PremierInvestor.net Newsletter Thursday 08-26-2004 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: Bulls Applying Pressure Watch List: Software to Chickens Market Sentiment: Volume Evaporates ================================================================= MARKET WRAP (view in courier font for table alignment) ================================================================= 08-26-2004 High Low Volume Adv/Dcl DJIA 10173.41 - 8.30 10193.54 10155.86 1.24 bln 1781/1424 NASDAQ 1852.92 - 7.80 1860.39 1848.88 1.18 bln 1231/1762 S&P 100 539.46 - 0.11 540.45 538.18 Totals 3012/3186 S&P 500 1105.09 + 0.13 1106.78 1102.43 W5000 10721.63 + 83.26 10737.04 10699.87 SOX 380.40 - 3.90 384.28 378.16 RUS 2000 547.25 - 2.89 550.14 546.00 DJ TRANS 3108.84 - 5.20 3130.55 3098.79 VIX 14.91 - 0.07 15.22 14.76 VXO (VIX-O)14.87 + 0.24 15.23 14.56 VXN 21.60 + 0.19 21.77 21.36 Total Volume 2,625M Total UpVol 1,100M Total DnVol 1,466M Total Adv 3467 Total Dcl 3580 52wk Highs 143 52wk Lows 79 TRIN 0.99 NAZTRIN 1.55 PUT/CALL 0.84 ================================================================= =========== Market Wrap =========== Bulls Applying Pressure by Jim Brown The major indexes may have finished in the red but it was only by a narrow margin. Sellers were unable to capitalize on a slow day and take back some of the gains from the last week. Oil prices, weak earnings, weak economics and potential terror events failed to remove the underlying bid that kept the markets near their highs for the week. Dow Chart – Daily Nasdaq Chart – Daily SPX Chart – Daily Russell Chart – Daily Jobless Claims jumped again to the 340,000 level and well above estimates for another drop to 330,000. The market tried to ignore the news because much of the increase was related to Hurricane Charlie. Despite the thousands of temporary hires in Florida the jump to 343K was the highest level in four weeks. Discounting the impact of Florida to the headline number the trend has been steadily downward. This tells us that layoffs are continuing to slow despite the lack of strong jobs growth. Rising oil prices and geopolitical concerns may be keeping employers from adding to the workforce but they are not cutting workers at the same rate they were earlier in the year. This suggests we could see some additional jobs growth in the Jobs Report next Friday. The estimate for +125,000 new jobs is well below last months optimistic level but still above the +32,000 jobs actually reported. Another employment report released today was the Help Wanted Index and it fell to only 37. This is the lowest level since December and only one point below the low of 36 set in May of 2003. With the move to job ads on the Internet instead of papers this index has been demoted to a footnote but it is still an indication of a lack of hiring. The recent high of 40 in March was inline with the rising job creation at the time. A continued drop is just another confirmation employers are still cost conscious and concerned about the future. For Friday we are scheduled to get the GDP update and the consensus is for another drop to +2.8% from the +3.0% last time around. With anecdotal evidence from several weak sectors there is some concern the number could drop even lower. A low number here could help fuel speculation that the Fed will not raise rates at the Sept-21st meeting. The current consensus is for another hike because the Fed views is as removing accommodation not raising rates. They view the current 1.50% as woefully low and in need of correction. The Fed funds futures after the morning reports are showing a 70% chance of another quarter point increase in Sept. We will also see the final Consumer Sentiment for August and it is not expected to change from the 94 in the earlier release. Greenspan is scheduled to talk at the Jackson Hole conference and that speech will be dissected for further insight on his comments earlier in the week. His Jackson Hole remarks have moved the markets in the past as he tends to be less formal and deviate from the party line at these conferences. His rebuttal letter to the Senate Banking Committee earlier this week suggested home prices were too high in some areas as a result of the recent housing bubble. He also said he thought Japan could be hurt significantly if oil prices continued to climb. Japan has no oil and is dependent on imports. He also said the economic cycle in Asia is slowing and oil prices could accelerate that weakness. He said growth in China had "braked sharply" and there was a risk of a hard landing. The letter was a constant set of good news/bad news comments where he made positive comments about an area of economic concern and then hedged his bet by giving a caution about that same area in the very next paragraph. This fence straddling will hopefully be resolved with any update on those topics tomorrow. Unfortunately I would not bet on it. Today was a bad news bulls type of day. Earnings misses and warnings from several high profile companies gave the bulls a wall of worry to climb and while they did not quite make it to the top they ended on the last step. Starbucks produced some bitter coffee for investors with sales growth that was the weakest since May 2003. SBUX dropped -$2.58 or -5.6% on the news. The slowing growth was undoubtedly due to consumers paying more at the pump and less at the counter over the last three months. $3 coffee may be a casualty of $2 gas. Krispy Kreme donuts failed to satisfy the sweet tooth of investors after turning in a dismal +0.1% growth in revenue. The stock was knocked for a -10% loss after reporting earnings and guidance that was far below estimates. KKD only earned $5.7 million this quarter compared to $13 million in the same quarter last year. This was a -55% drop in earnings. They also posted large increases in costs and big drops in margins from 19.3% to only 10.4% in company owned stores. They said they suffered losses in closing some non performing locations. Wow, have times changed. They also said stores purchased from franchisees had been under performing. If I reworded that sentence it would look something like this. Stores repossessed by KKD and those abandoned by franchisees were doing poorly as one would expect when taking over failed locations. Since boarding up a failed KKD store could produce very negative sentiment for other KKD stores in the area they are sometimes forced to run a location rather than close it. Shades of Boston Chicken all over again. At $13 today they are well off their $50 2003 highs and odds are good they will go lower. KKD blamed their problems on the Atkins diet and with that trend slowing they will have a chance for a sweet rebound in the future. Fred's missed estimates by a penny and blamed the results on slower sales in home furnishings and apparel. No real surprise here after WMT and TGT warned that sales were slowing earlier in the week. The impact of higher gas prices is likely to produce a flood of these type of earnings reports when earnings begin again in October. We are still a couple weeks ahead of the start of earnings warning season in mid September but I think everyone already knows how it is going to turn out. With home heating oil running +30% over last year there will be a lot of coal in the Christmas stockings and some people will be glad to get it. Kirkland's (KIRK) dropped -19% after warning that sales in August were down sharply. You may not have heard of them but they sell home furnishings. They said sales have "slowed considerably" and "customer traffic remains a concern, ESPECIALLY in mall stores" (my capitals) They also said they were "not optimistic they could produce comparable same store sales in the near term". They expect same store sales to drop -10% to -15% in the 3Q. Try telling them and other retailers that gas prices are not a problem for the retail community. I have seen several reports that mall traffic has slowed considerably across the country. Semi stocks took yet another hit today as various analysts continued their cautionary stance for chips. BofA cut their ratings on AMD, INTC, TXN, BRCM and MU. They feel the chip sector has peaked early for this cycle and expect capex spending to decline. They are expecting 2005 to exhibit a cycle trough like those that began in 1995 and 1997. I quickly tracked down a chart for that period and there were some significant declines after the 1995 and 1997 peaks. If they are correct then there are some rough times ahead. SOX Chart - Weekly 1995-1999 SOX Chart - Weekly 2001-2004 Do we have to wait for 2005 to determine what is going to happen in chips? Not if we believe the mid quarter updates currently in progress. NVLS gave their mid quarter update after the bell with mixed results. The stock dropped initially after the bad news but rebounded in later trading. Novellus said customer order patterns were becoming more cautious and the outlook was much different than the upbeat guidance in July. NVLS said they were seeing some push outs of orders, some as far as 1Q of 2005. They were still positive about the outlook but turning cautious as well. Bookings are now expected to be at the low end of the range at $420 million but shipments will be below previous guidance. 3Q revenue was also expected to be lower than previously forecast but only slightly. (they still have time to let investors down slowly) Q3 earnings were lowered to 37 cents compared to the current analyst consensus of 40 cents. On Wednesday CMOS also warned that conditions were deteriorating with order push outs and lower visibility. There is that "visibility" word again. It means we are not getting the orders we want but we are still hoping we can produce a miracle before time to report earnings again. The big dog, Intel, will have their mid quarter update on Thursday Sept 2nd and all eyes will be on how they are handling their inventory problem and how bookings are progressing. The back to school build out season is over and we are moving into the holiday build cycle. Time to get down and dirty on pricing to blow out those excess chips. Expect some killer computer deals this fall. AMR also warned after the bell that conditions were getting worse. With oil still hovering in the mid $40s AMR expects 3Q fuel costs to be $300 million over the same quarter in 2003. AMR said its full year fuel costs would be in the $3.8 billion range. They did say traffic loads were up about +7% but revenue per available seat mile (RASM) would be below last years levels. Obviously a continued rise in oil prices would be very detrimental. Unfortunately that is probably what is going to happen. Crude oil fell again today despite sabotage in Iraq cutting production again. Oil prices rose on the news but fell back again before the close on news of the ceasefire in Iraq. With oil demand continuing to rise on a daily basis this price pullback may only be temporary. I have discussed Hubbert's Peak several times in this commentary over the last several weeks. There is a scenario in the current peak forecast that predicts a push out of that production peak for several years if OPEC allows oil prices to run out of control. I believe we are seeing that today. Because the oil nations can see the future in terms of depletion they are determined to get every last dollar they can before the wells run dry. Does anybody really think this oil "crisis" just happened overnight? Of course not. Oil was $7 a barrel in 1997. What changed? Supply temporarily exceeded demand because OPEC was not managing production correctly. Now they have the price going in the right direction (for them) and there is no end in sight other than a dry hole. Sure prices may fluctuate but the last chapter has already been written. Below is a chart of Hubbert's Peak. The swing point extension is a prediction that very high prices could squelch demand and prolong the pain but the end result is the same. Remember it is not when the last oil well runs dry but when demand exceeds production that all hell will begin to break loose. Currently that is projected for 2007-2008. For a complete description of the projection go here: http://www.hubbertpeak.com/campbell/camfull.htm Hubbert's Peak Chart Not to spend all my space on negative events TIVO beat estimates by 12 cents and Ace Cash Express (AACE) beat by 8 cents. That tells me consumers are short on cash to buy gas and that benefits ACE and they are staying home more and that benefits TIVO. Need I say more? A study I saw last week said a $10 rise in the price of oil subtracted two cents from average corporate earnings and 50% from cash available to spend by consumers. That sounds a little strong to me on the consumer side but we all know almost every blue collar worker is supposedly only two paychecks away from bankruptcy. That may be an over exaggeration but I have heard it many times. Most consumers tend to spend what cash is available and max out their credit cards for the rest. When unexpected events happen there is very little cash available to fill the gap. Using that analogy I guess it is possible for the 50% study to be at least close. Using that same analogy UBS downgraded Capital One today from a buy to a neutral due to credit risks ahead. Capital One supplies credit cards to weaker credits. Considering all the bad news today I think the market performance was nothing short of spectacular. We may not have closed in positive territory but just holding the high ground with nothing positive in the headlines was a major achievement. The Dow closed at 10177 and continued to hold near that strong resistance range of 10200-10250. The Nasdaq was slightly weaker but managed to hold over 1850. Were it not for the SOX losing another -1% the Nasdaq might have made it back to positive territory. There was simply no profit taking from the gains of the last week and not even any sign of real weakness. These performances were even more amazing to me with the Olympics winding down to the closing ceremonies on Sunday and the Republican Convention starting on Monday. Add in the GDP and Greenspan speech on Friday and traders have a mine field of event risk ahead. Personally I am expecting a rally next week once the convention gets underway with no problems and I expect it to continue the week after Labor Day. Maybe the strong underlying bid this week is from institutional investors who are anticipating that rally and trying to sneak into positions ahead of the herd. It makes as much sense to me as any other theory. With only one trading day left before those two big events I would expect some event risk selling on Friday. However what I would expect and what we get may be two different things. With the futures shaking off the NVLS news after the bell and trading back in positive territory only a couple points away from the high for the month there is no evident event fear. One of our readers in the Futures Monitor today probably said it best. If all the bears are already short in anticipation of a drop on Friday are we not in danger of sinking our own boat? I paraphrased but you get the point. With the rebound to SPX 1105 this week every bear in the market was ready to jump on that very strong resistance in anticipation of both profit taking from the rebound and event risk selling into the weekend close. Neither has occurred and there are probably more than a few bears getting very nervous tonight. Should we get a positive GDP surprise tomorrow morning or Greenspan gets out of bed in a bullish mood then there may be some bearish road kill for lunch. I for one will be going long on any break over SPX 1110 if I have to close my eyes and hold my nose to do it. There is strong resistance at 10200-10250 but there was also strong resistance at 10150 and we blew right past it yesterday and never looked back. If bulls need a wall of worry to climb then this is it. Cinch up those climbing spikes and get ready for a run if the markets open higher tomorrow. It will defy logic but then most rallies normally do. If we do get a dip instead it will just a better buying opportunity for Monday. Enter Passively, Exit Aggressively. Jim Brown Editor ================================================================== 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 --------------------------------- Network Appliance - NTAP - close: 20.19 change: -0.37 WHAT TO WATCH: Two and a half weeks ago NTAP tested the $16.00 level and the bottom of its descending channel. Now the stock is up 25% and testing overhead resistance at its simple 200-dma and the top of its descending channel. This could be an entry point and we're betting on the bears. Readers can watch for a drop under $20.00 (or 19.50) and target a move toward $18.00, which would be the middle of the channel. If we're wrong look for a move past $21 and target a 4% move to resistance at $22. --- Pilgrim's Pride - PPC - close: 26.83 change: +0.86 WHAT TO WATCH: PPC has seen a pretty sharp oversold rebound from its drop on Tuesday. It's rival SAFM reported earnings on Tuesday and missed estimates and then guided lower. PPC traded down in sympathy with SAFM but now PPC is rebounding. The current six-week trend is still bearish for PPC but we can watch for a new relative high over 28.25 and target a move back toward $30.00. Or more aggressive traders can try and catch the bounce now, just watch your risk! --- Citrix Systems - CTXS - close: 16.02 change: -0.26 WHAT TO WATCH: CTXS' recent failure at $17.00 and the simple 40- dma produced a new lower high and reinforced the downtrend. We think the stock will test support at $15.00 again and it may not hold this time. The MACD indicator is fading and short-term technicals are already bearish. The P&F chart has cracked support and points to a $12.00 target. ----------------------------------- RADAR SCREEN - more stocks to watch ----------------------------------- IGT $29.06 - IGT tried to rally today but traders sold any strength and shares failed at its simple 10-dma under the $30.00 mark. This looks like an entry point to short it and target a drop to $25. =============================== Market Sentiment =============================== Volume has been very low all week and it is still sinking. A lot of investors have already placed their bets and or moved to the sidelines ahead of the Republican National Convention next week so there isn't a lot to do but sit and wait. "But look at oil!" you say? The sharp decline in oil is great news but with crude down five days in a row I'm surprised that the markets aren't higher. So that brings the question, "Is this just a dip in the bull market for oil?" Or "Are terror concerns about next week's convention really that high and keeping traders out of the markets?" Both questions are valid. Unfortunately, I don't have solid answers for either although I tend to believe a lot of folks are willing to sit out and not do any trading until after Labor Day. Our market wrap column on OptionInvestor.com has been saying that there aren't any strong catalysts to spur any buying until after Labor day for a while now. If you're an optimist then you can feel good that the NASDAQ is back over the 1850 level and the S&P 500 is back above the 1100 mark but that's about it. Yes, there are a number of stocks that appear to have put in a new bottom in August or was that just a new relative low? Until we see some new relative highs the prevailing downtrend is the one we need to be careful with. I might feel better if the Dow Industrials can breakout over 10,200 but the warm fuzzy feeling probably won't last long. Today's market was certainly mixed. Advancing stocks outnumbered decliners 15 to 13 on the NYSE but lost 12 to 18 on the NASDAQ. Likewise up volume outweighed down volume on the NYSE but it was reversed on the tech-heavy NASDAQ. Overall volume was pathetic with less than 2.5 billion shares trading on both exchanges. I will say that the strength in financials has been bullish but the banking indices are now looking over extended and just under resistance. The recent breakout in the Dow Transports is also bullish but the gains have been more muted than I would have expected given the sharp pull back in crude prices. There definitely seem to be a lot of cross-currents in the market right now and none of them are very strong. Everyone seems to be waiting for something. Now whether that's the RNC or the Labor Day weekend is up for debate. Look for tomorrow's trading to be influenced by the GDP revision and the sentiment numbers. Next week's volume is going to be worse than this week with rumors floating around that Wall Street is taking the week off to avoid the traffic delays caused by the RNC security. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 10753 52-week Low : 9233 Current : 10173 Moving Averages: (Simple) 10-dma: 10051 50-dma: 10149 200-dma: 10251 S&P 500 ($SPX) 52-week High: 1163 52-week Low : 983 Current : 1105 Moving Averages: (Simple) 10-dma: 1091 50-dma: 1104 200-dma: 1110 Nasdaq-100 ($NDX) 52-week High: 1559 52-week Low : 1280 Current : 1369 Moving Averages: (Simple) 10-dma: 1356 50-dma: 1406 200-dma: 1441 ----------------------------------------------------------------- CBOE Market Volatility Index (VIX) = 14.91 –0.07 CBOE Mkt Volatility old VIX (VXO) = 14.87 +0.24 Nasdaq Volatility Index (VXN) = 21.60 +0.19 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.84 563,139 472,778 Equity Only 0.70 441,929 309,162 OEX 0.99 21,186 20,831 QQQ 2.77 18,290 50,526 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 54.9 + 0 Bear Confirmed NASDAQ-100 32.0 + 3 Bear Confirmed Dow Indust. 46.6 + 0 Bear Confirmed S&P 500 50.6 + 1 Bear Confirmed S&P 100 49.0 + 3 Bear Confirmed Bullish percent measures the number of stocks in an index currently trading on a buy signal on their point and figure chart. Readings above 70 are considered overbought, and readings below 30 are considered oversold. Bull Confirmed - Aggressively long Bull Alert - Cautiously long Bull Correction - Pause or pullback in upward trend Bear Alert - Take defensive action if long Bear Confirmed - High risk if long, good conditions for shorting Bear Correction - Pause or rebound in downtrend ----------------------------------------------------------------- 5-dma: 0.94 10-dma: 0.82 21-dma: 1.20 55-dma: 1.25 Extreme readings above 1.5 are bullish, and readings below .85 are bearish. These signals don't occur often and tend be early, but when they do, they can signal significant market turning points. ----------------------------------------------------------------- Market Internals -NYSE- -NASDAQ- Advancers 1485 1212 Decliners 1308 1775 New Highs 91 36 New Lows 18 34 Up Volume 653M 349M Down Vol. 544M 799M Total Vol. 1224M 1173M M = millions ----------------------------------------------------------------- Commitments Of Traders Report: 08/17/04 Weekly COT report discloses positions held by small specs and commercial traders of index futures contracts at the Chicago Mercantile Exchange and Chicago Board of Trade. COT data can be found at www.cftc.gov. Small specs are the general trading public with commercials being financial institutions. Commercials are historically on the correct side of future trend changes while small specs tend to be wrong. S&P 500 There has been very little change in the commercial traders' positions. They remain slightly net short while small traders are net long (bullish). Commercials Long Short Net % Of OI 07/27/04 397,354 422,914 (25,560) (3.1%) 08/03/04 401,619 419,429 (17,810) (2.2%) 08/10/04 397,576 419,734 (22,158) (2.7%) 08/17/04 398,472 416,109 (17,637) (2.2%) Most bearish reading of the year: (111,956) - 3/06/02 Most bullish reading of the year: 23,977 - 12/09/03 Small Traders Long Short Net % of OI 07/27/04 135,136 90,433 44,703 19.8% 08/03/04 128,510 88,833 39,677 18.3% 08/10/04 135,689 93,897 41,792 18.2% 08/17/04 138,550 97,792 40,758 17.2% Most bearish reading of the year: (1,657)- 5/27/03 Most bullish reading of the year: 114,510 - 3/26/02 E-MINI S&P 500 In the e-mini contracts we see commercial traders upping both their long and short positions but they remain net bearish. Small traders have done the same by increasing positions overall and they have increased their bullish sentiment. Commercials Long Short Net % Of OI 07/27/04 337,615 429,477 ( 91,862) (12.0%) 08/03/04 340,053 428,736 ( 88,683) (11.5%) 08/10/04 369,547 441,055 ( 71,508) ( 8.8%) 08/17/04 404,065 457,372 ( 53,307) ( 6.2%) Most bearish reading of the year: (354,835) - 06/17/03 Most bullish reading of the year: 133,299 - 09/02/03 Small Traders Long Short Net % of OI 07/27/04 186,211 68,930 117,281 46.0% 08/03/04 195,105 68,717 126,388 47.9% 08/10/04 179,940 89,239 90,701 33.7% 08/17/04 192,939 92,361 100,578 35.3% Most bearish reading of the year: (77,385) - 09/02/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 Commercial traders have increased both their longs and shorts in the NDX but shorts made a stronger comeback. Commercial traders remain net bullish but the strength of their sentiment is decreasing at least as of Aug. 17th. Small traders have turned sharply bullish with a big switch in positions. Commercials Long Short Net % of OI 07/27/04 43,042 35,935 7,107 9.0% 08/03/04 42,771 36,863 5,908 7.4% 08/10/04 43,968 38,351 5,617 6.8% 08/17/04 44,743 41,535 3,208 3.7% Most bearish reading of the year: (21,858) - 08/26/03 Most bullish reading of the year: 25,160 - 06/01/04 Small Traders Long Short Net % of OI 07/27/04 14,543 14,518 25 0.0% 08/03/04 8,995 13,901 (4,906) (21.4%) 08/10/04 10,081 10,858 ( 777) ( 3.7%) 08/17/04 12,256 8,352 3,904 18.9% Most bearish reading of the year: (20,270) - 06/01/04 Most bullish reading of the year: 19,088 - 01/21/02 DOW JONES INDUSTRIAL Commercial traders are at a virtual standstill during the latest period and remain net bullish on the Industrials. Naturally small traders are making the opposite bet and have turned more bearish. Commercials Long Short Net % of OI 07/27/04 27,577 21,427 6,150 12.5% 08/03/04 30,118 25,029 5,089 9.2% 08/10/04 30,634 22,994 7,640 14.2% 08/17/04 30,271 22,809 7,462 14.1% Most bearish reading of the year: (8,322) - 1/16/01 Most bullish reading of the year: 15,135 - 10/16/01 Small Traders Long Short Net % of OI 07/27/04 5,310 6,099 ( 789) ( 6.9%) 08/03/04 4,325 5,212 ( 887) ( 9.3%) 08/10/04 6,450 8,488 (2,038) (13.6%) 08/17/04 4,388 7,089 (2,701) (23.5%) Most bearish reading of the year: (12,106) - 3/09/04 Most bullish reading of the year: 8,523 - 8/26/03 ================================================================= 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 Thursday 08-26-2004 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: AAPL, TKLC, GLW Net Bulls (Tech Stocks) Closed Bullish Plays: SBUX Active Trader (Non-tech Stocks) Closed Bearish Plays: -- OSI Stock Splits Announcements: None Trading Ideas Value Plays With Bullish Signals Breakout to Upside (Stocks $5 to $20) Breakout to Upside (Stocks over $20) Breakout to Downside (Stocks over $20) Recently Overbought With Bearish Signals (Stocks over $20) ================================================================== Stop Loss Adjustments ================================================================== AAPL - tech stock long - AAPL is soaring today up almost 5 percent and breaking out over resistance at $34.00. We're going to raise our stop loss from $30.00 to $31.50. TKLC - tech stock long - Danger Alert! - TKLC dropped 3.88 percent failing at the $19.00 level and dropping to the $18.00 mark. We don't see any specific news but we're starting to wonder if TKLC is building a Head & Shoulders pattern with a sharply slanted neckline. If TKLC breaks under the $18.00 mark we want to EXIT. We're raising our stop loss from $17.49 to $17.95. GLW - tech stock short - GLW is dropping sharply right on cue. The stock is already down more than 5 percent from our picked price. Short-term traders can be ready to take profits off the table. However, with today's 3.7 percent drop under the psychological $10.00 mark we could see GLW hit our target range soon. We're going to set an OFFICIAL exit at $9.40. Lower stop from $11.01 to $10.51. ================================================================== Net Bulls (NB) Tech Stock section ================================================================== ============ Closed Plays ============ Closed Bullish Plays -------------------- Starbucks - SBUX - close: 43.07 change: -2.97 stop: 42.75 Well that does it for our SBUX play. Last night we mentioned that the company reported same-store sales growth of 8 percent but that wasn't enough to make investors happy. Analysts were expecting 10 percent growth or more. The stock gapped down to $43.53 and then quickly traded through our stop loss at $42.75. Volume was massive at almost five times the norm. Longer-term traders may want to keep an eye on SBUX. The stock bounced from its rising simple 100-dma, which was support back in May. If there is no follow through on today's decline this may end up being a bullish entry point. Picked on August 24 at $45.51 Gain since picked: - 2.44 Earnings Date 07/21/04 (confirmed) Average Daily Volume: 3.2 million ================================================================== Active Trader (AT) Non-Tech Stock section ================================================================== ============ Closed Plays ============ Closed Bearish Plays -------------------- Outback Steakhouse - OSI - close: 39.70 chg: +1.07 stop: 40.01 Thursday's rally looks like a fluke. OSI, which had been struggling under its simple 21-dma and building a trend of lower highs suddenly surged higher on above average volume. The company announced same-store sales numbers that looked weak to us but evidently someone was impressed. OSI managed to trade to $40.11 intraday and stopping us out at $40.01. Picked on August 09th at $38.99 Gain since picked: + 0.71 Earnings Date 07/22/04 (confirmed) Average Daily Volume: 629 thousand ================================================================== Stock Splits ================================================================== Announcements ------------- None ================== Trading Ideas ================== This section contains stocks that meet criteria which may make them of interest to long and short side traders. These are not recommendations, nor have they been reviewed by PremierInvestor editors for investment potential. However, each of them has technical and fundamental characteristics that make them worthy of further review by traders and investors looking for fresh ideas. New stocks will appear daily following the market close. Value Plays With Bullish Signals --------------------------------- Ticker Company Name Close Change UBS UBS Ag 68.31 +0.66 GSK GlaxoSmithKline 40.90 +0.62 CVX ChevronTexaco 94.52 +0.72 FNM Fannie Mae 73.97 +0.60 MWD Morgan Stanley 51.94 +0.96 SNY Sanofi-Aventis 35.41 +0.62 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- CBK Christopher & Banks 17.75 +1.01 GRA W.R. Grace 7.25 +1.10 PUMP Animas 17.11 +1.41 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- GILD Gilead Sciences 69.24 +2.42 AAPL Apple Computer 34.66 +1.61 MIK Michaels Stores 56.86 +1.14 CAM Cooper Cameron 50.43 +1.29 EYET EyeTech Pharma. 39.20 +3.92 UOPX Univ. of Phoenix 88.51 +6.69 PCH Potlatch Corp 43.70 +3.45 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- SBUX Starbucks 43.07 -2.97 AOS A O Smith 23.91 -2.31 SAM Boston Beer 23.46 -3.94 BMHC Building Materials 22.65 -1.35 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- LMT Lockheed Martin 53.30 -1.11 PDCO Patterson Co 74.85 -1.55 MSA Mine Safety Appliance 37.00 -2.70 ZEUS Olympic Steel 21.96 -2.22 ================================================================= 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.
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.
To ensure you continue to receive email from Option Investor please add "firstname.lastname@example.org"
Option Investor Inc