us stock market, stock watch

Begin Part 2 of 4

THE PLAYS: KG announced a split today!! Also, we saw monster moves and breakouts all over the report, including FITB, CEFT, DGX, CAKE, BAX, and continuing moves from LOW and ASFC!

BONUS PLAYS:

BGEN (Biogen--$66.80; +2.62; optionable (BGQ): Biotech
http://biz.yahoo.com/p/b/bgen.html
STATUS: Made the buy point of 66.13 as volume shot above average to 5 million (avg. 3.4 million), breaking out of the ascending wedge pattern. We are looking for a continued move here; the stock remains within our 5% limit for buying on a breakout. Looks good target is $75.
BUY POINT: A buy on the move up to 69.44 on continued strong volume. Stop: 62.12 (50 day MVA, 62.83).
POSITION: Stock and/or October $60 calls to buy (BGQ JL).

IDPH (Idec Pharm--$68.61; -2.23; optionable (IHD): Biotech
http://biz.yahoo.com/p/i/idph.html
STATUS: Volume remains high (4.4 million; avg. 4 million) as the stock pulled back, testing the 18 day MVA on the low of 67.34. We are looking for a bounce back up from a re-test of that support, for a strong move back up toward breakout. The stock is in the double handle to its cup base. Target: $83-86.
BUY POINT: Aggressive: On a strong bounce from 67.72 (18 day) on rising volume. Stop: 63.
POSITION: Stock and/or October $60 calls to buy (IHD JL).

PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: Got the announcement from KG!

BEST PLAYS: Besides the plays set forth below best plays, there are some other stocks that also look good. These include Pre-Announcement ADVP (a put), Pre-Split LOW and new play, Continuing Candidate MERQ (a put), and Post-Split CAKE.

PRE-ANNOUNCEMENT BEST PLAYS:
1) FITB - No announcement, but broke out!
2) KG - Got the announcement!
3) CEFT - Broke out!
4) FISV - Still looking solid
5) BMET - Ditto
6) FDC - Looking for a 50 day MVA bounce

FITB (Fifth Third Bancorp--$62.65; +2.41; optionable): No announcement with the board meeting, but the great breakout move we were waiting for! We are still looking for an announcement with earnings, but we are looking ahead to earnings on 7-16-01 before the market open.
http://biz.yahoo.com/p/f/fitb.html
BACKGROUND: Last announced a 3:1 split on 6-20-00 at a stock price of $61. The annual shareholder meeting was on 3-20-01 at which time authorized shares were increased.
STATUS: Patience is key when you have a stock that is forming a nice, tight handle consolidation, and today it paid off as FITB blasted up from support (18 day MVA at 59.57). The stock broke out of the cup with handle with outstanding volume (5.52 million; average 1.8 million), making a new high in the process (handle high had been 61.11). Still a buy up to 64.17. Target: 68-70.
BUY POINT: A buy on the breakout up to 64.13, but there may be a bit of lower volume profit-taking first followed by more of a move higher. That is where we will look for more positions. Stop: 58.26.
POSITION: Stock and/or August $55 calls to buy (FTQ HK).

KG (King Pharmaceuticals--$55.53; -1.03; optionable): Announced a 4:3 stock split today, one day ahead of schedule!!
http://biz.yahoo.com/p/k/kg.html
BACKGROUND: Last announced a 3 for 2 split on 6-2-00 in conjunction with a board meeting. The stock price was $54. The annual shareholder meeting is scheduled for 6-22-01 at 3:00 ET at which time no additional shares will be authorized. The company has sufficient shares for a 3 for 2 split.
STATUS: Got the announcement, but as often happens after a stock has made a strong run, there was no immediate run on the news. In fact, the stock has run up the last few months in the right side of its base, forging a new high earlier this week on its breakout from a cup with handle (hitting 57.88). In such instances, we look for the stock to pull back to near support, and on the strength of the announcement look for a strong move up from there. In fact, KG has come back to test its breakout, setting up a nice pattern today with a doji over the support of its 10 day MVA (54.55). We will see if the stock holds this support and make a strong move back up. Volume has been strong, and continued to be so today (down to 1.72 million; average 1 million). Relative strength is at its high, with excellent money flow. Target: 64-65.
BUY POINT: A bounce back up from here with continued strong volume. Stop: 51.64 (18 day MVA at 53).
POSITION: Stock and/or October $50 calls to buy (KG JJ).

CEFT (Concord EFS--$54.56; +3.79; optionable): Forecast to announce a split on 7-25-01 in conjunction with earnings. At this time the company cannot confirm this date, but based upon our research this is the date for the release.
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: Made a big move up out of the little consolidation it had formed at the 50 level (18 day MVA at 51.02), breaking to a new high. The stock closed back over the early-June high established on a breakout from a cup with handle (54.50), and today's move was supported by very strong volume of 20.7 million (average 4 million). Looking good and well in split range. Target: 62.
BUY POINT: A continued move up on strong volume (today's high up to 55.50). We could get a bit of profit-taking early tomorrow, but will watch for its to hold the 54 range. Stop: 50.74.
POSITION: Stock and/or September $50 calls to buy (EQF IJ).

FISV (Fiserv--$60.84; -0.65; optionable): We are working on a date.
http://biz.yahoo.com/p/f/fisv.html
BACKGROUND: Last announced a 3:2 split on 3-25-99 in conjunction with its annual shareholder meeting. The stock price was $52. FISV's last two splits were announced in conjunction with its annual shareholder meeting. The company currently has sufficient shares for a 2:1 split.
STATUS: FISV broke out this week from its strong pattern, an ascending wedge formed after a breakout from a cup with handle, surging up four consecutive sessions from its 18 day MVA (57.44). Today the stock reached up to 62.25 before giving in to some selling, but it did not give up much ground as volume, though strong, decreased from the levels we have seen on the recent buying (1.77 million; average 1.48 million). We are looking for FISV to hold the 59-60 range on a continued lower-volume pullback (10 day MVA at 58.61), setting up for another push upward. The all-time high is at 64.13. Target: 68.
BUY POINT: A move up after a lower-volume pullback holds the 59-60 range. Stop: 55-56.
POSITION: Stock and/or September $55 calls to buy (FTQ IK).

BMET (Biomet--$48.14; +0.04; optionable): Medical equipment. Forecast to announce a split with a board meeting 6-29-01.
http://biz.yahoo.com/p/b/bmet.html
BACKGROUND: Last announced a 3:2 split on 7-6-00 at a stock price of $29. The annual shareholder meeting was on 9-16-00 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Made a big move up Wednesday, blasting up from its 18 day MVA (45.75) and hitting a new high intraday at 48.95. Today the stock took a rest, showing a star doji after hitting up to 48.70 and down to 47, with volume dipping back below the average at 1.55 million (average 1.78 million). We will see if BMET needs to test support again back at the 18 or 10 day (46.42), or if it can continue the move after this rest. The stock has been quite strong, breaking from a couple of solid ascending wedge patterns, and holding up well between moves. Still shows excellent relative strength, money flow and buying. It needs to get on its feet and put some distance up on this move. Target: 54.
BUY POINT: From here: Over 48.95 on above average volume. Stop: 45.52. Pullback: A move up after a test of the 10 day MVA, with increased volume on the move up. Stop: 44.17 (50 day at 43.18). Stop: 43.17 (50 day MVA at 43.56).
POSITION: From here: Stock and/or October $45 calls to buy (BIQ JI). Pullback: Stock and/or October $40 calls to buy (BIQ JH).

FDC (First Data--$66.00; -0.10; optionable): Working on a forecast date. Earnings were announced on 4-12-01.
http://biz.yahoo.com/p/f/fdc.html
BACKGROUND: Last split was a 2 for 1 on 11-18-96 at a stock price of $80. The annual shareholder meeting was on 1-11-01 at which time authorized shares were increased. The company has sufficient shares for a 2:1 split.
STATUS: FDC is moving in a rolling range between 64 and 69, holding in that pattern since breaking from a cup with handle in April. It could not make it up to the top of the range on the most recent move up, but could be holding above the bottom of the range (and its 50 day MVA, at 65.13) on this trip down as well. The last two sessions the stock has shown dojis after reaching above the 10 day MVA (66.34) intraday. We will see if it can hold the 50 day, for now looking at a breakout for positions. We like the doji right on the 50 day MVA, and are looking for a bounce up from there.
BUY POINT: Aggressive: Bound up from here on continued strong volume. Breakout: 69 on continued strong volume (up to 1.85 million today; average 1.62 million).
POSITION: Stock and/or August $65 calls to buy (FDC HM).

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, 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) DAKT - Looking for more on the bounce
2) ESRX - One more move?
3) LNCR - Strong
4) FHCC - A bit of a rest after a strong move

DAKT (Daktronics--$28.75; +1.75; no options): Scientific & Technical Instruments. Splits 2:1 effective June 25.
http://biz.yahoo.com/p/d/dakt.html
STATUS: Bounced back up from its 50 day MVA (26.49) today off of a tight doji on that level from Wednesday. The stock made an outstanding pre-split move from its 50 day recently, and we will see if DAKT can make another strong move Friday going into Monday's split.
PLAY: A move over the 10 day MVA (29.05), with stock.

ESRX (Express Scripts--$108.42; +0.28; optionable): Splits 2:1 effective on or about June 25.
http://biz.yahoo.com/p/e/esrx.html
STATUS: ESRX made an outstanding run into the split, and tried another move today, reaching up to a new high at 111.64. However, the stock pulled back to close, showing a 'shooting star' doji over its 10 day MVA (106.62). We will see if it can hold on and make one last gasp going into the split. We don't want to count this one out.
PLAY: On a bounce from here, stock and/or August $105 calls to buy (XTQ HA).

LNCR (Lincare Holdings--$66.45; -0.31; optionable): Health Services. Splits 2:1 effective 6-25-01.
http://biz.yahoo.com/p/l/lncr.html
STATUS: Has made a strong move back up after having tested its 50 day MVA (58.57) last week. It broke to a new high with a strong move Wednesday, and followed up today by testing back to 65.58 but holding up well. Volume dipped way back on the selling, coming in at 403,900 (average 601,000). Could be a topping sign, so be careful with existing positions. Still, we like the stock's movement, and we will see if it can give us more here before the split. Looking for the stock to turn back up from here. Relative strength and buying are solid.
PLAY: A move up from here, with stock and/or August $60 calls to buy (LQN HL).

FHCC (First Health--$51.05; -0.72; optionable): Insurance Broker. Splits 2:1 effective 6-26-01.
http://biz.yahoo.com/p/f/fhcc.html
STATUS: We followed FHCC as a pre-announcer and then let it go after the announcement, but now it is making an impressive move back up as it goes into next week's split. The stock had made four consecutive solid moves up going into Thursday, and today it pulled back a bit to rest. Volume was down but still very strong at 1.69 million (average 474,200). The pullback came as the stock is right at its early June high (51.83), with the all-time high ahead at 55.15. The 10 and 18 day MVA's are below at 49.85.
PLAY: A turn back up from here, watching the 52 level carefully for resistance, with stock and/or August $45 calls to buy (FHQ HI - low open interest).

CONTINUING CANDIDATE BEST PLAYS: Some puts in here.
1) MIKE - Looking ready
2) ASFC - Continued strong move
3) CECO - A little pullback after a big move

MIKE (Michaels Stores--$39.99; -0.15; optionable):
http://biz.yahoo.com/p/m/mike.html
BACKGROUND: Based upon our research it does not appear that MIKE has ever split its stock. The annual shareholder meeting was on 9-13-00 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: MIKE has formed another handle to its cup while testing a prior breakout, and is looking solid with four consecutive dojis. In fact, volume has spiked up the last two sessions (down to 369,900 today; average 213,200), telling us to 'get ready' for a breakout move. Today MIKE touched up to 40.80 at its high, past the breakout point, but could not hold on, forming a 'shooting star' doji. Looking for a move that will hold. Target on breakout: 46.
BUY POINT: Over 40.92 on continued strong volume. Stop: 38.05.
POSITION: Stock and/or September $35 calls to buy (IKQ IF).

ASFC (Astoria Financial--$58.09; +0.69; optionable): Savings and Loan.
http://biz.yahoo.com/p/a/asfc.html
BACKGROUND: Last split its stock in 1996 with the split at a price of $56. The annual shareholder meeting was on 5-17-00 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split. The next annual shareholder meeting is scheduled for 5-16-01 at 9:30 ET.
STATUS: ASFC is finally making a move up on strong volume. The stock had been plagued with low volume on moves up as it attempted to move from the handle to a cup pattern, which handle formed into a small double bottom. Today the stock broke from that double bottom with volume of 653,400 (average 363,400), pulling back at its intraday from the handle high of 58.50. We need to be careful after the close off of the intraday high, which indicates a pullback. On a pullback we will look for it to hold 57-57.50 (10 day MVA at 57, center of double bottom at 57.50). From here we will look for a breakout. Target on breakout: 67.
BUY POINT: Pullback: A move up on continued strong volume after a lower volume pullback to the 57-57.50 range. Stop: 53.25. Breakout: Over 58.50 on increased volume. Stop: 54.40.
POSITION: Both buy points: Stock and/or July $55 calls to buy (AQR GK).

CECO (Career Education--$56.74; -1.11; no options):
http://biz.yahoo.com/p/c/ceco.html
BACKGROUND: Last announced a 2 for 1 split on 8-1-00 in conjunction with earnings. The stock price was $57. The annual shareholder meeting is scheduled for 5-11-01 at 1:00 pm CDT at which time additional shares will be authorized. The company has sufficient shares for a 2 for 1 split without increasing authorized shares.
STATUS: The stock has been making its way up steadily along its 50 day MVA (51.11), and CECO blasted up from that level last week, then taking off again from its 18 day MVA (53.63) yesterday with a strong breakout move. Today the stock tested the breakout, hitting 55.45 on low volume (111,700; average 273,000) before recovering a bit. Looking for it to hold the 56 level before running up. Target: 65.
BUY POINT: A move up after the stock holds 56 on this pullback, looking for bigger volume near the average on a move up. Stop: 52 (18 day MVA at 53.63).
POSITION: Stock only.

POST-SPLIT BEST PLAYS:
1) DGX - Breakout!
2) JNJ - Still looking good

DGX (Quest Diagnostics--$72.00; +5.08; optionable): Health services. Split 2:1 June 1.
http://biz.yahoo.com/p/d/dgx.html
STATUS: Has been holding strong, and after starting up Wednesday DGX blasted up today, gapping and then running over its pre-split intraday high (70.15) with big volume (1.66 million; average 397,800). The stock hit up to 73 at its high, just below the all-time high (from December) of 73.13. A great move, and on some profit-taking we will look for it to hold 70, looking for a strong move back up that makes a new high. Target: 80.
PLAY: A move up on continued strong volume after a test of the 70 level, with stock and/or August $65 calls to buy (DGX HM).

JNJ (Johnson&Johnson--$53.02; -0.59; optionable): Drugs. Split 2:1 June 12.
http://biz.yahoo.com/p/j/jnj.html
STATUS: Made a solid move post-split, moving up off its 10 day MVA (currently 52.07). It hit a high of 54.20 Wednesday before pulling back for a doji. That was a topping sign, and JNJ pulled back slightly today for another loose doji. We will see what it does from here, watching for a possible test of the 10 day before a run back up. Good relative strength, solid money flow and good buying.
PLAY: A move up after a lower-volume test of the 52 range, with stock and/or October $50 calls to buy (JNJ JJ). Stop: 48.36 (50 day MVA at 49.58).
* * *
PRE-ANNOUNCEMENTS REMAINING PLAYS
* * *
KRB (MBNA Corp--$34.70; +0.80; optionable): Forecast to announce a split on 7-10-01 in conjunction with earnings. At this time the company cannot confirm an earnings date.
http://biz.yahoo.com/p/k/krb.html
BACKGROUND: Last announced a 3:2 split on 7-14-98 in conjunction with earnings. The stock price was $40. KRB is a holding company and does not hold annual shareholder meetings.
STATUS: Dropped hard last week out of a cup with handle, but caught itself at the 33 level and has tried a bit of a move back up the last couple of sessions. Thursday saw the stock hitting up to 35.05 at its high before closing at the 10 day MVA, with volume strong (2.78 million; average 2.5 million). We saw even stronger volume on the selling, so we will need to see the stock make a sustained move back up over resistance ahead in the 50 and 200 day MVA's (35.41 and 35.53) for positions. Has a bit of a move to go before being back in the split range.
BUY POINT: Aggressive momentum: A move over the 200 day MVA on continued strong volume.
POSITION: Stock and/or September $35 calls to buy (KRB IF).

CHV (Chevron--$93.46; -1.01; optionable): Forecast to announce a split on 7-25-01 before the open in conjunction with earnings. At this time the company cannot confirm the date.
http://biz.yahoo.com/p/c/chv.html
BACKGROUND: The annual shareholder meeting was on 4-25-01 at which time authorized shares were increased.
STATUS: CHV had been moving in a nice-looking ascending wedge, but has fallen out of that pattern with a drop back the last week. Today saw the stock drop through its 50 day MVA (94.43), selling on strong volume (3.94 million; average 2.4 million) but recovering from a low of 92.35. We will see if it can make a quick recovery back over the 50 day. No positions for Friday.

End Part 2 of 4

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