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

5-7-02
Productivity-Prel., Q1 (8:30): 7.0% versus 5.2% prior
Wholesale Inventories, March (10:00): -0.4% versus -0.7% prior
FOMC Meeting (2:15)
Consumer Credit, March (Consumer Credit): $6.0B versus $7.1B prior

5-9-02
Initial Claims, 5/4 (8:30): 407K versus 418K prior
Export Prices es-ag., April (8:30): NA versus 0.2% prior
Import Prices ex-oil, April (8:30): NA versus 0.0%
FOMC Minutes, 3/19 (2:00)

5-10-02
PPI, April (8:30): 0.4% versus 1.0% prior
Core PPI, April (8:30): 0.1% versus 0.1% priorAuto Sales, April (00:00): 6.0M versus

SUBSCRIBER QUESTIONS

Q: You often mention trading channels and I know you use TC2000 for charting. Could you share your settings for these channels? (envelope channels in TC?) And, do you ever use Bollinger Bands?

A: The channels we discuss are not generated by any charting service tools. What we are doing on these and what we teach in the online seminars is to draw a trendline for the stock or index. It could be an up trendline or a down trendline depending upon which way the stock or index is trending. If it is an uptrend, that means connecting the predominant lows in the trend. The more you can connect, the better. In a downtrend we would connect the predominant highs; we can toss out an aberration where the stock or index makes a sharp move that quickly reverses. We then draw the other trendline that forms the channel. On an uptrend that means we draw a trendline connecting the predominant tops. Again, that is a trendline that touches the most tops on the rise. If a stock breaks above that channel by 2 to 3%, we need to be cautious of a larger drop toward the lower trendline. On a downtrend we draw a trendline connecting the predominant lows, with the line drawn to hit the most lows. When you look at a trending stock or index, you can almost eyeball it when you get more experience. These channels are very reliable indicators of stock movement. We look at but do not really use Bollinger bands either, preferring to have the straight trendlines being our guide. In our experience, trendlines keep us in good plays and out of trouble in the vast majority of the trades. As taught in the seminars, simply using the trendline analysis we teach will help make you a better investor immediately by getting you into good positions and getting you out of decaying positions.

THE PLAYS: GTK announced a split today!

BONUS PLAYS: AMG headed back down, CYMI still looks weak. HLT looks ready to bounce, and UAG has been on a wild tear, and hit the target today (it could pull back some now off of the gap up and reversal).

GNTX (Gentex Corp--$31.27; -0.28; optionable): Hospitals
http://biz.yahoo.com/p/g/gntx.html
STATUS: After breaking out from a 'flying w' double bottom (right leg not as low as the left), GNTX pulled back into a handle-type consolidation that has leveled out and progressed along the 18 day MVA (31.33). The stock has reached down below 31 several times recently on its lows (50 day MVA at 30.46), reaching just over 32 at recent highs (today 32.12). Volume has been nice and low on the consolidation, and we are looking for a spike in volume to drive GNTX back up. The recent high is 33.30. Target: 38.
BUY POINT: 32.28 on volume of 460k (avg. 340k; today up to 255k). Stop: 30.30.
POSITION: Stock and/or September $30 calls to buy (GXQ IF - 66 OI).

QLGC (Qlogic --$42.00; +0.44; optionable): Semiconductor
http://biz.yahoo.com/p/q/qlgc.html
STATUS: Since its February drop through the 200 day MVA and then recovery, QLGC has triple topped, holding the 200 day (currently 42.62) on the interim lows. The stock gave up that support last week, and although it recovered Friday from a low of 40.15, today it could not hold a move over the 200 day, dropping back to close as volume eased again slightly (9.82m; avg. 9.5m). Looking for this test to fail and for QLGC to give into selling. Target on a put: 36.
BUY POINT: A drop through 41 on above average volume. Stop: 44
POSITION: June $50 puts to buy (QLC RJ).

LRCX (Lam Research--$23.45; -0.40; optionable): Semiconductor equipment
http://biz.yahoo.com/p/l/lrcx.html
STATUS: Has dropped hard off of double tops, and gave up the 200 day MVA Friday on big volume. Our favorite time to enter a put play in after a failed test of resistance, and LRCX moved back up through that level today, but volume was much lower (2.36m; avg. 2.69m) and it could not hold up. A weak test is often the precursor to a stronger drop, which is why we love the play, and why we are looking at a put here. Target: 19 (Jan-Feb lows at 20.50-21.50).
BUY POINT: Through 23 on increased volume. Stop: 25
POSITION: June $30 puts to buy (LMQ RF).

PRE-ANNOUNCEMENTS: MHK tried to breakout, but pulled well back to close off its intraday high.

BER ($60.07; +0.32): Forecast to announce a split at the annual shareholder meeting on 5-14-02 at 2:30 ET. Looking strong. After BER's gap up and run last week, it pulled back on lighter volume, but could be ready to run again. Today it showed a loose doji, moving up slightly as volume spiked back up to 231k (avg. 123k). On a move over 61 on continued strong volume, July $55 calls to buy (BER GK).

ABC ($77.22; +1.36): We are researching a forecast date. Bounced up off of Friday's doji, which was the culmination of a nice pullback to test the breakout. However, although volume was up it was not that impressive, coming in at 958,500 (avg. 1m). Still looking for a move over 78, with volume of 1.2m or better. Stock and/or August $75 calls to buy (ABC HO).

EASI ($50.14; -0.86): Forecast to announce a split the week of 5-27-02 with earnings. At this time, the company cannot confirm this date. Still in the handle, pulling back a bit today but on lighter volume (120,500; avg. 199k). It is holding support at the short-term MVA's (10 & 18 day at 49.79 and 49.16). Looking for the breakout with the volume we want. The play is 52.23 on volume of 290k, with stock and/or August $50 calls to buy (UFE HJ).

ATK ($110.40; -2.04): Forecast to announce a split on 5-9-02 before the open with earnings. Holding up going toward the forecast. ATK made a nice, strong breakout, and has shown three consecutive dojis, today tapping the 10 day MVA at its low of 109.20. We are riding positions going into the forecast, but for new positions will need to see a hold of the 10 day and a move up with substantial volume. After a hold of 109, a move over 113 with volume of 480k, with August $105 calls to buy (ATK HA).

MGA ($73.00; -2.00): Forecast to announce a split 5-9-02 with earnings. After a promising bounce last week that hit the new buy point with a lot of volume, MGA gapped back Friday on the news of a redemption of convertible debentures. A relief bounce could not do much, and MGA dropped back today to close at the level of its recent lows just over the 50 day MVA (72.46). We will see if it can hold the 50 day, but with existing positions are wary of a drop through the 50 day.

EXPD ($57.69; -1.32): Forecast to announce a split on 5-8-02 after hours with earnings or with the shareholder meeting (2:00 PT). As suspected, the low-volume move back over the 50 day MVA (58.31) did not hold, and EXPD dropped back through today. Volume was very low at 89,500 (avg. 306k), but volume has been low overall for the last couple of months. Not looking at anything upside before earnings at this time; we will keep our eyes open for the reaction to an announcement.

PRE-SPLITS:

ZRAN (Zoran Corp--$31.62; -0.70; optionable): Semiconductor. Splits 3:2 effective 5-23-02.
http://biz.yahoo.com/p/z/zran.html
STATUS: Broke down out of a head & shoulders recently, and has been on a steady drop from 42.50. It took out the 200 day MVA (33.10) last week, but has made a weaker test of that level, today tapping just through it before retreating. Volume was slightly up on today's retreat. This is the classic breach of support and "kiss goodbye," and we are looking for a continuation of the drop. Target: 27.50
PLAY: A drop through 31, with June $40 puts to buy (ZUO RH).

FAST ($83.69; -0.33): Splits 2:1 effective 5-13-02. Tried to make the bounce today, hitting over the 85.10 buy point at its high, but pulled back to show another doji as volume again was strong, spiking up to 482k (avg. 272k). Despite the pullback, still looks good, and we are riding existing positions, and we can again look for a bounce, moving the buy point out a bit to 85.25, looking at August $80 calls to buy (FQA HP).

LLL ($126.72; -2.63): Splits 2:1 effective 5-21-02. Still looking solid as LLL continued its low volume test of the recent breakout. Today it closed at the 10 day MVA (126.56), just over the prior pattern highs of 126. The breakout was a strong move, and on a hold here we can look at another chance to take options positions on a strong move up. On a move over 129.50, July $125 calls to buy (LLL GE).

IFNY ($18.10; +1.00): Splits 2:1 effective 5-14-02. IFNY was potentially forming a head and shoulders, but the stock held its 50 day MVA (16.35) and made a solid move today. Volume spiked way up to 94k (avg. 46,200), and it hit 18.69 at the intraday high. On a move over 18.75, stock.

CONTINUING CANDIDATES: ETN and MTG are looking decent.

GTK ($58.49; -0.38): Announced a 2:1 stock split today before the open, effective May 24! After its huge move in early April, GTK has held up over its short-term MVA's, moving on consistent low volume. A great run toward the announcement, but perhaps not a lot left here after such a great move; indeed, GTK pulled back a bit today on very light volume (167k; avg. 357k). Still protecting profits from a drop through the 18 day (at 58), but oftentimes after a solid run into the announcement a stock will pull back a bit and set up a good pre-split run.

AZO ($75.90; +0.40): Holding up in a lateral consolidation over the 10 day MVA (75.62), which is actually a handle to its cup dating back to December. The stock has been trying to move up each day but pulling back; today it hit up to 77.35, but volume was not there (615,500; avg. 977k). The aggressive play is a move over 77.50 on volume of 1.5m, with stock and/or September $70 (AZO IN).

POST SPLITS:

PRHC ($24.65; +0.19): Split 3:2 effective 5-1-02. A nice pullback off of its nice pre-split move, but PRHC is trying to hold up, showing a loose doji today on the 10 day MVA (24.43), testing toward the 18 day (23.79) at its low. The aggressive bounce is a move over 25 on above average volume (725,600; today 262k), with stock and/or September $23.37 calls to buy (DAH IW - 7 OI).

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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