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Begin part 2 of 3

TEAM TRADES

OEX: We were looking at taking positions on the OEX if a good move started, planning on adding positions on a strong breakout over 600. The index started strong, running over our buy point at 92 and then pulling back to near 590. From there it started back up and we wanted to be in when it made the move back up. It started the move higher, making a gap up as it started its move. The index was right at 591.50 and the April $590 calls were 13.30 by 14.20. We had been seeing at $1 spread so the 90 cent spread looked pretty good. We put in a limit order at the ask, and with these options, the fill comes quickly. Well, it had a good rally after that. From 591.50 it ran to 594 on the high. Not bad; we were looking at a target of 600 on this aggressive move, maybe hanging on if the breakout came. It was looking good enough to stay with them. As we all know, the index falls, dropping to almost 589.50 on the low. It rebounded to close at 592.09. The options closed at 13.90 by 14.90, basically where we bought them. We are keeping them for the breakout we feel is still to come.

THE PLAYS: Some nice bonus play moves!

BONUS PLAYS: DCLK made a solid move, and CSL ran but did not have the volume. VIA gapped up and reversed, so we will see if it will hold or drop back. ACF has generated much on this move, and could test back again. UVN started up but reversed today on big volume, so we are watching closely.

TXT (Textron--$50.74; +1.30; optionable): Conglomerates
http://biz.yahoo.com/p/t/txt.html
STATUS: After a huge drop out of its 55-60 range in September, TXT has made its way back up, forming a cup. It recently took out its 200 day MVA (46.11), and after hitting up to 51.05 pulled back into a handle. Today TXT blasted up from its 18 day MVA (48.62), hitting the breakout point with good volume behind it (1.11 million; average 754,400). It pulled back from a high of 51.16 to close, and we are looking for a continued breakout run. Target: 60.
BUY POINT: 51.26 on continued strong volume. Stop: 47.67 (7%).
POSITION: Stock and/or June $45 calls to buy (TXT FI).

Quick updates prior bonus plays:
BAX - Testing the breakout
SOV - Holding up after the breakout
KCIN - Still solid on a move back up today
LECO - Still solid as it moves up again
CRUS - Looking good for a move in this handle
INGR - Good move but pulled back off of the intraday high
EAT - Ready to drop some more
SDS - Trying to move
DD - Could test back after today's move and reversal
MER - Gapped out of the pattern but could only manage a doji
CUM - Continues the move but low volume
MKSI - Having trouble at the breakout high

MARKET FAVORITES: FISV could be coming back to test the breakout. CHKP make a weak move back up to resistance and still is set up for a fall.
1) BOBJ - Looking for a break from the handle

BOBJ (Business Objects--$43.58; -0.57; optionable): Software
http://biz.yahoo.com/p/b/bobj.html
STATUS: Deep in its base, BOBJ has pulled into a handle to its cup (left-side high at 55 from February 2001). Volume has steadily dropped back, and BOBJ is holding its 10 day MVA (42.83). It gapped up Monday but could only manage a doji, and today showed another doji after testing back near support. Volume continued down at 226,000 (average 645,400), and we will see if BOBJ can hold the 10 day and jump back up over the handle high (44.70). Targeting 51 on a breakout.
BUY POINT: 44.80 on volume of 970,000. Stop: 41.66 (7%).
POSITION: Stock and/or July $40 calls to buy (BBQ GH).

Updates on recent Market Favorites:
ZRAN - Still in the handle
MERQ - Tested the 50 day on high volume and looks to bounce
MSFT - Still at the resistance of the 50 day
PRGS - Holding in the handle
FLEX - Moving laterally but has hit up against the 10 day MVA
NTAP - Holding in the lower end of its recent range
LRCX - Nice move!
XLNX - Testing the 50 day MVA
MANU - Holding the 10 day MVA after the drop
BRKS - Holding the range of its prior highs

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

NEW PRE-ANNOUNCEMENT PLAYS:

PHM (Pulte Homes--$50.67; +0.56; optionable): Residential construction. Forecast to announce a split at its shareholder meeting on May 15, but we will keep an eye out for a split before that date. We have seen several recent splits in this sector.
http://biz.yahoo.com/p/p/phm.html
BACKGROUND: Last announced a 2:1 split on 5-7-98 at a price of $54. There is an shareholder meeting scheduled for May 15 and the company is asking the shareholders to approve an increase in authorized shares from 100 million to 200 million.
STATUS: Like other stocks from this sector, PHM broke from a reverse head and shoulders in early December, and has trended up nicely along its 50 day MVA. The stock recently hit a high of 55.74, dipped back last week through its 18 day MVA (51.34), but is holding over its prior high at 50 (from April 2001) and the 50 day (48.45). Today PHM held for a doji as volume spiked way up to 1.1 million (average 535,500), and it could be ready to make another move. Watching for a bounce, and targeting 60 on a continued trend.
BUY POINT: 52.50 on continued strong volume. Stop: 48.82 (7%).
POSITION: Stock and/or July $50 calls to buy (PHM GJ).

MGA (Magna--$72.76; +0.27; optionable): Auto Parts. Researching a date.
http://biz.yahoo.com/p/m/mga.html
STATUS: Broke out from a double bottom to start this month, hitting a new high on the run at 74.50. MGA has held up strong, pulling into a pennant and holding the 10 day MVA (72.09). It has now shown four consecutive dojis, today with volume up to 341,700 (average 290,400). Setting up nicely for another move. Target: 83. Good relative strength.
BUY POINT: 74.18 on volume of 390,000. Stop: 70.
POSITION: Stock and/or August $70 calls to buy (MGA HN).

PRE-ANNOUNCEMENT BEST PLAYS: Watching SLM for a continued run to 100 after its strong move Friday.
1) CPS - Got the breakout!
2) ESI - Also broke out
3) MMM - Still solid in its pattern
4) ATK - Working a pennant
5) KRB - Looking solid in its consolidation
6) IFIN - Ready for another move
7) DRI - Out of steam and looks ready to fall
8) BMS - Looking to bounce
9) CTAS - Another strong move up
10) RNR - Full retreat sets up a put
11) SUI - Tight consolidation

CPS (Choicepoint--$55.96; +2.06; 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.
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: Got the move! CPS blasted up out of its tightening pennant pattern today, making a new high. Volume was what we want on a breakout, coming in big at 449,200 (average 215,500). Right back in split range again, and CPS has wasted no time getting here since its last split a year ago. Target: 62.
BUY POINT: Still a buy up to 57 with continued strong volume. Stop: 52.04-53 (7%).
POSITION: Stock and/or July $50 calls to buy (CPS GJ - low open interest; plenty at $55).

ESI (ITT Educational Services--$46.02; +1.12; optionable): Education & Training. Forecast to announce a split with earnings on 4-18-02 before the open.
http://biz.yahoo.com/p/e/esi.html
BACKGROUND: Based upon our research it does not appear that ESI has ever split its stock.
STATUS: Broke out today, continuing its run started last week from the 18 day MVA (44.09) and moving our of the handle to its cup. ESI has made a good move to run up and break from the pattern, but the concern is the lack of volume. Although way up and above average today, it was short of what we look for in a breakout, coming in at 148,400 (average 128,400). Still, a decent move, and ESI now faces the all-time high from the left side of the cup, at 46.25 (July). Target: 54
BUY POINT: 46.35 on volume of 200,000. Stop: 43.75.
POSITION: Stock and/or July $40 calls to buy (ESI GH - no open interest as yet; plenty at the $45 strike).

MMM (Minnesota Mining & Mfg--$121.70; -0.50; optionable): Conglomerate. Forecast to announce a split on 4-22-02 with earnings (time not know as of yet). We are also looking at a board meeting that we believe to be taking place on 4-19-02.
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: MMM has pulled into a handle to its two-month cup, and tried to make a bounce up over the last few days, but it not quite able to make it to the highs. It has been using the 18 day MVA (119.93) as support, moving back up but gapping up to 123 the last couple of sessions, pulling back a bit intraday. Volume was a bit light on the attempts, up to 1.9 million (average 2.1 million). We could see a visit back to the 18 day (or 10 day, at 120.97), but are looking for a breakout with a surge of volume. The all-time high is at 127. The current cup pattern forms the right side of a huge reverse head and shoulders pattern going back over a year. Target: 140.
BUY POINT: Breakout: 123.80 on volume of 3 million. Stop: 118.
POSITION: Stock and/or July $115 calls to buy (MMM GC).

ATK (Alliant Techsystems--$99.00; +0.74; optionable): Aerospace/Defense. Forecast to announce a split on 5-8-02 in conjunction with earnings. At this time the company cannot confirm this date, but based on our research this should be the date for the announcement.
http://biz.yahoo.com/p/a/atk.html
BACKGROUND: Last announced a 3 for 2 split on 8-8-01 at a stock price of $98. The announcement was made a day after the annual shareholder meeting and in conjunction with earnings. The annual shareholder meeting was on 8-7-01 at which time additional shares were authorized. The company has sufficient shares for a 3:2 split.
STATUS: ATK has looked good, moving rapidly back up into split range over the last seven months. It formed a cup with handle from November through February, breaking out nicely and trending up along its 10 day MVA (currently 97.52). The stock hit a high of 101 earlier this month, and for the last couple of weeks has tightened into a pennant pattern, although it showed a wide range Monday, hitting the buy point but on less volume than we wanted. Today ATK made a bit of a move up, with volume tapering back to 251,600 (average 280,000). Still looking good for a move, but we need strong volume. Target: 110.
BUY POINT: Over 100.25 on volume of 375,000. Stop: 94.
POSITION: Stock and/or May or August $95 calls to buy (ATK ES or ATK HS).

KRB (Mbna Corp--$38.86; +0.59; optionable): Regional Bank. Forecast to announce a split on 4-11-02 in conjunction with earnings. The company will not release the date for earnings, but based upon our research this should be the date.
http://biz.yahoo.com/p/k/krb.html
BACKGROUND: Last announced a 3:2 split on 7-14-98 at a stock price of $40. The announcement was in conjunction with earnings. The annual shareholder meeting was on 4-30-01 at which time no additional shares were authorized. The company has sufficient shares for a 3:2 split.
STATUS: KRB broke from a small double bottom to start this month, solidly breaking the gentle downtrend of 18 months. A nice move that took out its August-January highs near 38, and hit a high of 39.45 before pulling back to test the move. KRB held its prior highs and 10 day MVA (37.96) on the test, and since has started back up, although as yet the move does not have a lot of strength. Looking good, and watching for a continued move over the recent and all-time high (40.13). Target 46.
BUY POINT: 39.55 on increased volume of 4 million. Stop: 36.36.
POSITION: Stock and/or June $35 calls to buy (KRB FG).

IFIN (Investor's Financial Service--$76.83; -0.14; optionable): Looking at an announcement on 4-16 with earnings or with the 4-23 shareholder meeting.
http://biz.yahoo.com/p/i/ifin.html
BACKGROUND: Last announced a 2:1 split on 5-15-00 with a board meeting. The stock price was $82. The annual shareholder meeting was on 4-17-01 at which time authorized shares were increased.
STATUS: After its nice breakout from a small double bottom, IFIN tested the move and is holding over the prior pattern highs (75-75.50). It tried a move Friday and Monday, but volume was not there, and IFIN pulled back for a doji Monday after hitting as high as 78.82. Today it followed with another doji on lighter volume (94,800; average 198,000), and the consolidation still looks good. Looking for a move up with some power behind it. Target: 87.
BUY POINT: A move over 77.51 on volume of 240,000. Stop: 72.50.
POSITION: Stock and/or July $70 calls to buy (FLQ GN - low open interest).

DRI (Darden Restaurants--$39.27; -0.18; optionable): Restaurants. Earnings are March 21 after the close.
http://biz.yahoo.com/p/d/dri.html
STATUS: The rebound has lost steam. DRI got creamed with the restaurants, a sector that is seeing some struggles after a nice run. Last week DRI fell hard through its 50 day MVA (39.36), but after hitting a low of 36.70, DRI rebounded to test that level. Monday DRI gapped over the 50 day but could only hold on with a doji on strong volume, and today it dipped back slightly, showing another doji with volume dropping considerably to 721,400 (average 911,800). We were looking for this test to fail, and this is a key point, where it certainly looks weak; watching for DRI to drop back down toward the initial target of 34, but looking at a possible drop to the 200 day MVA, currently at 32.22. Earnings is the wildcard, and they are out Thursday.
BUY POINT: For new or additional positions, a drop back through 38.75 on above average volume.
POSITION: May $42.50 or July $45 puts to buy (DRI QV or DRI SI - no open interest as yet).

BMS (Bemis--$56.20; +0.21; optionable): Researching a new forecast date.
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: Made a nice move and breakout in January-February, hitting a high of 58.24 earlier this month before a gradual retreat. That move has taken BMS back to its 18 day MVA (55.77), holding over that point for several sessions. Monday BMS reached down to 54.88 at its low but recovered on big volume, looking like a possible bounce. It is still giving an indication it could bounce, moving up slightly today on lower, but continued good volume (270,100; average 223,700). On a strong bounce targeting 62.
BUY POINT: A move over 56.60 on increased volume. Stop: 53.
POSITION: Stock and/or July $50 calls to buy (BMS GJ).

CTAS (Cintas Corp--$50.25; +1.06; optionable): Working on a new date.
http://biz.yahoo.com/p/c/ctas.html
BACKGROUND: Last announced a 3:2 split on 1-18-00 in conjunction with a board meeting. The stock price was $54. The annual shareholder meeting was on 10-25-00 at which time additional shares were authorized.
STATUS: A bit erratic of late, but showing some strength again. CTAS failed on its last move up at its December-January consolidation and one of its down trendlines (from early 2001), but made a higher low on the last trip down, finding support at the 200 day MVA (46.13) and rebounding smartly. Today CTAS move past its high from the last move up (early March), and reached up to 51 before pulling back to close (high in the consolidation was 51.22). Volume shot up to 1.52 million (average 970,000), so we will see if CTAS can finally make the move to convincingly break the down trendline and resistance. Target: 58.
BUY POINT: 51.32 on continued strong volume. Stop: 47.73.
POSITION: Stock and/or May $45 calls to buy (NQQ EI).

RNR (RenaissanceRe Holdings--$100.35; -2.37; optionable): Property & Casualty Insurance. Forecast to announce a split on 4-22-02 with earnings (tentative date).
http://biz.yahoo.com/p/r/rnr.html
BACKGROUND: Based upon our research it does not appear that RNR has ever split its stock. The company has sufficient shares for a 2:1 split.
STATUS: RNR broke out of a jagged saucer in mid-February, but double topped and has fallen back. Today RNR took out its 50 day MVA (101.54), selling on strong, much higher volume of 419,200 (average 224,300). Looking for the selling to continue now after the strong breach of support, with possible support at 95 but we are targeting its up trendline (from mid-2000) at 92 (200 day MVA is at 87.43).
BUY POINT: Through 99.50 on continued strong volume.
POSITION: May $110 puts to buy (RNR QB - no open interest as yet).

ACDO (Accredo Health--$54.55; +0.58; optionable): Forecast to announce a split with earnings on 4-29-02.
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: ACDO was hit hard earlier this month on some competitive product news, but is found support at its 50 day MVA (50.25) and has come back. ACDO had made a strong breakout from a trading range in January and again in February, showing a pennant pattern before getting hit. It is now back in the range of the pennant, today moving up a bit on increased volume (696,900; average 684,700), closing just below consistent highs in the pattern at 55 (all-time and pattern high at 56.50). Looking for a stronger move by ACDO to take out the recent and all-time high. Target: 64.
BUY POINT: 55.10 on volume of 720,000. Stop: 52. New high: 56.60 on volume of 900,000. Stop: 52.64 (7%).
POSITION: Stock and/or May $50 calls to buy (DZU EJ).

SUI (Sun Communities--$39.84; -0.06; no options): REIT. http://biz.yahoo.com/p/s/sui.html
BACKGROUND: Based upon our research it does not appear that SUI has ever split its stock. The annual shareholder meeting was on 5-22-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: After the big breakout move early this month, SUI has pulled laterally to slightly down, forming a flying plateau and looking good as it holds its 10 day MVA (39.77). Volume spiked up again Monday as SUI pulled back slightly, continuing down on lower volume today (42,900; average 41,500) as it showed a loose doji over the 10 day. Solid consolidation, and we are looking for a move. Target: 45.
BUY POINT: Over 40.19 on volume of 60,000. Stop: 39.40.
POSITION: Stock only.

PRE-SPLITS BEST PLAYS: PMI made the bounce as it continues to trend upward.
Remember, we try to grab Pre-Splits 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) JEC - Making another move
2) DF - Broke out Monday
3) WTNY - Dipped back a bit after the breakout

JEC (Jacobs Engineering--$72.57; +1.62; optionable): Splits 2:1 on April 2.
http://biz.yahoo.com/p/j/jec.html
STATUS: Making a good pre-split move. JEC held the 10 day MVA (70.26) after falling back abruptly from its last move up, forming a handle to its cup dating back to November. The last two sessions JEC has made a solid run back to the recent high. Today's move reached over that level, touching 73 but pulling back a bit to close. We will see if it can breakout and head up to the November (and all-time high) of 75.70; JEC also hit that level in May-June before retreating, so that will be a key level of resistance.
PLAY: 73.10, with stock and/or July $70 calls to buy (JEC GN). Stop: 68.

End Part 2 of 3

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