,244) ( 4.8%) 06/01/04 111,484 90,625 20,859 10.3% 06/08/04 140,191 84,649 55,542 24.7% Most bearish reading of the year: (77,385) - 09/02/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 Commercial traders remain net long on the NASDAQ 100. Small traders remain strongly net short. Commercials Long Short Net % of OI 05/18/04 58,376 37,528 20,848 21.8% 05/25/04 59,891 37,630 22,261 22.8% 06/01/04 59,944 34,784 25,160 26.6% 06/08/04 64,747 41,178 23,569 22.3% Most bearish reading of the year: (21,858) - 08/26/03 Most bullish reading of the year: 25,160 - 06/01/04 Small Traders Long Short Net % of OI 05/18/04 9,843 18,935 ( 9,092) (31.6%) 05/25/04 10,184 20,653 (10,469) (33.9%) 06/01/04 9,755 30,025 (20,270) (51.0%) 06/08/04 9,716 29,594 (19,878) (50.6%) Most bearish reading of the year: (20,270) - 06/01/04 Most bullish reading of the year: 19,088 - 01/21/02 DOW JONES INDUSTRIAL There has been very little action from the commercial traders in the Dow Jones futures but they remain net short. Small traders remain net long but their resolve may be weakening a bit. Commercials Long Short Net % of OI 05/18/04 22,257 22,444 ( 187) (0.4%) 05/25/04 23,578 24,632 (1,045) (2.2%) 06/01/04 23,397 24,393 ( 996) (2.0%) 06/08/04 24,636 25,821 (1,185) (2.3%) 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 05/18/04 9,098 6,591 2,507 16.0% 05/25/04 9,623 6,614 3,009 18.5% 06/01/04 9,000 6,021 2,979 19.8% 06/08/04 8,325 6,431 1,894 12.8% 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 --------------------------------- Waiting For Expiration Teradyne Inc. - TER - close: 20.16 change: -0.84 WHAT TO WATCH: With the Semiconductor sector getting hit hard on Thursday, it's no surprise to see shares of TER back to testing key support near $20. Aggressive entries look good on a break below $20, while the more conservative approach would be to wait for a break under the early May low of $19.64. Target a drop to strong support near $18. --- Burlington Resources Inc. - BR - close: 36.07 change: +0.43 WHAT TO WATCH: After coiling just under resistance at $35 and using the 50-dma for support for these past several weeks, BR finally broke out earlier this week and the stock is continuing to run. We're not brave enough to chase the stock higher at this point, but a mild pullback to test the $35 level would make for an ideal entry point ahead of a continued rally towards the $40 level. --- Intermune, Inc. - ITMN - close: 16.20 change: +1.22 WHAT TO WATCH: After getting hit hard in late April, shares of ITMN have been trying to build a new base near the $14 level. Based on today's strong upward move into April's gap, the bulls are ready to take a shot at filling that gap. Trigger entries over today's high and target a rally to $18 resistance. --- Accenture Ltd. - ACN - close: 26.79 change: +1.48 WHAT TO WATCH: Throw in strong earnings, and an upgrade and shares of ACN were looking strong today. The stock gapped up and continued advancing right to strong resistance at $27. Based on the strong volume, this looks like the beginning of a larger move. Use an entry trigger above today's high and target strong resistance at $30. =================== On the RADAR Screen =================== CTV $19.09 - After the strong move up earlier this week, CTV is back in position to challenge its January highs and a breakout over $20 looks like it has room to run towards strong resistance near $23. JCP $37.00 - After the briefest of pullbacks, JCP is once again threatening to push to new multi-year highs. Use a trigger over $37.25 and target a rally first to $40 and then to strong resistance near $44-45. SWY $24.51 - After breaking out over the $24 level, SWY is taking aim at next resistance at $26. but judging by the strong price action, the stock looks poised to scale that obstacle as well and make a run at the $28 resistance level. ================================================================= 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. 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PremierInvestor.net Newsletter Thursday 06-17-2004 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: SNDK, RMBS Stock Splits: CCFH 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 ================================================================= SNDK - tech short play - lower stop from $22.26 to $22.00 --- RMBS - high risk short play - lower stop from $19.01 to $18.01 ================================================================= Stock Splits ================================================================= Announcements ------------- CCFH announces a 3-for-2 stock split This morning shortly after 10:00 am ET the CCF Holding Company (NASDAQ:CCFH) announced that its Board of Directors had approved a 3-for-2 stock split and a 5 cent cash dividend. The cash dividend will be paid on a post-split basis. The stock split and the cash dividend will be paid on July 15th, 2004 to shareholders on record as of July 1st. Fractional shares will be paid in cash. About the company: CCF Holding Company is the parent company of Heritage Bank; a state chartered commercial bank serving in the southern market of greater Atlanta, Georgia. The Company had total assets of $335 million at March 31, 2004. The bank has six full service offices specializing in commercial, real estate and consumer lending. (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 UBS UBS Ag 73.50 +0.75 TOT Total Sa (ADS) 97.68 +1.10 SC Shell Transport 45.56 +0.60 MFC Manulife Financial 39.01 +0.60 OXY Occidental Petroleum 47.47 +0.53 HIG Hartford Fncl Services 67.06 +0.88 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- LZB Laz-Z-Boy Inc 19.14 +1.05 FLE Fleetwood Enterprises 14.51 +1.15 ITMN Intermune Inc 16.20 +1.22 PARL Parlux Fragrances 9.88 +1.85 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- ACN Accenture Ltd 26.79 +1.48 CCL Carnival Cruises 45.21 +1.65 MBT Mobile Telesys 125.50 +9.50 POT Potash Saskatchewan 92.05 +7.11 LEG Leggett & Platt 26.66 +2.95 THO Thor Industries 32.18 +3.06 WGO Winnebago Industries 36.85 +4.85 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- OMC Omnicom Group 77.84 -1.06 XLNX Xilinx Inc 32.48 -2.36 NTRS Northern Trust 41.22 -1.15 JBL Jabil Circuit 24.49 -3.56 NVLS Novellus Systems 29.37 -1.47 HSIC Henry Schein 63.66 -1.33 FRO Frontline Ltd (ADR) 32.51 -7.51 NTY NBTY Inc 26.99 -9.51 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- UTR Unitrin Inc 42.00 -0.56 ================================================================= 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 2003 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form.
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