us stock market, stock watch

Begin Part 2 of 4

BEST PLAYS: Besides the plays set forth below best plays, there are some other stocks that also look good. These include Pre-Announcements MIKE and CORS, Pre-Splits looking to pullback including STT, BAX, PKI and SDS, Continuing Candidate ASFC, and Post-Splits EMLX and SEBL (looking to pull back before a further move, but we need to watch them).

PRE-ANNOUNCEMENT BEST PLAYS:
1) FHCC - Announced a split!
2) ESRX - Forecast for Wednesday
3) CEFT - A strong run into Thursday's forecast

FHCC (First Health Group--$51.85; -1.92; no options): Got the split announcement after hours today!
http://biz.yahoo.com/f/fhcc.html
BACKGROUND: Last announced a 2:1 split on 5-19-98 at a stock price of $29.57. The annual shareholder meeting was on 5-16-00 at which time no additional shares were authorized. The next annual shareholder meeting is scheduled for 5-22-01.
STATUS: Announced after hours and made a bit of a pop after hours. The stock recently broke from a cup pattern (dating to December), but after gapping up to 55.15 the stock has come back to test that break twice. After a decent move up Monday the stock pulled back today on heavy volume (1.07 million; average 412,200). The high volume selling is not encouraging, but it closed at the 10 day MVA, and the announcement could provide the impetus for a move back up over the recent closing high of 53.77.
BUY POINT: On a strong move back up on continued strong volume.
POSITION: Stock.

ESRX (Express Scripts--$93.36; +0.86; optionable): Forecast to announce a split on 5-23-01 in conjunction with its annual shareholder meeting.
http://biz.yahoo.com/p/e/esrx.html
BACKGROUND: Last announced a 2:1 split on 10-12-98 in conjunction with a board meeting. The stock price was $80. Prior to that announced a split on 5-25-94 in conjunction with its annual shareholder meeting. The stock price was $80. The annual shareholder meeting is scheduled for 5-23-01 at 9:30 CT at which time no additional shares will be authorized. The company has sufficient shares for a 2:1 split.
STATUS: Looking tomorrow at a split, and the stock is well within its range. The stock was moving in a cup (with a small double bottom configuration) in March and April, but the handle to that pattern has extended almost as long as the cup. The handle itself has formed a small double bottom and has broken out over the middle of that configuration. Volume was up on today's move at 765,600 (average 770,500), and the high in the handle (the intraday spike in April) is 96.34. We will see if the stock can continue the move on increased volume, looking for the announcement to give it a boost.
BUY POINT: A continued move up on increased volume, particularly before the scheduled shareholder meeting. Making a good move.
POSITION: Stock and/or August $90 calls to buy (XTQ HR - low open interest).

CEFT (Concord EFS--$49.65; +0.65; optionable): Forecast to announce a split on 5-24-01 in conjunction with its annual shareholder meeting.
http://biz.yahoo.com/p/c/ceft.html
BACKGROUND: Last announced a 3:2 split on 8-26-99 at a stock price of $37. Prior to that announced a 3:2 split on 5-14-98 in conjunction with its annual shareholder meeting. The annual shareholder meeting is scheduled for 5-24-01 at 9:30 am CST at which time additional shares will be authorized.
STATUS: Tapped up to a new high today at 50.10 before closing a bit lower. The new high obviously has the stock in split range, but it has made quite a move over the last couple of weeks from the 42 level. Volume has not bee especially strong, and on today's move it managed to hold just above average at 3.7 million (average 3.8 million). At resistance and could give us a pullback here, so we will see where it catches support (the recent highs at 47.50 (10 day MVA at 46.61). After a pullback Wednesday, we will see if it can make a move with a split announcement or if it needs to consolidate a bit before making a move. Split announcers that have made strong moves sometimes settle back to resistance before making a strong move after an announcement.
BUY POINT: A move up on increased volume after a pullback that holds the 47 range. Breakout: over 50, but we may not get enough time if it pulls back first.
POSITION: Stock and/or August $45 calls to buy (SQL HI).

PRE-SPLIT BEST PLAYS: Remember, we try to grab these 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. Not huge money, but it can be very steady.
1) DGX - Made a nice pullback
2) BAX - Still strong after the breakout
3) FIC - Nice consolidation in a flying plateau

DGX (Quest Diagnostics--$122.89; -2.03; optionable): Health services. Splits 2:1 effective June 1.
http://biz.yahoo.com/p/d/dgx.html
STATUS: Made a great move last week off of its 18 day MVA (118.76), but after hitting up to 133.50 Friday the stock has pulled back, but it has been an orderly, low volume (down to 299,000 today; average 363,000) move back. It is currently holding the 10 day MVA (122.08), and we will see if it can hold here and make a move back up.
PLAY: After holding the 10 day, a strong move back up, with stock and/or June $120 calls to buy (DGX FD).

BAX (Baxter International--$98.40; +0.24; optionable): Health Services. Splits 2:1 effective 5-31-01.
http://biz.yahoo.com/p/b/bax.html
STATUS: Broke from its ascending wedge pattern last week and made another good run up Monday, although on low volume. Today saw a doji as the stock rested on lower volume of 842,700 (average 1.5 million). If this is just a rest the stock could power on forward, and is a buy on the breakout up to 100.48, but we also could see a drop back that we would look to test the breakout at 96 (with the 10 day MVA) for a move back up as we go toward the split.
PLAY: From here A move up with stronger volume, with stock and/or July $95 calls to buy (BAX FS). Pullback A move up after a successful test of the breakout, with stock and/or July $90 calls to buy (BAX FR).

FIC (Fair Isaac--$74.22; +0.36; no options): Splits 3:2 effective June 4.
http://biz.yahoo.com/p/f/fic.html
BACKGROUND: On 6-25-95, FIC issued a 100% stock dividend equivalent to a 2 for 1 split. The price at the time of the dividend was $56. The annual shareholder meeting was held 2-6-01 at 9:30 PST. Authorized shares were not increased, but the company has sufficient shares for a 2 for 1 split.
STATUS: Business services. Has recovered from a brief dip back to its 18 day MVA (71.46) and continues to move laterally in its flying plateau. The stock made a slight move off of the 10 day MVA (73.05) Monday, but could only manage a doji today as volume remained quite low (69,800; average 80,500). It could test the 10 day MVA again, but we are looking for a strong move out of the pattern. On a move, we will diligently exercise discipline in protecting profits, as it has made quite a run.
PLAY: A move over 75 on above average volume. Stock only.

CONTINUING CANDIDATE BEST PLAYS:
1) CBH - Solid breakout
2) OMC - Got some volume
3) KMP - Looking for one more solid move
4) BBT - Wanting to break over recent highs
5) GENZ - Battling back, but could test back before continuing

CBH (Commerce Bancorp--$72.70; +1.02; optionable):
http://biz.yahoo.com/p/c/cbh.html
BACKGROUND: Last announced a 5 for 4 split on 6-29-98. The stock price was $54.63. The annual shareholder meeting was on 6-20-00 at which time no additional shares were authorized. The company has insufficient shares for a 2 for 1 split.
STATUS: Finally broke out Monday, making a solid move up and continuing up today, with the kind of volume we have been looking for but which CBH had not been giving us. The break was from a cup with handle pattern, with the high in the handle at the levels of the high in the left side of the cup, at 70.40. Still a buy up to 73.92, and we are looking at a breakout target of 80.
BUY POINT: A continued move up from here on strong volume (up to 269,800 today; average 160,400).
POSITION: Stock and/or June $70 calls to buy (CBH FN).

OMC (Omnicom--$96.23; +0.42; optionable)
http://biz.yahoo.com/p/o/omc.html
BACKGROUND: Last announced a split on 12-16-97 at stock price of $70. The annual shareholder meeting is scheduled for 5-22-01 at 10:00 ET at which time no additional shares will be authorized. The company has sufficient shares for a 2:1 split.
STATUS: No announcement today, but the stock finally got some volume behind it. Strength had been lacking on the stock's recent run up out of its cup with handle (and over the high in the left side of the pattern, at 95.45). Finally a solid move, encouraging with the volume.
BUY POINT: Aggressive A move on continued strong volume. Pullback If we get a lower-volume pullback, we will look for it to hold the 94 level for a move back up on increased volume. .
POSITION: Both buy points Stock and/or July $90 calls to buy (OMC GR).

KMP (Kinder Morgan--$72.22; -1.18):
http://biz.yahoo.com/p/k/kmp.html
BACKGROUND: Based upon our research it does not appear that KMP has ever split its stock. KMP is a master limited partnership and therefore does not have annual shareholder meetings.
STATUS: Pulled back today on lower, below average volume, revisiting its 10 day MVA (71.81). The stock is on a continuing move up along that MVA since pulling back from its initial run out of its saucer pattern. It was a healthy pullback to support, so we will see if it can make another move. However, it is in the midst of its fourth move along this uptrend, and we are especially careful on a fourth move. Consequently, we are diligently protecting positions. Still shows solid relative strength, money flow and buying.
BUY POINT: A move up from here on increased volume (133,000 today; average 131,000). .
POSITION: Stock and/or September $70 calls (KMP FN).

BBT (BB&T--$37.01; +0.56; optionable): Banking. Did not get an announcement with earnings.
http://biz.yahoo.com/p/b/bbt.html
BACKGROUND: The company has declared 21:20 splits in 1996 and 1997. The annual shareholder meeting was on 4-25-00 at which time no additional shares were authorized. The company has insufficient shares for a 2 for 1 split, but just enough for a 3:2 split.
STATUS: Is back in the range of its January-February lateral consolidation, and is back near the highs in that range. The stock made a brief run back to the 18 day MVA (36.27), but today bounced back up again, closing right at the recent highs. Encouraging also is the volume that kicked in, at 1 million (average 804,000). We will see if it can finally make a strong move through these levels.
BUY POINT: A move over 37.25 on increased volume.
POSITION: Stock and/or June $35 calls to buy (BBT FG).

GENZ (Genzyme--$109.46; +0.52; optionable):
http://biz.yahoo.com/p/g/genz.html
BACKGROUND: Last split a 2:1 in July 1996, at a price of $47. The annual shareholder meeting on 5-25-00 at which time no additional shares were increased. The company has sufficient shares for a 2:1 split.
STATUS: Biotechnology. GENZ is finally making a move back up after its recent drop on the announcement that it was issuing some convertible notes. The stock found support last week at the 100 level, and now appears to have support at its short-term MVA's (10 and 18 day MVA's at 106.42 and 105.17, respectively). It had recently broken from a cup pattern, and now is again flirting with the breakout high at 111.50. Today the stock slowed to a doji after it made a strong move up Monday, and we will see if it can power up after this rest or if it will test the 10 day MVA first.
BUY POINT: From here A move over 111.50 on above average volume (2.8 million; today 2.2 million). Pullback After a low volume pullback that holds the 10 day MVA, a run back up on increased volume.
POSITION: Both buy points Stock and/or July $105 calls to buy (GZQ GA).

POST-SPLIT BEST PLAYS:
1) BRCD - Looking for a pullback and a surge back up
2) CHS - Looks good on the pullback

BRCD (Brocade--$52.39; -0.87; optionable (UBF): Telecom
http://biz.yahoo.com/p/b/brcd.html
STATUS: BRCD has made a great move, running up again Monday. It is now representative of several stocks that are on the report that showed dojis or loose dojis today, and look primed for a pullback (these include EMLX, SEBL and some others). These are still good plays but we need to wait for the move back, watching for it to hold the 50 level (or perhaps as far back as the 10 day MVA, at 46.70). From there, in a resumption of the market rally we can look at a move back up on increased volume (down to 15.4 million today; average 15.5 million).
BUY POINT: A move up on increased volume after a lower-volume pullback that holds the 47-50 range, with stock and/or July $45 calls to buy (UBF GI).

CHS (Chico's Fashion--$34.26; +0.56; optionable): Split 3:2 effective May 17.
http://biz.yahoo.com/p/c/chcs.html
STATUS: Made a solid move going into the split and on the actual split last Thursday the stock gapped up to a doji. That is a clear topping sign, and the stock pulled back the last three sessions, moving on lower volume but holding over its gap-up point of 33.32. Today the stock showed another doji as volume dipped to 340,700 (average 525,600), and we will see if it can hold here and make another move up off of this pattern. The stock has made three solid moves up along its current uptrend (the first move being a break from a saucer pattern), so we will be ready to get in but very protective of our gains on a move. Recent high is 36.70.
BUY POINT: Aggressive A move up from here on increased volume near the average.
POSITION: Stock and/or August $30 calls to buy (COJ HF).

End Part 2 of 4

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