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Bullish Play Updates Wednesday, September 10, 2003 - INSP - close: 18.90 change: -0.35 - stop: 17.00

Tuesday, INSP hit our stated first target of $19.50, so conservative traders have probably already happily taken profits. MACD confirmed the breakout, and continues to look strong.

Monday, INSP announced that the company would return to its roots as a yellow page and white page directory, and would rework its site as a destination for yellow pages. The company intends to attract local advertising dollars, a potential $14 billion pot. The company decided to focus on the yellow pages and white pages when it calculated that 85 percent of its traffic went to those pages. Investors liked the idea, and INSP added 6.81 percent on more than double the daily average.

Tuesday continued those gains, but Wednesday INSP printed an inside-day candle or harami. That candle rests on the support offered by regression channel INSP formerly occupied. That inside day offers traders both a new possible entry and a new possible exit. While we're keeping our official exit at $17.00, traders familiar with inside-day formations might elect to exit if INSP drops below Tuesday's $18.46 low, although it might be a good idea to give the downside test a little leeway to ensure that any drop was not a trap. New entries could be sought on a move above Tuesday's high.

One caution exists for those considering new entries, however. The YIH, the Internet Infrastructure HOLDRS Index, and XIS, the Industry Standard 100 Internet Index, two indices of which INSP is a component, dropped sharply on Wednesday. Before considering new entries, confirm that these two indices have regained their footing.

Annotated Chart for INSP:

Picked on Sep 7 at  $17.19
Change since picked: +1.71
Earnings Date:    07/30/03 (confirmed)
Average Daily Volume:  347 thousand

Link to Current Quote INSP

Orbital Sciences - ORB - close: 9.05 change: -0.15 - stop: 8.49

After last week's announcements of new contracts, ORB's press department has been quiet this week. We were interested in the reaction of the defense-related stocks after President Bush's speech Sunday night. Whether impacted by his speech or not, both ORB and the $DFI.X, the Amex Defense Index, climbed Monday.

Both retreated on Wednesday, however. ORB's retreat looks like nothing more than oscillation within its ascending regression channel. The 10- and 21-dma's rise to support price. Even with Wednesday's decline, MACD tries to peek above the descending trendline that has been capping its highs.

We do note, however, that the $DFI.X closed beneath its 10-dma, so traders might also keep a watchful eye on this index, especially those traders considering new entries. Those new entries can be found on a pullback and bounce from above $9.00.

Annotated Chart for ORB:

Picked on Sep 3 at   $9.18
Change since picked: +0.17
Earnings Date:    07/22/03 (confirmed)
Average Daily Volume:  347 thousand

Link to Current Quote ORB

Qualcomm - QCOM - close: 40.62 change: -1.20 - stop: 39.99

Monday, QCOM charged up the chart. Tuesday, Nokia raised its earnings target, but the CFO commented that phone prices would soften in the current quarter. The effect of that announcement was heard throughout Europe, when bourses turned down. It was also felt by QCOM. Although the stock held above its 10-dma Tuesday, it could not do so Wednesday, and closed below that average for the first time since early August.

The XTC, the North American Telecommunications Index, also felt the effect and also closed below its 10-dma on Wednesday. $520 support held on the XTC, but it's possible that this index might retreat as low as $500 if the $520 support fails. Such a retreat might also carry QCOM down, perhaps as low as $40.00, although we hope to see that round-number support to hold, especially as it's also the neckline of QCOM's inverse H&S.

Those seeking new entries could target a pullback and bounce from above $40.00, but they should also be aware of the possibility that QCOM could be setting up a possible regular H&S with a neckline near $40.00. If QCOM hits that level and moves up, profits should be guarded near the $41.50 possible right-shoulder level. Verify that the XTC has found support, too, before considering new entries.

Annotated Chart for QCOM:

Picked on Aug 27 at  41.00
Change since picked: -0.38
Earnings Date:    07/23/03 (confirmed)
Average Daily Volume: 	10 million

Link to Current Quote QCOM

Teradyne Inc. - TER - close: 19.71 change: -1.32 stop: 17.89

After all the bullish action in the Semiconductor index (SOX.X) over the past few weeks, Wednesday's 5.3% selloff was a rude awakening to the bulls. The SOX plunged below possible support at $455 and then $444 to close at its lowest level since 8/26. After its nearly vertical ramp of the prior 5 sessions, it wasn't surprising to see the profit taking hit shares of TER as well, but the more than 6% slide left behind an ugly looking candle on the daily chart. If last week's breakout was the real deal, then TER should find solid support near $19, which should be further supported by the 10-dma ($18.99). A rebound from above that level looks good for new entries, although the dip probably shouldn't be bought if the SOX is continuing to fall. If the SOX breaks below $435, then it will probably continue down to its 50-dma near $408, and that would have a strong negative impact on our play. Keep stops set at $17.89 for now.

Picked on September 3rd at  $20.11
Change since picked          -0.40
Earnings Date             10/14/03 (unconfirmed)
Average Daily Volume =    2.88 mln

Link to Current Quote TER


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