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Email Version, Section 1, Monday 04/09/01
The Newsletter            Monday 04/09/01 1 of 1
Copyright 2001, All rights reserved.
Redistribution in any form is strictly prohibited.

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In This Newsletter:
Market Commentary - Treading Water
Definition of the Day
Monday's Split Announcements - None
Tuesday's Expirations
Tuesday's Play-of-the-Day - ACI

Market Commentary

Treading Water

Today's action saw a decided lack of conviction from bears and
bulls alike.  In the end, bulls managed to stage a decent comeback
into the close but were unable to drive the market back to the
highs it had seen in earlier trading.

Technology stocks were once again the focus of the day, as
Internet related shares were relatively strong following some
positive comments from industry leader (NASDAQ:AMZN),
which stated that it will post a better than expected loss of
around 22 cents this quarter, 8 pennies better than current
estimates of a loss of 30 cents.  CFO Warren Jenson claimed that
it was the "best quarter in our history"." also added
that it could break even on an operating basis by as soon as June.
AMZN finished the day up $2.81 and closed at $11.18.

The early excitement from Amazon's positive news was quickly
abated following some more negative comments from the analyst
community concerning the semiconductor sector.

Lehman Brothers analyst Dan Niles lowered his expectations on
Intel (NASDAQ:INTC) and Texas Instruments (NYSE:TXN).  In
addressing the entire industry, Mr. Niles believes semiconductor
revenues are likely to drop 10 percent this quarter from the
previous quarter.  He additionally expects revenues to drop some
18 to 20 percent on a year to year basis.  If his suppositions
prove to be correct, the semiconductor industry will suffer from
its worst year-to-year revenue comparisons since 1985.

Intel dropped $0.43 to $23.20, while Texas Instruments fell an
equally modest $0.75 to $27.51.  Meanwhile, broad based weakness
dropped the PHLX Semiconductor Index (SOX) 12.35 to 475.20.

For the record, the NASDAQ (COMPX) rose 25.35 points to 1745.71
and the Dow Jones Industrials (INDU) gained 54.12 points and
closed at 9845.21.  Volume checked in on the light side.  The
NASDAQ saw 1.4 billion shares traded and the NYSE only traded 987
million shares.  Breadth was decent.  Advancers beat decliners by
19 to 11 on the NYSE and by 21 to 19 on the NASDAQ.

The NYSE did see some notable winners. The Shaw Group (NYSE:SGR),
a major piping supplier, rose $3.36 to $53.51; communications
company Scientific-Atlanta (NYSE:SFA) gained $3.07 to $42.92; and
International Game Technology (NYSE:IGT) improved $2.78 to $51.72.

There were some big names that lost ground today.  IBM dropped
$1.95 to $96.00 while Best Buy (NYSE:BBY) slipped $1.87 to $45.62.
Meanwhile insurance industry advisor Marsh & McLennan (NYSE:MMC)
lost $3.90 to $82.00 following a downgrade to Neutral from
Outperform from Morgan Stanley Dean Witter.

The NASDAQ (COMPX) was bolstered by a few well known companies.
VoiceStream Wireless (NASDAQ:VSTR) rallied $5.22 to $97.03, Check
Point Software Technologies (NASDAQ:CHKP) picked up $4.82 to
$52.07 and Human Genome Sciences (NASDAQ:HGSI) gained $3.12 to

There were a couple of notable losers.  Juniper Networks
(NASDAQ:JNPR) pulled back a modest $0.61 to $33.19,  KLA-Tencor
(NASDAQ:KLAC) slipped $1.99 to $34.01 and Sun Microsystems
(NASDAQ:SUNW) lost $1.10 to $13.04.

The Current Play list enjoyed a new 52-week high
from Stericycle (NASDAQ:SRCL), which soared $2.25 to $47.25.
Another solid winner on our list was Universal Health Services
(NYSE:UHS), which gained $1.38 to $91.90.  Arch Coal (NYSE:ACI)
moved higher by $1.36 to $31.72 and is threatening to make another
new high tomorrow.

Modest profit taking ruled the bond pits, as these traders
continue to try and figure out the Fed's next move.  The 10-year
Treasury note slipped 12/32 to a yield of 4.93% while the 30-year
government bond dropped 11/32 to a yield of 5.49%.

On the earnings front, wireless communications component
manufacturer Sawtek (NASDAQ:SAWS) reported earnings of 22 cents a
share after the close, which was in line with reduced estimates.
However, the company stated that it sees next quarter's revenues
dropping 10 percent. SAWS closed the regular trading session down
$1.38 to $14.18. It is now trading in the high $13's in after
hours trading.

Biotech concern Molecular Devices (NASDAQ:MDCC) badly missed its
earnings after the close and the bad news could hurt other
Biotechnology stocks tomorrow.  Analysts were expecting profits of
20 cents a share but MDCC reported profits of only 10 cents.  MDCC
closed the regular session with a gain of $1.05 to $49.99 but is
currently getting crushed by over $14.00 in after hours trading.

At this point, traders appear desperate for some news that will
help guide their decisions.  Today's lackluster volume was
indicative of many market participants sitting on the sidelines.
The most immediate influence will be the slew of earnings reports
scheduled for later this week.  Therefore, do not expect much
action tomorrow.  Traders will likely wait until we get a clearer
picture of the earnings trend before moving their cash.  Tomorrow
is a light day for earnings reports and the bulk of this week's
action will probably occur as we approach the weekend.

Still, it is encouraging to see that the NASDAQ (COMPX) appears to
have put in another bottom.  Last week's low of 1619.58 should
provide some support this week.  A move back above 1750 tomorrow
could signal that the COMPX has some more energy left.  The RSI is
starting to bounce but is indicating an extremely oversold
condition.  Now that the MACD has issued its latest buy signal,
the path of least resistance appears to be higher.

That said, I would not expect a huge rally later this week, unless
earnings reports consistently surprise to the upside and
technology companies start guiding future estimates higher.
Nevertheless, this bounce rally could easily test the important
2000 resistance.

As for the Old Economy, the Dow Jones Industrials (INDU) appears
to be stuck in a very narrow trading range between resistance of
10,000 and support of 9750.  The trend for the week will likely be
established once the Dow trades through and closes either above
the resistance or below the support.  Just like the NASDAQ, the
path of least resistance does appear to be higher due to a rising

I am trying to not sound like a broken record but the best
strategy is probably still to take quick profits and to keep the
stops tight.  This market is very nervous and a quick sell-off is
still a menacing risk.  That said, there appears to be a break in
the clouds and if we can get through the early stages of the
earnings period with an absence of negative surprises, we may see
a decent rally.

Good Luck! And may all of your trades be winning ones!

Jim Booth
Research Analyst

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Definition of the Day

Window Dressing

Window Dressing is the activity seen at the end of a quarter or
fiscal year when fund managers attempt to "dress up" their

For the complete definition, please go to:

Monday's Split Announcements


Tuesday's Expirations by Payable Date

Trading Split-Adjusted April 11:

UCBH Holdings (UCBH) splits 2:1
Novo Nordisk (NVO) splits 3:2

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===================== Plays

The PLAY LEGEND: Play Recommendations.

Play-of-the-Day is our number one play recommendation for the
FOLLOWING trading day.

You will see:
Stock Symbol, Company Name, Closing Price, Change for the Week.
Following the play you will find: Picked at Date and Change Since

BoD = Board of Directors meeting
ADV = Average Daily Volume
dma = daily moving average

At the website, we have comprehensive profiles
for each stock that we are playing or have played in the past, as
well as hundreds of others. Please take the time to visit the site
to view the profile of the stock(s) you wish to learn more about.

Play of the Day (For Tuesday)
Monday, April 9, 2001

ACI - Arch Coal Inc. $31.72 +1.36

Sunday's Comment:

With the price of coal more than doubling in recent months,
traders have turned up the heat within the coal industry. The real
standout in the sector has been ACI, which has added nearly 70%
over the last three months. Sound like a momentum play? A look at
the daily chart will certainly convince you. What we specifically
like about the chart is how traders have been consistently buying
on the pullbacks. This note is of importance to us now that ACI
seems to be in the process of consolidating. Turning to Friday's
action, shares gave up 1.14 points or 3.62% to finish the week at
$30.36. Sector related weakness might have been a contributing
factor to Friday's fall, as the Standard & Poor's Energy Index
(AXE) slipped 2.02% to close at 1584. Volume on the day came in
just under the 3-month ADV, as 436,000 shares crossed the tape.
Should shares resume an uptrend into next week, we'll look for
resistance to emerge at the high of $32, followed by a harder
challenge at the $35 mark. Support will come at $30, bolstered by
the 5-dma of $29.78. Look for entry points when shares bounce off
support or break above the $32 level on midday volume of at least

Monday's Update:

Since reporting its rosy first quarter outlook two weeks ago, Arch
has seen its stock climb over 10 percent.   Moreover, since
breaking through resistance at $15 in early February, the stock
has more than doubled in price to today's close of $31.72.  More
importantly, though, we think that ACI has the room to climb
higher. To that end, both the MACD and On-Balance Volume are
displaying strong momentum buy signals.  At current levels, Arch
appears to have strong support at the psychologically-significant
$30 level followed by the 20-dma at $28.  As for overhead
resistance, there really isn't any; however, prices near zero and
five often provide natural levels of support and resistance, so we
would not be surprised if Arch should run into some resistance
near $35.  With that said, traders considering a position in Arch
should look for strong volume, 250,000 shares or more traded by
noon EST, on a move through Monday's intra-day high of $32.10
before placing their trades.

Picked on April 5th@ $31.50
Change since picked +0.22
Stop Loss @ $28.25


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