stock watch, stock split

Begin Part 2 of 3

THE PLAYS: Lots of announcements this week, with BER, SRCL, STJ and ESI!

BONUS PLAYS: WY is still set up for the bounce and AEP is set up for a put.

Upside:

MAN (Manpower--$41.54; -0.16; optionable): Staffing
http://biz.yahoo.com/p/m/man.html
STATUS: Breakout test. MAN broke out from a lateral consolidation in March and then through a couple of flags, but early this month fell out of the second flag, testing the 50 day MVA (then 38.20, currently 39.28). MAN made a great move up from that level, hitting up to 43.30 before pulling back on light volume to test the April high (with the 10 day MVA, at 41.22). Today MAN showed a doji over the 10 day, and volume blasted way up to 1.25m (avg. 529k). Looking good for a bounce. Excellent money flow and buying. Target: 49
BUY POINT: Over 42.20 on continued strong volume. Stop: 40.20
POSITION: Stock and/or September $40c to buy (MAN IH).

DNR (Denbury Resources--$9.22; -0.03; optionable): Oil & Gas
http://biz.yahoo.com/p/d/dnr.html
STATUS: A year-long cup with handle. The pattern shows good accumulation in the base, and the handle has shaped up into an ascending wedge over its 18 day MVA (9.12). We have seen a couple of volume spikes lately, including today where DNR gapped down to its 18 day and pushed back up on volume of 147k (avg. 78k). Looking for a breakout with continued strong volume. Good money flow. Target: 12
BUY POINT: 9.56 on minimum volume of 120k. Stop: 8.89 (7%)
POSITION: Stock

Downside:

IWM (Ishares Russell 2000--$98.60; -1.52; optionable):
STATUS: Broke below the 50 day MVA at 100 today on rising, above average volume (1.25 million; avg. is 950K). The small caps are struggling, and they need a correction to build a better base. We will look for the support at 98 to be taken out for a move down to the 200 day MVA.
BUY POINT: 97.85 on volume of 1.2 million. Target=94. Stop=101
POSITION: August 105p to buy (IWM TA; delta -68).

EME (Emcor Group--$57.95; -2.83; optionable): General contractor
http://biz.yahoo.com/p/e/eme.html
STATUS: Has made a good run with the sector, but recently double topped, and a bounce from the 50 day MVA (59.09) failed to reach the prior highs. The pullback turned into a strong drop today, as EME took out the 50 day on sharply higher volume of 128,300 (avg. 100k). We will see if we get a test of the 50 day, looking for a failure and strong continuation of the selling. Target: 50
BUY POINT: From here or after a test toward 59, a drop through 57.25 on continued strong volume. Stop: 60
POSITION: July $65p to buy (EME SM - 30 OI).

SKX (Skechers Usa--$20.00; -0.76; optionable): Apparel footwear
http://biz.yahoo.com/p/s/skx.html
STATUS: Tried to break from a cup with handle late in April, but the move failed and SKX came back to test its 50 day MVA (20.40). It has been unable to mount a bounce, forming something of a head & shoulders while moving on light volume. Today volume picked up as SKX fell hard, taking out its 50 day, hitting down to 19.50 before pulling back up a bit to close. Looking for a test and 'kiss goodbye' from the 50 day, targeting 17 on a put play (200 day MVA at 16.52).
BUY POINT: From here or after a test of the 50 day, a drop through 19.50 on continued strong volume (544k today; avg. 441k). Stop: 21.50
POSITION: July $22.50p to buy (SKX SX - only 6 OI as of now, delta -.64). October $25p has 100 IO, delta -.65 - SKX VX, but much more expensive.

Quick updates prior bonus plays:

DP - Still looking good
GLYN - Still looking for a move
IGEN - Dropping like a rock!
LNY - Made the test and is now dropping
RACN - Turned back from the bounce, back on the 50 day, wary of a strong drop
LEN - Dropped back through the buy point on the put; volume a bit low but looking for more of a drop
CCRN - Dropped right back after the breakout, not what we were looking for
AGN - Dropped back again on increased, above average volume; still riding puts
WFMI - Has not been able to continue the bounce, holding for now
CPRT - Still waiting for the drop
GRMN - Holding up after the move
DISH - Still held back by its 10 day MVA and could retreat again
ROIA - Holding the 50 day and looking for a bounce
CCRD - Strong relief bounce today, but still riding puts, wary of a continued strong surge
WM - Could be setting up an ascending wedge
AVY - Holding the 18 day
TDY - Back to the 18 day with higher volume; wary of a breach
MCY - Fell back and hit the stop
LIN - Ditto
CF - Resting now after the nice 50 day bounce; looking for a hold and continued move

PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: Did not get the announcement from KSS today. Looking at KSWS and WEN Thursday and MEG Friday.

PRE-ANNOUNCEMENT BEST PLAYS:
1) KSWS - Forecast for Thursday
2) WEN - Also forecast for Thursday
3) CTAS - Testing the breakout
4) ABC - Looking for a breakout

KSWS (K Swiss-- $44.53; +0.38; optionable): Footwear. Forecast to announce a split on 5-23-02 in conjunction with its annual shareholder meeting.
http://biz.yahoo.com/p/k/ksws.html
BACKGROUND: Last announced a 2:1 split on 2-8-99 at a stock price of $35. The annual shareholder meeting is scheduled for 5-23-02 at 10:00 PST at which time additional shares will be authorized, and the proxy indicates that the number of shares is being raised for a potential split.
STATUS: KSWS has made a nice run since breaking over former highs at 35, riding along its short-term MVA's since late February. After that solid run it has come back to test its 50 day MVA (92.22), as strong stocks will do periodically. It made a promising start to a move Monday, bouncing on strong volume and closing just below the short-term MVA's (45.42). Today it could not continue, pulling back down on much lighter volume (78k; avg. 97k). Still looking for a strong move, and we will want to see a move back over the short-term MVA's going toward the forecast. A shareholder meeting, so we can move in with positions at any time. The high (from earlier this month) is 48.12. Targeting 58.
BUY POINT: 46 on volume of 110k or better. Stop: 43.20
POSITION: Stock and/or July $40 calls to buy (SWU GH - 46 OI).

WEN (Wendy's--$37.49; 0.00; optionable): Restaurants. We are looking at a wildcard date on 5-23-02, the date of a WEN investor conference.
http://biz.yahoo.com/p/w/wen.html
BACKGROUND: Based upon our research it does not appear that WEN has ever split its stock. The annual shareholder meeting was 5-1-02 at which no additional shares were authorized. The company has sufficient shares for a 3:2 split
STATUS: WEN has made a solid run since testing its 50 day MVA in March (then 31, now 36), but has turned laterally the last three weeks. WEN dropped today below the recent support of its 18 day MVA (37.55), showing a loose doji under that level as volume remained below the average (up to 564,500; avg. 811k). Not a great move, but still holding over prior lows in the pattern, more of a pennant now than an ascending wedge. Still a pretty good pattern (high 38.50) and looking for a breakout. Target: 44
BUY POINT: 38.60 on volume of 1.1m. Stop: 36.90
POSITION: Stock and/or September $35 calls to buy (WEN IG).

CTAS (Cintas--$53.80; -0.14; optionable): Business services. Working on a date.
http://biz.yahoo.com/p/c/ctas.html
BACKGROUND: Last announced a 3:2 split on 1-18-00 in conjunction with a board meeting. The stock price was $54. The annual shareholder meeting was on 10-25-00 at which time additional shares were authorized.
STATUS: Testing the breakout. Made a solid breakout recently, continuing up over several sessions to its new high of 56.62. CTAS has pulled back the last five sessions, closing the last two days just over the 18 day MVA (53.59; prior high from late 2000 at 54). Today volume pushed back up to 1.47m (avg. 1.07m), as CTAS reached up to 55.19 at its high before pulling back to close. The loose 'shooting star' doji is a bullish candlestick, and we will look for a strong move back up to add to positions or take new ones. Target 65.
BUY POINT: Bounce: Over 55.50 on continued strong volume. Stop: 52.25
POSITION: Stock and/or August $50 calls to buy (NQQ HJ).

ABC (Amerisourcesbergen--$77.27; -0.04; 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: After a good move Friday in its handle-type consolidation (formed after a breakout from a six-month cup with handle), ABC has taken a couple of sessions to rest. Today ABC showed its second consecutive loose doji with very low volume (down today to 491,800; avg. 1.02m). No problem with the rest, and we are looking for a continued move, with the closing and intraday highs in the pattern ahead at 78.61 and 79.70. Good buying and relative strength is solid.
BUY POINT: Over the closing high: 78.71 on increased volume of 1.4m. Stop: 74
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) FOSL - A new play!
2) ALC - Another new play!
3) RYAN - And yet, another
4) BER - Ascending wedge
5) ATK - Looking for another run
6) APPB - Consolidation

FOSL (Fossil--$31.48; -0.37; optionable): Recreational goods. Splits 3:2 effective 6-10-02.
http://biz.yahoo.com/p/f/fosl.html
STATUS: Made a huge move on the announcement, blasting up from its 50 day MVA (28.36). After hitting a new high at 33.61, FOSL has dropped back, today gapping down a bit but holding its 10 day (31.10) with increased volume of 178,700 (avg. 122k). Comfortably over the prior highs, and the high volume doji over support points to a bounce. Target: 36
PLAY: Over 32, with September $30c to buy (QFS IF - 60 OI). Stop: 30

ALC (Alltrista--$37.39; +0.39): Rubber & plastics. Splits 2:1 effective 6-4-02.
http://biz.yahoo.com/p/a/alc.html
STATUS: Made a great breakout in early April, and has trended up nicely along its 10 day MVA (currently 36.64). Over the past few weeks ALC has leveled out and formed a tight ascending wedge, today showing its fourth consecutive doji over the 10 day. Although it has made quite a move, we can still look for a solid breakout and a pre-split play. Great money flow and buying. Target 43
PLAY: 37.60 on volume of 67k (avg. 49,500; today 45k), with stock. Stop: 35

RYAN (Ryan's Family Steak House--$27.59; +0.59; optionable): Splits 3:2 effective 5-30-02.
http://biz.yahoo.com/p/r/ryan.html
STATUS: RYAN has been very strong, steadily trending upward along its short-term MVA's with an occasional visit to the 50 day. RYAN could be setting up for a pre-split run, currently showing an ascending wedge over its 18 day MVA (26.81). RYAN tapped the 18 day at its low today before making a move up in the pattern on increased volume (227k; avg. 224k). Looking for a breakout and targeting 32 going into the split next week.
BUY POINT: 28.10, with August $25 calls to buy (UYY HE).

BER (W.R. Berkley--$59.89; -0.16; optionable): Splits 3:2 on or about July 3.
http://biz.yahoo.com/p/b/ber.html
STATUS: BER formed an ascending wedge with its bounces from the 50 day MVA (58.10) in late April and last week, making highs near 61. After reversing after a gap up Monday, BER held on today, closing with a doji over its short-term MVA's (18 day at 59.30). Volume was much lighter at 100,500 (avg. 119k), and we are looking for BER to hold this support to continue the pattern and set up a strong breakout. Target 72.
PLAY: Over 61.20 on volume of 160k, with October $55c to buy (BER JK - 62 OI). Stop: 57.50

ATK (Alliant Techsystems--$108.45; -0.30; optionable): Aerospace/defense. Splits 3:2 on or about June 11.
http://biz.yahoo.com/p/a/atk.html
STATUS: Started the move back up Monday, stopping to rest today. After the great move on the split announcement, ATK pulled back through the 18 day MVA (107.35), but showed bottoming signs with decreasing point losses on strong volume (which indicates that buying are stepping in to pick up the shares), and then a doji. Monday's move was strong and encouraging, and today ATK held over support with a doji. Looking for a continued move, and we know that ATK can generate some really nice runs. Targeting 125, but this leg on the bounce will run into resistance at the high of 115.
PLAY: New or additional positions on a move over 110.15, with stock and/or August $100c to buy (ATK HT). Stop: 103

APPB (Applebee's--$40.85; +0.15; optionable): Restaurants. Split 3:2 effective June 12.
http://biz.yahoo.com/p/a/appb.html
STATUS: APPB has moved in a consolidation for the three weeks since its impressive breakout. The pattern is something of an ascending wedge, and today APPB tried to break out, reaching up to 41.50 as volume moved up to 363,400 (still below the average of 411k). It could not hold on, dropping back to close with a doji, still holding pattern support at the 10 day MVA (40.47). Still holding positions, and looking for new ones as APPB again tries to make a pre-split run. Targeting 46 on an options play.
PLAY: 41.60, with August $35c to buy (AQB HG).

CONTINUING CANDIDATES BEST PLAYS: JCI is setting up a nice pattern.
1) DHR - Tanks through the 50 day
2) AHC - In a handle
3) FITB - Weak test of strong drop
4) DRYR - Big drop
5) MHK - Testing the move

DHR (Danaher--$69.25; -1.61; optionable): General building materials.
http://biz.yahoo.com/p/d/dhr.html
STATUS: Has made a good run for us, but after a low volume run to a new high (75.45) in April, DHR is now struggling to hold its 50 day MVA (70.68). DHR tanked back through that level today, although volume on the selling remained light at 569k (avg. 1.1m). The stock has given up the 50 day recently, twice dipping near 69 before making a recovery over the 50 day. We will see what DHR does from here; although we could see a test of the 50 day, we are watching for strong selling volume to kick in and drive it down. There is support from recent lows (April and May) at 69. Target: 63
BUY POINT: 68.80 on above average volume. Stop: 71.75
POSITION: September $75p to buy (DHR UO).

AHC (Amerada Hess--$83.29; +0.67; optionable): Oil & Gas.
http://biz.yahoo.com/p/a/ahc.html
BACKGROUND: Last announced a split on 7-21-80. Base upon our research we are unable to determine the price at the time of the split announcement. The company has sufficient shares for a 2:1 split.
STATUS: AHC is in a pattern within a larger pattern. The larger pattern is a cup with handle dating back to May 2001, and the smaller pattern is a seven-week saucer (with a bit of a double bottom configuration). AHC made a strong move off of its 50 day MVA (77.30) a couple of weeks ago, completing the saucer, and now has pulled laterally into a handle-type consolidation. Volume has dropped off the last two sessions as the stock moves sideways and holds support at the left-side saucer highs near 82.50 (10 day MVA at 81.36). Holding existing positions taken on the initial move out of the saucer, and looking for new positions on another strong move. Target: 96.
BUY POINT: May take a few more sessions of consolidation. Over 84 on volume of 960k (avg. 644k; today up to 561k). Stop: 79
POSITION: Stock and/or August $80c to buy (AHC HP).

FITB (Fifth Third Bancorp--$65.86; +0.37; optionable): Regional bank
http://biz.yahoo.com/p/f/fitb.html
STATUS: Dropped hard Monday, gapping through the 50 day MVA (67.05) and continuing to sell on the day with strong volume. Tuesday brought a relief bounce, but it retreated to close off of its intraday high of 66.39, finishing with a loose doji. Unlike the last drop through the 50 day a couple of weeks ago, the selling this time had some strength behind it. The stock has some support here from its August high and April low, so we will watch for the bounce to fail and a drop through the support to set up the put. Initially targeting 62.50 (200 day MVA is at 62.32, with October and December highs), adjusting the target for existing positions as well, but we could get a more serious drop than that.
BUY POINT: A drop through 65.15 on continued strong volume (down to 2.1m today; avg. 1.75m). Stop: 68
POSITION: August $70p to buy (FTQ TN).

DRYR (Dryer's Grand Ice Cream--$43.47; -1.91; optionable):
http://biz.yahoo.com/p/d/dryr.html
STATUS: DRYR has been testing its 50 day MVA (44.86; now just below its up trendline from September) at its intraday lows, but today finally gave way and crashed through that support. The move also took the stock through its January-March highs at 44, although volume was not that severe (though up from recent sessions) at 140k (avg. 197k). Because of the below average volume, we will look for DRYR to test the 44 range or 50 day MVA, but watch for the failure and 'kiss goodbye' - higher volume selling back after being unable to hold a move back up. Target: 38 (December and February lows; 200 day MVA at 37.29)
BUY POINT: After a failed move on the 44-45 level, a drop back through 43.50 on above average volume. Stop: 46.
POSITION: July $45p to buy (QDF SI - no OI as of yet).

MHK (Mohawk Industries--$69.00; -0.80; optionable): Textile manufacturing.
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 2:1 split.
STATUS: A strong breakout move, but after pulling back to close off of its high of 70.60 on Monday, MHK came back to test the move today. Although we like for breakouts to run for more than one or two sessions, this was not a bad move, as volume was way down on Monday's selling (748k; avg. 641k), and MHK held over prior pattern highs at 58 (low today 68.25). We will see if it can hold 68 and set up the next phase of its move. Still targeting 79.
BUY POINT: After showing it can hold 68, a move back over 69.80 on increased volume. Stop: 65
POSITION: Stock and/or August $65c to buy (MHK HM).

End Part 2 of 3

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