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Begin Part 3 of 4

PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: No announcements scheduled for this week.

NEW PRE-ANNOUNCEMENT PLAYS:

IGT (International Game Technology--$67.60; +0.08; optionable): Forecast to announce a split on 3-4-02 in conjunction with its annual shareholder meeting.
http://biz.yahoo.com/p/i/igt.html
BACKGROUND: Based upon our research it does not appear that IGT has ever split its stock. The annual shareholder meeting is scheduled for 3-4-02 at 1:30 MT, at which time no additional shares will be authorized. The company has sufficient shares for a 3:2 split.
STATUS: Gaming. IGT has formed a small saucer since pulling back off of its high of 71.95 in late December after breaking out of a 7-month cup. It took out its 50 day (64.55) in mid-February, but held above the 200 day MVA and has now formed a short handle with four dojis in the range of its January consolidation. We like these short bases after moving out of a longer base. Volume has been rather light (down to 653,800 Friday; average 1.24 million), and we are looking for IGT to spring, and an announcement Monday would help push it. Target: 82.
BUY POINT: 68.70 on volume of 1.8 million. Stop: 64.
POSITION: Stock and/or July $65 calls to buy (IGT LM).

ACDO (Accredo Health--$53.75; +2.10; optionable): Researching a new date.
http://biz.yahoo.com/p/a/acdo.html
BACKGROUND: Last announced a 3:2 split on 1-29-01 in conjunction with earnings. The stock price was $45. The annual shareholder meeting was on 11-16-01 at which time no additional shares were authorized. The company has sufficient shares for a 3:2 split.
STATUS: Health services. ACDO broke out of a length trading range in early January (highs of 40), and then blasted up again in early February after a rest, hitting a high of 56.50. ACDO is consolidating its gains again, pulling into a pennant pattern over the last four weeks. It is using the support of its short-term MVA's (18 day at 52.21), Friday moving back up from that level on continued light volume (360,900; average 593,000). Looking good for another surge. Excellent relative strength and strong money flow. Target: 63.
BUY POINT: 54.80 on volume of 800,000. Stop: 51.
POSITION: Stock and/or May $50 calls to buy (DZU EJ).

AHC (Amereda Hess--$71.93; +2.66; optionable): Forecast to announce a split with earnings on April 24 (tentative date).
http://biz.yahoo.com/p/a/ahc.html
BACKGROUND: Last announced a split on 7-21-80. Base upon our research we are unable to determine the price at the time of the split announcement. The company has sufficient shares for a 2:1 split.
STATUS: Oil and Gas. AHC is making a solid move up the right side of its base (a cup dating back to mid-May with highs at 90). Moves up have been on solid volume, and the stock made a steady run from mid-January from the 57.50 level. It stalled at the 200 day MVA (69.66), forming a week-long consolidation on low volume before taking off with a nice move Friday, gapping over the 200 day on big volume (1.12 million; average 636,600). Solid action, and we will see if AHC tests the former resistance on lighter volume. From that test we are looking for a strong move back up that we can play toward a target of 82 (there is a consolidation from August that could provide resistance at 79).
BUY POINT: After a test back toward 70 on lighter volume, a move back over 71.50 on volume of 900,000. Stop: 68. From here: A move over 72.40 or continued strong volume. Stop: 68.
POSITION: Stock and/or May $65 calls to buy (AHC EM).

RUS (Russ Berrie--$31.58; +0.18; no options): Researching a date.
http://biz.yahoo.com/p/r/rus.html
BACKGROUND: Last announced a split in 1993 at a stock price of $35. The company has sufficient shares for a 2:1 split.
STATUS: Toys and Games. Has been a steady performer, riding up its 50 day MVA with the occasional dip to test the 200 day (currently 28.26; 50 day 30.49). RUS broke out of a 2-month cup with handle in November and has moved more or less laterally up the 50 day MVA since then. It hit a high of 31.85 while moving in the present consolidation, and is showing a small pennant pattern, inching up Friday on low volume (19,400; average 24,900). Looks ready to breakout to a new high, but we could get a test of the 18 day first (38.18); that is fine if it can again hold. Target: 36.
BUY POINT: 31.95 on volume of 34,000. Stop: 30.25.
POSITOIN: Stock only.

PRE-ANNOUNCEMENT BEST PLAYS:
1) CYN - Still waiting for the move
2) DRYR - Forming a handle
3) KRI - Perhaps some shakeout in the pennant

CYN (City National--$51.09; +0.27; optionable): Regional bank. Forecast to announce a split with earnings 4-16-02 before the open.
http://biz.yahoo.com/p/c/cyn.html
BACKGROUND: Based upon our research it appears that CYN split its stock in 1990 in the $40 range. The company has sufficient shares for a 3 for 2 split.
STATUS: After moving out of the 5-month cup pattern, CYN is creeping back up toward the high of its ascending wedge pattern it moved into after the cup. We like this combination of patterns. We got some volume mid week, but it could not hold moves up intraday. Friday we saw a small move on low volume (169,000; average 208,000), so we could be looking at another test of the 18 day (50.25), but from there or here we are looking for a strong breakout move for positions. Good relative strength, money flow and buying. Target: 60.
BUY POINT: 51.75 on minimum volume of 280,000. Stop: 48.13 (7%).
POSITION: Stock and/or May $45 or $50 calls to buy (CYN EI and CYN EJ - under 100 open interest for the $45's).

DRYR (Dreyers Grand Ice Cream--$43.21; -0.50; no options): Forecast to announce a split with earnings on 4-24-02 before the open.
http://biz.yahoo.com/p/d/dryr.html
BACKGROUND: Last announced a 2:1 split on 10-27-97 at a price of $42. Before that it announced in October 1990 at about the same price range. The annual shareholder meeting was on 5-9-01 at which time no additional shares were authorized. The company has sufficient shares for a 3 for 2 split.
STATUS: Tried to break to a new high this week, but after its solid bounce from the 50 day MVA (40.21), it needed a rest. DRYR broke from a large cup with handle pattern in December, and hit a high of 44.88 before testing back to its 50 day MVA (currently 40.08). A couple of bounces from that level formed a 'flying w' pattern (a type of double bottom), and now it is forming a handle to the small (5+ week) pattern. After hitting a new high Wednesday (44.88) on good volume, it has dipped back, Friday on very light volume (91,500; average 258,500), holding comfortably over the 10 day MVA (42.47). We will look for the stock to hold up over that support in a handle, and look for a breakout. Target: 50.
BUY POINT: After holding 42-43, the breakout is 44.98 on volume of 370,000. Stop: 41.83. Aggressive: After holding support at 42-43, a move back over 44 with volume of 300,000 or better. 41.50.
POSITION: Stock only.

KRI (Knight-Ridder--$66.50; -0.90; optionable): Newspapers. Forecast to announce a split on 4-24-02 before the open. There is also the shareholder meeting the next day at 9:30 PT.
http://biz.yahoo.com/p/k/kri.html
BACKGROUND: Last announced a 2:1 split in July 1996 at a stock price of approximately $70. The company has sufficient shares for a 2 for 1 split.
STATUS: KRI made a very nice breakout to a new high last week, running out of a handle-type consolidation formed after the stock had fought back from a test near its 200 day MVA (60). Since the breakout, KRI has tested back a bit as it formed a handle, forming into a nice pennant pattern. Friday it dropped below the recent support of the 10 day MVA (66.52), tapping the 18 day at its low of 65.85 but pulling back up to close. Higher volume selling near the tip of a pennant pattern is not unusual, and it can serve to "shake out" weak holders and set up a move. We will see if that is the case, and we are looking for a breakout. Target: 80.
BUY POINT: 68.10 on volume of 540,000. Stop: 63.75. The move to a new high is 68.83.
POSITION: Stock and/or July $60 calls to buy (KRI GM - under 50 open interest).

PRE-SPLITS BEST PLAYS: NJR made a nice move going into the split, and we will see if it can continue strength post-split.
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) GILD - Held the move this time
2) CUB - Started the move
3) SMD - Set up in a wedge
4) PMI - Started to bounce, but looking for something better

GILD ($73.75; +3.29): Splits 2:1 effective March 8.
http://biz.yahoo.com/p/g/gild.html
STATUS: Great move! After pulling back from intraday highs the last two sessions, GILD held over its long-term down trendline, and Friday tested down to 68.36 (18 day MVA at 68.07) before springing back up over our buy point (72) with a lot of punch. It closed at a new high (prior high 73.67), and we will look for a continued move up, although GILD will likely need a rest somewhere along the way to a target of 80.
PLAY: From here: Riding positions, with new (aggressive) positions on a move over 74.25. Stop: 69.50. If we get a test of 72 early in the week, we can look at positions on a last pre-split run from there. Stock and/or April $65 calls to buy (GDQ EM).

CUB (Cubic Corp--$56.70; +1.83; no options): Scientific & Technical Instruments. Announced a 3:1 split, subject to shareholder approval, date TBA.
http://biz.yahoo.com/p/c/cub.html
STATUS: CUB made a nice breakout from a cup with handle in December, and after tracing back in January to the 50 day MVA (then 45, now 49.28), CUB blasted up on its split announcement. It hit a high of 57.45, and set up nicely with a gentle pullback to the 10 day MVA (54.86). Friday CUB made a good start to a move, hitting our buy point as it surged on very strong volume (71,500; average 34,400). Looking for a continued move over the high. Target: 64.
PLAY: New high: 57.55 on continued strong volume. Stop: 53.52. Stock only.

SMD (Singing Machine--$23.99; -0.41; no options): Karaoke systems. Split 3:2 effective 3-16-02.
http://biz.yahoo.com/p/s/smd.html
STATUS: A stock that is rather thinly traded, but we have enjoyed some good moves on pre-splits with these small stocks. SMD tripled in the last quarter of 2001, and has set up in a tightening narrow range over the last couple of months. After testing its 50 day MVA (currently 21.73) three times, the last three weeks it has held the short-term MVA's (23.49) on light volume (29,500; average 51.000), in something of a tight pennant, with the high made on an intraday spike of 26.80 early this month. Looking for a strong move out of the pattern on a pre-split run. Target: 29.
PLAY: Over 25, with stock.

PMI (Pmi Group--$71.80; +0.95; optionable): Surety & Title Insurance. Announced a 2:1 stock split, effective date to be determined.
http://biz.yahoo.com/p/p/pmi.html
STATUS: Holding the short-term MVA's (18 day at 70.66). Friday PMI popped up, tapping at this week's intraday high at 71.99, with volume decreasing to 197,900 (average 250,100). Over the last few months, PMI has been steadily trending up its 18 day as it moves up in the right side of its cup pattern (dating back to June, with the left side high at 74.50; all-time high at 74.94). We are still riding current positions as PMI holds support, looking for the stock to make a bounce it can hold. The most recent high at 73.25. Targeting 80 on the longer term plays we are in, with 76 the quick target if we get a stronger bounce before a pullback in the uptrend.
PLAY: From here: Over 72.25 on above average volume, with stock and/or June $70 calls to buy (PFI FN), with calls being the position of choice if just playing the bounce. Stop: 68.

CONTINUING CANDIDATES BEST PLAYS:
1) HB - Tighter still in the pennant
2) AZO - Falling fast
3) DHR - Holding support
4) RARE - We will see if it can breakout

HB (Hillenbrand--$59.70; -0.29; optionable):
http://biz.yahoo.com/p/h/hb.html
BACKGROUND: Based upon our research it does not appear that HB has ever split its stock. The company has sufficient shares for a 2:1 split.
STATUS: Continues to tighten up in pennant pattern. Earlier this week it looked like we could get a move, as high volume kicked in on a move up from the support of the 18 day MVA (59.39). It has settled back the last couple of sessions, showing a couple of dojis, Friday on increased volume (170,200; average 149,200). Solid over support, and looking like it could give us a move at any time. HB made a big breakout at the beginning of this month, moving from a jagged cup with handle. Target: 70.
BUY POINT: Breakout: Over 60.95 on volume of 200,000. Stop: 57. Aggressive: 60.52 on increased volume. Stop: 57.
POSITION: Stock and/or June $55 calls to buy (HB FK - under 100 open interest).

AZO (Autozone--$63.90; -2.46; optionable): Auto Parts
http://biz.yahoo.com/p/a/azo.html
BACKGROUND: Last announced a 2:1 split in March of 1994 at a price of $58. The annual shareholder meeting was on 12-14-00 at which time no additional shares were authorized.
STATUS: Retreated on earnings, and after trying to hold the 50 day MVA (70.16) with a doji Thursday, crashed back on higher volume Friday (1.5 million; average 1.27 million). It tapped down to some support from its January consolidation lows at its Friday low of 63.25, and it could try to hold there momentarily. However, with the strength of the selling we have seen, we will look for a drop through support for a put play, targeting 55 (200 day MVA currently at 53.72).
BUY POINT: A drop through 63.25 on continued strong volume.
POSITION: April $70 or June $75 puts to buy (AZO PN or AZO RO).

DHR (Danaher--$68.03; +0.80; 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: In mid-February, DHR broke from an ascending wedge that served as the right shoulder in a reverse head and shoulders. On that move it made a test of the 10 day and then shot up again to a high of 69.94, from where it has pulled back to test the 10 day again. It showed a bit more volume on the selling back than we might have liked, but it has held comfortable over the 10 day (67.04), moving up from there on increased volume Friday (1.23 million; average 1.18 million). DHR stopped just short of our buy point for a quick bounce play, but on a strong move we are revising our longer-term target to 75. We can look for a bounce target of 72.
BUY POINT: Aggressive Bounce: Over 68.25 on increased volume. Stop: 65.
POSITION: June $65 calls to buy (DHR FM).

RARE (Rare Hospitality--$26.29; -0.60; 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 challenging the handle high, but could not quite make it this week on low volume. The stock pulled back Friday, holding its short-term MVA's (18 day at 26.11), but although volume was up it was still quite low at 158,000 (average 271,700). In a cup with handle going back to May (high 28.43; all-time high 32). The handle initially dipped back to the 50 day (24.97) before making this rather week move up. However, it is setting up well, and if it can hold 26 on light volume, we continue to look for a breakout. Target: 32.
BUY POINT: 27.15 on volume of 400,000. Stop: 25.25.
POSITION: Stock and/or May $25 calls to buy (QRH EE - low open interest).

POST SPLITS BEST PLAYS:
1) MGAM - Quick test of the breakout

MGAM (Multimedia Games--$31.04; -0.53; optionable): Split 3:2 on February 12.
http://biz.yahoo.com/p/m/mgam.html
STATUS: No the best follow through to Thursday's strong breakout move, as MGAM immediately back and tested its 10 day MVA Friday at its low of 28.85. The stock managed to hold there and bounce back up to close over recent pattern highs (breakout point was 30.81) as volume backed way down (360,500; average 236,200). Clearly not what we were looking for, as the target on this move is 35. We will see if MGAM can hold the prior highs on this test, and if so, we can look at some positions if strength on a move up resumes.
PLAY: After showing it can hold 30 with a lower volume test, a move back over 31.50 on volume of 400,000, with stock and/or July $25 or $30 calls to buy (QMG GE - no open interest or QMG GF - low open interest). Stop: 29.39.

End Part 3 of 4

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