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7/11/01 Stock Split Report Market Summary
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Stock Split Report Subscribers:

The Alert service is up and running! Subscribers to the current reports can sign up at the following link:
http://www.investmenthouse.com/alertssr.htm

A so-so market, but good news from the alerts with CEFT, ELN, BMS, and BMET making solid moves, while BRO set up for tomorrow's projected announcement. The alerts are a great way to get keyed in on the moving stocks for the day that have already set up a good pattern and are making their moves. We expect the alerts to be popping tomorrow with the MSFT, YHOO, and MOT news after hours tonight!

Seminars: Second series starting August 1!

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PLAYS TO LOOK AT: Some more solid moves today with many stocks setting up in nice patterns.

BONUS PLAYS:

LPNT (Lifepoint Hospitals--$45.23; +3.43; optionable):
http://biz.yahoo.com/p/l/lpnt.html
STATUS: Has formed a cup with handle since early January, and after consolidating in the handle over the 18 day MVA (40.98) the stock broke out today with a big move. Volume was of the solid breakout variety, coming in at 1.17 million (average 660,000). A great move, and still a buy up to 47. Target: 51.
BUY POINT: Over 45.75 on continued strong volume. Stop: 42.55.
POSITION: Stock only.

GMST (Gemstar--$42.47; -0.45; optionable):
http://biz.yahoo.com/p/g/gmst.html
STATUS: Has been moving in a rolling range the past three months, but has made higher lows its last two trips down, now holding its short-term MVA's (10 & 18 day at 41.79 and 40.99, respectively; prior range lows near 35). It continues to have trouble with the pattern highs at 45, tapping up to that level again yesterday before pulling back with a doji today. Volume has picked up the last two sessions (down slightly to 5 million today; average 3.5 million), and we will see if the stock can use this doji on support as a spring to break out of the pattern. Good money flow and buying. Target: 52.
BUY POINT: 45.47 on continued strong volume. Stop: 42.29.
POSITION: Stock and/or August or November $40 calls to buy (QLF HH or QLF KH).

PRE-ANNOUNCEMENTS: Also looking at FITB, MNC and FISV.

BRO ($44.59; +0.34): Forecast to announce a split on 7-12-01 before the open in conjunction with earnings or on 7-25-01 in conjunction with a board meeting. On the heels of its big move yesterday, BRO tapped up to 45.32 today before dipping back to close with a loose doji on huge volume (239,200; average 37,200). We will see what the morning brings, and with an announcement we will look for the move to continue, eyeing the high in the left side of the saucer at 46.10 as possible resistance, but our target is still 49. Stock only.

ELN ($62.85; +1.45): Forecast to announce a split on 7-18-01 in conjunction with earnings. The company has not confirmed this date. Has been pulling into a pennant, holding over its up trendline connecting April-June closing lows (at 61), and today blasted up off of that level with an excellent volume surge (1.94 million; average 1.5 million). The recent intraday high in the pattern is 63.20, with the recent breakout high at 65. From here, on a move over 63.20 on continued strong volume, with stock and/or October $60 calls to buy (ELN JL).

CEFT ($56.99; +2.00): 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. Broke out today, jumping off of its 10 day MVA (54.89) and moving out of its somewhat erratic consolidation. Volume was sharply up at 6.15 million (average 3.42 million), but the stock pulled back off of its intraday high of 58.14 to close. Nonetheless, we are looking for the move to continue, and on a move over 58.14 on continued strong volume, stock and/or September $55 calls to buy (CQF IK).

RHB ($46.80; +1.60): Forecast to announce a split on 8-7-01 in conjunction with earnings. At this time the company cannot confirm this date, but based upon our research this should be the date. Turned back up from its 18 day MVA (45.82), surging up on increased, solid volume of 134,700 (average 130,000). The volume is much better than we saw on the last move up, and we are looking for a breakout from this cup with handle pattern. The aggressive can try a move over 47 on increased volume. Stop: Just below the 50 day MVA (43.92). The breakout is a move to 48.13 on volume of 195,000. Stop: 44.76. Stock only.

PRE-SPLITS: RAVN could be ready to move after a shakeout, and BMET made a good rebound.

HRB ($65.74; -0.19): Splits 2:1 August 1. Has pulled back to its 10 day MVA (65.83), but after dipping intraday to 64.76 the stock ran back up to close with a tight doji on that support. Volume picked up significantly (870,500; average 551,800), and the pattern suggests that HRB is ready to make a strong move from here. On a move over 66.50, stock and/or October $60 calls to buy (HRB JL).

KG ($53.65; +0.37): Splits 4:3 on or about July 19. KG managed to hold the 10 day MVA (53.17), edging back up from that level today, and getting sharply higher volume behind it (1.35 million; average 1.13 million). It could be ready for a strong move back up in the handle (high of 57.88). On a move over 55 on increased volume, stock and/or August $50 calls to buy (KG HJ).

CONTINUING CANDIDATES: KMP is looking pretty good, and IGT is still weak.

ACF ($56.32; +0.15): Made a breakout move yesterday, and followed up with a doji on much lower volume today (1.34 million; average 1.06 million). This could just be a rest before a continuation of the move, but it could also lead to a quick pullback that we would watch to hold 55. From here, we will look for a move over 56.75 on increased volume; on a pullback we can look at a move back up over 56 after a test of 55. For both buy points, stock and/or August $50 calls to buy (ACF HJ).

CBH ($71.60; +1.50): Made a strong move up today in its handle, closing just under the high (71.70) as volume skyrocketed (349,000; average 147,100). Looking for a breakout, so on a move to 71.83 on minimum volume of 220,000, stock and/or September $65 calls to buy (CBH IM).
ASFC ($58.74; +0.29): The stock continued up, breaking out of its saucer, moving up again today. Volume was down but remained strong and above average at 493,700 (average 361,400). It has been an erratic ride for the stock, but this move takes it through resistance that has been quite difficult, so we will look for a continued move over 59, with stock and/or October $55 calls to buy (AQR JK).

POST SPLITS: GENZ is still holding onto support.

CAKE ($26.89; -0.06): Still testing its strong breakout, holding its 10 day MVA (26.74) with its fourth consecutive doji. Volume continued to dip (155,400; average 410,600), and we will look for the stock to make a solid move up from here back toward the breakout high of 28.50. On a move over 27.25 on above average volume, stock and/or October $25 calls to buy (CFQ JE).

JNJ ($53.49; +0.99): JNJ has made a solid move back up after testing its 50 day MVA (50.38). Today the stock gapped up and then continued to move, and volume on the move spiked up to very strong levels (12.48 million; average 5.3 million). The high on the stock's recent breakout run was 54.20, and on a move over that level, stock and/or October $50 calls to buy (JNJ JJ).

DGX ($69.35; -0.05): It made the move down toward its 50 day MVA (64.84), but after hitting 66 it was able to make a strong recovery, running back up on big volume of 1.02 million (average 449,600). It closed with a doji with a long tail, and after this strong recovery we will see if it can run back up hard. On a move up over 71 on continued strong volume, stock and/or August $65 calls to buy (DGX HM).

* * THE SUMMARY * * *

TONIGHT:
- Indexes climb on stronger volume during the session and then explode after hours on MSFT pre-announcement.
- The day was setting up for a reversal, and we will see if it can now deliver.
- Team Trades

The indexes try to recover on strong volume and then the after hours news provided the next peg in the recovery board.

The session was not much on its face. All indexes gapped lower a bit, touched down even lower intraday, and then moved back up to close either with a gain or near the top of the intraday trading range. Volume expanded even greater than Tuesday's above average selling. It looked decent and we did see some stocks breaking out from our plays as usual, but it was not overly impressive.

As the session wore on, we realized late in the day that the S&P had reversed and was either going to close positive or close to it on much stronger volume. The patterns were not as dramatic on the Dow and the Nasdaq, but they mimicked that action. It was a possible reversal in the making, but it would need a lot more.

After hours it appears we may have received a major catalyst.

We have been saying for awhile that turns back up set up the move ahead of time and then get a catalyst to put it all in motion. The economic numbers are the foundation that set up the move. They have been improving just as we have been predicting. That is laying the groundwork for the move higher. That, however, has a lot of skeptics still as analysts are just not trusting what they are seeing in the economic numbers. We see the recovery starting just as it has in past slowdowns, but as we said, there needs to be something else to get things going.

We have said that would come from earnings that were not as bad as all of this hubbub we have seen of late. There would be better economic news, some earnings that were, gee, not as bad as they were imagined to be, and then some big names would come out and let us all know that things were not only not that bad, but were looking pretty darn good for the future.

Well, the rumor was that ORCL was going to miss its number. It did not; in fact, it said that things were looking really good this quarter with big orders coming in. Now MSFT has pre-announced earnings and revenues ahead of expectations and has a good outlook for the future. Software was one of the areas that we said would lead back up, and these two appear to be making that case.

It is not a one horse (or two horse) race, however. After hours YHOO beat expectations by a penny and beat revenue estimates $182 million versus $175 million expected. Not stellar, but both were better than expected, and YHOO affirmed earnings and revenues for the rest of the year. MOT also announced earnings after the close, and they also beat the street by a penny. More importantly, its handset sales and handset orders beat expectations. That shadow that everyone was scared about is just not that black and gloomy.

Overcame some bad news.

CMVT pre-announced terrible earnings before the bell, and that had the techs and the overall market heading down. In a reversal of Tuesday's bearish action, the indexes overcame bad news and rose higher. That is a positive; if it had a so-so rise on good news, that would have been nothing to get interested in. Today's move was worthy of interest; the after hours news, however, made it pretty important.

End Part 1 of 2

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