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Daily Newsletter, Tuesday, 12/21/2004

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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


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Do not duplicate or redistribute in any form.







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


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