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Daily Newsletter, Wednesday, 11/17/2004

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PremierInvestor.net Newsletter               Wednesday 11-17-2004
                                                   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: A Complicated Dance
Watch List:  Semiconductors to Oil and more


===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
      11-17-2004           High     Low     Volume   Adv/Dcl
DJIA    10549.57 + 61.92 10602.85 10481.83 2.12 bln 1932/ 889
NASDAQ   2099.68 + 21.06  2112.18  2090.72 2.20 bln 2009/1050
S&P 100   565.72 +  3.46   568.67   562.26   Totals 3941/1939
S&P 500  1181.94 +  6.51  1188.46  1175.43
SOX       439.85 + 12.24   445.64   427.61
RUS 2000  622.97 +  5.08   627.89   617.89
DJ TRANS 3600.46 + 28.27  3631.53  3571.78
VIX        13.21 +  0.00    13.39    12.77
VXO (VIX-O)13.64 -  0.36    14.02    13.57
VXN        18.50 -  0.10    18.63    17.36
Total Volume 4,320M
Total UpVol  3,283M
Total DnVol    993M
Total Adv  3941
Total Dcl  1939
52wk Highs  482 
52wk Lows    30
TRIN       0.57
PUT/CALL   0.71
===============================================================

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

A Complicated Dance
Linda Piazza

The relationship among costs, the dollar's behavior, and
equities' performance composes a complicated dance.  That's
particularly apparent when the costs being considered are fuel
costs, paid for in dollars.  

A record jump in the PPI on Tuesday and an overnight plummet in
the dollar against the euro and yen focused particular attention
on Wednesday's CPI and crude inventories numbers.  Against a
background of a weakening dollar and the specter of increasing
costs, equity investors needed to see satisfactory crude
inventories.  

At least, that's what the dance program suggested.  The day
didn't turn out that way.  The combination of a higher-than-
expected rise in CPI; disappointing crude, gasoline, and
distillate inventories; and continuing weakness in the dollar
should have pressured equities.  That dance program was ignored,
although the strengthening bonds suggested that it should not be,
until later in the session.  Crude finally bounced, pressuring
equities.  

Annotated Daily Chart of Crude Futures for December Delivery:

  

It was the TRAN that first demonstrated the effect of the rising
crude prices.  The TRAN often serves as an indicator index, being
particularly sensitive to both crude and economic developments. 
Watch the TRAN for clues as to how the S&P's and Dow might react,
as the TRAN sometimes leads these other indices.

Annotated Daily Chart for the TRAN:

 

Visible on the TRAN's 60-minute chart is a potential triple-top
formation.  The TRAN, however, did not break down out of its
recently established consolidation pattern, and so has not yet
confirmed that triple top.  A break higher remains possible, with
such a break starting a new leg higher. 

The charts of the two S&P's and the Dow show similar
characteristics.

Annotated Daily Chart for the Dow:

 

Annotated Daily Chart for the SPX:

 

Like the TRAN, both the Dow and the SPX ended the day within the
recently built consolidation zones. Unlike the TRAN, both had
attempted breakouts above that zone, only to be hit by selling.  

The tech-related indices present somewhat different pictures. 
The SOX's successful move above the 200-ema predicted a test of
the 200-sma.  That test occurred today, ahead of AMAT's after-
hours earnings release.  

Annotated Daily Chart for the SOX:

 

Note the breakout above the long-term descending red trendline. 
This chart suggests the danger in acting on a warning, such as
the confirmed CCI H&S, rather than letting price be the ultimate
guide.  Bulls in semi-related stocks do not want to see the SOX
retreat back beneath the 200-ema and that red trendline tomorrow,
however, as quick reversals after a breakout suggest danger to
long positions.  

Annotated Daily Chart for the Nasdaq:

 

In general, the day's trading produced several attempts to break
out, met with strong selling when the dollar collapsed again and
crude rose again.  Tech-related indices kept climbing, but may be
vulnerable to sell-the-news effects after AMAT's earnings, as
strong as that earnings report appeared to be.  With new orders
beating expectations, AMAT reported earnings of $0.27/share
against expectations of $0.26/share and compared with $0.01/share
a year ago.  The company reported that it had gained market
share.  Net sales rose from last year's $1.22 billion to this
year's $2.20 billion.  The report was mostly in-line with
expectations, although some had worried that orders would
decrease.  The chief executive did note some cautiousness among
customers due to increasing chip inventories.

However, some evidence of excessive bullishness exists in AMAT's
trading.  As noted by Marc Eckelberry of OIN's Futures Monitor,
short interest declined to 8 percent over the last month, with
put/call rations declining, too.  That sell-the-rumor effect may
already be reflected in after-hours behavior, with AMAT last at
$16.77 as this report was prepared, down from the cash close of
$17.34.  

We can't always trust after-hours behavior, however, and there's
more to consider in that complicated dance among equities, the
dollar's behavior and costs.  This morning's CPI added one step
to that dance.  

Last month, CPI had risen 0.2 percent, with the ex-food-and-
energy component rising 0.3 percent.  October produced a 0.6
percent rise against expectations of a gain of 0.4 percent, with
over half that rise coming from energy costs.  The core CPI rose
0.2 percent, in line with expectations.  The number emphasized
the importance of energy costs and the need for crude to continue
its recent pullback if inflation is not to rear its head.

Although less attention was paid to other economic releases, this
Wednesday's economic calendar was almost as full as last
Wednesday's, beginning with the MBA Refinancing Index at 7:00,
and continuing with that CPI and Housing Starts and Building
Permits at 8:30.  Despite the holiday-shortened preceding week,
the Composite Index of mortgage loan applications rose 4.3
percent, week-over-week, on a seasonally adjusted basis.  Not
adjusted for seasonality, applications decreased.  Refinancing
activity increased 10.6 percent, with the refinance share rising
to 48.6 percent of all applications.  The seasonally adjusted
Purchase Index decreased 0.6 percent.  

Finance activity revealed some worrisome tendencies, and housing
starts and building permits provided a mixed impression.  Housing
starts zoomed up 6.4 percent, but building permits dropped 0.7
percent.  Some seasonality issues might have produced the
decrease in permits.  
  
At 9:30, October's Industrial Production and Capacity Utilization
followed, leading into the 10:30 release of crude, gasoline, and
distillate inventories.  October's industrial production rose a
much greater-than-expected 0.7 percent, with capacity utilization
increasing a greater-than-expected 77.7 percent.  The Federal
Reserve noted that September's number had been affected by
hurricanes in the Southeast, and termed Monday's number a
possible bounce back from that hurricane-slowed production.

The American Petroleum Institute scooped the Department of
Energy, releasing figures showing crude imports up 4.5 percent
from the year-ago level.  The API reported a rise of 3 million
barrels in crude inventories, but a drop of 1.5 million barrels
in distillates and a rise of 126,000 million barrels in gasoline
inventories.  With winter months approaching, attention has
focused on distillate stocks, with expectations among analysts
for a rise instead of the actual decline.  Distillate supplies
include heating oil.  While weather forecasts are for a mild
winter, some worry that a hard cold snap would deplete supplies
and drive up prices.

The Department of Energy's later release revealed crude
inventories higher by 800,000 barrels, but distillate and
gasoline inventories down 1 million and 400,000 barrels,
respectively.  These numbers fell below expectations for a rise
of 2.3 million barrels.  

Economic releases tapered off, but the pre-market shakeup created
by the Kmart (KMRT) and Sears (S) merger announcement continued. 
Both had bounced in pre-market trade, with KMRT closing higher by
7.69 percent and S, by 17.23 percent.  Competitors Wal-Mart
(WMT), Home Depot (HD) and Lowes (LOW) didn't fare so well, with
WMT closing lower by 0.65 percent; HD, 1.67 percent and LOW, 0.41
percent.  The net effect on the retail index, the RLX, was to
close it higher by 0.37 percent. 

The merged company will be named Sears Holdings Corporation, and
will be the third-largest retailer in the U.S., although both
companies will keep their original brand names.  The structuring
of the deal gives Sears' shareholders a 10.6 percent premium over
Tuesday's closing price.  The companies expect the merger to be
finalized by March 2005.  Cost savings and an increase in
incremental gross margin will benefit the companies, executives
believe.   

Reviewing the moves of that complicated dance show that crude
bounced and the dollar declined, with that combination proving
somewhat difficult for equities to negotiate.  Yet if equities
face resistance just ahead, so does crude, and it's not yet clear
which will take the lead in this complicated dance.  Equities
pause, but might glide through either resistance or support, not
yet having clearly broken through in either direction.  CCI
flutters into H&S formations, hinting that the indices might be
tiring and might need at least minimal retracements, but that
probably depends on both crude costs and the SOX's reaction to
AMAT's earnings release.  Watch the recently established
consolidation zones, the SOX's 200-ema and Nasdaq 2100 for clues.

Thursday's economic releases begin with the usual 8:30 release of
jobless claims, but tomorrow's economic calendar rivals today's
in number, if not in importance.  At 10:00, October's Leading
Indicators will be released, followed by Natural Gas Inventories
at 10:30, and November's Philly Fed Index at noon.  The Leading
Indicators number is generally not considered market-moving, but
I've seen it do just that.  The Money Supply number will be
released at 4:30.  One report suggests that the Semi Book-to-Bill
number also appears tomorrow, but the official site at
wps2a.semi.org (formerly semi.org) lists November 22 as the
release date.  Be ready for the next big move, but be willing to
be wrong, too, reversing course if necessary.


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

Intersil Corp - ISIL - close: 17.54 change: +0.91

WHAT TO WATCH: We came very close to adding ISIL to the play list 
as a high risk/reward bullish candidate.  The rally in the 
semiconductors helped push ISIL through resistance at $17.00 and 
its simple 100-dma.  Volume was very strong at about 50 percent 
above the norm.  The P&F chart shows the same bullish breakout 
over resistance and a new buy signal with a $22 target.  We would 
consider this high risk because ISIL still has technical 
resistance at its simple and exponential 200-dma's overhead.




---

Tesoro Corp - TSO - close: 31.66 change: +1.98

WHAT TO WATCH: Energy stocks look ready to breakout into a new 
leg higher and TSO could help lead the way.  Shares added 6.6 
percent on very strong volume.  TSO's technicals have turned 
bullish with the MACD producing a new buy signal.  The P&F chart 
is very bullish with a $59 target.  We would watch for a move 
over $32.00 and use it as an entry point.  The next level of 
resistance would be $35.00.




---

Valero Energy - VLO - close: 43.68 change: +1.74

WHAT TO WATCH: VLO is another energy/oil-related stock that looks 
ready to breakout from its six-week consolidation.  Technicals 
are turning positive and its MACD is nearing a new buy signal.  
We would watch for a move over $44.50-45.00 as a new bullish 
entry point.  




---

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

BRCM $30.95 +1.01 - BRCM has broken out from its three-month 
trading range and produced a new P&F buy signal.

CVG $15.00 +0.54 - This networking stock has broken through 
resistance at $14.50 and its simple 200-dma.  It could be a 
bullish entry point.

MAY $30.75 +2.23 - MAY has been climbing on strong volume the 
last couple of weeks and today's 7.8 percent rally broke through 
resistance at $30.00. 

SWIR $19.56 +1.17 - SWIR has been stuck in a trading range 
between $15 and $20 for the past three months.  A breakout over 
$20 would certainly be positive.

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

*****************************************************************
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Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

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







PremierInvestor.net Newsletter               Wednesday 11-17-2004
                                                   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

Net Bulls (Tech Stocks)
  New Bullish plays:    SEBL

Active Trader (Non-tech Stocks)
  New Bullish plays:    ONXX
  Closed Bearish Plays: WGR

Stock Splits
  Announcements:        LCAV

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


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

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


  New Bullish Plays
  -----------------

Siebel Systems - SEBL - close: 10.18 change: +0.55 stop: 9.49

Company Description:
Siebel Systems, Inc. is a leading provider of business 
applications software, enabling corporations to sell to, market 
to, and serve customers across multiple channels and lines of 
business. With more than 4,000 customer deployments worldwide, 
Siebel Systems provides organizations with a proven set of 
industry-specific best practices, CRM applications, market-
leading analytics products, and business processes, empowering 
them to consistently deliver superior customer experiences and 
establish more profitable customer relationships. Siebel Systems' 
sales and service facilities are located in more than 30 
countries.  (source: company press release)

Why We Like It:
We have recently had SEBL on the watch list for a breakout over 
round-number psychological resistance at the $10.00 mark and 
technical resistance at its simple 200-dma.  Today's 5.7 percent 
rally on twice its average volume broke through both levels.  
This is purely a technical breakout play but we did hear there 
are rumors circulating that IBM could make a bid to buy SEBL.   
P&F chart readers will point out that SEBL is still in a sell 
signal and fighting a downtrend.  We also want to suggest caution 
given how overbought and extended the GSO software index is.  If 
you're not comfortable with any of these observations then don't 
play SEBL.  There will always be another trade later.  We're 
going to try and minimize our risk with a stop loss at $9.49.  
Our target is the $11.50-12.00 range.

Annotated Chart:

 

Picked on November 17 at $10.18
Gain since picked:       + 0.00
Earnings Date          10/20/04 (confirmed)
Average Daily Volume:       7.5 million 



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

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


  New Bullish Plays
  -----------------

ONYX Pharma - ONXX - close: 31.05  change: +0.81 stop: 29.95

Company Description:
Onyx Pharmaceuticals is engaged in the development of novel 
cancer therapies that target the molecular basis of cancer. With 
its collaborators, the company is developing small molecule 
drugs, including BAY 43-9006 with Bayer Pharmaceuticals 
Corporation  (source: company press release)

Why We Like It:
ONXX looks ready to fill the gap and the oversold bounce has 
brought the stock back to the bottom of the gap down.  Normally 
the tops and bottoms of a gap tend to be resistance.  If ONXX can 
break into the gap it has a chance to fill it.  The stock gapped 
down on October 25th after the company reported on some Phase II 
trial news for its leading drug in development.  Analysts are 
suggesting that the reaction was overdone as the company still 
plans to submit for an FDA approval after Phase III results come 
in.  Yesterday Piper Jaffray upgraded the stock to an "out 
perform" and this morning A.G.Edwards upgraded the stock to a 
"buy" with a $39.00 target.  We are going to use a TRIGGER at 
$31.26 to open the play.  That means ONXX will have to break 
through resistance at $31.20 or the gap down from Oct. 25th.  
Once triggered we'll use a stop loss at $29.95.  Our target will 
be a move into the $35-36 range so we're not actually targeting 
an entire move to the top of the gap near $40.

Annotated Chart:

 

Picked on November xx at $xx.xx <-- see TRIGGER
Gain since picked:       + 0.00
Earnings Date          11/04/04 (confirmed)
Average Daily Volume:       1.0 million 




============
Closed Plays
============

  Closed Bearish Plays
  --------------------

Western Gas - WGR - close: 29.64 change: +0.72 stop: 29.31

The oversold bounce has been much stronger than expected but then 
the oil/natural gas sectors have not been exactly weak the past 
few days.  There was no follow through on WGR's breakdown and WGR 
is now challenging resistance at the $30.00 level with rising 
volume.  Yes, the P&F chart still looks very bearish but a 
breakout over $30.00 could put shorts on the run.  We've been 
stopped out at $29.31.

Picked on November 07 at $27.01 
Gain since picked:       + 2.63
Earnings Date          11/05/04 (confirmed)
Average Daily Volume:       506 thousand




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

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

LCAV announces 3-for-2 stock split

Wednesday morning before the market's opening bell LCA-Vision Inc. 
(NASDAQ:LCAV) announced that its Board of Directors had approved a 
3-for-2 stock split of its common shares.  The Board also approved 
an increase in their cash dividend to 8 cents per share payable on 
a post-split basis.

The stock split will take the form of a 50 percent stock dividend 
payable on December 15th, 2004 to shareholders on record as of 
December 6th.

About the company:
LCA-Vision currently operates 43 laser vision correction centers, 
including 40 wholly owned LasikPlus vision centers located in 
large metropolitan markets throughout the United States and three 
joint ventures in Canada. (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)            107.91     +1.84
BP      BP Plc                     59.70     +0.74
XOM     Exxon Mobil Corp           50.00     +0.59
MO      Altria Group               57.42     +3.03
MWD     Morgan Stanley             53.23     +0.72
BR      Burlington Resources       41.80     +0.86

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

FSL     Freescale Semiconductor    17.95     +1.11
AUO     Au Optronics               12.94     +1.35
IDCC    Interdigital Community     19.90     +1.65
MICU    Vicuron Pharma             17.58     +1.58
ABGX    Abgenix Inc                10.14     +1.02
ABMD    Abiomed Inc                17.48     +1.71

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
FD      Federated Dept Stores      56.68     +1.31
BRCM    Broadcom Corp              30.95     +1.01
VRTS    Veritas Software           23.11     +1.04
NTAP    Network Appliance          29.57     +4.55
MAY     May Dept Stores            30.75     +2.23
CHIR    Chiron Corp                33.46     +2.09
WHR     Whirlpool Corp             66.43     +2.90

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

KSS     Kohl's Corp                49.70     -1.40
FRX     Forest Labs                40.68     -1.93
CELG    Celgene                    27.87     -1.49
FSH     Fisher Scientific          53.49     -1.43
INSP    Infospace Inc              44.34     -4.83

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

URBN    Urban Outfitters           44.02     -1.75
FS      Four Seasons Hotels        68.70     -1.28
IPCR    IPC Holdings               41.16     -1.26
CBI     Chicago Bridge & Iron      36.75     -1.11
IOC     Interoil Corp              30.69     -1.26
SKT     Tanger Factory Outlet      48.80     -1.27


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