stock watch, stock split

Begin Part 2 of 3

THE PLAYS:

BONUS PLAYS: Several setting up, and a strong continued breakout move by WBST.

OEX (Standard & Poors--$567.13; -0.66; optionable):
STATUS: The OEX hit our initial upside target at 566 on Monday then edged up to Thursday's high at 571.40 (just under the 50 day MVA). We were, on Tuesday, looking for a move down from the 18 day MVA (565.66) but the index was over that resistance next day where it stalled out before hitting the 50 day MVA. The candlestick chart shows a doji on the higher volume (1.25 million; avg. 1.3 million), indicating churning, so we are looking for a move down from here. On a break of the 18 day, will again look for a move down to the target at 549.38, a price hit four times since October. The index may test back up to the broken support before making the real move.
BUY POINT: Aggressive: 565 on continued rising volume.
POSITION: April $570 puts to buy (XEK PL).

QQQ (Nasdaq 100--$36.88; -0.07; optionable):
STATUS: We looked at playing the index down two days ago when it tapped its short term down trendline and put in a small loss. However, the QQQ was back over that resistance next session and traveled up to the 18 day MVA (37.39), moving over it on the intraday high of 37.57 but pulling back down below the resistance. Volume was strong, which helped buoy the index back up from 36 and it closed on top of the trendline (just below the 10 day MVA which is at 36.85). On a break below that, we will look at taking aggressive positions for a drop to our target at 34. We will watch that 36 level for potential support, since the index bounced back up from there today.
BUY POINT: Aggressive: 36.50 on continued strong volume.
POSITION: June $44 puts to buy (QQQ RR).

ANSI (Advanced Neuromo--$30.75; -1.10; optionable): Medical Instruments. http://biz.yahoo.com/p/a/ansi.html
STATUS: ANSI is ready to make the serious fall. It gave up its 50 day MVA (32.45) Monday, although volume was not that strong on its two-day drop from the 36 range. It tested back over the 50 day the two sessions prior to today, and Wednesday volume kicked in as ANSI sold down. Today it gapped back over the 50 day but dropped on even stronger volume (141,100; average 111,300). Looking for a continued move down, targeting the 200 day MVA at 25.02.
BUY POINT: Though 30.25 on continued strong volume.
POSITION: March $35 or May $40 puts to buy (UAI OG or UAI QH - check delta, etc. with your broker).

JILL (J. Jill Group--$23.00; -0.50; optionable): Catalog & Mail Order Houses.
http://biz.yahoo.com/p/j/jill.html
STATUS: JILL had formed a big double bottom since February 2001, dropping back in a handle to test its 50 day MVA (20.81) in January. It broke out last week, hitting an intraday high of 25.60 Tuesday before pulling back to test the move. It is currently holding over its December high (22.55), closing today over its 10 day MVA (22.86) as volume dropped on the slight drop (217,200). Good action and we will look for JILL to hold the 10 day (18 day below at 22.26) for a continuation of the move. Target: 27.50. Good buying.
BUY POINT: Holding the 10 day, and a move over 24.25 on increased volume (217,200 today; average 131,000). Stop: 22.65.
POSITION: Stock and/or June $22.50 calls to buy (JUI FX).

PLAB - hit the buy point but had no volume.
PRIA - ditto
ACAS - Continued to be strong on the upside, taking out the 50 day.
MSM - Tested the 50 day but rebounded on big volume.
SIE - Showing some strength with a move back up today on good volume.
DRIV - Falling back again after testing the 50 day.
NTBK - Holding up and might need to test the short-term MVA's.
GS - Testing the 200 day MVA again, but could be in for another drop back.
WBST - Continued the breakout move on good volume.

PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: Looking at RARE and DIAN for next week.

BEST PLAYS:

MARKET FAVORITES: Got the downside moves from JNPR and BRCM, and EXTR continues down!
1) CSCO - Setting up for a fall

CSCO (Cisco Systems--$17.46; -0.06; optionable): Networking.
http://biz.yahoo.com/p/c/csco.html
STATUS: CSCO dropped hard through its 200 day MVA (18.13) last week on a gap, and hit as low as 16.27 before pulling back up. The move up has been on steadily decreasing volume, however, and Thursday it showed its third straight doji with volume down to 53.6 million (average 60.1 million). It is approaching the 10 day (17.83) and the 200 day, and with the overhead resistance we will look for CSCO to fall with a weak market. Target: 14.
BUY POINT: A drop through 17 on increased volume.
POSITION: April $20 puts to buy (CYQ PD).

SNPS - Still battling the 200 day with another doji.
XRX - Never hit the buy point and dumped back hard on a downgrade.
PG - Moving up, but we are wary of the weak volume.
ERTS and MCHP have both fought back over support, and we sent a stop advisory alert on MCHP.
FLEX - Still heading down on the trend.

PRE-ANNOUNCEMENT BEST PLAYS
1) DIAN - Holding up after the great surge out of the pennantj
2) BMS - Pulling back and at a critical point
3) RARE - Looking for a bounce

DIAN (Dianon Systems--$62.93; +0.07; optionable): Forecast to announce a split with earnings on 2-21-02 before the open.
http://biz.yahoo.com/p/d/dian.html
BACKGROUND: Based upon our research it does not appear that DIAN has ever split its stock. The annual shareholder meeting was on 10-25-00 at which no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: DIAN made a great move out of the pennant Tuesday, blasting up on huge volume. It continued up intraday the following sessions, hitting a new all-time high at 65 before pulling back to close with a doji. Today marked the second consecutive doji for DIAN as volume dropped way back below the average (168,900; average 267,100). After the solid move, we will see if it DIAN holds up here in a consolidation here (which has support from the December highs at 62) or if it needs to come back and test the move, with the 10 day MVA at 60. The pennant formed after DIAN broke from its lateral range in December and then tested back to its 50 day MVA (then 52.50, now 56). Our target is now 72.
BUY POINT: If it can hold over 62 in a consolidation on continued low volume, a move over 64 on above average volume. Stop: 59.61.
POSITION: Stock and/or May $60 calls to buy (UID EL).

BMS (Bemis--$51.69; -0.84; optionable): Working on a date. Earnings were 1-24-02.
http://biz.yahoo.com/p/b/bms.html
BACKGROUND: Based upon our research it does not appear that BMS has ever split its stock. The company has sufficient shares for a 2:1 split.
STATUS: Broke out Monday, gapping over the former high (52.47) and hitting 53.37, but the move stalled quickly. Not what we like in a breakout, but it was not a huge concern as the stock held its prior highs (52) and looked poised to move again with a high-volume 'shooting star' doji Wednesday. However, BMS retreated some more today, falling back through the former highs. This was not what we were looking for, but the selling was on lower volume (215,500; average 231,300), and BMS held to close over the 10 day MVA (51.55). Stocks often use the 10 day as support on a breakout test, and the low volume selling (much lower than we have seen over the past week and a half), could mean that the stock will hold support and continue its move. On a continuation of the move we are targeting 60. BMS has been on a steady upward trend from levels below 25 in October 2000, making a strong breakout from a reverse head and shoulders in November. Shows excellent buying and relative strength.
BUY POINT: Needs to hold here, and we will look at new or additional positions on a move back over 52.75 on above average volume. Stop: 49.06 (7%; 50 day at 49.76).
POSITION: Stock and/or July $50 calls to buy (BMS GJ).

RARE (Rare Hospitality--$25.10; +0.22; optionable): Restaurants. Forecast to announce a split on 2-19-02 with earnings. The company has not confirmed the date.
http://biz.yahoo.com/p/r/rare.html
BACKGROUND: Last announced a 3:2 split on 7-26-00 in conjunction with earnings. The stock price was 29.50. The annual shareholder meeting was on 5-14-01 at which time authorized shares were increased. The company has sufficient shares for a 2:1 split.
STATUS: RARE is in a cup with handle dating back to May (high 28.43; all-time high at from February at 32). It has pulled steadily back in the handle over the last two weeks, finding support at its 50 day MVA (24.29). Wednesday RARE showed a doji on sharply higher volume, but today could not manage a move beyond its short-term MVA's (25.49) as volume dipped back again (260,600; average 257,000). A decent overall pattern, and the pullback to the 50 day has been orderly. Looks good, and we can play a strong move over the short-term MVA's on the way to looking for a breakout over the handle high (27.05; there is an intraday spike at 27.50 made just before the handle formation). Target: 32.
BUY POINT: Aggressive: A bounce over 25.50 on above average volume. Stop: 23.81. Breakout: 27.15 on volume of 380,000. Stop: 25.25.
POSITION: Aggressive: Stock and/or May $22.50 calls to buy (QRH EX - low open interest). Breakout: Stock and/or May $25 calls to buy (QRH EE - low 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) BSYS - Resting a bit
2) ACS - Set up for another put

BSYS (Bisys Group--$63.36; -0.82; optionable): Business software. Splits 2:1 effective 2-25-02.
http://biz.yahoo.com/p/b/bsys.html
STATUS: Has made a nice pre-split move back over the resistance from its 50 day MVA (61, with its short-term down trendline at 60) and its 18 day at 61.96. After Wednesday's strong move, BSYS pulled back a bit today, although the drop was slight and on low volume (420,100; average 572,300). If it pulls back some more we will look for BSYS to hold the 62 level and start another run. We can look at new or additional positions then, or if we get a strong move up over the high of 66. With current positions we will see how it handles 66, as it could make another pause there before blasting to a new high.
PLAY: Pullback: After holding 62-63 on this pullback, a move back over 64, with stock and/or March $60 calls to buy (BQY CL). Stop: 59.61.

ACS (Affiliated Computer--$95.67; +1.42; optionable): Software. Splits 2:1 effective 2-25-02.
http://biz.yahoo.com/p/a/acs.html
STATUS: We were looking for ACS to make its way back up toward one of its up trendlines to find resistance that would set up another put. This week ACS looked to be stymied at a lower level (the 10 day MVA, at 94.03), but has managed to move over that level and today made it up close to the trendline (which is just under ACS' 50 day MVA, 97.07). Volume was down on today's action, however, indicating a weak move (632,900; average 688,200). ACS also has to contend with its most recent high at this level, for we are looking for this move to fail and for a drop back and put play to a target of 90, or perhaps as low as the recent lows (87.50-88.50), which approach the 200 day MVA, at 85.81.
PLAY: Aggressive: A drop through 95 on above average volume, with April $105 puts to buy (ACS PA).

CONTINUING CANDIDATES BEST PLAYS:
1) TGIC - Forming a new consolidation
2) GOSHA - Waiting, waiting . . . .
3) RYL - We will see if it can move
4) DHR - Made the breakout
5) APPB - Could be ready to tumble
6) THC - We will see how it handles the 50 day

TGIC (Triad Guaranty--$41.85; -0.14; 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: Made a breakout move from its cup with handle last week, finally getting some solid volume behind the move, and now has formed a consolidation over the 10 day MVA (41.13). Good action, as TGIC pulled laterally on declining volume, then today tapped the 10 day again at its low before closing with a doji with a volume spike (90,000; average 44,000). Looking for another breakout, which could come on the heels of today's high volume doji. Target: 49.
BUY POINT: Over 42.39 on minimum 50,000. Stock: 39.52.
POSITION: Stock.

GOSHA (Oshkosh--$41.70; -0.12; no options):
http://biz.yahoo.com/p/g/gosha.html
BACKGROUND: Last announced a 2:1 on 8-10-98 at a stock price of $20. The annual shareholder meeting was on 5-4-01 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
STATUS: The consolidation continues. GOSHA's ascending wedge pattern has tightened into tight lateral consolidation along the short-term MVA's (41.50), and the 50 day MVA has drawn close at 40.08. GOSHA tapped the 50 day its low Wednesday, but although it rebounded it again could not break out, showing a doji today on low volume of 12,700 (average 44,500). We will just keep it on the radar screen and be ready for the breakout. Good money flow and relative strength. Target: 50.
BUY POINT: 43.10 on volume of 61,000. Stop: 40.08 (7%).
POSITION: Stock only.

RYL (Ryland Group--$80.30; +0.18; optionable): Residential construction.
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: Has been impressive as it makes its way up after breaking out of a reverse head and shoulders in December. RYL took a strong bounce from its 50 day MVA (currently 71.76, then 65) in January, and on its most recent pullback held support at the 18 day (77.01). This week RYL has made its way back to the recent high, showing a pair of dojis the last two sessions. We will see from here if RYL can make a higher low on a pullback, continuing to use the 18 day as support, and form an ascending wedge to set up a breakout. We have been riding position toward a target of 85, but on a strong move over the high (81.62), we will adjust the target to 90.
BUY POINT: New high: 81.72 on volume of 500,000 (average 383,400). Stop: 76.
POSITION: Stock and/or July $75 calls to buy (RYL GO).

DHR (Danaher--$65.33; -0.34; optionable):
http://biz.yahoo.com/p/d/dhr.html
BACKGROUND: Last announced a 2:1 split on 3-6-98 with a board meeting. The stock price was $70. The annual shareholder meeting was on 5-1-01 at which time authorized shares were increased. The company has enough shares for a 2:1 split.
STATUS: Received an upgrade and broke out Wednesday with a gap up, but could only manage a loose doji in the range of its June highs. Today it gapped up but pulled back, not giving up much ground at all as volume was down but remained high at 1.5 million (average 1.08 million). Still a buy on this move up to 67.95, although we could see a quick test back. If it holds 64 on a test, we will look at new or additional positions with a run back up on continued strong volume. Targeting 72 (high is 69.81).
BUY POINT: Test of 64: On a lower-volume test that holds 64, a run back over 65 on continued strong volume. Stop: 60.54 (7%).
POSITION: Stock and/or June $60 calls to buy (DHR FL).

APPB (Applebee's International--$34.85; -1.63; optionable):
http://biz.yahoo.com/p/a/appb.html
STATUS: Fell hard today. APPB has flirted with its 50 day MVA several times in the last week, hitting it intraday but hen moving back up to close in the range of its short-term MVA's (18 day at 35.82). Today it did not recover, closing at the 50 day (34.92) after a big volume drop (923,400; average 412,600) after having hit an aggressive upside buy point at 37. We will see if there is enough institutional support to prop the stock up at the key 50 day, but with several recent attempts to break below, and today's weak finish, it could be ready to break down. In that instance we need to be ready to shed any remaining upside positions, and flip APPB to a downside play, targeting the 200 day MVA at 31.
BUY POINT: A drop through 34.30 on continued strong volume.
POSITION: March $40 or May $45 puts to buy (AQB OH or AQB QI - April will be out Monday).

THC (Tenet Healthcare--$62.05; -1.69; optionable):
http://biz.yahoo.com/p/t/thc.html
STATUS: THC showed good moves recently on a breakout from a 'flying w,' but after testing the breakout formed bearish double tops. We were wary of a drop through the short-term MVA's (18 day at 63.62), and THC held that level after an intraday tap to the 50 day (62.18) Monday. However, today THC gapped down and the hit a low of 60.32 before rallying back to close just under the 50 day. Volume was huge at 9.26 million (average 1.64 million). We will see how things shake out, as there is a lot of downside pressure but also some support given the rally back up to close. We could see a bit of a bounce back over the 50 day, but on a failure of that move at the short-term MVA's, we will look for a drop back down for a put play, targeting the 200 day MVA (55.77).
BUY POINT: After a bounce back over the 50 day fails, a drop back below 62 on continued strong volume.
POSITION: May $75 puts to buy (THC QN - check open interest, delta, etc. as not available at the time of writing).

POST SPLITS BEST PLAYS:
1) VAR - Still strong
2) CHBS - Stymied under the 50 day

VAR (Varian Medical--$39.70; -0.30; optionable): Split 2:1 on 1-16-02.
http://biz.yahoo.com/p/v/var.html
STATUS: VAR has made a great move, breaking out of a 'flying w' with handle formed since November, and making another move this week after pulling back into a nice handle-type consolidation to test the move. Wednesday VAR reached up to a new high at 40.75 but pulled way back to close, and coupled with the big volume this was a signal that we could get a pullback. VAR held on for a doji, however, reaching up intraday to 40.40 before pulling back. We will still see if it can hold 39 (10 day MVA at 38.94) on a pullback with lower volume (down today to 637,000; average 323,000), and on a strong move back over 40 we can look at new or additional positions. Target: Moved up with the last move to 46.
PLAY: After holding 39 on a pullback, a move over 40 with continued strong volume. Stock and/or May $35 calls to buy (VAR EG). Stop: 37.29.

CHBS (Christopher & Banks--$29.70; +0.23; optionable): Split 3:2 December 13.
http://biz.yahoo.com/p/c/chbs.html
STATUS: CHBS gave up its 50 day MVA (30.05) last week to find temporary support at 28. It had a wild day last Thursday, gapping down to 26 but rallying all the way back to close at the 50 day. It has not been able to crack back through that resistance (10 & 18 day just above; 18 day at 30.59), today showing another loose doji as volume dipped further (161,400; average 438,000). On a put, targeting the 200 day MVA, currently at 24.31.
PLAY: Aggressive: A drop through 29 on increased volume near the average (438,000; today down to 161,400). Through recent lows: Below 28 on continued strong volume. March $35 puts to buy (URH OG).

End Part 2 of 3

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