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Begin Part 3 of 3

Correction from part 2:

WLP (Wellpoint Health Networks--$123.20; -1.96; optionable): Working on a date.
http://biz.yahoo.com/p/w/wlp.html
BACKGROUND: Based upon our research it does not appear that WLP has ever split its stock. The annual shareholder meeting was on 5-8-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: WLP broke out Wednesday, but even with the good volume we were skeptical after the low volume drift up in its handle that preceded the move. However, there was a nice pullback today, with volume dropping back to 467,400 (average 637,000). We are looking for WLP to dip back to the 10 day MVA (120.80, with some recent highs), hold and make a move back up.
BUY POINT: After holding the 121 range, a move back over 123 on volume of 1 million.
POSITION: Stock and/or April $115 calls to buy (WLP DC).

CONTINUING CANDIDATES BEST PLAYS:
1) ETH - Big drop sets up a put
2) THC - Pulling back from the run
3) THQI - Bounce could lead to more selling and a continued play

ETH (Ethan Allen--$38.41; -1.19; optionable): Did not get the announcement and it tanked.
http://biz.yahoo.com/p/e/eth.html
BACKGROUND: Last announced a 3:2 split on 4-28-99, approximately 2 weeks after earnings release. The stock price was $34.64. The annual shareholder meeting was on 11-15-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Continued down on low volume Wednesday, but then gapped down and continued to run through its 50 day MVA (38.95) today. Volume was very strong as the stock hit down to 37.55 at its low before reversing to close (volume 664,800; average 217,500). There is support at 38 from the May-August high and the December low, so we will see if we get a test of the 50 day and then a drop back on continued strong selling volume. On the put play, targeting the 200 day MVA (35.63).
BUY POINT: After a test of the 50 day, a drop through 38 on continued strong volume.
POSITION: February $45 puts to buy (ETH NI).

THC (Tenet Healthcare--$64.33; -1.17; optionable):
http://biz.yahoo.com/p/t/thc.html
STATUS: THC broke out from its short handle (formed after gapping up in its awkward, 'flying w' shaped cup in early January) this week. It looked like it would pull back after the initial move, but continued to push upward, hitting a high of 66.40 Wednesday but pulling way back to close. That candlestick signaled a pullback, and today we got it, but on nice, lower volume of 1.6 million (average 1.87 million). We note it hit the up trendline that it broke in November, and that can act as resistance. If lighter volume continues on a pullback that can hold the 10 day MVA (63.37) or handle highs (and left-side highs) at 63, THC could set up nicely for a move back up. We will see how it does in possible market weakness, and if it can hold over through that, perhaps over a few sessions, we can look at a play.
BUY POINT: After holding 63 on a lower-volume pullback, a move back over 64 on above average volume.
POSITION: Stock and/or May $60 calls to buy (THC EL).

THQI (Thq Inc--$44.01; +1.86; optionable):
http://biz.yahoo.com/p/t/thqi.html
STATUS: THQI reached down close to the target of 40, hitting down to 41.25 before recovering a bit Wednesday. After several days of dropping a bounce is likely, and today in the market strength THQI moved up, but on the expected low volume of 1.11 million (average 1.6 million). On the open we could see move right back down tomorrow, but it could still battle 42.50 a bit before dropping through. We are still riding existing positions toward the target at 40, but on a drop through 42.40 on above average volume we can look at new positions on the ride the rest of the way.
BUY POINT: A move through 42.50 on above average volume.
POSITION: February $50 puts to buy (QHI NJ).

POST SPLITS BEST PLAYS:
1) CACI - Looking like more of a drop is coming

CACI (Caci Int'l--$33.55; -0.60; optionable): Technical Services. Split 2:1 effective 12-7-01.
http://biz.yahoo.com/p/c/caci.html
STATUS: After the huge drop Tuesday, CACI has managed to slow the bleeding but has not made a decent move to test the 50 day (up at 36.91). In fact, today it dropped further, taking out the buy point but not getting very far in the process. Volume was sharply down again but still quite strong at 929,000 (average 466,600). This slow bleed after the big drop looks ominous, and we are still targeting 30 on a put play, but it could go further (200 day is down at 25.39).
PLAY: From here or after a failed move toward 35, a drop back through 33 on continued strong volume, with February $45 or $50 puts to buy (QHI NI or QHI NJ).

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REMAINING PLAYS:
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PRE-ANNOUNCEMENTS REMAINING PLAYS:

AROW ($28.86; +0.59): Working on a date. Has dropped back below the December lows, ending the streak of higher lows in the ascending wedge. Made a weak push up to the loose convergence of the short-term and 50 day MVA's on slightly increased, but still light volume of 4,200 (average 11,600). Weak increases often presage a drop, so we are still watching for more playable action.

BRL ($78.50; +0.23): Researching a split date. Little change today, as BRL continues into a 2-week consolidation over the 50 day and at the short-term MVA's (77.90-78.12). 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 ($59.57; +0.92): 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 through the 50 day (59.70). Made a weak push up through that level today, but pulled way off the high to close so we will watch out for another pullback. We will see if it can hold going toward the forecast (200 day at 57.51 with one of its down trendlines), but this was not encouraging.

DIAN ($58.50; +0.60): Forecast to announce a split with earnings on 2-21-02 before the open. Continuing to edge up (from Tuesday's great bounce) as volume increases (up to 475,100, average 235,200). It is looking like a pullback, with the smaller gains on rising volume, and waiting for a stable pullback to provide an opportunity to pick up additional/new positions. After holding the short-term MVA's (56) we will want to see a move over 57 on volume over 300,000 with stock and/or February $50 calls to buy (UID BJ - very low open interest).

EXPD ($58.40; +1.28): Working on a date. Trying to recover from the nasty pullback, today pushing up from the 18 day (57.18) on slightly increased volume of 347,400 (average 418,800). This recovery comes on relatively low volume, so we will continue to watch out for another pullback. If we didn't get out of positions on Monday's drop we will consider doing so on a dip back from here. The 50 day is below at 54.70.

PII ($56.15; +0.55): Forecast to announce a split on 1-29-02 before the market opens in conjunction with earnings. Sill holding the 50 day as volume held steady and light today at 50,100. The prior ascending wedge pattern was promising, but after this drop we will see if it can hold support, and the aggressive can look for a volume surge to spur a move over the 10 day (56.65) on above average volume (115,500), with stock and/or March $55 calls to buy (PII CK). Would likely be a quick move.

RYL ($69.50; +1.60): 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. Still trying to clear the tighter convergence of the short-term MVAs (70) but the falling volume isn't helping (down today to 201,500, average 357,600), as it was lower even on the strong housing permit numbers. It could still fall back, and we are wary of the sector. For now the 50 day stands below at 65.57.

STU ($81.80; +0.29): Researching a date. Broke out in a big way in late December (over its April and August tops), tested back to the 10 day (then 80.15) and after drifting up again toward 82, STU is now testing back again in a series of loose dojis with long upward intraday wicks. The breakout high ahead at 83.68. On a move over 85.80 on volume of 15,000 (average 12,500), stock.

PRE SPLITS REMAINING PLAYS:

Watchlist:

MGAM ($35.15; +0.10): Splits 3:2 on or about February 12. Pushed up from the 50 day on sharply increased volume Wednesday, but could not clear the short-term MVA's (18 day at 36.10) and sold back a bit today on significantly decreased volume of 119,300 (average 175,700). Looking for the stock to hold the 50 day and set up a pre-split move. If we get a solid move over the 18 day we can look at positions with stock.

XRAY ($51.12; -0.02): Splits 3:2 effective February 1. Once again, another doji as XRAY continues to creep up the 10 day (50.61) on slightly erratic volume. While we would prefer to see a gradual drift back, XRAY could still produce a nice pre-split move out of this consolidation. Still treating existing positions with care, looking to ride them toward a target of 57 but wary of a breach of support (18 day at 50.07). The play remains a move over 52 with stock and/or January $45 calls to buy (XAQ AI).

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 ($108.65; +1.96): Still holding the 10 day (106.96), today bouncing back up from that level as volume fell to 332,500 (average 488,900). Still enjoying the ride, and still wary of a drop as it is well over its former upper channel line (102).

APPB ($34.08; +0.60): Volume remains below average and steady at 344,200 (average 419,800) as APPB struggles to hold the 50 day (33.75). It closed just below that level Wednesday, but gapped up to close with a loose doji today. Moving in something of a descending wedge now, so we continue to look for stronger selling through 33 on volume of 550,000 for positions with February $40 puts to buy (AQB BH).

AZO ($63.99; -0.39): Still creeping down, just under the 10 day at 65.54 (50 day at 66.49). Technically still in the range of the November consolidation, but is now riding those pattern lows, and still looking ripe for stronger selling. On a move through 63.50 on volume of 2 million (average 1.36 million, up today to 986,000), we can look for February $70 puts to buy (AZO NN). Still targeting 60.

BBY ($73.18; -0.07): Volume is gently falling as BBY continues to hold the short-term MVA's (18 day at 72.93). BBY made a nice bounce up from 65 in December on positive earnings. It was weakening after reversing earlier in the month, but it has formed a very tight trading range on below average volume. We have to be ready for this one either way. If it breaks down from here we are taking our money off the table.

BBBY ($32.45; +0.81): Hanging on to the 50 day. Tried to bounce today, but came up short of resistance at the short-term MVA's, and whether it has enough support to hold here is iffy. We are still concerned about retailers, but BBBY is one of the sector leaders, and it recovered in one session back over the 50 day MVA on strong volume (4.23 million today, average 3.64 million). The aggressive can play it on a move over the 18 day (33). Stock and/or February or May $30 calls to buy (BHQ BF or BHQ EF).

EDS ($68.40; +2.97): Gapped up to open at the 50 day (67.09) (on news of an upgrade), ruining the put play and we are out of any remaining put positions. With today's strong push on increased volume, EDS is at its short-term down trendline. We will see if this upward momentum continues and carries EDS up over the more gentle trendline (68.50; drawn from early and mid-December closing highs). On that move we may look at flipping it to an aggressive up side play. If it tests the 50 day, a chance to get out of any open short positions.

MI ($61.18; +0.84): Volume shot up considerably today (298,400, average 241,600) but it wasn't enough to push MI past the 50 day (61.15, 18 day at 61.42). We will see what it does from here, looking again at a put play if it fails on this move.

GNSS ($68.21; +3.81): Did not get the announcement, and although GNSS made a solid bounce up on increased volume of 4.36 million (average 2.57 million) from the range of the former pattern lows (65 in a pennant dating back to mid-December), it was ripped after-hours on earnings. We will see where it opens tomorrow. On a gap down we will watch to see where it catches support.

POST SPLITS REMAINING PLAYS:

Watchlist:

CBH ($41.78; +0.17): Today's low volume doji may signal a coming test. CBH has been edging up following the strong breakout earlier this month along the 10 day (40.73). Still watching out for a possible test back that would have us taking profits. We would be especially wary of the breach of the 18 day at 40.14. (former pattern highs at 39.60).

CHBS ($32.68; +1.28): Nice move today. Initially tested back toward the recent lows near 30.50, but caught support and powered back up on sharply increased volume of 729,300 (average 360,200). From here the aggressive can look for continued momentum and consider positions on a strong move over 33 (stock and/or March $30 calls to buy).

VAR (36.16; +0.41): Split 2:1 on 1-16-02. Split Wednesday, testing back to the 10 day (35.33) on big volume. Made a weaker push up from that level today on volume of 353,700 (average 242,500), but it wasn't enough to push it past the down trendline (connecting June and November highs) at 36.50. We may see more of a consolidation over the 10 day before a strong move over 36.50, with stock and/or May $32.50 calls to buy (VAR EZ - low open interest).

LIZ ($25.40; +0.30): Split 2:1 on 1-17-02. Tested up to the 10 day (25.74) and down through the 50 day (25.06) before closing with a tight doji today as volume shot up to 661,000 (average 453,590). Looking for support over the 50 day to hold post-split, and watching to see if we get a solid bounce up from here. On that move the aggressive can play a move over 26 on continued strong volume with stock and/or April $22.50 calls to buy (LIZ DX - no open interest).

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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