stock watch, stock split

Begin Part 4 of 4

GD (General Dynamics--$81.76; -3.04; optionable): Forecast to announce a split on 10-17-01 before the open with earnings.
http://biz.yahoo.com/p/g/gd.html
BACKGROUND: Last announced a 2:1 split on 3-4-98 at a stock price of $89. The company has just enough authorized shares for a 3:2 split, but can certainly announce contingent on an increase in the number of authorized shares.
STATUS: GD made another weak push up through the 50 day yesterday, and nearly hit the 10 day MVA (85.26) at the high, but the selling took over again today as the stock fell back and closed with a significant loss on steady volume of 1.39 million (the average). GD was involved in the potential acquisition of NNS, but NOC's bid for NNS was approved by the pentagon today as GD's was attacked on anti-trust concerns. This news reinforces our downside bias, and we are looking for stronger selling tomorrow. With today's below average volume we may see a small bounce up first, but we are looking for the move to fail. We are still targeting the 200 day MVA at 75.97, but will carefully watch the up trendline at 78 (connecting February, June and July lows).
BUY POINT: From here or after a bounce up fails, a move back down through 81 on increased volume.
POSITION: November $90 puts to buy (GD WR - December available Monday).

LLL (L-3 Communications--$84.43; -3.22; optionable): Telecom. Announced earnings ahead of the company's original schedule.
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: After selling back late last week on news of additional convertible securities, LLL seemed to catch itself at 85 and was trying to push back up from there, but it could not hold on. The stock fell back from the 18 day MVA (88.48) today, and tapped through the 50 day (83.45) before pulling up just a bit at the close. Volume has steadily and sharply fallen since the news of the issuance (down today to 841,100, average 820,000), so we will see if LLL has truly caught itself here. LLL had made a solid, rapid recovery on the re-open after a long, steady downtrend from its March-June highs near 90 but experienced some weakness after hitting a high of 98.07 earlier this month. Increased demand after the attacks has driven LLL's price success, and we will now see if it can overcome this news, settle down over the 50 day, and work toward coming back. The 200 day is down at 80.
BUY POINT: Aggressive: After showing that it can hold support over the 50 day, a move back over 90 on continued strong volume. Stop: 87.
POSITION: Stock and/or January $85 calls to buy (LLL AQ).

MIKE (Michaels Stores--$48.10; +0.61+0.02; 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 briefly hit the left side-highs (from its ragged 16-month cup) today, but once again it fell way back to close as volume fell to 267,700 (average 363,000). MIKE is edging up as it moves in something of a lower volume handle to the cup. As we have noted before, this is not the preferred handle action (a gentle increase can lead to a weak breakout that quickly fails), but with today's close of the intraday high, we may finally see the pullback to support that we have been watching for (the 10 day MVA is just below at 46.28). After it has a chance to rest and digest the recent gains (up from 33.81), we will look for the next run up on above average volume. The high in the left side is 49.12, and handle high is now 49.14.
BUY POINT: Aggressive: After holding support at the 10 day, a move back up on above average volume. Stop: 44. Breakout: After a pullback in the handle, a move to 49.26 on volume of 540,000. Stop: 45.50.
POSITION: December $40 calls to buy (IKQ LH - under 100 open interest).

MKC (McCormick--$45.20; +0.30; optionable): Food & Beverage.
http://biz.yahoo.com/p/m/mkc.html
BACKGROUND: Last announced a 2:1 split in November 1991. The annual shareholder meeting was on 3-21-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Volume is gradually picking up as MKC is pushing back up from the 50 day MVA (44.15), and is now back over the short-term MVA's. Today the stock cleared the 10 day (44.82) and our buy point, but although volume increased to 130,600 (average 158,300), it was still much lighter than we wanted to see, so it did not trigger the play. MKC is still moving in a handle-type consolidation (in the range of the cup with handle it fell from in September), but with its September drop it has shaped up as a reverse head and shoulders pattern. We are watching to see if support continues to hold as it digests the recent gains (up from 40) and gathers strength for another run. Looking for a move on above average volume and still targeting 52.
BUY POINT: Aggressive: A move over 45.50 on above average volume. Stop: 44. Breakout: A move to 46.67 on volume in the 250,000 range. Stop: 44.
POSITION: Both buy points: Stock and/or December $40 calls to buy (MKC LH).

RE (Everest Re Group--$69.50; -6.40; optionable): Insurance. No announcement yet, and hammered on 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: After last week's fairly gentle pullback, RE pushed up from the 10 day MVA (72.94) on slightly lighter volume Monday, but tanked back hard today on earnings news. Volume was huge (2.52 million, average 606,400) as the stock gapped down and traded between the 10 day and 50 day (67.91) before pulling into a loose doji to close. RE had been shaping up nicely before today's action, so we will see where it catches support and watch for the next move up. Volume was a bit light Monday, but for those that took positions, today is an excellent example of a stop limit providing the chance to watch for a more opportune exit point (with the stop order, one could have been taken out at the opening low of 70, but the stock made it back to 72.50 before dropping again). After RE settles down, we are looking for a sustained move over the 10 day to trigger new positions. It may take some time. Target: 90.
BUY POINT: Aggressive: After holding the 50 day, a move over the 10 day on continued strong volume. Stop: 70.
POSITION: Stock and/or January $70 calls to buy (RE AN).

SLM (USA Education--$83.72; -0.33; optionable): We did not get the announcement.
http://biz.yahoo.com/p/s/slm.html
BACKGROUND: Last announced a 7:2 split on 11-21-97 at a price of $132. The annual shareholder meeting 5-10-01 at which time additional shares were authorized.
STATUS: Volume is falling as SLM's weak bounce up from Friday's visit to the 50 day MVA (81.52) is stalling. Today the stock showed a small loss on the day as it closed with a loose doji over the 10 day (83.67) on decreased volume of 463,800 (average 815,200). SLM is generally trending down in a rather jagged consolidation (extending from a 6-week double bottom begun in mid-August), but is trying to move but cannot find the volume. Looking for strength on a move up to the high (86.70). Target on a breakout: 100.
BUY POINT: Breakout: 86.82 on increased, above average volume. Stop: 82.
POSITION: Stock and/or January $80 calls to buy (SLM AP).

SUI (Sun Communities--$36.40; +0.10; no options): REIT. Did not get the announcement.
http://biz.yahoo.com/p/s/sui.html
BACKGROUND: Based upon our research it does not appear that SUI has ever split its stock. The annual shareholder meeting was on 5-22-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Last week, SUI had gently pulled back from the recent high of 38.05, but had caught support at the 18 day MVA (37.05). Monday however, the stock sold back hard on earnings news, closing below the 50 day (36.46) and back in the range of the late September consolidation, ending the play before it even began. Today, volume picked up considerably to 61,600 (average 43,000), but it wasn't enough to sustain a recovery attempt. SUI pushed up to 36.70 at its high, but could not hold on, and fell back to tap its up trendline (connecting February, March and August lows) before pulling up to close with a loose doji under the 50 day. SUI held on through the attack, and had made a nice breakout move earlier this month, but from here we will see if the stock can pull back over the short-term MVA's (37), and consider new upside positions from there. Nothing for now.

THC (Tenet Health Care--$60.80; -1.43; optionable):
http://biz.yahoo.com/p/t/thc.html
BACKGROUND: Last announced a stock split in September 1991 in the $45 range. No additional shares will be authorized at the annual shareholder meeting, but the company has sufficient shares for a 2:1 split.
STATUS: THC has been behaving well as it continues to move in its uptrend. However, it was not able to generate a strong move on its last rotation off of support at the 18 day MVA, moving on low volume Monday and immediately turning back down today, as volume on the selling increased (1.72 million; average 1.9 million). After 4 small bounces up the 18 day MVA, it may try to sell back further back toward the 50 day MVA (57.75). Riding the long term trend, that is okay. For shorter term plays taken to play the move up the 18 day MVA, particularly with options, we don't want to rise that one back down. If it can hold again and give us a better move up to a new high, we are still targeting 70 with new or additional positions.
BUY POINT: Breakout: 62.90 on volume in the 3 million range. Stop: 59.
POSITION: Stock and/or February $60 calls to buy (THC BL).

WHR (Whirlpool--$60.50; -0.50; optionable): Consumer Durables: Appliances.
http://biz.yahoo.com/p/w/whr.html
STATUS: After falling hard from the recent high of 64.47, WHR has managed to bounce off the 200 day MVA (58.45), but has not been able to crack back over the 50 day (61.13). Today the stock tried to push up through the 50 day, but volume has fallen in this little consolidation (down today to 559,000, average 771,400), and the stock could not hold the move. Now we are watching to see if this lateral consolidation continues, and if it sets up a strong move over the recent highs. Quite a move from here, so once the run begins, it may take more than one session to hit our aggressive buy point.
BUY POINT: Aggressive: A move over 64.60 on increased, above average volume.
POSITION: Stock and/or December $60 calls to buy (WHR LL).

POST SPLITS REMAINING PLAYS:

ATK (Alliant Techsystems--$83.51; -1.29; optionable): Aerospace/Defense. Split 3:2 effective 9-10-01.
http://biz.yahoo.com/p/a/atk.html
STATUS: After ending last week with a small push up over the short-term MVA's (10 day at 85.14), ATK has pulled back through them this week. Not terribly troubling as volume has been lower on the selling, today down to 200,400 (average 305,200) and the stock is still holding over the recent low (82.20). Some defense issues have retreated much harder, but ATK is hanging in there, and a consolidation could set up another run if it can hold on. On a volume surge, the aggressive can still look at new or additional positions. ATK is becoming a leader and regular splitter and we are looking for more. Target on the next run: 105.
PLAY: From here (aggressive) or after consolidating: A move over 88 on increased volume, with stock and/or February $80 calls to buy (ATK BP).

CEFT (Concord EFS--$28.42; +0.29; optionable): Split 2:1 effective 10-01-01.
http://biz.yahoo.com/p/c/ceft.html
STATUS: Volume remained steady at 3.70 million (average 3.21 million) as CEFT edged up. CEFT has been making a solid post-split recovery, but has been running up against the resistance of the late July-August consolidation (high at 29). It has formed something of a brief, v-shaped cup, with a rough handle that it pulled back into last week. This move back up has been weak, but we will see if the handle develops a bit more on a pullback from here. On a move from here, we could play a strong move, but with this type of set up (drifting up on low volume), we will exercise care with stops, as these breakouts can quickly fail. Relative strength has broken out. Target: 35.
PLAY: After a dip back and a bit more consolidation, a move to 29.12 on volume of 4.8 million. Stop: 27.25. Stock and/or December $25 calls to buy (EQF LE).

JNJ (Johnson & Johnson--$58.85; -0.12; optionable): Drugs. Split 2:1 June 12.
http://biz.yahoo.com/p/j/jnj.html
STATUS: After opening the week with yet another small gain, JNJ rested a bit today as it briefly tapped up to a new high (59.32) and then fell back to close in a loose doji on lower volume of 7.23 million (average 7.96 million). We are still looking for a lower volume consolidation over 57 (highs from the August-September double tops) or the 10 day MVA (57.43) to give JNJ a chance to take a breather as it digests the recent gains. After holding and perhaps consolidating, we will look for the next move up. Target: 64.
PLAY: After a lower volume consolidation in the 57-57.50 range: A move over 58 on increased, above average volume, with stock and/or January $55 calls to buy (JNJ AK). Stop: 54.

KMP (Kinder Morgan--$38.12; +0.10; optionable): Energy. Split 2:1 effective Sept. 4.
http://biz.yahoo.com/p/k/kmp.html
STATUS: Volume held steady at 189,400 (average 183,100) as KMP made a small push up toward the recent highs before pulling back to close with a loose doji. The stock is forming a somewhat volatile consolidation after having broken out over the August lateral consolidation. We are watching this carefully to see if it can settle down and hold over support (the consolidation highs are in the range of the 10 day MVA, at 37.17). We would prefer to see slight pullback toward the 10 day, and a lower volume consolidation there lead to a solid breakout move. Still looking at an overall target of 42.
BUY POINT: After pulling back and holding 37, a strong move back to 39.02 on increased, above average volume, with stock and/or December $35 calls to buy (KMP LG). Stop: 36.

PDLI (Protein Design Labs--$29.21; -1.54; optionable): Biotechnology. Splits 2:1 effective October 12.
http://biz.yahoo.com/p/p/pdli.html
STATUS: After struggling with resistance at the 200 day MVA (29.66) and down trendline connecting the November and June closing highs (currently 28.50), PDLI made a very weak push through them Monday, but the stock could not hold the move today after gapping up in a strong price move on the open. Volume increased slightly to 2.07 million (average 1.93 million) as PDLI gapped up to open, and then promptly fell back through the 200 day to close. This action indicates more potential selling, so we will see if it can hold what has been good recent support at the 50 day, below at 27.27. We will see if it can hold and consolidate, finally making the strong move, but the downtrend continues. When we get the move, the initial target is 35.
PLAY: A move to 31 on volume of 4 million, with stock and/or November $25 calls to buy (PQI KE). Stop: 28.50.

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.

stock watch
stock split