PremierInvestor.net Newsletter Tuesday 10-26-2004 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: Better Late Than Never Watch List: Computer Services to Bath Towels and more! Market Sentiment: Is the rally here? ================================================================= MARKET WRAP (view in courier font for table alignment) ================================================================= 10-26-2004 High Low Volume Adv/Dcl DJIA 9888.48 +138.50 9888.48 9749.55 1.98 bln 2213/ 879 NASDAQ 1928.79 + 14.80 1928.80 1905.49 1.81 bln 1796/1275 S&P 100 531.69 + 7.69 531.60 524.00 Totals 4109/2154 S&P 500 1111.10 + 16.30 1111.10 1094.81 SOX 396.77 - 1.10 400.27 393.38 RUS 2000 577.61 + 5.94 577.99 567.32 DJ TRANS 3435.61 + 55.40 3437.83 3366.07 VIX 16.40 - 0.18 16.87 15.97 VXO (VIX-O)16.48 - 0.39 17.28 16.12 VXN 22.40 - 0.03 23.14 22.36 Total Volume 4,094M Total UpVol 2,854M Total DnVol 1,183M Total Adv 4498 Total Dcl 2469 52wk Highs 270 52wk Lows 121 TRIN 0.55 NAZTRIN 1.14 PUT/CALL 0.68 ================================================================= =========== Market Wrap =========== Better Late Than Never by Jim Brown The historical end of October ramp finally appeared but the reasons remain far from clear. The Dow has been the laggard for weeks but today the blue chip index roared higher with a +138 point jump to almost regain the 9900 level. It is amazing we had sunk so far that a +138 point gain does not make it back to 9900 and a level that was support then resistance over the last two weeks. Nasdaq Chart SPX Chart Wilshire Chart The morning started off far different than it finished. The indexes dove at the open in anticipation of the Consumer Confidence number with the Dow retesting 9750 before the numbers hit the wires. The Consumer Confidence came in less than expected at 92.8 with a decline on almost all internal components. The magnitude of the declines were minimal on each internal component but the forward looking views were the most telling. Most consumers are backing away from a potential home or major appliance purchase and feel business conditions and employment will be worse six months from now. Only autos showed an increase in purchase expectations and that was due to the new model year and the very strong incentives now being offered for year end inventory reductions. This was the third consecutive month of declines and this is the lowest level in seven months. The high was 105.7 in July making today's number a -13 point drop in only three months. After the headline number was announced the markets rebounded off the lows on decent volume despite the worse than expected results. Traders claim the whisper number was far worse based on the negative campaign ads, mudslinging and the rise in energy prices. The drop was not as severe as the recent Michigan Sentiment and analysts expect the low interest rates will help buoy confidence once the election is over. Retail prices are still experiencing some deflation from excess inventory and are expected to rise but the elimination of apparel quotas should lower apparel prices after the first of the year. Bottom line is a continued decent environment for consumers as long as the Fed does not get carried away in Nov/Dec. Weekly Chain Store sales posted their second week of declines with a -0.6% loss which indicates the high gas prices are continuing to drag on consumer budgets. The index fell to the second lowest level since the beginning of April and has nearly erased the early October bounce. However the ICSC feels growth will improve for the entire month to something in the +3.5% range compared to only +2.4% in September. Somebody better buy a lot of Halloween candy very soon because October is about over. While the economics probably did not provide a large boost to the market the Marsh Mclennan news did. The extremely quick turnaround by MMC to the Spitzer claims has cooled the Spitzer attack. Spitzer has removed the criminal portion of the claims and said the problem can be handle on a civil basis. This removes the potential death sentence for MMC and by association several other companies. The board of MMC quickly addressed the problem and came up with a huge bundle of changes structured to make buyers, investors and Spitzer happy once again. Investors have moved back into the stock over the last three days based on changes being made and discussed and the calming of the Spitzer attack. MMC gained +2.45 today to $28.81 and well above the $22.75 low from last week. AIG was a major winner with a +4.23 gain. As a Dow component this equates to about +35 points of the Dow rebound. The AIG chairman is Hank Greenberg and the father of Jeffery Greenberg the CEO who resigned from MMC. The Dow also got help from GE after GE backed 4Q and full year estimates citing strength across all divisions. GE rose +0.73. Also helping were CAT +1.07, HD +1.00, BA +0.98, AA +0.98. IBM also rose slightly after authorizing a $4 billion stock buyback. Despite the gains by the major insurers, AET +4.49, ATH +3.84, CB +4.56, CI +3.69, WLP +4.67, there is another lion prowling the woods. Connecticut Atty General Richard Blumenthal confirmed he had issued 35 subpoenas to insurance companies and brokers who operate in his state. Anthem was the headliner for this effort but ATH downplayed the event saying it was not material to their business. Bloomenthal said he was working with his counterparts in other states to sift through not only property and casualty but also health, auto and employee benefits. The wide net approach is sure to trip over some more practices they feel are contrary to the public good. Hopefully the fear has already been seen in the boardrooms and when any problems are found there will be a swift response. Given the cash cow that could be milked by aggressive states currently in financial stress the odds are very good there will be some heated discovery and the insurance companies will eventually pay. The Dow rebound this morning may have pulled it out of danger for making the history books. At the open the Dow had lost -2.3% for the month, more than any October since 1997. The +1.4% one-day jump erased more than half of that drop for the month. The key question is obviously how long will it last? With 9900 resistance looming overhead and 9950 almost as strong there is going to be some potholes in the road. However this is October and this is the week that should see a strong rally. At least in normal years we could expect a rebound from the October lows to set us up for the Nov/Dec year end run. The Dow actually pegged the pattern almost to the point with Monday's drop to 9700. The downtrend since February was looking for a lower low and 9700 was the earliest potential rebound point once the August lows at the 9800 level was broken last week. Dow Chart The Nasdaq was not as lucky. A couple of high profile warnings from FLEX and SLAB and the SOX was knocked for a loss that almost took the Nasdaq down with it. FLEX dropped -$1 after it said profits would be below prior analysts estimates on weaker than expected sales. While that warning hurt the market more than it hurt the FLEX stock price the damage from SLAB was much more drastic. SLAB was slammed to a -6.56 point loss after warning that high inventory levels and cautious customers had turned the outlook "extremely murky" according to one analyst. SLAB said they expected the current inventory excess impacting the entire sector to take time to work itself out. SLAB expects Q4 sales to fall to $95 million from prior estimates of $125 million. That slash in outlook knocked three times that amount at -$370 million off the market cap for SLAB. DBS and FB downgraded the company to inline levels making the last six ratings changes all downgrades on SLAB. It seems the analyst community has turned sour on SLAB. The challenge was not the downgrades to FLEX/SLAB but the impact to the markets. The SOX clung to support at 395 and tried several times to rally to no avail. The SOX closed flat at -1.10 at 396. The lack of SOX support for the Nasdaq kept the Nasdaq from joining the Dow party and held it to only a +7 gain at 1920 until the closing spike. The closing spike was due to a couple buy programs on the S&P and the Russell which pushed the Russell to a three week high at 577.63 and over strong resistance. The result was a Nasdaq that moved right back into the middle of its recent range (1900-1950) at 1927 and a +15 point gain. Last week the chip stocks could do no wrong in the eyes of investors. Of the 20 or so chip stocks reporting earnings one analyst said 19 either missed estimates or guided lower. Yet the SOX rallied off its 375 low to a high of 411 last Thursday. So what changed? The reason for the SLAB warning was exactly the same as the rest but the market timing was different. Last week you could not give away insurance stocks and huge amounts of money was flowing into sectors not related to insurance. Once the get out of jail free card was played by Spitzer that cash suddenly saw returning value in insurance and weakness in chips for Q4/Q1. As you can tell by the gains in the insurance stocks I reported above the funds were rushing back into the sector and away from techs they loved last week. Why? Insurance stocks were suddenly undervalued repositories for excess cash ahead of the fund year end on Friday. Those funds wondering what to do with cash generated from the portfolio rebalancing over the last three weeks suddenly decided Chubb, AIG, AET, HIG and CI were better investments at their current valuations than chip stocks where 19 of 20 had warned. Another factor sending the indexes higher was the AT&T Wireless sale to Cingular. According to futures traders the close of the deal produced a huge index disparity in the S&P-500. S&P dropped AWE from the S&P-500 and added CIT. AWE had a market cap of $41 billion and CIT only $8 billion. This meant index funds had to buy the index equivalent $33 billion of other S&P stocks to make up for the reduction to the overall market cap loss in the S&P. Rick Santelli said that about 12,000 S&P futures contracts would need to be bought to cover the changes. Obviously the S&P got a much needed shot in the arm and the rebound in insurance stocks definitely did not hurt. I am sure you are thinking the same thing I am. What does that mean for tomorrow? Based on the procrastination factor I would expect more S&P buying tomorrow. I really doubt that every fund that needed to make the change did it today. The Justice Dept did not make the announcement until 3:26 pm on Monday and there were some qualifications. S&P did not announce until 5:46 PM on Monday what changes would be made to the various indexes. This means funds could not make changes until today and just given the enormous amount of money to be shuffled and the number of funds needing to make the change the odds are very good we have not seen the last of it. After setting the stage I suggest we look at it from the bears point of view. Oil closed over $55 again and is moving higher overnight. The S&P closed at 1110 which is just below strong resistance at 1112 where the 50dma and 100dma converge. That resistance won't matter if funds still need to buy billions in S&P stocks. The tech sector did not join the party despite the S&P being better than 25% weighted in tech stocks. That may change tomorrow once fund traders are shocked but the big gains in some non tech stocks. Non-techs may look suddenly over valued and techs may be combed over once again for bargains. The calendar is right for more buying as funds put the finishing touches on their portfolios for year end. The calendar is also wrong for a continued rally based on the current election surveys. With the election still a dead heat according to the surveys there are some other sources predicting a Kerry victory with the University of Minnesota releasing its latest projection on the election saying that Bush has less than a 30% chance of being reelected. The missing 350 tons of explosives made the news all afternoon and the blame is being placed on Bush despite him not even knowing it was there. Late news today suggests a setup by Dr. ElBaradei in an effort to discredit Bush ahead of the election. The IAEA Director General Dr. Mohamed ElBaradei is no friend of the Bush administration and releasing this news the week before the election could be payback. For whatever reason it was released this week it is not doing the Bush campaign any good. This causes even more confusion for investors with only four trading days until the election. The combination of these events suggests more confusion in the markets but a potential upward bias from the S&P changes. The Nasdaq has room to run and the S&P could break 1115 if the fund shuffling continues. The Dow has the biggest challenge at 9900 and 9950 but a textbook support low is in place at 9700. This could be all the bulls need to justify continued buying. Were it not for the election I would bet we close higher on Friday than we did today. However, the election mudslinging on both sides and the closeness of the race will continue to keep the market outcome in doubt. Fortunately October and the election will be history in five trading days and we will be free to trade on fundamentals once again. That may have it's own set of problems but at least it will be different than the ones we are facing this week. 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 --------------------------------- MTS Systems - MTSC - close: 24.75 change: +1.22 WHAT TO WATCH: MTSC continues it rally and stretches the winning streak to five days in a row. Volume has been above average for the stock for the last three days. Yesterday the stock broke through its simple 200-dma. Today MTSC broke through six-month old resistance at the $24 level. This looks like a breakout worth watching. One note of caution through, MTSC's normal volume is very, very low, which makes any play here a high-risk play. --- Electronic Data Systems - EDS - close: 20.99 change: +0.96 WHAT TO WATCH: EDS delayed its earnings report to November 3rd and announced that it plans to cut about 4,000 jobs to reduce expenses. The news sent EDS soaring for a 4.7 percent gain on above average volume. Furthermore the rally broke through eight- month old resistance in the $20.50-20.65 range. Technical traders will also note that the rally sparked a bullish triangle breakout on its P&F chart. This is traditionally a very successful pattern to trade. The current upside target is $29. --- ExxonMobil - XOM - close: 49.39 change: +0.58 WHAT TO WATCH: As crude oil continues to flirt with all-time highs the rally in the oil sector continues. There's no denying the up trend in shares of XOM and the recent pull back toward the $48 region looks like an entry point. We like the bounce today and would consider bullish positions. However, we want to wait and see how investors react to the half-dozen energy-related earnings reports tomorrow. Plus, XOM is due to report earnings on Thursday. We'll be watching to see how traders react to XOM's Q3 numbers and its guidance. --- Bed Bath & Beyond - BBBY - close: 40.00 change: +1.51 WHAT TO WATCH: The RLX retail index is still trading relatively close to all-time highs. In spite of all the economic data showing that growth is slowing investors still expect a strong fourth-quarter shopping season. That's why today's rally in BBBY might be of interest. The stock added 3.9 percent to close right at round-number resistance at the $40 mark. A broker starting coverage with an "over weight" outlook was to blame for today's gain. We suggest that patient traders watch for a breakout over the $40 level and then give BBBY time (several weeks) to climb toward the $44 level. ----------------------------------- RADAR SCREEN - more stocks to watch ----------------------------------- LCAV $29.00 +5.41 - Whoa! That's quite a reversal on Tuesday. The company beat estimates by 4 cents and guided higher. UNP $62.22 +0.97 - UNP continues to look like a bullish candidate and today's breakout over minor resistance at $62 reaffirms our opinion. CHRT $6.22 -0.04 - CHRT has been stuck in a trading range between $5.90 and $6.80 for the past three months. Nimble traders can take advantage of that trend. XLNX $29.48 +0.28 - XLNX is currently challenging its simple 100- dma. If shares can breakout over $30.00 or $30.40 again it could be a bullish entry point. =============================== Market Sentiment =============================== Is the rally here? - J. Brown There have been a lot of traders waiting and watching for the end of October rally in stocks. You can bet that more than a few of them are hoping that today's 138-point gain in the Dow is the beginning. There are probably a few more hoping or speculating that today could be the beginning of the widely-expected post- election fourth quarter rebound higher. It is certainly a possibility to consider. Most will point the finger at insurance stocks today if you're looking to blame someone for the bounce. The entire insurance sector soared higher after news hit of NY Attorney General Eliott Spitzer's decision to not file criminal charges against Marsh and Mclennan (MMC). The IUX insurance index added 5.3 percent and Dow-component AIG soared more than 7 percent and was the Dow's biggest gainer. The rally spread to the rest of the Big Board and soon almost the entire market was trading higher. Only semiconductors, disk drives, and gold stocks closed lower as evidenced by their respective indices. Bulls produced some big bounces in healthcare (HMO.X +5%), homebuilders (DJUSHB +3.4%), and airlines (XAL.X +4.3%). Overall market internals were very bullish. Advancing stocks outnumbered decliners 20-to-7 on the NYSE and 3- to-2 on the NASDAQ. Up volume was about four times heavier than down volume on the NYSE and only about 25 percent heavier on the NASDAQ. I feel like I should mention crude oil again and its rebound back over the $55 a barrel level but does it really matter? Oil didn't influence stocks today and it certainly didn't impact the transportation sector, which climbed right back toward five-year highs. On a different note there are probably some big-picture pundits out there pondering the implications, if any, of the SEC's vote on hedge funds today. The hedge fund industry is rumored to control upwards of $1 trillion in assets. The agency voted in approval of having hedge funds register as investment advisors. This would allow SEC examinations, force them to have and follow security compliance guidelines and provide more information in general. Tomorrow's economic reports are the durable goods orders and new home sales. Plus, we'll get the latest oil and gas inventory supply data. Wednesday is also another full day of Q3 earnings. Some of the oil/energy stocks reports are AHC, COP EOG, KMG, and POG. A few of the tech stocks reporting are ASKJ, JDSU and SIRI. Plus, we have a handful of other big names like BUD, BDK, NEM, NOC, BA, PG and UL. Tuesday leaves us with just seven days and only five trading days before the Nov. 2nd election. It wouldn't surprise me to see stocks rally into the election on the singular notion that the whole circus is almost behind us. But then that's probably not true. Such a razor-thin race probably guarantees the whole thing will be decided in court and we won't know the "winner" for days. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 10753 52-week Low : 9497 Current : 9888 Moving Averages: (Simple) 10-dma: 9883 50-dma: 10110 200-dma: 10264 S&P 500 ($SPX) 52-week High: 1163 52-week Low : 1018 Current : 1111 Moving Averages: (Simple) 10-dma: 1105 50-dma: 1112 200-dma: 1119 Nasdaq-100 ($NDX) 52-week High: 1559 52-week Low : 1301 Current : 1442 Moving Averages: (Simple) 10-dma: 1443 50-dma: 1411 200-dma: 1439 ----------------------------------------------------------------- CBOE Market Volatility Index (VIX) = 16.39 -0.19 CBOE Mkt Volatility old VIX (VXO) = 16.48 -0.39 Nasdaq Volatility Index (VXN) = 22.47 -0.23 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.67 841,443 566,655 Equity Only 0.58 705,920 406,927 OEX 0.84 22,756 19,085 QQQ 1.40 14,958 21,023 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 62.9 + 0.2 Bear Correction NASDAQ-100 49.0 + 2 Bull Alert Dow Indust. 50.0 - 0 Bear Confirmed S&P 500 60.2 + 0.6 Bear Correction S&P 100 59.0 + 1 Bear Correction 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: 1.03 10-dma: 1.04 21-dma: 1.02 55-dma: 1.07 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 2063 1793 Decliners 745 1197 New Highs 135 91 New Lows 25 63 Up Volume 1672M 1047M Down Vol. 397M 728M Total Vol. 2089M 1803M M = millions ----------------------------------------------------------------- Commitments Of Traders Report: 10/19/04 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 Commercial traders continue to hedge their bets in the big S&P contacts and are nearing a dead heat between longs and shorts. Small traders remain mostly net bullish but have pared back their enthusiasm a bit. Commercials Long Short Net % Of OI 09/28/04 404,773 434,441 (29,668) (3.5%) 10/05/04 421,217 435,736 (14,519) (1.7%) 10/12/04 423,472 436,780 (13,308) (1.5%) 10/19/04 432,945 441,041 ( 8,096) (0.1%) 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 09/28/04 135,317 107,173 28,144 11.6% 10/05/04 137,210 114,489 22,721 9.0% 10/12/04 139,175 113,903 25,272 9.9% 10/19/04 147,148 124,827 22,321 8.2% 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 We see a similar picture in the e-minis. Commercial traders aren't making any changes. They remain net bearish and we have the same reading as last week. Meanwhile small traders have slowly grown more net bullish, which of course is a bearish contrarian indicator. Commercials Long Short Net % Of OI 09/28/04 226,020 420,714 (194,694) (30.1%) 10/05/04 248,190 476,608 (228,418) (31.5%) 10/12/04 258,457 517,805 (259,348) (33.4%) 10/19/04 264,860 531,541 (266,681) (33.4%) 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 09/28/04 262,501 68,255 194,246 58.7% 10/05/04 308,021 80,373 227,648 58.6% 10/12/04 309,720 62,502 247,218 66.4% 10/19/04 353,903 66,027 287,876 68.5% 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 trades have not moved much. They remain net bullish on the NASDAQ 100. Small traders upped both their longs and shorts and reduced their bearish posture a tad but remain strongly net bearish. Commercials Long Short Net % of OI 09/28/04 55,045 32,319 22,726 26.0% 10/05/04 55,640 32,872 22,768 25.7% 10/12/04 52,572 32,775 19,797 23.2% 10/19/04 52,630 31,940 20,690 24.4% 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 09/28/04 10,078 22,917 (12,839) (38.9%) 10/05/04 12,254 30,693 (18,439) (42.9%) 10/12/04 8,756 24,400 (15,644) (47.2%) 10/19/04 10,462 25,243 (14,781) (41.3%) 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 seem content to sit on the sidelines with out any big directional bets on the Industrials. Longs and shorts have remain pretty close to one another for a few weeks now. That's not so with the small traders. The latest data shows a big drop in short positions and the bias has turned bullish for the first time in weeks. Commercials Long Short Net % of OI 09/28/04 29,714 26,877 2,837 5.0% 10/05/04 27,498 25,772 1,726 3.2% 10/12/04 24,150 22,849 1,301 2.7% 10/19/04 25,385 24,213 1,172 2.3% 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 09/28/04 5,143 5,988 ( 845) ( 7.6%) 10/05/04 5,531 5,539 ( 8) ( 0.0%) 10/12/04 8,814 9,167 ( 353) ( 1.9%) 10/19/04 8,327 6,015 2,312 16.1% 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 Tuesday 10-26-2004 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: PLAB, BC, BG Net Bulls (Tech Stocks) Closed Bearish Plays: -- SWIR 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 ================================================================== PLAB - tech stock long - The bounce from $17.00 looks like another bullish entry point. BC - non-tech long - BC added a strong 3.64 percent to breakout over resistance near $47.00 and close at new all-time highs. Remember that we plan to exit this play on Wednesday afternoon to avoid the Thursday morning earnings report. BG - non-tech long - BG turned in a strong performance with a 2.64 percent rally and close over the $44 level. Remember that we plan to exit on Wednesday's close to avoid the Thursday morning earnings. ================================================================== Net Bulls (NB) Tech Stock section ================================================================== ============ Closed Plays ============ Closed Bearish Plays -------------------- Sierra Wireless - SWIR - close: 16.53 chg: +0.27 stop: 16.75 Time is almost up and SWIR is not cooperating. The stock continues to bounce and has now closed above the $16.50 level. We are choosing to exit now, per our comments last Sunday, to avoid the company's Q3 earnings report after the closing bell on Wednesday evening. Picked on October 18 at $15.45 Gain since picked: + 1.08 Earnings Date 10/27/04 (confirmed) Average Daily Volume: 1.9 million ================================================================== 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 WFC Wells Fargo 58.70 +0.85 WB Wachovia Corp 48.50 +1.11 AIG American Intl Group 60.33 +4.23 COP ConocoPhillips 86.43 +1.51 CVX ChevronTexaco 53.95 +0.51 FNM Fannie Mae 69.13 +2.26 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- NVDA NVIDIA Corp 14.49 +1.15 NUS Nu Skin Enterprises 19.40 +1.40 CSGS CSG Systems Intl Inc 17.37 +1.65 ABMD Abiomed Inc 10.85 +1.40 MACE Mace Security Intl 5.45 +2.48 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- AMX America Movil 41.50 +2.65 PGR Progressive Corp 92.73 +1.84 CCU Clear Channel Comm. 32.61 +2.19 OMC Omnicom Group 79.44 +6.72 MON Monsanto Co 40.42 +1.20 CIT CIT Group 40.10 +2.00 TROW T.Rowe Price 52.39 +1.91 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- DNA Genentech Inc 42.87 -1.13 APOL Apollo Group 66.75 -4.20 PIXR Pixar 76.96 -1.66 DVA Davita Inc 29.40 -2.86 TIN Temple Inland 59.74 -1.49 RCI Renal Care Group 30.00 -2.48 SLAB Silicon Labs 27.88 -6.56 TRMB Trimble Navigation 25.89 -2.51 ATRS Altiris Inc 27.18 -1.89 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ----------------------------------------- QCOM Qualcomm Inc 39.50 -1.64 CME Chicago Mercantile Exchg 165.70 -3.65 CTSH Cognizant Tech 30.79 -1.46 ================================================================= 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. 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