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Daily Newsletter, Monday, 11/29/2004

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PremierInvestor.net Newsletter                   Monday 11-29-2004
                                                    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: Volume Returns  
Watch List: Financials, Electronics, Biotechs and more  


===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
      11-29-2004           High     Low     Volume   Adv/Dcl
DJIA    10475.90 - 46.33 10557.41 10417.08 1.71 bln 1294/1539
NASDAQ   2106.87 +  4.90  2117.89  2090.35 1.83 bln 1749/1293
S&P 100   560.15 -  2.50   564.60   557.73   Totals 3043/2832
S&P 500  1178.57 -  4.08  1186.94  1172.37
SOX       429.89 -  1.09   438.28   428.16
RUS 2000  634.46 +  3.30   636.00   626.84
DJ TRANS 3650.13 +  2.14  3665.65  3620.94
VIX        13.30 +  0.51    13.69    12.93
VXO (VIX-O)13.46 -  0.09    14.03    13.34
VXN        18.83 +  0.89    19.18    18.02
Total Volume 3,544M
Total UpVol  1,829M
Total DnVol  1,631M
Total Adv  3043
Total Dcl  2832
52wk Highs  535 
52wk Lows    16
TRIN       1.02
PUT/CALL   0.74 
===============================================================

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

Volume Returns
Jonathan Levinson

Traders returned from the holiday with pockets full, gapping the 
indices higher at the open and driving the Nasdaq to a new rally 
high in the first 15 minutes of the session.  Those gains were 
reversed in a drop that ended just before noon, and a sharp 
bounce brought the indices back to lower highs.  

Volume was a healthy after the anticipated holiday doldrums, with 
the Nasdaq beating its average of 1.68B shares on 1.84B shares 
for the day, while the NYSE traded a more moderate 1.37B.   
Declining volume led advancing by a factor of 1.45 on the NYSE, 
while advancing shares led declining volume 1.58:1 on the Nasdaq.


Daily Dow Chart



Dow traders were treated to a wide range today of 140 points 
between 10417 and 10557, with the Dow settling lower by 46 points 
at 10476.  The move violated last week's high and low, finishing 
around midrange for an engulfing doji star.  10417 is fibonacci 
support at the failed bear flag from 3 weeks ago, and that 
confluence zone stretches to a low of 10360.  Below that support, 
it should be an easier run to the 10270 level.  The daily cycle 
downphase continues to suggest a bearish bias, but the potential 
for a bullish consolidation remains so long as price holds above 
10360.

Daily S&P 500 Chart


The SPX also finished a wild session slightly below its opening 
level, losing 4.08 to close at 1178.57.  As with the Dow, the day 
opened on a gap up, with the session highs printed within the 
first 15 minutes, followed by a clothesline drop to the lows and 
a slower rise to the midpoint for the day.  For the SPX, support 
came at a low of 10172, which is the top of confluence support to 
1168 as well as the upper rising channel support line.  Below 
1160, there's light support at 1160, followed by stronger support 
at 1143-44.


Daily Nasdaq Chart


The Nasdaq finished 4.9 points in the green at 2106.87, failing 
from a new rally high of 2117.78 and then bouncing from 2090.  
The closing print held at the top of last week's strong bounce, 
and the daily cycle downphase for the Nasdaq remains the least 
assertive of its peers.  The Nasdaq's daily cycle downphase looks 
clearly corrective to me, and Nasdaq bears have little to talk 
about until price gets below 2070 at minimum, with the more 
important test at 2045-50 support.


Weekly TNX Chart


Treasury bonds kicked off the week on a sour note, with ten year 
note yields (TNX) rocketing past previous resistance at 4.26% in 
a strong move that closed higher by 9 bps at 4.33%.  Today's gain 
represented a 2.12% rise for the TNX, and the first time the TNX 
has cleared the 22 and 50 week EMA's since the beginning of 
April.   The weekly cycle upphase suggests an imminent test of 
4.44%-4.45% below stronger resistance at the year high at 4.904%.  
4.14%-4.16% and 4.26% should now act as support for any retest. 

There was a surprising lack of discussion about fundamental 
factors or events to explain the sudden and strong drop in 
bonds/rise in yields this morning.  Reuters attributed the 
selling in bonds to "speculative traders" but mercifully dropped 
that one early in the day.  It was later reported in an unrelated 
AP story that China has today signed a free trade accord with a 
number of Southeast Asian nations to create the world's largest 
free trade area by 2010.  The announcement emanated from the 10 
nation Association of Southeast Asian Nations at the group's 
annual summit in Laos, and will include Brunei, Cambodia, 
Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, 
Thailand and Vietnam.  The agreements seeks to end all tariffs by 
2010, which would pull the economies of these 10 countries, cited 
by Associated Press as being worth $1 trillion, closer to China's 
$1.4T economy.

If the Chinese currency peg to the US dollar and the consequent 
massive buying in US treasuries with the proceeds of China's 
dollar purchases have been behind the notable resilience in the 
US treasury market in the past few yearrs, then any indication 
that China might no longer need a strong US dollar could spell 
severe dislocation for the USD and treasury markets.  The idea is 
that Chinese suppliers to the US have been benefiting from 
China's peg to the USD, which keeps the price of Chinese goods to 
America stable despite the sinking US dollar.  US businesses and 
consumers have also been benefiting, at least insofar as 
persistent low interest rates and easy borrowing are concerned.  
However, if China no longer needs to sell as much to the US, such 
as might occur under an Asian free-trade scenario, the currency 
peg and support of the treasury market would become less 
important.  Today saw WMT decline as well, though the media 
attributed this to its soft Thanksgiving same-store sales 
(discussed below).  However, I find the Asian free trade story, 
which explains today's weakness in the dollar, treasury bonds and 
WMT, to be more persuasive. 


Weekly chart of Crude oil


Crude oil was firm again today, this time on news of that a gas 
leak requiring the evacuation of 180 workers from a North Sea 
platform halted production of approximately 130,000 bpd by 
Norway's Statoil ASA.  The leak puts an additional 75,000 bpd 
potentially in peril as well.  Norway's oil ministry said that it 
did not think that any oil had leaked into the water as a result 
of the accident.  News stories also cited uncertainty ahead of 
the December 10 meeting of OPEC ministers in Cairo as 
contributing to the morning's strength in oil, which reached a 
high of 49.95 on the Nymex.  For the day, January crude oil 
closed +.30 at 49.75, just off a 4-week high.

Nymex crude continues its ongoing bounce off the sub-46 low 
earlier this month.  The shape of the weekly cycle oscillators 
suggests that the bounce will be corrective and fail at a lower 
high.  If such occurs, the 44-45 level will very likely be 
retested on the way to a test of stronger support in the 40-42 
area.

It was a quiet day for market news, with no major economic 
reports released.  The Washington Post reported that treasury 
Secretary John Snow's tenure may be growing short, and that he 
might remain in the Cabinet for only a short time into the 
administration's second term.  White House spokesman Scott 
McClellan said that the President "appreciates the job Secretary 
Snow is doing" to implement the President's economic agenda, but 
commented no further on the Washington Post's assertions.

Later this morning, it was announced that the President has 
nominated former CEO of Kellogg (K) Carlos Gutierrez to replace 
outgoing Commerce secretary Don Evans. Gutierrez' nomination 
awaits confirmation by the Senate.

Over the weekend, WMT announced that this year's Thanksgiving 
week fell short of expectations, causing it to lower its November 
sales forecast to a 0.7 year-on-year rise.  The previous forecast 
had been for a 2%-4% rise.  Walmart dropped over 2.5% in 
premarket trading on the news, with analysts saying that WMT's 
news suggests that the ongoing oil rally, poor job and wage 
growth would hurt holiday spending, especially among lower income 
consumers.  

The WMT slam saw WMT lose 3.94% to close the day at 53.14.  The 
S&P Retail Index (RLX) finished lower by .95% at 457.06, not 
helped by KRMT which lost 5.01% to finish at 102.01.

This morning also brought a dire warning from outgoing Ukrainian 
president Leonid Kuchma to the effect that Ukraine's financial 
system could collapse shortly "like a house of cards" due to the 
chaos that has been growing in the wake of the contested 
presidential election.  Kuchma stated that he and his government 
cannot be held responsible, as the situation is beyond their 
ability to control.  Later in the day, it was reported that 
Kuchma agreed to a new presidential election, yielding to 
pressure from domestic protesters and the international 
community.

A brighter point on the consumer front was a report from 
MasterCard of a 9.3% year-over-year increase in overall 
transactions, while Visa USA reported a 14.3% increase for the 
week.

Outback Steakhouse (OSI) reported a rise in its November same-
store sales of .8% y-o-y.  Sales at its Carrabba's Italian Grills 
rose 4%, Roys rose 7.7%, Bonefish Grills rose 1.5%, and Fleming's 
Prime Steakhouses saw a 15% y-o-y increase.  OSI finished higher 
by 1.2% at 43.76, just off its high for the day at 43.86.

Homebuilding material supplier RYG announced that its special 
committee of independent directors, which oversees all matters 
arising from the ongoing investigations into the executives' 
roles in some of the company's 1998 land transactions, terminated 
the company's CEO and Senior V.P./CFO "for cause."  The committee 
also terminated chairman Vic de Zen and requested that the three 
directors resign from the board.  The committee alleged that the 
roles played by these three directors demonstrated "a breach of 
their responsibilities to the company..."  V. James Sardo was 
named as the company's interim president and CEO.  RYG closed 
higher by 4% at 8.84.

Biotech firm DNA got a lift from its joint announcement with  
Roche Group that the Phase III trial of its Avastin and Folfox4 
chemotherapy treatment increased the survival rate for colorectal 
cancer patients, reducing their risk of death by 26%.  The stock 
was halted ahead of the news and rose sharply after being 
released for trading, finishing the day higher by .99% at 49.20.

AAPL had a good day as well, managing a 6.03% rise on an upgrade 
from Merrill Lynch citing strong anticipated holiday sales of its 
popular iPod product.  AAPL closed higher by 3.89 at 68.44.

After the bell, retailer HOTT lowered its Q4 target from the 49-
52 cent EPS range to 37-43 cents.  The company attributed the 
adjustment to weak November same-store sales, down 8% from 
November 2003.

Also after the bell was a statement from Treasury Department 
spokesman Tony Fratto to the effect that the administration still 
supports the "strong" dollar, but that the price of this strong 
dollar should be set in "open, competitive markets."

Tomorrow kicks off what is a full slate of economic data for the 
week, with the preliminary Q3 GDP and Chain deflator at 8:30, 
followed by consumer confidence and the Chicago PMI at 10AM.  The 
dollar and treasury story delivered a large, uncertain range 
today, and I see no reason for that to change until the forex 
markets stabilize.  The Nasdaq continues to trade bullishly 
compared with its peers but for all 3 indices, all but the most 
aggressive bears should be waiting for the market to show them 
some convincing weakness, at least on a break of the support 
levels discussed above. 


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

New York Community Bank - NYB - close: 19.92 change: +0.57

WHAT TO WATCH: NYB turned in a very strong day with a 2.9 percent 
rally.  This pushed NYB up through its recent trading range and 
above technical resistance at its 40 and 50-dma's.  We would 
watch for the move over $20.00 as a potential bullish entry point 
with a $22.00 target. The P&F chart is pretty bullish with a 
long-term target at $30.




---

Cabot Microelectronics - CCMP - close: 37.80 change: +1.04

WHAT TO WATCH: CCMP is bouncing from support near $36 after the 
pre-Thanksgiving week sell-off.  Short-term technicals are 
already turning bullish.  Watch for the move over $39.00 as a 
potential entry point.  The next hurdle should be the $42 level.  
The P&F chart is very bullish with a long-term $62 target. 




---

Northfield Labs - NFLD - close: 18.70 change: +1.21

WHAT TO WATCH: NFLD is a biotech stock that is out performing its 
peers.  Shares have not only broken out from its recent 
consolidation but are also breaking out past resistance at $18.00 
dating back to April.  Today's 6.9 percent gain was fueled by 
strong volume.  Bulls can use it as an entry point but watch out 
for round-number resistance at $20.00.   The P&F chart is bullish 
with a $27 target.




---


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

OCR $32.50 +0.55 - OCR is breaking out from its recent two-week 
trading range to hit new four-month highs.  

LANC $44.04 +0.84 - LANC is nearing major resistance in the 
$44.00-44.25 level.  Watch for the breakout.

EXM $31.17 +2.85 - Aggressive traders can use the breakout in EXM 
as an entry point. The short-term trend is up again.  We would 
target $37.50 to $40.00.

IPAR $17.12 +2.19 - IPAR soared more than 14 percent on big 
volume to hit new four-month highs and breakout over its 
exponential 200-dma.

PARL $18.10 +2.15 - PARL is in the same industry as IPAR and is 
showing a similar breakout. 

PBY $16.12 +1.27 - PBY is breaking out over the $15.00 level and 
its simple 100-dma.  A move over today's high would be bullish!

TNC $39.75 -1.14 - This looks like a bearish entry point given 
today's breakdown under the 200-dma and the $40.00 mark.  We 
would target $37.50-38.00.
 

=================================================================
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send email to Contact Support
=================================================================
DISCLAIMER
=================================================================

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

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

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

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

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


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







PremierInvestor.net Newsletter                   Monday 11-29-2004
                                                    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, CHK, ZEUS, DNR, VLCCF    

Stock Splits
  Announcements:  SKT   

Active Trader (Non-tech)
  Closed Bullish Play:

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 -
  We're impressed.  SEBL added 2.38 percent on decent
  volume to hit new five month highs. 
 
 
CHK - non-tech long -
  CHK is seeing some profit taking.  We'd watch the
  $17.25-17.50 region for support.
 
 
ZEUS - non-tech long -
  ZEUS experienced some very strong follow through
  on Friday's breakout.  Shares soared 5.25 percent 
  on Monday with extremely strong volume, which is
  very bullish.  We are raising our stop loss from 
  $18.99 to $20.65 - our entry point.  Watch for a possible
  dip back toward $22.00.  Our target remains the $24.50-
  $25.00 region.  Prepare to exit. 
 
 
 DNR - non-tech long - 
   DNR is showing more relative strength today with 
   a 1.99 percent rally.  Shares are now up eight days 
   in a row.  We're expecting some resistance near the
  $30.00 mark.
 
 
VLCCF - high risk/reward long -
  VLCCF is also showing some relative strength with a
  1.75 percent gain today. 
 

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

SKT declares a 2-for-1 stock split

This morning just before the lunch hour Tanger Factory Outlet 
Centers, Inc. (NYSE:SKT) announced that its Board of Directors had 
approved a 2-for-1 stock split. 

The split will take effect as a stock dividend payable on December 
28th, 2004 to shareholders on record as of December 17th.


About the company:
Tanger Factory Outlet Centers, Inc. is a fully integrated, self- 
administered and self-managed publicly traded (REIT), that 
presently has ownership interests in or management 
responsibilities for 36 centers in 23 states coast to coast, 
totaling approximately 8.8 million square feet of gross leasable 
area. (source: company press release)


========================
Active Trader (Non-tech)
========================

Closed Bullish Play:

OMI Corp - OMM - close: 20.98 change: +0.73 stop: 18.49     

Exit alert!  OMM had already hit our initial profit target in the 
$20-21 range but we decided to keep it given its relative strength.  
We set a new target for the $21.50-22.00 range this past week and 
OMM has already hit it.  The strength this morning (with an 
intraday high of $22.05) was due to positive news from the company.  
Management issued bullish upside guidance of at least $1.10 a share 
for its Q4 earnings outlook.  Compared to consensus analysts' 
estimates of just 98 cents we can see why the stock jumped.  At 
least one broker firm reiterated their "buy" rating on the stock 
following the news.  Looking at the intraday chart OMM still looks 
bullish but we're going to exit following out revised target for a 
16 percent run (out at $21.50). 

Picked on November 10 at $18.45 
Gain since picked:       + 2.53
Earnings Date          10/18/04 (confirmed)
Average Daily Volume:       1.1 million 




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

Value Plays With Bullish Signals
---------------------------------
Ticker  Company Name               Close     Change

AMX     America Movil              46.38     +1.58
GDW     Golden West Financial     118.57     +1.39
HDI     Harley-Davidson            58.28     +0.58
CIT     CIT Group                  41.99     +0.77
ITT     ITT Industries             86.40     +0.60
ABK     Ambac Financial            81.71     +0.66

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

PBY     Pep Boys                   16.12     +1.27
XXIA    IXIA                       15.05     +1.30
NFLD    Northfield Labs            18.70     +1.21
KONG    Kongzhong Corp             10.96     +1.55
VOXX    AudioVox Corp              15.21     +1.01
IPAR    Inter Parfums Inc          17.12     +2.19

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
AAPL    Apple Computer             68.44     +3.89
INFY    Infosys Technologies       70.30     +4.60
BEN     Franklin Resources         65.47     +1.72
KCI     Kinetic Concepts           64.22     +2.97
ICBC    Independence Cmmty Bank    42.78     +2.21
ELAB    Eon Labs                   26.94     +1.57
RMBS    Rambus Inc                 23.57     +1.40

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

WMT     Wal-Mart Stores            53.15     -2.17
K       Kellogg Co                 43.47     -1.54
BBY     Best Buy Co                57.78     -1.14
OSIP    OSI Pharmaceuticals        47.96     -2.53
MTW     Manitowoc Co               37.01     -1.48
CNCT    Connetics                  20.30     -1.23
SALM    Salem Communications       24.85     -1.39
TNC     Tennant Co                 39.75     -1.14

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

BNN     Brascan Corp               36.99     -1.81
NMG.A   Neiman Marcus              66.58     -2.62
AXP     American Express           55.82     -0.29
COF     Capital One Financial      78.51     -1.47
FPL     FPL Group                  71.71     -1.00
TOL     Toll Brothers              51.26     -2.20
JOE     St. Joe Co                 54.80     -1.54


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