stock watch, stock split

Begin Part 2 of 2

Support and Resistance

Nasdaq: Closed at 1562.56
Resistance: 1600 is some resistance. Then the second March down trendline at 1655 and the 18 day MVA (1655.52). The next March to April trendline now at 1680 and the February low at 1700. The 50 day MVA (1710.74) and the January/March 2002 down trendline is at 1755.
Support: 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 1040.68
Resistance: 1050 is some resistance. 1060 offers minor resistance after that from previous prices. The March/April down trendline at 1071, right at the February lows at 1074. The 18 day MVA (1076.67). After that 1100 and the 50 day MVA at 1093.96.
Support: There is possible support at 1000, but it is not much. The September low is 944.75.

Dow: Closed at 9709.79
Resistance: 9811, the April and May lows. The 200 day MVA (9885.73). The September 2000/February 2001 down trendline is at roughly 9980. The 18 day MVA (10,031.77), then 10,100. Then 10,250 to 10,300.
Support: 9500 to 9600 in the shelf of support from 9500 to 10,100.

Economic Calendar

Jun 03
Auto Sales, May (00:00):5.7M actual versus 6.3M expected and 6.3M prior.
Truck Sales, May (00:00):6.9M actual versus 7.4M expected and 7.5M prior.
ISM Index, May (10:00):55.7 actual versus 55.0 expected and 53.9 prior.

6-05-02
ISM Services, May (10:00): 56.0 vs 55.3 prior.

6-06-02
Initial Claims, 06-01 (8:30): 410K vs 410K prior.

6-07-02
Nonfarm Payrolls, May (8:30): 70K vs 43K prior.
Unemployment Rate, May (8:30): 6.1% vs 6.0% prior.
Hourly Earnings, May (8:30): 0.3% vs 0.1% prior.
Average Workweek, May (8:30): 34.2 vs 34.1 prior.
Wholesale Inventories, April (10:00): 0.1% vs 0.0% prior.
Consumer Credit, April (15:00): $6.0 B vs $4.6B prior.

SUBSCRIBER QUESTIONS

Q: I have enjoyed and profited from your service for several years and have a question. How important is it for a stock to reach the target volume or better on a BO play or even a play where you note the target volume? I've been following your alert service and note that up to 80% of the alerts do not reach the target volume even though they reach the BO point. I regularly calculate the % volume using the % of the day that has passed and that doesn't help much. Keep up the good work you are the only service I now use and find your analysis of the market and economic situation invaluable.

A: Your observations on the breakout are right on target: many times the price is met before the volume is met. As volume levels and intensity vary throughout a session it is often difficult to determine where the volume is exactly. It is easy at the end of a session or if there is an immense amount of early action on a stock. In most cases, however, it is relatively early in the session and the volume is decent but not flying. What do we do when the alert is hit? We look at the intraday volume and see if there is volume building on the move through the buy point. If we see that we will go ahead and enter into a position, but in this market we usually will not take a full position. We will take that position and then see what the volume is at the end of the session. If it is a good breakout, i.e., it holds the gains and volume is at or near our target (or blows it out on the upside) on that day, we will look at taking more positions late in the session. Or, we might wait until the next buy point, maybe after it rallies and then tests the 18 day MVA for the first time. Strong stocks will breakout and rally and then test the 18 day MVA; that is the next solid entry point. Thus we can work our way into a proven winner that is showing more strength than other stocks. That is a key in this choppy market.

THE PLAYS:

BONUS PLAYS:

CUB (Cubic Corp--$28.90; +1.89; optionable): Scientific & Technical instruments
http://biz.yahoo.com/p/c/cub.html
STATUS: One that we followed pre- and post-split as it made a remarkable run. After its very strong, abrupt post-split blast-off CUB has pulled back, pulling back on low volume last week to test the 50 day MVA (26.32). Today CUB made a strong bounce, running on sharply higher volume of 237k (avg. 111k). It closed just over the short-term MVA's (28.85), and we will look for a continued move up from here toward the high of 32.97. Target: 35
BUY POINT: Over 29.50 on continued strong volume. Stop: 27.53 (7%)
POSITION: Stock and/or October $25c to buy (CUB JE - 1 OI).

BVN (Compania De Mina Buena--$30.08; +0.23; no options): Gold mining
http://biz.yahoo.com/p/b/bvn.html
STATUS: We have seen gold stocks doing well in this economic environment, and BVN has steadily trended up, making solid bounces from its 50 day MVA (currently 27.80) every few months since breaking back over that level in December. BVN made a very nice move up from the 50 day in May, topping out at 32 before pulling back last week. With lower volume selling it has held the 10 day MVA (29.92), today showing a doji on lower volume. Looking for a bounce. Target: 35
BUY POINT: Over 30.50 on above average volume (189k; today down to 152k). Stop: 29
POSITION: Stock only

LZB (La-Z-Boy--$26.91; -1.09; optionable): Home furnishings
http://biz.yahoo.com/p/l/lzb.html
STATUS: Put. A great breakout move in February followed by a break from a consolidation in April put LZB at a new high (30.94), but after lazily pulling back to the 50 day MVA (28.27), LZB is struggling to hang on. It is in something of an elongated head & shoulders, having bounced from the March consolidation lows at 27 last week to form the right shoulder. It gapped up over the 50 day MVA and reversed on huge volume last Thursday, and since has pulled back on continued strong volume, today closing below last week's lows and in the range of the March consolidation lows. Breaking down, and we are looking at a put down to a target of 23.50 (200 day MVA at 22.85).
BUY POINT: From here or after a bit of a test toward 28, a drop through 26.50 on continued strong volume (up to 351k today; avg. 207k). Stop: 29.50
POSITION: July $30p to buy (LZB SF - 6 OI, delta -.68).

PRE-ANNOUNCEMENTS: WFMI and HSIC are still hanging in there. MUR gapped down with a high volume doji over support, and we could see it make another strong move.

HUG ($39.72; -0.03): Working on a new announcement date. Another doji over the support of the 10 day MVA (39.41, with the small double bottom pattern center), with volume again rising Monday (210k; avg. 181k). Looking for a bounce, with the buy point a move over 40.55 on increased volume, stock and/or October $35c to buy (HUG JG - No OI as yet).

NYT ($49.74; -0.53): Forecast to announce a split the week of June 17 in conjunction with a board meeting or on 7-16-02 before the market opens with earnings. Pulled back with the market but held over the 10 day MVA (49.62), and volume was down on the day's selling (453k; avg. 484k). Holding up well after breaking from its recent lateral consolidation, and relative strength has broken out. Looking for a move over 51 on increased volume of 700k, with stock and/or October $45c to buy (NYT JI - 89 OI).

MUR ($90.45; -1.99): MUR formed a head & shoulders pattern since late March. It did not break down in mid-May, instead bouncing from the neckline at 92, but it could not clear the short-term MVA's (then 94, now 93). After a failed move on those levels Friday, today MUR gapped back, closing with a doji just above its May intraday low at 90. Looking for a breakdown, either from here or after another test toward 92. On a drop through 90 on average or better (281k, today 153k) volume, July $95p to buy (MUR SS - 24 OI).

PRE-SPLITS: CPS is trying to move, but could need another quick pullback first.

FOSL ($30.25; -0.71): Splits 3:2 effective 6-10-02. Gapped back through the 18 day MVA (30.79), but held on with a doji as volume spiked up to 187k (avg. 127k). The doji held over the early May high at 30, and this could be the last bit of selling before FOSL makes another run going into the split. The aggressive can look at a bounce over 31.10, with September $30c to buy (QFS IF - 60 OI).

CONTINUING CANDIDATES: PII and MGA made drops after the weak tests of resistance. TGH is holding up and could create something to the upside. KLAC is one we will watch for a test of broken support and then look for a continued fall.

PII ($66.70; -2.84): Made the drop back through the put buy point, although volume was down on the selling today (131,500; avg. 174k). It tapped just below the recent low (66.25) today, and we could see a bit of a test back up, especially if we get a relief bounce in the market. That is fine, as we expect that move to fail, and look for another drop by PII with stronger volume. On the move through 66.20 on average or better volume, July $70p to buy (PII SN - 20 OI).

POST SPLITS: FAST made the move down. Watching for AMAT and GTK to test broken support and set up a put.

FBC ($20.66; +1.76): Made a big bounce on the split! FBC had stair-stepped it back to the 50 day MVA (18.77) after its great April run, and today blasted back up on a bounce, moving over the recent resistance of the short-term MVA's (19.91) on solid volume (188,500; avg. 75.7k). A chance for new or additional stock positions on a continued move up over 21.

MKC ($26.25; -0.01): Still looking good, moving in a handle-type consolidation to something of a double bottom (also resembles a pennant). Today volume remained light (224k; avg. 259k) as MKC tapped down to 25.90 but recovered to again close over the 18 day (26.08). Relative strength has broken out, and MKC shows good money flow. On a move over 26.85 on volume of 360k, stock and/or September $25c to buy (MKC IE).

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.

stock watch
stock split