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Begin Part 3 of 3

Corrected BRL:

BRL (Barr Labs--$72.24; -2.05; optionable): Generic Drugs.
http://biz.yahoo.com/p/b/brl.html
STATUS: BRL dropped out of its extended lateral consolidation last week, and volume finally kicked in today as the stock dropped hard through the support of its 200 day MVA (73.64). Strong downward momentum now, and we will look for a continued drop. There is possible support from some prior price levels (September and a couple of touches from November-December) at 70, but we are looking for a drop to 65 or even the November lows of 59-62.
BUY POINT: From here or after a test toward the 200 day: A drop through 71.50 on continued strong volume (1.28 million today; average 843,000).
POSITION: March $65 puts to say (BRL OM).

CONTINUING CANDIDATES BEST PLAYS:
1) GNSS - Ready to drop again
2) PII - No announcement and the big drop
3) PMI - Looking to bounce again
4) TGIC - Holding up in the handle
5) RYL - Looking to come back and test the breakout

GNSS (Genesis Microchip--$58.01; -2.24; optionable):
http://biz.yahoo.com/p/g/gnss.html
STATUS: GNSS made quite a move up Monday, but hit hard against the 50 day MVA (60.09) and fell back today. This was the second attempt to break back over the 50 day after GNSS tanked last week, and with the higher selling volume today the upside does not hold much promise (4.27 million; average 2.75 million). We have been looking for a continued put play entry point, and this time GNSS could give us the move and sustain the downward pressure. Still targeting 50.
BUY POINT: A drop through 55 on continued strong volume.
POSITION: March $70 puts to buy (QFE ON).

PII (Polaris Industries--$53.93; -2.74; optionable): Recreational vehicles. Did not get the announcement and PII tanked.
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: Started a bounce going into the forecast but earnings were not well received, and PII tanked back on huge volume (564,200; average 108,100). It initially hit up to 57.85, over the aggressive buy point, but then dropped through the 50 day MVA (54.58), hitting an intraday low of 52.05 before recovering a bit to close. It could test the 50 day, but on a failure of that move PII could be in for another sizable drop. If we did not get out of aggressive positions we will use such a test to exit, and then 'flip' the play to a put and make lemonade out of lemons. We have to pay attention to potential support just below today's low (the 51.50 range), which defines tops for February, March and August. On the put play we are targeting the 200 day MVA, at 47.50.
BUY POINT: From here or after a test toward the 50 day, a drop through 52.50 on continued strong volume.
POSITION: March $55 puts to buy (PII OK).

PMI (Pmi Group--$69.16; +0.11; 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: Could do nothing with the breakout move. PMI broke out of its cup with handle Friday, but we did not get the breakout volume we wanted and it pulled right back. Not much good about that except that it has held the 10 day MVA (68.91, with the recent support of the 18 day at 68.22), and today showed a 'shooting star' doji on increased volume (239,000; average 279,800). The pattern indicates we could get another bounce to continue the steady uptrend, but that is an aggressive play we will watch closely as PMI could need to consolidate a bit to set up another sustained move. PMI formed the cup with handle since June off another cup pattern that failed at the high of 74.94. We are still targeting 80 (watching resistance at the high), but we are wary as we were looking at that target on a strong breakout.
BUY POINT: Aggressive: Over 70.65 on volume of 430,000. Stop: 65.80.
POSITION: Stock and/or March $65 calls to buy (PMI CM).

TGIC (Triad Guaranty--$38.46; -0.54; 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: TGIC continues in its somewhat choppy handle to its cup pattern, formed since August after a strong move up. TGIC hit down below recent support at the 18 day MVA (38.28) Monday, but surged back on big volume. That move made it look like TGIC could be ready to move, but today it dropped back again. However, it held the 18 day and volume was down at 32,100 (average 41,200), so we are watching for it to hold, and we are still looking for the breakout move, targeting 47.
BUY POINT: 40.26 on volume of 60,000. Stop: 37.44.
POSITION: Stock only.

RYL (Ryland Group--$77.71; -0.09; 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: RYL made a very strong move, running from the 50 day MVA (67.48) and making a new high Monday with a continued strength. However, the stock appears to be topping on this move, as it showed a tight 'star' doji with volume increasing to the heavy 688,200 (average 363,000). The sellers would appear to have caught up with the buyers, so this signals a pullback that we will watch to be a test of the recent highs at 75. From there wee will see if it can hold and mount another move. Targeting 85.
BUY POINT: After a test of 75, a move back over 77 on continued strong volume. Stop: 71.70 (7%).
POSITION: Stock and/or April $70 calls to buy (RYL DN).

POST SPLITS BEST PLAYS:
1) VAR - Tried to breakout
2) CHS - Testing the breakout

VAR (Varian Medical--$36.93; +0.08; optionable): Split 2:1 on 1-16-02.
http://biz.yahoo.com/p/v/var.html
STATUS: VAR tried to break out of its 'flying w' with handle 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 just under 37). We were targeting a move over that resistance for positions, and got it today, with the good volume we wanted, but VAR pulled back to close at the trendline after hitting an intraday high of 37.65. The candlestick could indicate a test back (recent handle support is at the 10 day MVA, 36.30. However, VAR has been strong and we will continue to target 43, but looking for a move it can hold.
PLAY: After holding the 10 day, a move back over 37.25 on continued strong volume, with stock and/or May $35 calls to buy (VAR EG). Stop: 34.74 (7%).

CHS (Chico's--$29.50; -0.62; optionable): Retail apparel. Split 3:2 effective 1-22.
http://biz.yahoo.com/p/c/chs.html
STATUS: Made a nice breakout, but showed a topping sign Monday by gapping up and closing with a 'hanging man' doji (intraday low below the close). This is the mirror image of a 'tombstone' doji (both occur at the top of a run), but also signals the end of a run. Today it dipped back, but CHS held its former highs at its low of 38.82, and moved up a bit from there to close. Volume was up at 1.03 million (average 267,300), so we will see if it can hold on a test and continue the move up.
PLAY: After holding 27.50 on a low-volume pullback, a run back over 29 on volume in the 750,000 range, with stock and/or May $26.63 calls to buy (PHO EX).

WATCHLISTS:
****
PRE-ANNOUNCEMENTS WATCHLIST: BRL, NDN

LSTR ($83.38; -0.63): Working on a new date. Pulled back a bit today, which was expected after its big run of late. We will look for it to hold its prior high at 81 and then take off again. The target is 90.

DIAN ($55.60; -0.99): Forecast to announce a split with earnings on 2-21-02 before the open. Dipped back again today, but after testing its 50 day MVA at its low of 53.94 DIAN showed that it still has support at that level, moving back up to close. We will see if it can continue to hold, but not much to play at the moment.

MRBK ($42.79; -1.65): Forecast to announce a split on 3-12-02 in conjunction with a board meeting. The company will not confirm this date, but our research determines this is the date for the next board meeting. No news as MRBK abruptly fell from its pattern without hitting the buy point. Financial fallout. It closed just under the 50 day (42.95), with volume strong (320,200; average 184,800). We will see if it tests back over the 50 day, which can be an opportunity to get out of positions that did not have a stop take them out.

IFIN ($68.60; -3.92): Looking at an announcement on 4-16 with earnings or with the 4-23 shareholder meeting. Had formed a little pennant pattern that served as a handle to a cup dating back to July, but Tuesday IFIN fell back to the 50 day MVA (68.16); more financial fallout. We will see if it can set up again.

EXPD ($59.11; -0.72): Working on a date. Made a low volume move up Friday and Monday, and dipped back a bit today. We will see if it can continue to hold the 18 day MVA (58), and if so it could be shaping up a decent pattern.

DRI ($37.18; -0.32): We are working on a date. We were looking for a bounce from the 18 day (37.37) but the market did not cooperate and DRI dipped back again. Still holding up well if it does not drop further, and the aggressive can play a move back over 38.16 on above average volume (724,000), with stock and/or April $35 calls to buy (DRI DG).

WLP ($122.04; -3.21): Working on a date. Had been holding precariously after recent moves, and today it dropped back pretty hard, holding the 18 day to close, but selling volume was strong at 710,700 (average 532,000). More support below from the December (former handle) highs near 120 and the 50 day (118.53).

PRE SPLITS WATCHLIST:

BLL ($75.56; +0.65): Splits 2:1 effective February 22. Has made a great run, but is clearly topping with a doji ('hanging man' variety) on strong volume. We are ready for the fall, looking to exit short-term positions. Support is the recent highs at 74 but it could drop to the short-term MVA's at 70-72.

HOTT ($31.64; -1.36): Splits 3:2 effective February 6. Nothing good happening today outside of HOTT holding its 50 day MVA (31.61) to close after gapping down on big volume (2.03 million; average 767,000). Splits next week, so we will see if it holds.

MGAM ($35.15; +0.65): Splits 3:2 on February 12. No bounce here as the stock is stymied by the 18 day MVA (35.44). Something of a descending wedge, which does not bode well for a move.

SYMC ($75.75; -1.45): Splits 2:1 effective February 1. Pulled back a bit today, but still holding support (10 day & 18 day at 74.76 and 73.04). It has been drifting up slowly as we get closer to the split, so we are on guard for a drop with current positions.

XRAY ($49.85; -0.76): Splits 3:2 effective February 1. Made us uncomfortable by drifting up slowly earlier this month, and now looks to be turning over, selling back again today with stronger volume. The 50 day MVA is below at 48.80.

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 ($89.85; -3.80): After the bounce we got the predictable drop back, as ACS is a classic example of a stock that continues to drift up over its upper channel trendline and then suddenly paying the price. It has been a good put play, and the stock is now resting on one of its long-term up trendlines. With existing positions we will see if it holds or drops to the 200 day (84.22).

DHR ($61.56; -1.42): Tapped up to recent highs at 64 today but pulled back to close, selling on sharply stronger volume. It has been banging around between 58 and 64; might take it back down before turns back up. If it can hold here (short term MVA's just below), DHR could be setting up an ascending wedge. We will see.

THC ($61.91; -0.69): Dropped back a bit further than we would want, now under the 18 day MVA (62.75) and its recent highs in the pattern (flying w) at 63. Still 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 ($34.50; -2.10): Got another gap over the 50 day (36.53), but it again pulled back intraday. For existing put positions we will see if it continues down, with the recent low at 30.80 (200 day at 26.15).

CHBS ($32.48; -1.36): Has been looking good, forming a pennant pattern, but it could not take out the recent highs today (it hit up against them), turning back from there and closing back with the lows of the last couple of sessions. Still not bad, and if it can hold we will still look for a move over 34.50 on volume of 500,000, with stock and/or March $30 calls to buy.
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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