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Begin Part 3 of 3

CONTINUING CANDIDATES BEST PLAYS:
1) BBBY - Good institutional support
2) APPB - Still looking for a put

BBBY (Bed, Bath & Beyond--$32.63; -0.02; optionable):
http://biz.yahoo.com/p/b/bbby.html
BACKGROUND: Last announced a 2:1 split on 7-13-00 with a board meeting. The stock price of $39. The shareholder meeting was on 6-28-01 at which time authorized shares were increased. The company has sufficient shares for a 2:1 split.
STATUS: We have been concerned about retailers, and even leaders like BBBY have struggled of late. BBBY could not break out from its ascending wedge last week, as volume was lackluster and it gave up its 18 day MVA (33.23). Now it has drifted back to its 50 day MVA (32.05), but volume kicked in heavily (4.4 million; average 3.66 million), indicating that BBBY has some solid institutional support. While many retailers are struggling, BBBY had good numbers and is a leader, and with the support of the big money at the 50 day, we could get a solid bounce. On the move, however, we are carefully watching the recent highs for resistance at 35.70.
BUY POINT: Aggressive: A move over the 18 day MVA (33.23), with continued strong volume. Stop: 31.50.
POSITION: Stock and/or February or May $30 calls to buy (BHQ BF or BHQ EF).

APPB (Applebee's--$33.95; +0.70; optionable): Restaurants. We are researching a date.
http://biz.yahoo.com/p/a/appb.html
STATUS: APPB could not hold its 18 day MVA (34.58), and stopped us out of remaining positions with a drop Monday that came on considerably higher volume and took out its 50 day MVA (33.75). Today it made a bounce back over the 50 day from support at its former cup with handle highs (33). Having been stopped out (and today's move gave a better exit point if not), at this point we can 'flip' the play to the downside if we get renewed strong selling. On a put play, targeting 30.
BUY POINT: On a drop through 33 on volume of 550,000.
POSITION: February $40 puts to buy (AQB BH).
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REMAINING PLAYS:
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PRE-ANNOUNCEMENTS REMAINING PLAYS:

Watchlist:

EXPD ($57.00; +1.29): Working on a date. The nice pullback turned nasty, and Monday EXPD gapped through the 18 day MVA (57.19). It test back up today but on lower volume, so this could present an opportunity to exit if not taken on the initial drop. The 50 day is below at 54.61.

AROW ($28.35; +0.14): Working on a date. Has dropped back below the December lows, ending the streak of higher lows in the ascending wedge. Had shaped up as a nice pattern, so we will have to see where it goes from here.

BRL ($77.98; -0.33): Researching a split date. Is still holding in a consolidation over the 50 day and at the short-term MVA's (76.75-78). The consolidation is a handle to a v-shaped cup pattern. Volume continues to be very light, and for aggressive positions we are looking at a move over 80 on above average volume (1 million), with stock and/or February $75 calls to buy (BRL BO).

DHR ($59.91; -3.15): Forecast to announce a split on 1-24-02 before the open with earnings; however, the company has declared a quarterly dividend which could make a split announcement less likely. Was looking good in a handle to its reverse head and shoulders, but fell back very hard today (volume 2.8 million; average 1.23 million) to its 50 day (59.75). We will see if it can hold going toward the forecast, but this was not encouraging.

PII ($55.75; +0.51): Forecast to announce a split on 1-29-02 before the market opens in conjunction with earnings. PII was in a promising ascending wedge pattern, but fell back Friday and then continued down hard Monday. It is trying to hold the 50 day MVA (54.18), showing a doji today over that level, which is with its November and early December highs. If it can bounce back over the 10 day MVA (57.02) on above average volume (120,000), the aggressive can play stock and/or March $55 calls to buy (PII CK). Would likely be a quick move.

RYL ($69.50; +1.10): Forecast to announce a split on 1-24-02 in conjunction with earnings. At this time the company has not confirmed a time for the release. Trying to bounce from the 50 day (78.24), but showed low volume today and it up against its short-term MVA's (70). It could still fall back, and we are wary of the sector. On a drop through 64 on volume of 600,000, February $75 puts to buy (RYL NO).

STU ($81.97; +0.07): Researching a date. Broke out in a big way in late December (over its April and August tops), and tested the move and its 10 day MVA (81.76; 18 day at 81.07). It drifted up but has pulled back gradually, holding the 10 day with a doji today. We got a big volume spike Monday (16,200; average 13,300), and will see if we get strong volume on a move up. The breakout high ahead at 83.68. On a move over 85.80 on volume of 15,000 (average 12,500), stock.

WLP ($122.60; +0.48: Working on a date. Moved up near the breakout point, but volume has dropped as the stock has drifted up, signaling a weak move. Looking for WLP to dip back to test the 10 day MVA (120), and from there we are looking for a breakout move, with the buy point 123.02 on volume of 1 million. Stock and/or April $115 calls to buy (WLP DC).

PRE SPLITS REMAINING PLAYS:

Watchlist:

VAR ($72.08; +0.20): Splits 2:1 effective 1-16-02. Splits Wednesday, and looks to have topped at the recent high of 72, showing a doji on high volume (392,700; average 228,000). That is a topping sign, and looks to be heading back down.

CHS ($38.36; -0.01): Splits 3:2 effective 1-22-02. CHS has made double tops after its breakout from a double bottom with handle, and now is drifting back toward the 50 day MVA (36.51). We will see if it can hold and show a run going into the split, but it does not look promising. The aggressive play is a move over the 10 day (39.52), with stock and/or February $35 calls to buy (CHS BG).

LIZ ($51.82; -0.13): Splits 2:1 effective 1-17-02. Holding over its prior pattern highs on this pullback, but we have one more day until the split to get a rebound. The recent high is 53.45. The aggressive would be looking at a move over 52.25, with stock and/or April $50 calls to buy (LIZ DJ). A quick play.

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.

Watchlist:

ACS ($109.39; +2.95): ACS is relentless, bouncing back up and ending a very quick attempt at a covered call play. It did not make it to the target of the 18 day MVA (104), instead bouncing today on good volume (577,500; average 487,000) from the 10 day (106.55). Enjoying the ride, although not making anything on the covered call play. While we are enjoying positions, we are wary of a drop as it is well over its former upper channel line (102).

AZO ($65.14; +1.29): Just hanging on under the 50 day (66.68) on below average volume. It is in the range of the November consolidation, but still looking ripe for stronger selling and on a move through 63.50 on volume of 2 million (average 1.4 million), we can look for February $70 puts to buy (AZO NN). Still targeting 60.

BBY ($73.70; +1.24): Still holding on at the short-term MVA's (18 day at 72.85). BBY made a nice bounce up from 65 in December on positive earnings, but now retail stocks could be heading for tougher times and BBY, which had some good news last month and made good moves, could see a struggle. We will see if it can hold, but need to be ready for a possible move down to test the 50 day (68.56). On a move down, we are taking our money off the table.

EDS ($66.30; +0.15; optionable): Stymied under the 50 day (67.10), but not falling either, and today recovering from its intraday low at 64.64. Still riding existing put positions toward the target of the 200 day (62.69).

THC ($65.22; +0.45; optionable): Did not bother pulling back, instead breaking out Monday with decent volume. The move could be over, however, as it gapped up slightly today and showed a loose doji on reduced volume (1.83 million; average 1.87 million). Care here with short-term positions as we could get a fall back to the 10 day (62.63), which is with pattern highs.

THQI ($43.81; -0.04): After the good move that took out the put buy point, THQI finally stopped the bleeding today with a doji on much lower volume (1.36 million; average 1.58 million). Targeting 40 with existing positions, but as indicated, 42.50 is possible support that we are watching.

POST SPLITS REMAINING PLAYS:

Watchlist:

CBH ($41.24; +0.89): Edging up here and getting a bit erratic as it creeps ups the 10 day (40.26). Still looking at the target of 45, but we need to watch out here for a possible test back that would have us taking profits. The 18 day is at 39.75 (former pattern highs at 39.60).

CHBS ($31.16; +0.26): Not looking good as it has drifted back below the 18 day (31.60). With the potential trouble in the retail sector, we could see a rendezvous with the 50 day (28.78) coming before we get another try at upside action.

FMBI ($28.38; +1.37): Was absolutely hammered Monday, but came back today, giving another chance to get out. Dropping.

Play:

CACI (Caci Int'l--$34.46; -4.45; optionable): Technical Services. Split 2:1 effective 12-7-01.
http://biz.yahoo.com/p/c/caci.html
STATUS: What a huge drop today. CACI took out its 50 day MVA (37.17), picking up speed from the gradual slide into the lower part of its recent wedge pattern. Volume was huge (2.12 million; average 428,600), and we could get a put play out of it after a failed test of the 50 day. Target on that play: 30.
PLAY: After a failed move on the 50 day, a drop back through 35 on continued strong volume, with February $50 puts to buy (QHI NJ).

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.

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