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Begin Part 3 of 4

NDN (99 Cents Only Stores--$36.70; +2.10; optionable): Retail. Researching a date.
http://biz.yahoo.com/p/n/ndn.html
STATUS: NDN rested a bit this week and then blasted back up again today, closing at its high as it moved on much higher volume (470,400; average 309,500). It has been 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), and making a new high of 39.50 in early October, but then crashing back to the 50 day MVA (32.33). After holding there it has crept back up along its 10 day (34.48), showing a bit of lateral, low volume movement the last several sessions before today's move. It is now at its prior high from 13 months ago, and we will ride current positions on a continued move toward the high. But for the wild movement earlier this month, NDN would be showing a very nice cup pattern. We will treat it that way, perhaps getting more of a move here, but looking for a formation of a handle as it approaches its high.
BUY POINT: Aggressive momentum: A move over 37 on increased volume. Stop: 35.
POSITION: Stock and/or December $35 calls to buy (NDN LG).

THQI (THQ Inc.--$53.80; +2.42; 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 dipped back hard last week with earnings, but the company had actually beaten estimates and raised its guidance. As often happens, a negative move on such news can be short-lived, and THQI held support over its 50 day MVA (49.10), which formed the lower limit of its handle to a cup pattern, and the stock made a move back up today. Volume was not particularly good, coming in down at 1.02 million (average 1.1 million), but the stock closed near the handle high of 55. After this recovery, we are now looking for the stock to break out of the pattern with a volume surge. The high is 62, and that will be the initial target.
BUY POINT: Breakout: 55.12 on minimum volume of 1.7 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.

SCHL (Scholastic Corp--$47.61; +2.19; optionable): Publishing.
http://biz.yahoo.com/p/s/schl.html
STATUS: SCHL made a big move back up today in its handle (to a cup dating back to February). However, the move was on very weak volume of 102,500 (average 250,100). SCHL fell back last week with the severe Wednesday selling, but despite the size of the drop (from near the handle high of 48.24), volume was not that alarming and SCHL was able to hold support at the 18 day MVA (45.40). Low volume is typically fine for a handle, but that is when we get a nice, gradual drop in the pattern. We have seen quite a bit of price volatility of late, so we will see if the stock will pull back into a better pattern; however, we will continue to look for volume to kick in on a breakout move from here. Target: 56.
BUY POINT: Breakout: 48.36 on volume of 410,000. Stop: 46.
POSITION: Stock and/or December $45 calls to buy (USC LI).

PRE-SPLITS REMAINING PLAYS:

PCL (Plum Creek Timber Reit--$28.19; -0.47; optionable): Lumber. Splits 5:4 effective 12-3-01.
http://biz.yahoo.com/p/p/pcl.html
STATUS: Broke out from a small handle to its double bottom Monday, but volume was below what we were looking for. As can happen on a weak volume breakout, the stock immediately reversed. However, it is holding up well, moving back today on lower volume (508,400; average 603,600), but closing over its 10 day MVA (27.85). Below the 10 day is the pattern center (27.20), which is near the 50 day MVA (27.35). We will see if the stock heads back into that range, which was the range of its brief handle. The recent high from the left side of the pattern is 30, with the breakout high on this move at 28.98. Targeting 34 on a breakout.
PLAY: After holding the 10 day on continued low volume for a nice handle, a move back to 29.10 on volume of 900,000. Stop: 27. Stock and/or November $25 calls to buy (PCL KE).

ADVP (AdvancePCS--$58.51; +0.25; optionable): Health services. Announced a 2:1 stock split, effective date TBA.
http://biz.yahoo.com/p/a/advp.html
STATUS: ADVP has given a good put play, and it bounced from the target today (200 day MVA, at 57.69), hitting 61.31 before dropping back to close. The move stopped us out of positions, so we will see if ADVP hangs on at the 200 or retreats gain. It gapped to a low of 56.55 today before moving back up, and has more support in the 55 range from the lows in its May-August cup pattern. If a bounce from the 200 day fails and the stock drops back through 55, we can look at another aggressive and quick put, although we are looking for this stock to gradually make its way back up, as it has been solid and dropped on news with questionable applicability.
PLAY: Aggressive: A drop back through 55 on continued strong volume (3.44 million today; average 1.43 million), with December $75 puts to buy (QVD XO).

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.--$92.29; +0.45; 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), and now it has stalled and pulled somewhat laterally at its upper channel trendline. A bit precarious here, and for current positions we are watching support here at the 10 day MVA (90.73) carefully, as we could get a drop. For now, we are putting on a watch list to see if it forms up for another potential buy.

AZO (Autozone--$57.34; -0.09; 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 has finally pulled back a little bit. After its initial drop it has shown three consecutive dojis or loose dojis, just holding onto the 10 day MVA (57.21) today. 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, pulling them just under the 18 day MVA (55.70). We will see if it can hold here a bit longer and set up a new run.
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.
POSITION: Aggressive: Stock and/or December $50 calls to buy (AZO LJ).

BJ (BJ Wholesale--$51.93; +0.88; 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, but appears to be forming a handle here. The stock has held its 50 day MVA (49.91) on the last two pullbacks, tapping that level today before moving back up on decreased volume (474,400; average 612,000). The handle is shaping up as a pennant, and we will look for it to hold the 10 day MVA (51.08) from here and make a breakout move. It might need a bit more time. The high is at 57.24.
BUY POINT: Breakout: 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--$75.71; +0.01; 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: Has dropped heavily, taking out positions. We will keep on a watch list for it to form up again. Dropping.

FLIR (Flir Sys--$46.32; +3.70; optionable): Electronics. Did not get the split, but made a very nice move on earnings.
http://biz.yahoo.com/p/f/flir.html
BACKGROUND: Based upon our research it does not appear that FLIR has ever split its stock. The annual shareholder meeting was on 7-24-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Announced earnings and made a solid move up after posting a tight, lateral consolidation on the 18 day MVA (42.15). Volume was huge (848,700; average 302,800) as the stock closed back near the recent (and all-time) high of 47. The stock had broken out of a long cup with handle in June, and since then trended up steadily along its short-term MVA's, testing its 50 day MVA (currently 37.02, then 27) for a couple of weeks in August-September. For positions taken as the stock hit our buy point, we are looking for a continued move over the high, but will be watching as it approaches its upper channel line, which is currently at 49. Target: 54.
BUY POINT: Aggressive: A move to 47.12 on continued strong volume. Stop: 44.
POSITION: Stock and/or January $45 calls to buy (FFQ AI - low open interest).

FRX (Forest Labs--$75.30; +1.12; 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: Took a big and heavy tumble last week on earnings, but is valiantly trying to hold its 50 day MVA (74.27). The lateral consolidation it has formed since the drop could be termed a handle to an August-October cup, but it is hanging on here and will have to show a strong move up before it is convincing. Before the drop the stock had been at the levels of its double tops from July and August (82.33), so that resistance will be a strong test if the stock can put together a move. Before that, however, we are looking for FRX to start to hold its lows over the 50 day (has been dipping to the 72 range).
BUY POINT: On a consolidation that holds lows over the 50 day, a move over 78 on above average volume (1.33 million; today 825,900). Stop: 74.
POSITION: Stock and/or January $75 calls to buy (FRX AO).

GD (General Dynamics--$85.09; +2.10; 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 today. It is not shaping up as anything at the moment after having taken a sharp drop recently, so we will drop it but keep an eye on it.

LLL (L-3 Communications--$91.00; +3.66; 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 caught itself at the 50 day MVA (83.89) and has made an impressive bounce, hitting our aggressive buy point today on good volume (up to 1.12 million; average 839,000). We will see if the momentum continues up to the high (from earlier this month) at 98.07. The strong volume today is encouraging that the move has not lost steam, so the aggressive can still look at a play in a strong market, although it has already bounced 7 percent. Increased demand after the attacks has driven LLL's price success, and we will now see if it can continue to recover from the recent drop.
BUY POINT: Aggressive momentum: A move through 92 on continued strong volume, in a strong market. Stop: 88 (below the short-term MVA's).
POSITION: Stock and/or January $90 calls to buy (LLL AQ).

MIKE (Michaels Stores--$53.34; +3.38; 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: Great move today! After gapping up to a breakout earlier this month (from a brief handle over 40), MIKE began drifting up the 10 day MVA on generally lower volume, and on that weaker price-volume action, we were watching for a pullback. But MIKE had ideas of its own, and after starting the move Wednesday on increased volume, it took off today on huge volume of 1.54 million (average 366,600), and hit a new all time high (53.74) before pulling back just a bit at the close. MIKE is now past our 5% "breakout buy" range, so from here, we will look for a lower-volume pullback to provide an opportunity for additional positions. Current target: 57.50.
BUY POINT: Riding current positions toward the target. After a pullback that holds support over 51, a move to 52 on increased, above average volume. Stop: 48.
POSITION: December $45 calls to buy (IKQ LI).

MKC (McCormick--$44.45; -0.53; 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 was gradually picking up as MKC pushed back up from the recent test of the 50 day MVA (44.19), but it was not enough to hold a move back over the short-term MVA's. Today the stock gapped below the 18 day (44.71) to open, and tested down to the 50 day again, before pulling up to close with a tight doji on sharply decreased of 89,100 (average 159,900). This particular action provides a great example of why we wait for volume, and do not rely solely upon price movement to trigger a play. MKC was looking good before the attacks, and it recovered nicely. It is dipping but still holding in the right shoulder of the reverse head and shoulders pattern it moved into when the markets reopened. It is also still in the range of the cup with handle it fell from in September, and if it can continue to hold support over the 50 day, we could see it gather 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 238,500 range. Stop: 44.
POSITION: Both buy points: Stock and/or December $40 calls to buy (MKC LH).

NOC (Northrup Grumman--$103.35; -0.39; optionable): Aerospace/Defense.
http://biz.yahoo.com/p/n/noc.html
BACKGROUND: Based upon our research it does not appear that NOC has ever split its stock. The annual shareholder meeting 5-17-00 at which time no additional shares were authorized. We are working on the number of authorized shares.
STATUS: The initial reaction to the acquisition news (that the Pentagon favors NOC over GD in acquiring NNS) pushed NOC back down, testing its breakout and 50 day MVA (96.76). However, it made a solid reversal, pushing up to close under the 10 day (104) on huge volume Wednesday, but following with a hanging man doji at that level as volume fell considerably to 2.17 million (average 1 million). The candlestick pattern normally indicates a run is over, but we will see if NOC can make a move or hold, catching its breath. We will likely not see a split announcement in the current circumstances, but if it can hold up, we will look for a volume surge to trigger a new play. It has moved solidly since the attacks, although steadily pulling back the last couple of weeks from its new high of 110.56.
BUY POINT: Aggressive: On a move back over 105 on continued strong volume. Stop: 99.
POSITION: Stock and/or January $100 calls to buy (NOC AT).

End Part 3 of 4

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