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Daily Newsletter, Sunday, 12/26/2004

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PremierInvestor.net Newsletter          Weekend Edition 12-26-2004
                                                    section 1 of 3
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: Too Much Eggnog         
Market Sentiment: Seasonal Trends    
Watch List: Recreation to Apparel to Tech and more!          

=================================================================
MARKET WRAP  (view in courier font for table alignment)
=================================================================
       WE 12-24        WE 12-17        WE 12-10        WE 12-03 
DOW    10827.12 +177.20 10649.9 +106.70 10543.2 - 48.99 + 69.98 
Nasdaq  2160.62 + 25.42 2135.20 +  7.13 2128.07 - 19.89 + 45.99 
S&P-100  576.06 +  8.67  567.39 +  1.89  565.50 -  1.58 +  4.43 
S&P-500 1210.13 + 15.93 1194.20 +  6.20 1188.00 -  3.17 +  8.52 
W5000  11933.81 +150.45 11783.4 + 91.38 11692.0 - 43.29 + 99.63 
SOX      426.43 +  2.68  423.75 +  1.00  422.75 - 22.53 + 14.30 
RUT      649.37 +  7.29  642.08 +  9.84  632.24 -  9.97 + 11.05 
TRAN    3787.78 + 36.71 3751.07 + 65.04 3686.03 - 40.71 + 78.75 
VXO       11.23           12.71           13.20           13.61 
VXN       16.80           18.21           19.57           18.26 
=================================================================

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

Too Much Eggnog
by Jim Brown

After several weeks of pre holiday celebrating that sent 
many of the indexes to new highs the markets stumbled into
Thursday's close and barely remained positive. The tipsy
trading on Thursday exhibited very little bias as the 
markets closely resembled the winding down of a holiday 
party with revelers heading for the door. With $60 billion,
yes billion, in bonuses being paid to Wall Street managers
as the year end draws to a close there was just enough
positive bias to protect those bonuses. 

Dow Chart – Weekly

 
Nasdaq Chart – Monthly

 
SPX Chart – Monthly

 

While traders were attending the office party economic 
reports were flowing faster than Christmas cheer. The
Jobless Claims bounced back from their multi month lows
at 316K the prior week to a more normal 333,000 for the
current week. It appears that abnormally low number last
week and those abnormally high numbers of 361K and 350K 
the previous two weeks were all errors in the seasonal 
adjustments. With this weeks claims back at 333k and
the recent average, the conditions appear to be back 
to normal. 

Durable Goods rebounded from last months -0.9% drop to 
grow +1.6% in November. However, orders ex-transportation
fell -0.8%. This was the second consecutive decline. The
gain in the headline number was due mainly to a +64.2%
jump in civilian aircraft orders. You would have thought
that big a jump in aircraft orders would have pushed the
headline number even higher but a -35% drop in communication
equipment offset much of those aircraft gains. Defense orders
also fell -31.8%, general machinery -3.3% and computers fell
-4.2%. Backorders rose +1.2% stretching their consecutive
string or gains to 15 months. 

Personal Income rose +0.3% for November with wage growth 
rising a little slower at +0.2%. Spending rose by +0.2%
and even more remarkable savings rose +0.3%. All of these
numbers may seem trivial but in the greater scheme of
things this is a continued improvement in the face of
potential economic weakness. This was the slowest wage
and salary growth in five months but the key word is 
still growth. 

The Monthly Mass Layoffs for November rose again to 1399
and will impact 130,423 workers. This was the second monthly
increase and well above the lows at 69,000 back in Aug/Sep.
Manufacturing continues to be the weakest sector with 29%
of the layoffs and the Western region the weakest area. The
initial jobless claims for November showed the West with
the most new claims at 46,854. 

New home sales dropped -12% in November to an annualized
rate of 1.125 million. This was the strongest drop in a
decade. Inventory levels rose for the fifth month and now
stands at a 4.5 month supply. I discussed the drop in 
housing starts last week as indications that builders
may be experiencing a buildup in inventory and could be 
holding off on new starts until just before spring. This
sales number suggests the ever higher trend may be slowing
not that the bubble is bursting. With inventory at the
highest levels since Feb-2003 there could be some continued
price declines if buying does not pickup in the spring. 
Prices fell -5.2% in November. This could pressure earnings
by the builders but nobody seems worried. The drop in sales
had no real impact on builder stocks with only minor losses
for the day. 

Despite the layoffs, drop in home sales and the slow 
down in personal income we saw Consumer Sentiment jump
to its highest level since January at 97.1. This was a
gain of +4.3 points from November and +1.4 from the 
initial December reading. With the election behind us 
we no longer have every TV commercial telling consumers
how bad conditions have been over the last four years.
The market is hitting new multiyear highs and cash 
coming into funds at year end is expected to be at 
record levels. Consumers have forgotten about the high
gas prices in October and are oblivious about the gas 
problems ahead. Interest rates are still low despite 
continued hikes by the Fed. Jobs are being created and
from the consumer viewpoint life may not be good but it
is a heck of a lot better than it was last year. One 
survey released on Thursday showed over 50% of workers
would like to change jobs. While I am surprised it was
not any higher it is amazing that so many people want 
to change what they do for a living. 

Franklin Raines was tossed out on his fanny on Thursday
but it was not a hard landing. Fannie Mae allowed him 
to retire early and that allowed him to keep all his 
compensation totaling some $36 million and an annual 
pension of $1 million for life. This has quite a few 
analysts up in arms since the majority of his 
compensation was tied to the stock price. The same stock
price that he is accused of manipulating by managing
earnings. If anything criticism is raining down on 
Franklin and odds are good he will be booted in the 
fanny from board positions he holds in several other
companies. 

I know some people are getting tired of this but there
are very bad implications from the Russian takeover of 
Yukos. The hourly news on Thursday was full of sound 
bites where Putin acknowledged that the takeover by the
state was orchestrated by perfectly legitimate market 
means and was absolutely ethical. The smug acknowledgement
by Putin was like a slap in the face for democracy in 
Russia and analysts are racing to see who will be the 
next target. The game board for strategic global oil 
assets is changing as we move ever closer to the coming
oil shortage. We had news today that China, in fear their
oil supply from Russia may be in danger, was moving to 
acquire significant production from Canada. Guess who 
currently buys the majority of Canadian oil? The U.S. 
of course. Should China bid enough to acquire future 
oil from Canada then the price we pay for any remaining
oil supplies would also be higher. More than price 
concerns we would then have increasing supply concerns
if forced to compete with China for the available 
production. There is an oil shortage ahead and the 
positioning by major countries we are watching play 
out on the global stage is proof of that shortage ahead. 

If you are still looking for that late holiday gift then 
Genetic Saving and Clone has the perfect copycat gift for
you. Literally! They will copy your cat and produce a dead
ringer clone for a mere $50,000 and give you a money back
guarantee. The guarantee is that the cat will be a perfect
genetic copy in everything but personality. Personality is
a learned component based on upbringing and life experiences
but as cat lovers all agree cats think they are better 
than humans anyway. A woman in Houston was the first cash 
customer and is very happy with her replacement pet. 
According to the company hundreds of prospective purchasers
have already supplied DNA material from their cats in hopes
of a successful clone. Dog lovers will have the last laugh
today however because in an interview with the company 
president he said dogs were much more difficult to clone
than cats because they were more complex. He said dogs
were even harder to clone than humans. I guess that proves
that humans are actually a dogs best friend not the other
way around. Abusing this news item for all it is worth I 
guess the next thing to look forward to is dogs having 
their pet humans cloned. 

Back to the reality of the markets the Dow posted a new
closing high for the year on Thursday at 11827. That was
only a +11 point gain for the day but it was enough to
nearly guarantee a continued post holiday rally. That 
was +525 points higher than the pre Christmas close in
2003 at 10305 and only 60 days away from its low for this
year at 9708 on Oct-25th. Essentially the gains for the
entire year for the Dow have transpired over the last 60 
days with the first ten months of declines only the preshow.
The odds are good we will see 11000 sometime next week and
the odds are also good that could be our battleground for
quite a while. 11000-11250 was the upside resistance range
from April 1999 through June of 2001. We traded well above
and below that range during that period but that is the
level we must overcome for any real gains in 2005. 

The Nasdaq struggled higher on Thursday as well to close
at 2160 and just over that 2153 level that has been causing
so much trouble. I believe this time we will see a move 
higher and we will see 2250 become the next resistance 
level to cuss. The Nasdaq is still struggling under the
weight of the SOX and its strong hold on 425. Despite
some decent chip news on Thursday the SOX only managed
to post a two point gain to 426. The Russell is trying
to pull the Nasdaq higher with its all time high close
on Friday at just over 649. Both the SOX and the Russell
have provided little upward pressure for the last two
days but at least the Russell is poised for another leg
higher. It should be the index of choice next week. 

I mentioned the $60 billion in bonuses expected to be
paid to Wall Street money managers as the year comes to
a close. These people have a very strong motive to keep
the markets printing new highs right into the close on
Dec-31st. This performance-based compensation is keeping
funds fully invested in hopes of a retirement cash 
windfall in January. That windfall is currently expected
to be more than $31 billion with estimates rising daily. 
Even if it does not provide a new leg up for the rally
it should give those managers with overbought positions
a volume cushion to sell into. 

For next week the game plan is clear, remain invested as
long as the market continues higher. Next week is when
the typical Santa rally occurs and market worries should
not appear until the first week of January. There are
no material economic events on Monday and I doubt the
market would pay attention anyway. Holiday cheer and 
performance anxiety should supply all the motive power
we need. Remember the adage, "Should Santa fail to call
bears may come to Broad and Wall." All eyes will be
watching for the Santa rally to appear.    
 
Jim Brown
 

================================================
Market Sentiment
================================================

Seasonal Trends
- J. Brown

It looks like a Merry Christmas for stocks on Wall Street.  Would 
you believe the traditional "Santa Claus" rally hasn't even begun 
yet?  It's true.  Normally the Santa rally is the last five days 
of the year and the first two trading days in January, according 
to the Stock Trader's Almanac by Hirsch.  This past week has been 
one of seasonal bullishness and arguably some mutual fund window 
dressing for the year-end and quarter-end.  

Thursday's gains may not have been stunning but we're impressed 
with the market's relative strength.  You can bet that 3 1/2 year 
highs for the Dow and three-year highs for the S&P 500 are bound 
leave many individual investors in a cheerful mood.  The economic 
data out on Thursday didn't hurt the bulls.  Durable goods orders 
rose better than expected and consumer confidence closed December 
above expectations.  

I am beginning to worry a bit about January.  The volatility 
indices closed at or near new multi-year lows again.  Sooner or 
later these will correct as the market sees a significant pull 
back and it could be sooner rather than later.  I also want to 
point out that the bullish percent data, while positive, are also 
near very high levels and in reversal territory.  

Next week could be a quiet one.  The economic data is almost 
nonexistent and there are zero earnings announcements to speak 
of.  We can look forward to more window dressing and some tax 
loss selling for any big losers. 



-----------------------------------------------------------------

Market Averages

DJIA ($INDU)

52-week High: 10864
52-week Low :  9708
Current     : 10827

Moving Averages:
(Simple)

 10-dma: 10696
 50-dma: 10365 
200-dma: 10244 



S&P 500 ($SPX)

52-week High: 1213
52-week Low : 1060
Current     : 1210

Moving Averages:
(Simple)

 10-dma: 1201
 50-dma: 1163
200-dma: 1126



Nasdaq-100 ($NDX)

52-week High: 1635
52-week Low : 1301
Current     : 1613

Moving Averages:
(Simple)

 10-dma: 1611
 50-dma: 1545
200-dma: 1454


-----------------------------------------------------------------

CBOE Market Volatility Index (VIX) = 11.23 -0.22 
CBOE Mkt Volatility old VIX  (VXO) = 11.23 -0.58
Nasdaq Volatility Index (VXN)      = 16.80 -0.35 


-----------------------------------------------------------------

          Put/Call Ratio  Call Volume   Put Volume

Total          0.84        449,664       376,167
Equity Only    0.57        375,124       212,569
OEX            2.64          8,076        21,352
QQQQ           1.31         15,804        20,727


-----------------------------------------------------------------

Bullish Percent Data

           Current   Change   Status
NYSE          76.6    + 0.6   Bear Correction
NASDAQ-100    78.0    + 0     Bull Confirmed
Dow Indust.   73.3    + 3.3   Bull Confirmed
S&P 500       78.0    + 1     Bull Confirmed
S&P 100       78.0    + 1     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: 1.05
10-dma: 0.99 
21-dma: 0.96
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    1535      1675
Decliners    1228      1334

New Highs     270       137
New Lows       10        11

Up Volume    671M      873M
Down Vol.    478M      485M

Total Vol.  1189M     1423M
M = millions


-----------------------------------------------------------------

Commitments Of Traders Report: 12/14/04

**The COT data has not yet been updated.  We expect
  it will be here by next Tuesday, Dec. 28th.


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
 

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

Brunswick Corp - BC - close: 49.55 change: +0.67

WHAT TO WATCH: The four-month rally in BC stalled when it hit the 
$50 level in November.  Now after weeks of consolidating sideways 
shares of BC look ready to breakout.  Technicals are turning 
positive and its MACD is very close to a new buy signal.   The 
P&F chart is very bullish with a $99 target.  We would use a 
trigger over $50 and target a run towards $55.




---

Ralph Lauren Polo - RL - close: 40.55 change: +0.89

WHAT TO WATCH: RL is a retail stock that looks ready to lead the 
other retailers to new highs.  Shares hit the $41 level in 
November and have since consolidated sideways between the $38 
level.  Now RL is on the move again with a breakout above the $40 
mark and a new MACD buy signal about to appear.  We would use a 
trigger over $41.00 and target a move to the $44-45 region.




---

Natl Semiconductor - NSM - close: 17.97 change: +0.40

WHAT TO WATCH: NSM is one semiconductor stock that is bucking the 
short-term trend in the sector.  Granted NSM churned sideways 
through most of October and November while the SOX climbed but 
now NSM is coiling for a breakout over $18.00.  The $18.00 level 
also hosts the simple 200-dma, which is heavy technical 
resistance.  Use a trigger and target a move to $20, which could 
be round-number, psychological resistance.  The P&F chart looks a 
lot more convincing with a quadruple-top breakout buy signal and 
a $24 price target.




---

Sun Microsystems - SUNW - close: 5.44 change: +0.17

WHAT TO WATCH: Is it time to look at SUNW as a new bullish 
candidate?  Share turned in a very strong rally from late October 
toward the end of November.  Since then SUNW has been digesting 
those gains with a bearish wedge pattern of lower highs against 
support near $5.10.  On Thursday SUNW added 3.2 percent on above 
average volume to break the four-week pattern of lower highs. The 
move was fueled by positive comments from Morgan Stanley.  We 
also notice that SUNW's P&F chart is bullish with a $9.50 target.  
This looks like an aggressive traders entry point since SUNW 
still has long-term resistance at the $6.00 level dating back to 
early 2004. 





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

CVH $54.01 +1.46 - The rebound rally in CVH has been incredible.  
Will it breakout over resistance or will it finally see some 
profit taking? 

OCA $5.95 +0.70 - OCA added 13.3 percent on big volume after 
reporting a positive earnings surprise.  Shares are nearing 
resistance at $6.00 and its exponential 200-dma.

PETD $40.44 +0.62 - PETD continues to look bullish but is nearing 
resistance at the $42 level.

ETH $39.10 +0.52 - The technical picture on ETH suggest this may 
be a short-term bottom for the stock.  Aggressive traders could 
go long now with the new MACD buy signal.  More conservative 
types can wait for ETH to trade over $40.00.

PAYX $34.27 -0.13 - PAYX is back above resistance at $34 but 
still has to deal with resistance at the bottom of its June gap 
down near $35.00.  
 

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DISCLAIMER
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only. The information provided herein is not to be construed
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Do not duplicate or redistribute in any form.







PremierInvestor.net Newsletter          Weekend Edition 12-26-2004
                                                    section 2 of 3
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:

Tech Stocks
  New Bullish Plays:     See Note
  Closed Bullish Plays:  MNST, QLGC

Active Trader (Non-tech)
  Bullish Play Updates:  ACI, BMS, CYT, KFY, MKC, ONXX, PDCO, STJ,
                         USB

Stock Splits
  Announcements:         None


==================================================================
Net Bulls (NB) Tech Stock section
==================================================================

=========
NEW PLAYS
=========

Editor's note:  We are not adding any new candidates to the play 
list this weekend.  Please see our watch list tonight for potential 
trading ideas.


============
PLAY UPDATES
============

============
CLOSED PLAYS
============


  --------------------
  Closed Bullish Plays
  --------------------

Monster Worldwide - MNST - close: 33.30 chg: +0.40 stop: 29.45     

MNST continued the rebound from Wednesday and soared to $34.16 
Thursday morning on heavy volume.  That was enough to push the 
stock into our profit target range of $34-36.  We remain bullish on 
the stock but shares look a little short-term overbought.  We're 
going to close the play now that our target has been achieved but 
those willing to hold it may want to seriously consider raising 
their stop loss.  

Picked on December 14 at $30.11
Gain since picked:       + 3.19
Earnings Date          02/08/05 (unconfirmed)
Average Daily Volume:       1.4 million 




---

QLogic Corp - QLGC - close: 34.89 change: -0.36 stop: 34.95

The semiconductor sector and the SOX index have reached a pivotal 
turning point.  The four-month up trend is bullish but the short-
term consolidation of lower highs is bearish. The consolidation has 
narrowed to the point that a breakout one way or the other is 
inevitable. This recent weakness and lack of participation in the 
broader market rally led us to raise our stop loss in QLGC to 
$34.95 a few days ago.  Shares of QLGC hit our stop on Wednesday 
and the stock continues to look vulnerable to more weakness.  

Picked on December 05 at $36.21 
Gain since picked:       - 1.32
Earnings Date          01/12/04 (unconfirmed)
Average Daily Volume:       3.1 million 




==================================================================
Stock Bottom / Active Trader (AT) section
==================================================================

============
PLAY UPDATES
============

  --------------------
  Bullish Play Updates
  --------------------

Arch Coal - ACI - close: 35.40 change: +0.20 stop: 32.49*new*

This has been a positive week for ACI.  Shares rose strongly on 
Tuesday following a Smith Barney upgrade from "hold" to a "buy" 
rating.  Unfortunately, ACI could not break out over the $36 level 
and has struggled to do so for the last couple of sessions.  The 
good news is that we see a short-term trend of higher lows 
suggesting ACI should eventually push through resistance.  
Technicals are also improving with the MACD producing a new buy 
signal on Thursday. Readers can look for a dip to $35 or a move 
over $36 as a new entry point.  We continue to target the $40 
level, which is also the P&F target.  We are raising our stop loss 
to $32.49 just under the exponential 200-dma. 

Annotated Chart:



Picked on December 13 at $34.71 
Gain since picked:       + 0.69
Earnings Date          01/29/05 (unconfirmed)
Average Daily Volume:       951 thousand




---

Bemis Co - BMS - close: 29.23 change: -0.05 stop: 27.49

This past week has been very positive for BMS.  Shares rallied from 
their simple 10-dma and then broke through major resistance at the 
$29.00 mark on huge volume that was four times the norm.  Our 
trigger to go long was at $29.15 but BMS gapped open at $29.22 
immediately filling our hypothetical entry.  There was some minor 
profit taking on Thursday but traders bought the dip near $29.00, 
which should begin to act like new support.  No change in our 
strategy, stop loss or target. 

Annotated Chart:



Picked on December 22 at $29.22
Gain since picked:       + 0.01
Earnings Date          01/20/05 (unconfirmed)
Average Daily Volume:       411 thousand



---


Cytec Industries - CYT - close: 51.20 change: +0.23 stop: 47.99

There is not much new to report on for CYT.  We recently added the 
stock on the breakout over resistance at $50.00.  Technicals remain 
positive and its MACD is still in a buy signal.  The P&F chart is 
bullish with a $66 target.  There was a little bit of profit taking 
this morning but traders bought the dip at $50.59.  We would remain 
long over $50.00 with any dip towards $50 as a new entry point.  No 
change in stop loss or target.

Annotated Chart:



Picked on December 21 at $51.10 
Gain since picked:       + 0.10
Earnings Date          01/20/04 (unconfirmed)
Average Daily Volume:       357 thousand



---

Korn/Ferry Intl - KFY - close: 21.48 change: -0.02 stop: 19.75*new*

Heads up!  We expect KFY to move soon.  Shares have spent the last 
few days digesting its breakout over major resistance at the $20.00 
level.  Now that consolidation has narrowed significantly with 
Thursday's range down to 20 cents.  We hope the breakout is up 
through the $22 level but we can't rule out a dip.  It's not 
uncommon to see shares pull back and retest old resistance as new 
support.  Readers can be ready to buy a bounce from the $20 level.  
We're going to raise our stop loss to $19.75.

Annotated Chart:



Picked on December 12 at $21.30 
Gain since picked:       + 0.18
Earnings Date          12/08/04 (confirmed)
Average Daily Volume:       345 million 



---

McCormick & Co - MKC - close: 38.51 chg: -0.13 stop: 35.99

It has been a quiet week for MKC.  Shares have continued to slowly 
drift higher in a minor rising channel.  Currently MKC is near the 
bottom of this new channel so we expect the next move to be up.  If 
not we can look for a bounce from the $37.50-38.00 region as 
support.  No change in our target or stop loss.

Annotated Chart:



Picked on December 14 at $38.15 
Gain since picked:       + 0.36
Earnings Date          01/26/05 (unconfirmed)
Average Daily Volume:       328 thousand





---

ONYX Pharma - ONXX - close: 33.40 change: +0.40 stop: 31.26*new*

It has been a relatively quiet week for ONXX.  We're a little bit 
disappointed that the stock didn't rally more strongly with the 
broader markets and the recent strength in the DRG drug index.  
Fortunately, ONXX is still climbing with a steady trend of higher 
lows.  We expect the stock to breakout over the $34 level soon and 
hit our profit target/exit at $35.00.  We are not suggesting new 
plays.  Let's hope ONXX hits our target soon before we see any tax 
loss selling near the end of the week.  We are raising our stop 
loss to breakeven.

Annotated Chart:



Picked on November 18 at $31.26
Gain since picked:       + 2.14
Earnings Date          11/04/04 (confirmed)
Average Daily Volume:       1.0 million 




---

Patterson Companies - PDCO - close: 43.23 chg: -0.18 stop: 37.99

The rally continues for PDCO albeit a bit more slowly than we 
expected.  Shares spent much of December digesting its gains from 
its breakout over resistance at $40.00.  Now that the consolidation 
is over and technicals are turning positive again we're looking for 
PDCO to begin a new leg higher.  If PDCO dips we'd look for support 
near $42.00.  We are raising our stop loss to $39.99.  We are 
considering a target adjustment in the $46 range.  We'll keep you 
posted.

Annotated chart:




Picked on December 01 at $42.06 
Gain since picked:       + 1.17
Earnings Date          11/24/04 (confirmed)
Average Daily Volume:       378 thousand



---

St. Jude Medical - STJ - close: 42.19 chg: -0.16 stop: 38.95*new*

So far so good.  STJ broke through major resistance at the $40.00 
level in early December and shares have been inching higher since 
with at least two tests of the $40 level as new support.  STJ hit a 
new all-time high on Thursday before shares slipped a bit in profit 
taking.  If the stock does dip we would look for a bounce from $41 
as a new bullish entry point.  We're raising our stop loss to 
$38.95 under its 50-dma.  P&F chart traders will note that the 
quadruple-top breakout buy pattern now points to a $63 target.

Annotated Chart:



Picked on December 05 at $40.64 
Gain since picked:       + 1.55
Earnings Date          01/19/04 (unconfirmed)
Average Daily Volume:       854 thousand




---

US Bancorp - USB - close: 31.47 change: -0.05 stop: 29.49*new*

This has been a very bullish week for USB.  The company raised its 
cash dividend by 25 percent to $1.20 a year and announced a 150-
million share stock buy back program.  Investors responded with a 
three-percent rally on Tuesday and a breakout over the $30.50 
level.  The rally continued for USB on Wednesday when the BIX and 
BKX banking indices both broke through resistance at the top of 
their consolidation patterns to hit new all-time highs.  USB does 
look a little overbought so a dip might be a preferable entry point 
for new positions.  Our target is the $33 level by the end of 
February, which would also allow us to capture the 30-cent dividend 
on January 17th to shareholders on record as of December 31st. 

Annotated Chart:



Picked on December 21 at $30.88 
Gain since picked:       + 0.59
Earnings Date          01/18/05 (unconfirmed)
Average Daily Volume:       4.2 million 





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

Announcements
-------------

None


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

*****************************************************************
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Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

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Copyright (c) 2001-2004  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.





PremierInvestor.net Newsletter          Weekend Edition 12-26-2004
                                                    section 3 of 3
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 three:

Market Watch for Week of December 27th, 2004
   - Major Earnings
   - Stock Splits
   - Economic Reports

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)


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

==========================================
Market Watch for the week of December 27th
==========================================

-----------------
Earnings Calendar
-----------------

*This is not a complete list.  We only try and highlight the 
more significant earnings reports.


Symbol  Co               Date           Comment          EPS Est

------------------------- MONDAY -------------------------------

INLD  Interland, Inc.     Mon, Dec 27  After the close    -0.29
SATC  SatCon Technology   Mon, Dec 27  ----- n/a -----      n/a

------------------------- TUESDAY ------------------------------

..none..

------------------------ WEDNESDAY -----------------------------

..none..


------------------------- THURSDAY -----------------------------

..none..


------------------------- FRIDAY -------------------------------

..none..


----------------------------------------------
Upcoming Stock Splits In The Next Two Weeks...
----------------------------------------------

Symbol  Company Name              Ratio    Payable     Executable

SKT   Tanger Factory Outlet       2:1      Dec 28th    Dec 29th
BEBE  bebe stores                 3:2      Dec 29th    Dec 30th
SVBI  Severn Bancorp              2:1      Dec 30th    Dec 31st
LUK   Leucadia Ntl Corp           3:2      Dec 31st    Jan  3rd
NADX  National Dentex             3:2      Dec 31st    Jan  3rd
CLF   Cleveland Cliffs            2:1      Dec 31st    Jan  3rd
O     Realty Income               2:1      Dec 31st    Jan  3rd
BRC   Brady Corp                  2:1      Dec 31st    Jan  3rd
NX    Quanex Corp                 3:2      Dec 31st    Jan  3rd
SBIT  Summit Bancshares           2:1      Dec 31st    Jan  3rd

-----------------------------------
Economic Reports & Events This Week
-----------------------------------

This is a very quiet week for economic events and earnings.  Those
traders not on holiday will look for the consumer confidence
numbers on Tuesday, existing home sales on Wednesday and the Chicago
PMI index on Thursday.

==============================================================
                       -For-           
----------------
Monday, 12/27/04
----------------
..none..

-----------------
Tuesday, 12/28/04
-----------------
Consumer Confidence for December

-------------------
Wednesday, 12/29/04
-------------------
Existing Home Sales for November
Crude oil and gasoline inventory numbers

------------------
Thursday, 12/30/04
------------------
Weekly Initial Jobless Claims
Help Wanted Index for November
Chicago PMI for December

----------------
Friday, 12/31/04
----------------
U.S. bond market closes early (half day)

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

SI      Siemens Aktien             83.71     +0.78
RD      Royal Dutch                56.95     +0.67
XOM     ExxonMobil                 51.97     +0.68
STI     Suntrust Banks             74.35     +0.67
UNP     Union Pacific Corp         66.80     +0.56
PKX     Posco                      45.50     +1.05

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

ERES    Eresearch Tech             15.40     +1.19
EPAY    Bottomline Technologies    15.98     +1.06
ULBI    UltraLife Batteries        19.62     +4.92
NSSC    Napco Security             13.38     +1.72
LNOP    Lanoptics Ltd              14.59     +1.32
NVI     National Vision Inc         8.36     +1.12

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
JOE     St. Joe Co                 62.81     +2.17
RHI     Robert Half Intl           29.38     +2.13
SNDK    Sandisk Corp               25.55     +1.35
GPN     Global Payments            59.00     +3.19
RECN    RSCS Connection            53.10     +6.50
DHB     DHB Industries             22.53     +3.92

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

NTAP    Network Appliance          32.05     -1.02
MAC     Macerich Co                61.53     -2.57
SFL     Ship Finance Intl Ltd      21.20     -1.11
AM      American Greetings         24.25     -3.66
NFI     Novastar Financial         50.00     -5.71

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

NRP     Natural Resource Prtnrs    54.30     -1.59
PCSA    Airgate PCS Inc            34.64     -0.31

=================================================================
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) 2001-2004  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.

DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

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