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Begin Part 2 of 2

TEAM TRADES

FLR is a put we had on the TTR. We were looking at it because it was already bouncing down a downtrend that started back in May and held when the stock rallied in October, and it was a contractor for CPN. With the ENE news, we anticipated CPN might start having trouble and that would effect stocks it gave business to. Downtrend and ENE fallout; a winning combination that we look for on the TTR and in downside plays.

FLR did the gap down, but just a dollar. It had cleared our buy point, but stocks usually try to move up after a gap down (unless there is really bad news out). It opened at 33.25 (entry was 33.75), but then rallied up to the 33.60 to 33.80 range for about an hour. It made a gasp at 34 at about 9:45 CT and reversed sharply. That was the alert we were looking for. It tried one more move after that, but it could not get through 34 and turned down, breaking below 33.50, the bottom of the early consolidation. That started the cascade lower. We were in with February options, wanting to capture the move down the downtrend as it had been hugging the 18 day MVA and was due for a fall. Man did it come. FLR tumbled down, closing the session off almost $4.50.

PLAYS TO LOOK AT:

BONUS PLAYS: MIL made a great move down on the put play! ASL, a gold stock, made a move up. It could hold while we get a relief bounce in the techs, but we will watch for a move back up if that bounce fails. QMDC is still looking good.

TIBX (Tibco Software--$13.63; -0.62; optionable):
http://biz.yahoo.com/p/t/tibx.html
STATUS: After a solid run up the right side of its cup pattern (formed since June), TIBX has pulled back steadily from its recent high of 16.90. After a fairly strong drop back Monday through its 18 day MVA (14.73, with the 10 day), TIBX has held the 50 day MVA (13.34). Volume has continued to be below average, dipping back today to 900,600 (average 1.69 million), but holding support in today's action is key, and with a bit of a market rebound we will look for TIBX to make a bounce along with it. On the move we will watch the 18 day, but looking for a move that could take it back up to its recent high (but wary that this could be a quick play if the market cannot sustain the bounce).
BUY POINT: In a market bounce, a move over 14 on increased volume near the average. Stop: 13.11 (7%).
POSITION: Stock and/or February $12.50 calls to buy (PAV BV).

GMST (Gemstar--$22.20; -0.60; optionable): Electronic Equipment.
http://biz.yahoo.com/p/g/gmst.html
STATUS: GMST gave up the 50 day MVA (25.36) early this month, but after the strong drop has held on for the last week. It showed four consecutive loose dojis as it tracked gradually back up toward the 10 day MVA (23.43), then today drifted back a bit as volume remained below average at 3.22 million (average 4.25 million). The weak drift up toward resistance spells a possible continuation of the weakness. It might not be Thursday, as if the market bounces we could see a test toward the 10 day; however, we are looking for a strong drop back to continue its slide. There is possible support at 20 from the April low, but we are targeting 18.
BUY POINT: A drop below 22 on above average volume.
POSITION: February $25 puts to buy (QLF NE).

MARKET FAVORITES:

MXIM (Maxim Integrated--$55.29; -0.34; optionable): Semiconductor.
http://biz.yahoo.com/p/m/mxim.html
STATUS: MXIM formed a double bottom over the course of 2001, but as it formed a handle in December it tested back to its 50 day MVA. After a bounce took it to 61.36, it has again peeled back to the 50 day (54.23), but did not give up support in the weak market today. In fact, it showed a doji over that support as volume picked way up to 8.89 million (average 5.45 million). Looks poised for a bounce, and with AMD's numbers and the relief bounce we could get Thursday, we are looking for a quick bounce play. We are not planning to stay with it long, riding it up toward 60 but ready to get out on signs of it and the market turning back over.
BUY POINT: Over 56.27 (short-term MVA's) on continued strong volume. Stop: 53.75.
POSITION: Stock and/or February $50 calls to buy (XIQ BJ).

SEBL (Maxim Integrated--$32.19; -1.33; optionable): Semiconductor.
http://biz.yahoo.com/p/s/sebl.html
STATUS: SEBL has shown some very strong moves of late, most recently breaking over its December high and 200 day MVA (31.45). It made a move up to 36.05, pulling back over the last week in a slow, low volume fashion. It gapped below the 10 day MVA (32.82) with the weak open this morning, but held on well, closing with a 'shooting star' doji and holding its 200 day. Not bad for a session like today, and the candlestick is bullish. Looking for a bounce, watching carefully at the recent high in case the market turns back over and makes this a quick play.
BUY POINT: In a Nasdaq rebound, a move over the 10 day on above average volume (17.7 million; today 15.7 million). Stop: 31.
POSITION: Stock and/or February $30 calls to buy (SGQ BF).

NEW PRE-ANNOUNCEMENT PLAY:

MRBK (Mercantile Bankshares--$44.38; 0.00; no options): Banking. Back in split range; it last split in 1997 at $40.
http://biz.yahoo.com/p/m/mrbk.html
STATUS: MRBK made a solid trend up in 2000, then last year showed a large double bottom pattern. Early this month the stock broke over the pattern center at 44, making a strong move up to 44.89 before testing back to its short-term MVA's. MRBK gapped back to the 18 day (43.65) Tuesday but pushed back up on higher volume, and held steady today as volume rose to 249,000 (average 184,700). We could see a bit more of a handle form here, but we are looking for a breakout. The left side high is at 45.13. Target: 52.
BUY POINT: 45.01 on volume of 276,000. Stop: 42.25.
POSITION: Stock only.

NEW PRE-SPLIT PLAY:

MGAM (Multimedia Games--$35.05; +0.87; no options): Gaming. Splits 3:2 on or about February 12.
http://biz.yahoo.com/p/m/mgam.html
STATUS: MGAM made a super run from its September low at 12.50, hitting a high of 39.99 before drifting back to test its 50 day MVA (33.71). Stocks cannot run forever, and need to come back to test the 50 day. The stock made a bounce from that level at the start of this month, but after hitting 39.34 it has again come back to test the 50 day. A little choppy now, which is not unusual after such a run, but support is still there at the 50 day, as volume spiked way up today as MGAM bounced (269,800; average 172,000). We need to be careful here, as the recent tops could turn into a double top and send the stock back down. However, with the volume today we can look at a bounce play over the short-term MVA's (18 day at 36.21), watching the recent highs as points to possibly take profits.
PLAY: A move over the 18 day on continued strong volume, with stock. Stop: 35.

PRE-ANNOUNCEMENTS: TGIC and PMI started moves, but could rest while the techs bounce, picking up again if the tech bounce falters.

DRI ($37.14; -0.29): We are working on a date. Still in its consolidation, acting well. It had good volume on its recent breakout, but in this consolidation volume has dipped (525,400 today; average 667,000) and it has held the 10 day MVA (37.03), which is with its long-term upper channel trendline. The buy point on a move over the recent high is 38.51 on increased volume, with stock and/or April $35 calls to buy (DRI DG).

DIAN ($57.90; +0.30): The company is keeping quiet and will not confirm the date; originally forecast for 1-17-02, but we could get a February announcement, like last year. DIAN has bounced back, but it tested all the way back to the short-term MVA's at its low of 55.65 before managing to close slightly up. The move could be out of gas for now, so we will see if it can hold the short-term MVA's on a pullback and set up another move.

GNSS ($64.40; -4.09): Forecast to announce a split with earnings, on January 17 after the close. However, GNSS has dipped back below recent support of the 18 day MVA (67.43). It tried to hold on yesterday, but dropped back again today on increased, strong volume (3.34 million; average 2.54 million). Could be ready to test the 50 day, at 60.22), and we are not looking at new positions going toward the split with the continued downward momentum.

ETH ($39.60; -0.84): Forecast to announce a split on 1-17-02 before the market opens with earnings. Testing back toward the 50 day (38.98) on low volume (down to 112,100 today; average 221,200). The steady selling is not good, but the volume is not horrid, and it has made several runs up the 18 day MVA, so the test back to the 50 day MVA is not unexpected. The combination of the 50 day MVA and an announcement could provide a nice move. It could be a quick, aggressive play however, with the recent high at 43.45. On a move over 40.85 with above average volume, stock and/or February $40 calls to buy (ETH BH).

WLP ($125.16; +2.56): Working on a date. Broke out today! WLP looked like it was ready to test back after a low-volume move back up to form a saucer-shaped handle, but took off with decent volume, but not the 1 million we were looking for (735,700; average 632,600). Still precarious as this was not a good move up before today, and with the volume we would be very cautious with any existing positions.

PRE-SPLITS:

SYMC ($66.95; -3.45): Splits 2:1 effective February 1. Dropped back on big volume (6.27 million; average 2.53 million) going into earnings, reaching toward the 50 day (64.73) at its low. Stopped us out of positions, but for those who are still in, the earnings after hours produced a big jump back up over 71. Looking for the gap up, which could mean a test back toward 70 (10 day MVA at 69.42), and from there we can look at a continuation of the run. For new positions on that move, stock and/or February $65 calls to buy (SYQ BM - under 100 open interest).

HOTT ($33.86; -0.45): Splits 3:2 effective February 6. Still trying, again reaching up to 34.68 today but with very low volume (361,200; average 853,300). The breakout is 34.81 on volume of 1.3 million, with stock and/or February $30 calls to buy (UHO BF).

CONTINUING CANDIDATES:

APPB ($33.48; -0.47): Tested back over the 50 day (33.74), hitting its 10 day at the high of 34.39 before dropping back to close with a doji. We could get another bounce up to try the 10 day, but we are still looking for a drop through 33 on volume of 550,000 for a play with February $40 puts to buy (AQB BH).

POST-SPLITS:

CACI ($34.15; -0.31): After the huge drop Tuesday, we were looking for a failed test of the 50 day MVA (37.05) to set up a drop back and put play. Today it reached up to 35.81 before falling back, and although we could see another attempted move up, we will also watch for CACI to drop from here. On a drop back through 33.50 on continued strong volume (down to 1.22 million today; average 452,000), February $40 puts to buy (QHI NH).

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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