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Email Version, Section 1, Tuesday 03/27/2001
The SplitTrader.com Newsletter          Tuesday 03/27/2001 1 of 1
Copyright 2001, All rights reserved.
Redistribution in any form is strictly prohibited.

  - Your World Leader for Trading Stock Splits on the Internet -

Posted online for members at: http://www.SplitTrader.com

To view this email newsletter in HTML format with imbedded
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http://www.splittrader.com/htmlemail/032701_1.asp
================================================================

In This Newsletter:
===================

Market Commentary - And The Oscar Goes To.
Definition of the Day
Tuesday's Split Announcements - None
Wednesday's Expirations
Plays - New - Updates - Drops
Wednesday's Play-of-the-Day - TMIC

==================================================================


Market Commentary
=================

And The Oscar Goes To.

The market!  Tell me, what does Gladiator have that the market
doesn't?  In the Oscar winning best picture, Gladiator, the main
character goes from being a general, to a slave and finally to a
charismatic gladiator that wins over Rome.  In its own Oscar
winning performance, the market has gone from hero that could do
no wrong, to slave whose master was earnings, and finally to a
nervous, over-reactive child that just wants to grow up to be a
hero again.

While the market's performance has been nothing short of dramatic
(and probably should be rated R for retrenchment), many wouldn't
mind a bit of a respite.  And a respite may just be what the
market has in store for act four.  I say this because there are
crosscurrents blowing through Wall and Broad that should keep the
market in check.

The main current, or at least the one that Mr. Greenspan surfs,
just came in on the high side today.  If you have been paying
attention for the last few months, you know that I am referring to
the Consumer Confidence Index.

After dropping for five months straight, the Consumer Confidence
number unexpectedly ticked up in March to 117.0.  Economists were
expecting a number around 105.  This gives credence to the fact
that even though the manufacturing sector is already in dumps, the
consumer is holding up and continuing to spend in an environment
that is marked by low interest rates and high employment.

At first glance, this appears to be great news.  But, take one
look at what the Fed funds futures did after the release of the
number and it becomes immediately clear that the market has kissed
an inter meeting rate cut by the Fed bye-bye.

While the market still expects more cuts at the May Fed meeting,
if we continue to get strong data that show consumers are gaining
confidence, these may disappear as well.  The question for me
still remains, "Is Alan & Company giving the consumer too much
credit in its collective ability to single handedly save us from
the depths of a prolonged downturn?"  In other words, can the
consumer drag the manufacturing and corporate sectors out of the
depths without the help of aggressive rate cuts.

Getting back to the whole crosscurrents thing, any good economic
news going forward should be tempered by the fact that we are
getting close to the dreaded pre-earnings season.  Economic
conditions have not changed much for the better since most
companies reported last quarter.  And although many companies have
already pre-announced earnings shortfalls, many are waiting in the
wings, crossing their fingers and hoping for a sudden pick-up in
orders to at least get them close to their numbers.  With
investors still in worry mode and with earnings still the focus
(as they should be); a flurry of warnings or negative comments out
of company's conference calls will certainly put a lid on any
prolonged rally attempt.

Today's Markets

The market was expecting a hint out of the Fed Chairman's morning
speech to the National Association of Business Economics as to the
direction of the economy and or monetary policy.  Greenspan failed
to cooperate in this regard, but it didn't stop the market from
powering higher anyway on the heels of a strong consumer
confidence number.

The NASDAQ (COMPX) was lifted by 53.81, or 2.80% to 1972.30.
Volume was moderate at 1.8 billion shares.  But the stat that will
make folks smile the most has to be the advancers versus
decliners.  Advancers beat decliners 2209 to 1566 today and this
is exactly what we need to see going forward as the market firms.

Some tech leaders included our Splittrader.com play, THQ, Inc.
(NASDAQ:THQI) up $2.00 to $38.88, Microsoft (NASDAQ:MSFT) up $2.19
to $58.25 and Apple Computer (NASDAQ:AAPL) up $1.09 to $22.87.

The DOW (INDU) powered ahead by 260.01, or 2.68%, to close just
under the psychologically important 10,000 level at 9947.54.  The
DOW was bolstered by just about every sector within its makeup,
but real strength was seen in the lagging banks, brokers and drug
stocks.  Merk (NYSE:MRK) was lifted by $2.13 to $73.61, Merrill
Lynch (NYSE:MER) added $1.77 to $59.77 and Citigroup (NYSE:C) rose
$2.25 to $46.45.

Treasurys reacted to the high consumer confidence number by
selling off heavily.  Bond traders were obviously not expecting
such a robust reading and immediately took to locking in profits.
The 10-year note lost 31/32 to yield 4.99% while the 30-year bond
fell by 29/32 to yield 5.43%.

Stocks and Sectors on the Move

The semiconductor index (SOX.X) managed to close with meager gains
of 3.82 but didn't get any help from the communication chip
stocks.  This was because one of the communication chip giants,
Vitesse (NASDAQ:VTSS), bellied up to the bar today and announced
that it would not meet its $0.20/share earnings estimates for the
second-quarter.  In fact, it lowered estimates to between $0.10
and $0.11 citing continued weak demand and order cancellations
during the quarter.  VTSS closed down $4.88, or 14.36%, to $29.06.

Other chips that took a dip included TranSwitch (NASDAQ:TXCC),
which also lowered its earnings estimates today from $0.16/share
down to $0.09 to $0.10/share.  TXCC fell $3.75 to $15.13.  In
addition, Conexant (NASDAQ:CNXT) continued to fall after it warned
of lower profits yesterday.  CNXT lost $0.44 to $10.06in today's
session.

In the world of wireless stocks, two handset giants both weighed
in during the regular session with words of job cuts today.  Nokia
(NYSE:NOK) announced that it would eliminate up to 400 jobs and
Ericsson (NASDAQ:ERICY) gave notice that 2,100 jobs will be going
by the wayside.  Of course, cost cutting was the impetus behind
the cuts, as both companies try to deal with drastic declines in
demand for their mobile phones.  NOK closed up $0.26 to $27.34 and
ERICY finished the day up $0.88 to $6.72.

Just when wireless investors thought the coast was clear, Nokia
dropped another bad-news bomb after the bell that it was to cut an
additional 5,000 jobs and that it would fall very short of current
revenue estimates.  The stock was halted in the after-hours
session.

In other after-hours news that could serve to put a speed bump in
the recent NASDAQ rally, Palm, Inc. (NASDAQ:PALM) reported
earnings of $0.02 for its third-quarter, beating estimates by a
penny, but echoed Nokia's woes going forward into its fourth-
quarter.  PALM said that it will be trimming about 250 employees
and expects a loss of $0.08/share in its upcoming quarter.  PALM
shares plummeted in the after hours session after coming off a
halt.  PALM competitors Handspring (NASDAQ:HAND) and Research in
Motion (NASDAQ:RIMM) also felt PALM's pain as they sold off
sharply after the bad news.

Looking Forward, Always Forward

No economic news to worry about tomorrow, but we do have initial
jobless claims on the horizon for Thursday.  With the market
trading largely on economic and earnings news, without any
economic data tomorrow, investors will be free (unfortunately) to
focus upon the bad news out of Nokia and Palm.

Lest you think that I have turned totally bearish, I would like to
state that I am very encouraged by the recent break out activity
that we have seen in many different types of stocks.  Prior to
this week, any stock that dared stick its head above a defined
base pattern got hammered right back into it the following day.
It seems that investors are again willing to trade on hope, so if
we see more of these break out moves holding up, it can only mean
that the Bull is not far behind.

Chart of Apple Computer, Inc:



Although I do think that the Bull is out there in the pasture
somewhere, we still have to remember that we are in Bear territory
and therefore have to play by Bear rules.  Bear rules state that
after a big rally, watch for a pullback.  Due to nervous
investors, the sticking power of rallies still has to be seriously
questioned.

One look at the DOW tells us that the next few days may witness
some selling pressure.

Chart of the Dow:



Keep Stops In Place and Play By Your Rules

Craig Seidler
Assistant Editor
www.SplitTrader.com


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Definition of the Day
=====================

Target Price:

The target price is the estimated price that a person hopes a
stock will trade to.

For the complete definition, please go to:
http://www.splittrader.com/glossary/viewglossary.asp?glossaryid=363


Tuesday's Split Announcements
=============================

None


=======================================
Wednesday's Expirations by Payable Date
=======================================

Trendwest Resorts Inc. (TWRI) splits 3:2


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************************************************************


=====================
SplitTrader.com Plays
=====================

The PLAY LEGEND:

SplitTrader.com Play Recommendations.

Updates are just that - updates on continuing plays
New plays are brand new for the newsletter.
Closing plays are plays that we feel have lost the advantage.

You will see:
Stock Symbol, Company Name, Closing Price, (change for the week)
Picked at date and Change since picked

Terms:
BoD = Board of Directors meeting
ADV = Average Daily Volume
dma = daily moving average

On the SplitTrader.com website we have very detailed profiles
for the stocks we play.  Please take the time to visit the site
and look up a stock's profile if you are interested in more
information.
================================================================


=========
NEW PLAYS
=========


NEW SPLIT RUN PLAYS 03/27/01
============================

None


NEW SPLIT CANDIDATE PLAYS 03/27/01
==================================

EQT - Equitable Resources, Inc. $67.20 +1.33 (+2.14)

Equitable Resources supplies and distributes natural gas in the
Appalachian region. The company also provides energy-management
services throughout the United States. Shares of EQT ran into
major resistance in October after two years of solid performance.
Since then, EQT has been stuck in the $56-$66 range. On Tuesday,
the stock broke out to an all-time high of $67.75 and closed above
$66 following six failed attempts in the past two weeks. After
five months of consolidation, we believe that EQT could make a
substantial move upward as we move closer to earnings season. We
are also looking for a possible stock split with EQT's April
earnings release or out of its Annual Shareholder meeting on May
17th. The company currently has enough shares for a split with 80
million shares authorized and 37.26 million shares outstanding and
the stock is trading within historic split range. EQT announced a
3:2 split in 1993 when the stock was trading in the $35-$40 range.
Going forward, EQT has support at Tuesday's intra-day low of
$65.87 with stronger support at $64.70, Monday's intra-day low.
There is resistance at $67.75 and then the $70 mark. The stock is
being added to the S&P Midcap 400 after Friday's close. The news
was announced after the bell on Tuesday so we may see a bit of a
pop on Wednesday and a bit of sell-off next week. Traders may
consider starting new plays on a bounce off of $65.87 or a
breakout above $67.75 on volume greater than 80,000 shares by
noon. We plan to set stops at $63.40 to limit potential losses.

Picked on March 27th @ $67.20
Change since picked +0.00
Stop Loss @ $63.40

 

===

NVR - NVR Incorporated $166.20 +0.20 (+6.25)

NVR Incorporated (NVR) constructs and markets single-family homes,
townhouses and condominiums under three trade names: Ryan Homes,
NVHomes, and Fox Ridge Homes. The company currently serves 16
metropolitan markets in 10 states. In its largest market, the
Maryland Metropolitan area, NVR derived 60% of its homebuilding
revenues. The stock has appreciated very nicely over the past
year, gaining a phenomenal 200%. Much of the stocks recent price
strength can be attributed to NVR's impressive performance in the
third quarter. The homebuilder posted a 58% quarterly increase in
earnings from the same period a year earlier. Even more
interesting, the company only has 8.37 million shares outstanding
with 60 million authorized. Sound like a possible split play? We
certainly think so! The chart on NVR also looks compelling. NVR
shares may have just signaled yet another momentum breakout.
Bullish crossovers in both the MACD and Stochastic provide us with
further confidence of a potential rally. To that end, we'll look
for resistance to come at today's intraday high of $168.25 and
then at the $170 mark. Support comes in at the $160 mark,
bolstered by the 5-dma of $160.83. Traders looking for an initial
position in NVR should look to time their entries when the stock
breaches above resistance or recoils from support on strong volume
of 40,000 shares traded by midday. We will set our stop at $156.50
to limit our downside risk.

Picked on March 27th @ $166.20
Change since picked 0.00
Stop Loss @ $156.50

 


NEW MOMENTUM PLAYS 03/27/01
============================

None


=======
UPDATES
=======


SPLIT RUN PLAY UPDATES 03/27/01
===============================

TMIC - Trend Micro Inc. $9.25 +0.38 (+0.81)

Although it may seem odd to see a stock under $10.00 on our Split
Run list, this Japanese provider of anti-virus solutions has moved
up nicely following a series of positive news items.  The latest
positive development came yesterday when TMIC announced that it
had begun shipping the first integrated virus solution for the
Network Appliance (NASDAQ:NTAP) platform.  TMIC's recent advance
has enabled us to raise our stop-loss to $8.50. Today's action
bodes well for a continued advance.  Not only did TMIC close above
its 50-DMA of $8.94, but it also accomplished this feat with good
volume that fell just short of 70,000 shares. If the stock opens
tomorrow above support of $8.94, traders may want to add to
positions in anticipation of a rally to the next resistance of
$10.25.  The MACD and OBV are both trending in the right
direction, which tells us we may be able to achieve greater
profits with this play.  However, should TMIC gap up of three
quarters of a point or more at the open, you may want to wait for
a pullback before jumping on board.

Picked on March 22nd @ $8.38
Change since picked +0.87
Stop Loss @ $7.00

 


SPLIT CANDIDATE PLAY UPDATES 03/27/01
=====================================

PFGC - Performance Food Group $53.63 +3.00 (+4.13)

We could hardly ask for a better start for our new play.  PFGC
opened yesterday at $48.75 and has enjoyed a nice spike up.  Our
initial analysis, suggesting that PFGC has a history of quick
rallies following a consolidation at its 50-DMA, has come to
fruition. As good as the start to this play has been, it may be
time to become cautious, because PFGC also tends to retrace fast
rallies quite quickly.  Still, momentum traders may be interested
in looking for another quick gain if PFGC can trade above $54.50
and accomplish this move with midday volume of 60,000 shares.
Another good entry point may be around $52.50, which would be a
50% retracement of this week's move.  Current technical indicators
such as the MACD, Money Flow and OBV do point towards more gains
for PFGC over the longer term.  With that said, we could see a
test of the 52-week high of $56.75 later this week if the broad
market rally continues.

Picked on March 25th @ $49.50
Change since picked +4.13
Stop Loss @ $46.00

 

===

RCII - Rent-A-Center Incorporated $43.75 -1.56 (-1.38)

Rent-A-Center has been struggling to re-establish an uptrend after
hitting an all-time high of $47.44 on March 21. On Monday,
however, shares of RCII did see some strength and traded to an
intra-day high of $47.13. This rally came within 31 cents of
hitting the all time high before sellers pushed shares to a lower
close at $45.31. RCII fell below this level on Tuesday, as the
stock gave up 3.44% on the day. Shares did, however, give a sharp
intraday bounce off previous lows at $43.13, to finish at $43.75.
We would have liked for volume to come in under the three-month
average, but the stock nearly doubled this number at 504,700
shares traded. Nevertheless, we are encouraged by the fact that
OBV remains at year-high levels. Going forward, RCII has support
at last Thursday's intra-day low of $43.13, bolstered by the 30-
dma of $43.17. Resistance is Monday's intra-day high of $47.13 and
then the March 21 intra-day high of $47.44. A bounce off of the
30-dma or a breakout above $47.13 on midday volume greater than
150,000 shares may present possible entry points. Our stops will
remain firm at $42.25.

Picked on March 25th @ $45.13
Change since picked -1.38
Stop Loss @ $42.25

 

===

RDN - Radian Group Incorporated $63.03 -0.49 (+1.13)

Aside from the all the negative news about a slowing economy, the
interest rate environment for homebuyers remains strong and
continues to keep shares of RDN poised for more gains. Checking
out the chart, RDN delivered a nice rally on Monday, gaining 3% to
close at $63.52. More importantly, the stock was able to break
above stiff resistance at the previous high of $63.75 and hold
ground above the 200-dma of $62.98. Monday's volume did top the
three-month average, as 497,800 shares crossed the tape. In
today's trading session, however, the stock did give back some of
its gains, slipping $0.49 or 0.77% to close at $63.03. The good
news is that RDN was able to hold above the 200-dma. Granted, the
200-dma resides just below this level, but it also positions the
stock for a sharp bounce as early as tomorrow. The short-term
technical picture also looks promising, with both the MACD and
stochastic indicators issuing buy signals. Bearing this in mind,
we'll now look for an upside move to encounter resistance at the
100-dma of $64.42 and then at the $65 mark. Support will come in
at the 200-dma. Consider entries when the stock breaks above
resistance or bounces from support on good volume of 250,000
shares traded by noon. Continue to hold a firm stop at the $59.00
mark.

Picked on March 18th @ $61.00
Change since picked +2.03
Stop Loss @ $59.00

 

===

UHS - Universal Health Services $83.09 -1.63 (+0.24)

The huge rally among the Dow Jones Industrials (INDU) has placed
Julia Roberts-sized smiles upon the faces of NYSE traders.
Unfortunately, UHS, a major owner and operator of hospitals, has
only made a modest gain.  UHS was likely held back due to
yesterday's announced acquisition of 80% of the fourth largest
operator of French private hospitals for $75 million.  Some may
believe that investing in Europe right now is a dicey proposition.
Nevertheless, the technical picture for UHS continues to look
promising.  The 200-DMA, which closed today at $81.06, is still
providing excellent support.  The 50-DMA provided resistance today
at $84.81.  We have to admit to a little disappointment in the
fact that UHS soared above the 50-DMA yesterday but failed to
maintain its momentum.  Again, this was probably due to the
announced acquisition.  On the plus side, the MACD is now slightly
positive.  Perhaps a split announcement will get UHS moving
forward again.  We continue to like the prospect of adding
positions if UHS can hold the $81.06 support.  A move above
today's high of $84.75, that includes volume approaching 400,000
shares by the close, may prove to be another good entry
opportunity.

Picked on March 15th @ $83.50
Change since picked -0.41
Stop Loss @ $80.00

 


MOMENTUM PLAY UPDATES 03/27/01
===============================

SFD - Smithfield Foods, Inc. $37.34 +0.97 (+2.57)

Smithfield Foods, Inc. has been moving higher thanks to Europes
Foot-and-Mouth epidemic. On Monday, shares of SFD traded to an
all-time high of $37.22 and a record close of $36.37 on heavy
volume of 1.82 million shares, five times the daily average. On
Tuesday, the stock closed at a new all-time high of $37.34 on
volume of 1.08 million shares. SFD has gained momentum after a
major breakout on Friday, so it could trade even higher as the
market recovers. For now, support is at Tuesday's intra-day low of
$36.20 with additional support at $35.50, the 11/25/97 intra-day
high. All forms of resistance have been taken out over the past
two days, so new resistance may come in at $38 or the $40 mark. A
bounce off of $36.20 or a breakout above $38 on midday volume
greater than 180,000 shares may be possible entry points. We are
bumping our stops up to $35.25 to lock in profits.

Picked on March 22nd @ $32.25
Change since picked +5.09
Stop Loss @ $35.25

 

===

THQI - THQ Incorporated $38.88 +2.00 (+4.38)

THQ broke out of its trading range after twelve sessions of
sideways action. On Tuesday, the company announced that it was
shipping the new "Blues Clues: Blues Big Musical" game for the
Sony PlayStation and the new "Evil Dead: Hail to the King" game
for the PC. Shares of THQI hit an all-time high of $39.94
following the news. However, the stock pulled back towards the end
of the day to close at $38.88 on volume of 1.29 million shares.
THQI is gaining ground and volume is soaring on the heels of a
market recovery and improving fundamentals. The stock could see
more all-time highs as we approach earnings season. In the
meantime, support has moved up the 12/7/99 intra-day high of
$38.06 with stronger support at $37, Tuesday's intra-day low.
Resistance is now Tuesday's intra-day high of $39.94 and then
possibly $41 or $42.50. Look to open new positions on a bounce off
of $38.06 or a breakout above $39.94 on volume of at least 300,000
shares by noon. We have moved our stops up to $35 as downside
protection.

Picked on March 25th @ $34.50
Change since picked +4.38
Stop Loss @ $35.00

 


=====
DROPS
=====


SPLIT RUN PLAY DROPS 03/27/01
=============================

None


SPLIT CANDIDATE PLAY DROPS 03/27/01
===================================

None


MOMENTUM PLAY DROPS 03/27/01
=============================

None


WEDNESDAY'S PLAY-OF-THE-DAY
===========================

Tuesday, March 27, 2001
=============================

TMIC - Trend Micro Inc. $9.25 +0.38 (+0.81)

Tuesday's Comment:

It may seem odd to see a stock under $10.00 on our Split Run list;
nevertheless, there's one there.  TMIC, a Japanese provider of
anti-virus software solutions, has moved up nicely following a
series of positive news items.  The latest positive development
came yesterday when TMIC announced that it had begun shipping the
first integrated virus solution for the Network Appliance
(NASDAQ:NTAP) platform.  TMIC's recent advance has enabled us to
raise our stop-loss to $8.50. More importantly, though, today's
action bodes well for a continued advance.  Not only did TMIC
close above its 50-DMA of $8.94, but it also accomplished this
feat with good volume that fell just short of 70,000 shares. If
the stock opens tomorrow above support of $8.94, traders may want
to add to positions in anticipation of a rally to the next
resistance of $10.25.  To that end, the MACD and OBV are both
trending in the right direction, which tells us we may be able to
achieve greater profits with this play.  However, should TMIC gap
up three quarters of a point or more at the open, you may want to
wait for a pullback before jumping on board.

Picked on March 22nd @ $8.38
Change since picked +0.87
Stop Loss @ $7.00

 


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