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Begin Part 3 of 3

MHK (Mohawk Industries--$64.24; -0.12; optionable): Textile manufacturing. Forecast to announce a split at the shareholder meeting to be held 5-16-02.
http://biz.yahoo.com/p/m/mhk.html
BACKGROUND: Based upon our research it does not appear that MHK has ever split its stock. The company has sufficient shares for a 2 for 1 split.
STATUS: MHK made a failed breakout attempt Monday (high of 68.45), and has pulled back into the lower range of the handle to its cup pattern (dating to early March). Friday MHK showed a doji at recent lows, closing just under the support of the 18 day MVA (64.42). The selling back has been on low volume, as was Friday's action (267k; avg. 648k). We will see if it can bounce and try again to breakout going toward the forecast.
BUY POINT: Aggressive: Over 66 with volume of 950k. Stop: 62. The high was established on the breakout attempt at 68.45.
POSITION: Stock and/or August $60 calls to buy (MHK HL - 78 OI).

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) IFIN - Good bounce
2) PNRA - Could run again
3) COCO - Looking for a bounce
4) LLL - Rested on the down day
5) YUM - Could be ready to move

IFIN (Investors Financial--$76.43; +1.94; optionable): Asset Management. Splits 2:1 effective 6-17-02.
http://biz.yahoo.com/p/i/ifin.html
STATUS: IFIN has been moving in a tightening range, making something of a pennant pattern over the course of the last two months. The last two trips down have taken out the 50 day MVA, dropping about $2 beneath that level each time. This week IFIN pulled back but held the 50 day (73.95), and Friday, after testing below that level, made a nice bounce. Volume spiked way up to 248,300 (avg. 153k), and IFIN pulled back to close off of 77.17 (recent April high at 77.18). Looking for a continued pre-split move. Target: 90
PLAY: Over 77.18, with stock and/or July $70 calls to buy (FLQ GN - 21 OI). Stop: 72.

PNRA (Panera Bread--$67.33; -0.68; optionable): Restaurants. Splits 2:1 effective June 25.
http://biz.yahoo.com/p/p/pnra.html
STATUS: PNRA has dropped back through its April highs (69.70) and 18 day MVA (68.26). Volume was pretty strong on the selling, but Friday PNRA recovered from an intraday low of 65.75 (50 day MVA at 64.76, with February-March highs) and recovered to show a 'hammer' doji on increased volume (530,700; avg. 391k). Hit a stop point for short-term positions not sold out of after the last run, but we need to keep our eyes trained on PNRA as it has been a strong leader, and the recovery from support and bullish doji pattern indicate a possible bounce and run. Still targeting 80.
PLAY: 69 on continued strong volume, with stock and/or August $65 calls to buy (UPA HM). Stop: 64.17 (7%)

COCO (Corinthian Colleges--$55.78; -0.76; optionable): Splits 2:1 effective 5-28-02.
http://biz.yahoo.com/p/c/coco.html
STATUS: Light selling back to support. 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 52.17) 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, Friday down again as COCO closed on the 18 day and just above the August highs. Looking for a hold and solid move up. Target going into the split: 66.
PLAY: Over 58, with August $55 calls to buy (UCS HK). Aggressive: Over 57.50.

LLL (L-3 Communications--$130.47; -1.50; optionable): Splits 2:1 effective 5-21-02.
http://biz.yahoo.com/p/l/lll.html
STATUS: LLL made a good bounce Thursday, continuing up after rising from a doji over the 18 day MVA (126.48). With the market Friday LLL gapped back but held for a loose doji, with volume dropping to 618k (avg. 781k). Still showing decent action and we are riding positions, and on a continuation of the move up LLL is still a buy up to 134 on an options play.
PLAY: Riding positions. Still a buy on new, more aggressive positions up to 134, with July $130 calls to buy (LLL GF).

YUM (Tricon Global--$63.21; -0.45): Restaurants. Splits 2:1 effective June 18.
http://biz.yahoo.com/p/y/yum.html
STATUS: Has been on a steady trend up, using its 50 day MVA until bouncing up and using the short-term MVA's since early April. For the last several weeks YUM has set up an ascending wedge, and after gapping up but not doing much on the split announcement, YUM could be ready to go after pulling back and showing a 'shooting star' doji over the support of the 18 day MVA (62.51). Looking for an options play with a breakout to a new high. Target: 68.
PLAY: 64.21 on volume of 1 million, and July $60 calls to buy (YUM GL). Stop: 60.

CONTINUING CANDIDATES BEST PLAYS: INVN still set up for a possible put.
1) FITB - Strong drop through support
2) INVN - Dropped out of the consolidation range
3) PII - Still could move

FITB (Fifth Third Bancorp--$66.23; -0.79; optionable): Regional bank.
http://biz.yahoo.com/p/f/fitb.html
BACKGROUND: Last announced a 3:2 split on 6-20-00 at a stock price of $61. The annual shareholder meeting was on 3-19-02 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: FITB has been setting up an ascending wedge, but could not hold a higher low after the last move up could not garner any strength. The stock fell back to the 50 day MVA (67.08) Thursday, and then after a gap up Friday, dropped back through that former support on increased volume (1.58m; avg. 1.74m). The move sets up a put, and we will look for FITB to test the 50 day, but on a failure to break back through we will be ready to jump into a play on the drop back down. Target: 63 (200 day MVA at 62.20).
BUY POINT: After a failed test of the 67 level, a drop back through 66.20 on above average volume. Stop: 68.50
POSITION: August $70 puts to buy (FTQ TN).

INVN (Invision Technologies--$19.39; -1.97; optionable): Scientific & Technical instruments.
http://biz.yahoo.com/p/i/invn.html
BACKGROUND: Based upon our research it does not appear that INVN has ever split its stock. The company has sufficient shares for a 3:2 split.
STATUS: INVN has already taken a large drop, dropping back from a promising upside pattern in March. It dropped in a big way toward the end of last month after a failed test of a breach of the 50 day MVA (then 35), and that move took INVN below its 200 day MVA. The stock has consolidated in a rather tight pattern under that level (23.25) for two week, and Friday INVN finally fell below pattern lows at 20.40. Volume was not big on the selling back, remaining light as it has been in the consolidation (1.02m; avg. 1.88m). We will see if INVN test the consolidation range again, but on a drop back with higher volume, that is our cue that there is another put play coming. Target: 15
BUY POINT: After a test of the 20.50-21 range, a drop back through 19.40 on average or better volume. Stop: 23
POSITION: July $25 puts to buy (FQQ SE).

PII (Polaris Industries--$73.48; -0.62; 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 has pulled back this week in the pattern, with volume dipping back Friday (108,700; avg. 171k) as the stock close over its 18 day MVA (73.04). PII needs to hold here, for a drop could spell the end of the run and a visit to the 50 day MVA, back at 68. We often see a 'shakeout' of holders in this type of pattern, and this week's selling could be doing just that, setting up another strong surge to the upside. 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).

WATCHLISTS:

PRE-ANNOUNCEMENTS WATCHLIST: AROW, LE, LSTR, MUR, PDCO, SLM, STU and XL.

ABC ($75.42; -1.08): Drugs wholesale. We are researching a forecast date. Still in the nice handle-type consolidation, holding over prior highs and its 18 day MVA (74.50). Friday ABC dipped back a bit, but volume was quite low at 474k. Looking for a strong move off of this pattern, targeting 90. The buy point is a move over 78 on volume of 1.2 million. Stop: 72.63 (7%). Stock and/or August $75 calls to buy (ABC HO).

MEG ($65.40; -2.62): Forecast to announce a split on 5-24-02 in conjunction with its annual shareholder meeting. Fell out of the ascending wedge Friday, giving up the 18 day MVA (67.02) and heading down on higher volume. The 50 day is below at 63.89. We will see if it can hold and set something up.

BBBY ($34.53; -0.61): Researching a new date. Looked like it had some support at the 50 day MVA (34.74) after sharp rebound from that level Wednesday. However, it turned around again Friday and dropped through that support to close, with volume up at 2.92m (avg. 3.13m). Not good, and we will see if it can make a quick recovery.

PRE-SPLITS WATCHLIST: Watching FULT (5/21), GTK (5/24), MI (6/15), PMI (6/18), RYL (5/31), SU (5/23), FBC (6/21), UPC (6/7) and GG (TBA).

ATK ($110.75; -2.58): Splits 3:2 on or about June 11. A big move on the announcement Thursday, adding to gains and giving a nice short-term play as well. ATK gapped back Friday on a valuation downgrade, but did not give back much and held over its 10 day MVA (109.56) to close. Volume also was way down on the day, so with the strong ATK we do not expect too much damage from the downgrade. Looking for a hold of 110 and another playable run. Still targeting 125.

APPB ($40.17; +0.31): Split 3:2 effective June 12. Made a solid breakout last month from its December-April range, and made a second surge last week after a test. It is holding up nicely now, and has the split behind it. Looking for a hold of the 10 day MVA (39.68). We can look at new positions with options on a bounce over 41 with volume of 500k, and August $35 calls to buy (AQB HG).

STZ ($60.42; -0.56): Splits 2:1 effective 5-14-02. Has been in a lateral consolidation since its nice bounce and breakout to a new high last week. Friday it dipped slightly, holding the 10 day MVA with a doji. Close to the split date, but one that we will look to show some strength post-split. Target: 68. The aggressive can look at July $60 calls to buy (STZ GL) on a move over 61.30.

BBY ($70.81; -2.81): Splits 3:2 effective 5-13-02. Hit the buy point today with the strong selling we were looking for! Still have those existing and new plays going toward the target of 67.

ANN ($46.75; -1.42): Splits 3:2 effective 5-21-02. Made a nice move this week from its 50 day MVA (43.36), really powering up Thursday. However, it reversed today, dropping and showing a 'tweezer' pattern with the candlesticks (down candlestick right after a up candlestick, about the same size). That is an indicator of more downward movement, so we will watch carefully to see if ANN can hold 46.

ZRAN ($32.51; -1.44): Splits 3:2 effective 5-23-02. After hitting the put buy point ZRAN rallied big-time Wednesday with the market, but as suspected, it fell back from the resistance of the 50 day MVA (36.40). It continued down today, taking out the 200 day (33.10), but volume was quite low at 516k (avg. 948k). We could see some vacillation at the 200 day, but are still seeing if ZRAN will continue down to the target of 27.50.

FAST ($82.20; -1.45): Splits 2:1 effective 5-13-02. FAST could not continue the move, gapping up and reversing Wednesday, and then continuing down Friday, although selling volume was very low (128k; avg. 274k). Splitting Monday, so we will see if it can hold support from recent lows and April highs at 82.

IFNY ($18.86; +0.59): Splits 2:1 effective 5-14-02. Hit the buy point Thursday, but not managing much of anything going toward the split.

RNR ($113.80; +0.55): Splits 3:1 effective May 31. Has fallen back, and gave up the 18 day MVA (114.35) Thursday. Held Friday with a doji, just under the 18 day, but we are wary of a drop back to the 50 day (110).

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 ACDO, AHC, AZO, CPS, CYN, DHR, DIAN, DRYR, ESI, ETH, ETN, EXPD, GOSHA, JCI, KRB, SRCL, STI, TGH, THC and TGIC.

ACDO ($57.11; -1.86): Gave up the 50 day MVA (57.56) Friday with volume increasing to the average of 683k. An important point here with any remaining positions, no wanting to ride down a strong sell-off from here. We will see if it can recover (there is support from February-March consolidation highs at 55).

ASD ($75.93; +0.43): Got a huge spike in volume as ASD joined the S&P 500. It gapped up to 76.96 but pulled back to close, and we will probably get more of a pullback from here. Holding existing positions for now.

KLAC ($54.40; -3.10): The bounce was strong as expected, but the drop was swift as well, as KLAC dropped Friday back toward the 200 day MVA (52.59). Out of any remaining positions.

MGA ($73.15; +0.86): Did not get the announcement, and MGA dropped back to the 50 day MVA (72.52) and is now just trying to hang on, showing a doji Friday over that support. Not hanging around with any remaining positions on a drop.

MMM ($126.90; +0.60): Still in the ascending wedge, but not able to make a strong break. Instead, MMM is drifting up in the pattern, and could need to come back and test the 18 day MVA (125) before launching a move. Buy point is still 128.20 on volume of 2.5m. Stop: 121. Target: 145. Stock and/or July $120 calls to buy (MMM GD).

MTG ($71.05; -0.06): Is not making anything out of the latest bounce from the 50 day MVA (69.79), and after its short consolidation over the short-term MVA's it could be headed back to that point. That is an important level to hold, as MTG could be setting up a bearish head & shoulders.

RCII ($58.29; -0.37): Made a big gapping breakout with earnings, but has dropped back a bit out of its lateral consolidation formed off the breakout, now holding with three consecutive dojis over the 18 day MVA (57.20). Protecting profits from a fall through the 18 day.

RUS ($34.98; -1.62): RUS showed us topping signs and then Friday gave a strong fall. Should be out with profits at this point.

STJ ($84.10; +0.96): Still riding the 10 day MVA (83), and could be pulling back to that level again after a gap up and reversal on strong volume Friday. Still holding remaining positions but wary of a drop back, and it should not drop through 82 if it still has strength.

POST SPLITS WATCHLIST: Watching ACS, AMAT, APOL, DF, ICUI, MKC, OPTN, SONC, UOPX, WTSLA and WLP.

ABM ($18.01; -0.31): Split 2:1 effective 5-7-02. We were looking at a buying opportunity as ABM pulled back to test its 50 day MVA, but off of Thursday's doji it dropped back and gave up the 50 day (18.14). We will see if it can generate a quick recovery, and on a strong move up we can still look at positions.

CHS ($38.70; -1.59): Made a nice breakout, but turned about abruptly Friday, dropping back but holding over the prior highs at 38, with volume scaling back on the selling (815k). We will look for it to hold 38, still targeting 44, but protective of positions.

CHBS ($39.76; -0.14): After the great move Thursday, CHBS gapped up and reversed Friday. That move typically indicates more of a drop to come so, as with CHS, we will need to carefully watch the prior highs at 39-39.50 and look for CHBS to show strength and hold.

JEC ($41.39; -0.85): Split 2:1 April 2. After a break from a cup with handle in April, and then another handle in the 38-39 range that month, JEC has trended up nicely over the 10 day MVA (40.85). Wednesday JEC gapped up, but showed a doji with high volume on that move, which typically indicates a pullback. However, it held Thursday and then dropped Friday, but selling volume was way down at 214,500 (avg. 194k). The move fills the gap, but we will look for the stock to hold the 10 day and set up another move.

MCHP ($28.01; -1.59): Split 3:2 effective 5-9-02. After hitting the put buy point intraday Tuesday, MCHP was caught in the reversal Wednesday. We decided not to stop positions, instead waiting for a fall back and better exit point. MCHP has tanked all the way back, closing below the 50 day MVA (28.40) Friday. We will of course let it fall and ride it down, although we could again get a little bounce here to test back over the 50 day.

PFCB ($38.28; +0.48): Split 2:1 effective 5-2-02. Made a nice breakout on the split, but is not doing much now. Riding positions on a lower-volume test of support (prior consolidation highs at 37 and 18 day MVA at 36.84).

PRHC ($23.29; -0.41): Split 3:2 effective 5-1-02. Testing the 50 day MVA (22.72), tapping down to 22.97 at its low today. Volume has been light on the retreat from the strong breakout move, so we will see if it can hold on here.

WTNY ($36.26; -0.95): Split 3:2 effective 4-10-02. Made a great move, but telegraphed the pullback as the move lost momentum and showed a 'hanging man' doji Wednesday. Has Dropped back, taking out its March high and 18 day MVA (36.50), prompting an exit.

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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