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Begin Part 2 of 2

Weekly Economic Calendar (All times Eastern). The figures are the consensus expectations, not ours.

4-15-02
Business Inventories, February (8:30): -0.1% actual versus 0.0% expected and -0.1% prior (revised from +0.2%).

4-16-02
CPI, March (8:30): +0.3% actual versus 0.5% expected and 0.2% prior.
Core CPI, March (8:30): +0.1% actual versus 0.2% expected and 0.3% prior.
Housing Starts, March (8:30): -7.8% (1.646M) acutal versus 1.7M expected and 1.785M prior (revised from 1.769M).
Building Permits, March (8:30): -9.9% (1.599M) actual versus 1.685M expected and 1.774M prior.
Industrial Production, March (9:15): +0.7% actual versus 0.5% and 0.3% prior (revised from 0.4%).
Capacity Utilization, March (9:15): 75.4% actual versus 75.1% expected and 74.9% prior (revised from 74.8%).

4-17-02
Trade Balance, February (8:30): -31.5B actual versus -$29.0B expected and -$2.8B prior (revised from -$28.5B).

4-18-02
Initial Claims, 4/13 (8:30): 415K expected versus 438K prior.
Leading indicators, March (10:00): 0.3% expected versus 0.0% prior.
Philadelphia Fed, April (12:00): 13.0 expected versus 11.4 prior.
Treasury Budget, March (14:00): -$60.0B expected versus -$50.7B prior.

SUBSCRIBER QUESTIONS

Q: Please explain more about the ECRI as a forecaster. Do we have access to these figures and their interpretation?

A: The Economic Cycle Research Institute puts out a weekly gauge of leading economic indicators and also calculates a 6-month leading indicator as well as an inflation indicator. There is a website at http://businesscycle.com/. Not all of the information provided is free. You can get historical data free, but not the current data.

The ECRI has turned out to be a very accurate gauge of future economic activity. It takes into account many more elements than the governments LEI, and it is claimed to give a 'faster' view of what is going on because it is more sensitive given the elements it considers. It covers not only the U.S, but economies all over the world. It correctly forecast the slowdown in 2000 and 2001, and it showed there was no inflation on the horizon even as the Fed was making all of the noise about inflation around the corner. Not many look at it, but we sure do. Thus far it is saying that there is a recovery ongoing and will continue, that it won't be a double dip, and there is no threat of inflation at all.

THE PLAYS:

Reading the Plays: Please note that when we reference the 10, 18, and 50 day moving averages (MVA), those are exponential moving averages (EMA). The 200 day moving average is always simple (SMA). We will note when we reference a particular MVA differently, e.g., a simple 50 day MVA. Please click on the Yahoo and chart links for company and charting information. A "prior high" refers to the high at the start of a base.
For conserving space on listings of stop losses, the symbol (7%) indicates that the stop is 7% below the buy point.

Stocks from Tuesday report:
KEY: Paused on the breakout move, pulling back a hair on lower volume.
STKL: Explosive breakout!
ASX: Made the move, but it was all gap and on below average volume. Look for a test to 5.25 and then a rebound.
SNIC: Was making the move on massive volume, but reversed to close slightly lower. Never like these intraday reversals on breakout attempts, but we will see if it can hold on. Wont let it fall below 7.
COCO: Still pulling back in the handle.

Continued Plays:
RMHT: Again stopping short of the buy point, testing the 10 day MVA on lower, below average volume. Still fine.
ASBC: Holding just shy of the buy point on low volume. May have to come back a bit more to form a bit better handle. That is what we want.
HUM: That's the ticket. Good move on strong volume. Ready to breakout.
AGAM: Still showing a tight handle on below average volume. Still keeping a close eye on it.
STSA: Repeat, Repeat: Still looks great in its ascending wedge.
CRFT: Starting back up but on lower volume. Need more volume.
PRU: Hmmm. Back toward the 18 day MVA at 32, but volume was very low. Still fine.
PMSI: Broke out and pulled back on low volume today, testing the move.
CHPC: Continuing the breakout on above average volume, but showed a doji. May test 10 again.
MYK: Took a pause today after the breakout.
CCRN: Still in the handle.
RMCI: Still tanking, but held the 50 day MVA on the low and rebounded. Not a good breakout, and a bounce could give a point to exit positions.
PEGS: Testing the move higher on very low volume.
SPF: Doji in the handle on low volume. Still looking for the breakout.
OMX: Slowing down a bit here on some lower volume. may test 6.50 or so.
HARB: Whoa. Massive reversal. Volume lower but the move was not good. We thought it had run out of steam, but did not think it would tank in one session. Right below the 10 day MVA where we thought it would hit. Now we will see if it can bounce. If not, a lot of good work will be a wash when we sell.
SNS: Still in the handle, falling on lower volume. Good handle action.
HKF: Doji on lower volume on the heels of Tuesday's good move. May test back toward 18.20.
GBBK: Did not end the pullback, gapping down to 34 on massive volume. It either bounces off of this doji or we are out.
CHGO: Continues the low volume pullback and holding up pretty well.

Best Plays: They all look good.
1) OATS: Nice consolidation.
2) BBA: Setting up well.
3) STSA: From the continuing plays. Still looks solid.

New plays:

OATS (Wild Oats Markets--$10.75; +0.10; optionable): Health food grocery
http://biz.yahoo.com/p/o/oats.html
STATUS: We saw this one make the trend gap reversal in early April, and what did we do? We watched it. Then we watched it run from 8.50 to 11. Great. Sine then we have kept an eye on it, and now it is moving laterally after the strong move on very low volume (87,300; avg. is 165K). This is a bullish pattern known as a flying plateau, and where it is forming (right at the summer and December highs) it is also a handle. Buying is very strong and money flow has shot up. Looking for the breakout for the next run.
BUY POINT: Breakout: 11.30. Aggressive: 10.85. Volume: 280K+. Target=13.88 (initial). Stop=10.45.
POSITION: Stock and/or October 10c to buy (QOQ JB; low OI).

http://www.investmenthouse.com/cd/oats.html

BBA (Bombay--$3.30; +0.00; optionable): Home furnishings.
http://biz.yahoo.com/p/b/bba.html
STATUS: Still at the bottom of a 2.5 year base, but has formed a cup with handle at the bottom of the pattern. The past week it has pulled back in the handle, but the past two sessions has thrown very tight doji's on rising, above average volume (261,900; avg. is 120K). Buying in the stock is heavy and relative strength has broken over its previous tops when the stock was at higher prices; bullish action.
BUY POINT: 3.59 on volume of 250K+. Target: 4.75. Stop=3.18.
POSITION: Stock

http://www.investmenthouse.com/cd/bba.html

Revisited:

HNT (Healthnet--$27.61; +1.61; optionable): Health care plans
http://biz.yahoo.com/p/h/hnt.html
STATUS: 16-month cup with handle. HNT broke out from the handle in March, rallied, and then tested the 50 day MVA on the low Wednesday (25.45). It then rallied to the new breakout point on very strong volume (1.83 million; avg. is 440K). Buying has really picked up and relative strength broke out as well.
BUY POINT: Adding positions at 27.90 on volume of 900K or better. Target=33.40. Stop=25.95.
POSITION: Stock and/or July 22.50c to buy (HNT GX)

http://www.investmenthouse.com/cd/hnt.html

PORTFOLIOS: Each report, we look at these to see which is in a buy position. We don't cover them all each time, just the ones that look ready to pick up a few shares.

THE LEADERS: DGX, FRX, LLL, MIK. New: ICUI; RMCI

FRX (76.17; -1.83): It did not hold at 78, tanking today below the 200 day MVA at 76.75 on falling volume (1.16 million). Might give a kiss back up to the 200 day MVA, but a break below the 200 day MVA is ominous after the break below the 50 day MVA.

MIK (38.00; +0.02): MIK is riding up the 50 day MVA (36) while it bumps into resistance at 39. Kind of an ascending wedge, showing a doji above the 18 day MVA today on below average volume (335,300). This wedge is the third base after the cup with handle breakout in October and the double bottom in January to march. A third base is still playable, and we will watch for a breakout over 39.25 on above average volume.

UP & COMERS PORTFOLIOS: BBBY, SRCL

No coverage tonight.

MEMBER PORTFOLIO: CSCO, SEBL, EMLX, BRCM, HDI, BRCD, BUD, AMGN, WMT, ORCL, HB, NOC

SEBL (25.90; -2.41): Reported earnings after hours and was up, then down, then tried to recover. It was not soothing news for all investors.

EMLX (28.90; +0.04): Showing a doji below the 200 day MVA on rising though still below average volume (8.94 million). Right at the down trendline from February, a great place to play the stock lower to 25, the recent low.

BRCM (38.76; +0.40): Lost 2 cents less than expected. It sold hard at first and then recovered to where it closed. That puts it at the 200 day MVA; important point to hold.

BRCD (25.34; -1.39): Another stock at the down trendline from February, rising up to that level on lower and lower volume. Primed to sell off again if earnings in tech land cannot get things rocking.

BUD (51.55; -0.21): Starting the low volume descent toward 50.

WMT (59.29; -0.71): Bad news. Falling from the 50 day MVA on rising, above average volume (9.14 million). It made a game try to break back over and hold, but it failed. We can see if 58 holds (former price points from December, February, and just earlier in April, but we are inclined to close some positions now.

HB (65.40; +1.41): Moving back up to a new high on rising, above average volume after taking a breather Tuesday. This stock is showing continuing leadership qualities.

NOC (112.88; -2.86): Reported good earnings, but still dealing with TRW that just said 'don't take the deal' to its shareholders. That is what pushes this stock up and down on a day to day basis.

Good Investing!
Jon L. Johnson and The Daily Staff

All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Online Investment Services, LP or its paid consultants and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on our related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolio of Partners of Online Investment Services, LP or its paid consultants may, in some instances, include securities mentioned herein and on our web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors.

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