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Daily Newsletter, Monday, 08/02/2004

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PremierInvestor.net Newsletter                   Monday 08-02-2004
                                                    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:  Still bullish but willing to so bearish if I need to
Watch List:   Retail to Railways and more!

===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
     08-02-2004            High     Low     Volume Advance/Decline
DJIA    10179.16 + 39.45 10203.56 10101.36 1.53 bln   1621/1148
NASDAQ   1892.09 +  4.73  1893.13  1869.66 1.50 bln   1318/1801
S&P 100   540.41 +  2.74   541.49   535.22   Totals   2939/2949
S&P 500  1106.62 +  4.90  1108.60  1097.34
RUS 2000  551.93 +  0.64   551.93   544.40
DJ TRANS 3134.15 + 22.46  3135.35  3089.75
VIX        15.37 +  0.05    16.58    15.22
VXO        14.67 -  0.73    16.16    14.58
VXN        24.13 +  0.82    25.26    23.97
Total Volume 3,335M
Total UpVol  1,868M
Total DnVol  1,376M
52wk Highs     131
52wk Lows      171
TRIN          0.92
PUT/CALL      0.79
===============================================================

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

Still bullish but willing to so bearish if I need to
Jane Fox

Yesterday Homeland Security Secretary Tom Ridge raised the threat
alert to "orange," or high, for areas of New York City, northern
New Jersey and Washington because new intelligence pointed to Al
Qaeda terrorists targeting Wall Street and international
financial institutions. Yesterday's warning represented the first
time the color code was raised in a specific area for specific
institutions. The impact on the markets this morning however, was
surprisingly muted. Buyers were skittish from the get go but
sellers were not able to get a good foothold either. As the day
progressed, however, buy programs took over and pushed the
markets back to daily highs.

In other news, nearly eight months after taking the helm at the
NYSE, CEO John Thain, has put together a proposal to allow more
electronic trading, replacing the tradition-bound auction method,
known as the open-outcry system. Mr. Thain's proposal is a hybrid
that marries the benefits of the human-based system, which helps
minimize price volatility, with the convenience of sophisticated
technology. Needless to say Mr. Train is not too popular among
specialists, the people who keep the market flowing by using
their own cash to buy and sell shares when trading slows. The
more shares traded electronically the less profit for the
specialists. One specialist, Peter Murphy, head of Bear Stearns's
floor specialists unit was quoted as saying "What's the point of
being down there with capital if we can't use it?"

Fears of further disruptions in supply from Iraq and Russia on
top of the new terror warnings drove September crude up to the
highest price since oil futures began trading in New York 21
years ago. Crude Oil prices are nearly 35% higher than they were
a year ago.


Economic reports

June's Institute for Supply Management showed factory activity
continued to expand in the U.S. last month. The ISM rose to 62.0
from 61.1 in June whereas economists had expected a reading of
61.6. The survey found new orders and production jumped as
inflation pressures slowed but remained high while hiring slowed
slightly. Any reading above 50 indicates expansion and overall
readings in the survey have been above 60 for 15 months -- the
longest stretch since the 12-month period between July 1972 and
June 1973. An extended reading of 62.0 is consistent with a 7%
annualized increase in the U.S. gross domestic product.

The other report that hit the wires this morning was Construction
Spending for the month of June. The Commerce Department said
total construction spending for June fell 0.3%, the first decline
since January. Economists' expectations were for no change.

Earnings

Procter & Gamble Co.'s (PG), the maker of Tide detergent, Crest
toothpaste and Pampers diapers, saw fiscal fourth-quarter
earnings grow 44% from a year-earlier period. Company officials
say the figure included restructuring charges, as sales and unit
volume both saw double-digit gains. PG closed up +$1.19.

Edison International (EIX) reported a net loss of $374 million,
or $1.13 a share including a $610 million loss from the Edison
Mission Energy largely due to the termination of a big power-
supply contract in the U.S. The Edison Mission loss was partly
offset by $242 million of income from the #2 investor-owned
utility in California, Southern California Edison.  EIX closed
down -$0.75.

Shares of Corinthian Colleges (COCO) stumbled after announcing
its revenue and earnings for the fiscal fourth quarter and the
year would fall below its previous forecasts. Harris Nesbitt,
Bear Stearns and J.P. Morgan all downgraded the company's stock
saying they were  "completely shocked by the magnitude by which
the company has lowered guidance." Corinthian blamed the
shortfall on higher costs related to marketing and advertising
and negative publicity surrounding a series of lawsuits filed by
former students in Florida. COCO fell 43% today bringing
competitors down with it and COCO closed down -$8.42.

Reynolds American Inc. (RAI) reported net income for the quarter
at R.J. Reynolds rose to $151 million or $1.77 a share, from $70
million, or 83 cents a share. The 2nd quarter net income nearly
doubling was due to a net restructuring charge adjustment of $9
million, while the year-earlier net included a $55 million
restructuring charge.

RAI was formed on July 30 after R.J. Reynolds Tobacco Holdings
and British American Tobacco combined their U.S. tobacco
businesses. It reported the results of R.J. Reynolds as a
separate entity.

Annotated Daily Chart of the NYA :



In my wrap on July 28th I noted that NYA was the strongest market
and it continues to be so. I also showed a reverse head and
shoulders that continues to play out. Of course, this is not a
valid formation until the neckline is broken and even then I
would like to see a retest of the neckline just to make sure.

Annotated Daily Chart of the SOX:



The SOX has not yet broken above the swing high at 430 but is
closer today than it was when I talked about it on July 28th. The
MACD has definitely made a bullish cross giving the bulls just a
little more encouragement. I also still see the SOX reaching the
top of the regression channel at 467 before finding too much
resistance.

Annotated Daily Chart of the Nasdaq:



Like the SOX I see a bounce to 2000, the top of regression
channel, as doable but it needs to get past the swing high at
1933 first.

This is a hard chart to decipher because the higher high on July
30th failed and I cannot turn bullish here until I see this
market proving it to me. That proof would be in the form of a
break of the swing high at 1933 and then a higher low. Of course
this scenario will take days but if the last swing low is taken
out then all bullish bets are off.


Annotated Daily Chart of the SPX:



Is the SPX making a double bottom or a reverse Head and
Shoulders? You know it really doesn't matter because both are
bullish and both will require SPX to break above 1146 to prove
them. I really like the MACD cross but I just wish it were making
a higher low like price.


Annotated Daily Chart of the Dow:



You could ask the same question of the DOW - is it making a
reverse head and shoulders or a double bottom? And once again it
doesn't matter because both will need to be proven valid by a
trade above 10487. I am more encouraged by this chart because of
the MACD making a higher low along with price.


Annotated Daily Chart of the Russell 2000:



There is no question that the RUT is making a double bottom that
is supported by a MACD making a higher low. This double bottom
will need to prove itself with a trade above 591.5, a long ways
off.


After-hours developments

Shares of Priceline.com Inc. (PCLN) fell in after hours trade
after the closing bell after it said it expects third-quarter
earnings to come in below the Wall Street consensus. PCLN said it
expected current quarter adjusted income of 25 cents to 30 cents
a share, compared with the Wall Street average estimate of 31
cents.

Shares of Macrovision Corp. (MVSN) rose in after hours trade
after the company said a 22% rise in revenue helped drive second-
quarter profits sharply higher from a year earlier.

Tomorrows Earnings and Economic Releases

Tomorrow will see an 8:30AM ET Bureau of Economic Analysis'
release of Personal Spending and Personal Income. Income is
expected to be up 0.3% and spending even at 0.0%.

Companies releasing earnings tomorrow include Before the Open:
AMED CZN COH CMLS DVA EMR ETM EOG EOP EQR EXPD HNT MSO MLM MBI
MRCY MHX PRXL PDX PFGC PER PCG PL Q SRZ SPN THC TEVA TKTX TYC VSH
WPI WCI OATS. After the Close: ALO BRKR CEPH CKFR EDMC IMDC IACI
JILL PCTI PDLI PRU TALK UPCS VCLK VRSO.

Outlook

I am still bullish and as long as the charts I have shown above
hold up I will remain bullish but I am also very willing to turn
bearish again if I see the markets deteriorating.

Jane Fox


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

Retail to Railways and more!

American Eagle Outfitters - AEOS - close: 33.00 change: +0.23

WHAT TO WATCH: The oversold bounce in the RLX retail index may
have stalled under its simple 200-dma but that's not stopping
shares of AEOS.  This clothing retailer broke out above
resistance on July 27th and has continued to push higher.  Right
now traders appear to be buying the dips on a daily basis yet
despite the bullish trend of higher lows we'd probably look for a
deeper dip back to the $30.50-31.00 region.  Watch out for
earnings on August 12th.




---

Dade Behring Holdings - DADE - close: 50.49 change: +0.80

WHAT TO WATCH: This medical device maker of in vitro diagnostic
products produced an incredible bullish trend from August 2003 to
April of this year.  Then shares hit resistance near $48.50 and
proceeded to churn sideways for four months.  Now the stock is
breaking out to new highs above $48.50 and round-number,
psychological resistance at $50.00.  The current rally began last
week after shares popped higher on big volume on its earnings
report.




---

Sohu.com - SOHU - close: 21.45 change: +0.73

WHAT TO WATCH: Chinese Internet stock SOHU is not slowing down.
The stock gapped higher last week after reporting earnings.  Now
shares are breaking out over the $20.00 level, its simple 100-dma
and the descending trendline of resistance.  There could be some
additional resistance at $22.00 but aggressive traders might want
to give this stock another look.  Bulls could target the $25
level, which also happens to coincide with P&F resistance.  An
alternative entry would be to wait for a potential dip to $20.
Use a tight stop!




---

Canadian Pacific Railway - CP - close: 26.02 change: +0.55

WHAT TO WATCH: We mentioned CP on the weekend watch list.  The
stock recently broke through price resistance at $25.25 and
technical resistance at its simple 200-dma after reporting
earnings late last week.  Friday's saw a little bit of profit
taking but traders bought the dip at the 200-dma.  Now CP is
seeing some follow through.  Bulls may want to give it another
look.  The P&F chart points to a $40 target but we'd probably be
happy with a move to $28-29.





-----------------------------------
RADAR SCREEN - more stocks to watch
-----------------------------------

VRTS $18.99 -0.07 - We're still watching VRTS for a breakout over
the $20.00 level.  Shares have been trading sideways in a
relatively tight 65-cent range the last three days.

SWN $32.75 +0.56 - Another new high for this oil/gas stock.  SWN
recently broke through resistance and while it looks tempting as
a bullish candidate the stock is very overbought.

TSS $22.89 +0.15 - We're going to keep an eye on shares of TSS
for a potential breakout over major resistance at the $24 level
and its simple 200-dma.


=================================================================
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 08-02-2004
                                                    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:   DLTR
Split Announcement:  HOC


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

DLTR - non-tech short -
 Heads up!  DLTR out performed the RLX retail index
 with a 2.11 percent gain.  The move put DLTR above
 technical resistance at its simple 40 and 50-dma's.
 This is not good news for our bearish play and we
 expect to be stopped out tomorrow. Our stop is
 currently at $27.75.


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

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

HOC grows a 2-for-1 split

This evening after the closing bell Holly Corp (HOC) announced
that its Board of Directors had approved a 2-for-1 stock split of
its common shares.

The split will be paid in the form of a 100% stock dividend to be
distributed on August 30th, 2004 to shareholders on record as of
August 16th.  Post-split HOC should have approximately 31.8
million shares outstanding.

The BoD also declared a quarterly cash dividend of 8 cents per
share payable on a post-split basis on October 4th, 2004 to
shareholders on record September 20th.

The company also announced it was resuming its $20 million stock
buyback program, which currently has about $15 million left to
repurchase shares.


About the company:
Holly Corporation, headquartered in Dallas, Texas, is an
independent petroleum refiner and marketer that produces high
value light products such as gasoline, diesel fuel and jet fuel.
Holly operates through its subsidiaries a 75,000 barrels per day
("bpd") refinery located in Artesia, New Mexico, a 25,000 bpd
refinery in Woods Cross, Utah, and an 8,000 bpd refinery in Great
Falls, Montana. Holly also owns a majority interest (including the
general partner interest) in Holly Energy Partners, L.P., which
through subsidiaries owns or leases approximately 1,000 miles of
refined product pipelines in the west Texas and New Mexico region
and refined product terminals in several states. (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

BAC     Bank of America Corp       85.67    +0.66
HBC     HSBC Holdings Plc          76.56    +2.72
FNM     Fannie Mae                 71.80    +0.84
CVX     Chevrontexaco Corp         96.48    +0.83
DCM     NTT De Co Mo (ADR)         17.97    +0.76


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

CVC     Cablevision Systems CI A   19.34    +1.87
IST     ISPAT Internat Nv          19.10    +1.55
FHCC    First Health Group Corp    15.21    +1.19


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

HBC     HSBC Holdings Plc          76.56    +2.72
CMCSA   Comcast Corp CI A          28.75    +1.35
COX     COX Communications Inc     33.16    +5.58
ETR     Entergy Corp               58.55    +1.05
MTB     M&T Bank Corp              96.19    +2.96


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

APOL    Apollo Group Inc CI A      77.33    -6.22
WFMI    Whole Foods Market Inc     80.79    -1.53
CBH     Commerce Bancorp Inc NJ    48.99    -1.35
CECO    Career Education Corp      29.60    -4.21
SNPS    Synopsys Inc               21.05    -4.20


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

None


=================================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to remove@PremierInvestor.net
=================================================================
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 advertising@PremierInvestor.net.

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

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





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