us stock market, stock watch

Begin Part 2 of 2

PNC (Pnc Financial--$55.75; -1.02; optionable): Banking.
http://biz.yahoo.com/p/p/pnc.html
STATUS: Since dropping back with the market in September, PNC twice tried to make it back over 60 (pre-attack highs around 70), but failed. Earlier this month it tried another move up but made a lower high, dropping back to recent support at 55-56 to form a descending wedge. It has moved back and forth over the 50 day MVA (57.44) in this pattern, but a move up this week failed at that resistance, and Friday saw PNC take a sharp drop back on much higher volume (1.55 million; average 1.02 million). A bearish pattern, and with the strong selling PNC could be ready to take out its recent low in the pattern and dive. Targeting the September low at 51.14 on a strong drop.
BUY POINT: Below the recent low of 55.20, looking for continued strong selling volume.
POSITION: January $65 puts to buy (PNC MM).

DBD (Diebold--$40.90; +1.89; optionable): Business equipment.
http://biz.yahoo.com/p/d/dbd.html
STATUS: In a nice uptrend since April, forming something of an ascending wedge since early September. DBD hit a high of 41.10 in late November on an attempt to breakout, but pulled back and caught support at its 50 day MVA (currently 38.49). It had been using its up trendline (at 37.20), but using the 50 day this time showed some strength, and after testing that support Thursday DBD took off Friday, running past resistance (from numerous pattern highs) at 40, moving on big volume (885,800; average 369,000). Closed near its high (41), and we are looking for it to continue up. Target: 46.
BUY POINT: 41.22 on continued strong volume. Stop: 38.33.
POSITION: Stock and/or February $35 calls to buy (DBD BG).

LEH (Lehman Bros--$65.00; -1.17; optionable): Investment brokerage.
http://biz.yahoo.com/p/l/leh.html
STATUS: Fighting a downtrend since February, and after a recovery from its September lows (44) LEH again found the trendline too tough to beat. It has been dipping down to support below the 50 day MVA (65.89), twice hitting 63.30 before moving up to make lower highs. That pattern, with lower highs and a consistent bottom, is a descending wedge, and it indicates pressure building to the downside. LEH tried a move up this week but could not hold over its 50 or its 200 day (67.91), and Friday it dropped back down as volume increased (2.77 million; average 2.51 million). Looking for the selling to intensify and take out the recent lows. Target: 55, watching for possible support at 60.
BUY POINT: Below 63.30 on increased volume.
POSITION: January $70 puts to buy (LEH MN).

OMG (OM Group--$64.40; +1.65; no options): Chemicals. One we are keeping an eye on for a possible split.
http://biz.yahoo.com/p/o/omg.html
STATUS: OMG was on a nice trend up from the 35 range since the beginning of the year, but after hitting 66.70 before the September attacks it has tumbled and now steadily fought its way back up. It has made its way along the 50 day MVA (61.02), and after low volume pullback along that level the past couple of weeks, broke out over its early-December high (64.25) Friday. An excellent move on good volume (119,200; average 78,500), and we are looking for a continued move to take out the high. OMG shows excellent money flow. Target: 75.
BUY POINT: From here, a continued buy on a move up on strong volume. Over the high: 66.82 on continued strong volume. Stop: 62.14.
POSITION: Stock only.

PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: No announcements until we get into the new year.

NEW PRE-ANNOUNCEMENT PLAYS:

DRI (Darden Restaurants--$35.65; +0.52; optionable): We are working on a date.
http://biz.yahoo.com/p/d/dri.html
BACKGROUND: Based upon our research it does not appear that DRI has ever split its stock. The annual shareholder meeting was on 9-20-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Broke out from a cup with handle in early December (handle high at 32), and made another strong move after consolidating laterally until it intersected its 10 day MVA (34.99). This week started with a move that hit 37.47, but it has since pulled gradually back on much lighter volume than we saw on the upward surge, again catching support at the 10 day. DRI pushed back up from that support Friday, moving back up on slightly increased volume of 774,700 (average 773,000). Looking for DRI to build strength as it moves up toward the high and beyond. Target: 43.
BUY POINT: Aggressive: Over 36 on increased volume. Stop: 34 (18 day at 34.15). Over the high: 37.59 on increased volume. Stop: 34.96 (7%).
POSITION: Aggressive: Stock and/or April $32.50 calls to buy (DRI DZ). Over the high: Stock and/or April $35 calls to buy (DRI DG).

BEST PLAYS:

MARKET FAVORITES BEST PLAYS: Still looking at EMLX to break out.
1) TLGD - Ready to break from an ascending wedge
2) BELM - Nice pullback sets up a bounce
3) CREE - Nice breakout move

TLGD (Tollgrade--$33.79; +1.41; optionable): Telecommunications.
http://biz.yahoo.com/p/t/tlgd.html
STATUS: TLGD made a solid move up in November from its 50 day MVA (then 26), but after hitting up to 34.55 it fell back and caught the short-term MVA's (10 day currently at 32.41). The stock has made its way back up along that support, forming an ascending wedge in the process. Friday it moved back up, tapping over its early December high before pulling back slightly to close. Looking for a breakout move. Target: 40 (left-side high in its cup).
BUY POINT: 34.67 on volume of 270,000. Stop: 32.24 (7%).
POSITION: February $30 calls to buy (THF BF).

BELM (Bell Microproducs--$13.47; +0.07; optionable): Electronics Wholesale.
http://biz.yahoo.com/p/b/belm.html
STATUS: BELM has made a solid push up from its September lows (below 7), forming the right side of its cup base. Last week it reached the level of its left-side highs (from May), tapping just over them to 14.34 before pulling back a bit. It dropped back Thursday but landed on its 10 day MVA (13.33), showing a bullish 'shooting star' doji Friday (intraday high 13.90). Volume was down but still strong at 119,200 (average 96,500), so we will look for a bounce from here that will take out its pattern high. Target: 16.50.
BUY POINT: Bounce: Over 13.75 on increased volume. Stop: 12.79 (18 day MVA). Over the high: 14.46 on increased volume. Stop: 13.45.
POSITION: Stock and/or March $12.50 calls to buy (CVL CV).

CREE (Cree--$29.69; +2.38; optionable): Semiconductor equipment.
http://biz.yahoo.com/p/c/cree.html
STATUS: Broke out from its cup with handle Monday with a very strong move, and then after a pullback to test the move, CREE took off again Friday. News that CREE was on the favorable end of patent litigation drove the move. Volume was magnificent on the session (10.8 million; average 1.5 million) as the stock pushed off the support of its 10 day MVA (27.21), which was just below its prior handle high. Still a buy up to 30.66, with a target of 35.
BUY POINT: A buy up to 30.66 on continued strong volume. Stop: 27.62-28.51.
POSITION: Stock and/or March $25calls to buy (CQR CE).

PRE-ANNOUNCEMENT BEST PLAYS: Also looking at EDS, MI, SONC and JCI.
1) DIAN - Solid move back up on the breakout test
2) BRL - Poised for a move
3) FDC - Moved up toward the breakout
4) NDN - Looking to break from the ascending wedge

DIAN (Dianon Systems--$59.09; +2.19; optionable): Forecast to announce a split in 1-17-02 with earnings. At this time the company cannot confirm this date.
http://biz.yahoo.com/p/d/dian.html
BACKGROUND: Based upon our research it does not appear that DIAN has ever split its stock. The annual shareholder meeting was on 10-25-00 at which no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Made the bounce we were looking for. DIAN broke out last week from its July-November range (42-55), making a huge move on massive volume, but after hitting a high of 60 it showed a nice, gradual pullback on reduced volume. It caught support at the former highs (near the 10 day MVA, at 55.76), and pushed back up Friday on big, increased volume of 407,600 (average 197,500). Looking for it to take out its high of 60. Excellent money low and buying. Target: 65 initially.
BUY POINT: 60.12 on continued strong volume. Stop: 55.91.
POSITION: Stock and/or February $55 calls to buy (UID BK - no open interest at this time for this or the nest month out, May, although there is substantial open interest for the $60 calls, but the delta is of course low).

BRL (Barr Laboratories--$77.99; +0.08; optionable): Researching a split date.
http://biz.yahoo.com/p/b/brl.html
BACKGROUND: Last announced a 3:2 split on 5-31-00 in conjunction with a board meeting, at a price of $52. The annual shareholder meeting was on 10-25-01 at which time no additional shares were authorized. There are sufficient shares for a 2:1 split.
STATUS: Continues in its lateral pattern. BRL is holding over the 10 day MVA (77.07) on light volume, today showing another doji on volume of 457,900 (average 1.1 million). BRL made triple tops at 90 in July-October, but after retreating to 60 in November it has made a nice recovery. The run looks good, as BRL took out its 200 day MVA (70.64) in November and then consolidated, and then took out its 50 day (currently 75.31) with a strong move last week before pulling laterally again. Looking for it to hold and show a strong breakout. Target: 90.
BUY POINT: 78.86 on volume of 1.5 million. Stop: 74.
POSITION: Stock and/or February $75 calls to buy (BRL BO).

FDC (First Data--$78.00; +1.60; 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: Trying to break from its small ascending wedge. FDC took out its former (July) high when it moved out of a reverse head and shoulders in early November, and since has made a nice move up along the 18 day, making higher lows along that support as it formed the wedge pattern. Volume kicked in Friday as FDC moved over the high (77.93), stopping just short of our buy point (volume up to 2.56 million; average 2.07 million). Looking for a strong breakout move, and FDC could give us a couple more bounces from the 18 day on a continued upward trend. Target: 87.
BUY POINT: 78.25 on increased volume.
POSITION: Stock and/or February $75 calls to buy (FDC BO).

NDN (99 Cents Only Stores--$39.15; +0.66; optionable): Retail. Researching a date.
http://biz.yahoo.com/p/n/ndn.html
STATUS: Showing an ascending wedge in its handle. NDN has held strong at support (18 day MVA currently at 37.73) after dropping back hard from its recent move up in the right side of its 2.5-month cup (with something of a double bottom configuration). It had made a wild spike up to 42 on its last run before reversing on high volume, so holding support and forming this handle is good action. It tried a run Wednesday, hitting 39.90 before pulling back to close, but settled back and Friday pushed up on increased volume of 340,200 (average 414,400). Holding support and making a higher low was key, and now we look for the breakout. We will watch the recent high at 42 on a move up, targeting 45.
BUY POINT: Breakout: 40.02 on volume of 600,000. Stop: 37.22 (7%).
POSITION: Stock and/or March $35 calls to buy (NDN CG).

PRE-SPLITS BEST PLAYS: Remember, we try to grab these as they break out of good patterns or as they start a run right before the split. Not looking for home runs, but looking for those $3 to $4 moves running into the split, watching for topping signs and potential resistance. Not huge money, but it can be very steady. We set our initial stops at the 7-8% range below the purchase price (or just below obvious support), and move them up on a move to preserve our profits.
1) CPRT - Looking for a bounce
2) XRAY - Nice move back up
3) LIZ - A new play!

CPRT (Copart--$36.31; -0.04; optionable): Auto parts. Splits 3:2 effective 1-22-02.
http://biz.yahoo.com/p/c/cprt.html
STATUS: After dipping back Thursday on modest volume, CPRT held strong Friday at its 10 day MVA (35.92). Friday's candlestick pattern was a doji, coming on sharply stronger volume of 1.13 million (average 740,000). The high-volume doji on support indicates we could get a good bounce here. The last couple of moves have failed at the stock's upper channel trendline drawn from its December tops (currently at 38.15). We will watch that trendline as a possible point to take profits, looking for a dip back to support to catch yet another pre-split move.
PLAY: Bounce: Over 36.50, with stock and/or January $32.50 calls to buy (KQJ AZ - under 100 open interest, February available next week). Stop: 34.50.

XRAY (Dentsply Internat--$49.90; +0.86; optionable): Medical instruments. Splits 3:2 effective February 1.
http://biz.yahoo.com/p/x/xray.html
STATUS: XRAY is a bit erratic now, but we are used to that with post splits. The stock is making some nice moves, having broken out Wednesday but pulling way back to close off of its new all-time high of 51.14. After Thursday's gap up and reversal we were anticipating a possible drop back, but volume was low and XRAY immediately reversed, moving back up Friday on increased, strong volume of 421,900 (average 240,400). We can look at playing a continued move up, watching the high on the way toward an initial target of 54. Remember, with pre-splits we look to catch a move, ready to get out on topping signs, and wait for the set up for the next move.
PLAY: Over 50.19 on continued strong volume, with stock and/or January $45 calls to buy (XAQ AI).

LIZ (Liz Claiborne--$49.92; +0.42; optionable): Apparel. Splits 2:1 effective 1-17-02.
http://biz.yahoo.com/p/l/liz.html
STATUS: Like many stocks, LIZ was trending up nicely before September, but after free-falling to 36 the stock has battled back near pre-attack levels. It has hit up against the lower end of its August range twice, dropping back from 52 in November and early December. At its lows it has held the 200 day MVA (48.47; 50 day at 48.85), tapping down to that level but pulling back up, moving on high volume, and today pushing up slightly with less power (477,800; average 576,400). It is battling its short-term MVA's (50.08), but we want to see LIZ make a strong move over 52 as we go toward the split. The next level of resistance is the July high at 54.95.
PLAY: Aggressive: Over 50.64, with stock and/or January $45 calls to buy (under 100 open interest; February available Monday). Stop: 47.10. Over recent highs: 52.12, with stock and/or April $50 calls to buy (LIZ DJ). Stop: 49.

PAST SPLITS BEST PLAYS:
1) FIC - Might be ready to spring in the handle

FIC (Fair Isaac & Co--$63.34; +0.44; optionable): Business services.
http://biz.yahoo.com/p/f/fic.html
STATUS: FIC has moved into another handle after its early-December breakout, and the handle has now formed into an ascending wedge. It has pulled down slightly this week, Friday showing a doji over the 10 day MVA (62.79) as volume shot back up (217,600; average 195,600). Looks good for a move, and we are looking for a breakout over the recent high at 65. Good money flow and buying. Target: All-time high at 69.90.
BUY POINT: 65.12 on continued good volume. Stop: 60.56.
POSITION: Stock and/or April $60 calls to buy (FIC DL).

CONTINUING CANDIDATES BEST PLAYS: AZO still in its consolidation, and we are looking for a bounce. We are also looking at TJX, in a wedge that could pop.
1) IGT - Holding up on the test
2) THC - Making the move down
3) BBY - Stingy with the recent gains
4) FLIR - Still watching for a downside play

IGT (International Game Technology--$63.34; +0.44; optionable): Merger with SLOT approved on Friday the 14th.
http://biz.yahoo.com/p/i/itg.html
BACKGROUND: Based upon our research it does not appear that IGT has ever split its stock. The annual shareholder meeting was on 3-5-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: IGT moved up from its 10 day MVA (currently 65.86) on nice volume Monday after Friday's news that its merger was SLOT had been approved, but that move stalled. However, it has held on well, dipping back slightly, showing some tight patterns on below average volume (884,400; average 1.26 million). Looking solid as it holds, and we are looking for another move up, wanting to see more strong volume push it as we eye the target of 75 with existing positions.
BUY POINT: A move back over 68 on above average volume. Stop: 63.24.
POSITIONS: Stock and/or January $60 calls to buy (IGT AL).

THC (Tenet Healthcare--$57.42; -1.08; optionable):
http://biz.yahoo.com/p/t/thc.html
STATUS: THC had been bouncing along its 50 day MVA (58.76), pushed down each run by resistance at 61. Wednesday THC gave up the 50 day on higher volume, and after a test it dropped again Friday, taking out our buy point (through Wednesday's low of 58.10), although volume was back below average (1.71 million; average 2 million). Very weak, and we are looking at riding any existing positions down to the target of 54 (September and November lows). For new or additional positions we are looking for a drop on stronger volume, perhaps after a test back up toward 58-59.
BUY POINT: From here: Through 57 on above average volume. Test: After a test of 58-59 on continued below-average volume, a drop back through 57.50 with increased power on the selling.
POSITION: January $65 puts to buy (THC MM).

BBY (Best Buy--$72.03; -0.82; optionable): Did not get the announcement with earnings, but it made a great move on the numbers!
http://biz.yahoo.com/p/b/bby.html
BACKGROUND: Last announced a 2:1 split on 2-22-99 with a board meeting. The stock price was $95. Prior to that announced a 2:1 split on 4-24-98 with a board meeting. The stock price was $71. The annual shareholder meeting was 6-26-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: With the positive earnings announcement, BBY made a nice bounce from the 65 level, but stalled Thursday at its early-December high with a "tombstone" doji. That signals a drop, but it was stingy, giving up only a little bit Friday, as volume dropped off to 2.4 million (average 3.77 million). Its failure to take out the prior high is a concern, setting up a possible double top, but with the strong earnings and the slight dip on lower volume, we are looking for BBY to hold the 10 day (70.81) and then give us another push. On taking out the high, targeting 85.
BUY POINT: Aggressive: After holding the 10 day, a move back over 73 on above average volume. Stop: 68. Over the high: 75.04 on above average volume. Stop: 69.79 (7%).
POSITION: Stock and/or March $70 calls to buy (BBY CN).

FLIR (Flir Systems--$39.00; +0.16; optionable): Scientific & Technical Instruments.
http://biz.yahoo.com/p/f/flir.html
STATUS: Got killed Wednesday-Thursday on the news of an offering of additional shares. It closed on the 50 day Wednesday but continued down hard, slowing the carnage with a loose 'star' doji Friday. Off of the doji we are looking for a bit of a relief bounce, but for that bounce to fail and for the selling to turn back up. There is a bit of support here from prior price levels, but we are looking for a fall to 34, its recent low and August high.
BUY POINT: After a bounce fails at the 41 range, a drop back through 38 on increased volume.
POSITION: January $50 puts to buy (FFQ MJ).

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.

us stock market
stock watch