us stock market, stock watch

Begin Part 3 of 4

XL (XL Capital--$93.32; -1.13; 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 has made a nice run back up after the attacks, making a new high at 95 (after clearing its June double tops at 84 and the prior high at 90). It is now pulling into a pennant pattern support by its 10 day MVA (91.41). Not a bad pattern, with volume dipping back today as the stock gapped down but held the 10 day for a little push back up (1.39 million; average 1.69 million). We have been looking for the stock to rest a bit and digest its gains, and this little pattern is a nice way to do it. Still targeting 100 on a continued strong move after a rest.
BUY POINT: After holding the 10 day and perhaps showing some more of this pennant, a move back to 95.12 on volume of 2 million or better. Stop: 90.
POSITION: Stock and/or January $90 calls to buy (XL AR).

EASI (Engineered Support--$44.15; -2.06; optionable): 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 a defense stock that took off immediately in the wake of the terrorist attacks, but after another solid move out of a small cup with handle (or double bottom), it topped out at 58 and took an abrupt drop. It is currently holding the 50 day MVA (43.49), dropping back to that level again today. Volume on the dip has been low, however, coming in at 273,400 today (average 440,500). The low volume could mean that the stock will continue to display support at the 50 day, but it could take a bit of time before this one is ready to make a move it can hang onto. It is shaping up as something of a head and shoulders, so we will watch support carefully.
BUY POINT: Aggressive momentum: After holding the 50 day, a move over 49 on above average volume. Stop: 46. We carefully protect positions on these types of plays.
POSITION: Stock and/or December $40 calls to buy (UFE LH; no open interests).

EDMC (Education Management--$36.39; -1.01; 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 has formed something of a 'v' bottom cup with handle (once again, the 'v' courtesy of the attacks), but after a strong move back over the convergence of the 50 and 200 day MVA's (50 day at 35.10, 200 day at 34.51) and the formation of a decent handle, the stock has gotten volatile. It failed on a breakout move, but continues to hold support after its abrupt fall back. After another bounce it dipped back again today on increased volume (523,100; average 467,200), but pulled up to close after testing the 50 day at its low. The price/volume action has not been good, but we will see if it can continue to hold, settle down a bit in a consolidation, and start something again. The all-time of 46 was set in July.
BUY POINT: After showing that it can hold support here, a move back over 38 on volume in the 1 million range. Stop: 36.
POSITION: Stock and/or December $35 calls to buy (UKN LG - under 100 open interest).

FDC (First Data--$67.86; +0.65; optionable): Working on a forecast date.
http://biz.yahoo.com/p/f/fdc.html
BACKGROUND: Last split was a 2:1 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 made a huge move back up (after tanking in August and September) on the heels of surprising earnings and an upgrade. It is back in the range of its May-June consolidation and August lows, and at that resistance has pulled back into a handle to a small cup pattern. It eased up in the handle, which is not good action, and tested all the way back to its 10 day MVA (65.92) at its low Monday, but it is continuing to hold up. Today it tapped up to pattern highs (68.61) before retreating to close. We will see if it can settle into a better handle, dipping back again toward the 10 day, moving on lower volume.
BUY POINT: After pulling back and forming a lateral consolidation in the 66-67 range, a move back to 68.73 on volume of 3 million. Stop: 64.
POSITION: Stock and/or February $65 calls to buy (FDC BM).

MI (Marshall & Ilsley--$58.04; +0.06; optionable): Banking: Regional. We are researching a forecast date.
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 made a move up Monday, but volume was not there, and today it could only manage a doji after reaching up close the pattern middle (high today of 58.36; middle at 58.40). Volume was higher at 241,500 (average 203,700), but with a doji after this upleg that could spell a visit back to support. We will see if it can hold the range of its highs from last week in the 57 range, which also coincides with the 10 day MVA (56.54) and down trendline (connecting August-October highs). If it can hold there it could form another little handle and make another attempt at a move. High in the left side is 60.
BUY POINT: After holding the 57 range on a pullback, a move to 58.52 on volume of 300,000.
POSITION: Stock and/or December $55 calls to buy (MI LK).

NDN (99 Cents Only Stores--$35.04; +0.15; optionable): Retail. Researching a date.
http://biz.yahoo.com/p/n/ndn.html
STATUS: A wild one of late, screaming out of its cup pattern (without a handle, as many stocks do as money comes back into what has been a weak market), but then crashing back to the 50 day MVA (32.05). It held there and bounced, making a pretty good move over the past couple of weeks, but the recent moves have lacked volume. Today NDN showed a 'tombstone' doji as volume dropped way back to 167,300 (average 314,000), and with the momentum appearing to be gone we will look for it to drop back. There are the short-term MVA's before it gets to the 50 day (10 day at 33.85 and 18 day at 33.16, with its August consolidation highs), so we will see where it catches support. With any current positions we are carefully protecting profits. We will see if it can settle down a bit and form a base that will support a solid move.
BUY POINT: After catching support at 33-34 and consolidating a bit on low volume, a move back over 35 on above average volume. Stop: 32.
POSITION: Stock and/or December $30 calls to buy (NDN LF).

THQI (THQ Inc.--$49.92; -0.28; optionable): We are working on a date.
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 company has sufficient shares for a 2:1 split.
STATUS: THQI had formed a little cup with handle, but after announcing earnings the stock fell back Friday on big volume. It has held up since, however, showing consecutive tight dojis over the 50 day MVA (48.81), and squeezed between the short-term averages (10 day at 50.47 and 18 day at 49.48). Volume has also dipped but remains pretty strong (steady today at 1.42 million; average 1.16 million). We will see if THQI can continue to hold, and if so whether it can continue the handle consolidation through potential market weakness.
BUY POINT: Aggressive: After holding on here and perhaps consolidating a bit, a move back over 52.50 on continued strong volume. Stop: 49.75. Breakout: 55.12 on minimum volume of 1.8 million. Stop: 51.50.
POSITION: Both buy points: Stock and/or December $50 calls to buy (QHI LJ).

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--$40.22; +0.51; optionable): Education & Training Services.
http://biz.yahoo.com/p/a/apol.html
STATUS: After a steady pullback from its early-October breakout move (from a cup dating back to early August), the stock has been moving just under its 50 day MVA (40.72). We had been looking at a possible put, but the stock appears to have some support in the 38 range, above the 200 day at 37.43, and there is just not much volume up or down. Dropping for now.

LUV (Southwest Airlines--$15.91; +0.16; optionable): Airline.
http://biz.yahoo.com/p/l/luv.html
STATUS: LUV is in something of a descending wedge, holding support at 15 (just under the short term MVA's, at 15.45), but held back by the 50 day MVA (16.13). After a move up on weak volume Monday, the stock gapped up to the 50 day, but could only manage a doji under that resistance as volume increased to 4.03 million (average 3.55 million). It is trying, but does not appear destined to make it over resistance this time. The doji under resistance points to a drop, and we will again see if it can hold on at 15. We have been looking at LUV as a long term hold as it rallies to the low 30's and splits with frequency. This is a buying opportunity, one of the few stocks we will do this with, but for additional positions we are waiting for it to break over 17.
BUY POINT: Over 17 on above average volume.
POSITION: Stock.

SCHL (Scholastic Corp--$46.12; -0.01; optionable): Publishing.
http://biz.yahoo.com/p/s/schl.html
STATUS: SCHL is hanging in there with its handle (to a cup dating back to February). The stock dropped way back Wednesday with the market, but has held the 18 day MVA (45.10). It made a weak bounce from that level Monday, and does not look poised for a big move from here after today's doji on continued low volume (149,200; average 272,300), but we are watching for it to hold the pattern and build for a breakout try. It has some work to do. The handle high is 48.24.
BUY POINT: Breakout: 48.36 on volume of 410,000. Stop: 45.
POSITION: Stock and/or December $45 calls to buy (USC LI).

PRE-SPLITS REMAINING PLAYS:

PCL (Plum Creek Timber Reit--$28.30; -0.61; optionable): Lumber. Splits 5:4 effective 12-3-01.
http://biz.yahoo.com/p/p/pcl.html
STATUS: Broke out from the short handle to its double bottom Monday, although volume was below what we were looking for. As can happen on a weak volume breakout, the stock immediately reversed today, giving almost all of it back on increased selling volume of 806,900 (average 591,000). The pattern center (27.20) is near the 50 day MVA (27.26), and we will see if the stock heads back into that range, which was the range of its brief handle. The recent high is 30.
PLAY: Pullback: After holding the 28 level, a move back to 29.10 on volume of 880,000. Stop: 27. Stock and/or November $25 calls to buy (PCL KE).

ADVP (AdvancePCS--$63.03; -3.36; optionable): Health services. Announced a 2:1 stock split, effective date TBA.
http://biz.yahoo.com/p/a/advp.html
STATUS: ADVP took a hard tumble this week, likely prompted by ESRX's fall on losing a contract to competitor Medco, and meeting earnings. The stock took a relief bounce but predictably could not hold a move over the 50 day MVA (68.73), falling back and hitting our buy point for a downside play, today moving down on increased volume of 2.28 million (average 1.36 million). The target was 62.50, and it hit down to 60.78 today before pulling back up to close. With a weakening market we could get some more downside, so we will continue to hold existing positions and see if we get a move to the 200 day MVA, at 57.50. If a bounce causes us to take profits, we can look at a new put on a hard drop back off of a relief bounce.
PLAY: Aggressive: On a bounce that fails in the 66 range, a drop through 65 on continued strong selling volume, with December $80 puts to buy (QVD XP - low open interest).

CONTINUING CANDIDATES REMAINING PLAYS: When splits are not announced, we will keep the best split prospects on the report rather than continue to carry all of them in case there is a an unexpected announcement. We will continue to monitor the stocks that are trimmed and add them again when we ascertain a revised split announcement date.

ACS (ACS Inc.--$91.82; -0.08; optionable): Computer Software & Services
http://biz.yahoo.com/p/a/acs.html
BACKGROUND: Last announced a 2:1 split in October 1996 at a stock price of $60. The annual shareholder meeting was on 10-26-00 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Since bouncing up again from its trendline in late September, ACS made a slow, steady run up the short-term MVA's to a new high (93.20 Monday), but the move is in a precarious position here. It is just over its upper channel trendline, but it survived earnings and recovered from an initial dip below its 10 day MVA (90.06) to close with a doji on increased volume (814,900; average 767,300). Still protecting from a drop, and looking at the possibility of an aggressive trading play on a move back down to the trendline (with its 50 day MVA at 84.50). We would watch carefully the stock's action at the short-term MVA's (18 day at 88.31), but typically the stock will pull back to the lower trendline. This is the type of chart where we would be ready to exit short-term upside positions, but be inclined to ride our long-term holds back to the long-term trendline.
BUY POINT: A move down to 89 on increased volume. This is aggressive, but doable as we teach in the seminars
POSITION: November $100 puts to buy (ACS WT - low open interest).

AHC (Amereda Hess--$62.50; -2.06; optionable): No announcement from this struggling energy concern.
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: The stock has been weak, and is a long way from recovering. Dropping for now.

AZO (Autozone--$57.78; -0.33; optionable): Auto Parts
http://biz.yahoo.com/p/a/azo.html
BACKGROUND: Last announced a 2:1 split in March of 1994 at a price of $58. The annual shareholder meeting was on 12-14-00 at which time no additional shares were authorized.
STATUS: AZO finally pulled back a little bit, keeping the solid action by dropping on lower volume and then showing a doji over the 10 day MVA (57.12) today, that pattern occurring on higher volume of 1.58 million (average 1.24 million). This stock has made a solid run since bouncing up from the September low (38), but has been too extended to consider new positions. We have been watching for a pullback and lower-volume consolidation, and perhaps this is the beginning. Still enjoying those existing positions, but always protecting with stops. Target on the next move up: 60.
BUY POINT: Aggressive: After a lower volume consolidation over support in the 55-57 range, a move back up on continued strong volume. Stop: 53. The very aggressive could try a quick move off of the doji.
POSITION: Aggressive: Stock and/or December $50 calls to buy (AZO LJ). From here, stock and/or December $55 calls to buy (AZO LK).

BJ (BJ Wholesale--$51.52; -0.56; optionable): Retail - Discount
http://biz.yahoo.com/p/b/bj.html
BACKGROUND: Last announced a 2:1 split on 2-4-99 at a stock price of $44. The annual shareholder meeting was on 5-24-01 at which time no additional shares were authorized. The company has sufficient shares for 2:1 split.
STATUS: BJ is building the right side of its base, moving in surges and pullbacks. We got a bounce up the last few sessions, but it looks destined to fall short of its last high at 53.70. Today it could only reach up to 53.05 before turning over, dropping back but selling on lower volume (388,300; average 610,000). It is still holding comfortably over the 10 day MVA (50.86), and if it can continue to hold it can still be a decent cup with handle pattern.
BUY POINT: After a pullback that holds the 10 day, a move to 53.82 on volume of 900,000. Stop: 50.25.
POSITION: Stock and/or December $50 calls to buy (BJ LJ - under 100 open interest).

BRL (Barr Laboratories--$79.55; -7.85; optionable):
http://biz.yahoo.com/p/b/brl.html
BACKGROUND: Last announce a 3:2 split on 5-31-00 with a board meeting. The stock price was $52. The annual shareholder meeting 10-26-00 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Despite what appeared to be decent earnings, BRL sold back hard today (the last session before the merger with Duramed Pharma (DRMD) is scheduled to close). The stock fell back through the 50 day MVA (81.63) on huge volume of 3.41 million (average 780,000 million). Today's action takes us out of any remaining positions. With the pending merger, we will wait to see how the market reacts and how the pattern shakes out. Nothing for now.

FRX (Forest Labs--$75.25; -0.27; optionable): Drugs.
http://biz.yahoo.com/p/f/frx.html
BACKGROUND: Last announced a 2:1 split on 12-18-00 with a board meeting. The stock price was $135. Prior to that announced a 2:1 split on 2-23-98 in conjunction with a board meeting. The stock price of $62. The company has sufficient shares for a 2:1 split.
STATUS: Volume has remained below average as FRX is now struggling to hold a move over the loose convergence of the short-term and 50 day MVA's. As FRX struggled with resistance at the 50 day (74.23) late last week, we were looking for stronger selling to kick in and trigger a put play, but the move did not materialize. Instead, FRX made a stronger push up over that resistance Monday and closed over the 10 day (75.07), but it remains to be seen whether it will be able to hold the move. Volume dropped a bit today (1.22 million; average 1.35 million) as the stock tested down to the 50 day before pulling up to close with a loose doji over the 10 day. We don't like to whipsaw plays, so we will have to see how the stock handles this level in market weakness and watch how the pattern sets up for the next play. Nothing for Wednesday.

End Part 3 of 4

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