stock watch, stock split

Begin Part 3 of 4

PRE-ANNOUNCEMENTS REMAINING PLAYS
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RE (Everest Re Group--$78.50; +3.75; optionable): Insurance. Forecast to announce a split on 10-22-01 after the market closes in conjunction with earnings.
http://biz.yahoo.com/p/r/re.html
BACKGROUND: Based upon our research it does not appear that RE has ever split its stock. The annual shareholder meeting was on 5-23-01 at which time no authorized shares were increased. The company has sufficient shares for a 2:1 split.
STATUS: Broke out today! The stock hit our buy point on good volume (845,400; average 580,200), breaking from its recent pennant consolidation formed after its meteoric climb back up after being punished initially after the tragedy. The stock is at a new high, closing today at its intraday high. It is just below the buy limit of 5% on a breakout move, which would be 78.75. Looking for a continued move with existing positions, and if we get a test of the breakout, we will be ready on a move back up. Target: 90.
BUY POINT: Still a buy to 78.75. If we get a low volume test of 75, a move back up off of that level on continued strong volume. Stop: 72.
POSITION: From here: Stock and/or January $75 calls to buy (RE AO). Test: Stock and/or January $70 calls to buy (RE AN).

LLL (L-3 Communications--$93.20; -0.85; optionable): Telecom. Forecast to announce a split on 10-24-01 before the market opens in conjunction with earnings.
http://biz.yahoo.com/p/l/lll.html
BACKGROUND: Based upon our research it does not appear that LLL has ever split its stock. The annual shareholder meeting was on 4-26-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: LLL fell out of a double bottom pattern and went into a strong three-month downtrend to the 60 level before the attacks, but upon the market reopen it made a huge gap back up. It made a new high last week at 98.07, since then testing back to the 18 day MVA (90), which level is buttressed by the previous all-time highs in March-May. Not the caliber of strength we were looking for on the move, but today it managed to hold the 10 day (92.66) on lower volume of 677,000 (average 722,200). Looking forward to the forecast date, and we are looking for LLL to continue to hold and make another run, but we have to be careful of the potential low-volume double top. Those are very dangerous. It has good support at 90, but we always use caution on these low volume rallies to a recent top. Initially targeting 100, but a strong move could take it farther.
BUY POINT: After holding 90-93 level, a move back over 96 on above average volume. Stop: 90.
POSITION: Stock and/or January $90 calls to buy (LLL AR).

JEC (Jacobs Engineering--$69.20; +2.63; optionable): Construction. Forecast to announce a split on 11-1-01 in conjunction with earnings.
http://biz.yahoo.com/p/j/jec.html
BACKGROUND: Based upon our research it does not appear that JEC has ever split its stock. The annual shareholder meeting was on 2-13-01 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
STATUS: JEC is building the right side of its base, making strong surges and regular pullbacks. The most recent pullback held the 18 day MVA (65.29), and has bounced back up the last two sessions. Today it picked up volume, but it was still below average at 235,900 (average 267,000). If it continues the pattern it could reach up to the 72.50 range on this move before drawing back, but we will need to see more volume on the move. The June-July highs are just ahead at 70.75 (all-time high, from the left side of the cup, at 75.67).
BUY POINT: Aggressive: A move over 70.87, with increased, above average volume. Stop: 67.
POSITION: Stock and/or January $65 calls to buy (JEC AM).

XL (XL Capital--$94.83; +2.93; optionable): Insurance. Forecast to announce a split on 11-5-01 in conjunction with earnings. At this time the company cannot confirm a time for the release.
http://biz.yahoo.com/p/x/xl.html
BACKGROUND: Based upon our research it does not appear that XL has ever split its stock. The annual shareholder meeting was 5-11-01 at which time no shares were increased. The company has sufficient shares for a 2:1 split.
STATUS: XL was building the right side of its cup base when it double-topped in June and fell back, and as it tried to reach those tops again it took a hideous fall after the attacks. However, this insurer recovered with a massive move back up, over the double-top resistance and this week has established a new high, taking out the left side of its base (89.25). Today it gapped up and continued, moving on increased volume of 1.75 million (average 1.48 million). Not an extremely strong move compared to recent volume, and it is near the breakout buy threshold of 95.59. Watching current positions carefully for a move back to test the recent high at 91. Still targeting 100 on a continued strong move or after a successful test.
BUY POINT: Test: After a lower-volume test of 91, a move back over 93 on volume of 2 million or better. Stop: 88.
POSITION: Stock and/or January $90 calls to buy (XL AR).

EASI (Engineered Support--$45.52; -1.72; no options): Aerospace/Defense. Forecast to announce a split on 12-10-01 in conjunction with earnings. At this time, the company cannot confirm this date.
http://biz.yahoo.com/p/e/easi.html
BACKGROUND: EASI last announced a 5:4 split on 2-1-2001 with a board meeting at a price of $28.50. Before that it announced on 6-12-98 at a price of $26.50. The company has sufficient shares for a 3:2 split.
STATUS: EASI is another defense stock that took off immediately in the wake of the terrorist attacks, but after another solid move out of a brief consolidation last week, it has taken an abrupt drop. It has tapped down to and held the 50 day MVA (43.08) several times on the move, but today after gapping up and clearing the 10 day MVA (48.11) it could not hold, pulling back to close on continued decreasing volume (535,700; average 340,000). The bounces from the 50 day are good signs of solid support as institutions step in to buy at that level, but we will need to see a stronger move up that it can hold. The recent high is 58.
BUY POINT: Over 48 on volume in the 1 million range. Stop: 45.
POSITION: Stock (no option chain).

EDMC (Education Management--$38.50; +2.16; optionable): Education & Training services. We are researching a date.
http://biz.yahoo.com/p/e/edmc.html
BACKGROUND: Last announced a 2:1 split on 12-2-98 at a stock price of $47. The company has sufficient shares for a 2:1 split.
STATUS: EDMC made a very strong move back up from support at the 24 level, popping through the convergence of the 50 and 200 day MVA's (50 day at 34.91) last week. The stock pulled into a lower-volume consolidation, and today made a move out of that consolidation. However, volume was down at 400,800 (average 347,000), which although above average was light compared to what we have seen lately as the stock made its move up and then pullback. Today it pulled back from its intraday high of 39.44. It needs more volume to keep going or we may see a test back toward the recent lows at 35. The all-time of 46 was set in July. On a move we are targeting that level first.
BUY POINT: A buy up to 39.90 on volume of 500,000. Stop: 37.50.
POSITION: Stock and/or December $35 calls to buy (UKN LG - under 100 open interest).

KRB (Mbna Corp--$30.55; -1.15; optionable): Banks. Working on a date.
http://biz.yahoo.com/p/k/krb.html
BACKGROUND: Last announced a 3:2 split was on 7-14-98 at a stock price of $40. The annual shareholder meeting was on 4-30-01 at which time no additional shares were authorized. The company has sufficient shares for a 3:2 split.
STATUS: Struggling hard at the 50 day MVA, KRB is trying to hold on now. The stock had squeezed into a pennant between its 50 day MVA (31.96, with the June-July lows) to the upside and the short-term MVA's (10 day at 30.95) to the down, but is not showing the strength to make a run over resistance. The stock gapped way down last Friday, but managed to make a run on the 50 day, but failed again that level, dropping back today from a high of 32.32. Volume was down on the selling at 3.18 million (average 3.3 million), so we will see if it can hold and try again. Not a very good pattern, and there is a lot of upside resistance, with the 200 day at 34.28, and former down trendline at 37.
BUY POINT: There are better plays out there. Will keep an eye on it.

MI (Marshall & Ilsley--$56.40; +0.63; optionable): Banking: Regional. We are researching a forecast date. It is looking good here.
http://biz.yahoo.com/p/m/mi.html
BACKGROUND: Based upon our research it does not appear that MI has ever split its stock. The annual shareholder meeting was on 4-24-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: MI is moving in a large 'flying W' pattern, a double bottom where the right leg does not tap down to the right. It broke through the 50 day MVA (31.51) Monday, but closed well off of its intraday high today as it tries to climb toward the center of the pattern at 58.40, and the stock could be looking at a pullback from that candlestick, perhaps moving into a pennant or handle. On a pullback we will look for the stock to hold the 50 day, although if it pulls back to the short-term trendline connecting September-October lows would put support at about 54 (200 day MVA at 27.47). From here we will see if it can hold near support and make a strong continuation of the move up toward the pattern center.
BUY POINT: Aggressive: After holding the 50 day on a low-volume pullback, a move back over 56.50 on increased volume (today 202,600; average 218,000). Stop: 55.
POSITION: Stock and/or December $50 calls to buy (MI LJ).

NDN (99 Cents Only Stores--$33.31; +1.45; optionable): Retail. Researching a date.
http://biz.yahoo.com/p/n/ndn.html
STATUS: NDN is a prime example of what can happen when you have a strong move in a bear market. Instead of a steady rise back up, NDN blasted up out of the bottom of its 10-week cup base, breaking out without forming a handle. However, after a strong and fast drop back, the stock grabbed support at the 50 day MVA (31.51), today making a bounce up on very strong volume (773,700; average 290,000). The stock pulled back from the 34 level, which corresponds to the August consolidation highs. After the recent volatility, we would prefer to see it settle down a bit before jumping back in, but the aggressive can look at a continued strong move. The recent high is at 39.50.
BUY POINT: Aggressive: A move over 34 on continued strong volume. Stop: 32.
POSITION: Stock and/or December $30 calls to buy (NDN LF).

AHC (Amereda Hess--$67.00; +0.37; optionable): Wildcard forecast to announce a split on 10-25-01 during the market in conjunction with earnings.
http://biz.yahoo.com/p/a/ahc.html
BACKGROUND: Last announced a split on 7-21-80. The annual shareholder meeting was on 5-2-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Has finally dipped back after making a long series of gradual gains, although after a gapping back through the 10 day MVA (66.72) today it managed to push back up through that level to close. If it can hold and consolidate perhaps we will see a nice continuation of the recovery going toward the forecast next week. Upside plays are quite aggressive from here as the oil stocks are suffering due to slack demand. We will have to give it a little time to settle into a consolidation and maybe build strength for a move. The 50 day MVA is ahead at 70.83, and we would be most comfortable with a move through that level on big volume. Not too wild about this one now unless you just love oil stocks.
BUY POINT: Aggressive: After holding the 10 day in a lower-volume consolidation, a move back over 69 on volume of 1 million. Stop: 65.50.
POSITION: January $65 calls to buy (AHC AWM).

FORMER SPLITS REMAINING PLAYS: As the market finds itself, we are focusing on some of the stocks that have shown a propensity to split and which are looking solid.

APOL (Apollo Group--$41.98; +0.14; optionable): Education & Training Services.
http://biz.yahoo.com/p/a/apol.html
STATUS: Pulled back from its breakout move (from a cup dating back to early August, but the stock has held the 50 day MVA (40.86), tapping down to that level in recent sessions. That is a key level; if it cannot hold it here, that is a sign that institutions have lost interest after the pattern. Today it reached up to 42.99 before pulling back for a loose doji. Volume was strong on the move at 1.47 million (average 1 million), so we will see if it can continue to hold the 50 day on a move back down. If it can hold, a more lateral extension to this small cup pattern could be a decent set up. Keep in mind that is a fourth-stage base (the stock has formed three other cups as it has made its way up), so we will be diligent with stops on a breakout, although this stock has shown a lot of strength, and is becoming one of the consistent splitters.
BUY POINT: Aggressive: After holding the day and moving into a lower volume consolidation, a move back over 44 on increased volume. Stop: 41.50. Breakout: 47 on minimum volume of 1.6 million. Stop: 43.75.
POSITION: Aggressive: Stock and/or November $40 calls to buy (OAQ KH). Breakout: Stock and/or February $45 calls to buy (OAQ BI).

LUV (Southwest Airlines--$15.44; +0.11; optionable): Airline.
http://biz.yahoo.com/p/l/luv.html
STATUS: LUV has hit up to the 50 day MVA (16.29) twice recently on its rebound, and though it is holding support at the short-term MVA's (15.40) as it pulls back, it still has to contend with the 50 day before it is going anywhere. The last two sessions we have seen dojis on low, decreasing volume (1.55 million; average 3.35 million). With the double top at the 50 day, there could be trouble and we will need to carefully watch the stock to see if it can hold support. For new positions we will certainly need to see a break over that resistance on big volume. Again, LUV is not one that we are looking at for quick plays, but for the benefit of its long-term strength. It has been a consistent splitter, turning small positions into large ones, useful for writing covered calls.
BUY POINT: After holding here, a move over 16.50 on increased volume.
POSITION: Stock.

End Part 3 of 4

stock watch
stock split