stock tip, stock split

Begin Part 3 of 3

PRE-SPLITS BEST PLAYS: Remember, we try to grab Pre-Splits as they break out of good patterns or as they start a run right before the split. Not looking for home runs, but looking for those $3 to $4 moves running into the split, watching for topping signs and potential resistance. Not huge money, but it can be very steady. We set our initial stops at the 7-8% range below the purchase price (or just below obvious support), and move them up on a move to preserve our profits.
1) MKC - Broke out!
2) NDN - A new play!
3) JEC - Looking for a stronger bounce
4) ADSK - Still strong
5) AMAT - Could give us some great pre-split plays
6) TOL - Home builder, but giving a nice bounce

MKC ($50.50; +1.37; optionable): Splits 2:1 effective 4-9-02.
http://biz.yahoo.com/p/m/mkc.html
STATUS: Nice move! MKC had made a nice move up from 46 on its test of the 50 day MVA (currently 46.44). It had slowed down as it approached its prior high at 49.57, but after settling with a low volume doji Thursday, MKC blasted up Friday, and volume was way up again (as it had been on the recent move), at 375,900 (average 194,000). Good move, and we are adjusting the target for positions up to 56.
PLAY: Still a buy up to 51, with stock and/or June $45 calls to buy (MKC FI - no open interest for the May calls).

NDN ($37.47; +0.91; optionable): Splits 4:3 effective 4-4-02.
http://biz.yahoo.com/p/n/ndn.html
STATUS: Has formed a double bottom since a spike in mid-February, and recently has move up off of the pattern lows at 34. Friday NDN tapped up over the February left-side high at 37.95, hitting 38.11 before pulling back. Volume was higher at 374,800 (average 296,400), so we will expect NDN to pull into a handle here. On a gentle pullback that hold the 37 range, we will look for a strong move back up and a breakout. Target on that move: 41.
PLAY: After holding here or pulling back slightly, 38.21 with stock and/or June $35 calls to buy (NDN FG - no open interest on the May calls). Stop: 36.

JEC (Jacobs Engineering--$71.45; +0.17; optionable): Splits 2:1 on April 2.
http://biz.yahoo.com/p/j/jec.html
STATUS: Trending up along its 10 day MVA (70.77), moving in a cup dating back to November (high 75.70). JEC had formed a handle to the cup, but a bounce up this week turned back at the handle high of 73. It continues to make higher lows along the 10 day as it moves, but we are looking for a strong move over the handle high. On the move we are watching the November high; JEC also hit that level in May-June before retreating, so that will be a key level of resistance.
PLAY: 73.10, with stock and/or July $70 calls to buy (JEC GN). Stop: 68.

ADSK (Autodesk--$46.39; -0.18; optionable): Software. Splits 2:1 effective 4-19-02.
http://biz.yahoo.com/p/a/adsk.html
STATUS: ADSK is making its way up along the 10 day MVA (45.60), easing back up toward the early March high (47.37; made on a strong rebound from 38). ADSK tested the 10 day at its low again Friday, coming back up a bit to close with a loose doji. Would not be a bad thing for the stock to test support again and perhaps drift slightly back, setting up a strong move. Target: 53.
PLAY: Over 47.37 on volume of 1 million, with stock and/or July $45 calls to buy (ADQ GI). Stop: 44.05.

AMAT (Applied Materials--$51.53; -0.49; optionable): Splits 2:1 on or about 4-17-02.
http://biz.yahoo.com/p/a/amat.html
STATUS: Quite a surprising stock split, and one that speaks well for the recovery. AMAT broke from an ascending wedge in early March, came back to test the move and its 18 day MVA (currently 50.05), and has now set up in a pennant. Friday AMAT gapped up on the heels of the news but reversed, still holding support (10 day at 51.06). Looking for a hold at 51 and a run with a good market. Strong money flow; target is 58.50.
PLAY: Over 53 in a rallying Nasdaq, with stock and/or July $47.50 calls to buy (ANQ GW). Stop (7%): 49.38

TOL (Toll Brothers--$51.44; +2.64; optionable): Residential construction. Splits 2:1 effective 4-1-02.
http://biz.yahoo.com/p/t/toll.html
STATUS: Another construction stock that has done very well, but we are watching them carefully and they have shown some recent weakness and uncertainly in the sector. Friday was a solid session, however, with TOL one of several construction stocks to bounce from support. In TOL's case, it had tested back near the 50 day MVA (46.81) and the highs in its December-February range at the same level. The move took TOL back over the short-term MVA's (10 day at 50.43). An aggressive play as it moves back up on its high of 54.76. Target: 56.
PLAY: Aggressive: Over 52, with May $50 calls to buy (TOL EJ). Stop: 49.

CONTINUING CANDIDATES BEST PLAYS:
1) HB - Rested after the solid bounce

HB (Hillenbrand--$60.04; -0.46; optionable): Personal services
http://biz.yahoo.com/p/h/hb.html
BACKGROUND: Based upon our research it does not appear that HB has ever split its stock. The company has sufficient shares for a 2:1 split.
STATUS: HB made a big bounce back up Thursday, moving on strong volume off of the 50 day MVA (58.22). The move took HB back into the range of the pennant pattern it formed after some very nice January-February moves. Friday it pulled back slightly, but on much lower volume (138,900; average 147,000), and held at the tip of the pennant.. The high is ahead at 61.75. Looking for continued strength. Targeting 68.
BUY POINT: 61.05 on volume of 200,000 or better. Stop: 57.
POSITION: Stock and/or June $55 calls to buy (HB FK - under 100 open interest).

POST-SPLITS BEST PLAYS:
1) ICUI - Tried a big bounce

ICUI (Icu Medical--$35.17; +1.16; optionable): Split 3:2 effective 3-18-02.
http://biz.yahoo.com/p/h/hb.html
STATUS: After its February breakout took it to a new high of 37.30, ICUI peeled back to test the breakout and the 50 day MVA (33.17). It tried a bounce early in the week but pulled back, but Friday got a spike of volume (112,400; average 53,000) as the stock hit up to 36.67 before pulling back to close at the early-week high. A wild candlestick, but the volume was on the initial move up and then a nice surge to close. Looking for ICUI to make a run. Target: 40.
PLAY: Aggressive: Over 35.50 on continued strong volume, with stock and/or August $30 calls to buy (QPD HF - no open interest). Stop: 33.11 (7%).

WATCHLISTS:

PRE-ANNOUNCEMENTS WATCHLIST: AHC (4/24), AROW, BMS, BRL, DRS, DRYR, GTK, LE, MMM, MRBK, PDCO, STU and XL.

PHM ($49.51; +2.60): Forecast to announce a split at its shareholder meeting on May 15, but we will keep an eye out for a split before that date. We have seen several recent splits in this sector. Turned back up Friday with the sector, moving over the 50 day MVA (48.40) on reduced but still strong volume of 1.17 million (average 584,600). We will see if it can handle the short-term MVA's (18 day at 50.40), still looking at a potential dive back through 47, with May or July $55 puts to buy (PHM QK - no open interest, or PHM SK - 40 open interest).

ACDO ($52.22; -2.42): Forecast to announce a split with earnings on 4-29-02. Pulled back again, this time on much stronger volume (1.24 million; average 6.38 million). Looks like it might to settle back into its recent range to set up the move.

CPS ($57.86; +0.11): Forecast to announce a split on 4-18-02 in conjunction with earnings. At this time the company cannot confirm the date for the release, but based upon our research this is the date for the release. Made a great move but we are watching for a test back to the former pattern highs (56), as CPS has shown topping signs - Friday's doji followed pullbacks from its intraday highs each of the previous two sessions.

ESI ($44.88; -1.67): Forecast to announce a split with earnings on 4-18-02 before the open. Made the anticipated drop off of the 'hanging man' doji Thursday. The initial breakout did not have great volume, and its failure to get in gear quickly spelled disappointment. It is now in the range of former pattern highs and the 18 day MVA (44.61), so it can still make something of it if it can hold.

CTAS ($49.58; +0.43): Working on a new date. Not looking bad as it retreated from another try to break over highs in its December-January consolidation (highs at 51) and one of its down trendlines (from early 2001). Looking for a hold at 48-49 and another attempt to breakout.

RNR ($101.70; +0.62): Forecast to announce a split on 4-22-02 with earnings (tentative date). Hit the put buy point but rallied back hard Thursday, and Friday continued to hold the 50 day MVA (101.57). Could still fall back, but we are wary and will not let a strong move up carry us.

SUI ($39.60; 0.00): Has peeled back slowly to the 18 day MVA (39.55) with earnings, but has held that level the last two sessions with dojis. On a move over 39.75 with continued strong volume, stock only.

MUR ($92.94; +0.35): Working on a new date. Has been drifting upward, but Friday showed a big surge of volume with a loose doji. Could still get that test toward 90 before another strong upward surge.

KRI ($67.52; -0.54): Forecast to announce a split on 4-24-02 before the open. There is also the shareholder meeting the next day at 9:30 PT. Has fallen back into the range of the pennant after the weak breakout attempt. We will see if it can hold the 18 day (67.42) and gather strength for another run.

SLM ($95.99; +0.98): Researching a new date. Holding again at the 18 day MVA (94.45). It has made three runs from the 18 day, so it could give us one more - we do not like to play a fifth trend run as the often fail. Targeting 105.

LSTR ($93.90; +1.40): Researching a new date. After Wednesday's strong drop, LSTR caught support in the range of its early March consolidation (87.50, 18 day at 89.64), and made a solid push up toward the recent breakout highs. Friday's move was weaker (volume 54,200; average 68,300), and it pulled back from the recent high (94.40). With that action it could be coming back to test lower again.

RUS ($32.22; -0.18): Researching a new announcement date. Made a weak breakout Monday and is now deciding what to do. Friday saw a gap up and reversal, so on a pullback we will see if RUS can hold 32 and set a stronger move up.

BER ($57.63; +0.06): Researching a new announcement date. Pushed up over the recent highs but volume on Thursday's bounce was very light. Friday BER showed a tight doji, so it could come back again, but it has been holding well at the 18 day MVA (56.08) as it steadily trends up.

PRE SPLITS WATCHLIST: Watching CUB (could be setting up again, but we are protecting positions all the same), THQI and PMI.

DRI ($37.82; -0.34): Splits 3:2 effective 5-2-02. Gapped up after the stock split announcement, opening above the 50 day MVA (33.17) but then dropping back as volume was huge at 3.57 million (average 6.38 million). Obviously still a lot of weakness, so we can continue to see how it digests all the news, and targeting 34 on the existing puts.

DHI ($39.06; +2.01): Splits 3:2 effective 4-10-02. Caught support at the 50 day MVA (37.37) and made a bounce with the sector Friday. Had experienced some heavy selling, so an aggressive pre-split play on a move over 40, with stock and/or May $35 calls to buy (DHI EG).

WTNY ($50.44; +0.55): Splits 3:2 effective 4-10-02. Has made a couple of nice moves, breaking out from an extended handle to a cup to start the month, and then after short consolidation moving up again. It started up again Friday, hitting a high of 50.55. The aggressive can look at positions with stock on a continued move over 50.60.

DF ($73.32; -1.68): Splits 2:1 effective 4-24-02. As suspected after the low volume move up, DF dropped back Friday, but is still holding recent pattern highs and the 10 day MVA (72.90). If it can hold support here it could continue its move and set up another play.

DCOM ($30.36; -0.01): Splits 3:2 effective 4-25-02. In early March DCOM reached up on an intraday spike to 32.20, but retreated to test the 50 day MVA (29.44), making a nice run from there and holding higher support at the 18 day (30.26) this time. We got a small bounce Friday, and are targeting 34 if it can continue the move. Trending up steadily. The aggressive can look at stock on a move over 31.35.

WRI ($50.95 -0.10): Splits 3:2 effective 4-16-02. Showing erratic behavior, gapping up again Friday but reversing short of its high of 51.65. We will see if it hold support over 50.50 and makes another try.

CONTINUING CANDIDATES WATCHLIST: When splits are not announced, we will keep the best split prospects on the report rather than continue to carry all of them in case there is a an unexpected announcement. We will continue to monitor the stocks that are trimmed and add them again when we ascertain a revised split announcement date. These include APPB, AZO, BBBY, DHR, DIAN, EDS, ETH, GNSS, GOSHA, JCI, LLL, MI, RARE, STJ, TGH, TGIC, THC and YUM.

BBY ($79.94; +0.93): Holding up and now forming a lateral consolidation after its breakout over the January high (77.20). Holding existing positions, and we can look at new ones if it can continue to consolidate and then show us a strong move.

IGT ($62.45; +0.55): Still consolidating over what has been support at the 60 level (with the January-February lows). With near-term options (for example, if entered this play with April) where you expected a quick play and it does not happen, sometimes it is best to bag it before time decay takes its toll.

INVN ($43.88; -0.66): Watching carefully here. INVN is trying to hold up at the 18 day MVA (43.53), showing a loose doji Friday. There has not been a lot of volume on the selling back this week, so we will see if it can bounce or if it will go back to visit the 50 day MVA (39.25). If it can bounce in a rally, on a move over 47 on above average volume (1.8 million), stock and/or July $45 calls to buy (FQQ GI).

RYL ($89.32; +4.23): Made the anticipated bounce back up off of the high volume doji over support, clearing out put positions.

PII ($62.35; -0.85): Came back some more Friday, testing the gap up point (at 62, with the 18 day MVA). Protecting profits at this key support.

POST SPLITS WATCHLIST: Watching BSG, CHBS, CHS, SONC, and WLP.

ACS ($54.83; -0.73): Split 2:1 on 2-25-02. Great breakout Monday, but ACS is sliding back down again. It is still holding the left side high of its little cup pattern (54.78), tapping a low of 54.13 Friday. We want to see it hold here.

GILD ($37.31; -1.14): Split 2:1 effective March 8. Continues its erratic behavior, Friday pulling back on lower volume after its big gap down and surge up routine Thursday. We were looking for the upward momentum to continue, and the stock is holding support on the breakout at its prior pattern levels and 18 day MVA (36.45). Looking for a hold, and then a strong move up that will take out the high at 39.

MGAM ($34.86; -0.14): Split 3:2 on February 12. Holding with another doji Friday, but we could still see a test of the 10 day (33.86) as it makes its nice trend run.

SMD ($17.70; -1.35): Split 3:2 effective 3-18-02. After the high volume doji Thursday, SMD pulled back with even stronger volume Friday (138,600; average 50,000), although it held its 18 day MVA at its low of 16.90 and rebounded. Protecting any existing positions.

Good Investing!
Jon L. Johnson and the Stock Split Report 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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