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TEAM TRADES

URS showed one of our favorite patterns: a combination cup with handle breakout followed by an ascending wedge: the cup with handle shakes them out and the ascending wedge builds up pressure for a really strong move higher. We got the first breakout of the cup in December and January. We were then watching for the breakout as the wedge formed and got it back on February 27. It then pulled back to the 18 day MVA last Thursday and bounced on strong volume Friday. Today we got another move higher and were ready to add to positions. 32.55 was the next buy point. Well, it cleared that on the open, running to almost 33. It then peeled down 32.70; they always do after jumping up out of the gates. Volume was decent at 30% of average, but with all of the great volume on the breakout of the cup with handle and then with the wedge, we were just looking for decent volume to get in. We issued the alert, catching on the way back up at 32.80 when the spread was 32.65 by 32.80; we were not going to argue the spread at this point. Turned out fine as the stock roared up to close at 34 on another big volume day. These patterns can lead to very big gains, and we add to the positions when they present themselves while we let them run.

PLAYS TO LOOK AT:

BONUS PLAYS: HIB, MER and BVF are still looking decent, with HIB breaking out but without the volume we wanted. SY made a good move.

CUM (Cummins--$46.83; +2.69; optionable): Manufacturing
http://biz.yahoo.com/p/c/cum.html
STATUS: Breaking out of a cup with handle base of 10 months. The breakout buy point was 45.60, so the stock remains a buy on this move. Volume shot up to very strong levels (1.27 million; avg. 326,000) today on a Prudential upgrade of the stock, and it looks good for more upside from here. Huge money flow and relative strength broke out as well. Target: 52.
BUY POINT: A buy on the breakout up to 47.78 on continued strong volume. Stop: 43.75-44.43.
POSITION: Stock and/or June $40 calls (CUM FH)

MARKET FAVORITES: MERQ and MANU blasted off! BRKS still looking good in a low volume consolidation.

TER (Teradyne--$38.40; -0.80; optionable): Semiconductor.
http://biz.yahoo.com/p/t/ter.html
STATUS: TER made an excellent move of late with the semis, breaking over its January and July-August highs (35.50-36.50). The past week it has pulled laterally and is showing a nice consolidation with several consecutive dojis, today dipping back to tap its 10 day MVA (37.31) but pulling back up to close. Volume was down on the drop, as we would want (3.05 million; average 2.54 million). Looking for the stock to continue to hold up on the move, and show us a breakout. Target: 47.
BUY POINT: 40.09 on increased volume. Stop: 37.28 (7%).
POSITION: Stock and/or July $35 calls to buy (TER GG).

NEW PRE-ANNOUNCEMENT PLAYS:

CPS (Choicepoint--$54.25; -0.25; optionable): Business Services. Researching an announcement date.
http://biz.yahoo.com/p/c/cps.html
BACKGROUND: Last announced a 3:2 split on 1-31-01 at a price of $53. Before that CPS announced a 2:1 split on 10-20-99 at a price of $63.
STATUS: Since its last split a year ago, CPS has dashed back up into range - of course, one of the reasons we love to play stock splits is because they are great performers, and after the typical post-split pullback, usually rise back up more quickly than they would have had the stock not split. It has been on a nice uptrend, and after a test of the 50 day MVA (then 47.50, currently 52.07), CPS ran up to a high of 55.40, and over the last few weeks has formed a pennant pattern. It is now trying to hold its short-term MVA's (18 day at 53.75), tightening up on lighter volume (73,000 on today's doji; average 230,600). We will see if the pennant leads to an upside breakout. Target: 62.
BUY POINT: 55.10 on volume of 310,000. Stop: 51.75.
POSITION: Stock and/or July $50 calls to buy (CPS GJ - low open interest; plenty at $55).

MMM (Minnesota Mining & Mfg--$120.50; -1.00; optionable): Conglomerate. Researching an announcement date.
http://biz.yahoo.com/p/m/mmm.html
STATUS: MMM is back battling its highs at 125 (all-time high at 127), having made a nice trend up the last two months after having tapped 100. MMM broke over the December high of 122, that made a cup in the right side of a huge reverse head and shoulders pattern going back over a year. It is showing nice action now, pulling back and forming a handle to the cup, today holding again over the 10 day MVA (120.19) with a loose doji on light volume (1.59 million; average 2.03 million). Looking for a hold here and a run to a new high. Target: 140.
BUY POINT: Breakout: 123.80 on volume of 3 million. Stop: 118. Aggressive: Over 122 on volume of 2.5 million. Stop: 118.
POSITION: Stock and/or July $115 calls to buy (MMM GC).

PRE-ANNOUNCEMENTS: IFIN and SUI have slowed after the breakout but still oculd continue the move. CYN could not quite hold on to its breakout attempt, but MUR is looking to hold on the test back. STU has fallen back through the stop, and BMS is one that we are watching to exit if we get a further drop.

LSTR ($88.45; +0.51): Researching a new date. Held the prior high on the test (87.35), today pushing back up on sharply higher volume (101,600; average 64,600). Intraday the stock moved over our buy point of 89, hitting 89.15 before pulling back to close. Looking good, and watching for a continued move over the high and toward the target of 100. We can look at new or additional positions on a move over 89.30 with continued strong volume. Stock only.

KRI ($67.56; +0.60): 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. Still in the pennant, holding the 10 day MVA (67.14) as it moves on low volume (down to 287,000; average 405,100). The breakout is 68.35 on volume of 540,000, with stock and/or July $65 calls to buy (KRI GM - under 50 open interest).

BER ($55.51; -0.09): Researching a new announcement date. Held again over its 10 day MVA (55.33), showing a tighter doji as volume dipped to 63,100 (average 129,000). It has been a nice, orderly pullback, and we are looking for BER to make another bounce with volume of 150,000 behind it. On such a move over 56.20, stock and/or July $50 calls to buy (BER GJ - no open interest; plenty at the $55 strike).

DRI ($38.80; -2.00): As we wrote over the weekend, the restaurants were looking weak, and today DRI fell through its 50 day MVA (39.58), continuing down with big volume behind it. The sector has been strong but is now getting hit hard, and after breaking support we will look for more downside from DRI. It could try to test the 50 day, but on a drop back from here or after a test, through 38.50, July $45 puts to buy (DRI SI - check broker for open interest).

DRYR ($42.79; -0.63): Forecast to announce a split with earnings on 4-24-02 before the open. Still drifting in its handle on low volume, good action as it dipped back but held the 18 day MVA (42.54). Looking for the drift back to stop and for DRYR to make its move. The breakout is 44.98 on volume of 390,000, while the aggressive play is over 44 with volume of 300,000 or better. Stock only.

PRE-SPLITS: WLP snuck back over the 50 day MVA.

DF ($71.65; -0.40): Splits 2:1 effective 4-25-02. Showed another loose doji Monday as DF holds the 10 day MVA (71.55) in the handle to its cup pattern. For new positions on a breakout, 73.50 on volume of 840,000, with stock and/or June $70 calls to buy (DF FN).

WERN ($27.32; -0.07): Splits 4:3 on March 15. Going toward the split, WERN has been drifting up a bit, so we are still a bit wary. However, it tested back a bit today (low of 26.82), and jumped back up on much higher volume (357,000; average 320,700). Typically we are not that concerned with volume on pre-splits, but WERN could be up to something. Watching the downside to protect positions, but on a move over over 27.70, stock and/or April $25 calls to buy (QEH DE).

SMD ($24.20; +1.15): Splits 3:2 effective 3-18-02. Starting a move, today running back over its short-term MVA's (10 day at 23.51). Still a good, rather tight pattern, and from here we will look for a move over the recent high at 24.70, with stock.

CONTINUING CANDIDATES: THQI dipped back to close below the 200 day on strong volume, so we are keeping an eye on it. RARE tanked (we were concerned about restaurants this weekend, and they tanked - even those in good patterns like RARE). DHR we need to watch for a pullback, but MI is shaping up in a nice pattern.

IGT ($64.00; -3.85): Tried to break out recently, but did not have the volume we wanted and went nowhere. We watched it dip back last week and hold the short-term MVA's (66.27), but today it tanked back, taking out what would have been our stop point and the 50 day (65.08). Volume was much heavier on the selling (1.63 million; average 1.19 million), and we can look to 'flip' this play to the downside to make some money. IGT might try to test the 50 day, but on a failure we are looking for a drop through 63.75 on continued strong volume, targeting the 200 day MVA (58.45). April $70 puts to buy (IGT PN - looking at a short-term play given the near-term expiration - if we get a solid drop and then a bounce before the target, we will look to take profits on the bounce).

POST-SPLITS: BSG and ACS tried moves but could not hold.

GILD ($36.10; -0.02): Split 2:1 effective March 8. Settled down a bit today, although the intraday range was still a bit wide (high of 36.60 and low of 35.50). Volume continued down (1.82 million; average 2.17 million), and GILD is showing something of a handle to its ragged saucer. The aggressive can look at a move over 37 on above average volume, with stock and/or May $35 calls to buy (GDQ EG - no open interest as yet).

MGAM ($31.50; +0.80): Split 3:2 on February 12. Forming another pennant after pulling back from its last breakout. MGAM continues to hold the 18 day MVA (29.64), moving up on increasing volume today (301,400; average 234,600). The aggressive can look at a move over 32.45 on increased volume, with stock and/or July $30 calls to buy (QMG GF - low open interest).

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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