PremierInvestor.net Newsletter Tuesday 01-04-2005 section 1 of 2 Copyright (c) 2005, 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: Why Worry? Watch List: Biotech, Software and more Market Sentiment: Q4 Hangover ================================================================= MARKET WRAP (view in courier font for table alignment) ================================================================= 01-04-2005 High Low Volume Adv/Dcl DJIA 10630.78 - 98.70 10769.56 10605.15 2.13 bln 763/2420 NASDAQ 2107.86 - 44.30 2159.64 2100.56 2.73 bln 744/2414 S&P 100 566.77 - 5.56 574.49 565.51 Totals 1507/4834 S&P 500 1188.05 - 14.03 1205.84 1185.39 SOX 410.36 - 13.90 426.10 406.08 RUS 2000 628.54 - 11.90 643.05 627.89 DJ TRANS 3678.33 - 82.00 3768.51 3674.94 VIX 13.98 - 0.10 14.45 13.93 VXO (VIX-O)14.13 - 0.07 14.96 13.89 VXN 20.06 + 0.56 20.81 19.57 Total Volume 5,210M Total UpVol 809M Total DnVol 4,306M Total Adv 1820 Total Dcl 5547 52wk Highs 142 52wk Lows 27 TRIN 1.68 NAZTRIN 1.34 PUT/CALL 0.77 ================================================================= =========== Market Wrap =========== Why Worry? by Jim Brown We expected a drop this week and I have reported those expectations in this commentary more than once. After two days of decline the market pundits are suggesting the market conditions have changed and the bears are coming out of the woods to feast on fresh hamburger. Who is right and has investing as we knew it changed over the last week? Dow Chart Nasdaq Chart SPX Chart Russell Chart In my opinion nothing has changed. The economy is still struggling along and the multitude of worries mentioned on stock TV this week are just a rehash of the worries the bulls trampled over the last quarter. I will try to touch on the majority of those worries but first the economics of the day. Chain Store sales fell back to mediocre at only a +0.2% rate for the week ended Jan-1st. This is a very strong shopping week and buyers failed to appear in droves but the year over year number rose to +4.6%. Only a minor increase week to week but strong gains over the prior year. Retailers can now take their Rip Van Winkle nap until next fall with only Valentines and Easter to provide any waking excitement. Factory Orders jumped only slightly more than expected at +1.2% for November. All components rose slightly with the majority of the gains probably related to last minute pre-holiday shipping and a rebuild cycle beginning for depleted year end inventories. No big excitement here. Auto sales rebounded strongly in December with red tag specials and higher than ever cash back programs. The annualized rate jumped to 18.4 million from 16.4 million in November. This turned out to be the fourth strongest year on record. Light trucks jumped +10.1% but Japanese makers Toyota, Honda and Nissan topped the leader board with even higher double digit gains as they increased their share of the market to greater than 40%. Hybrid vehicles are selling faster than they can make them as consumers try to avoid the high gas prices ahead. Economics were just like they have been for the last three months with mixed messages across all components. The biggest economic bombshell today did not come from an economic report but from the Fed minutes from the December FOMC meeting. The Fed stated that the economy was expected to continue its leisurely pace of recovery and the recovery was seen to be firmly entrenched. They cited labor markets as improving and this should continue to support consumer spending. The problems appeared in the interest rate outlook with comments that the recent depreciation of the dollar, elevated energy costs and the possibility of slowing growth as factors that could increase the risk of inflation. They still see the risks to be balanced between inflation and deflation but they are now leaning toward inflation ahead. They said the increase in inflation signals over the last few months might be a warning sign that expectations for low inflation were not as well founded as they had been last summer. Fear is creeping into the Fed outlook and they feel part of that creeping inflation is still being fueled by excessive liquidity. In Fedspeak excessive liquidity means interest rates are too low. "Some participants believed that the prolonged period of policy accommodation had generated a significant degree of liquidity that might be contributing to signs of potentially excessive risk-taking in financial markets evidenced by quite narrow credit spreads, a pickup in initial public offerings, an upturn in mergers and acquisition activity, and anecdotal reports that speculative demands were becoming apparent in the markets for single-family homes and condominiums." The bottom line for the report was a significant fear that the Fed was losing control and could begin to ramp up the rate hike cycle with more aggressive hikes. The Fed believes that energy prices will remain low, a point I would argue is in error, global growth will continue and trade deficits will diminish due to the drop in the dollar. In general they are nearly united in their view that the Goldilocks economy is returning with the exception of a greater risk for inflation. Where the Fed minutes should have painted a positive outlook for investors given the Fed's rose colored glasses it also shattered that outlook with worries that rates were going higher soon. There had been a near unanimous view that the Fed would pause at the February meeting and take a longer view of the economic picture before making any new changes. After today's report the current 2.25% rate has now been speculated to rise to as much as 4.25% by year's end. This would mean at least one hike greater than 25 points or no passes at any of the eight meetings scheduled for 2005. This sudden change from a no more hike sentiment to a full and possibly aggressive hike scenario knocked the wind out of the market this afternoon. The yield on the ten-year treasury spiked to 4.3% and the equity markets imploded. The Dow dropped -100 points on the 2:PM news to 10605 and barely rebounded to close at 10632. The Nasdaq dropped another -21 points on top of an already steep decline to -59 off the highs at 2100. The Nasdaq only managed a very weak +9 point bounce into the close. It was the worst day for the Nasdaq in five months. Also helping the decline was a downgrade on AMZN to sell at Smith Barney. Despite very strong sales this year the analyst thinks other online firms are eating away at AMZN market share and will continue to do so. Brick and mortar retailers are reporting a much faster ramp in acceptance of their online sites and the online retail space is becoming more crowded. AMZN dropped -2.38 on the news and took all the other Internet stocks with it. GOOG fell -8.21 from its all time high reached just yesterday. Another crowd favorite also took a major hit of -1.83 or -14.8% after acknowledging accounting improprieties. The company, Krispy Kreme Doughnuts, admitted it had padded sales, double shipped, disguised problems at certain stores and misreported earnings. The stock dropped to $10 but my question is why not $1? This company appears to have committed multiple counts of fraud and could be delisted very soon. Looks like the public still has a sweet tooth for KKD. Maybe they should go back and look up Boston Chicken, BOST. All the shareholders got greased when BOST finally imploded after years of being the darling of Wall Street. Depending on which sentiment indicator you want to use the 2005 year is not off to a good start. Today was the last day of the typical Santa Rally period following Christmas. Needless to say the Dow or any of the indexes for that matter did not see a visit from Santa. The Dow lost -200 points during the period after the Dec-23rd close. The Nasdaq lost -53 points, Russell -22, -28 from its high and the SOX -17 (-4%). If you were counting on Santa for your sentiment then the Santa adage is running through your mind tonight. When Santa fails to call bears will come to Broad and Wall. It would appear on the surface the door is open and the red carpet rolled out for their arrival. The other market barometers include the first five days scenario. Theoretically the first five days of January are supposed to predict the direction of the market for the year. Not looking good for that one. Then there is the January barometer, as January goes so goes the year. None of these predictors of market direction have very good records but they are all consistently prove more often right than wrong. Bah humbug! We knew the market was going to sell off once the calendar rolled over. We talked about it in this space several times. When the indexes rally as they did in the fourth quarter the money managers are just holding their breath hoping to get to the new year before everybody pulls the rip cord on their profit parachute. Remember this table from last Thursday? Index Low 12/30 Gain Dow 9708 10800 +11.2% from October low Nasd 1899 2178 +14.6% from October low $SPX 1090 1213 +11.2% from October low Nasd 1750 2178 +24.4% from August low TRAN 2959 3807 +28.6% from August low $RUT 516 653 +26% from August low UTIL 260 336 +29.2% from May low Since August the Russell was up +26%, the Nasdaq +24%. There were huge amounts of profit to be taken and the managers are doing that this week. Whenever the market takes a sudden and unexpected (by the uninformed) drop the talking heads on TV scramble to find the reason. Today we were told it was weakness in China, unemployment in Germany, spiking oil prices, sudden inflation fears and last but not least new Fed fears. Obviously it was not oil since it fell over -$2 on Monday and the market still tanked. Today it rebounded to erase those losses but is still trading in exactly the same range it has been trading for the last five weeks. Today the oil worry is only smoke. It will eventually bite us but not today. The Fed outlook was blamed but there was really nothing in the outlook that was different than any prior outlook. The optimistic analysts had convinced themselves into believing their own dreams that the Fed was done. The Fed has never even hinted that it might pause. Every comment has always been "accommodation will continue to be removed at a measured pace." No change there. Some analysts blamed the drop on a lack of fund flows. The $31B of expected money had failed to appear. This is also smoke. The money does not appear the first two days of the year. The majority appears over the second and third weeks of January. TrimTabs said today they were still expecting $2.5B to $3B PER DAY over the next two weeks. No change there. Are you starting to get the picture? Nothing has changed and the current drop is just profit taking. Even Ralph Acampora came out again today and affirmed his Dow 13K forecast. Nobody expects a blowout market but they do expect the markets to move higher over the next two quarters. Where to from here? The Nasdaq has been literally slammed as funds took profit in techs. The index dropped back to 2100 today and decent support. It could stop there or it could drop all the way back to 2050 but it will stop. When the rebound starts it is likely to be sharp and on very strong volume. Be prepared. The volume today was very strong and weighted heavily to the downside. On the NYSE the down volume was 9:1 over up volume with over 2B shares traded. Despite the beating on the Nasdaq the down volume was only 4:1 over up volume. The NYSE volume was drastically stronger because the majority of energy stocks are on the NYSE. Of the 350 energy stocks I cover in my Oil Crisis Report there are only 36 listed on the Nasdaq. When you think about which sector had the biggest gains the last six months it all makes sense. The funds are taking profits in energy and tech. Crude was up nearly +$2 today but energy stocks were down. This is clearly a buying opportunity in the making. For the rest of the week I would look for a bounce but possible not before even deeper support levels are tested. SPX 1175-1180, Nasdaq 2050 and Dow 10450 would be my worst case support levels. I believe we will bounce before then but these corrections nearly always get overdone as traders react to the negative news in the press. The Nasdaq normally corrects about -5% in January and even if you count from Monday's high of 2191 to today's close at 2109 it is only -3.7%. There could be some weakness remaining but once the selling stops don't try to short the bounce. Managers will not be under any pressure to buy until the real money flows hit next week but they are generating a lot of cash from these two days of selling. If somebody steps on the trip wire we could change directions very quickly. Watch the up volume. If we get a reversal in the volume from 9:1 negative to 4:1 or 5:1 positive then we have seen the bottom. Pick your entry targets now. If you have no target you will probably miss the bulls eye. 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 --------------------------------- Chiron Corp - CHIR - close: 34.68 change: +1.67 WHAT TO WATCH: If you're looking for a bullish candidate amid the market pull back then check out CHIR. This stock added five percent on big volume following an upgrade to "buy" this morning. Bulls might want to use a trigger over the $35 level as an entry point with a target in the $38-40 range. --- BEA Systems - BEAS - close: 8.64 change: -0.15 WHAT TO WATCH: BEAS has been challenging higher for months but after December's big failed rally near $9.75 the stock has been consolidating lower. Now BEAS is testing major support at the bottom of its rising channel near $8.50 and its 200-dma. A breakdown here could lead to a significant retracement. --- Internet Security - ISSX - close: 21.39 change: -1.33 WHAT TO WATCH: Investors have been taking profits this week from their Q4 winners and ISSX certainly qualifies. The stock surged from $13 in August to almost $26 in early December. Now shares are breaking support at the 50-dma and the $22 mark. We would watch the $20 level, which should be round-number support. A bounce from $20 and aggressive bulls may want to consider longs. a breakdown under $20 and bears may want to consider a momentum play. ----------------------------------- RADAR SCREEN - more stocks to watch ----------------------------------- PWER $8.42 -0.23 - PWER has broken major support at its 50-dma and its simple and exponential 200-dma's near the $8.50-9.00 range. PVN $16.14 -0.21 - The long-term uptrend for PVN is still very much intact but the stock is working on a new double-top pattern with the peaks in November and January at $17.00 resistance. PFE $26.45 +0.00 - PFE has rallied back to resistance at its descending 50-dma following December's gap down. Now the bounce appears to be failing. Look for a drop under $26.00. KVHI $11.14 +1.20 - KVHI soared more than 12 percent on huge volume this Tuesday to breakout over resistance at $10.50 and its 200-dma. NGPS $35.91 -10.89 - Ouch! NGPS fell more than 23 percent on massive volume as its rocket-like trajectory comes to an end. =============================== Market Sentiment =============================== Q4 Hangover - J. Brown I've got one word for the first two trading days of 2005 - yuck! Market pundits blame it on profit taking after the very strong fourth quarter rally. Correct or not the market technicals have been very bearish both Monday and Tuesday. Today declining stocks outnumbered advancers about 11-to-3 on the NYSE and more than 3-to-1 on the NASDAQ. New highs have evaporated and down volume outweighed up volume by 9-to-1 on the NYSE and more than 4-to-1 on the NASDAQ. Yucky seems like an appropriate description. The talking heads on TV pointed out that last quarter's winners seem to be this week's losers as investors do some profit taking. Yet one guest on CNBC today was more encouraging. Biderman from TrimTabs, who watches mutual fund money inflows and outflows, said almost all the new money coming into the market this week (about $1 billion a day) has been going into global equity funds. He suggested that investors were putting money to work overseas to avoid the continuing decline in the U.S. dollar. He went on to say that if inflows into foreign funds have reached these heights that it could be a top. Thus the U.S. dollar could turnaround soon and U.S. stocks are likely to do well in the second half of January. He went on to remind viewers that there is a lot of money on the sidelines and January, a seasonally bullish time of year for stocks, could see some $60 billion in inflows for the month. Let's hope he's right. Normally the first two trading days of January are bullish as part of the seven-day post-Christmas rally. Plus, the first five days of January tend to be bullish due to the new inflow of money into retirement accounts but if all this money is going into global funds then the early January barometer (the first five days) could turn bearish. As I mentioned last week some traders look at the first five days of January as an early barometer for the month. Let's hope stocks rebound soon. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 10868 52-week Low : 9708 Current : 10630 Moving Averages: (Simple) 10-dma: 10780 50-dma: 10489 200-dma: 10264 S&P 500 ($SPX) 52-week High: 1216 52-week Low : 1060 Current : 1188 Moving Averages: (Simple) 10-dma: 1207 50-dma: 1178 200-dma: 1129 Nasdaq-100 ($NDX) 52-week High: 1635 52-week Low : 1301 Current : 1571 Moving Averages: (Simple) 10-dma: 1611 50-dma: 1568 200-dma: 1461 ----------------------------------------------------------------- CBOE Market Volatility Index (VIX) = 13.98 -0.10 CBOE Mkt Volatility old VIX (VXO) = 14.13 -0.07 Nasdaq Volatility Index (VXN) = 20.06 +0.56 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.78 1,071,868 831,280 Equity Only 0.60 823,299 494,997 OEX 0.99 33,587 33,327 QQQQ 2.33 53,555 124,869 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 76.2 - 1 Bear Correction NASDAQ-100 80.0 + 0 Bull Confirmed Dow Indust. 73.3 + 0 Bull Confirmed S&P 500 77.2 - 1 Bull Confirmed S&P 100 78.0 + 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: 1.44 10-dma: 1.04 21-dma: 1.07 55-dma: 1.01 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 636 741 Decliners 2221 2340 New Highs 53 57 New Lows 15 12 Up Volume 228M 530M Down Vol. 1853M 2175M Total Vol. 2146M 2718M M = millions ----------------------------------------------------------------- Commitments Of Traders Report: 12/21/04 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 are growing more bearish while small traders are naturally moving the other direction and growing more bullish. Commercials Long Short Net % Of OI 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%) 12/21/04 455,238 502,538 (47,300) (4.9%) 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 11/30/04 176,031 148,876 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% 12/21/04 157,015 106,205 50,810 19.2% 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 There has been a dramatic reduction in open positions for both longs and shorts for both the commercial traders and small traders. The net result has produced an increase in bearishness for professionals and an increase in bullishness for small traders. Commercials Long Short Net % Of OI 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%) 12/21/04 279,694 554,818 (275,124) (32.9%) 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 11/30/04 386,665 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% 12/21/04 227,047 66,140 160,907 54.8% Most bearish reading of the year: (77,385) - 09/02/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 Hmm... we are seeing a dramatic reversal for both commercial and small traders. Commercials have significantly cut their long positions reversing their bullishness into bearishness for the NDX. Small traders have drastically reduced their short positions to flip-flop them from net bearish to net bullish. Commercials Long Short Net % of OI 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% 12/21/04 30,614 45,158 (14,544) (19.1%) 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%) 12/21/04 20,840 9,109 11,731 39.1% 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 have suddenly become a lot more bearish on the Dow Industrials. Meanwhile small traders have significantly cut their positions on both sides of the trade. Commercials Long Short Net % of OI 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%) 12/21/04 24,850 31,920 (7,070) (12.4%) 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 11/30/04 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%) 12/21/04 5,637 6,961 (1,324) (10.5%) 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 01-04-2005 section 2 of 2 Copyright (c) 2005, 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, STJ, ACI, BMS, USB, PNC, YUM Net Bulls (Tech Stocks) New Bearish Plays: VSEA Active Trader (Non-tech Stocks) Closed Bullish Plays: ONXX, CYT 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 - long play - PDCO is holding up with traders buying the dip toward $42.00. STJ - long play - Keep an eye on STJ. A bounce from round-number support at $40.00 could be a new bullish entry point. ACI - long play - Coal-producer ACI has pulled back to major support near its rising 200-dma. Watch for a bounce from $33.00 as a potential entry point. If shares breakdown under $33.00 we may choose an early exit! BMS - long play - Hmm.... the drop under support at the $28.50 level is not good for the bulls. Traders need to be cautious here. USB - long play - If the market continues to pull back then we'd look for USB to retest the $30.50 level. PNC - long play - PNC has pulled back to support at the $56.00 mark. This was old resistance so it should hold as support. A bounce from $56 would be an attractive entry point for new bullish plays. YUM - long play - YUM is holding up relatively well but if it breaks down under the 40 or 50-dma it will be time to exit! ================================================================== Net Bulls (NB) Tech Stock section ================================================================== --------- New Plays --------- New Bearish Plays ----------------- Varian Semi - VSEA - close: 33.53 chg: -1.78 stop: 35.25 Company Description: Varian Semiconductor Equipment Associates, Inc. is a leading producer of ion implantation equipment used in the manufacture of semiconductors. The company is headquartered in Gloucester, Massachusetts, and operates worldwide. Varian Semiconductor maintains a web site at www.vsea.com. (source: company press release) Why We Like It: The semiconductor sector has looked vulnerable for the last few weeks. This is even more of a clue for future weakness because it occurred during December, traditionally one of the most bullish times of the year for stocks. Now that December has passed the semis are showing their true colors. VSEA looks like one to lead the group lower. Yesterday shares broke support at $36.00 and its 50-dma after Bank of America downgraded the stock from "neutral" to a "sell" rating while reiterating their $28 price target. Today, with the three-percent decline in the SOX, shares of VSEA out did its fellows with a five-percent drop on big volume breakdown support at the $35.00 mark and its simple and exponential 200- dma's. We're going to open positions at current levels. Our short-term target is $30.00. More aggressive traders may want to wait and look for a failed rally under $34.50-35.00 as their entry point. The P&F chart has reversed its recent buy signal into a sell signal with a $24 target. Annotated chart: Picked on January 04 at $33.53 Gain since picked: - 0.00 Earnings Date 01/27/05 (confirmed) Average Daily Volume: 700 thousand ================================================================== Active Trader (AT) Non-Tech Stock section ================================================================== ============ Closed Plays ============ Closed Bullish Plays -------------------- ONYX Pharma - ONXX - close: 31.06 change: -0.94 stop: 31.26 Ouch! It looks like we were right to be cautious on Sunday. ONXX's trend of lower highs turned into more weakness with the broader market indices leading the way. Shares broke support at $32.00 and hit our stop loss at $31.26. We are stopped out at breakeven. We would now look for ONXX to continue lower until shares hit round-number support at $30.00. A breakdown there and readers may want to consider bearish positions. Picked on November 18 at $31.26 Gain since picked: - 0.20 Earnings Date 11/04/04 (confirmed) Average Daily Volume: 1.0 million --- Cytec Industries - CYT - close: 49.60 change: -2.60 stop: 47.99 It is never a good sign for the bulls when their stock falls almost five percent on very heavy volume with no news. Either there is news out on CYT that we can't find or someone wants out really quick. Neither circumstance can be good for us. While we have not been stopped out yet we are choosing to cut our losses early with today's breakdown under round-number, psychological support at the $50.00 mark. Picked on December 21 at $51.10 Gain since picked: - 1.50 Earnings Date 01/20/04 (unconfirmed) Average Daily Volume: 357 thousand ================================================================== 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 LVS Las Vegas Sands 49.49 +0.98 CXW Corrections Corp of Amer 42.08 +1.57 RWT Redwood Trust Inc 62.55 +1.21 LPNT Lifepoint Hospitals 35.52 +1.48 ROV Rayovac Corp 34.18 +4.62 JOSB Jos A Bank Clothiers 28.91 +0.74 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- RDA Reader's Digest Assn 15.23 +1.28 GES Guess? Inc 13.41 +1.43 STEM Stemcells Inc 5.97 +1.86 TCNO Tecnomatix Tech 16.70 +1.51 KVHI KVH Industries 11.14 +1.20 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- CHIR Chiron Corp 34.68 +1.67 SONC Sonic Corp 31.44 +1.80 TONS Novamerican Steel 60.68 +5.46 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- BAY Bayer Aktien 32.47 -1.24 CA Computer Associates 29.77 -1.05 EMN Eastman Chemical Co 52.34 -4.96 CREE Cree Inc 35.54 -2.79 VSEA Varian Semiconductor 33.53 -1.78 EDO Edo Corp 27.81 -2.73 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ----------------------------------------- AMX America Movil 50.90 -2.55 CAH Cardinal Health 55.53 -1.65 UNP Union Pacific 66.02 -1.42 MON Monsanto Co 52.45 -2.30 ADSK Autodesk Inc 35.00 -2.43 ADBE Adobe Systems 60.06 -1.63 POT Potash Corp 79.20 -3.96 BG Bunge Ltd 55.43 -1.55 ================================================================= 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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