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Begin Part 3 of 4

PCL (Plum Creek Timber Reit--$28.54; +0.35; 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, and the stock dropped back immediately. However, PCL is now forming another handle. This one is shaping up very nicely, holding its 10 day MVA (27.98) as volume has dipped back and remains low at 469,300 (average 606,000). The recent high from the left side of the pattern is 30, with the handle high up at 28.98. Targeting 34 on a breakout.
PLAY: After holding the 10 day on continued low volume for a nice handle, 29.10 on volume of 900,000, with stock and/or November $25 calls to buy (PCL KE). Stop: 27.

PSC (Philadelphia Suburban--$28.87; +0.62; no options): Water utility. Splits 5:4 effective 12-3-01.
http://biz.yahoo.com/p/p/psc.html
STATUS: Formed a small cup from mid-August, and after a massive climb to an intraday high of 30.80 and pullback (closed that day at 28.50), PSC has held up over its 50 day MVA (27.08) to form a something of a pennant handle. Friday the stock continued up, with volume much higher than what we saw on the move up the preceding session (94,400; average 75,500). PSC reached 29.20 Friday (our buy point was 29, although we were looking for more volume), pulling back to close, battling its August highs (left-side highs of the cup), at 29. Looking for PSC to continue the move. Target: 34, eyeing the intraday high along the way.
PLAY: 29.32 on volume of 114,000, with stock. Stop: 27.

CONTINUING CANDIDATE BEST PLAYS:
1) RMD - Still consolidating on lower volume after the breakout
2) BJ - Nice little pattern
3) SUI - Resting on the run back at its high
4) TECD - Still looking good
5) AZO - Nice pullback

RMD (Resmed--$57.65; +0.21; optionable): Health services.
http://biz.yahoo.com/p/r/rmd.html
BACKGROUND: Last announced a 2:1 split on 2-25-00 with a board meeting. The stock price was $68.
STATUS: Made a strong breakout move last Friday and Monday, bouncing from 52 back over recent highs. RMD is fighting its way back up and is now in the upper range of its May-August cup pattern (high 61.39), consolidating after the recent strong move. It is holding in a lateral pattern on low volume, but we need to watch it carefully as it is edging ever so slightly upward, and in a consolidation like this we would prefer action that took the stock down slightly, measured along its intraday lows. Nonetheless, still pretty good, and we are looking for a high volume break out of the lateral pattern. We could get some more consolidation out of this one, looking for continued low volume and perhaps a pull back to the 56 level (10 day MVA at 55.65). That would set up nicely in a new cup with handle.
BUY POINT: Perhaps after a bit more of a handle consolidation, a move to 58.45 on volume of 285,000. Stop: 55.
POSITION: Stock and/or January $55 calls to buy (RMD AK).

BJ (BJ Wholesale--$52.17; +0.24; 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 has made a decent recovery after the attacks, working on the right side of its base and move recently pulling into a lateral handle pattern. Since pushing back over its 50 day MVA (50) a couple of weeks ago, the stock has reached as high as 53.70 before dipping back into something of a pennant. BJ tested its 50 day at is low Thursday, but the move up has shown weak volume, Friday at 383,500 (average 609,000). Off of the doji pattern we will see if BJ can hold the 10 day (51.28), which it tapped at its low today, and make a strong move toward the breakout. The high is at 57.24 (July). Target: 62.
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).

SUI (Sun Communities--$37.37; -0.40; 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: SUI made a big rebound from the fall it took on earnings, bouncing up from Tuesday's low just below its 50 day MVA (36.56). Friday SUI pulled back, but held comfortably over its 10 day MVA (37.22) on the low-volume drop (29,900; average 43,800). It is approaching all-time highs at 38, from where it recently dropped after having hit its head several times. With the move we have seen on the bounce, we will see if it can hold over the 10 day, perhaps consolidating a bit, to build for a blast to that new high. We will need to see some strong volume on that move, and will target 45.
BUY POINT: After holding her and perhaps consolidating over the 10 day, 38.17 on volume of 75,000, with stock. Stop: 36.50.

TECD (Tech Data--$43.70; -1.55; optionable): Computers wholesale. http://biz.yahoo.com/p/t/tecd.html
BACKGROUND: Last announced a 2:1 split in March 1994. The annual shareholder meeting was on 6-19-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: TECD made a nice breakout move recently, but pulled back and formed a new handle, which is in the form of a small cup. Thursday it attempted another breakout, but after trading in a wide range could not hold the move, and Friday TECD dipped back on lower volume (883,700; average 823,500). A reasonable pullback, holding the 10 day MVA (43.43) to close. Although the breakout attempt failed, it does not appear that TECD is ready for a sell-of, but instead is continuing in the handle. It is not the greatest looking handle, but TECD has been strong and we will continue to look for a breakout. On the next move we are setting an initial target of 50. Solid money flow.
BUY POINT: Breakout: 46.11 on volume of 1.2 million. Stop: 42.25.
POSITION: Stock and/or December $40 calls to buy (TDQ LH).

AZO (Autozone--$57.27; -0.07; 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, but after its initial drop it has shown four consecutive dojis or loose dojis, just holding onto the 10 day MVA (57.22). After volume initially dipped back on the selling, it has picked up the last two sessions on the dojis, Friday at 1.38 million (average 1.24 million). Pretty good action, and we could get a nice bounce back up here. AZO has made a solid run since bouncing up from the September low (38), and we have been waiting for a pullback as it made its steady move. The high (from last week) is 59.95. Target: 66.
BUY POINT: Bounce: 57.75 on increased volume. Stop: 55.
POSITION: Stock and/or December $55 calls to buy (AZO LK).

POST-SPLITS BEST PLAYS:
1) JNC - Patience
2) JNJ - Looking solid

JNC (John Nuveen--$47.30; +0.32; no options): Financial Services. Split 3:2 effective September 28.
http://biz.yahoo.com/p/j/jnc.html
STATUS: Patience is key as wait for stocks that form tight, lateral consolidations. We will continue to watch JNC closely, watching for the breakout. JNC has been a solid, steady performer as it has trended up over many months. It broke out at the first of October, and has now pulled into a flying plateau pattern that continues to extend, holding over its short-term MVA's (10 & 18 day at 46.81 and 46.40). Volume has been below average and sometimes extremely low, Friday slightly up (41,400; average 59,500) as JNC made a slight move toward the breakout. Target: 52.
PLAY: A move to 47.50 on increased volume in the 90,000 range. Stop: 45. Stock only.

JNJ (Johnson & Johnson--$58.67; -0.30; optionable): Drugs. Split 2:1 June 12.
http://biz.yahoo.com/p/j/jnj.html
STATUS: Earlier this month JNJ showed a strong move over its closing highs at 57, but lost some strength as it continued up and has shown some signs of topping. However, we are keeping a close eye on JNJ as it has held its prior intraday high (58) and its 10 day MVA (58.11) on its intraday lows the last two session (Friday 58.25), both times pulling back up to show loose dojis. JNJ might not be ready just yet, and we have been looking for a pullback, but we will see if it can continue to hold the 58 level in a consolidation on continued low volume (decreasing again Friday to 5.48 million; average 8 million). It is setting up well. Target: 64.
PLAY: After a consolidation on continued low volume that holds 58, a move over 59 on increased, above average volume, with stock and/or January $55 calls to buy (JNJ AK). Stop: 55.
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PRE-ANNOUNCEMENTS REMAINING PLAYS
* * *
JEC (Jacobs Engineering--$69.62; +2.77; 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: Nice move Friday, but on low volume in keeping with this erratic pattern. After spending most of October moving in a somewhat choppy handle (that has settled down recently) that generally held support over the 65 level, JEC closed the week with a decent move, hitting our buy point but without the volume, which was up to 154,000 (average 240,900). JEC is trying to build the right side of its base, and as it goes toward the forecast next week, we will look for stronger volume to carry a breakout move, but from here will watch carefully for a pullback, given the light volume on the move up. The all-time high, from the left side of the cup, is at 75.67.
BUY POINT: Breakout: 70.90 on volume over 400,000. Stop: 67.50.
POSITION: Breakout: Stock and/or January $70 calls to buy (JEC AN).

XL (XL Capital--$89.40; 0.00; 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: Doji over support Friday. 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 has pulled back a bit, and was forming a pennant before falling out of that small pattern Thursday and testing down to the 18 day MVA (89.08) on strong volume. Friday the stock briefly tested through that level before pulling up to close with a tight doji over support as volume fell to 1.52 million (average 1.75 million). We have been looking for the stock to rest a bit and digest its gains, so holding support is encouraging. We will see if it can hold here and set up something new as we go toward the split. Still targeting 100 on a continued strong move after a rest.
BUY POINT: After holding support at this level and consolidating a bit, a move back to 93 on continued strong volume. Stop: 89. The breakout is a move 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--$48.24; +0.64; 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: Little change Friday. 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 (from a double bottom), it topped out at 58 and took an abrupt drop. Since then it has bounced up from the 50 day MVA (43.92) three times, but has continued to stall around 49. Friday volume stayed steady and low at 246,000 (average 488,600) as the stock tapped up toward 50 again, but fell back to close with a tight doji over the 10 day (46.85). It could take a bit of time before this one is ready to make a move it can hang onto. It is right at the highs on the previous two bounces, so could be headed back down to test support again. It is shaping up as something of a head and shoulders, so we will watch support carefully.
BUY POINT: Aggressive momentum: After holding the 10 day, a move over 50 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 interest).

EDMC (Education Management--$38.55; +1.20; 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: Moving up in the handle. Friday EDMC tapped up toward the handle high (39.44) before pulling back at the close, as it moved on steady and low volume of 123,500 (average 468,600). The stock hit our aggressive buy point, but it did not have the volume we wanted. 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 currently at 35.37), the stock has shown an erratic handle consolidation with lousy price/volume action. We will see if it can continue to hold over the loose convergence of the short and long-term MVA's (34.50-36.50), but we would like to see better action in this consolidation and then big volume on a move up. The all-time high of 46 was set in July (initial target).
BUY POINT: Breakout: 39.56 on volume of 700,000. Stop: 37.
POSITION: Stock and/or December $35 calls to buy (UKN LG - under 100 open interest).

FDC (First Data--$70.31; +0.47; 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: Continuing to creep up. FDC closed the week with another small gain as volume picked up to 1.72 million (average 1.94 million). For current positions we still watching for a gentle drop to form a handle (to the all too common v-shaped cup), and we would look for that pattern to hold the 10 day MVA (67.67). FDC has made a rapid recovery after dropping on the attacks (low of 52.65), and is back in the range of its former high (72.25, from July). The left-side (and all-time high is at 72.25). Protecting current positions carefully.
BUY POINT: After pulling back and forming a lateral consolidation that holds the 10 day, the buy point is 71 on volume of 3 million. Stop: 67.
POSITION: Stock and/or February $65 calls to buy (FDC BM).

THQI (THQ Inc.--$52.32; -1.48; 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 is in a somewhat ragged handle to a ragged cup, and tried a move on the breakout Friday, but could not make it. Volume picked up a bit, and it looked as though THQI was going to continue the move, but after hitting an intraday high of 54.87, the move stalled and THQI fell back Friday to test support at the 10 day MVA (51.41, handle lows at the 50 day, 49.23). Volume increased to 1.25 million (average 1.09 million). Not a terribly surprising scenario Friday as the recent move up (begun mid-week) occurred on falling, below average volume. Still, holding support is key, and after this drop on increased volume we want to see the 10 day hold firm as we watch for increased volume to carry a move over the handle high of 55. The move may take a few sessions to set up. 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.

LUV (Southwest Airlines--$15.99; -0.46; optionable): Airline.
http://biz.yahoo.com/p/l/luv.html
STATUS: LUV retreated to close back under its 50 day MVA as volume remained low. We are still looking at this one as a long-term hold, watching for it to take out 17 to pick up more shares. We are dropping for now.

SCHL (Scholastic Corp--$47.65; +0.04; optionable): Publishing.
http://biz.yahoo.com/p/s/schl.html
STATUS: May not be able to hold Thursday's weak move up in the handle (to a cup dating back to February). SCHL tested up toward the handle high (48.24) Friday, but volume was even lower (down to 72,100, average 247,100) than we saw on Thursday's $2 move, and SCHL closed the week with a loose doji in the range of the recent closing highs. We will see if SCHL is just taking a breather, but given the low volume of Thursday's move, we may see more of a pullback in the handle, possibly to the 10 day MVA at 46.41 (the stock recently held support at the 18 day, at 45.63). We have seen quite a bit of price volatility of late, so we will see if the stock will pull back into a better handle consolidation. On a breakout move from here, we will continue to look for a volume surge. Target o a breakout: 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:

New Pre-Split Plays:

RMCI (Right Mgmt--$34.26; +2.01; no options): Business services. Splits 3:2 effective 11-2-01.
http://biz.yahoo.com/p/r/rmci.html
STATUS: Broke from a 2.5 month cup in late September, but since that time has shown a lot of volatility. RMCI made a move up to 37.45, pulled back hard going into the split announcement, blasted back up to 37 with a huge volume spike on the announcement, then made another rapid retreat on volume that was just as heavy. The good news is that the stock held the 18 day MVA (32.53) this time for a bounce made on Friday. With this volatility we will need to watch positions carefully, especially with the recent double tops and the hard selling. However, we could get a move going into next week's split, from here or after another test of the 18 day.
PLAY: Aggressive: From here, a move over 34.75. Stop: 32.50. After a test of the 18 day, a move over 33.25. Stop: 32. As the move progresses, we will carefully watch the recent highs.

End Part 3 of 4

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