stock split, stock recommendation

Begin Part 2 of 2

TEAM TRADES

HLT broke through its 50 day MVA Tuesday, continued down today. It dropped through the buy point of 14.30 and rebounded, testing the open at 14.45. We were looking for a drop back again, and HLT started back down a bit more than an hour into the session. We looked at July 17.50 and 15 puts, but the 15's were looking better at the time, showing a delta of -.60 and just moved to 1.25 x 1.30 as HLT dipped through the prior morning low at 14.25. We put in the order at the ask and was taken out as HLT held static for about 10 minutes before making a strong drop through 14. It recovered a bit but looked to be dropping back on strong volume when the bin laden news hit, driving it up to close in the range where we bought the options. It could test a bit higher, but we are looking for a failure of the move up and a continuation down.

THE PLAYS: THC announced a stock split!

BONUS PLAYS: WY made a bit of a push today, but the increased volume was still below average. MAN and DNR are still set up for their upside moves, and SKX and EME made their tests of former support and are set up for puts.

MOLX (Molex--$37.42; -0.03; optionable): Electronics
http://biz.yahoo.com/p/m/molx.html
STATUS: MOLX is building the right side of its base (prior 2000 highs at 63). In March MOLX broke over its 200 day MVA, and after a test of that level (32), the stock made a strong move this month, hitting a high of 39.61. It has pulled back to rest, testing its March high and 10 day MVA (37.10). A nice test, and with today's doji over support with increased volume (811k; avg. 761k), looks like it is ready to move again. Strong money flow and buying. Target: 45
BUY POINT: Over 38 on increased volume. Stop: 35.90
POSITION: Stock and/or August $35c to buy (OXQ HG).

FNF (Fidelity National--$28.70; +0.24; optionable): Surety & title insurance
http://biz.yahoo.com/p/f/fnf.html
STATUS: 17 month cup with handle. A solid April move took FNF to 30.50 before pulled back into the current handle consolidation. A nice pattern, with overall solid price/volume action showing accumulation, and nice, low volume as the handle has formed, pulling back gradually to the support of its 18 day MVA (29.12). Today volume spiked above average (866,400; avg. 512k) for the first time in a couple of weeks, with FNF testing the 18 day at its low before recovering. Looking for a strong move up and breakout. Target: 35
BUY POINT: Aggressive: Over 29.50 on continued strong volume. Stop: 27.90. Breakout: 30.60 on minimum volume of 770k. Stop: 28.46 (7%)
POSITION: Stock and/or October $27.25c to buy (FNF JY).

CBE (Cooper Industries--$40.70; -0.23; optionable): Conglomerates
http://biz.yahoo.com/p/c/cbe.html
STATUS: Put. Since breaking from a tight, lateral consolidation in April, CBE has traded in a range, holding the prior pattern highs and the 50 day MVA (42.39). CBE dropped hard through the 50 day and the 200 day (41.48) with a volume spike Tuesday. It tested the 200 day today, but pulled back to close with a loose doji, volume falling but remaining strong at 1.24m (avg. 900k). We could see a further test of the 200 day, and look for a drop through 40 for a put play down to 34.
BUY POINT: Below 40 on continued strong volume. Stop: 43
POSITION: July $45p to buy (CBE VI).

PRE-ANNOUNCEMENTS: LSTR dipped back through support, and may be bound for the 50 day, so we are protecting positions. MEG is still not showing much going toward the split, but our eyes are open for a run. XL and BMS continue down, and TFX is holding support and looking interesting.

KSWS ($45.09; +0.70): Forecast to announce a split on 5-23-02 in conjunction with its annual shareholder meeting. Moved up again today from the support of its 50 day MVA (43.51), but volume was weak and it made no attempt at the short-term MVA's (45.38), running on lower, weak volume of 45,800 (avg. 93.5k). Still looking at a buy point of 46 on volume of 110k or better, with stock and/or July $40 calls to buy (SWU GH - 46 OI).

WEN ($37.40; -0.09): We are looking at a wildcard date on 5-23-02, the date of a WEN investor conference. Still moving on low volume in a pennant, today testing 37 at its low but recovering to show a doji just under the recent support of the 18 day MVA (37.53). Still could make the move, and an announcement could certainly be a catalyst to a breakout. 38.60 on volume of 1.1m, with stock and/or September $35 calls to buy (WEN IG).

ABC ($77.80; +0.53): We are researching a forecast date. Holding steady, moving laterally on low volume (707k today; avg. 1m) after a nice move up to close last week. Looks solid, and watching for a buy point of 78.71 on increased volume of 1.4m, with stock and/or August $75 calls to buy (ABC HO).

PRE-SPLITS:

FOSL ($31.33; -0.15): Splits 3:2 effective 6-10-02. Holding steady over the 10 day MVA (31.14) and prior highs, showing a second consecutive doji Wednesday. Still solid on the test of its big move on the split announcement, and we are looking for a move over 32, with September $30c to buy (QFS IF - 60 OI).

BER ($59.85; -0.04): Splits 3:2 on or about July 3. Holding support over the short-term MVA's (18 day at 59.36), showing its second consecutive doji today. BER formed an ascending wedge with its bounces from the 50 day MVA (58.17) in late April and last week, making highs near 61. Looking good if it can hold here. Over 61.20 on volume of 160k, with October $55c to buy (BER JK - 62 OI).

CPS ($58.66; +1.72): Splits 4:3 effective June 7. After falling out of its handle, CPS gapped below the 50 day MVA (56.83) today and then reversed, running hard to the upside on big, much stronger volume (356k; avg. 216k). An aggressive play from here, but we let these pre-splits tell us when to jump in, and ride them until they tell us to get (by showing topping signs). The recent high from last week is 60.40, with the April high at 61.80. On a move over 59.20, July $55c to buy (CPS GK).

CONTINUING CANDIDATES: ACDO heading down on the put, as did DHR. DRYR still could test and set up a put. AHC, ETN and MHK are still looking good for the upside.

THC ($70.56; -0.84): Announced a 3:2 stock split today after the close! THC has made a great run, and has recently pulled back to test its 50 day MVA (69.80), pulling back slightly toward that level today on light volume. We will see if the news gives THC a pop that can propel it up for another move. Aggressive: Over 72 on above average (1.8m; today 1.18m), with stock and/or August $70c to buy (THC HN).

AZO ($76.67; +3.97): Has dipped back Tuesday going into earnings, but an announcement that was solid and beat the street propelled AZO back up on a gap and run. Volume was massive at 4.4m (avg. 1m), and it is a momentum play from here, with the high ahead at 80 (from the December left side high of the cup, and its April handle high). Aggressive: Over 77.50 on continued strong volume, with September $75c to buy (AZO IO).

POST SPLITS:

WLP ($68.04; +0.24): Still showing a put, today moving up slightly on lighter volume (1.15m; avg. 1.19m), closing with a doji under the 50 day MVA (68.89), which it breached with a strong drop Monday. Looking for a drop below 66.15 on increased volume, with July $72.50p to buy (WLP SV - 38 OI).

STZ ($27.84; +0.44): Split 2:1 effective 5-14-02. Made a push back up today toward the 50 day MVA (28.10), but as we would want when setting up a put play, volume was down at 267k (avg. 330k). We were looking for the weak test, and for positions we want a drop through 27 on increased volume (average or better), with July $30p to buy (STZ SF).

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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