"Initiative is the pulse of the market."

-- Christina Nikolov

Name/Ticker: Siebel Systems (SEBL)

Date: January 2, 2003

Opinion: Bearish

Current Price: $7.95

Target Price(s): $5.50

Commentary:

Over the past three months, Wall Street's prognosticators lowered their 2003 earnings estimates for Siebel Systems (SEBL) by 31%. Regardless, the shares are now 30.3% higher than they were three months ago and currently tout a p/e multiple of 34 based on those fiscal 2003 earnings.

After surging 78% between October 4th and November 4th, SEBL settled into a tight range ($7.15 to $9.00), forming a pretty solid support level at $7.15 in the process.

If by some chance this stock breaks out of this trading range to the upside, our analysis indicates there is some heavy overhead resistance between $9 and $11. (see chart #2) We don't expect the shares to surmount that zone. There are quite a resistance levels, so it's hard to pinpoint which one will ultimately cap the shares.

To profit from a decline, we suggest the August 10 put (Symbol: SGQTB), which is currently offered at $3.40.



Chart(s):

#1) Siebel Systems (SEBL) Seven Month Daily Chart

Click the Chart for an Enlarged View