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Daily Newsletter, Monday, 09/13/2004

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PremierInvestor.net Newsletter                   Monday 09-13-2004
                                                    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: Higher Highs 
Watch List:  Natural Foods to Biotech


===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
 
===============================================================

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

Higher Highs
Jonathan Levinson

The markets marched higher today on solid volume, breaking 
Friday's highs and setting new highs as the volatility indices 
scoped multiyear lows.  The indices peaked at lunch and began a 
slow rollover that picked up speed until the final half hour of 
the cash session, from which time the indices began a sharp 
bounce to correct the better part of the afternoon weakness.

The strength today extended what had become a trending move 
across the intraday cycles and continued the upside whipsaw in 
the daily cycles that we followed last week.  The lack of 
pullback was sufficient to generate the first stochastic buy 
signals on the weekly timeframe, the first such signal since 
before the summer.


Weekly Dow Chart


The Dow closed flat for the day, up 1.69 at 10314, failing at a 
high of 10348.  The move higher started this week's candle just 
below the upper descending resistance line of the bull flag in 
play from the January highs.  A move above the 10350-10400 zone 
on a weekly closing basis would set up a move to 10500 
resistance, but the bull flag breakout would imply a move to the 
year highs and beyond.  Confirming this bullish picture is a 
slightly higher stochastic and Macd histogram low as highlighted 
above, forming a bullish oscillator divergence.  A rollover below 
the 10300 level would start a retracement of the gains over the 
past month, but on this weekly timeframe, the trend is in the 
process of reversing to the upside.


Daily Dow Chart


The higher open on the Dow kept the day's candle right on the 
steeply rising daily trendline, but all of the day's gains had 
blown off in a doji spike by time of the cash close, setting up a 
bearish gravestone doji formation.  A break below today's low of 
10292 would bring us closer to a bearish Macd cross to confirm 
the rollover in the 10-day stochastic.  Next support is at 10260, 
followed by 10190-10200.  The daily cycle oscillators combine 
with today's upper doji shadow to paint a picture of an imminent 
daily cycle downphase, but it will take a close below 10260 to 
break last week's range and put a bearish tint on the 
consolidation.  The weekly cycle buy signal discussed above 
suggests that a daily cycle downphase from here should find 
support at a higher low- how high or how low that daily cycle 
bottom proves to be will tell us a great deal about the fate of 
the bullish weekly formation that bulls have been eyeing all 
year.


Weekly Nasdaq Chart


The Nasdaq outperformed the Dow again today, closing higher by 
16.1 points at 1910.4.  The high was at 1919.21, but bulls were 
happy to have closed above the 1890 confluence line.  As on the 
Dow, the lack of pullback for the past month was enough to 
generate the first weekly cycle buy signals.  Confluence, 
Fibonacci and trendline resistance line up at the 1940 level, 
above which bulls will be looking to the 2000 and 2025-30 levels.  
As with the Dow, a break above the descending upper flag 
resistance line has very bullish implications, suggesting that 
the decline this year was merely corrective following 2003's 
impulsive rally.  While the decline this year looks longer than a 
bull flag would ideally be, the upper resistance line is 
nevertheless set up as a key watershed between bull and bear 
territory.


Daily Nasdaq Chart


The daily Nasdaq looks considerably more bullish than the daily 
Dow, with an unfilled upside breakaway gap printed by today's 
open.  On this chart, there's rising resistance in the 1930 area 
but if the bulls manage another advance tomorrow, the 10-day 
stochastic should complete its upside whipsaw with a new buy 
signal.  That would be a very bullish development, but as noted 
last week in the Market Monitor, bulls need to continue their 
advance.  The upside whipsaw in the 10-day stochastic stopped 
what had been daily cycle downphase, but until the previous 
oscillator high is either matched or exceeded, there remains the 
risk of a bearish divergence against the higher price high.  A 
rollover in price from here would suggest a strong daily cycled 
downphase to follow, with the implication that the daily cycle 
upphase from the August low has been a corrective bear flag.  
1870-80 is key downside support, following which the lower rising 
trendline and the 1835 levels will be in play.


Weekly TNX Chart


Treasury  bonds rose today, with the ten year note yield (TNX) 
declining 2.9 basis points to close at 4.151% for a .69% move on 
the day.  On the weekly chart above, this week's candle 
(comprised solely of today's data) remained within the lower end 
of last week's range, and appropriately, there were no particular 
sharp or impressive moves in either direction.  Rising weekly 
support at 4.1% remains unbroken, with the lower spike 2 weeks 
ago repelled with authority from the lower line, bouncing higher 
in a doji hammer.  The weekly cycle oscillators are turning up, 
with the 10-week stochastic printing a buy signal today.  This 
suggests that the lower wedge support line is likely to hold on 
this run, and that higher yields / weaker bonds are on deck, at 
least in this weekly timeframe.  A break below 4% would suggest a 
bear wedge breakdown targeting the 3.1% support level, while a 
bounce from the line will have resistance at 4.4%, 4.88% and 
ultimately 5% at the top of the wedge.


Weekly chart of Crude oil



Crude oil rose strongly today, adding 2.45% or 1.05 to close the 
day session at 43.85 on the Nymex.  The weekly chart of front-
month crude futures shows a bearish stochastic divergence, and 
the sharp break from the bear wedge apex 4 weeks ago suggests 
more weakness to come.  However, the bearish divergence is of 
limited reliability because the weekly stochastic has been 
trending in overbought for months.  I would be more impressed 
with a break below the rising channel support confirmed with a 
move below 41 confluence.

The media attributed today's strong rise to the threat posed by 
Hurricane Ivan, whose flight path has edged westward and now 
threatens the Gulf of Mexico.  Hurricane Ivan, which remains the 
strongest of this year's series of hurricanes and is still 
measuring force-5, threatens not only damage to key 
infrastructure in the Gulf, but also the threat of downtime due 
to evacuations and delays.  Reuters reported that energy 
companies have already moved more than 3,000 workers off rigs in 
the area as a precaution.

Compounding this turn of events was uncertainty due to the 
plethora of stories to cover last Thursday's explosions in North 
Korea.  The story was reported after the fact as being one 
explosion with a "mushroom cloud" that left a crater and a 
mushroom cloud more than 3 kilometers wide.  The uncertainty was 
nearly total, with National Security Adviser Condoleezza Rice 
saying, "We don't think ... that it was a nuclear event. But 
we're looking at it and we'll get further analysis.  There are 
... all kinds of assessments that are going on. Maybe it was a 
fire, some kind of forest fire."  The uncertainty resolved 
somewhat today, with North Korean Foreign Minister Paek Nam-sun 
saying that that the explosions were deliberately set as part of 
the construction of a hydroelectric dam project.  North korea has 
invited foreign envoys to visit the scene and see for themselves, 
but it remains a mystery why no statements were made 4 days 
earlier to explain a matter of global concern.

The Commerce Department reported that revenues in three major US 
service industries accounting for approximately 15% of the US GDP 
increased by 5.4% from Q1 to Q2 2004, reaching $598.1B.  The data 
is the conclusion of a new quarterly survey covering following 
sectors: professional, scientific and technical services;  
information services; and administrative, support and waste 
management services.

At 2PM it was announced that the US federal budget deficit 
declined to 41.1B in August, down from the 76.6B last August. The 
cumulative deficit for FY 2004 is 436.9B with one month to go.  
At this time in 2003, that figure was 401B.  The 41.1B deficit 
exceeded the 40B level projected by the Congressional Budget 
Office. 

U.S Airways (UAIR) is seeking protection from its creditors for 
the second time in the past 10 years, filing a Chapter 11 
proceeding over the weekend.  The filing comes following the 
airline's failed attempt to obtain cost concessions from labor 
unions, some of which Reuters reported to be key shareholders of 
the company as well.  The company has assets of approximately 
8.8B and liabilities of 8.7B, though those assets include some 
2.5B of goodwill.  Another 1.45B of its assets is cash and cash-
equivalents.  Later in the afternoon, the Association of Flight 
Attendants-CWA (the union represent UAIR flight attendants) 
claimed that it never received the full details of the company's 
latest contract proposal, and that there were important delays in 
its receiving information from the company.  UAIR closed lower by 
29.45% at 1.03.

For tomorrow, bulls will hoping for a shallow or sideways 
correction to relieve the overbought intraday cycles, and 
particularly the 30 minute cycles which were in a downphase at 
the cash close.  The daily cycle is still up for grabs on the 
Nasdaq and Dow, both of which suggesting that the easy part of 
the recent rise has been seen.  On the other hand, the weekly 
cycle, which obviously lags its shorter-term counterparts, is 
only now printing buy signals.  That's a bullish sign for longer 
term traders, and sets up a bullish expectation for higher highs 
and higher lows for the daily cycle.  My own feeling is that a 
daily cycle correction, most likely to a higher low, is the next 
major move on the daily horizon.  If I'm wrong and the daily 
cycle begins trending in overbought from here, we will be much 
more likely to see a retest of the year highs within the context 
of a weekly bull flag breakout led by the Dow.  For that reason, 
the trendlines on the weekly chart highlighted above are the key 
upside levels to watch in the event of further strength this
 week.


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

Hansen Natural - HANS - close: 25.56 change: -2.92

WHAT TO WATCH: Whoa!  That's a really big bearish engulfing 
candlestick painted today.  HANS gapped higher and ticked above 
the $30.00 mark and then completely failed.  Volume soared to 
almost seven times the average.  This is a major bearish reversal 
signal.  We would watch for a breakdown under $25.00 and target a 
drop towards the simple 100-dma (21.75) and potentially the $20 
mark.




---

Dollar Tree - DLTR - close: 26.06 change: +0.60

WHAT TO WATCH: DLTR has broken through overhead resistance at its 
simple 50-dma and the $26.00 level.  The rally today was fueled 
by better than average volume and it would appear that DLTR is 
trying to change direction.  The stock has been suffering under a 
long-term trend of lower highs since late 2003.  A breakout over 
its simple 100-dma near $26.50 would be a good start to a new 
trend change.  Just be careful and watch for more resistance at 
its 200-dma's overhead.  The P&F chart remains bearish. 




---

Taro Pharmaceutical - TARO - close: 23.32 change: +0.73 

WHAT TO WATCH: The BTK biotech index was one of Monday's best 
performing sectors.  TARO outpaced most of its peers with a 3.2% 
rally.  We feel that bulls can watch TARO for a breakout above 
the bottom of its gap.  If TARO can push through the $24.75-25.00 
level then we can play a "fill the gap" strategy and target the 
$30.00 level.  However, the bottom of the gap could be tough 
resistance and bears will be watching for a failed rally to short 
it back to $20.




---

Ask Jeeves - ASKJ - close: 27.00 change: +1.62

WHAT TO WATCH: Wow!  News that Fidelity took a big position in 
GOOG's IPO sent the Internet search stocks higher.  ASKJ added 
more than 6.3% and broke through its simple 40-dma.  Volume was 
above average and suggests more upside.  Watch for a breakout 
over resistance at $28.00 and/or the simple 200-dma ($28.95) 
still overhead.  The P&F chart suggests this might be a good 
place to consider speculating on a bounce with ASKJ testing P&F 
support.






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

OVTI $12.97 +0.85 - OVTI, a semiconductor stock, soared more than 
7 percent on Monday.  The breakout over $12.50 looks good but 
shares look overbought.  Watch for a pull back and consider a 
bounce from $11.00 (or short the drop to $11.00, which would be 
very aggressive). 

AMZN $40.01 +1.44 - Surprise!  AMZN has rallied more than 3.7% on 
Monday with decent volume.  The breakout over the 40-dma was 
certainly a surprise.  Watch for a new high over $41.00.
 


=================================================================
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 09-13-2004
                                                    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: None  

Stock Splits
  Announcements: WBNK       


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

None


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

WBNK cashes in with a 2-for-1 stock split 

This afternoon a few minutes after the closing bell Waccamaw 
Bankshares (NASDAQ:WBNK) announced that its Board of Directors had 
approved a 2-for-1 stock split.

The split will be in the form of a stock dividend payable on 
September 30th, 2004 to shareholders on record as of September 
15th. 


About the company:
Waccamaw Bankshares, headquartered in Whiteville, NC serves 
Southeastern North Carolina with a network of six financial 
centers and offers a full line of consumer and commercial banking 
services. Waccamaw Bank's offices are located in Whiteville, 
Wilmington, Holden Beach, Shallotte, Tabor City, and Chadbourn. 
(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

TOT     Total Sa (ADS)            100.70     +0.58
KMB     Kimberly Clark             67.58     +0.55
MET     Metlife Inc                38.73     +0.57
OXY     Occidental Petroleum       53.48     +0.88
COF     Capital One Financial      73.30     +0.75
MAS     Masco Corp                 33.47     +0.60

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

AVT     Avnet Inc                  18.02     +1.02
MKSI    MKS Instruments            15.74     +1.88
ULCM    Ulticom Inc                13.16     +1.02
AUDC    Audiocodes Ltd             12.78     +1.28
ACTL    Actel Corp                 15.28     +1.01
INTX    Intersections              16.74     +2.27

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
XLNX    Xilinx Inc                 29.19     +1.17
BRCM    Broadcom                   30.30     +2.60
GWW     W.W.Grainger               55.41     +1.74
JBL     Jabil Circuit Inc          22.79     +1.01
NVLS    Novellus Systems           26.62     +1.04
MERQ    Mercury Interactive        37.19     +2.05
TRMB    Trimble Navigation         30.18     +2.20

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

AZN     AstraZeneca                41.80     -1.94
TRB     Tribune Co                 40.00     -1.35
MHS     Medco Health Solutions     30.67     -1.23
CBT     Cabot Corp                 36.74     -1.04

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

APSG    Applied Signal Tech Inc    34.31     -3.26
BMHC    Building Materials         23.53     -2.45
HANS    Hansen Natural             25.56     -2.92
WLB     Westmoreland Coal          26.85     -1.73
SKE     Spinnaker Exploration      34.43     -0.86
SMT     Summit Properties          26.70     -0.42
 


=================================================================
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.








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