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Daily Newsletter, Monday, 12/06/2004

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PremierInvestor.net Newsletter                   Monday 12-06-2004
                                                    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: Sleeper   
Watch List: Drugs to the Lottery and more!  


===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
      12-06-2004           High     Low     Volume   Adv/Dcl
DJIA    10547.06 - 45.15 10591.99 10526.82 1.72 bln 1153/1673
NASDAQ   2151.25 +  3.29  2157.43  2138.21 2.13 bln 1346/1713
S&P 100   566.59 -  0.49   567.79   564.57   Totals 2499/3386
S&P 500  1190.25 -  0.92  1192.41  1185.18
SOX       446.88 +  1.60   449.05   440.36
RUS 2000  639.03 -  3.18   642.21   636.56
DJ TRANS 3707.25 - 19.49  3727.85  3701.47
VIX        13.19 +  0.23    13.40    12.93
VXO (VIX-O)13.57 -  0.04    14.29    13.37
VXN        19.53 +  1.27    19.60    18.68
Total Volume 3,859M
Total UpVol  2,149M
Total DnVol  1,590M
Total Adv  2499
Total Dcl  3386
52wk Highs  149 
52wk Lows    23
TRIN       0.99
PUT/CALL   0.75 
===============================================================

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

Sleeper
Jonathan Levinson

Traders perturbed by the whippy price action were comforted by 
the extremely light volume today, with QQQQ barely managing to 
trade half of Friday's volume.  Despite the relatively tight 
price range and light volume, however, volatility rose sharply 
(QQV +10.09%)for the QQQQ while declining slightly (VXO -.7%) for 
the OEX.


Daily Dow Chart


Dow bulls must have missed the memo this morning, as the 
Industrials hung stubbornly in the red as the Nasdaq and SPX 
spent much of the session in the green.  The bounce in oil might 
have been a contributing factor, but as the one year daily chart 
above indicates, Dow bears have about 130 points left to go 
before the current bullish daily cycle picture can be 
invalidated.   The October-November flagpole rally has resolved 
itself into the "flag" portion of the pattern, and the current 
200 point range will either prove to be consolidation or 
distribution.  The direction of the break above 10650 or below 
10430 should be determinative.  Above 10640, the daily cycle 
uptick will confirm itself into a genuine upphase from a much 
higher price and oscillator low, while below 10430, bears will 
have a chance at retracing at least part of last month's rally.  
For the day, the Dow lost 45.15 to close at 10547.06.


Daily S&P 500 Chart


The SPX traded both sides of unchanged today as the Dow held 
lightly negative.  As with the Dow, the SPX is tracing a pullback 
from last week's highs within the flag atop the October-November 
rally.  The range here has risen to 1174-1200, with next support 
below at 1160 and 1140-45.  The light volume and doji prints 
today suggest that traders aren't willing to take a stand as to 
which way this deadlock will resolve.  A bounce from here will 
need to take out 1200 in order for the rally to reignite, while 
anything less suggest a renewed test of rising support at 1174.  
In my view, the bulls have a greater challenger than the bears, 
but that view is mitigated by the fact that price has been rising 
for the past 2 months and the trend is, as they say, your friend.  
Aside from aggressive traders and gunslingers, following a high 
volume range break should be the safer approach.  The SPX closed 
lower by .92 at 1190.25.



Daily Nasdaq Chart


The less oil-sensitive Nasdaq eked out a 3.3 point gain to close 
at 2151.3.  The daily cycle upturn apparent on the charts of its 
peers is also apparent here, but the angle of incline is so sharp 
that the consolidation looks more like a rising wedge than a 
rising flag.  In  any case, 10125-30 is support, 2180-85 
resistance.  Below the 2050 wedge implied target, next support is 
at 2035, but the daily cycle oscillators should reverse on a 
break of 2100, if it occurs.


Weekly TNX Chart


Bonds rose today, with the ten year note yield (TNX) managing to 
break slightly below 4.26% support, losing 3 bps to close at 
4.24%.  The headlines this morning attributed the move to the 
shootout at the US embassy in Saudi Arabia (discussed below), but 
I suspect that that particular event was a tempest in a teapot 
for the bond market today.  The weekly cycle upphase continues 
higher, and last week's strong whipsaw saw a test of 4.44% 
resistance followed by a strong decline in the TNX following 
Friday's disappointing employment report.  A move below current 
levels should target 4.14%-4.16% support, but until the weekly 
cycle turns down, these pullbacks should remain corrective for 
the upphasing TNX.


The Chicago Fed's senior economist, William Strauss, told Reuters 
that he expects slower growth in 2005 of 3.3% (Real GDP), down 
from the 4.4% projected this year. The estimate, derived from the 
Fed's experts as well as attendees of the Chicago Fed's economic 
symposium, is based on the anticipated slowdown caused by higher 
interest rates and high crude oil prices.  The only component of 
GDP expected to grow was exports, based on the decline in the US 
Dollar's rendering exports more attractive to holders of rallying 
foreign currencies.   Participants expect the unemployment rate 
to decline in 2005, and for inflation to decline from its current 
2.9% level this quarter to an average estimate of 2.4% in 2005.


Weekly chart of Crude oil


Iran's oil minister Bijan Zanganeh indicated that the OPEC 
ministers will be focusing more on quota compliance than on the 
removal of production ceilings at the upcoming meeting in Cairo 
later this week. Zanganeh noted that price is very unstable 
currently, but suggested that current oversupply be dealt with 
not by raising the production ceiling but rather by compliance 
with existing production quotas.  Zanganeh had nothing to say 
about the suggestion from other OPEC members that the oil price 
band target be raised from $22-$28 per barrel to a minimum of $30 
per barrel.  When pressed on what he felt to be a fair price, 
Zanganeh replied that the market price is, by definition, fair.

That price came down significantly last week, the largest move in 
either direction in over 3 years.  Support came at 42, and 40-42 
remains strong confluence support.  The weekly cycle downphase, 
so far very strong, suggests that selling might not be over, and 
unless we see a clear move back above the 50 level, that selling 
might in fact be just getting started.  While the long term 
fundamentals for oil remain very bullish, the shape of the weekly 
oscillators suggest that the correction may well have further to 
go.  For the day, crude oil closed higher by 1.08% at 43 on the 
Nymex.

The morning opened on a bleak note as Associated Press reported 
that a number of Americans were injured in an attack on the US 
consulate in Jiddah, Saudi Arabia.  The attackers apparently used 
grenades to make it past the Saudi security personnel to the 
interior of the compound where a gunbattle ensued.  The initial 
reports stated that 7 people were killed in the 3 hour crisis, 
among which 3 attackers, but later reports stated that "several 
Americans were slightly injured" and none were killed.  2 
attackers were captured, and an American spokesperson said that 
the attackers were suspected al Qaeda militants.  Later reports 
upped the body count to 7 and then 14, but security sources 
reported that all were Arabs and Asians, many of whom staff who 
were alleged used as human shields by the attackers during the 
battle.

Spain was rocked by at least 7 explosions following a series of 
telephone warnings from callers claiming to represent the Basque 
separatist group ETA.  The explosions occurred in Leon, 
Santillana del Mar, Avila, Valladolid and Ciudad Real, Alicante, 
and Malaga.  Initial reports indicated that only minor injuries 
were caused, with subsequent reports quantifying the inured at 
18.

In corporate news, Circuit City (CC) reported a 4.3% decline in 
same-store sales for fiscal Q3 from 2003's Q3 levels.  Total 
sales were higher by 3.8% to 2.5B, missing estimates of 2.6B for 
the quarter.  The company blamed the shortfall on its decision to 
reduce its promotions of music, movies and software, and a change 
in its DSS and wireless phone business models.  The stock was 
downgraded as well by SunTrust Robinson Humphrey to "neutral," 
and the combination saw the stock get hit for a 7.46% decline to 
close at 15.

Canadian miner GG reported that it intends to purchase WHT for 
2.09B in stock in a friendly offer following its failed hostile 
bid to take over CDE.  The Sunday announcement claimed that this 
latest consolidation in the mining industry will render GG the 
eighth largest gold producer worldwide with proven reserves of 
10.5M ounces and an expected production of 1.1M ounces in 2005. 
GG closed lower by .56%  at 14.26, while CDE got clipped for 
4.73% to close at 14.03 and WHT rose 7.84% to close at 3.44.

Kimberly-Clark (KMB) announced its plan to increase its quarterly 
dividend by 12.5% to 45 cents per share and to buy back "at 
least" 1B of its own stock in 2005.  KMB expects Q4 earnings in 
the 89-91 cent range.  KMB rose .56% to close at 64.34.

Navistar (NAV) announced that it expects Q4 earnings to be no 
less than $1.88 per share compared with $1 for Q4 2003 and 8 
cents above current consensus estimates.  The company attributes 
the rise in guidance to strong engine shipments and improved cost 
structure.  NAV lost 5.88% to close at 38.73.

3Com Corp. (COMS) warned that it expects to lose 12-14 cents per 
share on revenue of 149M-153M for Q2, solidly below consensus 
estimates of 7 cents per share on revenue of 174M.  COMS lost 
3.94% to close at 4.39.

CMGI announced a loss of $600,000 for fiscal Q1, breaking even on 
a per-share basis after earning 6 cents per share on income of 
29.9M in Q1 2003.  Net revenue rose 171% to 257.1M, while total 
operating income rose 134% to 2.4M. CMGI blasted higher, adding 
32.45% as of this writing to 2.49.

The White House gave a lift to the price of gold in the 
afternoon, when spokesman Scott McClellan stated that the federal 
government would be required to borrow in order to support the 
"upfront transition" costs associated with the reform of what he 
characterized as the currently "unsustainable" Social Security 
system.  Part of this transition includes the addition of 
personal retirement accounts to Social Security.  

While there were no economic reports today, tomorrow will see the 
release of revised Q3 productivity, estimated at 2%, and later in 
the day, consumer credit for October, estimated at +6.0B.  While 
today's lack of decline certainly suggests bullishness, that 
bullishness was severely tempered in my view by the lack of 
volume that came in for the rise, particularly on QQQQ.  As noted 
in the Market Monitor, the cycle setup this morning suggested a 
stronger decline than we got, but the intraday rise came in on 
dramatically lighter volume overall.  Perhaps the big boys hadn't 
closed out enough longs or gotten sufficiently short to permit a 
deep downside move this morning.  If so, the intraday gains 
should prove to be merely distribution, and should get no further 
than the afternoon highs tomorrow.  If so, the sellers who were 
so notably absent today should push back tomorrow.  If they 
don't, we can expect yet another powerful display of strength 
from the bulls when volume returns. 


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

ICOS Corp - ICOS - close: 27.44 change: +1.58

WHAT TO WATCH: The rally continues for shares of ICOS.  Last week 
ICOS broke through round-number, psychological resistance at 
$25.00.  Today's 6.1 percent gain on strong volume has pushed 
ICOS to a new four-month high.  Bulls can thank UBS for an 
upgrade this morning from "neutral" to "buy".  Currently shares 
are challenging resistance at $27.50 and its exponential 200-dma. 
It will take a move over $28.00 to reverse the P&F chart from a 
sell signal to a buy signal.  If this occurs we would target $35 
even though there looks like heavy resistance at $30.  An 
alternative entry would be to look for another dip towards $25.  
We would not expect this to be a quick trade.




---

Gtech Holdings - GTK - close: 26.56 change: +1.17

WHAT TO WATCH: Investors responded positively to news of another 
acquisition for GTK.  The stock added 4.6 percent on above 
average volume to breakout over resistance at its simple 200-dma 
and the $26.00 level.  Currently the P&F chart is bearish but the 
stock has gone a long way towards reversing back into a buy 
signal.  Bulls can target a move to $30 from here.




---

TRM Corp - TRMM - close: 20.72 change: +1.72

WHAT TO WATCH: Heads up!  TRMM added more than 9 percent on above 
average volume to break through round-number resistance at $20.00 
on Monday.  We can't find any news or catalyst for the rally.  
This could be a bullish entry point but we'd prefer to watch for 
a move over $21.00.  If TRMM can breakout over $21.00 it would 
produce a new spread-triple-top breakout buy pattern on its P&F 
chart, which already points to a $24.50 target.  




---

Fossil Inc - FOSL - close: 25.16 change: -1.06

WHAT TO WATCH: Uh-oh!  The double-top near $32 has now grown into 
a more distinguished breakdown in FOSL.  Shares lost more than 
four percent on heavy volume on Monday.  FOSL has now broken 
support at the $26 level and its simple and exponential 200-
dma's.  The P&F chart has turned bearish with a $17 target.  We 
would watch the $25 mark, which is bolstered by the 50-week 
moving average.  A breakdown there could be an entry point.  The 
next level of support would be $22.





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

G $44.80 +0.07 - G still looks like a bullish candidate for the 
more patient investor.  

UGI $40.59 +0.62 - The relative strength is holding up for UGI.  
Watch for a move over $41.00. 

BP $59.90 +0.51 - BP is bouncing from its simple 50-dma.  Watch 
for a move over $61 to fill the gap. 

SNDK $24.66 +0.61 - SNDK is making good progress on its own move 
to "fill the gap".  Shares just broke out over its simple and 
exponential 200-dma's. 

UNTD $11.60 +0.60 - Today's gap higher looks like an attempt to 
breakout from its from its four-month consolidation.


=================================================================
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                   Monday 12-06-2004
                                                    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: QLGC, ACH    

Stock Splits
  Announcements:  BRN      


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

QLGC - tech stock long -
  Recently added QLGC climbed 4.88 percent on Monday
  as it out performed the market and its peers in the SOX.
 
 
ACH - non-tech short -
  ACH continues to sink towards support at $62 and
  its simple 50-dma.  We remain cautious as ACH looks weak.


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

BRN declares 2-for-1 stock split

 
Monday morning before the market's opening bell Barnwell 
Industries, Inc. (AMEX:BRN) announced that its Board of Directors 
had approved a 2-for-1 stock split in the form of a stock 
dividend.

This dividend will be payable on January 28th, 2005 to 
shareholders on record as of January 11th.  This is the company's 
first stock split.


About the company:
Barnwell  Industries,  Inc.  and  its  subsidiaries are 
principally  engaged  in  the business  of exploring for, 
developing, producing, and selling natural gas and  oil  in  
Canada, investing  in leasehold land in Hawaii,  and drilling 
 wells and  maintaining water systems in the State of Hawaii. 
(source: company website)


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

C       Citigroup                  46.17     +0.52
AMX     America Movil              48.53     +1.17
LEH     Lehman Brothers            85.69     +0.69
PBI     Pitney Bowes Inc           45.35     +0.52
FD      Federated Dept Stores      55.74     +0.65
ABK     Ambac Financial            82.33     +0.72

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

IDBE    ID Biomedical              18.36     +1.55
GISC    GSI Commerce               16.04     +1.09
KOMG    Komag Inc                  19.00     +1.27
ADSX    Applied Digital             7.16     +1.31
RSYS    Radisys Corp               16.01     +1.08
CYTO    Cytogen                    10.55     +1.10

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
NTAP    Network Appliance          33.77     +1.56
CSC     Computer Sciences          57.70     +1.64
AMD     Advanced Micro Devices     24.85     +1.63
ABV     Ambev                      27.60     +1.19
MFE     Network Associates         31.46     +1.54
GYI     Getty Images               61.74     +2.05
DVA     Davita Inc                 36.82     +3.32

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

NAV     Navistar Intl Corp         38.73     -2.42
FOSL    Fossil Inc                 25.16     -1.06
CATY    Cathay General             37.67     -1.54
KCP     Kenneth Cole               29.04     -1.71
JOSB    Jos A Bank Clothiers       24.06     -2.17

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

CMI     Cummins Inc                77.70     -2.18
WIT     Wipro Ltd                  24.24     -0.60
KMT     Kennametal Inc             50.26     -1.24
CGI     Commerce Group Inc         58.38     -0.43
TGI     Triumph Group Inc          39.04     -0.96
OPY     Oppenheimer Holdings       26.02     -0.41


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