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Email Version, Section 1, Monday 04/02/01
The SplitTrader.com Newsletter           Monday 04/02/01 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 -

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

In This Newsletter:
===================
Market Commentary - New Quarter, More of the Same?
Definition of the Day
Monday's Split Announcements
Tuesday's Expirations
New Play - MBI
Tuesday's Play-of-the-Day - EQT
================================================================

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

New Quarter, More of the Same?

Spring is here. Birds are chirping and our the boys of summer took
the field today. However, the spring promise of beautiful days to
come was put on hold as the winter doldrums extended into the
second quarter today.  Clearly, there remains a decided lack of
confidence in the stock market as we head into the next earnings
season.

The positive momentum that carried us through the end of last week
was severely damaged today by bad news from the pharmaceutical
sector.  Schering-Plough (NYSE:SGP) and generic drug companies
American Home Products (NYSE:AHP) and Upsher-Smith Laboratories
were sued by the Federal Trade Commission today which charged that
the drug companies violated Anti-trust laws by conspiring to keep
generic drugs off the market.

The drug sector had been a relative safe harbor for investors but
if these accusations have merit, more drug companies could be
scrutinized for similar violations.  The Pharmaceutical Index
(DRG) dropped 10.24 points to 374.87.  SGP lost $1.07 to $35.46
and AHP lost $2.25 to $56.50.

Meanwhile, American Express (NYSE:AXP) lost $1.59 to $39.71
following a warning that first quarter profits should be about 39
cents.  Previous estimates were calling for profits of 51 cents.
The company cited diminishing revenues from its Financial Advisors
Group as well as a deteriorating economy for the shortfall.

Honestly, though, the Dow Jones Industrials (INDU) actually held
up pretty well considering all of the bad news. For the day, the
INDU lost 100.75 and closed at 9778.03.  The INDU had traded as
low as 9,705.07.

The broader NYSE saw decent volume of 1.2 billion shares.
Decliners trumped winners 19 to 12.

The NASDAQ (COMPX) dove to a new 29-month low following another
ugly day for technology stocks.  Weakness was pronounced in the
semiconductor sector, as the (SOX) fell 41.90 points to 503.15.
For the record, the NASDAQ lost 57.29 points and closed at
1782.97.  Volume was pretty solid for a Monday and came in at 1.83
billion shares. Losers crushed winners by a 27 to 10 ratio.

The NASDAQ's most active list saw declines from Dell Computer
(NASDAQ:DELL), Applied Materials (NASDAQ:AMAT), JDS Uniphase,
(NASDQAQ:JDSU) and Qualcomm (NASDAQ:QCOM).

Software company Acxiom (NASDAQ:ACXM) was the disaster du jour, as
it fell $9.38 to $11.50 following an earnings warning.  The
company said that fourth-quarter earnings are likely to fall into
the 10 to 12 cent range while previous estimates were calling for
profits of 36 cents a share.

As for the broader and smaller markets, the S&P 500 (SPX) dropped
14.50 to 1145.85 while the Russell 2000 (RUT), which had been
somewhat stronger than the big stock indices, collapsed 10.77 to
439.76.

As for the bond arena, Treasury prices did not respond favorably
to today's economic news.  The National Association of Purchasing
Management Index rose to 43.1% in March.  Estimates were calling
for a level of 42.5%. The numbers indicate the beginnings of an
economic recovery, which may hamper the Fed's inclination to
continue easing.  The 10-year Treasury note dropped 14/32 to a
yield of 4.97% and the 30-year government bond fell 17/32 to a
yield of 5.48%.

There appears to be no rest for the weary in the after hours,
especially among NASDAQ traders.  Software firm Ariba
(NASDAQ:ARBA) released disturbing news that its second quarter
earnings will be well below expectations and as a result the
Company will slash a third of its workforce, or 700 jobs.  ARBA is
pre-releasing losses of about 20 cents while previous estimates
were looking for a loss of about 5 cents.  ARBA finished the
regular trading session down $1.41 to $6.50 and is down more in
after hours trading.  This former high-flyer has a 52-week high of
$173.50.

Another former high-flyer of the software world, Inktomi
(NASDAQ:INKT), also announced that it will slash 25% of its
workforce as its business continues to crumble.  The company
expects a loss of 23 to 25 cents and analysts had been expecting a
loss of 4 cents.  INKT closed at $6.22 during regular trading
hours but is trading as low as $4.60 in after hours.  Inktomi has
a 52-week high of $195.12.

There are obviously continuing problems in the networking and
fiber-optic equipment world, as Redback Networks (NASDAQ:RBAK)
also decided to cut its workforce.  Redback will eliminate 150
jobs, or 12 percent of its workforce.  The company will have to
take a restructuring charge of $27 million over the next couple of
quarters.  Redback closed the day at $11.70 and is trading down to
$10.15 in after hours trading.

With so many former high-flyers now approaching zero, one has to
ask the question, when will it all end?  It is important to point
out that when the Internet high-flyers starting falling into
single digits many people started trying to pick a bottom.  Most
of them are very sorry, as many of these Internet stocks are
either in bankruptcy or close to it.

If you have to bottom fish in the technology sector it would
behoove you to stick with the big boys that are extremely unlikely
to go belly up.  Dell Computer (NASDAQ:DELL), IBM (NYSE:IBM), Sun
Microsystems (NASDAQ;SUNW), Microsoft (NASDAQ:MSFT), Cisco Systems
(NASDAQ:CSCO), Oracle (NASDAQ:ORCL), Corning (NYSE:GLW), Intel
(NASDAQ:INTC) and EMC Corp (NYSE:EMC) all come to mind.

It would also probably be a good idea to avoid buying the shares
of any company that is still not profitable.  It is becoming
increasingly unlikely that these companies will ever show a
profit.  If they cannot make money when the economy is flying, how
are they going to make money in a recession?  At some point these
companies will likely go broke, especially since there is clearly
no money available in the secondary market to keep them afloat.

NASDAQ traders that followed my advice in last week's write-up
could have made modest profits once the 2000 resistance held and
the Index started dropping.  Until the longer term trend improves,
traders will simply have to take quick profits.  The short term
technical picture for the NASDAQ is suggesting that we are near a
bottom.  The RSI is indicating a very oversold condition and the
MACD is trying to put in a bottom.  However, momentum is a
powerful force, and we could see a quick drop to 1,500 if we get
some more bad news.  If this occurs, it would likely present an
excellent buying opportunity.  Otherwise, be cautious about
getting caught up in short rallies.

The technical picture for the Dow Jones Industrials looks to be
improving a bit.  Some money seems to sloshing back and forth
between drugs, cyclicals and some financials.  There generally has
not been much progress, but we could see a decent rally if the Dow
can climb back over the 10,000 resistance.  Be careful with long
Dow positions if the average drops back below 9550 because it
could spark a quick retest of 9000.

Good luck and may all of trades be winning ones!

Jim Booth
Research Analyst


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Preparing for Battle.  This is a very popular session where
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Day Trading Options.  An extremely popular subject taught by one
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Calculating the Bullish Percent.  Applying your new knowledge
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Jim Brown, Founder, OptionInvestor.com
Austin Passamonte, Editor, IndexSkybox.com
Pre-Market Analysis.  A very popular session where multiple
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Straddles. An excellent strategy for today's markets.  Traders
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Understanding Option Basics and the roll of an options floor trader.

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Psychology of trading and the Importance of the top down
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Trading with Qcharts.  Learn how to properly set up, use, and
deploy the best features and techniques.

Derek Baltimore, Co-Editor, IntradayTrader.com
Exit Strategies, knowing when to quit

Tim Taylor - Preferred Trade
Using Direct Access Trading Platforms

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

Business Inventories:

This statistic, released by the Bureau of Census, defines Monthly
Retail Trade, Monthly Wholesale Trade, and data for manufacturers
production.

For the complete definition, please go to:
http://www.splittrader.com/glossary/viewglossary.asp?glossaryid=441

============================
Monday's Split Announcements
============================

None


=====================================
Tuesday's Expirations by Payable Date
=====================================

None


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

The PLAY LEGEND:

SplitTrader.com Play Recommendations.

Play-of-the-Day is our number one play recommendation for the
FOLLOWING trading day.

You will see:
Stock Symbol, Company Name, Closing Price, Change for the Week.
Following the play you will find: Picked at Date and Change Since
Picked

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

At the SplitTrader.com website, we have comprehensive profiles
for each stock that we are playing or have played in the past, as
well as hundreds of others. Please take the time to visit the site
to view the profile of the stock(s) you wish to learn more about.
==================================================================

NEW SPLIT RUN PLAY 04/02/01
============================

MBI - MBIA Incorporated $81.70 +1.02 (+1.02)

As traders continue to dodge bullets in the slow grinding
technology sector, opportunities appear to be rising elsewhere.
One such opportunity is MBIA Incorporated (MBI), which offers
insurance for new issues of municipal bonds, including bonds held
in unit investment trusts and mutual funds. Growth prospects for
the company are inherently tied to interest rates, which currently
make the stock timely because of the recent rate reductions by the
Federal Reserve.  What's more compelling to us though is the fact
that the company announced a 3:2 stock split back on 3/15/01,
which will be payable to shareholders of record on 4/20/01. We're
anticipating a possible split run into the payable date. Looking
at the chart, MBIA shares, after falling from an intraday high of
$83.80, managed to hold above the previous high of $81.10. Today's
advance came on volume of 1,121,900 shares, nearly 100 percent
above its three-month ADV. This is an excellent indication that
momentum players added positions on the breakout. The short-term
technical readings also points to higher levels, with a bullish
crossover in the MACD and the OBV planted firmly near year highs.
As far as entries in MBI are concerned, a move above today's high
of $83.80 could prove to be an excellent entry point. A bounce off
support offered by the 3/08/01 high of $81.10 may also prove to be
a good entry level. We'll set stops near the 40-dma at $76.50 to
limit our downside risk.

Picked on April 2nd@ $81.70
Change since picked 0.00
Stop Loss @ $76.50

 


=============================
Play of the Day (For Tuesday)
Monday, April 2, 2001
=============================

EQT - Equitable Resources Inc. $69.26 +0.26

Sunday's Comment:

Equitable Resources, Inc. got a boost from its addition to the S&P
400 as index funds are required to own the stock after Friday's
closing bell. On Friday, shares of EQT traded as low as $67 before
bouncing back to close at its intra-day high of $69 on volume of
1.66 million shares. Volume has been abnormally high over the past
three sessions due to the S&P 400 addition and we do not expect
the heavy volume to continue for much longer. Unfortunately, EQT
may suffer a bit next week as short-term traders playing the
addition unwind their positions and sell the stock. However, the
S&P 400 is not a high-profile index so the effects should not be
too severe. We are looking for a split announcement with the April
earnings release or out of its next BoD meeting. The company has
enough shares for a split and the stock is trading within previous
range. Going forward, support has come in at Friday's intra-day
low of $67 with stronger support at $66.19, the 10-dma. Resistance
is now up to Wednesday's intra-day high of $70.50 and then
possibly $72 or $73. A bounce off of $67 or a breakout above
$70.50 on midday volume greater than 100,000 shares may be
possible entry points. Our stops are holding steady at $63.40.

Monday's Update:

Since reporting its outstanding quarterly results in early
February, Equitable's stock has climbed steadily higher.  In fact,
since bouncing off support near $57 in late February, the stock
has climbed over $10 to today's close of $69.26, putting it
within $1.24 of its all-time high of $70.50 set on March 28th.
More importantly, though, we think that Equitable could continue
to climb higher. To that end, both the MACD and On-Balance Volume
are displaying strong momentum buy signals.  At current levels,
Equitable appears to have strong support from its 10-day moving
average, which it has been climbing to higher ground since early
March.  What's more, during this climb, the stock managed to take
our formerly stubborn resistance at $65.00.  With that said,
traders considering a position in Equitable should look for strong
volume, 100,000 shares or more traded by noon EST, on a move
through the all-time high $70.50 before placing their trades.

Picked on March 27th @ $67.20
Change since picked +2.06
Stop Loss @ $63.40

 


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