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The VRTrader.com VR Platinum Newsletter Monday 6/6/05 "Tools for the High Performance Trader" Copyright © 2005, All rights reserved. --------------------------------------------------------------- LEIBOVIT FILES | by Mark Leibovit --------------------------------------------------------------- Leibovit Files Monday, June 06, 2005 Opening Comments Economic Calendar June 6-11: --------------------------------------------- Monday, June 6: No reports. --------------------------------------------- Tuesday, June 7: 3:00 pm - Consumer Credit for April --------------------------------------------- Wednesday, June 8: 10:00 am - Wholesale Investories for April --------------------------------------------- Thursday, June 9: 8:30 am - Initial Job Claims for June 4 --------------------------------------------- Friday, June 10 8:30 am - Export Prices for May 8:30 am - Import Prices for May 8:30 am - Trade Balance April 2:00 pm - Treasury Budget May --------------------------------------------- --------------------------------------------- A 'cyclical change point' due Friday and/or today and midweek's 'Weird Wally Wednesday' phenomenon may be coincident with a market retracement this week, but it may be modest in view of the current 'Summer Rally' which gained some upward momentum last week. Blue Chip indexes lost upside momentum after Tuesday while Nasdaq carried momentum into Thursday and the Russell 2000 and S&P 400 Midcap extened strength into Friday. Last week also saw a near parabolic rise in market favorite Google (GOOG) result in a downside reversal on Friday. Stepping back, there is no clear sign the market has peaked on an intermediate basis, but there are short-term clues that we may now see a retracement before moving higher. Ideally, we correct for part of this coming week. Friday's employement numbers supposedly raised concerns that with the economy flashing mixed signals in recent weeks we may indeed be heading into a slowdown. The contrary view, of course, is that we've been climbing a Wall of Worry and any 'bad news' simply reconfirms the uptrend and any subsequent sell-off provides a buying opportunity. We're somewhere in the middle here, unwilling to buy stocks without a greater retracement, but unwilling to get short without extremely tight stops. The Dollar Index saw volume slow into Tuesday's 88.41 recovery high leading us to believe that we could see more downside action this coming week ahead of further gains. If true, gold and gold shares may see more upward resiliency. We've received numerous emails asking whether we support a short trade in high-flyer Google (GOOG). While there has been no significant downside volume in the stock, it does appear to be suffering from some vertigo at current prices. Short-term downside objective could be to 265.00. We're not officially recommending it as a short candidate, but it's awfully tempting. ============================================ --------------------------------------------------------------- PORTFOLIO UPDATE | by Mark Leibovit --------------------------------------------------------------- VR Platinum Portfolio Update Monday, June 06, 2005 Pre-Market New Buy/Short ---------------------------------- BBH - Short @ Market. Target: 163.00. Stop: 172.55 BBH - Note: Key Reversal Friday on increasing volume is our technical trigger. EFA - Short @ Market. Target: 152.60-153.00. Stop: 157.30 IWM - Short @ Market. Target: 119.75-120.00. Stop: 124.85 RTH - Short @ Market. Target: 91.00-91.50. Stop: 95.65 New Changes ---------------------------------- XMSR - Changed Entry Range From 32.50-32.60 To 32.00-32.15 ---------------- LONGS ---------------- PTF - Petrofund Energy Trust 14.62 COMPANY PROFILE: WHY WE LIKE IT: This is a Canadian trust that pays out well on dividends. It averaged about a .12/share monthly dividend in 2004. It has bounced sharply higher after finding support at its 200 day moving average. Petrofund Energy Trust (formerly NCE Petrofund) is an open-ended investment trust whose primary source of income is from 99% net royalty interests granted by its two wholly owned subsidiaries, PC and PVT (formerly Ultima Ventures Trust). PC acquires, manages and disposes of petroleum and natural gas rights and royalties and related property rights and interests located primarily in western Canada. PC also holds the legal interest to all properties beneficially owned by PVT. PVT receives 99% of the net revenue from these properties, which it in turn pays out to Petrofund in the form of the 99% net royalty noted above. In addition, PC may acquire royalties or other property interests or securities of other resource issuers. The Trust may also purchase directly or indirectly securities of oil and gas companies, oil and gas properties and other related assets. On June 16, 2004, PC acquired Ultima. POTENTIAL TRIGGER: Buy at market with a stop below the March 30 low at 13.40. This is one that could provide good income AND price appreciation. -------------------------------------------------------------- GNA - Gerdau Ameristeel 4.56 COMPANY PROFILE: WHY WE LIKE IT: We believe GNA is making its seven week cycle low in this area. It staged a decent looking reversal up on May 17. Steel stocks are very much oversold at this point and GNA looks like a coiled spring ready to bounce back. Gerdau Ameristeel Corporation is a large minimill steel producer in North America, with annual manufacturing capacity of over 8.4 million tons of mill finished steel products. Through its vertically integrated network of 15 minimills (including one 50%-owned minimill), 16 scrap-recycling facilities and 42 downstream operations, Gerdau Ameristeel primarily serves customers in the eastern two thirds of North America. The Company's products are generally sold to steel service centers, steel fabricators or directly to original equipment manufacturers (OEMs) for use in a variety of industries, including construction, cellular and electrical transmission, automotive, mining and equipment manufacturing. Gerdau Ameristeel is an indirect subsidiary of, and controlled by, Brazilian steelmaker, Gerdau S.A. The Company's operations are segmented into two operating divisions: Minimills and Downstream operations. POTENTIAL TRIGGER: Buy at market with a stop below the May 17 low of 4.35. Target 6.00. -------------------------------------------------------------- CALM - Cal-Maine Foods Inc 6.02 COMPANY PROFILE: WHY WE LIKE IT: Cal-Maine has seen an extended, relentless decline over the last couple of months. It formed a bullish outside bar on Wednesday, May 25. Momentum indicators are also showing a bullish divergence. Cal-Maine Foods, Inc., is primarily engaged in the production, cleaning, grading, packaging and distribution of fresh shell eggs for sale to shell egg retailers. The Company had sales of approximately 605 million dozen shell eggs during the fiscal year ended May 29, 2004 (fiscal 2004). It primarily markets shell eggs in the southwestern, southeastern, mid-western and mid-Atlantic regions of the United States. The Company markets its shell eggs through its distribution network to a diverse group of customers, including national and regional grocery store chains, club stores, foodservice distributors and egg product manufacturers. The Company also produces and markets value-added specialty shell eggs in the United States. Specialty shell eggs include reduced cholesterol, cage free and organic eggs. POTENTIAL TRIGGER: Buy at market with a stop below the May 25 low of 5.72. Target 9.00. -------------------------------------------------------------- WJCI - WJ Communications Inc 1.91 COMPANY PROFILE: WHY WE LIKE IT: WJCI has been rattling around its May 13 low for almost two weeks now. It tested the low on May 25 and closed higher on above average volume. It is also in the vicinity of a low made in October 2004. Momentum indicators are showing a bullish divergence as well. WJCI could take off soon. WJ Communications, Inc. is a radio frequency (RF) devices company providing radio frequency products worldwide to communications equipment companies and service providers. The Company designs, develops and manufacture products for both current and next-generation wireless and wireline networks, defense and homeland security systems and RF identification systems (RFID). Its products comprise highly functional RF semiconductors, components and integrated assemblies that seek to address the RF requirements of these various systems. The portfolio of RF technology products offered by the Company includes amplifiers, mixers, transistors and multi-chip modules, and RFID readers and reader modules. The Company sells its products principally to distributors and original equipment manufacturers, including their manufacturing subcontractors. POTENTIAL TRIGGER: Buy at market with a stop below the May 25 low of 1.76. Target 3.50. -------------------------------------------------------------- DPII - Discovery Partners International 3.00 COMPANY PROFILE: WHY WE LIKE IT: DPII put in a bullish outside day on June 2 with high volume after a prolonged decline. We are looking for a solid move to the upside here. There are bullish divergences on momentum indicators also. Discovery Partners International, Inc. (DPII) engages in the development and provision of libraries of drug-like compounds, instruments, consumable supplies, drug discovery services, computational tools to generate compound libraries, and testing and screening services for various drugs. It offers instruments and consumables that automate the process of making and storing collections, or libraries of chemical compounds; and chemistry services, that include compounds, medical chemistry, drug discovery informatics, and compound repository services. DPI also provides screening services. In addition, the company designs and conducts assays or tests that generate information about the effect of chemical compounds on a drug target. DPI sells its products and services to pharmaceutical and biopharmaceutical companies in the United States, Europe, Japan, and India. The company was founded as IRORI in 1995 and changed its name to Discovery Partners International, Inc. in 1998. Discovery Partners International is headquartered in San Diego, California. POTENTIAL TRIGGER: Buy at market with a stop below the June 2 low of 2.81. Target $4.00. -------------------------------------------------------------- -------------------------------------------------------------- TIMER DIGEST MARKET SIGNALS -------------------------------------------------------------- For Thursday, June 02, 2005 STOCKS: Neutral BONDS: Neutral GOLD: Neutral -------------------------------------------------------------- CURRENT PORTFOLIO -------------------------------------------------------------- [Reserved for Subscribers] ================================================================= NEW PICKS ================================================================= Based on either Bullish or Bearish technical signals and the Volume Reversal™ methodology, these stock picks look primed to make a move. No trading system is 100% accurate and care should be taken to consider market conditions before entering any trade. Not all trades are suitable for all investors and each investor should consider their own risk profile before making a decision. Format: Symbol - Company Name Buy @ = this is the strategic range picked by the VR staff. Target: = estimated destination of equity during life of play. Stop: = recommended* stop loss considering equity volatility. *stop losses should be placed according to your own risk tolerance. ================================================================= RISK MANAGEMENT STRATEGY When a stock declines/rallies 1 point or more from the price at which bought or sold short, we will raise/lower stop to cost. This will limit the potential loss on a trade. For each additional 1 point move, a further adjustment is made. ================================================================= ------------------------------------------------------ CURRENT BULLISH STOCK PICKS ------------------------------------------------------ [Reserved for Subscribers] ------------------------------------------------------ CURRENT BULLISH INDEX PICKS ------------------------------------------------------ [Reserved for Subscribers] ------------------------------------------------------ CURRENT BEARISH STOCK PICKS ------------------------------------------------------ [Reserved for Subscribers] ------------------------------------------------------ CURRENT BEARISH INDEX PICKS ------------------------------------------------------ [Reserved for Subscribers] ------------------------------------------------------- EXITED BULLISH STOCK PICKS FOR THE PREVIOUS 30 DAYS ------------------------------------------------------- RNO - Picked(5/18/04): 1.24 Exited(5/23/05): 1.23 Result: -0.01 AEM - Picked(4/11/05): 14.43 Exited(5/9/05): 13.07 Result: -1.36 ASA - Picked(5/4/05): 35.00 Exited(5/9/05): 35.05 Result: 0.05 HL - Picked(5/4/05): 4.83 Exited(5/9/05): 4.82 Result: -0.01 PDG - Picked(5/4/05): 13.50 Exited(5/9/05): 13.88 Result: 0.38 QTWW - Picked(5/9/05): 3.68 Exited(5/20/05): 3.44 Result: -0.24 GRU - Picked(5/10/05): 18.25 Exited(5/11/05): 16.45 Result: -1.80 IWOV - Picked(5/13/05): 7.50 Exited(5/16/05): 7.25 Result: -0.25 SIL - Picked(5/16/05): 11.74 Exited(5/23/05): 11.75 Result: 0.01 AEM - Picked(5/17/05): 11.18 Exited(5/23/05): 11.01 Result: -0.17 UCL - Picked(5/18/05): 54.85 Exited(5/24/05): 55.45 Result: 0.60 ALVR - Picked(5/19/05): 9.50 Exited(5/31/05): 9.20 Result: -0.30 HMY - Picked(5/19/05): 6.75 Exited(5/23/05): 7.40 Result: 0.65 AAPL - Picked(5/20/05): 37.34 Exited(5/24/05): 39.45 Result: 2.11 ASA - Picked(5/24/05): 34.69 Exited(5/31/05): 35.60 Result: 0.91 AEM - Picked(5/25/05): 11.58 Exited(5/31/05): 11.70 Result: 0.12 NEM - Picked(5/25/05): 36.29 Exited(5/31/05): 36.75 Result: 0.46 ------------------------------------------------------- EXITED BULLISH INDEX PICKS FOR THE PREVIOUS 30 DAYS ------------------------------------------------------- XLE - Picked(5/18/05): 39.66 Exited(5/24/05): 40.37 Result: 0.71 DIA - Picked(5/19/05): 104.15 Exited(5/23/05): 104.63 Result: 0.48 IBB - Picked(5/19/05): 67.50 Exited(5/23/05): 66.95 Result: -0.55 ------------------------------------------------------- EXITED BEARISH STOCK PICKS FOR THE PREVIOUS 30 DAYS ------------------------------------------------------- RYL - Picked(5/10/05): 62.84 Exited(5/16/05): 60.25 Result: 2.59 DF - Picked(5/20/05): 38.24 Exited(5/20/05): 38.70 Result: -0.46 MTH - Picked(5/26/05): 72.61 Exited(6/1/05): 75.25 Result: -2.64 AAPL - Picked(6/1/05): 39.90 Exited(6/3/05): 37.96 Result: 1.94 ------------------------------------------------------- EXITED BEARISH INDEX PICKS FOR THE PREVIOUS 30 DAYS ------------------------------------------------------- OIH - Picked(5/5/05): 93.05 Exited(5/11/05): 91.13 Result: 1.92 SPY - Picked(5/5/05): 117.11 Exited(5/11/05): 117.11 Result: 0.00 VNQ - Picked(5/9/05): 55.05 Exited(5/9/05): 55.60 Result: -0.55 QQQQ - Picked(5/11/05): 35.41 Exited(5/12/05): 36.06 Result: -0.65 QQQQ - Picked(5/12/05): 36.09 Exited(5/13/05): 36.25 Result: -0.16 SPY - Picked(5/12/05): 117.23 Exited(5/16/05): 116.14 Result: 1.09 IBB - Picked(5/16/05): 66.65 Exited(5/18/05): 67.14 Result: -0.49 DIA - Picked(5/23/05): 104.63 Exited(5/23/05): 105.21 Result: -0.58 IWM - Picked(5/23/05): 121.35 Exited(5/23/05): 121.75 Result: -0.40 QQQQ - Picked(5/25/05): 37.68 Exited(5/26/05): 38.01 Result: -0.33 SPY - Picked(5/25/05): 119.10 Exited(5/26/05): 120.05 Result: -0.95 DIA - Picked(6/1/05): 104.64 Exited(6/1/05): 105.45 Result: -0.81 OIH - Picked(6/1/05): 93.28 Exited(6/1/05): 93.60 Result: -0.32 ----------------------------------------------------------------------- VRTRADER.COM TELEPHONE HOTLINE: Due the recent proliferation of internet viruses, occasional technical problems and the ongoing threat of terrorist acts which might interfere with the integrity of the internet or the operation of our website and the delivery of email, I would like to remind you that a 800 telephone hotline continues to run parallel to the website. That hotline replicates commentary on the VRTrader.com website during emergency periods. At other times, a morning update is available. Access via the 800 number is billed at the rate of $2.50 per minute and a credit card authorization form needs to be completed to sign up for the service. Please contact us for details at mark@vrsurvey.com or please read the details and download the form at the VR HOTLINE link on the Home Page of VRTrader.com. ============================================================ To stop receiving this VRTrader Update, send email to mark@vrsurvey.com ============================================================ 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 VRTrader.com 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. VRTrader.com staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control. Copyright © 2005 VRTrader.com. Do not duplicate or redistribute in any form.