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Begin Part 2 of 2

Support and Resistance

Nasdaq: Closed at 1862.03
Resistance: 1875 is the bottom of the November consolidation. The 200 day MVA (1900.30). The top of the November consolidation at 1934 to 1941. After that is 1980 (the December gap up point) and some minor resistance at 2000. Then the January top at 2098.88.
Support: 1850 can act as some support (February interim top at 1859). After that, hello 1800 to 1775.

S&P 500: Closed at 1154.09.
Resistance: The December high (1173.62) and the January high (1176.97). That point also marks roughly the lows of summer 2001 consolidation that runs up to 1240.
Support: 1150 and the 200 day MVA (1148.34). After that, 1125 is the hump in the double bottom, and the simple 50 day MVA (1128.19) and exponential 50 day MVA (1128.90) are converging. 1100 has acted as support as well.

Dow: Closed at 10,501.85
Resistance: The top of the June, July, and August 2001 trading range at 10,600 (10,679 intraday high), is still holding. 10,800 represents some resistance. That is followed by resistance at 11,000 on its way to the May 2001 high at 11,345.72.
Support: 10,400 has been providing support, followed by the January high at 10,300. Then the 200 day MVA (10,013.03) and 10,000.

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): +0.3% actual versus +0.9% expected and -0.2% prior.
Retail Sales, ex-auto, February (8:30): +0.2% actual versus 0.5% expected and 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

LE: The retail news in the morning has many retail stocks looking down for the open. We were watching with interest because the news was really not all that bad and LE had some good news on its own. It has also been building a very solid pattern for over 3 months. The stock started low. We were monitoring a lot of retail stocks based on the news. Most started lower, but they started working their way back up. LE was no exception; about an hour into the session it turned positive. It hit our buy point right at that time (53.48). It ran to 54 but then fell back, and that is where we were able to pick it up as it started higher. It was already up $1 from Tuesday's close and was bouncing down a bit so we did not take our full position for the stock. It rallied to 54.50, pulled back to 53.55 and held. That was important, and it acted as a springboard to more gains. It spent the rest of the afternoon trading between 54.50 and 55, and volume was huge. Now we did not finish taking out our full position today; we could have as the stock looked strong and had solid volume. We will wait and see if it pulls back a bit to test the breakout tomorrow and if it is successful will look at adding to the position.

PLAYS TO LOOK AT: New information - looking at LE for a possible announcement tomorrow! Speaking of LE, it broke out, and LSTR made a nice breakout as well!

BONUS PLAYS: DD continues to hold support, and NEU dipped back but on low volume. CUM is testing its move, and MER dipped back a bit but on lower volume. SY is still testing its move.

SDS (Sungard Data Systems--$34.13; -0.26; optionable): Business software
http://biz.yahoo.com/p/s/sds.html
STATUS: After a failed breakout from a six-month cup with handle, SDS tested its 50 day MVA (then 29, now 30.76) and made a big move. It hit up to 34.95 last week and has tested that move, holding over prior pattern highs and the 10 day MVA (33.25) as it forms a pennant. After a move back up SDS dipped slightly today, showing a doji on light volume (749,200; average 1.19 million). After this rest we will look for another move, targeting 39.
BUY POINT: Over 34.65 on volume of 1.6 million. Stop: 32.22 (7%).
POSITION: Stock and/or July $30 calls to buy (SDS GF).

EAT (Brinker International--$31.56; -0.02; optionable): Restaurants
http://biz.yahoo.com/p/e/eat.html
STATUS: Made a nice run with the sector, but has taken a drop with them in recent sessions. The fall has been abrupt and strong, taking out the 50 day MVA (32.14) Tuesday. It tested back to that former support today, but pulled back to close with a doji on lighter, but still very heavy, volume (1.66 million; average 917,300). We could see another test, but a failure to hold over the 50 day (or make it back through), will set up a put play on a drop. Target: 200 day MVA, currently 27.42.
BUY POINT: After failed test of the 50 day or from here, a drop through 31.20 on continued strong volume.
POSITION: July $35puts to buy (EAT SG - very low open interest).

MARKET FAVORITES: NTAP tried a move but did not have volume, and LRCX gapped back up tried to rebound. A lot of stocks are looking precarious.

FLEX (Flextronics--$16.82; -1.51; optionable): Printed Circuit Boards.
http://biz.yahoo.com/p/f/flex.html
STATUS: Made a good move with the market, fighting back up after a steady three-month drop. It found resistance at the 50 day MVA (19.75) and one of its down trendlines from early December, and headed back down this week. Tuesday brought a gap down, and today FLEX continued to drop on stronger volume (16.1 million; average 11.7 million). Very weak, and looking for a continued drop back down to the recent lows at 14.
BUY POINT: A drop through 16.50 on continued strong volume.
POSITION: July $27.50 puts to buy (QFL SY).

PRGS (Progress Software--$17.93; -0.04; optionable):
http://biz.yahoo.com/p/p/prgs.html
STATUS: PRGS is forming a handle to its cup (dating back to early January highs near 19.50). After a big move to start the month, PRGS pulled back a bit, and tried to start a move in recent sessions but volume was not there. The stock gapped back with the market Tuesday, but is holding comfortably over the 10 day MVA (17.67) with a pair of dojis. It could need some more time to test the 10 day and form a better looking handle, but today volume spiked way up to 256,900 (average 126,000), and if the Nasdaq can hold up we could see PRGS make a strong move back up. The recent high is 18.45. Target: 21.
BUY POINT: Aggressive: In a strong Nasdaq, over 18.20 on continued strong volume. Stop: 17.25. Breakout: 18.55 on minimum volume of 190,000. Stop: 17.25 (7%).
POSITION: Stock and/or June $17.50 calls to buy (RGQ FW).

PRE-ANNOUNCEMENTS: Breakouts by LE and LSTR! RUS still looking decent.

LE ($54.69; +2.27): Forecast to announce a split tomorrow before the market opens in conjunction with earnings. In the alternative, forecast to announce a split on 4-15-01 in conjunction with a board meeting. Broke out today! Volume was excellent (up to 481,300; average 187,000) as LE moved over the highs in its ascending wedge pattern. Still a buy up to 56, and an announcement could kick it up some more toward our target of 62. Stock and/or June $50 calls to buy (LE FJ).

CPS ($53.81; +0.11): Forecast to announce a split on 4-18-02 in conjunction with earnings. There is going to be a mid quarter conference call tomorrow and we will watch that as well. Is holding the 18 day MVA (53.75) in its pennant, showing a doji today on low volume (104,400; average 218,000). We are watching the conference call tomorrow, and will be ready for move to the breakout, which is 55.10 on volume of 310,000. Stock and/or July $50 calls to buy (CPS GJ - low open interest; plenty at $55).

KRI ($67.35; +0.10): 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 nice pennant pattern, but we need to see a move soon. 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 ($56.50; +0.65): Researching a new announcement date. Made more of a move today on the bounce, but volume was still lighter than what we were looking for (115,800; average 125,000). It pulled back from an intraday high of 54.94 to close. For the breakout, 57.06 on volume of 180,000, with stock and/or July $50 calls to buy (BER GJ - no open interest; plenty at the $55 strike).

DRI ($37.60; +0.19): Tried a relief bounce, touching up to 38.86 but pulling back to close as volume continued to be very strong (3.08 million; average 828,600). On a drop back through 37 on continued strong volume, July $45 puts to buy (DRI SI - no open interest).

IFIN ($75.99; -0.61): Looking at an announcement on 4-16 with earnings or with the 4-23 shareholder meeting. Testing the breakout from a small double bottom, today tapping back to the former pattern high but bouncing back up to close. Much higher volume at 313,200 (average 199,000), so IFIN is looking interesting. We will be concerned on a retreat through 75, but on a move over 77.35 with continued strong volume, new or additional positions with stock and/or July $70 or $75 calls to buy (FLQ GN - low open interest, or FLQ GO).

SUI ($39.91; +0.07): Forecast to announce a split with a board meeting on 4-01-02. Holding a gradually descending consolidation after the breakout, again tapping back to 39.70 at its intraday low but closing with another doji. Volume has really escalated (130,800; average 41,000), so another that could go either way but is set up to potentially make a strong move. The buy point is 40.10 on continued strong volume, with stock.

PRE-SPLITS:

JEC ($69.73; -0.27): Splits 2:1 on April 2. Holding in a lateral pattern over the 10 day MVA (68.96). The pattern formed after JEC pulled back to test its recent move, where it hit 72.96 before an abrupt drop. We see volatility in pre-splits, and are looking for another run. On a move over 70.25, stock and/or July $65 calls to buy (JEC GM). Target: 76.

CONTINUING CANDIDATES: Big jump by THC.

INVN ($46.65; -1.64): After the breakout Tuesday, INVN hit up to a new high at 49.76 before reversing. Not the continuation of the breakout we were looking for, but battling the market, and the drop was on sharply lighter, though above average, volume (2.26 million; average 2.35 million). Looking for INVN to hold 45.50 with a light volume test, and a strong move back up. On a move back up on above average volume after a successful test, we can look at new or additional positions with stock and/or July $40 calls to buy (FQQ GH).

JCI ($91.41; -0.20): After its nice January breakout, JCI has made a nice move up (from 83), hitting a high of 92.94 last week. It has pulled into a pennant pattern, the last two sessions pulling off of intraday highs over 92 (92.39 today), as volume picked up (today 427,900; average 413,700). We could get a run to 100 on a breakout. On a move over 93, stock and/or July $85 calls to buy (JCI GQ).

POST-SPLITS:

CHBS ($30.07; -0.58): Is testing its 50 day MVA (29.31) after blasting back through it last Friday, but volume has been light on the test (294,400 today; average 500,000), and today it bounced back up from a low of 29.50 to close. Looking for the upward momentum to kick back in. On a move over 31.30 with volume of 600,000, stock and/or June $26.63 calls to buy (ULH FW).

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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