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Begin Part 3 of 3

POST SPLITS BEST PLAYS:
1) CHBS - Coming back to test support
2) CHS - New high
3) VAR - Forming a nice pattern

CHBS (Christopher & Banks--$34.00; -0.05; optionable): Retail apparel. Split 3:2 effective 12-13-02.
http://biz.yahoo.com/p/c/chbs.html
STATUS: A retailer showing some strength. CHBS made a nice run up last week after testing its break from a cup with handle pattern, and is holding just below the breakout high (35.76, from December). It looked like it would test its short-term MVA's (18 day at 32) after a gap up and reversal Tuesday, but it has held steady with consecutive dojis. Volume has remained strong (up to 533,900 today; average 381,400) though sharply less than what we saw on the move up last week, so we will see if CHBS can hold on and make another run from here. If it can break through the high, targeting 40.
PLAY: New high: Over 35.76 on increased volume, with stock and/or March $30 calls to buy (URH CG - low open interest). Stop: 33.37 (7%). Aggressive: Over 34.50 on increased volume, with stock and/or March $30 calls to buy. Stop: 32.20 (7%).

CHS (Chico's--$28.57; +1.01; optionable): Retail apparel. Split 3:2 effective 1-22.
http://biz.yahoo.com/p/c/chs.html
STATUS: On the split gapped up and reversed, and looked like a test of the 50 day MVA (24.86). However, CHS reversed again Tuesday and continued up today, making a new high (29.12 intraday) with volume increasing to a strong 942,900 (average 603,500). The stock closed back over the bearish double tops it formed after breaking from its double bottom with handle, from which it dove to test the 50 day. Targeting: 32.50.
PLAY: Still a buy up to 29.95, with continued strong volume, and stock and/or May $26.63 calls to buy (PHO EX).

VAR (Varian Medical--$34.00; -0.05; optionable): Split 2:1 on 1-16-02.
http://biz.yahoo.com/p/v/var.html
STATUS: VAR is pulling back in a handle to a 'flying w' pattern it has formed since dropping from its November high at (38.25). The handle started to form as the stock failed in an attempt to move over its down trendline connecting the November and June high (June high at 38.63, trendline at 37). There is another trendline connecting a lower November trendline, at 36.50. With the gradual drop back in the handle toward the 10 day MVA (35.90) with decreasing volume (438,100 today; average 260,500), we will look for a break over the upper trendline. The high in the handle is an intraday spike at 37.25. Target: 43.
PLAY: 37.10 on volume of 390,000, with stock and/or May $35 calls to buy (VAR EG). Stop: 34.50 (7%).

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WATCHLISTS:
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PRE-ANNOUNCEMENTS WATCHLIST: BRL

LSTR ($81.48; +1.30): Beautiful! Continuing to move on increasing volume and while this is great for existing positions, LSTR is too extended to chase at this point for new positions. The target is 90, and we will continue to ride.

GTK ($47.40; +0.03): Gave us a nice run, but closed with a tombstone doji in the range of the early December high (47.50) as volume dropped to 474,000 (average 436,200). A topping sign so we may see a test back from here before it moves on. If we get that move, looking for support to hold 46 and will look for a solid move up from there for new/additional positions. Reached a new high at 48.23 today.

DIAN ($58.86; +0.81): Forecast to announce a split with earnings on 2-21-02 before the open. Held the short-term MVA's (57) and made a move back up, but volume is weak. Not much of a pattern but a decent recovery from the 50 day (52 then, 54 now). The aggressive play is on a move over 60 on volume of 300,000 (average 242,000), with stock and/or May $55 calls to buy (UID EK - very low open interest).

AROW ($29.49; +0.46): Working on a date. Hit the aggressive buy point today as it starts to recover in its ascending wedge pattern. It had dipped back to its prior low, breaking the steady pattern of higher lows, but started marching up today on stronger, average volume. Now we look for a breakout move over 30.25 with volume of 15,000. Stock only.

EXPD ($57.81; -0.39): Working on a date. Holding its 18 day (57.54) in a consolidation at the highs of its former ascending wedge. We will see if it can hold and make a move, with the aggressive play a move over 59 on above average volume (410,000; today 243,000), with stock and/or May $55 calls (URP EK - low open interest).

NDN ($34.45; -0.05): Researching a date. Continues in its lateral consolidation after its drop (resistance just ahead that the 10 day, at 35.04). It looks as if the stock is trying to prepare for a bounce higher, but we do not anticipate it to last if it does. An aggressive play now on a move through 34 on above average volume, targeting the 200 day MVA (32.15) with March $40 puts to buy (NDN OH).

PII ($55.50; +0.51): Forecast to announce a split on 1-29-02 before the market opens in conjunction with earnings. Looked like it was ready to move after a high volume doji in its consolidation over the 50 day (54.46), and still could as we go toward the split. It showed another doji today, and on a move over the short-term MVA's (18 day at 56.14) with increased volume (today 111,000, about average), stock and/or March $50 calls to buy (PII CJ).

PRE SPLITS WATCHLIST:

FRED ($42.04; +0.34): Splits 3:2 effective February 2. Gave us a strong bounce, but with the second consecutive doji today (near the January high of 43.86), we continue to watch for a test (and are prepared to take profits). Looking for support to hold at the 10 day (40) on a pullback.

SONC ($35.37; -0.34): Splits 3:2 effective 2-9-02. Gave up the short-term MVA's today and tested back toward the 50 day (34.62) as volume increased to 270,600 (average 239,300). Looking for support to hold there (it bounced up to close) and bounce for a pre-split move. The aggressive pre-split play is a move over 36.50, with stock and/or March $30 calls to buy (ZXQ CF).

XRAY ($50.10; -0.36): Splits 3:2 effective February 1. Closed just below the 18 day (50.22) today as volume shot up to 393,900 (average 257,000). It appears ready to test the 50 day MVA though it is attempting to find support at the 50 range (having held that level for 3 consecutive sessions) but we are still watching out for a further test of the 50 day (48.60).

CONTINUING CANDIDATES WATCHLIST: 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. These include APPB, BBY, BBBY, EDS, JCI, MI and THQI.

ACS ($92.25; -5.25): Moved through our put target today (93), as volume continued to be massive on the drop (3.39 million; average 549,900). A great put play, but we could get a bounce, and there is a long-term up trendline at 90. The 200 day is at 83.78, and on drops such as these it could make that level.

AZO ($63.74; -0.71): Volume shot up to 2.17 million (average 1.29 million) as AZO tested down to 61.35 and took out our long-standing put buy point before pulling back up to close in the range of the current consolidation lows. With positions entered today, we will continue to watch for stronger selling back toward the target (60). Resistance above is at the 50 day, at 66.17.

DHR ($61.40; +1.80): Did not get the announcement. Made a nice bounce up from the 50 day today, and took out our aggressive buy point as volume shot up to 1.59 million (average 1.10 million). DHR did pull off the high of 62.19 to close. It has had trouble at 64, so that will be the real test on this move. If we see continued strength the aggressive can look at a move over 62.19 we can look at additional positions with stock and/or March $55 calls to buy (DHR CK).

ETH ($38.60; +0.35): Has pulled into something of a consolidation under the 50 day (38.91) over support at 38 (May-August high) on quite choppy volume. Still looking for a drop through that level on increased, above average volume (down sharply today to 316,900, average 217,700) to trigger a put play with February $45 puts to buy (ETH NI).

TGIC ($38.83; +0.67): Forming a rather choppy handle (to a cup dating back to August) on erratic volume but continuing to hold the 10 day (38.61). Still liking the overall pattern, and as long as support holds, we will continue to look for the breakout move to 40.26 on volume of 62,000. Stock only.

POST SPLITS WATCHLIST:

CACI ($36.71; -0.18): Made a move back to the 50 day MVA (36.66), and is trying to hold but fell back from a high of 38.50 today. For existing put positions we will see if it falls back again from here, ready to exit if it does not. The recent closing low is 33.80, with the low at 30.80.

CBH ($42.10; 0.00): Fifth consecutive doji today and while we will continue to watch for a test back. The 18 day is at 40.81. Dropping.

LIZ ($25.94; +0.46): Closed well off the high today, as volume remained quite low. Having trouble getting off of the 50 day, and we are dropping.

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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