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Daily Newsletter, Wednesday, 11/24/2004

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PremierInvestor.net Newsletter               Wednesday 11-24-2004
                                                   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: Turkey Run
Watch List:  Software to Telecom to Insurance and more


===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
      11-24-2004           High     Low     Volume   Adv/Dcl
DJIA    10520.31 + 27.71 10527.40 10482.26 1.43 bln 2033/ 775
NASDAQ   2102.54 + 18.26  2103.80  2090.20 1.62 bln 1869/1139
S&P 100   562.70 +  1.41   563.55   561.22   Totals 3902/1914
S&P 500  1181.76 +  4.82  1182.46  1176.94
SOX       433.65 +  3.94   435.59   430.75
RUS 2000  629.50 +  4.97   630.29   624.41
DJ TRANS 3647.59 + 26.51  3651.41  3621.04
VIX        12.70 +  0.05    12.89    12.56
VXO (VIX-O)12.97 -  0.11    13.48    12.82
VXN        17.88 -  0.55    18.28    17.73
Total Volume 3,055M
Total UpVol  2,060M
Total DnVol    940M
Total Adv  3902
Total Dcl  1914
52wk Highs  575 
52wk Lows    26
TRIN       1.03
PUT/CALL   0.61
===============================================================

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

Turkey Run
Jonathan Levinson

The markets opened and traded as scheduled, but hearts and minds 
appeared more acutely focused on the promise of turkey and 
trimmings. Light volume and slight ranges dominated the indices 
ahead of the (almost) long weekend.

Other than the absence of volume, it was a solidly positive day, 
as advancing volume more than doubled declining volume on the 
NYSE and almost did so on the Nasdaq.  There were 396 new NYSE 
highs for 3 new lows, 210:18 on the Nasdaq.  In light of these 
internals, it's surprising that the indices didn't advance 
further.



Daily Dow Chart


The Dow added 27.71 points to close at 10520.31, above this 
week's high but below resistance on the way to last week's high.  
This week has seen the first steps of an overdue daily cycle 
downphase, but without confirming followthrough.  Support is 
where indicated at 10425-30, 10360 and 10240-50.  A close below 
the 10425 level should be enough to get the daily cycles pointed 
more unambiguously south, but given the close near the highs 
today and the certain light, retail-dominated volume expected on 
Friday, bears will most likely have to wait for next week to see 
it.


Daily S&P 500 Chart


The SPX gained 4.82 to close at 1181.76.  The cycle picture 
matches that on the Dow, and bearish traders need a closing break 
of 1168 to be confirmed with a break of 1160 support.  


Daily Nasdaq Chart


The Nasdaq was relatively stronger than its peers, gaining .87% 
or 18.2 points to close at 2102.5.  The rally highs are spitting 
distance away, and Friday could see a light volume, high anxiety 
retest.  The daily cycle oscillators are trying to put together 
an upside whipsaw on today's gains.  The trouble with light 
volume moves is that they're more susceptible to reversal when 
volume returns.  While price is the only arbiter for traders, 
light volume price breakouts are the most likely to reverse, and 
for that reason we need to be careful in the event that the bulls 
pick up on Friday where they left off today.


Weekly TNX Chart


The Mortgage Bankers Association reported that its Mortgage 
Index, which measures weekly application for home mortgages in 
the US, declined 5.7% during the week ending November 19, 
engulfing the previous week's 4.3% gain.  This index can be very 
volatile from week to week, and the 5.7% drop would be 
uninteresting except that it occurred alongside a decline in 
interest rates, with the rate for a 30-year fixed mortgage down 
from 5.7% to 5.64% during the same period.  The Refi Index, which 
measures refinancing activity, declined 8.3%, while the Purchase 
Index lost 3.5%, posting its third consecutive week of declines.

Ten year note yields ($TNX) declined last week as well, with what 
appears to be a neutral pennant printing during the past 3 weeks 
in the early stages of the recently-commenced upphase.  If this
oscillator upphase is for real, the pennant should break to 
the upside, targeting next weekly resistance in the 4.4%-4.5% 
area.  The pennant of the past few weeks has reflected itself as 
a downphase in the shorter (ie daily) timeframes, which I've been
following nightly in the Futures Wraps.  That downphase has so 
far been corrective, and so long as the current consolidation 
does not violate 4.0% support, TNX bulls/bond bears should have a 
shot at the year highs above 4.8% on a break above 4.5%.  For the 
day, TNX finished higher by 1.1 bps at 4.195%.


Weekly chart of Crude oil


The Energy Department reported that crude oil inventories rose in 
the week ending November 19th by 100,000 barrels to 292.4M, their 
9th consecutive weekly rise.  Distillate supplies rose 1M barrels 
to 115.6M, while gasoline stocks rose 1.8M barrels to 202.7M 
barrels.  Later this morning, the American Petroleum Institute 
reported its own inventory figures, announcing that distillate 
inventories rose 1.8M barrels to 117.6M, crude oil inventories 
declined by 1.2M barrels to 293.2M, and gasoline rose 2.9M to 
204.1M barrels.  The Energy Department's and the API's figures 
are often at odds, as occurred with this week's crude oil data, 
and the disagreement as to whether crude stocks rose or fell is 
not particularly noteworthy.

Crude oil traded both sides of unchanged, bouncing from a low of 
47.775 per barrel to print an afternoon high at 49.65 and closing 
higher by 1.02% at 49.45.  The higher range so far this week sets 
up last week's doji hammer as a potential reversal candle.  
However, in light of the ongoing weekly cycle downphase 
(launching as it did from a bearish stochastic divergence), oil 
bulls will need to be vigilant for a lower bounce high, 
particularly in the 51-52 resistance zone.

At 8:30AM, the Labor Department released the initial claims data 
for the week ending November 20th, with 323,000 new claims for 
state unemployment benefits reported.  This figure was down from 
the previous week's 335K reading, and was lower than consensus 
estimates for 335K as well.  Continuing jobless claims declined 
29,000 to 2.76M, the lowest level since May 2001.  The 4-week 
moving average of initial claims also posted an encouraging drop 
of 6,750 to 332K, which is the lowest level since November 2000. 
The report indicated that 337K new jobs were added in October.

Also released at 8:30 was the Durable Orders report.  The 
Commerce Department reported that orders for durable goods fell 
0.4% in October, missing analyst expectations for a 0.5% rise.  
The data would have been even worse if not for strong military 
demand, as non-defense durable goods fell 1.5%, posting the sixth 
consecutive decline in 7 months.  By comparison, orders for 
military aircraft launched by 35.2% in October.  Ex-transport, 
durable orders were down 0.7%.   This bleak picture was somewhat 
mitigated by upward revisions to September's durable orders 
number from .2% to .9%.  

At 9:45AM, the University of Michigan announced that consumer 
sentiment as measured by the Umich sentiment index fell to 92.8 
in late November from its previous 95.5 reading released earlier 
this month.  The number fell short of analyst expectations for 
96, but remained above the October level of 91.7.

At 10AM, the Conference Board's Help Wanted Index, which tracks 
newspaper help-wanted ads in the US, rose to 37 in October from 
its September level of 36.

Also at 10AM, the Commerce Department reported a rise in New Home 
Sales of .2% to 1.226M units in October, the third highest level 
on record.  The data exceed analyst expectations by 26,000 units.  
The report further revealed an increase of 1% in the number of 
homes offered, which equates to 4.1 months' supply.  The median 
price of a new home rose from $203,300 in September to $221,800 
in October.

In corporate news, GE announced its agreement to purchase ION, 
manufacturer of water purification devices, for a price of $44 
per share comprised of 1.1B in cash and the assumption of ION's 
debt.  The $44/share purchase price represents a 48% premium on 
ION's previous closing price.  ION closed higher by 45.51% at 
43.29 while GE lost .42% to close at 35.66.

Insurer and financial manager AIG announced its agreement to pay 
126M in fines to settle ongoing federal investigations relating 
to its dealings with Brightpoint and PNC Financial Services Grp.  
The 126M figure is comprised of 46M to be paid to the SEC, and 
80M to the US Department of Justice.  AIG is not out of the 
woods, however, as a Wall Street Journal article reported that 
federal prosecutors are investigating allegations as to whether 
chairman Maurice Greenberg attempted to manipulate AIG's share 
price in 2001.  The alleged scheme would have sought to achieve a 
higher price for the stock in order to save money on its 23B deal 
to acquire American General.  AIG closed lower by 3 cents at 
64.17.

Overall it was a quiet day, with the treasury market closing 
early for the holiday.  The US Dollar got crushed to new lows for 
its multiyear decline, as commodities and foreign currencies 
rallied to new multiyear highs.  In the case of the CRB, it was 
nearly a 25 year high above 291.5.  In this environment, it's 
surprising that the degree of dollar selling hasn't corresponded 
with more weakness in treasury bonds, as the ten year yield has 
continued to mark time in the low 4% area.  As I've discussed at 
length in the Futures Wraps this year, the decline in the dollar 
has often coincided with rallies in everything else denominated 
in those dollars.  

Aggressive investors have sought protection from the depreciating 
dollar in commodities, real estate, metals, and equities.  Until 
we see pronounced selling anywhere but in the dollar, there's 
little reason to expect these intermarket trends to reverse.  
While the past month's rally in the indices looks toppy and ready 
for a correction, traders will want to see at least a few days' 
worth of weakness before assuming that the trend is changing.  
Recall that over the past month, we've seen 3 days' worth of 
weakness, and only one occasion during which there were 2 
consecutive days' worth of lower lows and lower highs.  If the 
markets feel toppy to you (as they do to me), ask yourself 
whether you believe that the USD Index is a buy at these levels-  
equities look almost as overbought on a daily chart as the USD 
Index looks oversold.  So far, the trend has maintained the 
dollar in opposition to dollar-denominated equities and while no 
trend is bulletproof, it's best to follow it as long as it lasts.

With the promise of a light volume session when trading resumes 
on Friday, traders are best to be mindful of the propensity of 
low volume markets to frustrate, obfuscate and whipsaw.  Have a 
safe and happy Thanksgiving.


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

Synopsys Inc - SNPS - close: 18.37 change: +0.62

WHAT TO WATCH: The rebound continues in software maker SNPS.  
Shares began to trend higher a few weeks ago and the stock just 
today broke out over minor resistance at $18.00.  SNPS is now 
challenging technical resistance at its 100-dma.  This looks like 
an entry point for a run toward $20.00.  The P&F chart has 
reversed into a new buy signal with a long-term $25 target.  Yet 
traders need to be aware that SNPS is due to report earnings on 
December 1st.  We usually avoid holding over an earnings 
announcement.




---

China Mobile Ltd - CHL - close: 16.43 change: +0.64

WHAT TO WATCH: CHL turned in a strong 4 percent rally on volume 
that was almost four times the average.  Today's gain pushed CHL 
up and through resistance at the $16.00 mark.  More importantly 
shares burst through technical resistance at the 200-week moving 
average.  This looks like a bullish entry point for a run toward 
its yearly highs near $18.00.  The bullish P&F chart points to a 
$21.00 target.




---

Marsh Mclennan - MMC - close: 28.70 change: +0.64

WHAT TO WATCH: There are a lot of opinions out there surrounding 
the insurance sector, especially beleaguered stocks like MMC who 
were under investigation by NY Attorney General Elliot Spitzer.  
Whether you think the stock is a dog and needs to be dumped or a 
value play at current levels it is worth noting that the four-
week consolidation seems to be breaking out to the upside.  A 
move over resistance at $30.00 could be a bullish entry point.  
The P&F chart has reversed from a sell signal to a buy signal 
with a $42 target.




---

Taro Pharmaceuticals - TARO - close: 29.40 change: +0.89

WHAT TO WATCH: After three months of consolidating above the 
$20.00 level TARO began to recover in late October.  Now shares 
are challenging the top of the gap down at $30.00.  Watch for a 
breakout over $30.00 as a bullish entry point.  Our short-term 
target would be $35 and its exponential 200-dma. 





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

SWIR $19.45 +0.25 - SWIR is creeping closer and closer to a 
breakout over resistance at $20.00.

FMX $46.20 +0.80 - FMX turned in a nice bounce from the $45 level 
and its simple 200-dma.  This could be a bullish candidate over 
$46.50.

IDSY $18.99 +2.41 - This has been a volatile stock but shares are 
breaking out to new highs. 

ARA $37.20 +1.85 - ARA is also suggesting that its consolidation 
phase may be over.  Watch for some follow through.

AFG $31.92 +0.03 - This continues to look like a bullish entry 
point in this insurance stock.

BCII $22.96 -1.14 - Looking for a bearish candidate?  BCII has 
been consolidating its early 2004 gains for the last six months.  
Watch for a breakdown under its simple 200-dma near $22.00.


==========================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to Contact Support
=================================================================
DISCLAIMER
=================================================================

This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

*****************************************************************
ADVERTISING INFORMATION

For more information on advertising in PremierInvestor.net
Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

*****************************************************************


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







PremierInvestor.net Newsletter               Wednesday 11-24-2004
                                                   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: SEBL, ASKJ, CHK, RIG, PCU, ZEUS

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

SEBL - tech stock long -
  The rally in the NASDAQ and software stocks helped
  lift SEBL to a 2.7 percent gain.  The stock looks poised
  to run higher on Friday.
 
 
ASKJ - tech stock short -
  Uh-oh!  The market's strength was not so kind to the
  technology bears.  ASKJ is trying to breakout and broke
  through $25.00 level on Wednesday.  This is a big clue
  for the bears that it may be time to exit.  If we don't
  see any weakness on Friday we will exit to minimize any
  losses.
 
 CHK - non-tech long -
   CHK continues to rally and looks very bullish with
   today's breakout over the $18.00 level.  We are raising
   our stop loss from $16.00 to $16.49.
 
 RIG - non-tech long -
   Shares of RIG continue to look very strong, especially with
   Wednesday's 2.17 percent gain and move over the $40 level.
   We are raising our stop loss from $36.00 to $36.99.
 
PCU - non-tech long -
  Heads up!  We were prepared to close PCU but shares turned
  around on Wednesday.  It could just be holiday volatility.  
  We're watching for some follow through over the $48.00 level.
 
 
ZEUS - non-tech long -
  We're going to give ZEUS one more day.  If ZEUS doesn't bounce
  on Friday we're closing it.


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

CHL     China Mobile Ltd           16.43     +0.64
TOT     Total Sa (ADS)            108.81     +0.77
BP      BP Plc                     60.80     +0.53
CHA     China Telecom              37.01     +1.10
LEH     Lehman Brothers            84.52     +1.13
COF     Capital One Financial      79.99     +0.52

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

DV      Devry Inc                  17.67     +2.77
AMSC    American Superconductor    13.81     +1.58
HDTV    Spatialight Inc             8.65     +1.12
MSB     Mesabi Trust               12.75     +1.05
MERCS   Mercer Intl Inc            10.90     +1.30
IDSY    I.D.Systems                18.99     +2.41

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
AAPL    Apple Computer             64.05     +2.78
PDCO    Patterson Companies        40.37     +1.39
TK      Teekay Shipping            54.17     +2.90
ARA     Aracruz Cellulose          37.20     +1.85
DCI     Donaldson Co Inc           33.70     +1.80
TECD    Tech Data Corp             45.25     +2.34
O       Realty Income Corp         50.50     +1.05

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

HRB     H&R Block                  47.40     -1.05
ESRX    Express Scripts            69.65     -2.60
MIK     Michaels Stores Inc        27.52     -2.68
OSIP    OSI Pharmaceuticals        49.41     -2.97
CNCT    Connetics                  21.72     -4.63

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

PLMO    Palmone Inc                35.46     -2.99
VLTR    Volterra Semiconductor     21.00     -1.95
BCII    Bone Care Intl Inc         22.96     -1.14


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