Tuesday’s Stock Watch

November 12, 2001
TradingMarkets Editors

The broader markets
were mixed in reaction to the airline disaster today. While the day’s
early sell off reminds us how quickly the markets can change, the following
rally was a sign of strength. As we look for indications of an economic rebound,
the Wall Street Journal reminds us that the profits of America’s companies were
off 72% in the 3rd Qtr, the worst since World War II. These are uncertain times
for America, and from an intermediate-term trader’s standpoint, we are looking
for signals to get us back into a good market. When the market moves sideways on
light volume it’s not a bad sign, but it’s far from the invitation IT traders
need for a good market. We are still looking for our leadership to surface, and
we are still counting our accumulation and distribution days.

Overall NYSE volume was

977,047,000. NYSE
advancing issues were
1,495, with up volume at
437,344,000; declining issues were
1,564, with down volume at
529,204,000. Overall Nasdaq volume was
1,585,873,000. Nasdaq advancing issues were
1,777, with up
volume at
1,073,643,000; declining issues were
1,778
with down volume at
484,952,000. The NYSE had
8 new 52-week highs, and 4 new 52-week lows. The Nasdaq had 11 new 52-week highs
and 1 new 52-week low.

Top sector gainers:

Semiconductor Sector Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) up
2.47% to
519.32.

Morgan Stanley Internet Idx
(
$MOX.X |
Quote |
Chart |
News |
PowerRating) up
1.77%
to
12.66.

Losing sectors:

Airline Index

(
$XAL.X |
Quote |
Chart |
News |
PowerRating) down
5.75% to
65.22.

Dow Jones Transport
Index
(
$TRAN.X |
Quote |
Chart |
News |
PowerRating) down 2.07% to 2,272.60.

Leading Sectors
with new highs:

Semiconductors – 3

Medical Instruments
and Supplies – 2

From the strong semiconductors sector, Nvidia
(
NVDA |
Quote |
Chart |
News |
PowerRating) hit a new high
today, up 2.69% on slightly less than average volume. This is encouraging on the
heels of an accumulation day for the stock, and will be watched for further
leadership.

From our recent breakouts list, Copart Inc.
(
CPRT |
Quote |
Chart |
News |
PowerRating) took a nasty tumble,
down 6.73% today. Another example of a company that appears to have everything
going for it — an EPS of 99 and an RS of 96 — that just can’t clear the
hurdle into a dominant leadership position in the market. This a clear
distribution day with shareholders dumping on over 70% average volume.

From our Stocks Forming Handles list, Integra LifeSciences
(
IART |
Quote |
Chart |
News |
PowerRating)
had a distribution day, down 2.53%. The stock penetrated its 50- day moving
average, but recovered to close just above it. The manufacturer of medical
devices for brain, spine and soft tissue applications has made a nice run up
since May of last year, and has been working on its base since mid August. The
company has had 100%+ EPS growth each of the last four quarters in its first
profitable year. Revenue growth has declined from 54% to 20% over the last four
quarters. Pre-tax margins exceeded 18% in the last quarter, improving each of
the last eight quarters. IART will need to hang on to hold to the bottom of its
handle as it sits just above its 50-day moving average.

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.

CPRT was heavily distributed today, as it dives toward its 50-day moving
average and its pivot.

GNSS continues recovering from its big distribution day last Thursday.

NVDA made another new high on above average volume.

PNRA inched back up on light volume. TARO, the latest breakout failure,
essentially closed flat after challenging its 50-day moving average.

Company Name	Symbol	12 Month RS	Price	Price Change	Average Volume
Copart Inc.	( CPRT \| Quote \| Chart \| News \| PowerRating)	96	30.60	– 2.21	692,400
Genesis Microchip	( GNSS \| Quote \| Chart \| News \| PowerRating)	98	46.86	+ 1.77	2,269,500
Nvidia Corp.	( NVDA \| Quote \| Chart \| News \| PowerRating)	94	54.63	+1.43	10,349,600
Panera Bread Co.	( PNRA \| Quote \| Chart \| News \| PowerRating)	96	44.27	+ 0.57	305,800
Taro Pharmaceuticals	( TARO \| Quote \| Chart \| News \| PowerRating)	98	39.99	+ 0.09	783,100

Stocks Forming a Handle

Handles:

IART penetrated its 50-day moving average, but recovered to close down just
above it.

KKD closed up on light volume as it approaches the third week of its handle.
Volume continues to dry up.

PECS closed up on below average volume as it continues to work on its less
than ideal handle.

THQI closed up on big volume, but on less than the
big distribution days of
late last week.

CECO wedged up a bit on its handle on very light
volume

Company Name	Symbol	12 Month RS	Price	Price Change	Average Volume
Integra LifeSciences Hld.	( IART \| Quote \| Chart \| News \| PowerRating)	96	28.36	– 0.74	346,800
Krispy Kreme Doughnuts	( KKD \| Quote \| Chart \| News \| PowerRating)	95	36.20	+ 0.83	681,600
PEC Solutions	( PECS \| Quote \| Chart \| News \| PowerRating)	98	24.70	+ 0.70	299,300
THQ Inc.	( THQI \| Quote \| Chart \| News \| PowerRating)	96	53.80	+ 1.10	1,400,400
CECO	( CECO \| Quote \| Chart \| News \| PowerRating)	92	31.50	+0.40	1,025,900

Stocks Building A Base

Company Name	Symbol	12 Month RS	Price	Price Change	Average Volume
Career Education Corp.	( CECO \| Quote \| Chart \| News \| PowerRating)	92	31.50	+ 0.40	1,097,200

Remember that all securities are
risky. In any trade, you should always reduce your risk by adjusting position
size and placing open protective stops where you will sell your long or
cover your short in case the market turns against you. For an introduction to
combining price stops with position sizing, see our lesson,
Risky
Business.

Tuesday’s Stock Watch

BUY THE FEAR, SELL THE GREED

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