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Begin Part 3 of 3

PII (Polaris Industries--$56.05; +0.55; optionable): Recreational vehicles. Forecast to announce a split on 1-29-02 before the market opens in conjunction with earnings.
http://biz.yahoo.com/p/p/pii.html
BACKGROUND: Based upon our research it does not appear that PII has ever split its stock. The annual shareholder meeting was on 5-3-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Looked like it was ready to move after a high volume doji Wednesday over the 50 day (54.52), but continued to consolidate, easing along that level on reduced volume. Friday it moved up a bit, but is contending with its short-term MVA's (18 day at 56.13), and the move was backed by low volume of 40,500 (average 110,700). PII broke from a double bottom in November, but its third bounce from the 18 day on that run failed, bringing the stock back to the support of the 50 day. We will see if we can get that strong bounce going toward the split, with the high ahead (from earlier this month) at 59.92. ).
BUY POINT: Aggressive: A move over 57.25 on above average volume. Stop: 54.25.
POSITION: Stock and/or March $55 calls to buy (PII CK).

YUM (Tricon Global--$52.05; -0.93; optionable): Forecast to announce a split on 2-6-02 after the market closes in conjunction with earnings.
http://biz.yahoo.com/p/y/yum.html
BACKGROUND: Based upon our research it does not appear that YUM has ever split its stock. The annual shareholder meeting was on 5-17-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: YUM broke back over its June highs in October, and since has formed a double bottom with a couple of bounces along the 50 day MVA (currently 50.76). As it reached the midpoint of the pattern it has formed a handle, but after moving nicely over the 10 day MVA (52.69) it gapped back Friday below the 18 day (52.29), holding on with a small 'hammer' doji on lighter volume (469,500; average 780,000). Despite giving up the recent support, not a bad move as the volume dipped and the stock is still holding in the handle pattern (perhaps the drop a reaction to MCD's earnings). Looking for a move back up from here toward the breakout (handle high 54.55). The stock is in a very large base dating back to early 1999 with highs at 70. Target: 62.
BUY POINT: Breakout: 54.67 on volume of 1.2 million. Stop: 50.84.
POSITION: Stock and/or April $50 calls to buy (YUM DJ).

DRI (Darden Restaurants--$37.55; -1.07; 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: Not much of a bounce this time from the 18 day MVA (currently 37.39), as DRI pulled back to that support Friday. Since breaking out from a cup with handle in December, DRI has made two bounces from that support, and after a good move out of its second consecutive handle-type consolidation that intersected the 18 day, we were looking for the bounce to continue to show momentum. It pulled back quickly, however, not able to generate much steam. It is not the death knell, however, but we will need to watch DRI carefully on the 18 day (which intersects a long-term upper channel trendline connecting November and July highs), as the selling back was strong, though not higher than what we saw on the recent move (999,000; average 702,600). We will see if DRI can hold, but it could take a few sessions before it is ready to bounce again. We have been targeting 43 on a strong move, and the high on the recent run was 39.15.
BUY POINT: Aggressive: After holding the 18 day, a move back over 38.25 on continued strong volume. Stop: 36.
POSITION: Stock and/or April $35 calls to buy (DRI DG).

WLP (Wellpoint Health Networks--$124.64; -1.40; 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 for 1 split.
STATUS: Not really a 'best play,' but it has hit some buy points on the way up and warrants discussion. Hit a new high Friday, but pulled back to close. WLP had recently broken out, but we were skeptical after the low volume drift up in its handle that preceded the move. It held up, wedging over the 10 day MVA (123.44), and we were looking for it to test back a bit to build strength for a move. It tried to break out again Thursday with another less than convincing move, and with Friday's higher volume drop we will be careful with any existing positions, watching support below at the 18 day MVA (121.87; 50 day at 118.11). A bit precarious here, so we will see if it can hold up and set up better.
BUY POINT: May take some time. After holding on a test of 122-123 to form a low volume consolidation, a strong move back over 126. Stop: 120.
POSITION: Stock and/or April $120 calls to buy (WLP DD - under 100 open interest).

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) BLL - What a great move
2) HOTT - Back to support
3) SONC - Looking for a bounce

BLL (Ball Corp--$73.29; +1.97; optionable): Packaging & containers. Splits 2:1 effective February 22.
http://biz.yahoo.com/p/b/bll.html
STATUS: What a move! Since announcing its split BLL has rambled back up from the 65 level (below its 50 day MVA, which is currently at 67.60). Friday is made its third consecutive impressive gain, tapping a new high at 74.43 before pulling back to close. Volume was down but remained very strong at 459,600 (average 256,000), but we need to watch BLL for a rest or pullback after having dipped back below its prior high (74, from early January). We will see if it can hold 72 on a dip back on lower volume and set up another pre-split surge that will take it to a new high.
PLAY: After pulling back and holding 72, a move over 74, with stock and/or March $70 calls to buy (BLL CN - under 100 open interest).

HOTT (Hot Topic--$33.35; -0.61; optionable): Apparel. Splits 3:2 effective February 6.
http://biz.yahoo.com/p/h/hott.html
STATUS: Pulled back again but held support of the 18 day MVA (33.36). HOTT has been edging up along its 10 day MVA (33.76), and we were looking for a pullback as the gradual upward action was not the best for a handle to its double bottom. Volume was down on the selling Friday (441,300; average 826,600), so we will look for HOTT to hold here and produce a bit more of a consolidation. Looking for the breakout (handle high at 34.75). Target: 40 (watching resistance at the all-time high at 38.20).
PLAY: Breakout: 34.85 on volume of 1.25 million, with stock and/or March $30 calls to buy (UHO CF - low open interest). Stop: 32.40. Aggressive: After showing it can hold support here, a move over 34, with stock and/or March $30 calls to buy (UHO CF). Stop: 31.73.

SONC (Sonic--$35.30; -0.07; optionable): Restaurants. Splits 3:2 effective 2-9-02.
http://biz.yahoo.com/p/s/sonc.html
STATUS: SONC has given up the short-term MVA's (35.59; coinciding with a long-term upper channel trendline), but after gapping down Friday the stock held its 50 day MVA (34.65). The last bounce from this level could not get to its high of 37.65, stopping short before turning back this week. We will look for another bounce that can give us a pre-split run. On the move, we will carefully look at the high as resistance that could turn it back. If it can take out that level, we can target 40.
PLAY: The aggressive pre-split play is a move the short-term MVA's, with stock and/or March $30 calls to buy (ZXQ CF). Stop: 34.

CONTINUING CANDIDATES BEST PLAYS:
1) PMI - Broke out!
2) TGIC - Looking good
3) GNSS - Looking for another drop
4) RYL - Trying for a new high

PMI (Pmi Group--$70.40; +1.72; optionable): Surety & Title Insurance. Did not get the announcement Wednesday, but we are still watching, as right in split range.
http://biz.yahoo.com/p/p/pmi.html
BACKGROUND: Based upon our research it does not appear that PMI has ever split its stock. The annual shareholder meeting was on 5-17-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: PMI broke out of its cup with handle Friday, although we did not get the breakout volume we wanted (up to 291,600; average 286,300). The handle has been a bit erratic, moving up a bit rather than showing the gradual descent on lower volume that we like. Still, the sector looks solid here and the move up Friday was not bad, finally clearing intraday highs at 70 from which the stock had repeatedly retreated. Looking for more strength on a move up from here. PMI formed the cup with handle since June off another cup pattern that failed at the high of 74.94. Target: 80, watching resistance at the high.
BUY POINT: A buy up to 73.58 on volume of 430,000. Stop: 65.50-68.50.
POSITION: Stock and/or March $70 calls to buy (PMI CN).

TGIC (Triad Guaranty--$39.49; +0.66; optionable):
http://biz.yahoo.com/p/t/tgic.html
BACKGROUND: Last announced a 2:1 split on 9-18-97 at a stock price of $28.25. The annual shareholder meeting was on 5-10-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Another insurer in a cup with handle, but although the handle is a bit choppy, the overall pattern is pretty solid (dating back to August, forming after a solid move up). Friday TGIC again bounce back up from the short-term MVA's (18 day at 38.17), with volume picking up on the buying to 58,200 (average 39,800). Still looking for the breakout move, targeting 47.
BUY POINT: 40.26 on volume of 60,000. Stop: 37.44.
POSITION: Stock only.

GNSS (Genesis Microchip--$56.17; +0.81; optionable):
http://biz.yahoo.com/p/g/gnss.html
STATUS: GNSS fell back hard last week, and then made the expected failed test of the 50 day MVA (60.19) Thursday. We were looking for new put positions on a drop back through 55, and Friday it gapped below that level (hitting 52.83; Wednesday's low was 52.80) but pushed back up from there, making a gain for the day. When we see a gap through a buy point we will typically look for a test back, which often happens before a continued move. With Friday's test back up, which was on lower volume of 3.98 million (average 2.74 million), we have another chance to get into a put play on a renewed drop. Still targeting 50.
BUY POINT: From here or after more of a test toward 58, a drop through 55 on continued strong volume.
POSITION: March $70 puts to buy (QFE ON).

RYL (Ryland Group--$74.75; +1.65; optionable): Did not get the announcement, but a positive reaction to earnings.
http://biz.yahoo.com/p/r/ryl.html
BACKGROUND: Based upon our research it does not appear that RYL has ever split its stock. The annual shareholder meeting was on 4-25-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: On earnings RYL gapped up Thursday on big volume, but looked like it might test back quickly as it closed with a loose doji on the day. However, it continued to show some strength Friday, edging up again as volume increased to 531,900 (average 352,700). RYL closed just under its high of 75.85, made on its fine October-December run before its recent test of the 50 day MVA (66.62). Looking for it to take out the high from here, although we could get a bit of a rest and pullback before it takes on the resistance. On a new high, targeting 85.
BUY POINT: 75.95 on continued strong volume. Stop: 71.68 (7%).
POSITION: Stock and/or April $70 calls to buy (RYL DN).

POST SPLITS BEST PLAYS:
1) VAR - Forming a nice pattern

VAR (Varian Medical--$36.45; +0.29; 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 (36) with decreasing volume (337,300 Friday; average 264,000), 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:
****
PRE-ANNOUNCEMENTS WATCHLIST: BRL, NDN

LSTR ($82.86; +1.38): LSTR has really run here, and continued Friday. However, volume was much lower on the continued move Friday (40,500; average 50,300), and with the stock pulling well off of its intraday high (83.90) to close, we need to be ready for a test back. We will look for it to hold its prior high at 81 and then take off again. The target is 90.

DIAN ($57.95; -0.91): Forecast to announce a split with earnings on 2-21-02 before the open. Still holding the short-term MVA's (57) after its bounce from the 50 day (then 52, now 54). 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).

EXPD ($58.91; +1.10): Working on a date. Made a move Friday out of its recent consolidation over the 18 day (57.68), but volume was low (260,200; average 405,000). Holding on, but we will need to see more strength on an attack on the recent breakout (failed) high at 60.80).

PRE SPLITS WATCHLIST:

FRED ($42.25; +0.21): Splits 3:2 effective February 4. Just continues to inch up after the very good pre-split run (on a bounce from 35 - the 50 day, currently 37.60), but the signs point to a test back. It has shown dojis as it creeps up, and we are ready to exit any remaining positions on a test back toward the short-term MVA's, at 38.94 and 40.45).

MGAM ($33.52; -0.38): Splits 3:2 on February 12. Did not get a bounce Friday, which we looking for after its intraday recovery from 30.45 Thursday. Instead, it gapped down and showed a 'hammer' doji, recovering from a low of 31.50. We will see if it can do it, looking for a move over its 18 day MVA (35.59). Stock only.

SYMC ($76.23; -0.77): Splits 2:1 effective February 1. After the remarkable move last week on earnings, SYMC has held on, but is not doing much more than that. Friday it showed a doji, and we will see if it tests back to the 10 day (73.94) or make a move from here. Aggressive: Over 77.50, with stock and/or April $75 calls to buy (SYQ BO).

XRAY ($50.67; +0.57): Splits 3:2 effective February 1. Holding the 18 day (50.26), moving up a bit Friday after again testing just under 50 at its low. Holding is encouraging, so we will see if it can generate a good move going into the split. The aggressive play is a move over 51.50, with stock and/or March $45 calls to buy (XEQ CI). The high is at 52.03.

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, AZO, BBY, BBBY, EDS, ETH, JCI, MI, STJ and THQI.

ACS ($97.10; +4.85): Got the bounce we were looking for after hitting through our put target of 93. Quite a jump, but we can look at a new play when this bounce fails on a further try at the 50 day MVA (100). From here, on a drop back through 95 on continued strong volume (down to 2.17 million Friday; average 589,000), March $105 puts to buy (check delta, price, etc. with your broker because unavailable at the time of writing). On a failure at 98-100, a drop back through 97 on continued strong volume.

DHR ($62.00; +0.60): A decent bounce with earnings Thursday, but could not continue the move Friday. It has had trouble at 64, so that will be the real test on this move.

THC ($62.77; -0.89): Dropping back a bit further than we would want, closing just below the 18 day MVA (62.88) and its recent highs in the pattern (flying w) at 63. Not catastrophic, and we will continue to look for it to hold up and on this test and set up another move.

POST SPLITS WATCHLIST:

CACI ($35.53; -1.18): Gapped back below the 50 day MVA (36.64), hitting 34.30 but recovering for a doji. Once again, for existing put positions we will see if it falls back again from here, with the recent closing low is 33.80, and the low at 30.80.

CHBS ($32.80; -1.20): Split 3:2 effective 12-13-02. Looked good on the breakout test, but after holding in a lateral pattern for a couple of sessions CHBS pulled back to its 18 day MVA Friday, recovering from a low of 31.80. Still not bad, and we will see if it can hold support here and start back up toward the breakout high of 35.76. Aggressive: Over 34.50 on increased volume, with stock and/or March $30 calls to buy. Stop: 32.20 (7%).

CHS ($29.55; +0.98): Split 3:2 effective 1-22. Continued the great move! CHS is just below our limit for buying on a breakout (29.95, or 5%), but this move started back at 25.17 (50 day at 25.04), so it could need a rest. Stock and/or May $26.63 calls to buy (PHO EX).

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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