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PremierInvestor.net Newsletter                Wednesday 06-30-2004
                                                    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:
Watch List:   No Surprise

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)
===============================================================
     06-30-2004            High     Low     Volume Advance/Decline
DJIA    10435.48 + 22.05 10471.24 10375.67 1.82 bln   2033/ 794
NASDAQ   2047.79 + 12.86  2055.65  2031.88 1.74 bln   1873/1197
S&P 100   553.87 +  1.36   556.05   550.88   Totals   3906/1991
S&P 500  1140.84 +  4.64  1144.22  1133.62
RUS 2000  591.52 +  3.69   591.53   587.73
DJ TRANS 3204.31 + 19.60  3204.80  3161.96
VIX        14.34 -  1.13    15.73    14.25
VXO        13.97 -  1.40    15.97    13.81
VXN        19.37 -  0.78    20.52    19.09
Total Volume 3,902M
Total UpVol  2,610M
Total DnVol  1,067M
52wk Highs     321
52wk Lows       81
TRIN          0.80
PUT/CALL      0.78
===============================================================

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

Two Down, One to Go
by James Brown

The second of this week's three big events has passed and for the
most part stocks remain stuck inside their trading range.  In
what has been described as the most telegraphed interest rate
move of all time the FOMC raised rates by 1/4 point, just as
expected.  A choppy session turned bullish in the afternoon as
money came in off the sidelines to do a little end of quarter
window dressing.  The Dow Industrials, the NASDAQ Composite and
the S&P 500 index all ended the month and the quarter in the
green.

Have investors left early for the fourth of July holiday or are
we merely stuck in the summer doldrums?  The markets have been
focused on this one week for weeks now and we're just not seeing
much conviction either way.  Monday's surprise transfer of power
in Iraq was great news but stocks failed to hold their gains.
Yesterday the markets didn't do much because investors were
focused on today's FOMC decision on interest rates.  Everyone
expected the Federal Reserve to raise rates by 1/4 point to 1.25%
so the focus was actually on the Fed's language in their
decision.  Bulls got what they wanted with the "measured pace"
comments still in there but traders continued to sit on the
sidelines.  There was an afternoon rally of what most were
calling some last minute window dressing but stocks began to fade
from their highs in the last 30 minutes.

No one really expected a lot of action in stocks ahead of the
2:15 PM ET interest rate decision but U.S. stocks should have
been somewhat primed for a bullish session.  The lack of
headline-grabbing news out of Iraq on a day that many expected
terrorists to strike despite the early transfer was a sigh of
relief.  Maybe it was the losses overseas that weighed on stocks
here.  European bourses didn't do so well with the French, German
and English exchanges all trading lower.  In contrast the Hang
Seng index in Hong Kong managed a 169-point gain to 12,285.  Its
Asian counterpart in Japan, the NIKKEI, closed relatively
unchanged.

The rise in crude oil didn't help matters.  Light sweet crude
soared 4% or $1.39 to $37.05 a barrel, significantly erasing a
good chunk of this week's losses.  Industry experts were
expecting U.S. crude inventories to rise.  The markets were
surprised to hear that the Energy Dept. reported a decline of
500K barrels while the API data reported a 4.2 million barrel
decline.  Combine this surprise with new comments from Saudi
Arabia about no new production hikes and it's no small wonder
that oil shot higher today.

Before the Fed decision was released today investors got to hear
the Chicago Purchasing Managers Index or PMI report.  Yesterday
Jim mentioned that we've seen a number of economic reports
indicating growth wasn't as strong as expected and thus the Fed
was likely to keep their rate hike and language market friendly.
The PMI proved to be just another report supporting this message.
Last month, in May, the Chicago PMI shot toward 16-year highs at
68%.  This month analysts were expecting a decline to 65.2% but
were surprised to hear the PMI drop to 56.4%, the slowest reading
in eight months.  Fortunately it's still a positive reading, with
anything over 50 indicating growth, and odds are good the Fed
probably had a heads up on what the data looked like before we
did.

The big event today was the decision on interest rates.  This is
a link to view the announcement but I've posted their comments
here:
http://www.federalreserve.gov/boarddocs/press/monetary/2004/20040630/default.htm

  The Federal Open Market Committee decided today to raise its
  target for the federal funds rate by 25 basis points to 1-1/4
  percent.

  The Committee believes that, even after this action, the stance
  of monetary policy remains accommodative and, coupled with
  robust underlying growth in productivity, is providing ongoing
  support to economic activity. The evidence accumulated over the
  intermeeting period indicates that output is continuing to
  expand at a solid pace and labor market conditions have
  improved. Although incoming inflation data are somewhat
  elevated, a portion of the increase in recent months appears to
  have been due to transitory factors.

  The Committee perceives the upside and downside risks to the
  attainment of both sustainable growth and price stability for
  the next few quarters are roughly equal. With underlying
  inflation still expected to be relatively low, the Committee
  believes that policy accommodation can be removed at a pace
  that is likely to be measured. Nonetheless, the Committee will
  respond to changes in economic prospects as needed to fulfill
  its obligation to maintain price stability.

The underlining and the bold lettering is mine not the Fed's.
Bulls were happy to see the "measured pace" comments, which
should soothe fears that the Fed is behind the curve.  More
critical traders point to the "nonetheless" comment as the Fed's
trump card to raise rates as fast as they need to should
inflation get out of hand.  Most analysts are interpreting the
"transitory factors" in the recent rise of inflation as higher
fuel costs, which are expected to abate somewhat.  All in all the
1/4-point hike is the first jump in rates since May 2000 and
pulls the Fed funds rate up off 40-year lows.

As mentioned earlier stocks did turn positive in the afternoon
after the announcement.  Market internals were also bullish.
Advancing stocks outnumbered decliners 20 to 8 on the NYSE and
almost 19 to 12 on the NASDAQ.  Up volume was more than twice the
down volume numbers and overall volume came in at a relatively
healthy (for this time of year) 3.5 billion shares for both
exchanges.  Several sectors look poised for a breakout.  The NWX
networking index and the BTK biotech index both rallied to new
relative highs and closed just under their simple 100-dma's.  The
Dow Jones Transportation index turned in a bullish close back
over the 3200 level.

The Dow Industrials added 22 points to close at 10,435 but the
index began to fail at its intraday high of 10,471 in the
afternoon under recent resistance near 10,480.  The S&P 500 index
climbed almost 5 points to 1140 but it too remains stuck in its
trading range.  The NASDAQ looks a lot more bullish with a new
two-month high but it failed to hold the breakout over resistance
at 2050 as it sank in the last half hour.  Still we shouldn't
complain.  The Dow climbed 2.4% in June and the NASDAQ added more
than 3% for the month.  Year-to-date the NASDAQ is up 2.2%, the
S&P 500 index is up 2.6% while the Dow Industrials are down 0.2%.

Chart of the Dow Industrials:



Chart of the NASDAQ Composite:



Chart of the S&P 500 index:



Wednesday was not without its stock-specific stories.  Research
In Motion (RIMM) announced earnings last night after the closing
bell on Tuesday and beat estimates by 4 cents per share.  RIMM
also raised its earnings and revenue estimates for the next
quarter to 32-37 cents and $290-310 million, respectively,
compared to prior forecasts of 24-29 cents in earnings and $270
million in revenues.  Shares of RIMM soared more than 15% today
to close at $68.45, a new all-time high.

Meanwhile Lexar Media (LEXR) was moving the opposite direction.
The stock lost 16.6% to close at $6.68 after the company warned
last night that its Q2 results would be less than expected.  LEXR
now expects June quarter revenues in the $155-160 million range
compared to analysts' estimates at $186 million.

Dow-component and NDX-component Microsoft (MSFT) also made
headlines today.  A Washington appeals court voted 6-0 to uphold
a district court's decision on the Department of Justice's
antitrust settlement.  The settlement, reached two years ago by
MSFT and the Justice Dept., was appealed by the state of
Massachusetts and a couple of trade groups.  Today's decision
should end the six-year antitrust saga for MSFT in the U.S. but
the company is currently appealing a recent decision in Europe.
Shares of MSFT added 6 cents to close at $28.56.

Looking ahead to tomorrow I'd like to be bullish but the late-day
action this afternoon is discouraging.  To echo Jim's comments
yesterday, if the NASDAQ continues to plod higher then the rest
of the market should follow.  Fortunately, the Stock Trader's
Almanac by Hirsch has a few things to say about the month of
July.  First of all the first day of trading in July has been up
13 out of the last 15 years.  The beginning of July tends to see
a lot of retirement money inflows that should buoy stocks.  The
month of July is the best month in the third quarter.
Unfortunately it happens to be the first month in the NASDAQ's
worst four months of the year and election year July's don't seem
to alleviate this trend.

Another positive factor for stocks is the historical trend for
the S&P 500 to rise 8% in the first six months once the Fed
begins a tightening cycle.  This is due to the improving economic
conditions and rising corporate earnings.  Now how this figure
meshes with the market's typically tepid performance in the third
quarter is a question I can't answer.

Tomorrow does bring a few more economic reports.  Before the
opening bell will be the weekly initial jobless claims.  After
the open we'll get the construction spending numbers, the ISM
index and the auto and truck sales figures.  The ISM index is the
one to watch but it will probably be overshadowed by Wall
Street's focus on Friday's non-farm payrolls report.

Short-term I would continue to be cautious.  The volatility
indices all took a dive today with the VXO falling 9% back toward
its lows and the VIX and VXN are right on its heels.  Regular
readers know that interpreting the VIX is more art than science
but these levels still scream "danger, the market is near a
short-term top".


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

No Surprise

Tenet Healthcare - THC - close: 13.41 change: +0.59

WHAT TO WATCH: We've been watching THC here lately, talking about
buying the recent dip to the bottom of the rising channel.  But
the stock made an unexpected jump today, breaking out over 5
months of resistance and the 200-dma.  This looks like a good
spot for momentum entries, targeting a rise towards the $16
level.  More conservative traders could look to buy a bounce from
what should be solid support now near $12.90.




---

Maxim Integrated Products - MXIM - close: 52.42 change: +0.21

WHAT TO WATCH: Ever since posting a double bottom near the $44
level last month, shares of MXIM have been making steady upward
progress and the stock almost broke out again today.  Use a
trigger over today's high for entries and look for a longer-term
rally towards the $60 resistance level.  Note that some
resistance will likely be found in the $55-56 area.  Use a tight
stop just under the $51 level, which defines the bottom of the
most recent consolidation pattern.




---

Southwest Airlines - LUV - close: 16.77 change: -0.04

WHAT TO WATCH: The rally in the Dow Transports hasn't been lost
on Airline stocks and LUV staged a major breakout through the
200-dma last week.  Since then, the stock has been consolidating
near its recent highs in preparation for the next bullish move.
The current weakness looks like an inviting entry point, with an
upside target of $18.00-18.50.  Use a tight stop just under
$16.50, just in case the pattern breaks to the downside.




---

FLIR Systems Inc. - FLIR - close: 54.90 change: +0.59

WHAT TO WATCH: We've had our eye on FLIR lately and this week's
breakout over the $54 level certainly looks encouraging.  But due
to the light volume accompanying the move, we're more inclined to
buy a pullback near the $52 support level.  Traders willing to
buy a breakout over yesterday's high should only do so if it
comes with a substantial increase in volume.





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

JBLU $29.41 - JBLU is another Airline stock that is posting a
healthy pattern of higher lows and higher highs.  After last
week's breakout to new multi-month highs, the current pullback
looks like an attractive entry opportunity.  Target entries in
the $28.50-29.00 area and look for a longer-term upward move
towards strong resistance at $35.

NTES $41.34 - Chinese Internet stocks continue to act poorly and
NTES is once again on the verge of a significant breakdown.  Use
a trigger below $40 and target a quick move down to solid support
near $36.

ISIL $21.66 - After basing for over a month, ISIL managed to push
through the top of its descending channel and then the 50-dma.
Showing they mean business, the bulls managed a solid breakout
over $21.50 resistance.  Entries look good on either a breakout
over the 100-dma or on a slight pullback near $21.  Target a move
towards strong resistance at $24.


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

PTR     Petrochina Co Ltd (ADS)    46.41    +0.77
CVX     Chevrontexaco Corp         94.16    +0.72
SI      Siemens Aktien             72.52    +0.87
UTX     United Technologies Corp   91.52    +0.99
UNH     Unitedhealth Group Inc     62.28    +0.87
COP     Conocophillips             76.31    +0.66


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

TKLC    Tekelec                    18.17    +1.17
VICR    Vicor Corp                 18.27    +1.03
INET    INET Technologies Inc      12.47    +1.77
JUPM    Jupitermedia Corp          14.17    +1.01
ASTE    Astec Industries           18.83    +1.20


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

WLP     Wellpoint Health Network  112.02    +2.02
GIS     General Mills Inc          47.57    +1.45
GILD    Gilead Sciences Inc        67.00    +1.48
CNI     Canadian Natl Railway      43.56    +1.21
ATH     Anthem Inc                 89.55    +2.13


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

FRX     Forest Laboratories Inc    56.63    -1.02
GLH     Gallaher Group Plc (ADS)   48.32    -1.03
AZO     Autozone Inc               80.22    -8.00
CBH     Commerce Bacorp Inc NJ     55.10    -6.05


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

YPF     YPF Sociedad Anonima       39.00    -0.25
ROST    Ross Stores Inc            26.76    -0.38
AAP     Advance Auto Parts Inc     44.11    -1.11
CMI     Cummins Inc                62.49    -0.44
ORLY    O'Reilly Automotive Inc    45.20    -0.98


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

*****************************************************************
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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 06-30-2004
                                                    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, ELX, SHW, SOHU

High Risk/Reward
  New Bearish Plays:    IMOS
  Closed Bullish Plays: MACE
  Closed Bearish Plays: NPSP


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

BRCM - long
Adjust from $43.50 up to $44.40

---

ELX - tech stock short -
Lower stop from $15.76 to $15.55

---

SHW - non-tech long -
Raise stop from $39.50 to $39.99

---

SOHU - high-risk/reward short -
Lower stop from $23.25 to $22.01


==================================================================
High Risk/Reward (HR) Stock section
==================================================================

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

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

ChimMOS Tech. - IMOS - close: 6.97 change: -0.78 stop: 8.50

Company Description:
ChipMOS Technologies (Bermuda) Ltd. is an independent provider of
semiconductor testing and assembly services.  The company
provides a range of back-end testing services, including
engineering testing, wafer probing and final testing for memory
and mixed signal semiconductors.  It also offers a broad
selection of leadframe-based and organic substrate-based package
assembly services for memory and mixed signal semiconductors.
IMOS' advanced leadframe-based packages include thin small
outline packages, and its advanced organic substrate-based
packages include mini-ball grid array packages.  In addition, the
company provides testing and assembly services for liquid crystal
display (LCD) driver semiconductors and other flat panel display
driver semiconductors by employing tape carrier packages, chip-
on-film and chip-on-glass technologies.

Why we like it:
With the solid upward action from the Semiconductor index (SOX.X)
over the past week, the extreme weakness in shares of IMOS is a
huge sign that something is very wrong.  With the SOX inching
upwards today to the tune of almost 1%, IMOS plunged more than
10% on very heavy volume.  The company released its latest
Financial statement today and something in that release seems to
have been the catalyst for the move, although the technical
picture was already looking pretty abysmal.  IMOS has been
steadily marching lower from its January highs, leaving a pattern
of lower highs and lower lows in its wake.  This latest failed
bounce looks particularly ominous, as it failed just under the
converging 50-dma ($8.34) and 200-dma ($8.42) with the bearish
crossover of those two key averages taking place today.  The PnF
chart shows a pretty grim picture as well, with last month's Sell
signal producing a downside target of $2.50.  That may be a bit
much to hope for, but a break of near support in the $6.00-6.50
area should easily open the door for a plunge down to next
support near $4.00.

With today's drop of 10%, clearly this is a higher risk play.
We're going to use an entry trigger at $6.50, which is just under
the lows from a couple weeks ago.  Aggressive traders can enter
on the initial break of support, but must be prepared for the
potential of at least one more rebound attempt.  Looking at the
weekly chart, we can see several points of support late last year
in the $6.00-6.50 area, so more conservative traders will either
want to wait for the break below $6.00 before playing, or target
a failed rebound for entry.  If looking for a rebound entry, the
$7.25-7.50 area looks viable with the 10-dma ($7.33) right in the
middle, but remember that we can't take that rebound entry until
AFTER the stock trades below our $6.50 trigger.  We want to give
the stock plenty of room to move in the near-term, so we're
setting a liberal initial stop at $8.50, which is just above both
the 50-dma and 200-dma.

Annotated Chart of IMOS:



Picked on June 30th at       $6.97
Change since picked          +0.00
Earnings Date              5/14/04 (confirmed)
Average Daily Volume =       297 K




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

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

Mace Security - MACE - close: 5.58 change: +0.10 stop: 5.35

There's no way to put a pretty face on it, MACE just hasn't done
as we expected.  After the initial news related drop a couple
weeks ago, the bulls made a feeble attempt at getting a rebound
going, but clearly they've failed with the recent rollover.  The
stock now looks like it will break below the lows near $5.40 and
we want to be long gone before that happens.  Use any hint of a
rebound to exit open positions and look to deploy the cash in
more promising plays.

Picked on June 13th at       $6.05
Change since picked          -0.47
Earnings Date                  N/A
Average Daily Volume =    4.92 mln





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

NPS Pharm. - NPSP - close: 20.98 change: +0.29 stop: 22.00

Following its short-lived breakdown below $20, our NPSP play
bounced back near the $21 level and has spent the past 2 weeks
consolidating in what is looking more and more like a bullish
price pattern.  Resistance at the 20-dma appears to be weakening
and an upside breakout could be explosive.  We're going to avoid
that possibility by just dropping the play tonight for lack of
performance.  Use any intraday weakness tomorrow to achieve a
better exit point from open positions.

Picked on June 13th at      $20.68
Change since picked          +0.30
Earnings Date              5/06/04 (confirmed)
Average Daily Volume =    1.08 mln





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