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NEWSLETTER & Oscillator Programs

Hello out there stock trading fans. As I mentioned last week the oscillator readings were at the lowest level
in since last October’s massive sell off. Moving up on Friday, the oscillator reading created and completed a
head and shoulder’s bottom formation, which could be a start of a new up trend in the market. This reversal
is the same head and shoulders pattern that I noticed in early November of last year. If you recall, the market
was at a bottom low when it began to take off. Back then, we saw a full blown 10% correction on the N.Y.
stocks and a more severe 16% correction on the NASDAQ. I think this may be the last leg up in this market
cycle and it could last 2-3 months. Maybe…
The S&P is bouncing off the 50-day moving average line for the second time in as many weeks as are most
of the other averages. We are still relatively extended on the NASDAQ, still over 10% above the 200-day
moving average line. I think this is the way many computer sector stocks were moving during the week,
which is normally very sensitive to market corrections. This foretells that the mini correction of the past few
weeks may be achieved. I’ll feel a lot better about the overall market once the S&P and other averages break
out of this little base and start making new highs.
It seems that Entremed (ENMD) has sparked an interest in many of the Biotech’s. Many Biotech’s have seen
big moves and high volume accumulation since this stock has made it’s run of last week. Could we be at the
beginning of a substantial move by this group? I sure hope so.
Since the market could be set to turn and run again, I though that I might list some stock’s that look like they
are ready to participate. These stocks are not low beta and not low P/E. As is the case with many “high yers”
they in fact have almost no earnings, as is the case of the Biotech’s, no earnings at all. But the market loves
these types of stocks. They make great press. So here is this week’s list of momentum stocks that are ready to
move. Many of them are this weeks-new Biotech’s that woke up and look to participate.
Advanced Tissue Science (ATIS) - $10

FDA to approve it engineered human skin soon. Stock gapped up on the news and volume is huge at 5 million shares last
Friday. Looks to be a big winner.
Celtrix Pharm. Inc. (CTRX) - $2.75

New issue that has many new products in the pipeline. Has good volume accumulation. Nice spikes on the upside when the
stock moves up and volume dry up on down days. Wait to break $3.50 to buy.
Icos Corp. (ICOS) - $16

This stock was a nice mover in the last market move. Two days of the stock closing on the high here and again nice volume
accumulation spikes.
Hollis Eden Pharmaceuticals (HEPH) - $15

Stock had a very explosive move up in January as it ran from $6 to $18. Rest looks to be over with soon. Draw deciding trend
line to nd your buy point.
Cor Therapeutics (CORR) - $19

FDA approved it’s new drug back in late march and the stock went from &12 to $22 in one day. Rest looks to have ended
Friday. Buy point is $20
Immunomedics Inc. (IMMU) - $6

Stock has very strong volume accumulation spikes. Looks to be going higher. Buy point $6.35
Agouron Pharmaceuticals (AGPH) - $35

Stock is one of the leading providers of the AIDS cocktail that’s working wonders. Stock went from 5 to 56 in two years. Then
collapsed to $27. Earnings are just starting to come through with this last quarters numbers, 44 cents vs. a loss on revenues
up 248% to $134 million. Company is also working on same type of cancer ghting drugs as ENMD but closer to phase 1
trails. Good support here at 33, the next buy point is $40.
Cephlon Inc. (CEPH) - $14

Biotech’s are a wild ride and this one is no exception. Five-days of massive volume change. Extended here but may not stop.
For active traders only at this time. Buy point is $14.75
Imclone System (IMCL) - $13

Percent volume change is the huge. Stock is leaping every day. Very extended here, wait for consolidation to enter. Could be
the leader so don’t lose sight.
Aviron (AVIR) - $28

Stock broke into new high here on record volume. Has a long eight-month base, so the move could be nice and long. Into live
virus vaccines.
Sugen Inc. (SUGN) - $15

Larry Elison CEO of Oracle owns a nice stake in this company. Company into target speci c drugs for various diseases such as
cancer and diabetes. Stock had a nice move this week, breaking out of nice long base. Percent volume change is the most
massive of any of the biotech’s that I’ve seen in my data base. Trading volume is normally 10 thousand to 40 thousand daily.
Now volume is 700,000 to over 1 million daily. Extended here but in triangle formation, so traders only.
Well I think that’s enough of the Biotech’s for now. Let’s move on to some other potential movers in other
areas.
AMZN Amazon.Com $92

I don’t think that I can say enough about this stock. Only 8.5 million shares oat. Company has been in a high level base for
almost 5 weeks and soon to split 2 for 1. This has got to be my #1 pick to buy as soon as it breaks $100 or $50 after the split.
I would not be suprised to see this stock leap out of the base and go up to $130 to $140 in a ash. Do not let this one get
away this time.
Yahoo (YHOO) - $117

This stock and AMZN are the current market leaders. Stock has a nice rising trend line and looks to have nished the mild
correction. May also be waiting for the 50 day to catch up. Buy the descending trend line break for the rst buy point and
then as it breaks into a new high at $130. This stock didn’t sell off, as did the other engine stocks. This shows a lot of power
and toughness for now.
Metris Co. (MTRS) - $58

Company growing at a 118% growth rate and sells at P/E of 27. Earnings and revenue up 45% and 69% respectively. I gave
this one to you back in December at $27. Stock will be moving here again this week. Buy point is $59.
Natural Alternatives (NAII) - $22

Stock at this point in time is doing all the right moves. Earnings due out this week and this stock could go either way. 3.5
million shares oat.
Nordstrom Inc. (NOBE) - $66

Big cap stock at 77 million shares. Has a spotty past but appears to have a nice eight-month base under its belt… set to go!
P/E of 28 and last earnings were up 43 percent to 76 cents. Buy point is $67.75.
OYO Geospace (OYOG) - $31

What can I say except hang on? Group rotation and the incredibly huge earnings numbers posted this past week make this
stock look very attractive. Problem is how do I get on board. Stock just went from $22 to $31 in 7 days. Hopefully it will rest a
few days so I can jump on. Company is into processing seismic data for the oil and gas industry. P/E of 20 and earnings just
posted were up 93% to 52 cents a share on revenue gains of 83% to 19 million.
Novellus Systems (NVLS) - $48

Stock is wedging up and has good support at $46 and needs to be bought at $50. Should get a quick pop to $60. Has long
been a favorite of the institutions.
Radica Games (RADAF) - $19

I know I sound like a broken record on this stock, but the base to me says this stock will one-day wake up and move 20 to 30.
No more than a 1 ½ point price movement in 5 weeks. Best Buy did the same at $30 when I told you about the “frozen rope”.
Best Buy as you know went on to $70 in 3 months. This stock appears to be doing the same “frozen rope”, but probably will
not go to $70. Keep you eyes peeled for the break point at $20. Remember… when you are asleep, this stock will move.
VISX Inc. (VISX) - $42

Stock had one of the more spectacular breakaway gaps you will ever see on the release of earnings, and the gap does not
look to be lled. In fact it looks as if the stock has bottomed here and is set to turn. You may want to consider nibbling here
and again at $46. Last quarter earnings up 228% to 59 cents a share and revenue up 54% to 24 million. Only 15 million
shares outstanding total, and company is under owned. Stock is still a little extend, as the 50 day is at 32.
Applied Materials (AMAT) - $36

Here is a nice big cap semi machine marker with large market share. Nice base here as is set to go. Earnings due out this
week so this stock could move nicely. Buy point is $37 and stop out at $34.
ATL Products (ATLPA) - $25

Huge earnings at .37 cents here this last quarter, up 185%. Stock ran from $20 to $25 in a hurry. Hope it can rest for a few
weeks so I too can go for a ride.
Apple Computer (AAPL) - $30

Big cap old timer that is being revitalized by Steven Jobs. All the box makers are doing just ne and this one could move to
$50 or better in this market. Buy here with a tight stop at $28.
Autodesk (ADSK) - $48

A big cap software stock with earnings beginning to expand along with margins. Nice base here of 8 months and set to go.
P/E of 33 and last quarters earnings were .64 cents. Earnings due out this week, so wait for them and the break into new
highs before you buy. Buy point is $50.
Broadcom Corp. (BRCM) - $59

Could this be the next Acend? Earnings out this week and the stock moved up 4 points. Only 4 million shares total and 3.5
million shares oat. Revenue doubled vs. last quarter to $35 million dollars. Earnings at .27 cents. I think we will have to wait
for later to enter this one as the stock moved out of it’s little base here on Friday.
Costo Wholesale (COST) - $56

Stock just won’t stop moving up. Another big cap with a very nice base and set to move in a few days. Buy point is $58.
Dell Computers (DELL) - $91

I gave you this one to buy at $70 three weeks ago and the stock is on re again. A very nice bell curve in progress and very
extended here. You may want to take some pro ts here.
Hutchinson Technology (HTCH) - $30

Another old favorite but this time in a new business. Sells medical devices. Company just got FDA approval for monitoring
oxygenated blood in tissue. Stock looks like it wants to base here and has for the last few weeks and could be set to go. Buy
point is $32 and set your stops at $28.
Let’s Talk Cellular (LTCH) - $18

Stock has put in the proper time to rest after moving from$10 to $18. Earnings due out any day and this stock could really
surprise. Buy point is $19.50. Revenue s up 56% to 32 million and earnings up 8% but on many more shares as this stock
sold addition shares to the public in November.
Well folk’s that’s about it for today. Let hope that we do not cross the 50-day moving average line on the S&P
for awhile so we can all make some cash here. I also hope the advance decline line turns north again as it is
lagging here.
Remember to keep your trend lines in place and to set your stops tight, and keep your losses on your new
positions at no more than 5-7% of your purchase price.
Also if you know of anyone that would like this letter please have them send me their e-mail address so I can
include them on the fun, as this letter is free.
Dan Zanger
zangdan@ix.netcom.com

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