stock watch, stock split

Begin Part 2 of 3

THE PLAYS: Two splits today! ATK announced its split, as forecast, and made a great, great move! APPB announced as well!

BONUS PLAYS: WM and WB still set up in their patterns. DISH made the drop back in a big way. FCN fell back and no mas on MAS. RHI is still set up for a drop.

Downside:

NVLS (Novellus Systems--$49.02; -1.88; optionable): Semiconductor equipment
http://biz.yahoo.com/p/n/nvls.html
STATUS: NVLS made quadruple tops at 54 in March-April, with the last drop taking it down through the support of the 50 day MVA (48.15) and down to the 200 day (42.65). From there it took a relief bounce, and then made a huge gapping move back over the 50 day in Wednesday's rabid buying. However, after hitting back up to Wednesday's high at 52 today, NVLS sold back on volume that was just about as strong as we saw on the previous day's buying (down slightly to 14.3m; avg. 973k). Not expecting the buying enthusiasm to start again, and we will see if NVLS quickly returns to its old ways. On a breach of the 50 day, looking at a put down to 43.50
BUY POINT: Below 47.50 on continued strong volume. Stop: 51
POSITION: June $55 puts to buy (NLQ RK).

PCAR (Paccar--$69.49; -0.99; optionable): Trucks & vehicles
http://biz.yahoo.com/p/p/pcar.html
STATUS: PCAR broke down out of a descending wedge last week, giving up the support of its 50 day MVA (71) with strong selling. The stock slowed the drop, catching support in the range of 66.50-67. PCAR bounced up Tuesday and Wednesday on decent volume, although substantially lower than what we saw on the selling before it. It reached back up near the 50 day, but fell back from that level today, with volume dropping back to 907k (avg. 804k). We like to play puts on the 'kiss goodbye' after a failed test of support, and can look at playing this one down to a target of 63.50 (200 day MVA at 62.61).
BUY POINT: A drop through 68.50 on increased volume. Stop: 72
POSITION: August $75 puts to buy (PAQ TO).

Upside:

PPD (Pre-Paid Legal Svcs--$28.70; 0.00; optionable): Personal services
http://biz.yahoo.com/p/p/ppd.html
STATUS: Building the right side of a base dating back to 2000 with highs near 50. PPD made a great move in February-March from 18 up to the recent high of 31.75, and since has corrected back, forming a double bottom with handle. It dropped in the right leg below the 50 day MVA (then 26, now 27.26), showing good action in taking out the low of the left leg. PPD bounced back up strong to form the right side of the pattern, and has peeled back the last two-plus weeks on nice, light volume, holding support over the 18 day MVA (28.19). Today was the second consecutive doji over support, and we are looking for a strong bounce that will lead to a breakout. Strong money flow. Targeting 36.
BUY POINT: Bounce: Over 29.50 on above average volume (366k; today down to 153,600). Stop: 27.70. Breakout: 30.55 on volume of 550k. Stop: 28.41 (7%).
POSITION: Stock and/or August $25 calls to buy (PPD HE).

LNY (Landry's--$28.01; +0.24; optionable): Restaurants
http://biz.yahoo.com/p/l/lny.html
STATUS: LNY has been a solid uptrend since late 2000, and recently broke from a small double bottom. The breakout has not produced a spectacular move, but it has held, and formed a solid base-on-base pattern with an ascending wedge over the support of the 18 day MVA (27.34). The stock tried a breakout last week, pulling back from an intraday high of 29.10, and holding support with lower volume. Today it showed a second consecutive loose doji, and we are looking for a move from here. Good money flow and relative strength. Target: 35.
BUY POINT: 28.60 on volume of 350k (avg. 219k; today down to 148,400). Over the high (intraday spike): 29.20 on volume of 350k. Stop: 27.15 (7%).
POSITION: Stock and/or July $25 calls to buy (LNY GE).

Quick updates prior bonus plays:

LIN - Broke out!
QLGC - Dropped a bit today, and still looking for a larger drop for at least a better exit point; it tapped the 50 day at its low today
LRCX, CYMI - Much like QLGC
AMG - Dropped back through the 200 day, not keeping strength from the rally. We will let it drop
MXIM - Could not pierce the 200 day MVA, and dropped back from that level today
NTBK - Fell hard back from the breakout, holding the 50 day
AVY - Holding up on the breakout
XTO - The weak breakout did not hold, and it is back in the consolidation
TBCC - Holding up on the move
MTB - Fell out of the consolidation, dipping on lower volume
ARW - The bounce did not hold, and ARW continues down
TDY - A bit erratic, but holding up on the breakout
MFC - Moving back up after the test of the breakout, looking for more volume on a move over the recent high
CCL - Failed breakout and back at the 50 day
IRIC - A bit wild now, barely holding the prior highs on the test
LEXR - Testing the 50 day
RF - Leveling out a bit but holding support
RTEC - Relief bounce but looking for a continued drop
MCY - Looking good on the breakout test
HLT - Did not bounce, instead fell back toward the 50 day; failed breakout test
PZB - Trying to bounce from the 18 day
ASCA - Looking like a bearish head & shoulders now
SMTC - Bounced big in the rally but looking for a drop back; started today
CAT - The bounce finds its testing the 50 day, but it dropped back from that level today
CF - Back on the 50 day, but big volume today as it held
CDIS - Gave up the 50 day, not hanging around

PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: MGA did not join ATK and APPB in announcing a split.

NEW PRE-ANNOUNCEMENT PLAYS:

PRE-ANNOUNCEMENT BEST PLAYS:
1) ATK - Great move on the split!
2) EASI - Still a good pattern
3) KSS - Still a buy on the put
4) ABC - A nice handle-type consolidation

ATK (Alliant Techsystems--$113.33; +5.33; optionable): Aerospace/Defense. Got the announcement today, as forecast! Splits 3:2 on or about June 11.
http://biz.yahoo.com/p/a/atk.html
STATUS: Big move on the announcement! ATK has already performed very well for us, and on today's announcement before the open, the stock started a move that lasted all day, steadily rising on huge volume (873k; avg. 303k). We were looking at new or additional positions with options, and the stock's move of over $7 (high today of 115.40) makes for a healthy return for a day's work, up to 50% or more. ATK closed just over the prior high of 113.20, and is still a buy on this move as we target 125.
BUY POINT: Riding current positions, and still a buy up to 116 on continued strong volume. Stop: 106-108.
POSITION: August $105 calls to buy (ATK HA).

EASI (Engineered Support--$51.00; -0.04; optionable): Aerospace/Defense. Forecast to announce a split the week of 5-27-02 with earnings. At this time, the company cannot confirm this date.
http://biz.yahoo.com/p/e/easi.html
BACKGROUND: EASI last announced a 5:4 split on 2-1-2001 with a board meeting at a price of $28.50. Before that it announced on 6-12-98 at a price of $26.50. The company has sufficient shares for a 3:2 split.
STATUS: Being patient with this one. EASI is trying to break from a cup with handle, and last Thursday it made a bit of a move, but it could not hold on to the gain and came back into the handle. EASI has since held on over the short-term MVA's (18 day at 49.69), today showing its second consecutive doji as volume decreased again to 127,100 (avg. 188k). Looking for a volume surge to push a breakout. With some strength on a move, targeting 62. The left side high in the pattern is at 58 from October 2001.
BUY POINT: 52.23 on volume of 290k. Stop: 48.57 (7%).
POSITION: Stock and/or August $50 calls to buy (UFE HJ).

KSS (Kohl's Corp--$70.15; -1.51; optionable): Department Store. Forecast to announce a split on 5-16-02 after the market closes in conjunction with earnings or on 5-21-02 in conjunction with its annual shareholder meeting.
http://biz.yahoo.com/p/k/kss.html
BACKGROUND: Last announced a 2:1 split on 3-16-00 at a stock price of $76. The company has sufficient shares for a 2:1 split.
STATUS: Not fooled by the gap over the 50 day MVA (71.35) in Wednesday's rally. Although the stock hit up to 73 but pulled back for a doji. Today it promptly gapped back through support, and hit our buy point. Volume was heavier but still below average at 1.68m (avg. 1.75m). KSS recovered from an intraday low of 69.38, and could in fact try to test the 50 day again, but we will still look for a put play down to a target of 64.
BUY POINT: Riding existing positions. From here or after a test upward toward the 50 day, looking for above average volume on a drop through 69.50. Stop: 73.
POSITION: July $80 puts to buy (KSS SP).
ABC (Amerisourcesbergen--$76.50; +0.51; optionable): Drugs wholesale. We are researching a forecast date.
http://biz.yahoo.com/p/a/abc.html
BACKGROUND: Last split in March 1999 in the $70 range. The annual shareholder meeting was on 2-27-02 at which time no additional shares were increased. The company has sufficient shares for a 2:1 split.
STATUS: ABC has been on a solid uptrend for two years, and recently broke from a six-month cup with handle. After a quick test of that breakout, ABC blasted up recently on big volume, hitting a new high at 79.70. It has made a nice pullback, moving on lower volume, and today gapping down to the 18 day MVA (74.47; comfortably over prior highs at 73) but pushing back up to close. , gradually coming back as volume has mellowed. Looking for more volume to push a move. Target 90.
BUY POINT: Over 78 on volume of 1.2 million. Stop: 72.63 (7%)
POSITION: Stock and/or August $75 calls to buy (ABC HO).

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) COCO - A new play!
2) LLL - Looking good
3) BBY - Dropping back on the put
4) STZ - Consolidation

COCO (Corinthian Colleges--$56.54; -0.95; optionable): Splits 2:1 effective 5-28-02.
http://biz.yahoo.com/p/c/coco.html
STATUS: COCO has trended up steadily off of its September lows (25). In April the stock could not break through the high at 55, retreating to the 50 day MVA (then 49, now 52.02) to regroup and try again. It was successful, blasting to a new high and reaching 59.38 before gradually pulling back to test the move. Volume has been nice and low on the test, although it did spike up on a loose doji Wednesday. Looking good as it holds over the prior highs and the 18 day MVA (55.85), and looks like it is ready to move again. Target going into the split: 66.
PLAY: Over 58, with August $55 calls to buy (UCS HK).

LLL (L-3 Communications--$131.97; +3.22; optionable): Splits 2:1 effective 5-21-02.
http://biz.yahoo.com/p/l/lll.html
STATUS: The move we were looking for, as LLL bounced up, reaching to a new high intraday (133.50). A nice test of the breakout, with the stock holding prior highs and the 18 day MVA (126), bouncing as volume moved over the average (880,600; avg. 764k). Riding positions toward a target of 145 as we go toward the split, and can still catch a move here up to 134 on an options play.
PLAY: Riding positions. Still a buy on new, more aggressive positions up to 135, with July $130 calls to buy (LLL GF).

BBY (Best Buy--$73.62; -1.18; optionable): Electronics stores. Splits 3:2 effective 5-13-02.
http://biz.yahoo.com/p/b/bby.html
STATUS: After the low volume relief bounce Tuesday, BBY gapped up with Wednesday's rally, but could only manage a 'hanging man' doji as volume remained below average. We thought it was a move that would not hold, and today BBY gapped down and dropped intraday. It hit our put buy point, but volume was not what we were looking for, coming in even lighter at 1.8m (avg. 2.73m). Still looks weak and is a put on continued selling, but we would be more comfortable with more volume, and on a downward move we will look for additional weakness post split. Target 67.
PLAY: Aggressive: Through 72.50 on above average volume. Through recent lows: Below 72 on above average volume. June $80 puts to buy (BBY RP).

STZ (Constellation Brands--$60.98; -0.24; optionable): Splits 2:1 effective 5-14-02.
http://biz.yahoo.com/p/s/stz.html
STATUS: STZ has been on a steady uptrend since breaking from a double bottom with handle in February. It made a nice bounce and breakout to a new high last week, and since then has leveled out, pulling laterally and about to again intersect the 10 day MVA (60.43). Thursday STZ showed a doji, and we will be ready for a move, although it might want to snug up a bit more with its 10 day before we see a strong move. Close to the split date, but one that we will look to show some strength post-split. Target: 68
PLAY: Over 62.50, with July $60 calls to buy (STZ GL).

CONTINUING CANDIDATES BEST PLAYS: INVN still set up for a possible put.
1) APPB - Split announcement!
2) PII - Shakeout in the flag
3) MMM - Could be up to something

APPB (Applebee's--$39.86; +0.03; optionable): Restaurants. Announced a 3:2 stock split today, effective June 12!
http://biz.yahoo.com/p/a/appb.html
STATUS: Made a solid breakout last month from its December-April range, and made a second surge last week after a test. APPB made a new high on that move at 40.90, pulling back again nicely before having a bit of a wild day Wednesday, where it tested near its 18 day MVA (38.86) at its low before recovering. Today the announcement was made during the session, and APPB hit 40.45 intraday but pulled back to close with a doji. Oftentimes, when you have a strong run going into the split, there is not much left on the actual news, so we watch for the stock to catch support and form up for the next move. APPB is looking pretty good already, and we will look for it to hold the 10 day and set up another surge.
BUY POINT: Holding existing positions. We can look at new positions with options on a bounce over 41 with increased volume (down to 424,300 today; avg. 445k). Stop: 38.80.
POSITION: August $35 calls to buy (AQB HG).

PII (Polaris Industries--$74.10; -1.27; optionable): Recreational vehicles.
http://biz.yahoo.com/p/p/pii.html
BACKGROUND: Based upon our research it does not appear that PII has ever split its stock. The annual shareholder meeting was on 5-3-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: PII has formed a third flag pattern, and with the consolidation has set up another possible breakout run. It pulled back a bit today on slightly lighter volume (193,200; avg. 169k), giving up the recent support of the 10 day MVA (74.51; 18 day at 73.16), but we often see a 'shakeout' of holders in this type of pattern. The shakeout can get rid of the last sellers at this stage, and set up a breakout. We will look at an options play on a run, targeting 85.
BUY POINT: Breakout: 76.85 on volume of 230k. Stop: 72.50. Aggressive: 76.10 on volume of 230k. Stop: 72.50
POSITION: September $70 calls to buy (PII IN).

MMM (Minnesota Mining & Mfg--$126.30; +0.12; optionable): Conglomerate
http://biz.yahoo.com/p/m/mmm.html
BACKGROUND: Last announced a 2:1 split on 3-15-94 in conjunction with a board meeting. The stock price was $100. The annual shareholder meeting was on 5-8-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Forming something of an ascending wedge here, holding support roughly at the 18 day MVA (124.72), actually dipping just below that level the last two dips back. MMM made a great move in April on a solid outlook, and since has held the March highs as it forms the current pattern. Off of Tuesday's doji MMM bounced with the rally, but volume dipped and today the stock showed a second consecutive doji, with volume dropping again (1.5m; avg. 1.86m). We will see if it can hold here or at the 18 day, setting up a breakout move. Target: 145
BUY POINT: 128.20 on volume of 2.5m. Stop: 121
POSITION: Stock and/or July $120 calls to buy (MMM GD).

POST-SPLIT PLAYS:
1) CHBS - Broke out!
2) ABM - Could be ready to move back up

CHBS (Christopher & Banks--$39.90; +2.90; optionable): Apparel stores
http://biz.yahoo.com/p/c/chbs.html
STATUS: Nice move! We have been looking for CHBS to breakout of its lateral consolidation, formed after its strong breakout from a cup pattern. It has hit our buy point a couple of times, but volume has not been there. It was thinking about giving up the support of its 18 day MVA (37.43), closing just under that level Wednesday, but today CHBS took off on solid sales numbers. The stock reached 41.39 at its high, pulling back to close as volume spiked to 1.2m (avg. 450k). Still a buy on this move. Good money flow. Target: 47
PLAY: A buy up to 41.50 with continued strong volume, with stock and/or September $35 calls to buy (URH RG). Stop: 37.50-38.60.

ABM (Abm Industries--$18.32; -0.16; now optionable): Split 2:1 effective 5-7-02.
http://biz.yahoo.com/p/a/abm.html
STATUS: ABM gapped back on the split, retreating to the 50 day MVA (18.10) in a post-split slump. Volume spiked up Wednesday on the drop, but today after a gap down ABM showed a 'shooting star' doji over the 50 day, with volume dipping to 102,200 (avg. 77k). We typically will see about four runs up along the 18 day MVA and then get a test of the 50 day, and that is the pattern that ABM followed here. We look at this test as a buying opportunity for new positions. Looking for the bounce and a renewed move along the short-term MVA's. Still shows good money flow. Target: 22.50
PLAY: Aggressive: Over 18.66 on increased volume, with stock. Options are now available, and on the aggressive play, July $17.50 calls to buy (ABM GW - but no OI for any options at this point).

End Part 2 of 3

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