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Daily Newsletter, Wednesday, 06/23/2004

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PremierInvestor.net Newsletter                Wednesday 06-23-2004
                                                    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:  A Day for Breakouts
Watch List:   Stampeding Bulls

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)
===============================================================
     06-23-2004            High     Low     Volume Advance/Decline
DJIA    10479.57 + 84.50 10486.87 10359.46 1.77 bln   2007/ 810
NASDAQ   2020.98 + 26.83  2023.23  1990.78 1.78 bln   2016/1029
S&P 100   557.80 +  4.33   558.30   551.72   Totals   4023/1839
S&P 500  1144.06 +  9.65  1145.16  1131.73
RUS 2000  580.15 +  8.26   580.79   571.23
DJ TRANS 3139.27 + 61.44  3139.27  3073.52
VIX        13.98 -  0.33    14.82    13.75
VXO        13.63 -  0.47    14.56    13.37
VXN        18.98 -  0.31    19.71    18.78
Total Volume 3,894M
Total UpVol  3,168M
Total DnVol    667M
52wk Highs     314
52wk Lows      108
TRIN          0.41
PUT/CALL      0.83
===============================================================

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

A Day for Breakouts
by James Brown

Express courier Fedex got us started on the right foot when the
company announced earnings this morning and raised its earnings
guidance for the next quarter.  Unfortunately, the markets
continued to trade inside its three-week trading range - that is
until the last hour.  Suddenly, volume surged and stocks, lead by
technology issues, charged into the last hour and broke through
the top of the trading range.  The Dow and the NASDAQ Composite
actually closed positive for the year with the Industrials at new
two-month highs and the NASDAQ at new two-week highs above the
pivotal 2000 mark.

Jim was on the right track yesterday when he said the market felt
like it wanted to go higher and that traders were getting nervous
that stocks could rally without them.  We have been staring at
the June 30th deadline non-stop for the last three weeks so
everyone who wanted to sell to avoid any event risk certainly had
their chance.  Now that the June 30th-fever has broken there is a
lot of money on the sidelines that could really lend some
momentum to today's gains.

I noticed a number of significant breakouts across the board with
stocks and sector indices hitting new highs or breaking through
technical resistance like their 50-dma's.  Dow theory fans will
point out that the Dow Transports are partly to blame for today's
gains.  The transports soared another 2% to breakout over
resistance at the 3100 level to hit new three-year highs.  The
move in transports was boosted by a down tick in crude oil prices
to $37.57 a barrel.  Yet this failed to stall the rally in energy
stocks.  The OIX oil index and the XNG natural gas index soared
to new all-time highs while the OSX oil services index hit new
two-month highs.

Chart of crude oil (August contract):



While we still have the Russell shuffle ahead of us the Russell
2000 still managed to hit new two-month highs.  More importantly
the Dow Industrial's 84-point gain broke through resistance in
the 10,440 area.  The NASDAQ's 26.8-point or 1.34% rally pushed
the index back through the 2000 mark and confidently back above
its descending trendline of resistance and its simple 100-dma.
The S&P 500 index also managed a new relative high.

Chart of the Dow Industrials:



Chart of the NASDAQ Composite:



Chart of the S&P 500 index:



Overall it was a very widespread rally with every sector-specific
index closing higher.  The largest gains were seen in networking
stocks, semiconductors, Internets, biotechs, airlines, and
homebuilders.  Meanwhile defense stocks managed to hit new all-
time highs again.  The rally in the networkers was fueled by
yesterday's news that telecom giant SBC Communications (SBC) was
discussing plans to spend $4B to $6 billion over the next five
years on a new fiber-optic network.  Gains for the several
networking stocks have been substantial as traders speculate on
who might win such a lucrative contract.  Over the last two days
Lucent (LU) has rallied 8.5%, Juniper Networks (JNPR) has soared
15% and JDS Uniphase (JDSU) is up 18%.

Market internals were strongly bullish as you might expect.
Advancing stocks outnumbered decliners 5-to-2 on the NYSE and 2-
to-1 on the NASDAQ.  Up volume was approximately three times
stronger than down volume on both exchanges.  More importantly
overall volume was relatively strong at 3.5 billion across both
exchanges.  This is a significant improvement to what we've
experienced over the past couple of weeks and adds a little bit
more confidence to today's rally.

Fedex (FDX) deserves some credit for both improving investor's
moods with their positive earnings forecast as well as
contributing to the rally in transports.  The company reported
earnings this morning of $1.36 per share, which was above
estimates at $1.33 and well above last year's 92 cents for its
fourth quarter.  FDX's revenues jumped more than 20% to $7.04
billion compared to just $5.8 billion a year ago.  FDX now sees
next quarter (Q1) falling in the $0.90-to-$1.00 range compared to
analysts' estimates at 80 cents per share.  Shares of FDX jumped
more than 2% to close at $80.05 - a new all-time high.  Don't
look now but the closer FDX edges toward $100 the closer we are
to hearing another stock split announcement.  Its last 2-for-1
split was back in May of 1999.

RJ Reynolds Tobacco (RJR) made headlines today after the FTC gave
its approval last night to the company's long-awaited merger with
Brown & Williamson, a division of British Tobacco (BTI).  The
newly formed company will be the No 2 cigarette maker behind
Phillip Morris.  Shares of Phillip Morris, now Altria Group (MO),
added 1.3% and helped lift the Dow Industrials.  Meanwhile RJR
received a credit upgrade from "negative" to "stable" from Fitch.

There were plenty of tech stocks hitting new highs but none of
them performed quite as well as Salesforce.com (CRM).  The
company's IPO came to market today with 10 million shares at $11
per share.  This was above the expected offering price in the $9
to $10 range.  CRM's claim to fame allows customers to truly use
their application software "on demand" for as much or as little
as they need.  The stock soared 56% to close at $17.20 per share
on volume of 10.89 million.

Alas the day was not without its losers.  Mylan Labs (MYL) lost
about 7% to close at $20.86 after the FDA chose to extended JNJ's
patent protection on its Duragesic pain relief patch by another
six months.  MYL had planned to offer a generic version.  The
company plans to fight the decision and sue the FDA.  Meanwhile
Career Education Corp (CECO) plummeted another 24.7% to $44.11
after the company confirmed that the SEC had formalized its probe
into the ongoing scandal involving falsified student records.
Merrill Lynch and Bear Stearns downgraded the stock to "neutral"
and "peer perform", respectively. I wonder how BAC and
ThinkEquity feel after the two firms reiterated their "buy" and
"strong buy" ratings on CECO in the previous two sessions.

AT&T was making headlines after the closing bell when the company
lowered its financial outlook for fiscal year 2004.  T is
lowering its revenue outlook from $31-32 billion for the year to
$29.5-30.5 billion.   AT&T separately announced it would stop
selling local and long distance services in seven states as it
continued to fight with competition from the regional Bells.
Existing customers would be allowed to keep their current
service.  AT&T (T) was trading down more than 4% in after hours
markets.

Tomorrow should prove interesting.  Now that the major indices
have broken through the tops of their trading ranges will we see
any follow through?  The Dow could struggle with the 10,500 level
but I suspect it will be the 10,550-10,600 region that will be
the next hurdle.  The NASDAQ has plenty of overhead resistance
but the strength in the two-day rally should encourage investors
who have been sitting on the sidelines to jump on the bullish
bandwagon before they "miss" the rally.  Thursday does bring a
few economic reports.  Before the opening bell will be the May
durable goods orders.  Economists are looking for a small gain of
1.5% after April's 3.2% loss.  We'll also get the weekly initial
jobless claims before the open.  After the bell will be the May
new home sales.  The economic data continues on Friday with the
final Q1 GDP numbers, the chain deflator numbers, existing home
sales and the Michigan sentiment index.

Finally, let me leave you with a word of caution.  The breakout
today looks great.  I believe we should trade what we see.
However, the volatility indices are waving huge red flags as they
drop back to the low end of their trading range or to new all-
time lows like the VXN.  Traditionally, these would be huge sell
signals but one thing we've learned over the past 18 months is
that the volatility indices can continue to slip lower than we
would normally imagine.


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

Stampeding Bulls

Manulife Financial Corp. - MFC - close: 39.99 change: +0.24

WHAT TO WATCH: After last month's dip to the 100-dma, shares of
MFC have been running strong and are right back to resistance
near all-time highs.  Use a trigger over the April high ($40.41)
and target a rally to the $45 area.  Use a stop at $38.




---

D R Horton Inc. - DHI - close: 29.06 change: +1.06

WHAT TO WATCH: The strongest of the Housing stocks on a relative
strength basis, DHI looks like it is preparing to make a serious
bullish move.  But with strong resistance looming near the $30.50
level, we need to see the stock prove itself before attempting a
bullish play.  Use a trigger at $30.50, just over the early June
highs and target a rally back to solid resistance in the $33.50-
34.00 area.




---

Yahoo! Inc. - YHOO - close: 33.97 change: +1.43

WHAT TO WATCH: After 3 weeks of coiling near multi-year highs,
YHOO made its intentions known on Wednesday with a powerful
breakout through $33 resistance, and closed at its best level
since late 2000.  Aggressive traders can chase the stock higher
above today's high, while the more conservative approach will be
to target entries on a pullback near the $32.50-33.00 area.
Target strong resistance near $40, and use an initial stop at
$31, just under the bottom of the recent consolidation.




---

J B Hunt Transport Services - JBHT - close: 36.56 change: +0.90

WHAT TO WATCH: Transports are on fire, breaking to new highs for
the year today and on the cusp of a breakout to their best levels
since late 1999.  JBHT is no laggard, busting out to new highs
and looking like it could keep on running.  While it looks
extended on the weekly chart, aggressive traders may be able to
jump on for a quick ride higher.  Look for a rally towards the
$40 level, so entries on either a continued breakout or a slight
pullback near $35.50 look good.





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

YELL $39.92 - While more extended than JBHT, YELL is another
transport that is looking quite bullish, breakout out to new
highs today.  Use an entry trigger over $40 and target a
continued rally towards the $45 level.  Use a tight stop at $38,
just under the recent consolidation lows.

APPB $23.97 - While not quite a H&S top, APPB has been building a
major topping formation over the past several months and the
$23.50 support level appears to be the key.  Use a break under
that level for new entries and then target a drop towards the
$20-21 area.


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

SI      Siemens Aktien             69.25    +1.53
PTR     Petrochina Co Ltd (ADS)    44.25    +0.86
BP      BP Plc                     54.38    +0.74
WB      Wachovia Corp              45.44    +0.53
NTT     Nippon Tel & Tel (ADS)     26.42    +0.62
CVX     Chevrontexaco Corp         94.88    +1.05


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

TLK     P T Telekom Indonesia      15.36    +1.04
UNA     Unova Inc                  19.64    +2.29
CKR     CKE Restaurants Inc        13.45    +2.24
OSUR    Orasure Technologies Inc    9.44    +1.73
QADI    QAD Inc                    10.94    +1.64


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

GS      Goldman Sachs Group Inc    91.72    +1.12
ERICY   LM Ericsson Telephone Co   29.13    +1.78
HIT     Hitachi Ltd                68.61    +1.76
FDX     Fedex Corp                 80.05    +1.62
BAX     Baxter International Inc   34.50    +1.54


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

APOL    Apollo Group Inc CI A      90.62    -3.55
MYL     Mylan Laboratories Inc     20.86    -1.56
LH      Laboratory Cp Am Hldgs     40.83    -1.05
CECO    Career Education Corp      44.11   -14.47
COCO    Corinthian Colleges Inc    25.06    -1.84


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

MCBC    Macatawa Bank Corp         25.90    -0.20


=================================================================
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 06-23-2004
                                                    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:  BRCM, JCP, SBUX, MACE

Net Bulls (Tech Stocks)
  New Bullish plays:    CSCO
  Closed Bullish Plays: TTEC
  Closed Bearish Plays: ISIL, SNDK


Stock Splits
  Announcements:        BAC


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

BRCM - long
Adjust from $41.60 up to $42.75

JCP - long
Adjust from $35.75 up to $36.50

SBUX - long
Adjust from $42.50 up to $42.90

MACE - long
Adjust from $4.90 up to $5.35


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

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

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

Cisco Systems - CSCO - close: 23.97 change: +0.75 stop: 22.50

Company Description:
Cisco Systems, Inc. manufactures and sells networking and
communications products and provides services associated with
that equipment and its use. The Company's products are installed
at corporations, public institutions and telecommunication
companies, as well as commercial businesses, and are also found
in personal residences. Cisco provides a broad line of products
for transporting data, voice and video within buildings, across
campuses and around the world. It conducts its business globally
and is managed geographically in four segments: the Americas;
Europe, the Middle East and Africa (EMEA); Asia Pacific, and
Japan.

Why we like it:
While the persistent weakness in the Technology sector in recent
months has had a negative impact on the price of CSCO, the stock
has held up better than many other stocks in the sector.  It
really started gaining some relative strength earlier this month
with the breakout over the 50-dma (now $22.46), but the real key
is the new PnF Buy signal on the non-standard 0.5-point box
scale.  Note that the standard scale chart remains bullish with
an upside target of $52.50.  The fresh Buy signal on the non-
standard scale chart gives us a more reasonable near-term target
of $30.50 to work with, which is still a solid 20% above current
levels.  On the candle chart, we can see that the stock has been
held in check by the $24 resistance level over the past couple
weeks and it began to peek over that level this afternoon.  With
the Networking index (NWX.X) posting a better than 4% advance
today and blasting through the 50-dma as well as the $250
resistance level, it looks like the sector is on the move and
CSCO appear poised for a strong breakout.

We'll use an entry trigger of $24.25 (just over today's high) to
confirm we do get a breakout.  Momentum traders can enter on a
breakout over that level, while those with a more cautious
approach can look for a subsequent pullback and rebound from
above the 10-dma ($23.39)  Note that there should be solid
support now in the $23.50 area.  On the upside, look for
resistance first at $24.75-25.00 area, with the next obstacle
being the top of the February gap near $26.  While conservative
traders may want to harvest a small gain near that resistance
area, based on the strength of the CSCO charts as well as that of
the NWX, we're going to go for the gusto and look for a rally
into the $27.50-28.00 area.  Set stops initially at $22.25, just
under the bottom of the early June gap, as well as the 50-dma.

Annotated Chart of CSCO:



Picked on June 16th at      $23.97
Change since picked          +0.00
Earnings Date              8/10/04 (unconfirmed)
Average Daily Volume =    51.8 mln




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

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

TeleTech Holdings - TTEC - close: 8.36 change: -0.01 stop: 7.85

Hmm... it looks like somebody wanted out of TTEC and dumped their
position on Tuesday.  Shares fell quickly through support at
$8.00 and its 10-dma and 200-dma to hit $7.77 (near its 21-dma)
before bouncing back within the first hour of trading on Tuesday.
We we're stopped out at $7.85.  The upward trend is still viable
and traders still willing to follow the stock can look for
bounces from $8.00 or moves above today's high at $8.51.

Picked on June 13 at $ 8.03
Gain since picked:   + 0.33
Earnings Date      05/05/04 (confirmed)
Average Daily Volume:   441 thousand




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

Intersil Corp. - ISIL - cls: 20.79 chng: +0.33 stop: 21.00

After spending the past few weeks workings its way down towards
support, shares of ISIL surged higher yesterday, breaking
strongly over the descending trendline and both the 10-dma and
20-dma.  But with price still under the 50-dma, we had reason to
hope for a rollover under resistance.  Those hopes were dashed
today with another strong performance from the Semiconductor
sector and ISIL looks intent on making a run back near the early
June highs.  Rather than wait for our $21 stop to be hit, let's
cut our losses here and look for better places to put our capital
to work.

Picked on June 2nd at       $20.65
Change since picked          +0.14
Earnings Date              4/21/04 (unconfirmed)
Average Daily Volume =    2.05 mln




---

SanDisk Corp - SNDK - close: 22.15 change: +0.69 stop: 21.51

The semiconductor sector has exploded higher in the last two
sessions and it has lifted the entire technology sector with it.
SNDK and other flash memory makers like FLSH have rallied
strongly from their bearish trends.  Yesterday's move over $21.00
and SNDK's simple 10-dma was the first clue.  Today's 3.2% jump
hit our stop loss at $21.51 and closed us out.

Picked on June 13 at $21.33
Gain since picked:   + 0.82
Earnings Date      04/14/04 (confirmed)
Average Daily Volume:   7.4 million




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

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

BAC deposits a 2-for-1 split

This afternoon Bank of America (NYSE:BAC) announced that its Board
of Directors had approved a 2-for-1 stock split of its common
shares.  The split will take the form of a stock dividend.
Meanwhile the BoD also approved a 12.5% rise in BAC's cash
dividend from 80 cents to 90 cents on a pre-split basis.

The stock split will be payable on August 27th, 2004 to
shareholders on record as of August 6th.  The cash dividend will
be paid on September 24th for shareholders on record as of
September 3rd, which will make the actual pay out 45 cents per
share on a post-split basis.


About the company:
Bank of America is one of the world's largest financial
institutions, serving individual consumers, small businesses and
large corporations with a full range of banking, investing, asset
management and other financial and risk-management products and
services. The company provides unmatched convenience in the United
States, serving 33 million consumer relationships with 5,700
retail banking offices, more than 16,000 ATMs and award-winning
online banking with more than ten million active users. Bank of
America is the No. 1 Small Business Administration Lender in the
United States by the SBA. The company serves clients in 150
countries and has relationships with 96 percent of the U.S.
Fortune 500 companies and 82 percent of the Global Fortune 500.
(source: company press release)


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

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

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

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

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

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

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






DISCLAIMER

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.

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