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Begin Part 2 of 4

Weekly Economic Calendar (All times Eastern). The figures are the consensus expectations, not ours.

3-11-02
Wholesale Inventories, January (10:00): -0.2% actual versus -0.5% expected and -0.5 prior (revised from -0.6%).

3-13-02
Retail Sales, February (8:30): 0.9% versus -0.2% prior.
Retail Sales, ex-auto, February (8:30): 0.5% versus 1.2% prior.

3-14-02
Business Inventories, January (8:30): -0.4% versus -0.4% prior.
Initial Claims, 3/9 (8:30): 375K versus 376K prior.
Export Prices ex-ag., February (8:30): 0.1% versus 0.1% prior.
Import Prices, ex-oil, February (8:30): 0.1% versus 0.1% prior.
Current Account, Q4 (8:30): -$101.5B versus -$95.0B prior.

3-15-02
PPI, February (8:30): 0.1% versus 0.1% prior.
Core PPI, February (8:30): 0.1% versus -0.1% prior.
Industrial Production, February (9:15): 0.2% versus -0.1% prior.
Capacity Utilization, February (9:15): 74.3% versus 74.2% prior.
Mich. Sentiment-Prel., March (9:45): 93.0 versus 90.7 prior.

TEAM TRADES

VVUS: Va-va-voom. Issued the alert and then just watched it sail on up without acting on it. You know, one of the things you have to do when you see the move you are looking for is act.

SWK: A recent favorite, we were looking for SWK to give us another chance for a good move. It had sold back to and tested the 18 day MVA on Monday, and today it started up off of that level. We could have jumped on it right off the bat, but with the market as it was we waited for it to move up over 50 and show us some decent volume. Well, right after noon CT it cleared 50 on good volume. It had been in an intraday ascending wedge and broke out. We should have jumped in right there. This was its first bounce off the 18 day MVA following its solid breakout in late February. We waited, however, to let some more volume come in; it cleared 50.50, ran to 50.65. It came back to 50.50 and held. We moved in at that point. It started back up over the next hour but then got caught in the selling before rebounding to close right at our buy point. Volume was good and the sector is doing well; it can give us another 20% we think.

THE PLAYS: Some nice plays setting up.

BONUS PLAYS: Breakout by CMX, and a good move by MER!

NEU (Neuberger Berman--$46.43; -0.03; optionable): Financial Services
http://biz.yahoo.com/p/n/neu.html
STATUS: NEU has formed a nice cup with handle over the last 9 weeks, pulling into the handle the last four sessions. Looking good, as volume is steadily decreasing (72,700 today; average 150,500) and after the initial pullback the stock is holding laterally over the 10 day MVA (45.34). Left side high is 48.15. Target: 54.
BUY POINT: Breakout: 47.60 on volume of 225,000. Stop: 45.
POSITION: Stock and/or July $45 calls to buy (NEU GI - under 50 open interest).

DD (Dupont E Nemours--$47.24; +0.01; optionable): Chemicals.
http://biz.yahoo.com/p/d/dd.html
STATUS: DD broke out over the highs in its recent range in mid-February, and popped up to a high of 48.75 recently before making a bit of a pullback over the last week. The pullback has been orderly, on below average volume and now holding the 18 day MVA (46.67), tapping that level each of the last two sessions. A decent test, and we will look for a strong bounce up and a challenge of its 2000-2001 highs at 50. On a move over that level, a target of 54. Excellent money flow and buying.
BUY POINT: Over 47.50 on above average volume. Stop: 44.27.
POSITION: Stock and/or July $45 calls to buy (DD GI).

Quick updates prior bonus plays.
CUM - Holding up after a good move.
BVF - Still under resistance.
MDR - Still solid in its pattern.
MKSI - Holding up after the run.
SHFL - Trying a bounce.
IR - Moved again, but still protecting positions.
IEX - Has pulled back and is testing the 50 day MVA.
SEE - Nice test of the 10 day MVA.
MAG - Testing the 10 day with light volume - not bad.

MARKET FAVORITES: AMAT, BRKS, BRCM, TER, MANU and MERQ all gapped back with the market, but are holding support and could set up new or additional plays on a move up. XLNX pulled back with a bit more gusto than the others.
1) NTAP - Working a little consolidation
2) LCRX - Gap back held

NTAP (Network Appliance--$21.15; -0.59; optionable): Data Storage Devices.
http://biz.yahoo.com/p/n/ntap.html
STATUS: NTAP has made a nice move up from its 200 day MVA (15.75), trying to form the right side of a cup (from early January - high 29.75). It has dipped laterally into something of a handle over the last week, dipping back again today with the market but moving on light volume (8.4 million; average 11 million). Setting up well, and we are looking for a move over the recent high of 22.10. Target: 29.
BUY POINT: 22.20 on volume of 15 million. Stop: 20.65 (7%).
POSITION: Stock and/or June $20 calls to buy (NUL FD).

LRCX (Lam Research--$27.55; -0.87; optionable): Semiconductor.
http://biz.yahoo.com/p/.lrcx.html
STATUS: Has rambled up from its recent low near 20, taking out the January high (27.10) and now in the mid-2001 range. After a big finale to the move last Friday, LRCX dipped back a bit on lower volume, and today gapped down with the market. However, the stock closed with a doji today on even lighter volume (2.24 million; average 2.26 million). At its low today LRCX tapped the January high. Good action, and we will look for LRCX to hold here and give us a move in the next rally. Target: 34 (2001 high).
BUY POINT: In a rally, a move over 28 with volume of 2.5 million or better. Stop: 26.13 (7%).
POSITION: Stock and/or June $25 calls to buy (LMQ FE).

PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: None scheduled for this week.

PRE-ANNOUNCEMENT BEST PLAYS: Most are consolidating with the indexes.
1) LE - On the verge of a new high
2) CPS - Good pennant and in split range
3) MMM - Gapped down but nice recovery
4) DRYR - Drifting down a bit in the handle
5) LSTR - Still testing the breakout
6) KRI - The pennant continues
7) BER - Looking for a stronger bounce

LE (Lands' End--$52.42; -0.20; optionable): Catalog & Mail Order. Researching an announcement date.
http://biz.yahoo.com/p/l/le.html
STATUS: LE blasted up in November from near 30 to hit the recent high of 53.38. It has since pulled laterally, forming an ascending wedge, and its last move up from the 50 day MVA (49.11) has taken it right up to the highs (53.38, from November). The last two sessions it has pulled laterally with tight dojis, today on reduced volume of 163,800 (average 199,000). A good pattern, and we are looking for the breakout. Target: 62.
BUY POINT: 53.48 on volume of 310,000. Stop: 49.74 (7%).
POSITION: Stock and/or June $50 calls to buy (LE FJ).

CPS (Choicepoint--$53.70; -0.55; optionable): Business Services. Forecast to announce a split on 4-18-02 in conjunction with earnings. At this time the company cannot confirm the date for the release, but based upon our research this is the date for the release. There is going to be a mid quarter conference call on 3-14-02 and we will watch that as well.
http://biz.yahoo.com/p/c/cps.html
BACKGROUND: Last announced a 3:2 split on 1-31-01 with a board meeting at a price of $53. Before that CPS announced a 2:1 split on 10-20-99 at a price of $63. The company has sufficient shares for a 3 for 2 split.
STATUS: Pulled back a bit in the pennant. Since its last split a year ago, CPS has dashed back up into range, as splitting stocks often do. It has been on a nice uptrend, and after a test of the 50 day MVA (then 47.50, currently 52.13), CPS ran up to a high of 55.40, and over the last few weeks has formed a pennant pattern. It pulled back the last couple of sessions to its 18 day MVA, closing on that level today as volume has been low on the drop (83,100 today; average 224,500). Looking good, and watching for 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--$121.30; +0.80; optionable): Conglomerate. Forecast to announce a split on 4-18-02 in conjunction with earnings. At this time the company will not confirm the date.
http://biz.yahoo.com/p/m/mmm.html
BACKGROUND: Last announced a 2:1 split on 3-15-94 in conjunction with a board meeting. The stock price was $100. The annual shareholder meeting was on 5-8-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Gapped back with the market but made a nice recovery. 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, and today's recovery keeps it right in the handle range as volume remained light (up to 1.91 million; average 2.09 million). Looking for a run to a new high. Target: 140.
BUY POINT: Breakout: 123.80 on volume of 3 million. Stop: 118. Aggressive: Over 122.50 on volume of 2.5 million. Stop: 118.
POSITION: Stock and/or July $115 calls to buy (MMM GC).

DRYR (Dreyers Grand Ice Cream--$42.46; -0.33; 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: Continues in its handle, but the drift needs to stop. DRYR is in a short but nice 'flying w' double bottom pattern, and has been dipping back in a handle for a couple of weeks. Today it dropped back again to close just under its 18 day MVA (42.53). Not a whole lot of concern, as volume continues to be quite low, which is healthy for this type of pattern (86,700; average 261,000). However, the stock should find support here and hold for a move up - handles should not get so long that they are out of proportion to the rest of the pattern. Still shows good money flow and buying. Target: 50.
BUY POINT: 44.98 on volume of 390,000. Stop: 41.83. Aggressive: Over 44 with volume of 300,000 or better. 41.50.
POSITION: Stock only.

LSTR (Landstar System--$88.97; +0.52; no options): Researching a new date.
http://biz.yahoo.com/p/l/lstr.html
BACKGROUND: Based upon our research it does not appear that LSTR has ever split its stock. The annual shareholder meeting was on 5-16-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Still looking pretty good on the test of its recent breakout. LSTR has battled back from recent lows at 77, taking out the high it made (87.35) as we took it up on its nice January breakout. The breakout was on excellent volume, and it has held 87.50 on the test, moving back on low volume and then pushing back up Monday with a nice volume surge. Today it moved up slightly, but volume dipped back down (41,000; average 61,900), and it closed shy of the breakout high at 89.30. Looking for LSTR to breakout with big volume and head up to 100.
BUY POINT: A move over 89.30 on volume of 75,000 or better. Stop: 84.50.
POSITION: Stock only.

KRI (Knight-Ridder--$67.25; -0.31; 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: Tested down the 18 day MVA again at its intraday low (66.48), but again, as it has consistently done in this pennant pattern, pulled back up to close over the 10 day (67.16). Volume continued to contract as KRI tightens in the pattern (173,800; average 396,500), and it is looking good. However, we know that pennants are prone to go either way (as HB showed). Looking for the strong breakout to the upside. Target: 80.
BUY POINT: 68.35 on volume of 540,000. Stop: 63.57. The move to a new high is 68.83.
POSITION: Stock and/or July $65 calls to buy (KRI GM - under 50 open interest).

BER (W.R. Berkley--$55.85; +0.34; optionable): Property & Casualty Insurance. Researching a new announcement date.
http://biz.yahoo.com/p/b/ber.html
BACKGROUND: Based upon our research it does not appear that BER has ever split its stock. The annual shareholder meeting was on 5-15-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: BER is holding firm on the pullback at the 10 day MVA (55.42). The smooth dip back is contrary to the recent erratic movement it has shown, but overall BER has been steadily trending up in the right side of its base (a cup dating back to November, high of 58.40). Off of Monday's doji over the 10 day BER moved up slightly today, but volume continued to be light at 82,800 (average 125,000). Looking for BER to show some more strength of volume as it moves up from here. On the play we will see how it handles the high, but are targeting 64. Good buying.
BUY POINT: 56.30 on volume of 150,000. Stop: 54.
POSITION: Stock and/or July $50 calls to buy (BER GJ - no open interest; plenty at the $55 strike).

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) WERN - Continued the move
2) MKC - New play making a 50 day MVA bounce.
3) PMI - Looking to bounce

WERN (Werner Enterprises--$27.82; +0.50; optionable): Trucking. Splits 4:3 on March 15.
http://biz.yahoo.com/p/w/wern.html
STATUS: Moving toward the split, and WERN made another strong move Tuesday. We have been a bit wary as it was drifting up after its big move last week, but after a good move off of its lows Monday it was looking pretty good, and today it gave us a move. Volume was very strong on the run at 496,100 (average 322,200), and we will see if WERN can give us any more as we go the last few sessions before the split. Protecting profits on the way up.
PLAY: Aggressive: Over 28, with stock and/or April $25 calls to buy (QEH DE). Stop: 26.50.

MKC (McCormick & Company--$47.10; +0.69; optionable): Food & Beverage. Splits 2:1 effective 4-9-02.
http://biz.yahoo.com/p/m/mkc.html
STATUS: Made a nice run in January-February up and out of a cup pattern, but last week fell back from the all-time high of 49.57 rather abruptly. The move held on a test of the former pattern highs (46), and the last several sessions has tapped near the 50 day MVA (45.58) at its low. Today MKC bounced back up, closing just at its short-term MVA's (10 day at 47.15) as volume increased to 199,900 (average 197,100). We will see if the resistance pushes the stock back again for another test toward 46, but on a continued move we can look at a run back up at the high. Watching 49.67 as we target 52.
PLAY: Aggressive: Over 47.25 on increased volume. Stop: 45.50.

PMI (Pmi Group--$74.00; -0.10): Surety & Title Insurance. Splits 2:1, effective date TBA.
http://biz.yahoo.com/p/p/pmi.html
STATUS: PMI is at the highs of a 16-month double bottom, and has been trending steadily up the 18 day MVA (72.40). The stock made a new high at 75.25 as it gapped up and reversed last week, but has held on with a slightly descending consolidation since. Today PMI showed a 'shooting star' doji over the 10 day (73.22), with volume dipping back to low levels (194,600; average 243,700). It could still test lower, but from here we can look at could be a quick play on a break to a new high. Target on long-term plays is 76, but on a strong bounce we could get a move to 80.
PLAY: 75.10 on volume of 375,000 or better, with June $70 calls to buy (PMI FN).

CONTINUING CANDIDATES BEST PLAYS:
1) INVN - Broke out!
2) FLIR - Doji over support
3) MI - Forming a nice pattern

INVN (Invision Technologies--$48.29; +3.25; optionable):
http://biz.yahoo.com/p/i/invn.html
BACKGROUND: Based upon our research it does not appear that INVN has ever split its stock. The company has sufficient shares for a 3:2 split.
STATUS: INVN broke out today! The stock had been inching up, showing decent volume a couple of days but rather weak on most of the run over the last couple of weeks. Consequently, we were guarded about the chances of a breakout on this move, as INVN looked more like it was ready to test the short-term MVA's (18 day at 41.72) and set up another higher low in its ascending wedge. However, volume as very strong on today's move (3.87 million; average 2.35 million), and we are targeting 57.
BUY POINT: Still a buy up to 49.44 on continued strong volume. Stop: 44.92-45.98 (7%).
POSITION: Stock and/or July $45 calls to buy (FQQ GI).

FLIR (Flir Sys--$53.50; -1.19; optionable): Electronics. Did not get the split, but made a very nice move on earnings.
http://biz.yahoo.com/p/f/flir.html
BACKGROUND: Based upon our research it does not appear that FLIR has ever split its stock. The annual shareholder meeting was on 7-24-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: After a very solid move on its breakout from its ragged saucer in mid-February, FLIR has pulled back. Today it tapped toward its prior pattern highs at 50 on its low of 51.25, but managed to move back up and close with a doji over the support of its 18 day MVA (53.38). Volume on the pullback has been comparatively lighter than what we saw on the recent move up, and today on the doji it was steady at 448,300 (average 418,800). Looking good on this test back, and we will watch for a bounce and run, with the recent high at 59.50. Will watch that level as we target 62.
BUY POINT: Over 55 on volume of 500,000 or better. Stop: 51.24.
POSITION: Stock and/or July 50 calls to buy (FFQ GJ).

MI (Marshall & Ilsley--$62.11; -0.57; optionable): Banking: Regional.
http://biz.yahoo.com/p/m/mi.html
BACKGROUND: Based upon our research it does not appear that MI has ever split its stock. The company has sufficient shares for a 2:1 split.
STATUS: MI is forming a handle to a cup formed since December (high of 64.20). It is still moving quite a bit, tapping down to 61.20 today at its low (50 day MVA at 60.94) but recovering to close over the 10 day (61.90). Volume is settling down (up today to 445,700; average 394,600), and we will look for MI to continue to hold the 62 range and set up a breakout. The handle high is 63.02. Target on a breakout: 70.
BUY POINT: 63.12 on volume of 590,000. Stop: 60.
POSITION: Stock and/or June $60 calls to buy (MI FL - low open interest).

End Part 2 of 4

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