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TOMORROW

April retail sales are out before the open, and these are one of the 'meat' economic reports as they give insight as to the one area that has held the economy up, the consumer. Sales have been flagging recently after a good start to the year. A bit of a downside surprise may put some brakes on the Monday hope rally even ahead of the AMAT numbers. If retail is a letdown, we do not anticipate this weak bounce to last much longer. If it is inline, then we get a rise up toward the AMAT numbers.

The big point will be AMAT's actual numbers and how positive it is about the future. It has to be positive and not just another 'this looks like the bottom' pronouncement that has hampered semiconductors and the rest of tech for the last three quarters. There are signs such as INTC keeping its investment decent and AMD increasing its equipment expenditures, but these did not get the market excited in the past couple of months. After CSCO's questionable news, however, it is a market in search of a catalyst. The indexes are all trying to put in some higher lows to attempt to change character. If they can put together a higher volume rally and take out near resistance, we will have to close out some downside positions, but we are not going to run out of them just yet.

What we anticipate is a move up to next resistance ahead of AMAT if the retail numbers don't get in the way of the move. Then the indexes are primed to fall if there is no volume and no major headlines from AMAT. Two up sessions then more selling; that is about the norm for a downtrend, but the indexes are putting in those higher lows. They are going to try and rally, and how they react to next resistance is the key.

Support and Resistance

Nasdaq: Closed at 1652.54
Resistance: The 18 day MVA at 1672.74. Then the February lows and recent top at 1696 to 1700. Then the second March down trendline at 1715. 1750 and the 50 day MVA are right behind that level.
Support: Some support from 1600 to 1620 from the October consolidation. 1550 to 1560 are the October lows and could try to hold. Then 1500. After that is the September low at 1387.06.

S&P 500: Closed at 1074.56
Resistance: The February lows at 1075 is where it closed. The down trendline at 1075 is right at that level. Double ice, but it could break it intraday. The 18 day MVA (1082.36) backs that up. Then the next down trendline at 1090, backed up by 1100 from price consolidations. 1125 is the serious resistance as that represents strong price points and the 200 day MVA (1122.86).
Support: The bottom of the downtrend channel held from Friday's close. The October lows at 1050 are the last price consolidation level before the September low. There is possible support at 1000, but it is not much. The September low is 944.75.

Dow: Closed at 10,109.66
Resistance: 10,100 continues to block the passage (50 day MVA at 10,120.70). After that, 10,200 to 10,300 holds the key to reaching toward the March high. After that is 10,400, the barrier to the upper half of the March trading range. The top of the June, July, and August 2001 trading range at 10,600 (10,679 intraday high) marks the top half of the March trading range.
Support: The 200 day MVA (9907.96) held again. Then recent lows at 9811. The bottom of the downtrend channel is at 9625. Then 9500 to 9600 in the shelf of support from 9500 to 10,100.

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

5-14-02
Retail Sales, April (8:30): 0.5% versus 0.1% prior
Retail Sales ex-auto, April (8:30): 0.4% versus 0.3% prior

5-15-02
CPI, April (8:30): 0.4% versus 0.3% prior
Core CPI, April (8:30): 0.2% verus 0.1% prior
Business Inventories, March (8:30): -0.1% versus -0.1% prior
Industrial Production, April (9:15): 0.4% versus 0.7% prior
Capacity Utilization, April (9:15): 75.7% versus 75.4% prior

5-16-02
Housing Starts, April (8:30): 1.63M versus 1.646M prior
Building Permits, April (8:30): NA versus 1.63M prior
Initial Claims, 5/11 (8:30): NA versus 411k prior
Philadelphia Fed, May (12:00): 11.0 versus 12.3 prior

5-17-02
Trade Balance, March (8:30): -$32.3B versus -$31.5B prior
Mich Sentiment-Prel., May (9:45): 93.0 versus 93.0 prior

TEAM TRADES

EPXE: After a strong run up the 18 day MVA, EXPE needed to test the 50 day MVA, and it did that last week, holding Friday just above the 50 day. Strong stocks in continuing uptrends test the 50 day MVA every so often, and we wanted to play EXPE's next move higher. It reported blowout earnings in April and shot higher on them. The 50 day MVA is a good add to point in a strong uptrend or a good point to get in on the action.

We were looking for the stock to show the move by hitting 74. It walked up to that point two times in the first two hours, but could not make the move over the near resistance. Then at 10:40 there was a good volume push and EXPE hit the buy point at 74. The spread was 2 to 3 cents, but by the time the alert was entered the ask was 74.03. We entered the order with a limit at the ask, and it looked as if the stock had jumped us when the bid hit 74.07, but then it quickly fell back to 74.03 for several trades before moving higher. It was a nice bounce, finishing over 76, and volume was not bad. We would have preferred stronger volume, but above average volume is never a bad thing.

THE PLAYS: ESI announced a split today!

BONUS PLAYS: ROIA surged and hit the buy point, while NAFC is still set up to move to the upside. To the downside, CCRD gapped down and continued falling, while ABT gapped down but showed a doji, so could bounce. CPRT is still set up for the drop, and BMET bounced through its 50 day, but the move does not have much strength.

ATVI (Activision--$33.49; +1.70; optionable): Multimedia & graphics software.
http://biz.yahoo.com/p/a/atvi.html
STATUS: Last week ATVI broke from an ascending wedge pattern, which it had formed over its prior flat base pattern. The breakout was on huge volume, but it reversed quickly to test the move. That is not our favorite action, but ATVI has been strong overall, and today it rebounded nicely, having held the support of former pattern highs and its 18 day MVA (31.47). Volume was up and strong at 2.77m (avg. 1.4m). Looking for continued strength, and a continued rally would give it a nice push. Target: 39.50
BUY POINT: Over 34 on continued strong volume. Stop: 31.71 (7%)
POSITION: Stock and/or August $30 calls to buy (AQV HF).

WFMI (Whole Foods--$48.03; +0.12; optionable): Grocery stores
http://biz.yahoo.com/p/w/wfmi.html
STATUS: WFMI has been a solid performer on a steady uptrend, and is now getting back toward split range. The stock tested its 50 day MVA (then 44, currently 46.07) in early April and has made a nice move up along its 18 day (47.54), recently breaking over the March high for a new all-time high (50). After the strong move WFMI has come back to test that former high and 18 day MVA, testing through that support the last two sessions but recovering to close, today with higher volume of 502k (avg. 552k). A nice test, and we are looking for a bounce and continued run. Excellent money flow. Target: 57
BUY POINT: Bounce: Over 49 on volume of 600k. Stop: 45.90
POSITION: Stock and/or August $45 calls to buy (FMQ HI).

AGN (Allergan--$58.90; +1.89; optionable): Drug manufacturer
http://biz.yahoo.com/p/a/agn.html
STATUS: Put. AGN has been on a steady downtrend. After taking out old price support at 60 in April, AGN bounced back up to test its 200 day MVA at 70, but fell back, and last week took a very hard fall back through 60. Today featured a relief bounce, with AGN moving back up on reduced volume (3.09m; avg. 1.41m), tapping 59.94 at its high and then retreating. We will see if it tests 60 again, but will look for a retreat back through 58 to pick up puts, targeting 52.
BUY POINT: Back through 58 on continued strong volume. Stop: 62
POSITION: July $65 puts to buy (AGN SM).

Update request: NTBK made a nice move earlier this month with earnings, but received a downgrade and was driven back to its 50 day MVA (15.70; lots of price support at 15), where it is trying to hold on now. NTBK made a move back up today on some business news, but it pulled back from a move over its short-term MVA's (16.13), so we will see if it can hold and put together a rebound. However, we are not looking to ride it down if it falters.

PRE-ANNOUNCEMENTS: KSS and MHK are forecast for Thursday, with KSS still in the downtrend and MHK in the bottom of an erratic handle. LE blasted up on a gap with news of the Sears acquisition, ABC still looks good, and BRL made a weak move up and we are still looking at a put.

BER ($58.39; +0.54): Forecast to announce a split at the annual shareholder meeting on 5-14-02 at 2:30 ET. BER is holding its 50 day MVA (57.65), today pushing back up from that level on light volume. Going into the shareholder meeting we will look at positions on a move, watching for a push over 58.82 (short-term MVA's) on above average volume (131k). Stock and/or July $55 calls to buy (BER GK).

CAKE ($41.68; +0.50): Forecast to announce a split on 5-16-02 in conjunction with its annual shareholder meeting. Made a bit of a bounce today from the 18 day MVA (41), reaching over our buy point but pulling back as volume was weak at 403k (avg. 549k). Still looks good holding over support, and going into the shareholder meeting we can pick out entry point. Looking for above average volume to support a move over 42.25, with stock and/or July $40 calls to buy (CFQ GH).

BMS ($53.36; -0.22): We are researching a date. After the strong drop Friday we were looking for a possible test of the 50 day MVA (54.26), and BMS showed a loose doji today on low volume, reaching up to 54 at its intraday high. We still could see an attempt at the 50 day off of today's pattern, and after that move fails, looking for a drop through 53 on above average volume (291k; today 244k). July $60 puts to buy (BMS SL - 20 IO).

EASI ($50.96; -0.17): Forecast to announce a split the week of 5-27-02 with earnings. At this time, the company cannot confirm this date. Tested the 18 day MVA at its low of 50.15 today, moving back up to close. Volume spiked up to 217k (avg. 192k), and we are still looking for a breakout, with the buy point 52.23 on volume of 290k. Stock and/or August $50 calls to buy (UFE HJ).

PRE-SPLITS: IFIN made a nice continuation of the bounce move! GG is still moving up, and BBY is weak on the put play, although it could take a relief bounce off of today's loose doji.

COCO ($55.79; +0.01): Splits 2:1 effective 5-28-02. Tested the April highs, dipping to 54.43 at its low but pulling back up to close with a doji at the 18 day MVA. Looking for a bounce. The aggressive can look at a move over 57.50, with August $55 calls to buy (UCS HK).

LLL ($131.49; +1.02): Splits 2:1 effective 5-21-02. The test of the breakout has developed into a small ascending wedge. Today LLL showed a second consecutive loose doji, and we are looking for a move over 133.50. If we get a test of the 10 day or 18 day MVA's (129 and 127, respectively), we can look for a bounce over the closing high of 132. July $130 calls to buy (LLL GF).

YUM ($63.75; +0.54): Splits 2:1 effective June 18. Building pressure to the upside as YUM has formed an ascending wedge, with higher lows pressing toward the highs at 64. Looking for an options play with a breakout to a new high, targeting 68. The play is 64.21 on volume of 1 million, and July $60 calls to buy (YUM GL). Stop: 60.

ATK ($110.60; -0.15): Splits 3:2 on or about June 11. After blasting up on the announcement, ATK has pulled back a bit, holding its 10 day MVA (109.75), today with a doji. On a move over 113.33, we can look at another options play, with August $105 calls to buy (ATK HA).

APPB ($40.04; -0.13): Split 3:2 effective June 12. Made a strong breakout going into the split announcement, and has held up, showing a pennant pattern over the 10 day MVA (39.75). 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).

CONTINUING CANDIDATES: INVN continued down, CPS made a strong move up, and JCI looks to be forming a double bottom with handle.

ESI ($49.64; +0.69): Announced a split today! Splits 2:1 effective June 6. ESI has dropped off of double tops at 53, falling through the support of its 18 day MVA (50.05) Friday. On the news today, ESI stopped the bleeding and turned back up on higher volume (178,400; avg. 132,500); however, it was not able to break back through the 18 day (10 day at 50.42). The aggressive look for momentum to push ESI back over 50.50 on increased volume, with stock and/or July $45 calls to buy (ESI GI).

AHC ($80.79; +2.36): In a large cup with handle dating back to May 2001. The handle has extended for over a month now, holding its 50 day MVA (75.87) as it eased back nicely on light volume. Today AHC finally made a move, jumping up on good volume of 767k (avg. 651k). The breakout is 82.32 on 980,000, with stock and/or August $75 calls (AHC HO). We would not mind seeing a bit of a pause that holds 80, setting up the move with a rest.

FITB ($67.10; +0.87): Dropped through the 50 day MVA (67.09) Friday, and we were looking for a failed test of that broken support to set up a put play. Volume was lighter on this move (1.37m; avg. 1.76m), which demonstrates the weakness of the bounce. Looking for a drop back through 66.20, with August $70 puts to buy (FTQ TN).

POST SPLITS: CHS and CHBS are holding up on tests of their moves.

WTSLA ($36.70; +0.44): Split 3:2 effective 5-10-02. Dropped hard going into the split, taking out its 50 day MVA (34.80). WTSLA found some support at 21, rebounding to test the 50 day, but today turned back down, showing post-split weakness. It tapped its recent low at 21.11 today as volume was strong at 499k (avg. 327k). We can look at a put play on a drop through 21 with continued strong volume. July $25 puts to buy (WTQ SE - no open interest as yet).

APOL ($36.65; +1.28): Split 3:2 effective 4-26-02. Has come back to test the 50 day MVA (35.55), as good stocks will do from time to time, and can especially do so on a bit of post-split weakness. It bounced today on increased volume (1.25m; avg. 1.1m), also as good stocks will do, and after the close it was announced that APOL would take WCOM's place on the S&P 500. The stock was trading up on that news after hours, so we will look for a gap up over the short-term MVA's at 37, watch for a test back to support (the MVA's or perhaps the open price), and on a strong move up from there, we can look at new or additional positions. Stock and/or August 33.37 calls to buy (AKA HX).

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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