stock split, stock recommendation

Begin Part 3 of 3

POST-SPLITS BEST PLAYS:
1) WLP - Test of the breach and ready to drop
2) STZ - Falling after the test

WLP (Wellpoint--$67.80; +0.66; optionable): Health care plans.
http://biz.yahoo.com/p/w/wlp.html
STATUS: WLP was downgraded Monday took it on the chin, gapping down to its 50 day MVA (68.92) and then continuing down on big volume. Today WLP tested the 50 day, also tapping Monday's low at 66.15 before showing a loose doji on decreased, continued strong volume (2.74m; avg. 1.16m). After this test, looking for a strong drop for a put play. Target: 60.50 (200 day MVA at 59.81).
PLAY: A drop below 66.15 on continued strong volume, with July $72.50p to buy (WLP SV - 38 OI). Stop: 69.75

STZ (Constellation Brands--$27.40; -0.53; optionable): Wineries & distilleries. Split 2:1 effective 5-14-02.
http://biz.yahoo.com/p/s/stz.html
STATUS: After gapping down hard on the split, STZ has been struggling with the 50 day MVA (28.11). Monday STZ gapped back over that level but retreated to close back below that former support, and today after gapping up to the 50 day, the stock dropped back again, with volume down but strong at 593,600 (avg. 323k). Looks like it could give in to selling and drop. Targeting 24 (200 day MVA at 23.50).
PLAY: Through 27 on continued strong volume, with July $30p to buy (STZ SF). Stop: 28.80

WATCHLISTS:

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

MEG ($65.55; -1.11): Forecast to announce a split on 5-24-02 in conjunction with its annual shareholder meeting. Volume remains quite low and below average, as MEG tested back toward the recent lows today (64.77). The 50 day is at 64.56, so we will see if it can bounce. A shareholder meeting, so up to the time of the meeting the aggressive can look at a bounce back over 67.25 on average or better volume (80k), with stock.

XL ($85.95; -1.92): Well, we were looking for a put play with XL, but instead of a test of broken support or even a steady drop, XL received a downgrade and gapped well below our buy point, opening back at 85.50 and then pushing up a bit. We will see if it bounces, but a bit out there to chase for new positions.

EASI ($45.40; -0.86): Forecast to announce a split the week of 5-27-02 with earnings. At this time, the company cannot confirm this date. Volume has fallen off since Friday's strong test through the 50 day, and with today's tombstone doji, EASI could be ready to make another test of that level. Not promising going toward the forecast.

BRL ($69.90; -1.35): BRL has made a strong move, running back over its down trendline and 50 day MVA (67.71), making a cup. Today it reversed on light volume (307k), and we will see if it can form a handle.

BMS ($50.82; -0.33): We are researching a date. Volume has fallen off and is below average as BMS made a weak push up toward 52, but could not hold it and fell way back to close. Still riding positions toward the target of 49.50.

EDMC ($40.81; -2.09): Researching a date. Fell out of the ascending wedge today, and gave up the 50 day (41.57) as volume picked up a bit, but did not quite hit the average. We will see where EDMC catches itself, or if it sets up a put.

TFX ($58.00; -0.44): Forecast to announce a split on 7-17-02 with earnings. The company has not confirmed a time for the release. Tried to continue moving today, but after hitting an intraday high of 59.35, and despite the sharply increased volume of 231k, TFX could not hold on and fell back to close at the prior pattern highs. Riding positions as long as support holds, and looking for TFX to set up another run.

PRE-SPLITS WATCHLIST: Watching ZRAN (5/23), GTK (5/24), MI (6/15), SU (5/23), RNR (5/31), SRCL (6/1), ESI (6/6), FBC (6/21), and UPC (6/7).

FBC ($29.99; +0.11): Splits 3:2 June 3. After breaking out of a shallow cup in early April, FBC made a very nice run up the 10 day before shooting up to a high of 34.13 in early May. Its testing that move now, pulling back toward 29 and closing with a doji today on lower, but still strong, above average volume of 107,000. Looking for it to bounce from here, with the aggressive play a move over 31. Stock only.

GG ($21.95: +0.95): Splits 2:1 May 29. Opened the week with a terrific breakout on huge volume that continued today. Too extended to chase at this point.

IFIN ($74.25; -1.68): Splits 2:1 effective 6-17-02. Gave up the short-term MVA's today (18 day at 75.68), and sold back through the 50 day (74.57) as volume shot up. IFIN has a habit of dipping hard below the 50 day and rebounding sharply, so we will keep an eye on it and see if it can recover.

CPS ($56.94; -1.41): Splits 4:3 effective June 7. Fell out of the handle today and briefly tested back through the 50 day (56.75). Was promising, now we will see if it can hold on and set something up.

PNRA ($67.70; -0.82): Splits 2:1 effective June 25. PNRA dipped back a bit more today, but held the recent support of the 67.50 level to close. Holding positions as long as support holds and waiting for the next run.

COCO ($55.11; -0.39): Splits 2:1 effective 5-28-02. Didn't get the bounce. Instead, COCO tested back toward the 54 level (50 day at 53.18) and pulled up to close on increased, but still below average volume (for the second time this month). We will see if it can hold on and set up a stronger move.

RYL ($109.32; -2.53): Splits 2:1 effective 5-31-02. Trying to hold the 18 day, but we are cautious of a drop back toward the 50 day at 102.57.

SRCL ($70.00; -1.73): Splits 2:1 effective June 1. Still holding the rather choppy consolidation, although precariously, as the overall pattern is edging slightly back. Today SRCL gave up the 18 day (70.34), as volume shot up. If it can't hold here, it may need to test back toward the 50 day (66.87).

PMI ($84.96; -1.83): Splits 2:1 effective June 18. Gave up most of the recent gains today, gapping back to open and selling back hard toward the 18 day at 84.40 (early May consolidation highs at 85.15). Not looking to ride on a breach of the 18 day, protecting positions.

YUM ($64.94; -0.40): Splits 2:1 effective June 18. Volume picked up but remained below average as YUM sold back a bit today. We just haven't seen any momentum since last week's breakout, so we are carefully watching support and stops, still targeting 68 as long as support holds.

STJ ($83.92; -0.08): Splits 2:1 effective June 29. Made a weak push up toward pattern highs today (85-86), but fell back to close with a loose doji over the 10 day (64.38). Like the hold of support, we need some volume (900k) for aggressive positions on a move over 85.20. July $80 calls to buy (STJ GP). Target: 93

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 ASD, AZO, BBBY, CYN, DHR, DIAN, DRYR, ETH, GOSHA, KLAC, KRB, MGA, MMM, MTG, PII, RCII, RUS, STI, TGH, TGIC and THC.

ACDO ($53.04; -0.02): After falling steadily since the beginning of May, ACDO is resting a bit at 52.50 level as volume has dropped way off. Off of today's doji it could bounce toward 55, but still looking for stronger selling to kick back in and on a solid move down through 52.45 on increased, above average selling volume (728k), we will look at August $60 puts to buy (DZU TL - only 2 OI, delta -.64; the 65 strike has 76 OI, delta -.74, but much more expensive).

CAKE ($40.00; +0.04): Holding over the 50 day (39.30), so we will see if it continues to hold and sets up a move.

ETN ($84.05; -1.16): Has pulled back to the 50 day (83.53). Not much promise at the moment, but we will see how it handles the support.

EXPD ($58.16; -0.32): Fell from its promising test of its down trendline, now trying to hold onto its 50 day MVA (58.31). We will see if it can recover.

GNSS ($26.60; -0.63): Moved back below the 50 day MVA (27.28), but selling volume was low at 1.5m. Stopped out of our aggressive positions, but we will see if GNSS can make a recovery over the 50 day and set up a move. It is deep in its base and trying to build the right side, and could produce some moves, but the plays will be aggressive.

INVN ($22.71; +3.42): Suddenly reversed, approaching our stop point (23) on huge volume today (200 day ahead at 23.72). Read to exit.

KSS ($75.90; -1.72): No announcement, and KSS pulled back today, erasing much of Friday's gains. The selling was on lower volume (1.72m), but it closed just below recent highs at 76. Looking for a hold here, and if it can, we will look at a strong move back up to trigger new positions.

POST SPLITS WATCHLIST: Watching ABM, ANN, CHS, DF, FAST, FULT, ICUI, MCHP, MKC, OPTN, PFCB, SONC, UOPX, and WTNY.

ACS ($54.78; -1.12): Pulled back today, selling on lighter volume. We will see if it can hold the 54 level to continue the strength from last week's powerful run.

APOL ($36.65; -0.10): Has pulled back again to the 50 day MVA (35.93), tapping that level at its low today but recovering. Not liking the two quick tests of the 50 day, and are wary of a breach.

AMAT ($26.31; -0.47): Having trouble at it recent highs, although still holding up with some intraday volatility. With the solid earnings numbers behind it, looking for AMAT to hold on at 26 and set up another move, but wary of strong tech selling.

BBY ($47.22; -1.44): Split 3:2 effective 5-13-02. Dropping back hard, having been unable to break through the 50 day. Riding toward the target of 45.25.

CHBS ($38.55; -2.19): Was in a nice little consolidation, but tanked back today on stronger volume. Could be in for a test of the 50 day (36.53).

JEC ($39.48; -1.06): Split 2:1 April 2. Did not get the bounce off the dojis last week, and today gave up the 18 day MVA (40.28). The 50 day is below at 38.34.

LLL ($63.12; +0.37): Splits 2:1 effective 5-21-02. Fell out of the ascending wedge pattern Friday, holding under the 18 day (63.72) with a doji today. We will see if holds through the split and sets up again.

PRHC ($23.50; -0.16): Split 3:2 effective 5-1-02. Still holding the 50 day (22.89), but struggling to move, held back by the short-term MVA's (23.65).

WTSLA ($21.91; -0.59): Split 3:2 effective 5-10-02. Could not hold over the 50 day MVA (22.53), dropping back today on lighter volume. The aggressive play is on a drop through 21.50 with volume of 400k, with the drop through recent lows on a move through 21. July $25 puts to buy (WTQ SE - no open interest as yet).

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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