PremierInvestor.net Newsletter Tuesday 12-21-2004 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: Glad Tidings Watch List: Banking to Networking and more Market Sentiment: Checking His List ================================================================= MARKET WRAP (view in courier font for table alignment) ================================================================= 12-21-2004 High Low Volume Adv/Dcl DJIA 10759.43 + 97.80 10765.27 10661.89 1.86 bln 2324/ 920 NASDAQ 2150.91 + 23.10 2151.71 2133.34 2.02 bln 2037/1120 S&P 100 573.36 + 5.56 573.46 567.80 Totals 4361/3040 S&P 500 1205.45 + 10.80 1205.93 1194.65 SOX 424.40 + 5.00 424.91 418.42 RUS 2000 646.20 + 8.15 646.20 638.05 DJ TRANS 3792.09 + 61.20 3798.54 3730.04 VIX 11.55 - 0.28 12.00 11.37 VXO (VIX-O)11.52 - 2.09 12.23 11.35 VXN 16.94 - 1.27 18.35 16.58 Total Volume 4,080M Total UpVol 3,087M Total DnVol 923M Total Adv 4958 Total Dcl 2360 52wk Highs 460 52wk Lows 41 TRIN 0.68 NAZTRIN 0.63 PUT/CALL 0.79 ================================================================= =========== Market Wrap =========== Glad Tidings by Jim Brown While there is a new high celebration in progress on most of the indexes there were a couple not yet feeling the holiday cheer. The SOX continues to hold below resistance at 425 and well off the December highs at 453. The Nasdaq is still struggling with the 2153 level and is also under last weeks high of 2171. Dow Chart Nasdaq Chart SPX Chart Wilshire 5000 Chart The markets had a lot to celebrate with Chain Store Sales rising for the second consecutive week with a +1.6% gain. The holiday shopping season is alive and well and with only two shopping days remaining until Christmas those gift cards are flying off the counter. Ironically stores cannot count them as sales until redeemed. It is unknown if you will buy an item with a 50% margin or a 5% margin so the money goes into limbo status until spent. I have not heard any complaints from retailers being forced to hold off accounting for the cash. The ICSC reiterated its estimate for holiday spending at only +2.5% to +3.0%. This is down from the +4.0% level last year but up from this November's level at +1.8%. An economic negative the market brushed off today was the Chicago Fed National Activity Index at only +0.12. The index rallied in October to +0.49 from -0.23 in September but that rally appeared short lived. The three-month average is holding at +0.13. This index hit its highs back in early 2004 in the high 70s, low 80s and has been declining ever since. With the average holding at +0.13 we may be trying to put in a bottom and 2005 could see a rebound in activity. The pressure from high energy prices is creating a drag on the economy and this national index is proof. The real decline in the CFNAI did not begin until after July and the real escalation in oil prices began. RIMM announced earnings after the close and beat the street by +3 cents at $0.58 per share. Despite this +450% jump in earnings and raised earnings guidance the stock was crushed in after hours trading. They raised earnings guidance to a range of 60 to 67 cents per share and analysts were expecting 62 cents. There were two problems impacting the stock price. Their revenue guidance for Q4 at $390-$410 million was below the analysts estimates of $412.5 million. New BlackBerry subscribers rose +387,000 for the quarter to over two million but analysts were hoping to see stronger growth. The stock was very active in after hours and was holding at $83 and dip support from last week. The shell game in Russia over the new owner of the Yukos oil assets is continuing. There are so many players you can't tell who will be in the drivers seat from day to day. The Yukos asset, Yuganskneftegaz, was sold to a mystery bidder on Sunday for $9 billion with a true value of closer to $20 billion. This phony sale was done to legalize the eventual transfer back into Russian control. According to Russian investigators the mystery company, Baikal Finance, whose reported registration address turned out to be a café in a small town 125 miles from Moscow, may have been a front for Kremlin-backed oil company, Surgutneftegaz. Surgutneftegaz chief Vladimir Bogdanov is perceived as Kremlin-loyal and could have obeyed government instructions to use his company's reported $8 billion in cash reserves to acquire Yuganskneftegaz — and ultimately transfer it back to Gazprom. Putin said today that the buyers of the Yukos asset would likely partner with another Russian energy company with interest in the oil. Analysts said this confirmed to them that it would eventually end up as part of the state controlled gas giant Gazprom. This is exactly where Putin wanted it, right back under Russian control with oil headed back over $50 again soon. I believe strongly that this is the first shot in the coming oil wars and has guaranteed a stable oil supply for Russia regardless of what happens on a global scale. They can now be independent of outside supply concerns and insulated from future high prices. I believe we will see further positioning in the oil sector very soon. With the permanent decline of global oil production looming in our near future we can expect further subtle changes in the playing field as 2005 unfolds. Make no mistake, this was a key move in setting up the global chess board for the crucial game ahead. While Santa may be trying to tiptoe into town this week the bulls are stampeding. The Dow broke out to a new 52-week high and a new three year high at 10758. While the Dow had been lagging the other indexes for months the big caps have finally attracted the attention of the bulls. Only one Dow component finished the day in negative territory and that was JNJ at -0.12. Hardly a serious loss but just enough to keep it from being a shutout for the bears. For two weeks the Dow has been resting on support at 10650 and the final breakout today comes in advance of the normal Santa Claus rally period. That period is typically the last four days of the year and the first two days of the new year. I speculated last week we would see traders try to move into the market by midweek in anticipation of that year end liquidity rally. I was surprised by the strength of the big caps today given the weakness in chips and a lagging Nasdaq. The Nasdaq has tried for a week to get back over its prior resistance high at 2153 with no success. We have traded over that level for extended periods twice in December but we just can't seem to maintain traction at the new highs. Part of this problem is directly related to the continued weakness in chips with the SOX stuck at 425. Even the bullish outlook by SG Cowen today on Dell could only provide a minor SOX bounce. SGC said there was unusually strong demand for PCs from the corporate sector with an sharp upgrade cycle in progress. I have mentioned before that the accelerated depreciation tax benefit that expires on 12/31 was going to have an impact on year end PC sales and it appears to be working. Still the Nasdaq closed at 2150, under the psychological 2153 level but poised for a takeoff if conditions warrant. According to a report out from TrimTabs.com today the conditions are ripe for a major move. According to them money flows are stronger now than any time in the last ten years. The firm turned "leveraged bullish" or 200% long from "cautiously bearish" and 50% short. They were long since the end of October and turned short just last week. They said the market digested the three-year high in IPOs over the last two weeks with barely a pause and conditions going into the year end were very strong. They said new offerings would slack off until late January and stock buybacks were adding about $1.8 billion in cash daily. There were $20 billion in buybacks announced last week. TrimTabs also said insider selling typically slows in late December as blackout periods apply before the January earnings cycle. They expect fund flows in January to possibly surpass the $31 billion they took in last January. SPX 1300 was mentioned as a potential January target. After that paragraph above it would seem as if Wall Street was about to be overrun with stampeding bulls reminiscent of the cattle stampedes in western movies. Helping provide confirmation is the VXO (old VIX) which closed today at 11.52 and a level not seen since 1995. Yes, 1995. For nearly ten years the 18-20 level has been a reliable sell signal with the last prolonged stint around 15 back in 1996. For nearly all of 2004 that 14-15 level has been the base but a complete lack of volatility over the last quarter has caused a collapse to today's low. While it would be a historical sell signal on the surface you have to take other factors into consideration. The TrimTabs numbers above expecting an extreme liquidity boost over the next four weeks is removing the fear from the market. We still have that Microsoft cash sloshing around the market plus cash from a strong flurry of takeovers. The Dow is at three-year highs and life is good on the surface for the bullish case. It is also the time when bulls should be the most concerned. Disaster always strikes the hardest when you least expect it. When everyone lines up on the same side of the boat it usually capsizes. I do believe we are going higher over the next two weeks. Fund managers are painting the tape as hard as they can to dress up those statements and earn those bonuses. This suggests the VXO/VIX can move even lower and every tick down is another warning signal that there will eventually be a reversal. Today's close at 16.94 on the VXN (Nasdaq VIX) is an all time historical low. VXO Chart VXN Chart One factor that gives technicians cause for concern is volume indicator. For the three days prior to today the volume was very high, even extreme on Thr/Fri with Thr at 5.9B and Friday 5.985B and it was strongly weighted to the downside. While I believe this was due to the various index reweighting games it is still a caution. We really need a strong volume day to the upside to bring conviction to the market. I heard several analysts claiming today was lackluster but based on the internals it looked pretty strong. The A/D line was better than 2:1 in favor of advancers and volume was better than 3:1 in favor of up volume. Were it not for the drag from the SOX I suspect it would have been much stronger. For the rest of the week the volume is expected to slow but all indications are the markets will move higher from here. With the SPX bouncing at our 1195 level we were using as a long/short indicator on Sunday everyone should be long tonight and hoping for a that TrimTab 1300 target to come true. The market is closed on Friday and we will be putting out the Sunday newsletter on Thursday night. While I doubt anybody will be reading it until Sunday it will be there and waiting for your viewing pleasure. I would like to take this opportunity to wish everyone happy holidays and a joyous time with your friends and family. When boredom sets in over the weekend and your family has charged off to the mall to return all those thoughtful gifts you personally selected you can always spend the time registering for the End of Year Renewal Special. Buy the dips until the trend changes. Jim Brown Editor ================================================================== WATCH LIST ================================================================== The PremierInvestor.net watch list is not designed to be read as full fledged stock picks. Rather we would prefer to offer it as an extra tool in today's investor toolbox. Think of it as a radar screen with your own radar operator pointing out interesting developments, technical patterns or potential plays that you may or may not have seen on your own. Due to time constraints we do glance at the news but rarely do we have time to fully read pertinent news stories, due background research and other necessary screens that investors should do before making a decision. A common exercise is to read the entry, glance at the sector and other stocks in that industry and then compare what's happening in the stock to what's happening in the broader market indices. We hope you enjoy the Watch List and that it proves to be a useful tool for your own trading success. STOCKS WORTH WATCHING --------------------------------- Maverick Tube - MVK - close: 31.16 change: +0.73 WHAT TO WATCH: Is that a new inverse (bullish) H&S pattern for MVK? It looks like shares are working on the right shoulder and its technical oscillators are turning bullish. The MACD juts produced a new buy signal. We would watch for a breakout over the $32.00-32.25 region. A move over $33.00 would be a new quadruple-top breakout buy signal on its P&F chart. --- Hibernia - HIB - close: 29.98 change: +0.57 WHAT TO WATCH: The rally in HIB looks tempting. We almost added HIB to the play list with a trigger to go long over $30.00. The stock has been a consistent winner over the last several months with traders buying dips to support at the 50-dma. Yet HIB has been consolidating sideways for the last six weeks and looks ready to start the next leg higher. We would watch for a move over $30.00. Target a run towards $32-33 and use a stop loss under the 50-dma. --- Global Imaging - GISX - close: 38.99 change: +1.26 WHAT TO WATCH: The high-volume breakout in GISX sent shares above the $38.50 level to new all-time highs. Technicals are positive and its MACD just produced a new buy signal. Bulls may want to consider positions here or on a dip back towards $38.00. The P&F chart is very bullish with a $64 target. We would probably target a move toward $43-45. Watch for possible resistance at $40. --- Black Box - BBOX - close: 44.45 change: +2.34 WHAT TO WATCH: A broker upgrade for BBOX helped push the networker to a 5.5 percent gain on volume almost three times the norm. The stock is back above its simple 200-dma but still has resistance at the $45.00 level. Technicals are turning positive again so we would watch for the breakout and target a move toward $50.00. The bullish P&F chart currently points toward $64.00. Watch out for possible resistance in the $52.50 region. ----------------------------------- RADAR SCREEN - more stocks to watch ----------------------------------- CA $30.95 +0.68 - Looks like traders are buying the dip to $30.00 just as the GSO software index rebounds. AW $9.00 +0.07 - The consolidation in AW has narrowed and we believe a breakout (up or down) is imminent. C $47.19 +0.50 - We're still watching Citigroup for a breakout over $48.00. TYC $35.60 +0.74 - Today's breakout over the $35.00 level clears significant resistance and produced a new buy signal in TYC's MACD indicator. =============================== Market Sentiment =============================== Checking His List - J. Brown Santa has been making his list and checking it twice. It looks like the bulls came up on the nice side and the seasonal "Santa Claus" rally may have begun. According to the Stock Trader's Almanac the January effect actually tends to begin around mid- December which then leads into the real Santa Claus rally which is typically the last five days of December and the first two trading days in January. Altogether it adds up to a very bullish time of year for equities and the new 3 1/2 year highs for the Dow Industrials really helps set the holiday mood. Overall market internals were pretty good. The number of advancing stocks out weighed decliners by almost 3-to-1 on the NYSE and about 2-to-1 on the NASDAQ. Up volume was about three times stronger than down volume on both exchanges. Speaking of volume the overall volume totals were pretty good considering there are just two trading days left to Christmas. There were some pretty big declines in the volatility indices. The VIX slipped 2.3 percent to hit 11.55. The VXO (or old VIX) fell about 15 percent to 11.52. The VXN fell almost 7 percent to close at 16.95. That is a new all-time low for the VXN and the VIX is nearing new ten-year lows. What does this mean? It means bullish sentiment is hitting extremes. Normally at these levels we'd be talking about a potential top but we suspect that the volatility indices will continue to drop as stocks climb towards New Year's Eve. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 10765 52-week Low : 9708 Current : 10759 Moving Averages: (Simple) 10-dma: 10637 50-dma: 10334 200-dma: 10240 S&P 500 ($SPX) 52-week High: 1207 52-week Low : 1060 Current : 1205 Moving Averages: (Simple) 10-dma: 1193 50-dma: 1157 200-dma: 1125 Nasdaq-100 ($NDX) 52-week High: 1635 52-week Low : 1301 Current : 1609 Moving Averages: (Simple) 10-dma: 1609 50-dma: 1538 200-dma: 1452 ----------------------------------------------------------------- CBOE Market Volatility Index (VIX) = 11.55 -0.28 CBOE Mkt Volatility old VIX (VXO) = 11.52 -2.09 Nasdaq Volatility Index (VXN) = 16.94 -1.27 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.79 783,169 620,054 Equity Only 0.51 141,297 289,787 OEX 1.07 16,019 17,237 QQQQ 2.57 17,456 44,883 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 76.0 - 0.3 Bear Correction NASDAQ-100 78.0 + 1 Bull Confirmed Dow Indust. 70.0 + 0 Bull Confirmed S&P 500 77.0 + 0.4 Bull Confirmed S&P 100 77.0 + 0 Bull Confirmed Bullish percent measures the number of stocks in an index currently trading on a buy signal on their point and figure chart. Readings above 70 are considered overbought, and readings below 30 are considered oversold. Bull Confirmed - Aggressively long Bull Alert - Cautiously long Bull Correction - Pause or pullback in upward trend Bear Alert - Take defensive action if long Bear Confirmed - High risk if long, good conditions for shorting Bear Correction - Pause or rebound in downtrend ----------------------------------------------------------------- 5-dma: 1.04 10-dma: 1.02 21-dma: 0.98 55-dma: 1.07 Extreme readings above 1.5 are bullish, and readings below .85 are bearish. These signals don't occur often and tend be early, but when they do, they can signal significant market turning points. ----------------------------------------------------------------- Market Internals -NYSE- -NASDAQ- Advancers 2104 1984 Decliners 746 1058 New Highs 279 142 New Lows 8 12 Up Volume 1444M 1467M Down Vol. 390M 478M Total Vol. 1857M 1982M M = millions ----------------------------------------------------------------- Commitments Of Traders Report: 12/14/04 Weekly COT report discloses positions held by small specs and commercial traders of index futures contracts at the Chicago Mercantile Exchange and Chicago Board of Trade. COT data can be found at www.cftc.gov. Small specs are the general trading public with commercials being financial institutions. Commercials are historically on the correct side of future trend changes while small specs tend to be wrong. S&P 500 Commercial traders upped their positions in both longs and shorts with the net result as a decrease in their bearish bias. Small traders did the same but with a net result in a decrease in their bullish bias. Commercials Long Short Net % Of OI 11/23/04 462,408 491,384 (28,976) (3.0%) 11/30/04 462,394 491,813 (29,419) (3.0%) 12/07/04 450,072 498,057 (47,985) (5.0%) 12/14/04 502,471 540,494 (38,023) (3.6%) Most bearish reading of the year: (111,956) - 3/06/02 Most bullish reading of the year: 23,977 - 12/09/03 Small Traders Long Short Net % of OI 11/23/04 171,192 150,606 20,586 6.4% 11/30/04 176,031 148,876 27,155 8.3% 12/07/04 187,707 135,776 51,931 16.0% 12/14/04 201,428 164,111 37,371 10.2% Most bearish reading of the year: (1,657)- 5/27/03 Most bullish reading of the year: 114,510 - 3/26/02 E-MINI S&P 500 Hmm.. we have some interesting movement here. Commercials upped both their longs and shorts but their bearish bias has been slowly decreasing for weeks. Meanwhile the small traders more than doubled their short positions putting a serious dent in the overall bullish bias. Commercials Long Short Net % Of OI 11/23/04 412,724 849,091 (436,367) (34.6%) 11/30/04 439,074 855,440 (416,366) (32.2%) 12/07/04 470,553 805,234 (334,681) (26.2%) 12/14/04 556,980 899,616 (342,636) (23.5%) Most bearish reading of the year: (436,367) - 11/23/04 Most bullish reading of the year: 133,299 - 09/02/03 Small Traders Long Short Net % of OI 11/16/04 445,737 70,169 375,568 72.8% 11/23/04 400,995 62,080 338,915 73.1% 11/30/04 386,665 67,926 318,739 70.1% 12/07/04 311,838 66,496 245,342 64.8% 12/14/04 398,915 137,598 261,317 48.7% Most bearish reading of the year: (77,385) - 09/02/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 We are seeing some interesting movement here too. Commercial traders significantly raised their positions in both longs and shorts with a serious drop in their bullish bias as the net effect. Meanwhile small traders added a huge chunk of new longs compared to a significant jump in shorts with the net effect being a sharp drop in their bearish bias. Commercials Long Short Net % of OI 11/23/04 58,159 34,104 24,055 26.0% 11/30/04 56,629 30,571 26,058 29.8% 12/07/04 57,621 34,313 23,308 25.4% 12/14/04 73,554 50,286 23,268 18.7% Most bearish reading of the year: (21,858) - 08/26/03 Most bullish reading of the year: 26,058 - 11/30/04 Small Traders Long Short Net % of OI 11/23/04 11,153 39,712 (28,559) (56.1%) 11/30/04 9,902 44,779 (34,877) (63.7%) 12/07/04 15,489 49,064 (33,575) (52.0%) 12/14/04 26,781 58,159 (31,378) (36.9%) Most bearish reading of the year: (34,877) - 11/30/04 Most bullish reading of the year: 19,088 - 01/21/02 DOW JONES INDUSTRIAL Commercial traders added significant amounts to both their long and short positions with a net decrease in their bearish bias. Small traders also poured a lot of new money into both their long and short positions with the net effect as a decrease in their bearishness. Commercials Long Short Net % of OI 11/23/04 22,527 25,537 (3,010) (6.2%) 11/30/04 22,622 25,411 (2,789) (5.8%) 12/07/04 25,523 27,351 (1,828) (3.4%) 12/14/04 36,960 38,566 (1,606) (2.1%) Most bearish reading of the year: (8,322) - 1/16/01 Most bullish reading of the year: 15,135 - 10/16/01 Small Traders Long Short Net % of OI 11/23/04 5,833 8,299 (2,466) (17.4%) 11/30/04 5,739 8,536 (2,797) (19.6%) 12/07/04 5,274 9,507 (4,233) (28.6%) 12/14/04 13,445 19,089 (5,644) (17.3%) Most bearish reading of the year: (12,106) - 3/09/04 Most bullish reading of the year: 8,523 - 8/26/03 ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. PremierInvestor.net staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control. 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PremierInvestor.net Newsletter Tuesday 12-21-2004 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: PDCO, ACI Active Trader (Non-tech Stocks) New Bullish plays: BMS, CYT, USB 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 ================================================================== PDCO - non-tech long play - PDCO looks ready to breakout over resistance at $43.00. ACI - non-tech long play - ACI surged 4.69 percent on strong volume Tuesday following an upgrade from Smith Barney who raised its outlook from neutral to a buy. ACI's technical oscillators are turning positive again and its MACD is nearing a new buy signal. ================================================================== Active Trader (AT) Non-Tech Stock section ================================================================== --------- New Plays --------- New Bullish Plays ----------------- Bemis Co - BMS - close: 29.01 change: +0.46 stop: 27.49 Company Description: Bemis Company is a major supplier of flexible packaging and pressure sensitive materials used by leading food, consumer products, manufacturing, and other companies worldwide. Founded in 1858, the Company reported 2003 net sales of $2.6 billion. The Company's flexible packaging business has a strong technical base in polymer chemistry, film extrusion, coating and laminating, printing and converting. The Company's pressure sensitive materials business specializes in adhesive technologies. Based in Minneapolis, Minnesota, Bemis employs about 12,000 individuals in 52 manufacturing facilities in 9 countries around the world. (source: company press release) Why We Like It: The Dow Jones Transportation index is hitting new all-time highs and shipping giants like UPS and FDX says business is booming. If businesses and consumers are shipping more goods they're going to need more packaging to ship those goods. That could be the logic driving BMS toward new highs of its own. Shares recently cleared resistance in the $28.50 level but there is still resistance near $29.00-29.12. We want to go long with a TRIGGER set at $29.15 so we can catch the breakout on a new all-time high. The Point & Figure chart is bullish with a double-top breakout buy signal and a $45 target. We are going to target a move into the $33-35 range. Annotated Chart: Picked on December xx at $xx.xx <-- see TRIGGER Gain since picked: + 0.00 Earnings Date 01/20/05 (unconfirmed) Average Daily Volume: 411 thousand --- Cytec Industries - CYT - close: 51.10 change: +1.28 stop: 47.99 Company Description: Cytec Industries is a specialty chemicals and materials technology company with sales in 2003 of $1.5 billion. Its growth strategies are based on developing technologically advanced customer solutions for global markets including: aerospace, plastics, industrial coatings, mining, and water treatment. (source: company press release) Why We Like It: We like CYT as a technical breakout play. The stock has been trading in a wide range between $44 and $50 since July. Shares just broke out over resistance at $50.00 today with volume well above average. We can't find any news to account for today's breakout. We do see that the EU approved CYT's planned acquisition of UCB's chemical unit, a Belgian drug company; but this news came out early Monday morning. Technical oscillators are positive and the P&F chart shows a new bullish buy signal pointing to a $66 target. We're going to set our initial, short-term target at $55.00 although it wouldn't surprise us to see CYT exceed the $55 level. If shares dip look for a bounce from $50 as another entry point. Annotated Chart: Picked on December 21 at $51.10 Gain since picked: + 0.00 Earnings Date 01/20/04 (unconfirmed) Average Daily Volume: 357 thousand --- US Bancorp - USB - close: 30.88 change: +1.01 stop: 29.25 Company Description: U.S. Bancorp, with $193 billion in assets, is the 6th largest bank holding company in the United States. The company operates 2,346 banking offices and 4,621 ATMs in 24 states, and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. U.S. Bancorp is home of the Five Star Service Guarantee in which the company pays customers if certain key banking benefits and services are not met. U.S. Bancorp is the parent company of U.S. Bank. (source: company press release) Why We Like It: We're going to experiment again with a bullish play in the banking sector again but this time we're going to pick a huge money center bank like USB. The stock started the session of strong but the rally got even stronger after lunchtime. This afternoon USB announced a 25 percent increase in its cash dividend and a 150 million-share stock buy back program. The dividend is now worth $1.20 a year with the next 30-cent payout on January 17th, 2005 to shareholders on record as of December 31st. USB also looks good as a technical breakout play. The $30.00 level was major overhead resistance and after flirting with it for weeks this looks like the beginning of the next leg up. We plan to target a move toward the $33.00 region. Our time frame is the end of February. This should allow us to capture the run fro $30.88 to $33 and the 30-cent dividend. FYI: for the P&F trades out there USB's chart points to a $37 target. If USB dips we would look for a bounce from the $30.50 level. Annotated Chart: Picked on December 21 at $30.88 Gain since picked: + 0.00 Earnings Date 01/18/05 (unconfirmed) Average Daily Volume: 4.2 million ================================================================== Stock Splits ================================================================== Announcements ------------- None ================== Trading Ideas ================== This section contains stocks that meet criteria which may make them of interest to long and short side traders. These are not recommendations, nor have they been reviewed by PremierInvestor editors for investment potential. However, each of them has technical and fundamental characteristics that make them worthy of further review by traders and investors looking for fresh ideas. New stocks will appear daily following the market close. Value Plays With Bullish Signals --------------------------------- Ticker Company Name Close Change WB Wachovia Corp 52.80 +0.65 FNM Fannie Mae 70.54 +1.12 BAC Bank of America 46.33 +0.81 C Citigroup 47.27 +0.58 MO Altria Group Inc 61.02 +0.77 AIG American Intl Group 65.83 +0.78 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- SIM Grupo Simec 6.20 +1.05 XRTX Xyratex Ltd 17.11 +1.13 ARS Aleris Intl Inc 16.74 +2.31 CLHB Clean Harbors 14.03 +1.28 ANGO Angiodynamics 18.36 +3.06 ATCO American Technology 10.06 +1.52 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- FRE Freddie Mac 71.81 +1.32 IACI InterActiveCorp 27.41 +1.53 UNP Union Pacific 65.80 +3.55 BNI Burlington Nrth Santa Fe 48.51 +2.40 SEPR Sepracor 59.05 +1.94 CVC Cablevision Systems 25.18 +3.07 CP Canadian Pacific Ltd 33.60 +1.60 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- LMT Lockheed Martin 57.70 -1.38 LFC China Life Insurance 27.83 -1.05 BSC Bear Stearns 102.60 -1.90 R Ryder Systems 46.91 -2.06 GTK Gtech Holdings 26.05 -2.31 RMBS Rambus Inc 21.50 -3.85 YRK York Intl Corp 33.40 -4.96 LFUS Littlefuse Inc 34.40 -2.79 IMGC Intermagnetics 26.73 -2.58 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ----------------------------------------- YCC Yankee Candle Co 32.71 -0.60 COHR Coherent Inc 30.75 -0.62 MPX Marine Products 27.22 -0.64 PDA Perdigao Sa 40.70 -0.66 ================================================================= 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. 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