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Begin Part 2 of 2

PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: BMET is next Monday, and we have quite a few coming up as earnings season picks up steam!

BEST PLAYS:

PRE-ANNOUNCEMENT BEST PLAYS:
1) ELN - Good pattern
2) PDII - Doji on support
3) BMET - Forecast for next Monday
4) THQI - Still showing strength

ELN (Elan--$60.25; -1.53; optionable): Forecast to announce a split on 7-18-01 in conjunction with earnings. The company has not confirmed this date.
http://biz.yahoo.com/p/e/eln.html
BACKGROUND: Last announced a 3:2 split on 3-2-99 in conjunction with a board of director meeting. The stock price was $76.88. Prior to that announced a 3:2 split on 8-15-96 at a stock price of $63. Based upon our research we are unable to determine when the annual shareholder meeting took place.
STATUS: The stock has been moving well, recently breaking from a ten-month cup with handle base, and then coming back to test the breakout. It made a bit of a run back up, hitting 63.20 last Friday, but has now pulled back to its 18 day MVA (60.17). After the bit of selling Tuesday we will see if it can make a move back up.
BUY POINT: A move back over 62 on volume near the average of 1.57 million. Stop: 57.66 (or just below the 50 day MVA at 57.47).
POSITION: Stock and/or October $60 calls to buy (ELN JL).

PDII (Professional Detailing--$88.05; 0.00; optionable): Business Services. Wildcard Forecast to announce a split on 7-11-01 with its annual shareholder meeting.
http://biz.yahoo.com/p/p/pdii.html
BACKGROUND: Based upon our research it does not appear that PDII has ever split its stock. The annual shareholder meeting is scheduled for 7-11-01 at 10:30 am ET at which time additional shares will be authorized.
STATUS: Took a big drop from last November to February, and gradually showed strength by climbing back up steadily through May. It has since dropped back from that intermediate high of 97.83, finding support at 73 before making a strong move back up over the last couple of weeks. From Friday's high of 94 the sock has pulled back a bit, showing a doji today over its 10 day MVA (86.84) Tuesday after selling back on above average volume that matched the volume on the move up Friday. Has shown some strength, and after this pullback we will see if the selling has subsided and if it will hold support, from where we are looking for a solid bounce back up and continuation of the run.
BUY POINT: A bounce up from here on solid volume near the average of 180,000. Stop: 81.84 (50 day MVA at 82.25).
POSITION: Stock and/or October $90 calls to buy (PKU JR).

BMET (Biomet--$46.25; -0.60; optionable): Medical equipment. No announcement with the board meeting, but we are looking at 7-9-01 before the open with earnings.
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: Has been very strong as we have progressed toward the forecast, but sold back through its 18 day MVA (46.75) Tuesday to close below that support for the first time in a couple of months. We will watch carefully as we go toward Monday's forecast, seeing it if will make a speedy recovery or if it needs to test its 50 day MVA (44.64). The stock hit a new high at 49.18 last week, but the drop off Monday was on solid volume, and Tuesday's selling volume was strong for half a day (1.24 million; average 1.64 million).
BUY POINT: Aggressive: A move back over the 10 day MVA (47.18) with above average volume. Stop: 43.88.
POSITION: Stock and/or August and October $45 calls to buy (BIQ HI and BIQ JI). With earnings plays, we buy short-term options to sell before the announcement when the earnings run loses steam, and longer-term options to hold through the announcement.

THQI (THQ Inc.--$57.11; -0.68; optionable): Forecast to announce a split on 7-20-01 in conjunction with the shareholder meeting (earnings 7-26-01).
http://biz.yahoo.com/p/t/thqi.html
BACKGROUND: Last announced a 3:2 split on 10-26-99 in conjunction with earnings. The stock price was $44. Prior to that announced a 3:2 split on 7-23-98 in conjunction with earnings. The stock price was $33. The annual shareholder meeting is on 7-20-01 at which time authorized shares will be increased. The company has sufficient shares for a 2:1 split.
STATUS: Made a nice run last week, and off of Friday's doji the stock has pulled back. In Tuesday's short session the stock held the 10 day MVA (56.66), showing a doji on that level after testing near its 18 day at its low of 55.52. We will see if it holds, and as this stock has been showing consistent strength we can look at a play on a move up off of this doji pattern, carefully watching the high at 62. It has been a strong performer, breaking from a cup with handle in January and making several trend runs since then, going steadily upward. We have been looking for a pullback and possible test of the 50 day, but it might not be ready yet.
BUY POINT: A move up on average or better volume (604,500). Stop: 53.11. Pullback: Astrong move up after a pullback and perhaps a consolidation in the 54-55 range.
POSITION: Aggressive: Stock and/or September $55 calls to buy (QHI IK).

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) HRB - Pullback
2) RAVN - Nice consolidation
3) TARO - Pulled back to support

HRB (H&R Block--$67.30; -1.11; optionable): Tax services. Splits 2:1 August 1.
http://biz.yahoo.com/p/h/hrb.html
STATUS: Recently broke from a 22-month cup with handle, and after testing that break with a long, lateral consolidation, it broke out again Monday, moving on big volume of 1.22 million (average 540,000). The stock reached up to 69.60 Tuesday before finally pulling back, but held on pretty well although volume was big for a short session (699,400). We will see if the selling continues, but if the stock can hold on after a lower-volume drop back to the 65.50 pivot point, we will look for a strong move back up.
PLAY: On a move up on strong volume after a lower-volume pullback that holds above the breakout, stock and/or October $60 calls to buy (HRB JL).

RAVN (Raven Ind--$27.10; +0.10; no options): Textile Manufacturing. Splits 3:2 effective July 16.
http://biz.yahoo.com/p/r/ravn.html
STATUS: Made an outstanding move in May and early June, rising from 19 up to 28, but has since pulled back into a nice, tight consolidation of dojis over its 10 day MVA (26.85). There have been a few 'get ready' volume spikes in the past two weeks, with volume on the rest of the sessions very low, as we have seen the last few sessions. That is a thinly traded stock, but although we in most circumstances avoid them because of liquidity issues, with pre-splits we have had quite a bit of success on the report taking smaller positions (like TWRI recently). Excellent relative strength and good buying.
PLAY: On a move over 27.25 on average or better volume, stock.

TARO (Taro Pharmaceutical--$84.19; -1.90; optionable: Drugs. Splits 2:1 July 27.
http://biz.yahoo.com/p/t/taro.html
STATUS: Broke out from a cup with handle last October and has increased more than fourfold since. It announced the split last week and after making a quick run up has pulled back a bit the last few days, Tuesday tapping its 10 day MVA (82.84) at its low of 83.05. We will see if TARO can hold the 10 day, looking for a chance to catch a move back up toward the high of 90.50.
PLAY: After holding the 10 day, a strong move up on volume of the average or better (422,000), with stock and/or August $80 calls to buy (QTT HP).

CONTINUING CANDIDATE BEST PLAYS: Some puts in here.
1) MIKE - Holding on
2) ACF - Forming decent pattern
3) KMP - Making a move

MIKE (Michaels Stores--$40.30; -0.42; 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 broke out from its cup with handle Friday, but has had a wild ride on the move. After hitting 42.06 at it high Friday, the stock gapped back to its 18 day MVA (39.30) Monday before pushing up, and then made a noncommittal move Tuesday. It dipped back a bit, with volume on pace to be strong (171,100; average 219,100), so we will see if it has to test back again, preferably holding here at its breakout point rather than dropping to its 18 day MVA again, or if it can manage a continuation of the breakout move from here. Target: 47.
BUY POINT: A move over 41 on above average volume. Stop: 38.13.
POSITION: Stock and/or September $35 calls to buy (IKQ IF).

ACF (Americredit--$52.63; -0.58; optionable): Credit Services.
http://biz.yahoo.com/p/a/acf.html
BACKGROUND: Last announced a 2 for 1 split on 8-18-98 at a stock price of $35. The annual shareholder meeting was on 11-7-00 at which time no authorized shares were increased. The company does not have sufficient shares for a 2 for 1 split, but does have sufficient shares for a 3:2 split.
STATUS: After testing it 50 day MVA (48.21) last month, ACF has made a solid move up. The last several days it has pulled somewhat laterally into what could be a small ascending wedge, forming something of a handle to a small cup. It has potential, but is not a great pattern, as it is only six weeks long and has a 'V' bottom. However, ACF has been strong and the small base could produce a good move, with the high just ahead at 55. The stock shows excellent relative strength and good money flow.
BUY POINT: Breakout: Over 55 with volume of 1.5 million (average 1 million). Stop: 51.15.
POSITION: Stock and/or August $50 calls to buy (ACF HJ).

KMP (Kinder Morgan--$70.70; +1.11):
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: Broke out today from a wedging pattern, almost an ascending wedge, along its 50 day MVA (68.71). It had been using the 68 level for support since pulling back in late May and early June from its high of 73.98. Volume on the move looked like it would have been above the average of 131,000, and today's 87,500 was in the range of what we have seen on the stock for full sessions. We will see if it can continue the run, watching the recent high carefully as it approaches.
BUY POINT: Aggressive: A move up from here on above average volume. Stop: 67.
POSITION: Stock and/or September $65 calls (KMP FM).

POST-SPLIT BEST PLAYS:
1) CAKE - Pulled back from its big move
2) GENZ - Testing breakout
3) DGX - Still looking good
4) WFMI - Making a move

CAKE (Cheesecake Factory--$27.38; -0.29; optionable): Restaurant. Splits 3:2 effective 6-19-01.
http://biz.yahoo.com/p/c/cake.html
STATUS: Has pulled back the last two sessions after making an explosive move last week out of a double bottom. It tested its 10 day MVA (26.43) and center of its double bottom (26.80) at the Tuesday low of 26.60, but managed to pull back up to close. Holding that support after the breakout is key, and we will look for CAKE to make a strong move back up to continue the move. The next major resistance is at the January-February highs near 30.
PLAY: After holding support in the 27 range, a move up on above average volume (way down at 171,700, even for a short session, Tuesday; average 429,200), with stock and/or October $25 calls to buy (CFQ JE). Stop: Just under the 18 day MVA (currently 25.70).

GENZ (Genzyme--$59.00; -0.25; optionable): Split 2:1 effective 6-4-01.
http://biz.yahoo.com/p/g/genz.html
STATUS: Biotechnology. Broke out Friday, making a strong move up to a new high, but closing way off of its high of 64. We expected a pullback off of that pattern, and got one, as the stock gapped back and has shown consecutive dojis. The dojis are holding the support of the breakout point, however, which is strong action, and volume has dipped on the pullback (down Monday and in at 2 million on Tuesday's short session; average 3 million). Looking for the stock to hold here and make a run back up. Target: 66.
PLAY: After holding here, a move up on increased volume near the average, with stock and/or October $55 calls to buy. Stop: 54.87.

DGX (Quest Diagnostics--$72.42; -0.58; optionable): Health services. Split 2:1 June 1.
http://biz.yahoo.com/p/d/dgx.html
STATUS: Made a solid breakout move last Thursday, and is now testing that move. It has pulled back off of Friday's doji, but is holding its up trendline (connecting March-May closing lows), which is at 71.75, and is just below the breakout point, which was 73. We will see if the test stops here, looking for a strong move back up and over the breakout high of 75.75. Target: 80.
PLAY: After holding here, a strong move back up with above average (454,000) volume, with stock and/or August $70 calls to buy (DGX HN). Stop: 67.35.

WFMI (Whole Foods--$28.27; -0.03; optionable): Grocery Stores. Split 2:1 June 5.
http://biz.yahoo.com/p/w/wfmi.html
STATUS: Had pulled back in its long handle to a cup pattern, testing the 50 day MVA (26.57), and blasted up from that level Monday. Tuesday saw the stock gap down to open, but it managed to recover just about all the move down during the short session. With the short day it is difficult to tell if the stock will test back to the 10 day MVA (27.44), but we will look for that scenario as well as a continued strong move from here, watching for a breakout.
PLAY: Aggressive: Over the recent consolidation high of 28.50 on above average volume (472,000). Stop: 26.50. Breakout: 29.55 on minimum volume of 720,000, with stock and/or August $27.50 calls to buy (FMQ HY). Stop: 27.48.
* * *
BEST OF THE REST
* * *
Pre-Announcements:

ATK (Alliant Techsystems--$87.01; -0.20; optionable): Forecast to announce a split on 8-7-01 in conjunction with its annual shareholder meeting.
http://biz.yahoo.com/p/a/atk.html
BACKGROUND: Last announced a 2:1 split on 11-2-00 in conjunction with earnings. The stock price was $89. The annual shareholder meeting is scheduled for 8-7-01 at 2:00 pm CT at which time additional shares will be authorized.
STATUS: The stock took a relief bounce late last week after its big, rapid drop, but that move lost steam in the range of the 10 day MVA (88.82). It pulled back Monday, and although it held on Tuesday for a doji on what was shaping up as low volume (53,600; average 182,500), the stock is weak and we are looking for another strong drop back and continued put play. On a drop we will watch the recent low at 84.10, and on a drop below that we are targeting 78-80.
BUY POINT: Aggressive: After a failed attempt back up at the 10 day MVA, selling back down on above average volume.
POSITION: August $100 puts to buy (ATK TT).

NVDA (Nvidia--$89.77; +1.13; optionable): Semiconductor. Forecast to announce a split on 8-15-01 in conjunction with its annual shareholder meeting or on 8-13-01 during the market in conjunction with earnings.
http://biz.yahoo.com/p/n/nvda.html
BACKGROUND: The company last announced 5-16-00 after the close with earnings. Price was at $94, but the stock rose $8.74 that day in anticipation.
STATUS: NVDA has made at least four trend runs up its trendline connecting March and May closing lows, but after the last run (which hit up to 100) the stock pulled back to visit the 50 day MVA (86.63). It bounced from that level but pulled back from the 94 level, and today held the 50 day after tapping the 10 day MVA at its high of 90.70. In a good market we are looking for NVDA to make a strong move off of support. It was hit by that infamous short seller David Tyce, the man who wrongly accused Tyco of accounting irregularities. Draw your own conclusions.
BUY POINT: Aggressive: A move back over the 10 day MVA on above average volume (5.1 million).
POSITION: Stock and/or September $85 calls to buy (RVU IQ).

Pre-Splits:

ING (Ing Groep--$67.20; -0.13; optioinable): Life Insurance. Splits 2:1 effective July 13.
http://biz.yahoo.com/p/i/ing.html
STATUS: ING is making a solid pre-split run, but after closing well off of its high of 68.13 Monday it gapped back bit and closed Tuesday with a loose doji. It could test back to the 66 level, and if it does we are looking for a surge back up going into the split, watching the 200 day MVA as resistance ahead at 68.84.
PLAY: Aggressive: A move over 67.50, watching the 200 day carefully and protecting positions carefully, looking at stock and/or August $65 calls to buy (ING HL - but very low open interest). Pullback: A move up after a pullback that holds 66, with stock and/or August $60 calls to buy (ING HM - very low open interest).

Continuing Candidates:

CECO (Career Education--$59.14; +2.00; 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: Has made several sharp moves up from its short-term MVA's (18 day at 56.74), and after a pullback to that level over the preceding three sessions, CECO jumped back up off of the 18 day Tuesday. Volume was not shaping up as a huge day (110,200; average 232,500), and the stock's steepening trend makes us cautious, but we will look at a continued move up on strong volume (high is 61.35), protecting positions diligently with stops.
BUY POINT: A continued run from here on above average volume. Stop: 55 or just under the 18 day MVA.
POSITION: Stock only.

Post-Splits:

BRCD (Brocade--$44.09; +1.01; optionable (UBF): Telecom
http://biz.yahoo.com/p/b/brcd.html
STATUS: BRCD is a stock that we expect to show strength in a stronger market, and it has made a good move up last week, running back over its 50 day MVA (41.25). It has pulled somewhat laterally the last couple of sessions, reaching up near 45 before pulling back to close. If we can get some strong market action, we will look for BRCD to take out 45 and look toward the June high of 48.94.
PLAY: In a strong Nasdaq, a move over 45 on strong volume near the average of 14.6 million, with October $40 calls to buy (UBF JH).

SEBL (Siebel--$47.67; -1.86; optionable) (SGW): Application Software
http://biz.yahoo.com/p/s/sebl.html
STATUS: SEBL is another tech that made a nice move last week, taking out its 50 day MVA (45) and short-term down trendline connecting May and June highs (45.75). It reached up to 50.90 intraday Monday on a strong move before pulling back to close, but held on strong with a doji today. Looking for it to hold the 46 range, and from there make a strong move up. The June high was 52.32.
PLAY: After holding the 46 range, a move back up on above average volume (16.2 million), with August $40 calls to buy (SGW HH - next expiration is November).

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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