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Email Version, Section 1, Tuesday 04/24/2001
The SplitTrader.com Newsletter          Tuesday 04/24/2001 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
charts and graphs, click here:

http://www.splittrader.com/htmlemail/042401_1.asp
================================================================

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

Market Commentary - Who Could Ask for Anything More?
Definition of the Day
Tuesday's Split Announcements | None
Wednesday's Expirations
Plays - New - Updates - Drops
Wednesday's Play-of-the-Day - LEA

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


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

Who Could Ask For Anything More?

Even though it's been hard to be upbeat about the recent market
action, from a technical standpoint, it deserves a gold star.  I
say this because after a rigorous rally such as we saw last week,
a few days of retracement on lighter volume is always welcome.  I
know this pill is hard to swallow, especially after hopes were
lifted into the upper stratosphere last week, but as long as the
reasons behind the recent sell offs remain "typical" and key
support levels hold, I think it's safe to say that the emotion-
dial could remain at "cautious optimism" into this summer.

We have been here before.  We need look back only as far as
January, when the Fed last did an inter-meeting rate cut, to see
how the market popped then subsequently sold off.  The big
difference this time, however, is the change in the market's
reaction to bad news and the fact that companies are starting to
get some earnings visibility.

Due largely to the recent shift in investor psychology, traders
are now hoping that this time around, the markets will bounce as
they are supposed to after a rate cut.  That said, if the market
is going to bounce, it better do it soon, as we are fast
approaching support levels on the NASDAQ, that if violated, may
make a comeback bounce less likely.

Chart of the Nasdaq:



If these support levels hold, we may be expected to trade
sideways for a while, since corporate earnings are still holding
the indices back from trading to the upside with conviction.
Although, starting next week, the steady stream of earnings will
dry up to a mere trickle.  This is both good news and bad.  It's
good news since we won't have to worry about any potential
overnight catastrophes in individual stocks but bad news because
investors will again be turning to economic news for guidance;
news that has been showing an economy with its foot on the brake.

Speaking of economic news, we received the April Consumer
Confidence number today, which showed consumers are less
optimistic about their current and future prospects.  The April
figure came in at 109.2, as opposed to the 116.9 level posted in
March.  The 109.2 also missed economist expectations of 112.1.
In addition, when questioned about how they felt about their
prospects six months down the line, consumers said they were less
optimistic than last month.  They were also pessimistic on
employment opportunities, which is not surprising given the word
"layoffs" has been prevalent in just about every business
headline.

Today's Markets

After shrugging off early morning bad news out of some key tech
companies, traders changed their tune midmorning, causing a slow
drift lower that persisted all the way into the close.

The NASDAQ (COMPX) lost 42.71, or 2.07%, to 2016.61.  This close
puts us back below where the NASDAQ was right before the Fed cut
interest rates last Wednesday (that was quick).  The good news
was that volume continues to come in light, with today's session
seeing 1.9 billion shares trade hands.  The NASDAQ also saw 82
stocks hit new highs as opposed to 49 hitting new lows.

Turning to the DOW (INDU), the old economy average held up a
little better, posting a 77.89 loss to close at 10454.34.  The
Dow is still about 100 points above where it was just prior to
the Wednesday morning Fed announcement, but is still technically
overbought; so further pullbacks may be yet to come.  Again,
volume was light on the NYSE, with 1.2 billion shares finding new
homes today.

Long dated Treasurys continued to sell off amid fears that
further Fed cuts will trip inflationary pressures down the line.
The 10-year note was off 5/32 to yield 5.205% and the 30-year
bond was down 9/32 to yield 5.755%.

The recent rise in the long dated securities has also served to
tip mortgage rates back to the upside.  They had been plummeting
to two-year lows, right along with the 30-year bond.  Now that
home loan rates are again rising, we could see a slowdown in
refinancing that could stifle an already weak consumer.  This is
because quite a bit of capital is put into the hands of consumers
when they refinance, since lower rates enable the homeowner to
borrow additional monies for everything from home improvement
projects to buying a new car.

Stocks and Sectors on the Move

It looks like the shorts are still in the game.  There is no
doubt that they were flat on the mat last week, but it looks like
they have managed to crawl off the canvas to fight another day.
How do we know this?  The shorts want stocks to drop in price.
What better way to get a stock to fall than to float some rumors?
And given all the rumors flying around the Street the last two
days (all bad) there's no doubt that the shorts have gone back to
work, albeit bruised and hobbled.

Two rumors in particular affected the trade in two headline tech
stocks today.  The first rumor involved speculation that Applied
Micro Circuits (NASDAQ:AMCC) would miss their earnings number
after the bell and that they would announce layoffs.  The rumors,
as it turned out, were off base, as AMCC reported earnings of
$0.09/share after the bell and announced that it wouldn't cut
jobs but that it would slow hiring.  After plummeting more than
$3.00 after the rumor hit, AMCC managed to close down by $1.62 to
$23.99 on the day.

Applied Material (NASDAQ:AMAT) was the other rumor victim in
today's session.  The stock went from $54 to $50 in a matter of
about 20 minutes on rumors of weak earnings.  The stock closed at
$51.70, down $1.09 on the day.  The only reason I mention these
calamities is to illustrate the point that the bulls and the
bears are still battling.  These rumors also point to the fact
that the bears are getting very nervous, which we can certainly
take as a good sign.

Turing to earnings (or the lack thereof), the feel good story of
the day goes to Lucent Technologies (NYSE:LU).  After reporting a
loss of $0.22/share, beating estimates by a penny LU rocketed
higher by $1.05, or 11.41% to $10.25.  The company also said that
sales growth is due to accelerate into next year.  Topping off
the Bad News Bears style report, LU was upgraded by Salomon Smith
Barney from a "neutral" to an "outperform".  Solly indicated that
LU is not "out of the woods yet" and that "a rally into the low
teens" might be warranted.

JDS Uniphase (NASDAQ:JDSU), after reporting last night that it
had an important announcement to make this morning, announced
before the bell that it met earnings expectations of $0.14/share.
Had they stopped there, everything would have been just fine,
however, they went on to announce layoffs of 5,000 employees and
warned for their fourth-quarter.  They now see fourth-quarter
earnings of $0.05/share instead of the previous bogey of
$0.12/share.  JDSU closed down $3.36, or 13.90%, to $20.82.

Rounding out today's highlights, we actually had a successful IPO
start to trade today, and trade at a premium.  Aquilla
(NYSE:ILA), a carve out from Utilicorp United (NYSE:UCU), was
priced at $24 (the upper end of the range), opened at $29.75 and
closed at $27.85.  The strong demand for shares of the trader of
natural gas, bandwidth, coal and other commodities shows that
investor optimism may be on the rise.  One of the hallmarks of a
bull market is of course a healthy IPO market.  With only a few
successful IPOs coming to market as of late, we won't jump the
gun and say this is a great sign, but it's better than the stale
IPO market of 2000 so far.

Looking Forward, Always Forward

Wednesday brings with it the Durable Goods orders number as well
as Existing and New home sales figures.  Durable goods are
expected to rise 0.50% and new and existing home sales are
expected to have fallen off from February levels.

With mostly positive earnings news flooding the news wires after
hours, we may just get the rebound we were looking for tomorrow.
Of course, the market will probably go back to questioning any
strong rally, so be ready to lock in profits if we see signs of
failed breakouts and or resistance levels that turn back buyers.

The Splittrader Current Play list remains well diversified, with
emphasis on the early cyclical stocks such as our new play, Lear
Corporation (NYSE:LEA).  We have not yet pulled the trigger on
any tech stocks but remain ready to pounce, should the charts
tell us it is time.

Craig Seidler
Assistant Editor
www.SplitTrader.com


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

Employment Situation Report

A set of labor market indicators measuring both the nation's
unemployment levels and non-farm payrolls.

For the complete definition, please go to:
http://www.splittrader.com/glossary/viewglossary.asp?glossaryid=413


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

None


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

None


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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 04/24/01
============================

None


NEW SPLIT CANDIDATE PLAYS 04/24/01
==================================

JEC - Jacob's Engineering $62.00 +2.21 (+2.50)

JEC makes nice profits for itself by providing professional
services in four areas; construction, scientific and systems
consulting, operations and maintenance and full project services
including engineering, design, and architectural services.  Last
week, JEC reported record quarterly revenue of $1.0 billion and
posted profits of $0.79 a share.  Future prospects also look good
for the company because it has a backlog of $5.9 billion orders.
JEC has been climbing nicely in price all year primarily because
the economic slowdown has not hit its particular businesses.  Last
week, JEC reported record quarterly revenue of $1.0 billion and
posted profits of $0.79 a share.  Future prospects also look good
for the company thanks to a backlog of $5.9 billion.  Short-term
momentum traders may want to consider adding to their JEC
positions because the stock established a new high today of
$62.14, which could bode well for another move higher.  One
positive consequence of today's move was the fact that the MACD
avoided issuing a sell signal and is now pointing towards more
price gains for JEC.  Keep in mind, though, that the RSI is
currently indicating an overbought condition.  That said, the last
time the RSI was at a similar level it just kept going.

Picked on April 24th @ $62.00
Change since picked +0.00
Stop Loss @ $58.00

 


NEW MOMENTUM PLAYS 04/24/01
============================

LEA - Lear Corp. $36.20 +1.15 (+1.08)

Stocks sensitive to interest rates should benefit in this lower
interest rate environment, which is one reason we've added LEA to
the Current Play list.  Another reason is that LEA made a strong
break above formerly tough resistance at the $35.00 level on
951,300 shares traded, which was more than twice the three-month
daily average of 443,000.  Credit Lyonnis and Prudential
Securities can take much of the credit for trader interest in LEA,
as both firms upgraded the stock today.  More importantly to us,
though, the stock looks very good technically.  LEA has been
riding a 45-degree uptrend line since early April, moving from $28
a share to today's close of $36.20.  What's more, LEA is showing
no inclination to backpedal.  To that end, the stock should gain
support from former resistance at $35.00, with additional support
being provided by the 10-dma at $33.74.  As for resistance, it
looks like clear sailing until the April 1999 highs of $50 (though
it could hit mild resistance at the psychologically-significant
$40 level).  Traders considering a position in LEA should look for
strong volume,  250,000 shares or more traded by noon EST, on a
move through Tuesday's intra-day high of $37.80 or a bounce off
support at $35.00 before placing their trades.

Picked on April 24th @ $36.20
Change since picked 0.00
Stop Loss @ $33.88

 


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


SPLIT RUN PLAY UPDATES 04/24/01
===============================

SOTR | SouthTrust Corporation $45.96 0.00 (+0.15)

SouthTrust Corporation has been consolidating in the $44-$47 range
after hitting an all-time high last Thursday. On Tuesday, shares
of SOTR traded to an intra-day high of $46.76 but the stock
reversed directions along with the rest of the market. The stock
ended the day at $45.96 on volume of 755,000 shares. SOTR has lost
its short-term upward momentum and volume is trending lower. On
the positive side, the long-term trend remains in tact as we
approach the 2:1 stock split, payable on May 11th. SOTR may need a
volume surge to push the stock to new highs. Going forward,
support is the 10-dma at $45.55 with additional support at $44.93,
the 20-dma. Resistance has fallen to Tuesday's intra-day high of
$46.76 and then the all-time high of $47.20. Look for a bounce off
of $45.55 or a move above $46.76 on midday volume of at least
500,000 shares before opening new positions. We are keeping our
stops at $44 to limit potential losses.

Picked on April 19th @ $46.96
Change since picked |1.00
Stop Loss @ $44.00

 


SPLIT CANDIDATE PLAY UPDATES 04/24/01
=====================================

HRB - H & R Block Inc. $53.45 -0.03 (-0.26)

H & R Block appears to be resting after last week's strong run.
For the second-consecutive session, HRB went nowhere fast, though
there was decent action in the stock, as 930,000 shares changed
hands, 300,000 more than the three-month daily average.  Despite
today's ennui, we think that HRB will revive itself because the
stock still looks attractive technically.  HRB continues to be
supported by its up-trending 10-dma, which is currently at $52.41.
What's more, the MACD remains positive while the On-Balance Volume
continues to hold its long-term uptrend.  As it now stands, HRB
has strong support at its 40-dma at $50.40 and no immediate
resistance until the July 1999 high of $59.50.  In other words, we
like this risk/reward scenario.  Traders considering a position in
HRB should look for strong volume, 250,000 shares or more traded
by noon EDT, on a move through  Tuesday's intra-day high of $53.90
or a bounce off the 10-dma before placing their trades.

Picked on April 18th @ $52.85
Change since picked +0.60
Stop Loss @ $49.25

 

===

MKC | McCormick & Company $40.38 |0.25 (-0.82)

McCormick & Company showed some early signs of relief on Tuesday.
Shares of MKC traded to an intra-day low of $40 before bouncing
back to a close of $40.38 on volume of 227,000 shares, 77,000
increase to the 10-day average daily volume of 150,000. MKC has
now made five consecutive lower highs and it is now in a firm
downward trend. What's more, the stock closed below the 50-dma for
the first time since January 24th. The 50-dma has been a major
source of support for MKC and the stock has not closed below the
50-dma for two straight sessions in the past six months.  Still,
MKC is holding the $40 mark, so it may be able to rally from here.
From a technical standpoint, MKC has support at Tuesday's intra-
day low of $40 with additional support at $39.53, the March 26th
intra-day low. Resistance has fallen to Tuesday's intra-day high
of $40.89 and then $41.42, the 10-dma. Traders may consider entry
points on a bounce off of $40.00 or a move above $41.42 on volume
greater than 75,000 shares by noon. Our stops remain at $38.75.

Picked on March 29th @ $41.43
Change since picked |1.05
Stop Loss @ $38.75

 


MOMENTUM PLAY UPDATES 04/24/01
===============================

GTK - GTECH Holdings Corp $31.10 +0.49 (+1.31)

GTECH keeps hitting winning numbers by establishing new highs
yesterday and today.  Granted, the advance has not been huge but
considering the weakness in the overall market so far this week,
we are impressed with the stock's relative strength.  GTK is
attractive to investors who seek growth at a reasonable price.
Analysts expect GTK to grow its earnings by 32% this year, and the
stock is trading at a comparatively low P/E of 24.88.  Momentum
traders may be interested in picking up this stock if it can trade
above today's high of $31.50 tomorrow. However, a gap up opening
to $33.00 or higher might result in a pullback later that would
offer a potentially more favorable purchase price. A bullish trade
may be even more enticing if a new high is accompanied by first
hour trading volume exceeding 50,000 shares.  Speaking of volume,
today's volume of 640,000 was more than twice the three-month
daily average of 268,000.  This is a very good sign that there is
increasing interest in GTK among bulls.  One caveat:  Traders
should probably be cautious if GTK starts pulling back because the
RSI is now indicating an overbought condition.

Picked on April 22nd @ $29.79
Change since picked +1.31
Stop Loss $26.75

 

===

HSIC | Henry Schein, Inc. $38.78 +0.42 (+0.78)

Henry Schein is gaining momentum on positive news from the
healthcare providers. On Tuesday, shares of HSIC hit a new 52-week
high of $39.27 before pulling back to a close of $38.78 on volume
of 516,000 shares. HSIC has made three consecutive higher highs
coupled with higher lows, so the stock may be able to hold its
upward trend into the earnings release expected on May 1st
(unconfirmed). For now, the stock has support at Tuesday's intra-
day low of $38.37 with stronger support at $37.83, the 5-dma.
Resistance has moved up to the 1/22/99 intra-day low of $40 and
then $41.25, the 2/4/99 intra-day low. A bounce off of $38.37 or a
move above $40 on midday volume greater than 250,000 shares may be
possible entry points. We are leaving our stops at $35 as downside
protection.

Picked on April 22nd @ $38.00
Change since picked +0.78
Stop Loss @ $35.00

 


=====
DROPS
=====


SPLIT RUN PLAY DROPS 04/24/01
=============================

None


SPLIT CANDIDATE PLAY DROPS 04/24/01
===================================

OMC - Omnicom Group $89.20 +1.12 (-1.49)

Omnicom got knocked down with the rest of the market yesterday,
and, consequently, we were stopped out of this position.  Omnicom
did report solid quarterly results this morning.  The company beat
consensus estimates by a penny with profits of $0.52.  Omnicom did
not announce a split today, however.  We will continue to monitor
this stock.  If OMC continues to correct, look for the stock to
find support at the 50-DMA of $86.72.

Picked on April 15th @ $86.50
Profit/Loss +2.50 (3%) (Stopped Monday @ $89.00)
Best Profit +6.20 (7%)

 

===

TARO - Taro Pharmaceutical Industries $46.15 -6.15 (-8.75)

Taro traded lower yesterday to hit our tightened stop at $53.00.
We were fortunate this happen because today Taro was thoroughly
routed in a fit of profit-taking that took the stock down to
$44.03 a share.  In case you have been wondering why we keep our
stop losses so tight, look no further than Taro.

Picked on April 10th @ $49.45
Profit/Loss  +3.55 ( 7%) (Stopped Monday @ $53.00)
Best Profit  +6.55 (13%)

 


MOMENTUM PLAY DROPS 04/24/01
=============================

UNP | Union Pacific Corporation $55.88 +0.88 (-2.97)

Union Pacific gapped down on Monday following a weak earnings
announcement from CSX Corp. (CSX) and a downgrade from Salomon
Smith Barney. Shares of UNP traded to an intra-day low of $54.25
late in the session. We were stopped out at $54.50, so we are
dropping UNP tonight.

Picked on April 3rd @ $57.35
Profit/Loss = -2.85 (-5%) (Stopped Monday @ $54.50)
Best Profit = +2.25 (+4%)

 


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

Tuesday, April 24, 2001
=============================

LEA - Lear Corp. $36.20 +1.15 (+1.08)

Tuesday's Comment:

Stocks sensitive to interest rates should benefit in this lower
interest rate environment, which is one reason picked LEA to be
the Play of the Day.  Another reason is that LEA made a strong
break today above formerly tough resistance at the $35.00 level on
951,300 shares traded, which was more than twice the three-month
daily average of 443,000.  Credit Lyonnis and Prudential
Securities can take much of the credit for trader interest in LEA,
as both firms upgraded the stock on Tuesday.  More importantly to
us, though, the LEA looks very good technically.  The stock has
been riding a 45-degree uptrend line since early April, moving
from $28 a share to today's close of $36.20.  What's more, LEA is
showing no inclination to backpedal.  To that end, the stock
should gain support from former resistance at $35.00, with
additional support provided by the 10-dma at $33.74.  As for
resistance, it looks like clear sailing until the April 1999 highs
of $50 (though it could hit mild resistance at the
psychologically-significant $40 level).  Traders considering a
position in LEA should look for strong volume, 250,000 shares or
more traded by noon EDT, on a move through Tuesday's intra-day
high of $37.80 or a bounce off support at $35.00 before placing
their trades.

Picked on April 24th @ $36.20
Change since picked 0.00
Stop Loss @ $33.88

 


************************Advertisement*************************
Tired of waiting on trades to execute?
Does your broker offer Stop Losses on Options?

Trade instantly with Stop Losses at PreferredTrade Inc.
Stop Losses based on the option price or the stock price.
Move your trading into the next millennium with PreferredTrade.

Anything else is too slow!

http://www.sungrp.com/tracking.asp?campaignid=2118
**************************************************************


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