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TOMORROW

Thursday is the last session of the month and the quarter as the market will be closed on Good Friday. While there may not be a lot of trading action on the session before a three-day weekend, there won't be a lack of economic data. Final GDP numbers, Michigan sentiment, Chicago PMI, and personal income and spending are all out Thursday. We have seen the market pop up on good economic data, but there has not been the sustained buying all session to hold the gains in many stocks.

Tomorrow we would prefer to see the indexes just hold steady and set up for next week. The action though down before the past two sessions has been constructive overall as there has been no significant distribution on the selling. As we have said before, the majority of investors are holding onto stocks they have bought over the past month as evidenced by the lack of volume on the selling sessions.

The small and mid-cap indexes started their breakout moves ahead of the rest of the market, perhaps tipping the market's hand as to what is in store when the rest of the big money returns next week. Over the past two years we have come to hate the opens after holidays, but this time around we have an improving economic outlook. The success of the smaller issues is much more encouraging. Instead of having to look to the big name techs to bail out the market, investors are putting money in a broad range of stocks that are actually growing sales and earnings as the economy recovers. That helps provide a much more stable foundation for the market.

Today we saw many of our plays from these areas moving into buy points, and we see more heading that way. We won't know the real story until next week when volume comes into the market, but as we said, stocks from these categories are leading, and we are not going to wait until they are too extended; when they show the move we are initiating positions.

Support and Resistance

Nasdaq: Closed at 1826.75.
Resistance: 1850. Then 1875, the bottom of the November consolidation that stopped the prior attempt. The simple 50 day MVA (1856.83) and then the 200 day MVA (1882.79) is what stopped the recent rally attempt. The top of the November consolidation at 1934 to 1941. After that is 1980 (the December gap up point) and some minor resistance at 2000. Then the January top at 2098.88.
Support: 1800 was waved at once again Wednesday (second straight session), and it represents some support. Clearer support is 1775, the October high. Then the early November gap up at 1768 and 1745, where it launched from on that gap.

S&P 500: Closed at 1144.58.
Resistance: Cleared the 200 day MVA (1142.20) today, but it was not a clean break. After that is 1150 (represents prior tops and bottoms). The December high (1173.62) and the January high (1176.97) will be the real key. That point also marks roughly the lows of summer 2001 consolidation that runs up to 1240. Before that point there is some resistance at 1183 from March 2000.
Support: Maybe the 200 day MVA (1142.20), but it is still right in that range. The simple 50 day MVA (1127.44) and then 1125 (former price consolidations and the 'hump' in the brief November double bottom). 1100 has acted as support as well.

Dow: Closed at 10,426.91
Resistance: 10,400 was taken out today on the close, but it has not really cleared this level. The top of the June, July, and August 2001 trading range at 10,600 (10,679 intraday high), is still holding it back. 10,800 represents some resistance. That is followed by resistance at 11,000 on its way to the May 2001 high at 11,345.72.
Support: 10,400 is possible, but it was recently broken and may not hold intraday if it does in fact hold on the close. The January intraday high at 10,300 and the closing high at 10,259.74. Then 10,000 followed up by the 200 day MVA (9984.36).

Weekly Economic Calendar (All times Eastern). The figures are the consensus expectations, not ours.

3-25-02
Existing Home Sales, February (10:00): 5.88M (+2.8%) actual versus 5.50M expected and 6.04M prior.

3-26-02
Durable Orders, February (8:30): +1.5% actual versus 1.0% expected and 2.6% prior.
Consumer Confidence, March (10:00): 110.2 actual versus 98.0 expected and 94.1 prior.

3-27-02
New Home Sales, February (10:00): +5.3% to 875K units versus 880K expected and 831K prior (revised from 823K).

3-28-02
Initial Claims, 3/23 (8:30): 375K versus 371K prior.
GDP-Final, Q4 (8:30): 1.4% versus 1.4% prior.
Chain Deflator-Final, Q4 (8:30): -0.3% versus -0.2% prior.
Mich Sentiment-Rev., March (9:45): 95.0 versus 95.0 prior.
Chicago PMI, March (10:00): 54.0 versus 53.1 prior.
Help-Wanted Index, February (10:00): 47 versus 47 prior.
Personal Income, February (8:30): 0.2% versus 0.4% prior.
Personal Spending, February (8:30): 0.5% versus 0.4% prior.

SUBSCRIBER QUESTIONS

Q: You have been referring to the small and mid-cap indexes frequently lately. What are the ticker symbols for them?

A: Predominantly we look at the S&P 600 (small cap) and S&P 400 (mid-cap) to get a look at what these stocks are doing. The S&P 600 ticker is $SML. The S&P 400 is $MID.

PLAYS TO LOOK AT: Lots of great moves on the stocks we are following! Breakouts from ATK, PDCO, MUR, WTNY, DF and CHBS, with other fine moves by ACDO, WLP, CYN and others!

BONUS PLAYS: Strong moves by CECO and MANU!

CF (Charter One--$31.30; +0.15; optionable): Savings & loans
http://biz.yahoo.com/p/c/cf.html
STATUS: CF has pulled back into a handle to its eight-month cup pattern (left side and all-time high 32.98). Price/volume action has been solid throughout the cup pattern, although volume has not settled down much in the handle. However, it has held recent March consolidation lows at 31 (18 day MVA at 31.25), and today showed a second consecutive 'shooting star' doji on volume that surged to a very high 1.68 million (average 842,000). The aggressive can look at a bounce play from here, with the handle high out at 32.50. Good buying and relative strength. Target on a breakout: 37.
BUY POINT: Bounce: Over 31.78 on continued strong volume. Stop: 30.80. Breakout: 32.60 on minimum volume of 1.25 million. Stop: 30.80.
POSITION: Stock and/or August $30 calls to buy (CF HF).

AOG (Alberta Energy--$44.04; -0.09; optionable): Independent oil & gas
http://biz.yahoo.com/p/a/aog.html
STATUS: Has been trending up nicely along its short-term MVA's since breaking out in February from a small cup with handle within a larger cup pattern dating back to May 2001 (high of 50.90). AOG has pulled back to test the 18 day MVA (43.82), forming a handle on volume that continues to be low, coming in at 105,500 on today's doji (average 188,100). Looking pretty good, and we can look for a move back up from here and then a breakout over the recent high (45.96). Excellent money flow and relative strength. Target: The high at 50.90 initially.
BUY POINT: Bounce: Over 44.50 on above average volume. Stop: 41.75. Breakout: 46.06 on volume of 280,000. Stop: 42.84 (7%).
POSITION: Stock and/or June $40 calls to buy (AOG FH - very low open interest).

KSS (Kohl's--$72.00; +2.75; optionable): Department stores
http://biz.yahoo.com/p/k/kss.html
STATUS: KSS was in a year-long double bottom with handle, but the handle dragged out and has now become a three-month saucer with handle. It made a run at its all-time high of 72.20 recently, but could not make and came back into a handle, testing its 50 day MVA (68.36) but bouncing. Today it made a very powerful move, running up on huge volume of 3.4 million (average 1.7 million), closing just over the handle high. Looking for a continued move over all-time high. Relative strength has broken out ahead of price. Target: 82.
BUY POINT: 72.40 on continued strong volume. Stop: 67.90.
POSITION: Stock and/or July $70 calls to buy (KSS GN).

PRE-ANNOUNCEMENTS: Also looking at DRS, IFIN, MGA, SUI, RUS, EXPD (needs volume), CPS and MUR.

FITB ($68.07; +0.65): Forecast to announce a split on 4-16-02 before the market in conjunction with earnings. Nice bounce today from the 18 day MVA (67.28), with volume picking up off of Monday's doji (2.26 million; average 1.57 million). It pulled back from an intraday high of 68.63, and we can look for a continuation of this move with a run over 68.63 on continued strong volume, with stock and/or August $65 calls to buy (FTQ HM).

ACDO ($55.90; +2.69): Forecast to announce a split with earnings on 4-29-02. After testing back near the lows of its recent range (and 50 day MVA, at 50.99), ACDO made a nice move up today, pushed by strong volume (784,200; average 704,400) to the brink of a new high. On a move over 56.50 on increased volume, stock and/or August $50 calls to buy (DZU HJ - under 100 open interest).

ATK ($102.00; +4.92): Forecast to announce a split on 5-9-02 before the open with earnings. The drop was indeed a 'shakeout' of the pennant, as ATK rebounded in a big way Wednesday and broke out to a new high. A very strong move, with volume at 649,200 (average 289,000). Moving the target out to 115, and looks like a buy up to 104 with stock and/or August $95 calls to buy (ATK HS).

CYN ($52.76; +1.14): Forecast to announce a split with earnings 4-16-02 before the open. CYN made a relatively weak bounce from the 50 day MVA (50.41) Tuesday, but really picked up steam today as volume soared back up to 413,700 (average 220,000). Watching for a new high, with a buy point of 53.28 on continued strong volume, and stock and/or August $50 calls to buy (CYN HJ - under 100 open interest).

PRE-SPLITS: AMAT and ADSK still looking good, and WTNY and DF made nice breakouts.

PMI ($75.20; +2.81): Splits 2:1 on a date TBA (shareholder approval sought at 5-16-02 meeting). PMI bounced on average volume Tuesday, and then gapped up today and continued to run, moving on sharply higher volume of 405,400 (average 259,000). Looking good, and on a move to a new high at 76.39 on continued strong volume, stock and/or June $70 calls to buy (PMI FN - low open interest).

CONTINUING CANDIDATES: THC broke out, but there is no volume (YUM also moved with no volume). HB also suffered from lack of volume on a breakout. BBBY is looking strong, as is TGIC.

BBY ($78.68; -0.18): Still in its consolidation over the 10 day MVA (77.97), showing a doji over that support today. Setting up well, and our buy point is 80.72 on volume of 3.85 million, with stock and/or June $75 calls to buy (BBY FO).

LLL ($112.29; +3.88): Good day for defense, and LLL, which has shown us some nice plays of late, bounced smartly from its 50 day MVA (106.32). Volume picked way up today at 967,100 (average 651,500), clearing the short-term MVA's at 111.10. We can pick up this move again, but will be watching the recent double tops (116.60-117.15), perhaps picking up additional positions on a strong move over that level. Stock and/or July $105 calls to buy (LLL GA - 11 open interest; $110 strike has 185 open interest and a current delta of 62).

STJ ($77.24; +0.69): STJ took a hard fall through the 50 day MVA (77.74) on Tuesday, hitting down to the February-March lows and bouncing today. A weaker bounce, however, that stopped short of the 50 day. We will see if it can recover, but we are looking for a drop through 76 on increased volume, with July $85 puts to buy (STJ SQ). Target 72.

POST-SPLITS: Great breakout from CHBS!

MGAM ($33.94; -0.26): Still looks good on this test back to the 18 day MVA (33.02) and former highs, and we are looking for a move up on better volume (down today to 167,000; average 257,300) to take positions on a continued trend run. Today it showed a doji after reaching up to 35.40. With volume of 300,000 or better, over 35 with stock and/or July $30 calls to buy (QMG GF - low open interest).

WLP ($63.07; +1.27): Some health stocks did very well today, and WLP was finally able to surge from the 50 day MVA (61.34), where it has been languishing a bit since its post-split run took it back over that level. WLP retreated from its intraday high of 63.79 to close just over the recent highs at 62.90. Looking for more strength, and on a move over 63.50 on increased volume (up nicely today to 1.56 million; average 624,400), stock and/or July $60 calls to buy (WLP GL).

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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