This Week’s Intermediate-Term Report

July 11, 2003
Chris Tyler

Since we last
left off, a major technical level in the Spyder (SPY) was breached, only
to reverse course intraday and trigger the first of six higher highs in our
broadest index proxy. The ensuing trade of the past three sessions has resulted
in a two-day pullback to the 20-Day EMA, with Friday ending the latest pullback
with a rally off of technical supports.Â

The ‘confirmed rally’, all said and
done, is still in place as we approach the four month mark from the March lows.
The most recent action does appear to leave the averages susceptible to some
downside action should the prior lows from last week be tested. The reversal
last week was classic as all eyes and fingers were more than ready to jump on
the breakdown. At present, with a lower high being established in the Spyder, a
move down to retest would have a much better chance at pushing lower than the
first attempt at the neckline break.Â

As always, especially when things
look to good to keep going, proper money management will keep you in when it’s
time to stay the course, and will provide for exiting gracefully when the market
decides to ‘rear it’s ugly head’ once more. How difficult will the next
corrective move, prove to be? I don’t know, but it’s not something that needs to
be wrestled with either, as long as we keep our own heads on straight when
executing quality trades. For now that means maintaining our current positions
as price and volume dictate, and also being in the fortunate position of still
scouring the land for more growth stock opportunities out of classic technical
patterns. To compliment the most recent rally in the ETFs, over half of our
stocks from the recent breakouts list put forth new 52-Week highs, while the
others on the list that failed to push higher, also maintained their composure
by consolidating recent gains in orderly trade.

To paraphrase Kevin Haggerty,
“It really has been too easy.” Our report has triggered some excellent
results from both the swing trade category, and from the stocks building a
handle list. From the swing list: Kronos
(
KRON |
Quote |
Chart |
News |
PowerRating) made a run of over 9
points, and nearly 20%, right up to the next significant resistance mark as
judged by the weekly chart. Pixar
(
PIXR |
Quote |
Chart |
News |
PowerRating) has shown gains of over 7
points out of it’s ‘sloppy’ Cup & Handle, while two of our ‘daily trigger’
patterns from the list, Mercury Interactive
(
MERQ |
Quote |
Chart |
News |
PowerRating) and Avid
Technology
(
AVID |
Quote |
Chart |
News |
PowerRating) made respective gains of approximately 3.5 and 3 pts
at their recent highs. But, the big percentage winner, and newest member to our
list of recent breakouts goes to Digital River
(
DRIV |
Quote |
Chart |
News |
PowerRating), with gains of
over 6 pts, or 30%. As they say, good things come to those who wait, and the
weekly breakouts are definitely a testament to that.

Until we see otherwise, in both our
individual names, as well as our ETF friends, we will continue to look for
stocks setting up in a healthy market environment. And so it goes, that with the
most recent market action, we have more potential trade opportunities for which
to consider.

	NYSE	NASDAQ
Advancing Issues	1947	1939
Declining Issues	882	1102
Total Volume	1.47b	1.49b
New 52-week Highs	207	343
New 52-week Lows	14	8

New Category:

Swing Trade Setups: Potential
position plays that are expected to last 2 to 7 trading days, using key
technical levels for entry. These stocks do not necessarily meet all of our
stringent Intermediate Term requirements, but are demonstrating many of the same
strong criteria. Due diligence on the individual traders part is an absolute
requirement!!! Proper money management rules are emphasized in scaling out of
profitable positions, as is, the setting of prudent stop losses, on the
establishment of any positions taken. The list is not maintained on a weekly
basis as trades are considered, at time of entry, short term in nature.

None Today.

Company Name	Symbol	12 Month RS	Price	Pivot +.10	Technical Perspective
Emulex	( ELX \| Quote \| Chart \| News \| PowerRating)	65	23.08	26.74	7-Month basing pattern
BEA Systems	( BEAS \| Quote \| Chart \| News \| PowerRating)	72	11.07	12.42	5-Month basing pattern
Take Two Interactive	( TTWO \| Quote \| Chart \| News \| PowerRating)	76	29.34	31.50	8-Month Cup & Handle
Lexmark	( LXK \| Quote \| Chart \| News \| PowerRating)	58	75.98	77.54	10-Week High level basing pattern
Sabre Group	( TSG \| Quote \| Chart \| News \| PowerRating)	66	26.23	26.78	One Year Cup & Handle pattern with 6-week handle being established
WCI	( WCI \| Quote \| Chart \| News \| PowerRating)	73	19.87	20.75	One Year Cup & Handle weekly
Avocent	( AVCT \| Quote \| Chart \| News \| PowerRating)	86	32.08	33.95	Upsloping weekly handle on top of 2-Year W base
Everest Re Group	( RE \| Quote \| Chart \| News \| PowerRating)	66	76.14	78.69	4-Week consolidation at off All Time HighsÂ

Watch List Action:

As always, the search goes on for top stocks meeting our fundamental and
technical criteria. Stocks forming bases or handles are monitored, and put on
our watchlist, and then moved to our position list of recent breakouts, on price
triggers above resistance pivots.

Stocks Building A Base

Company Name	Symbol	12 Month RS	Price	Technical condition	Average Volume	Pivot
Â	Â	Â	Â	Â	Â

Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â

Stocks Forming A Handle

Company Name	Symbol	12 Month RS	Price	Technical condition	Average Volume	Pivot
Â	Â	Â	Â	Â	Â	Â

Â Â Â Â Â Â Â

Recent Breakouts

We monitor the action of Recent Breakouts as an
indicator of the market health for IT traders. When breakouts are acting well,
this is a good sign for the likelihood of further sustainable breakouts. When
breakouts are failing, IT traders should be even more cautious.Â

Â Â Â Â

Company Name	Symbol	12 Month RS	Price	Average Volume-65 Day	Pivot	52-Week High
Apollo Group	( APOL \| Quote \| Chart \| News \| PowerRating)	70	65.56	2,085M	46.89	66.10
Career EducationÂ	( CECO \| Quote \| Chart \| News \| PowerRating)	80	77.01	774K	54.40	77.58
Centex Corp.	( CTX \| Quote \| Chart \| News \| PowerRating)	67	77.23	1,425M	59.80	87.50
Coach Inc.	( COH \| Quote \| Chart \| News \| PowerRating)	82	55.33	1,015M	28.35	56.86
Hovnanian	( HOV \| Quote \| Chart \| News \| PowerRating)	81	58.38	1,105M	40.90	70.50
Boston Scientific	( BSX \| Quote \| Chart \| News \| PowerRating)	81	60.65	3,529M	47.65	65.73
International Game Technology	( IGT \| Quote \| Chart \| News \| PowerRating)	75	26.59	1,174M	18.71	26.70
New Century Financial	( NCEN \| Quote \| Chart \| News \| PowerRating)	79	44.41	971K	34.90	50.84
UCBH Holdings	( UCBH \| Quote \| Chart \| News \| PowerRating)	68	30.56	356K	22.60	31.50
Corinthian Colleges	( COCO \| Quote \| Chart \| News \| PowerRating)	70	51.15	759K	43.09	52.83
Endo Pharmaceutical	( ENDP \| Quote \| Chart \| News \| PowerRating)	82	16.45	927K	14.98	19.45
Nextel	( NXTL \| Quote \| Chart \| News \| PowerRating)	95	18.80	23,929M	15.85	20
Digital River	( DRIV \| Quote \| Chart \| News \| PowerRating)	92	23.05	1,300M	20.20	26.37

Breakouts that may
require extra diligence. Those issues that are near pivot entries or 15%
or more, from established highs.

This list accounts for those issues that have performed strongly, but may
require position management due to deteriorating technical condition before
pivot price is reached. If an issue pullbacks 30% or more from highs, the stock
will be removed from our lT lists, so we can make room for more compelling trade
candidates.

Company Name	Symbol	12 Month RS	Price	Average Volume-65 Day	Pivot	52-Week High
Â Gtech Holdings	( GTK \| Quote \| Chart \| News \| PowerRating)	64	38.99	640K	37.05	40.70
Garmin Ltd.	( GRMN \| Quote \| Chart \| News \| PowerRating)	79	42.77	816K	23.46	51.70

This Week’s Intermediate-Term Report

BUY THE FEAR, SELL THE GREED

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