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Daily Newsletter, Wednesday, 09/15/2004

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PremierInvestor.net Newsletter               Wednesday 09-15-2004
                                                   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: Storm Warnings
Watch List:  Bottles to Tankers and more!

===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
      09-15-2004           High     Low     Volume   Adv/Dcl
DJIA    10231.36 - 86.80 10317.05 10228.78 1.58 bln 1127/1642
NASDAQ   1896.52 - 18.88  1908.38  1892.08 1.58 bln 1133/1840
S&P 100   542.63 -  4.30   546.93   542.57   Totals 2260/3482
S&P 500  1120.37 -  7.96  1128.33  1119.74
SOX       380.78 - 12.72   393.50   379.81
RUS 2000  568.52 -  2.44   570.97   566.53
DJ TRANS 3215.78 -  9.25  3227.71  3208.71
VIX        14.64 +  1.08    14.67    13.68
VXO (VIX-O)14.77 +  1.22    14.79    13.78
VXN        20.30 +  0.81    20.53    19.82
Total Volume 3,161M
Total UpVol    839M
Total DnVol  2,287M
Total Adv  2260
Total Dcl  3482
52wk Highs  148 
52wk Lows    50
TRIN       1.83
PUT/CALL   0.94
===============================================================

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

Storm Warnings
Linda Piazza

Earnings warnings, economic numbers, results of an OPEC meeting,
and discussions of Ivan's impact bombarded investors Wednesday. 
Along the Gulf Coast, homeowners and businesses prepared for the
coming storm.  On Wall Street, investors did likewise, not liking
all the news that bombarded them.  

That news actually began with Xilinx's (XLNX) warning after the
close Tuesday and continued through the morning hours Wednesday. 
Not all news was bad.  The HMO, the Morgan Stanley Healthcare
Index, posted a strong gain.  Component stock Pacificare Health
(PHS) announced a buyout of American Medical Security (AMZ). 
Investors liked the deal as both stocks soared, even though PHS
will pay a 41 percent premium to AMZ's closing price on Tuesday
and assume the company's debt.  Analysts may have something to
say about the terms of the deal, but PHS's confidence that the
deal will contribute to net income caused it to raise its 2005
earnings forecast.  

Even a hurricane's winds blow first one direction and then the
other as the eye passes.  Damage is still done, and so it was to
the markets in Wednesday's trading.  Programmable-chip
manufacturer Xilinx's (XLNX) warning damaged sentiment in the
semiconductor sector.  The company joined INTC, TXN, NSM and LSI
in trimming revenue estimates.  UBS did its part to damage that
sentiment, too, cutting its rating on Nvidia Corporation (NVDA)
to a reduce rating on valuation concerns.

By midday, the SOX had dropped to the converging 20- and 30-
sma's, erasing all the week's gains and appearing to produce an
evening-star reversal pattern.  That's where the SOX closed, too.

Annotated Daily Chart of the SOX:

 

Several chart characteristic of potential importance show up
here.  The confirmed evening-star formation hints that the SOX
could head lower, but first the index has to push past the
converging 20- and 30-dma's.  Those averages could instead
support it.  Bullish divergence was confirmed as the SOX dipped
to the early September high.  That divergence, coupled with the
level from which the SOX turned lower again, suggests the
possibility of an inverse H&S forming.  Should the SOX
consolidate or stop any pullback above or near 360, that
possibility is preserved.  A dip past 360 tends to negate the
possibility with a dip past the early September low confirming
the bearishness.  Any SOX bears should have profit-protecting
plans in place from the SOX's current level down to 360 in case
the SOX does complete that inverse H&S.  

As of tonight, a push above 400 would be required for a
confirmation of the inverse H&S, but the neckline rises.  Any SOX
bulls should have profit-protecting plans in place as the 50-dma
and then 400 are tested in case the SOX turns lower again at the
neckline.

Some indices withstood the day's storm of economic numbers and
news better than others.  The day's economic releases began with
the MBA Refinancing Index at 7:00.  Headlines announced the
decline in mortgage application volume but pegged the decrease on
a holiday-shortened week, with that cause buffering the effect of
the decline.  The composite number fell a seasonally adjusted 2
percent from the previous week's.  The seasonally adjusted
Purchase Index and Refinance Index fell 4.3 and 1.2 percent,
respectively.  The average interest rate for 30-year, fixed-rate
mortgages fell to 5.68 percent from the previous week's 5.79
percent.  The Dow Jones US Home Construction Index, the DJUSHB,
withstood potential storm winds relatively well, losing only 0.52
percent and closing well off its low of the day.  The index's
pattern forms a possible bearish rising wedge on the daily chart,
so it's possible that ill winds in the form of lower home sales
could yet topple it.  So far, this index continues to defy
expectations of a deeper decline, however.

Earnings before the open included BBY's, with the headlines 
touting the beat-by-a-penny earnings and the increase in Q2's
profit.  Other headlines noted that cost controls had been
responsible for those earnings.  Improved margins also
contributed, however.  Earnings were 46 cents per share,
including charges of 7 cps for asset impairments.  According to
at least one article, analysts had expected earnings of 52 cps,
but apparently that expectation had been a before-charges number. 
At $6.08 billion, revenue slightly topped the $6.06 billion
expected.  The company expects to achieve earnings of 41-47 cps
in Q3 and $2.80-2.93 per share for the full year against
analysts' expectations of 44 cps for the quarter and $2.90 per
share for the full year.  BBY not only withstood any economic
storm winds, but also gapped above its 200-sma and posted a 4.61
percent gain.

The strength in BBY was offset by a blue chip warning.  Perhaps
to be expected after bottling group Coca-Cola Enterprise's (CCE)
warning last week, Coca-Cola (KO) warned before the open.  KO
said that H2 earnings will not meet expectations, blaming weak
volumes in North America and Germany.  The summer had been
unseasonably cool and rainy in Western Europe, the company noted. 
Merrill Lynch later downgraded KO to a neutral rating from a buy.

That blue chip warning also damaged sentiment, causing some to
worry about the quality of earnings in the coming quarter.  More
storm warnings gathered, and KO gapped lower.  This blue chip's
decline helped send the Dow below the 200-sma early in the
session.  KO, INTC, and MSFT led the volume decliners in the Dow,
with KO closing lower by 3.98 percent.

Other companies lowering guidance included Celestica (CLS) and
Tribune Company (TRB).  Not even Oracle's originally well-
received earnings and strong climb Wednesday could help protect
the techs from a buffeting as Goldman Sachs cut its rating of the
IT hardware systems and software sectors to a neutral rating. 
The GSO, the GSTI Software Index dropped 0.79 percent, but
remained within the trading range established this week.

Economic numbers continued at 8:30 with the release of 
September's Empire State Manufacturing Index and July's Business
Inventories at 8:30. The prior number for the Empire State
Manufacturing Index had been 12.6, with expectations for
September's number ranging from 20.0-22.0, and with the 28.3
number surprising to the upside.  Even that strong number had
negative import, though, with the optimistic winds created by
this number soon swinging the other direction.  Some considered
that number's strength to have increased the chances that
September's FOMC meeting will result in another rate-hike
decision. 

Business inventories gained 0.9 percent in June, but were revised
up to 1.1 percent.  July's inventories climbed 0.9 percent
against an expectation of a 0.8 percent increase.  This was
touted as the strongest two-month gain in four years.  The
inventory-to-sales ratio climbed to 1.32.  Retail inventories
rose 0.6 percent in July. 

A rise in inventories can be viewed from two perspectives, one
suggesting it as a positive as businesses gear up for anticipated
demand.  When that rise outpaces sales gains, it's difficult to
view that rise as a positive, however.  Since the components of
this number, with the possible exception of retail inventories,
are known prior to its release, the business inventories number
wasn't expected to be a market-moving number. The 1.8 percent
rise in auto inventories might have damaged sentiment, however,
reviving worries about anticipated cuts in production. U.S. car
manufacturers dropped.

More attention was expected to focus on the rest of the morning's
numbers.  At 9:15, the Federal Reserve released figures on
August's industrial production and capacity utilization. 
August's industrial production rose 0.1 percent against an
expected rise of 0.4 percent, but it rose to 116.6 on the
government's index, with that number passing up the previous high
recorded in June 2000, before the recession.  Capacity
utilization was steady at 77.3 percent after July's number was
revised up to 77.1 percent, matching expectations.  Despite the
belief that more attention would focus on these numbers, markets
appeared to pay little attention.

Near 10:30, the Department of Energy released crude, distillate,
and gasoline inventories with the American Petroleum Institute
releasing its figures near the same time.  The DOE figures showed
crude inventories dropped 7.1 million barrels, distillate
inventories climbed 1.7 million barrels and gasoline inventories
fell by 1.6 million barrels.  The drop in crude supplies was
termed "hefty" in one article.  The API also showed a drop in
crude inventories, with their figures detailing that drop at 2.3
million barrels.  The API noted a rise in gasoline inventories by
700,000 barrels.  DOE and API figures almost always differ, but
they didn't differ in their revelation that crude inventories had
dropped more than expected.  Storm winds stiffened, although most
damage had already been done to the markets by the time those
numbers were released.  

An OPEC meeting had already focused attention on crude and
related stocks, a focus that was heightened by Ivan, continued
attacks on the pipelines in Iraq and this week's CSFB Small Cap
Energy Conference and Peters & Company North American Oil and Gas
Conference.  OPEC's outcome had been intended to calm the storm
winds.  

OPEC's president quantified the fear premium in the price of
crude, stating that the premium was in the $10-15 range per
barrel.  He labeled the degree of worry about shortages
unwarranted.  OPEC left the price band at $22-28 a barrel, with
the decision as to whether to increase the price band postponed
to the December 6 meeting.  OPEC also attempted to calm worries
by upping the production quota by 1 million barrels a day, with
that increased production to begin in November.  Some analysts
noted that the official increased production to 27 million
barrels a day will have little impact since OPEC members already
unofficially produce 0.4 million barrels a day more than new
quota.  An OPEC member put a different spin on that conclusion,
though, saying that OPEX had "officialized" the increased
production.  

Some immediate impact did occur, however, with crude prices
dipping initially until the decrease in inventories blew that
fear premium higher again after 10:30.  Later in the afternoon,
OPEC's president made another attempt to calm the winds, saying
that he expected 2005's demand to be less than that in 2004. 

Ivan also focused attention on crude, with major petroleum
companies and smaller independents closing offshore and onshore
facilities or going on storm-alert status.  The U.S. Minerals
Management Service noted at midmorning that 50 percent of the
manned platforms in the Gulf of Mexico had been evacuated and 60
more rigs shut down.  Forty-six percent of the distillation
capacity for the U.S. is located in the four-state region
possibly impacted by Ivan, with Texas and Louisiana accounting
for all but three percent of that capacity.  By midmorning,
damage was already being reported on some of those rigs, with
Ivan's full force not yet impacting the industry's production
capacity.  

Crude futures for October delivery again appeared to bounce off
the 50-dma, with prices climbing above $45.00 but they didn't
hold those levels.  

Annotated Daily Chart of Crude Futures for October Delivery:

 

Crude futures may not have been able to sustain gains because
Ivan's impact on the industry will be deemed transitory and
because of those soothing words out of the OPEC meeting.  As long
as the contract remains above the 50-dma on a closing basis,
however, the possibility remains that it may break to the upside
rather than the downside.

Ivan's impact will not be on the energy industry alone, of 
course.  Ports are being shut down along the Gulf.  Some ships
were diverted to other Gulf ports and some reversed course. 
Shipbuilders have shut down facilities.  Any industry relying on
cargo shipments might be impacted.  Still, despite the possible
impact on stocks in the TRAN, the Dow Jones Transportation Index,
the index held close to recent highs until the last couple of
hours of trading.  It closed at the low of the week, but didn't
suffer major technical damage.  It's been consolidating just
below possible monthly support/resistance from the late 90s but
holding above 3200 and the early July swing high.  Bearish
price/divergence appeared on the recent move above the July swing
high, so watch for a possible dip in this important index.  A dip
below 3200 might damage sentiment.  

The damage from earnings warnings and worries about Ivan's impact
was too much for the Dow to sustain, with that index dropping
below the 200-sma by midmorning.

Annotated Daily Chart of the Dow:

 

The Dow could drop as far as the 100-dma and still preserve the
possibility that the current decline is a bull flag decline.  The
first downside target then appears to be 10,184-10,200, with a
break of that level perhaps sending the Dow down to test the
converging 30- and 50-sma's.  Although the above QCharts-drawn
regression channel has an upper boundary just under 10,400, a
simple trendline drawn across this year's swing highs crosses at
about 10,340.  A move above the September 7 high of 10,363 would
be needed to confirm an upside breakout.  Such a breakout would
soon face resistance from the late June highs of 10,487.

MSFT and INTC also impacted the Nasdaq, turning it down after two
days of testing its 100-sma.  The Nasdaq clung to 1900 and the
200-ema at 1904.38 much of the day, but closed at 1896.52,
creating an approximation of an evening-star pattern.

Annotated Daily Chart of the Nasdaq:

 

The Russell 2000's test of its 200-sma and subsequent bounce near
10:35 might have helped to steady other markets during the midday
period.

Annotated Daily Chart of the Russell 2000:

 

A move above Monday's high would confirm a breakout above the
descending regression channel in which the Russell 2000 has been
trading, while a move below the 200-sma, confirmed by a move
below 566, might send the Russell down to test 560-563 and then
552-554.  Bears might have a profit-protecting plan in mind if
the Russell 2000 should test that 552-554 zone and bulls might
have one in mind if the index should test 588-590.

The SPX still remains an index to watch, however.  Unlike the Dow
and the Russell 2000, this index did not retest its 200-sma. 

Annotated Daily Chart of the SPX:

 

If markets should continue to decline, traders should set alerts
for an SPX test of its 200-dma, as tests of that average can and
have moved the markets.  A breakout above the top of the
ascending regression channel, at about 1132 on the above QCharts-
drawn chart but at 1130 by some others' calculations, would
signal an upside breakout, to be confirmed by a move above the
June high.  Any entering bullish trades on an upside breakout
should keep stops tight until that June high is bypassed.  

A break below the 200-sma on a closing basis would likely damage
sentiment and strengthen storm warnings related to the often-seen
September and October declines.  As Jim Brown noted on the
OptionInvestor Market Monitor, that range between the top
trendline of the descending regression channel and the 200-sma is
a risky one to trade.

Will markets continue to decline?  Forecasters must warn of an
approaching storm, and that warning must encompass all possible
landfalls.  Obviously, however, not all those warnings are
realized, and so they might not be with the market's storm
warnings offered by the recent lows in volatility indices, the
often-seen dismal market performance in September and October,
and the earnings warnings that are beginning to appear.  

However, many indices produced reversal signals at the tops of
their regression channels.  The VIX and VXO saw strong moves up
from their recent lows, a warning for those with bullish hopes. 
The VXN's move was not as pronounced.  While traders must be open
to the possibility that this storm will not bring a decline but a
consolidation that withstands the pressure, or that indices could
even surge above the year-long descending trendlines seen on
some, this does not yet appear to be a good time to be nurturing
bullish hopes for the immediate future.  Let price action show
you if bullish hopes are to be realized by producing those needed
breakouts.

For tomorrow, investors have two reasons to anticipate the
possibility that markets might not go much of anywhere.  One is a
tendency for large-range days to be followed by small-range days. 
Another is related to opex, with markets sometimes ratcheting
down on opex Thursday, with S&P 500 options ceasing to trade as
of Thursday's close.  

A couple of factors argue against that tight-range consolidation
theory, however.  Along with news of Ivan's damage, investors
will be treated to overnight discussions about the implications
of the Dow's close beneath its 200-sma.  Although savvy investors
know that the Dow is not the broadest of markets, it draws much
attention.  If the decline should continue, however, bears should
pay special attention if the Russell 2000 and/or SPX should test
their 200-sma's, as those would be potential bounce points. 
Until breakouts occur to the upside, this appears to be a time
for selling rallies rather than buying support, but watch for
those potential breakouts.

In addition, economic reports and events have the potential to
move fragile markets.  Economic reports Thursday begin with the
usual 8:30 release of initial jobless claims, with last week's
release cheering with markets with a drop to 319 thousand.  That
figure will also be accompanied by the 8:30 release of CPI, with
prior numbers at a drop of 0.1 percent for the headline number
and a rise of 0.1 percent for the ex-food and energy number. 
Tuesday morning, I listened to a report on a survey of small
business owners, with a majority of those owners saying that they
felt able to pass higher costs on to consumers and were planning
on raising prices.  We'll see if any of that confidence has
filtered down into the CPI numbers yet.

Additional numbers include the July Treasury Capital Flows at
9:00 and Natural Gas Inventories at 10:30.  Perhaps more closely
awaited will be the September Philly Fed Index at noon, with that
index last showing a 28.5 reading.  At 1:00, the Fed's Gramlich
is scheduled to report on oil and policy matters in a talk in
Kansas City, with the market perhaps reacting to Gramlich's take
on the oil's effect on the economy, unless Ivan's anticipated
swath through the U.S. might somehow impact Gramlich's
appearance. Money supply will be reported after the market's
close, at 4:30.   


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

Coca-Cola Enterprises - CCE - close: 19.08 change: -0.44

WHAT TO WATCH: It has been a tough few weeks for KO and its 
bottling company CCE.  The big drop was back in late July but now 
KO is warning again. CCE's recent drop through $20.00 was bearish 
enough but now today's bearish engulfing candlestick looks like 
an entry point to short the stock.  Volume was well above normal 
and its MACD is nearing a new "sell" signal.  We would target the 
$17.00 level.




---

Career Education - CECO - close: 31.97 change: -1.77

WHAT TO WATCH: Beleaguered education stock CECO has been 
struggling under resistance at its simple 50-dma.  Now the stock 
is rolling over and its oscillators are looking bearish.  The 
MACD is nearing a new "sell" signal.  Aggressive traders may want 
to consider positions now.  We're going to watch for a drop under 
round-number support at $30.00. 




---

Seacor Holdings - CKH - close: 45.06 change: +0.57

WHAT TO WATCH: If you're looking for an alternative way to play 
the oil sector check out CKH.  The company runs an oil tanker 
business.  We like the breakout to new two-year highs.  Plus, the 
move looks like a bullish breakout from an inverse head-and-
shoulders pattern.  The P&F chart is very bullish with a fresh 
quadruple-top breakout buy signal and a $54 target.  We do have 
one note of caution.  Volume is extremely low!  Low enough we 
normally would avoid the stock.




---

Digital Recorders Inc - TBUS - close: 5.49 change: +1.18

WHAT TO WATCH: The speculative traders out there may want to give 
TBUS another look.  Four days ago the stock broke through 
technical resistance at its simple 200-dma.  After some 
consolidation the stock is rocketing higher again on big volume.  
Today's 27 percent gain smells like a short squeeze and TBUS does 
have above average short interest.  With only 1.7 million shares 
outstanding shorts could be panicked to find shares to cover.
Volume today was 4.8 million shares.




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

AIV $34.70 +0.33 - Not sure which direction this one is going.  
AIV has a tendency to run for several days in a row.  It's seen 
some profit taking recently but is bouncing from 
support/resistance at $34.00.

HRL $27.19 -0.44 - After spending several days trying to breakout 
over $28.00 and its exponential 200-dma HRL is now rolling over.  
We would look for it to test the $25.50 region.

PETM $29.86 +0.74 - PETM bucked the overall market weakness today 
and broke out over some key moving averages.  PETM was trading 
above round-number resistance at $30.00 before some afternoon 
weakness.  Watch for new strength and consider longs over $30.50 
with a target at $33.85-34.00.
 

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DISCLAIMER
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This newsletter is a publication dedicated to the education
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only. The information provided herein is not to be construed
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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
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presented. All investors should consult a qualified professional
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Do not duplicate or redistribute in any form.







PremierInvestor.net Newsletter               Wednesday 09-15-2004
                                                   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:  ARB, ETM, DPH, PCLN, ICOS

Net Bulls (Tech Stocks)
  New Bearish Plays:    IMN


Active Trader (Non-tech Stocks)
  New Bearish Plays:    SMRT

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

ARB - tech stock short -
  We're still un-triggered but we're expecting ARB to show
  some weakness tomorrow.
 
 
ETM - non-tech short -
  ETM is nearing new lows and we're going to drop our
  stop loss from $38.51 to $37.51
 
 
DPH - non-tech short -
  A downgrade from Morgan Stanley sent shares of DPH lower
  today.  The stock opened at $9.01 and quickly dropped to 
  $8.61 before bouncing.  We were triggered at $8.89.  DPH's
  MACD indicator has produced a new "sell" signal.
 
 
PCLN - high risk/reward short -
  PCLN is rolling over under resistance at $21.00 and its 
  simple 40-dma again.  This looks like an entry point for new
  shorts.
 
 
ICOS - high risk/reward short -
  ICOS did bounce from its short-term trendline of support
  but now that bounce is fading.  We are looking for more 
  weakness tomorrow.



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

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

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

Imation - IMN - close: 35.15 change: -1.10 stop: 37.01

Company Description:
Imation Corp is a leading developer, manufacturer and supplier of 
magnetic and optical removable data storage media. As the only 
U.S.-based manufacturer of advanced magnetic data storage media, 
Imation has a heritage in removable data storage media that spans 
more than 50 years, since the introduction of the first data 
storage tape in 1953. Today, Imation continues to be the leader 
of removable data storage media, offering the broadest product 
portfolio in the industry -- spanning from a few megabytes to 
hundreds of gigabytes of capacity in each piece of media, and 
serving customers in more than 100 countries, in both business 
and consumer markets. (source: company press release)

Why We Like It:
We like IMN for its bearish reversal and fading momentum.  The 
stock gapped down hard back in July after the company warned for 
the second quarter.  When they reported a few days later IMN 
missed by 4 cents.  Since then it's been a slow climb back to the 
bottom of the gap.  IMN actually broke through the bottom of the 
gap, which is normally resistance.  Yet it couldn't break through 
technical resistance at its simple and exponential 200-dma's.  
Now IMN's RSI and stochastic oscillators have rolled over into 
bearish formations and its MACD is nearing a new "sell" signal.  
The P&F chart is bearish with a $17.00 target.  We're going to 
suggest that readers target the $32-31 levels.  

We do like the bearish reversal in the last four sessions but IMN 
does have support at the $34.00 level and you may want to take 
that into consideration as you plan an entry.  

Annotated Chart:

 

Picked on September 15 at $35.15 
Gain since picked:        - 0.00
Earnings Date           07/21/04 (confirmed)
Average Daily Volume:        352 thousand




==================================================================
Active Trader (AT) Non-Tech Stock section
==================================================================

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

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

Stein Mart - SMRT - close: 14.93 change: -0.30 stop: 16.25

Company Description:
Stein Mart's 258 stores offer the fashion merchandise, service 
and presentation of a better department or specialty store, at 
prices competitive with off-price retail chains. Currently with 
locations from California to New York, Stein Mart's focused 
assortment of merchandise features moderate to designer brand-
name apparel for women, men and young children, as well as 
accessories, gifts, linens and shoes.
(source: company press release)

Why We Like It:
There is no denying that SMRT has made an impressive run over the 
last 15 months.  The stock climbed from October 2003 to August 
2004 to hit new six-year highs.  Wouldn't you know it... in mid 
August the company reported earnings, beat by a penny, but came 
in under the revenue estimate.  Thus began the current downtrend 
of moderate profit taking.  We are expecting this trend of profit 
taking to pick up speed now that SMRT has broken both its simple 
50 and simple 100-dma's.  Bears will also note that SMRT's 
declines have been occurring on above average volume. 

Our obvious concern is possible technical support at the 200-dma 
near $13.00.  Fortunately, SMRT's P&F chart is bearish with a new 
triple-bottom breakdown sell signal and an $11.00 target.   We're 
willing to speculate that SMRT can trade to the $12.00-12.50 
levels.  This was major resistance in the past and should be 
significant support.

Annotated Chart:

 

Picked on September 15 at $14.93 
Gain since picked:        - 0.00
Earnings Date           08/19/04 (confirmed)
Average Daily Volume:        384 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

CFC     Countrywide Financial      37.43     +0.66
BBY     Best Buy Co                52.61     +2.32
AET     Aetna                      96.51     +1.06
CNQ     Canadian Natural Resources 34.78     +0.86
ATH     Anthem                     87.65     +1.59
FRO     Frontline Ltd (ADR)        40.23     +0.70

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

RMBS    Rambus Inc                 15.31     +1.42
TBUS    Digital Recorders           5.49     +1.18

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
GDW     Golden West Financial     112.52     +3.57
ASH     Ashland Inc                54.31     +1.67
PHS     Pacificare Health Sys      36.32     +1.92
FMD     First Marblehead           48.49     +1.19
NCEN    New Century Financial      58.09     +2.34
PHRM    Pharmion Corp              53.09     +1.10
NFI     Novastar Financial         46.96     +2.56

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

PEP     Pepsico Inc                49.38     -1.15
KO      Coca-Cola Co               41.16     -1.71
SNN     Smith & Nephew             43.88     -2.09
BLL     Ball Corp                  35.86     -1.10
BAB     British Airways            38.47     -1.48
BWA     Borg Warner Inc            42.73     -1.04
AXL     American Axel & Mfg        30.84     -1.16
ISCA    Intl Speedway              49.94     -1.39

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

ADBE    Adobe Systems              47.44     -2.11
SBC     SBC Communications         26.06     -0.56
MMM     3M Co                      82.00     -1.92
RRD     R.R.Donnelley & Sons       31.35     -0.40
IMN     Imation                    35.15     -1.10


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