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PremierInvestor.net Newsletter                   Monday 06-21-2004
                                                    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:  Broken Record
Watch List:   Energy, Drugs And Metals


===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
     06-21-2004            High     Low     Volume Advance/Decline
DJIA    10371.47 - 44.94 10440.05 10363.36 1.40 bln   1340/1487
NASDAQ   1974.38 - 12.35  1995.06  1972.43 1.38 bln   1338/1687
S&P 100   552.36 -  2.45   556.29   551.92   Totals   5678/3174
S&P 500  1130.30 -  4.72  1138.05  1129.64
RUS 2000  568.74 -  1.80   571.85   568.15
DJ TRANS 3065.24 -  3.43  3078.46  3054.43
VIX        15.26 +  0.27    15.62    14.96
VXO        14.63 -  0.12    15.24    14.42
VXN        19.73 -  0.29    21.01    19.70
Total Volume 3,083M
Total UpVol  1,125M
Total DnVol  1,807M
52wk Highs     209
52wk Lows      109
TRIN          1.45
PUT/CALL      0.83
===============================================================

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

Broken Record
by James Brown

All the financial media, including this column, is starting to
sound like a broken record.  The markets are just not moving as
investors wait for the June 30th deadline for the Iraq handover
of "power" and the interest rate decision by the Federal Reserve.
The challenge for traders is the lack of volume and volatility.
The stock market is stuck going sideways and we could easily
remain here for the next seven sessions.

Monday's market actually started bullish as stocks pushed higher
on several merger and acquisition announcements and up beat
comments from Dow-component Intel.  Unfortunately, the positive
glow began to fade on news that three British boats and their
eight soldiers were all captured after straying into Iranian
waters on a narrow river between Iran and Iraq.  The majority of
the session was spent trading sideways. Not counting the first
and last hour of the day the Dow Industrials were stuck in a 30-
point range.  The NASDAQ traded in a 9-point range and the S&P
500 traded in a 3-point range.  Then suddenly in the last 90
minutes of the day all three indices broke down through their
intraday ranges and began to sink into the closing bell.

Overseas indices didn't fair much better and most closed near the
unchanged mark.  The Japanese NIKKEI was the exception with a
218-point gain but this failed to erase all of Friday's 225-point
loss.  The Hang Seng index closed down almost 10 points to 11,845
after its recent breakdown below the 12,000 mark.  The German DAX
lost just over 10 points to 3989.  England's FTSE dipped 3.6
points to 4502 and the French CAC lost less than a point to 3740.
Like their U.S. counterparts the world indices all appear to be
waiting for the June 30th deadline and the onset of the Q2
earnings season.

Here at home the Dow Jones Industrials lost 45 points to close at
10,371.  The venerable index could be headed to the bottom of its
two-week trading range at 10,300.  The NASDAQ looks weaker with
its 12-point loss to close at 1974.  The NASDAQ composite is only
a couple of points above its simple 200-dma and appears to be
headed toward its June lows near support at 1960.  Technical
traders will notice the fresh MACD sell signal.

Market internals were mixed most of the day but turned bearish by
the close.  Declining stocks outnumbered advancers nearly 15 to
13 on the NYSE and about 17 to 13 on the NASDAQ.  Down volume was
almost 50% stronger than up volume on the NYSE while down volume
was almost double up volume on the NASDAQ.  Overall volume was
extremely low and ranked as one of the lowest volume days of the
year with less than 2.75 billion shares trading on both
exchanges.  The downturn in the last two hours of trading made
for a market wide decline with only four sectors: airlines,
retail, natural gas and utilities; closing in the green.

Chart of the Dow Industrials:



Chart of the NASDAQ Composite:



It shouldn't come as a surprise that the markets are churning
sideways ahead of the June 30th handover in Iraq.  The White
House has warned us for months that violence and terrorist
activities would rise sharply ahead of the deadline.  Last week
we heard about the terrorists in Saudi Arabia kidnapping and
beheading American Paul Johnson.  According to reports this
weekend Saudi security forces killed terrorist leader Abdul Aziz
al-Muqrin and three more terrorists responsible for Paul's death.
Unfortunately, there is a new kidnapping case.  Insurgents in
Iraq have captured a S. Korean man and have threatened to kill
him if S. Korean doesn't change its mind about sending 3,000
soldiers to help with Baghdad/Iraq security.

The big story in Iraq today was the capture of three British
boats and their crew by Iran.  This news put a wet blanket over
the markets and probably raised a number of eyebrows after last
week's headlines that Iran was massing troops on the Iraq-Iran
border.  Iran continues to butt heads with the U.N. over its on
going nuclear energy/weapons development program so any negative
headline involving Iran is sure to grab the markets attention.
It might be surprising that the rising "geo-political tensions"
did not send oil prices higher.  Fortunately, news that one of
Iraq's recently damaged oil pipelines was working again and
pumping 42,000 barrels an hour helped alleviate some of crude's
recent rise.  Crude futures slipped $1.23 to $37.77 a barrel and
appear to be building what looks like a bear flag pattern.  Now
if Norway, the globe's third largest oil exporter, could solve
its oil-worker strike, currently on its fourth day, we might see
oil prices truly begin to ease lower.

Speaking of lower the SOX semiconductor index edged closer to
breaking support at the 450 level in spite of bullish comments
from Intel Corp (INTC).  Intel, the world's largest producer of
semiconductors, expects that its Q2 numbers will be strong and
near the record setting pace of their Q1 report.  The report
comes from Intel CEO Craig Barrett who was interviewed by a
Spanish newspaper.  You might remember a few weeks ago that Intel
narrowed its revenue forecast to the upper half of its previous
guidance.  This surprised the market, which was expecting Intel
to guide lower.  Barrett was quoted as saying the recession in
the semiconductor industry is over.  Wall Street firm J.P.Morgan
(JPM) decided to raise its earnings estimates for Intel based on
the news.  Investors will need to keep an eye on the SOX.  If it
breaks support at the 450 level the NASDAQ will have a hard time
making any sort of recovery with the chips sinking lower.

Market analysts traditionally look at rising M&A activity as
bullish.  If companies are willing to make acquisitions it
usually means that management has a positive outlook on the
future and they're willing to spend money on improving their
competitiveness.  If that's the case then today's spat of
acquisitions looks pretty bullish for the market.

Monday's biggest deal was between banking giant Wachovia (WB) and
SouthTrust (SOTR).  WB announced it was buying SOTR in an all-
stock deal worth $14.3 billion.  This valued SOTR at a 20%
premium over Friday's close.  Unfortunately, Wall Street thought
the deal was a little expensive and issued concerns over some of
WB's expectations on what the merger might be able to do for WB's
earnings.  SOTR soared 13% while shares of WB slipped 4%.

The second biggest deal was a consolidation in the mall business.
Simon Property (SPG) announced it was buying rival Chelsea
Property Group (CPG) for $3.5 billion in cash and stock.
Finishing out the M&A news were announcements from MHR, BFD and
OXM.  Magnum Hunter Resources (MHR) declared it was buying $243
million in oil and gas properties in New Mexico from EnCana
(ECA).  MHR will be gaining 458 oil and gas wells and close to
44,000 acres of undeveloped land to explore.  Meanwhile BostonFed
Bancorp (BFD) announced it was buying Banknorth (BNK) for $195
million in cash and stock.  Finally Oxford Industries (OXM)
reported it was purchasing Ben Sherman, an English clothing
designer, for $146 million.

In other news HMO providers Aetna (AET) and Cigna (CI) announced
a major win at the Supreme court.  The court voted 9-0 on two
cases in favor of the HMO's saying patients can't sue their HMO
for refusing to pay for doctor-recommended treatments.  The
decision will help protect companies like AET and CI from the 72
million Americans currently covered by HMO's.  Consumer groups
are likely to take their cause to Congress.

After the closing bell today Priceline.com (PCLN) raised its
earnings guidance for the second quarter.  PCLN had previously
forecast 25-30 cents per share while analysts were expecting 28
cents per share.  PCLN said business is strong and they now
predict earnings in the 29 to 32 cent range.

The next couple of days are devoid of major economic reports so
stocks will be left to trade on their own news or any new
developments coming out of Iraq.  The current market forecast
calls for stocks to remain range bound until the end of the
month.  Contributing to this lack of direction will be 16 IPOs
this week sucking up capital that may have been spent elsewhere.
Traders can keep an eye on the brokerage stocks tomorrow.  Before
the opening bell we'll hear earnings reports from Goldman Sachs
(GS) and Morgan Stanley (MWD).  Estimates for GS are $1.95 per
share.  Estimates for MWD are $1.05.  In the past these companies
tend to beat estimates only to see their stocks trade down on the
news.  Now that both MWD and GS are near two-week lows there is a
chance they could pop higher instead.


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

Energy, Drugs And Metals

Lone Star Tech inc. - LSS - close: 26.75 change: +1.14

WHAT TO WATCH: After breaking out over $23 resistance last week,
shares of LSS have really been on a tear, continuing that rally
today with the breakout over $26.  While volume has been strong,
we're hesitant to suggest chasing the stock higher.  But a
pullback to fill the gap left behind as LSS shot through the $24
level could provide a solid bullish entry point.  Look for strong
resistance to come in near $30.




---

Brown & Brown Inc. - BR - close: 42.77 change: +1.23

WHAT TO WATCH: With BRO stalling near the $41.50 level on its
April rally, it's no great surprise to have seen the stock stall
there for the past couple weeks.  But with the expiration
nonsense behind us, the stock blasted through that resistance to
set new all-time highs today.  Look for a pullback to confirm
broken resistance as new support as the ideal entry point and
then target a run to the $45-46 area.




---

Pharmaceutical Resources - PRX - close: 37.30 change: +0.20

WHAT TO WATCH: Following a convincing breakdown under the $40
level, shares of PRX are trying to gather enough strength for a
credible bounce.  But with strong overhead resistance and the 50-
dma bearing down as well, a failed bounce in the $39-40 area
would be a great setup for new bearish entries.  Target a drop to
the 200-week moving average, which is currently near $34.




---

Southern Peru Copper - PCU - close: 38.65 change: +0.15

WHAT TO WATCH: Finally breaking the nearly 6-month descending
trendline on Friday, shares of PCU also blasted through the 200-
dma on strong volume.  While the stock is holding its ground
today, we're looking for a measured pullback to the site of the
broken trendline and 200-dma in the $35 area to offer a solid
bullish entry.  Once clear of the $42 resistance, we're expecting
PCU to make a run back at strong resistance in the $49-50 area.





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

PNR $31.73 - Steady as she goes, PNR has been riding its 50-dma
higher throughout the first 6 months of the year.  While momentum
traders can certainly consider new entries on a break above the
$32.30 level (setting new all-time highs), the more conservative
approach would be to look for entries on a dip and rebound in the
vicinity of the 50-dma.

PCLN $28.00 - Having already broken out to its best levels this
year, PCLN looks like it is giving us a gift of a pullback entry.
Target entries on a successful rebound from the $27.00-27.50 area
and then ride the rally up to the $32-33 resistance zone.

AXCA $20.92 - As strong as the early breakout move looked today,
AXCA lost a lot of its bullish tone with the pullback from the
highs.  Closing above resistance salvaged some of that honor, but
we're expecting a solid fill of today's gap before the stock is
able to continue higher.  Target entries in the $20.25-20.50 area
and look for a rally to the $24-25 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 06-21-2004
                                                    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:   SNDK, SOHU
Split Announcement:  SLXP


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

SNDK - tech stock short -
Lower stop from $22.00 to $21.51

---

SOHU - high risk short-
Lower stop from $23.25 to $22.15


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

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

SLXP announces a 3-for-2 stock split

This morning before the opening bell Salix Pharmaceuticals
(NASDAQ:SLXP) announced that its Board of Directors had approved a
3-for-2 stock split of its common stock.

The split will be payable on July 12th, 2004 to shareholders on
record as of June 30th.  Post-split SLXP will have approximately
36 million shares outstanding.

About the company:
Salix Pharmaceuticals, Ltd., headquartered in Raleigh, North
Carolina, develops and markets prescription pharmaceutical
products for the treatment of gastrointestinal diseases. Salix's
strategy is to in-license late-stage or marketed proprietary
therapeutic drugs, complete any required development and
regulatory submission of these products, and market them through
the Company's 100-member gastroenterology specialty sales and
marketing team. Currently the Company markets COLAZAL.,
XIFAXAN(TM), and AZASAN.. (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

CAT     Caterpillar Inc            74.98    +0.56
CNQ     Canadian Natural Res Ltd   29.38    +0.55
DVN     Devon Energy Corp          64.51    +0.98
SOTR    Southtrust Corp            39.37    +4.57
FO      Fortune Brands Inc         74.82    +1.72


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

None


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

RJR     RJ Reynolds Tobbaco Hldg   64.33    +1.24
FMX     Fomento Economic Mex       44.90    +1.31
TK      Teekay Shipping Corp       37.65    +1.54
BRO     Brown and Brown            42.77    +1.23


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

WB      Wachovia Corp              45.02    -1.98
APOL    Apollo Group Inc CI A      91.85    -2.59
FMD     First Marblehead Corp      36.74    -1.46


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

AET     Aetna Inc New              83.93    -1.69
AGN     Allergan Inc               90.44    -0.98
BGG     Briggs & Stratton Corp     83.67    -1.13


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