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Email Version, Section 1, Monday 05/07/01
The Newsletter           Monday  05/07/01  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 - And Then They Rested
Definition of the Day
Monday's Split Announcements - none
Tuesday's Expirations
Tuesday's Play-of-the-Day - ASD

Market Commentary

And Then They Rested

There are very strong arguments (as always) for buying and selling
and this resulted in a very narrow trading range for the major
markets today.

Bulls are pointing towards the strong move on Friday following an
employment report that was less than rosy, as an indication of
underlying strength in this market.  Bears, or more accurately,
the cautious set, are pointing towards the huge percentage gains
the markets have seen during last month's bounce as a reason to
slow down and start selectively protecting profits.  This
sentiment was publicly expressed by a Lehman Brothers analyst who
suggested that it may be time to start buying puts to protect
gains in technology stocks.  If investors follow this advice (and
early evidence suggests that they are) it will result in an
increase in put buying, which is a contrary indicator that may
result in a breakout to the upside.

Confused? Well, if there is one undeniable fact about stock price
movement it is that a difference of opinion is what makes markets
work.  Bullish and bearish forces are currently even and this will
not change until we get some news that can break the impasse.

Today's closing numbers saw the Dow Jones Industrial Average
(INDU) slip 16.07 points to 10,935.17.  The index had a trading
range of about 100 points.  11,000 provided strong resistance
again.  The volume of 928 million shares on the NYSE was
relatively light.  Decliners narrowly beat advancers by a 16 to 15
margin on the NYSE trading floor.

The INDU was hurt by a downgrade of JP Morgan Chase (NYSE:JPM)
from Prudential Securities.  The research firm's new rating is
"Sell" from a previous "Hold". JPM lost $1.40 to $49.20.  Fellow
DJIA financial component, American Express (NYSE:AXP) slipped
$0.62 to $43.23.  Also on the downside was Minnesota Mining &
Manufacturing (NYSE:MMM), which lost $2.09 to $117.90.

The DJIA was helped by positive comments from Morgan Stanley Dean
Witter concerning Caterpillar (NYSE:CAT).  The research department
raised its target price for Caterpillar to $60.  As a result, CAT
closed up $0.96 to $51.51.  AT&T (NYSE:T) also helped the Dow by
rallying $0.48 to $22.47.

Helping the broader NYSE was Guidant (NYSE:GDT).  Shares of this
medical device company were hit hard on Friday following comments
from an FDA official that claimed that GDT had made improper
claims of safety and effectiveness concerning its heart failure
treatment system.  The Company denied the allegations.  Even
though CS First Boston downgraded the stock to "Hold", GDT
nevertheless recovered a solid $3.25 to $36.25.

Another big gainer on the NYSE was credit-payment services
provider NOVA Corp (NYSE:NIS), which agreed to be acquired by U.S.
Bancorp (NYSE:USB) for $2.1 billion in cash and stock.  NOVA
shareholders will have the option of either receiving 1.407 USB
shares for each of their NIS shares or $31.00 in cash.  NIS closed
at $29.05 with a gain of $5.53 and USB closed at $21.24 with a
loss of $1.44.

Overflowing coffers resulted in two major acquisitions in the oil
and gas universe.  Independent oil refiner Valero Energy
(NYSE:VLO) will buy Ultramar Diamond Shamrock Corp (NYSE:UDS) for
$4 billion in cash and stock.  VLO will swap 1.228 shares for
approximately half of UDS' shares and pay $55.00 a share for the
rest.  VLO was down $2.77 to $42.70 and UDS gained $7.79 to
$50.50.  Williams Cos. (NYSE:WMB) outbid Shell Oil (NYSE:RD) to
purchase Rocky Mountain based Barrett Resources (NYSE:BRR).  The
complicated deal calls for WMB to offer $73 a share for 50% of
Barrett's common stock and follow that up with an exchange of
1.767 shares of common stock for each remaining Barrett share.
WMB lost $2.39 to $39.28, BRR gained $2.85 to $70.15 and RD lost
$0.05 to $58.70.

These two key mergers may increase pressure on the Bush
Administration.  The Oval Office is a well-publicized supporter of
the oil industry and is already facing constituent outrage over
rising oil and gas prices.  The slew of acquisitions in the oil
and gas sector over the past two years has put more assets into
fewer entities, which could lead to even higher prices.

The NASDAQ (COMPX) had closing numbers that were similar to the
numbers seen by the DJIA and the NYSE.  The index lost 17.99
points to 2173.54.  The index had a trading range of just less
than 50 points.  Resistance was found just above 2000.  The volume
of 1.72 billion was lighter than previous sessions.  Decliners
slipped ahead of advancers by a 20 to 18 margin.

Although most of the bigger technology names had modest movement
today there were a few exceptions.  Juniper Networks (NASDAQ:JNPR)
lost $4.05 to $57.08, BEA Systems (NASDAQ:BEAS) dropped $3.09 to
$32.89, Seibel Systems (NASDAQ:SEBL) declined $3.80 to $44.10 and
Veritas Software (NASDAQ:VRTS) fell $4.68 to $67.31.

One notable disaster was Portal Software (NASDAQ:PRSF), which
plummeted $3.35 to $5.93 after guiding analysts lower for its
first quarter results.  The previous estimates called for a profit
of a penny but the company believes that a loss of $0.19 to $0.21
is more realistic.  The news resulted in downgrades from Merrill
Lynch and Raymond James.

Rallying on the NASDAQ today were shares of Krispy Kreme Doughnuts
(NASDAQ:KREM), which picked up $4.41 to $48.53, graphic chip
manufacturer, NVIDIA (NASDAQ:NVDA), which rallied $4.03 to $93.85
and Genzyme (NASDAQ:GENZ), which gained $3.47 to $105.27.

The denizens of the Play List mirrored the
listless action seen by the overall market.  The best performer
was Allegheny Energy (NYSE:AYE), which finished the day in new
high ground with a gain of $1.00 and a close at $52.00.  American
Standard (NYSE:ASD) made a foray into new high ground but pulled
back to finish unchanged at $62.50.  H&R Block (NYSE:HRB) enjoyed
a solid day with a gain of $0.83 to $54.21 and could be on the
verge of breaking above its 52-week high of $55.00.

The other major stock indices all closed with mild losses.  The
S&P 500 (SPX) slipped 3.10 to 1263.50, the S&P 100 (OEX) fell 1.28
to 657.46 and the Russell 2000 (RUT) lost 3.25 to 489.64.

The sector indices were characterized by mixed results with some
more substantial pullbacks among two of the major technology stock
barometers.  The PHLX Semiconductor Index (SOX) fell 8.50 to
631.05 and the AMEX Networking Index (NWX) lost $9.15 to 468.95.
The AMEX Oil and Gas Index (XOI) gained a modest 2.42 to 569.04.

The bond market managed small gains despite the prospects of huge
new bond supplies to hit the market later this week. There will be
a 5-year note sale tomorrow and a 10-year note sale on Wednesday.
Additionally, corporate bond traders are bracing for an $8 billion
offering due later this week from WorldCom (NASDAQ:WCOM).

The big news after the close came from Dell Computer
(NASDAQ:DELL).  The PC leader said that it will slash 3 to 4
thousand jobs over the next two quarters.  Additionally, the
company said that it will be necessary for many of its salaried
employees to take unpaid leaves of absence.  However, Dell did say
that it expects to meet current first quarter estimates calling
for profits of $0.17 and sales of $8 billion.  After hour traders
were encouraged by the news and have driven DELL to $26.64 following the
regular session that saw DELL gain $0.07 to $25.91.

The most significant earnings report that occurred after the
market closed came from VoiceStream Wireless (NASDAQ:VSTR).  The
communications concern reported a first quarter loss of $2.54,
which was a penny better than the consensus estimates.   VSTR
closed the regular trading day with a loss of $1.13 to $100.93 and
has recovered $0.43 of that loss in after hours trading.

The technology investor will be firmly focused upon Cisco Systems
(NASDAQ:CSCO) earnings release after the close tomorrow.  The
results are unlikely to surprise anyone due to the fact that Cisco
has been very forthcoming about guiding analysts about its third
quarter numbers.  For the record, analysts expect the networking
giant to post profits of 2 cents a share and revenues of $4.69
billion.  The real influence on Wednesday's trading will probably
be the comments during the company's conference call.

The NASDAQ (COMPX) could see a repeat of today's trading pattern
tomorrow.  An initial rally in the early going, due to the mildly
positive Dell Computer (NASDAQ:DELL) news, could be followed by
some nervousness ahead of the Cisco announcement.

An early rally will likely find resistance at 2000. Any decline
later in the day should be modest with the NASDAQ finding support
at 2150, which is just below today's low of 2162.  Keep an eye on
the MACD.  Although this indicator has been rising nicely since
early April, it appears to be slowing its ascent.  If it crosses
back over and subsequently issues a sell signal, we could easily
see declines over the next several trading sessions that could
take the NASDAQ down to the 2000 support.  The next leg up of the
NASDAQ rally could be sparked if Cisco can offer encouragement
during its conference call that suggests that the worst is behind
the company and further hints that solid profits will start to
roll again by the end of the year.  A breakout for the NASDAQ
would become even more likely if bearish sentiment continues to

The technical picture for the Dow Jones Industrials (INDU) is
reflecting a lack of conviction to drive the index through the
11,000 resistance.  Traders are searching for a catalyst.  Perhaps
an additional rate cut during the May 18th FOMC meeting will do
the trick.  Until that happens though, look for the DJIA to
continue to flop around between 10,700 and 11,000.  Those of you
who prefer to track the S&P 500 (SPX) should be conscious of the
resistance level of 1275 and support of 1225. Just like the
NASDAQ, the DJIA's MACD is slowing its ascent and may trigger a
sell signal if we see a couple down days in a row.  That said, any
declines should be mild and just part of the natural process of
consolidating the April rally.

I do believe that traders should seriously consider protecting
profits among their NASDAQ and DJIA holdings if either of the
MACD's of these respective indices issues a sell signal.  The MACD
has been an invaluable technical indicator for determining
intermediate trends this year.

Good Luck! And may all of your trades be winning ones!

Jim Booth
Research Analyst

Definition of the Day

Simple Moving Average

The basic definition of a moving average is that it is the average
price of a security at a specific point in time.

For the complete definition, please go to:

Monday's Split Announcements


Tuesday's Expirations by Payable Date


===================== Plays

The PLAY LEGEND: 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

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

At the 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.

Play of the Day (For Tuesday)
Monday, May 7, 2001

ASD - American Standard Co. $62.50  0.00

Sunday's Comment:

American Standard Companies is a global manufacturer of air
conditioning systems, bathroom and kitchen fixtures, and vehicle
control systems for trucks, buses, trailers and utility vehicles.
Shares of ASD have been hitting new highs over the past four
months following a major breakout from the $35-$50 range in
January. The stock closed at an all-time high on Friday and we
believe that ASD could continue to move higher. We are also
looking for a split announcement with the July earnings report or
out of the next BoD meeting. The company has enough shares for a
split with 200 million shares authorized and 71 million shares
outstanding. Going forward, ASD has support at Thursday's intra-
day high of $61.75 with stronger support at $60.33, the 10-dma.
Resistance was taken out on Friday so new resistance may show up
at $63 or $65. Look for a bounce off of $61.75 or a breakout above
$63 on midday volume of at least 200,000 shares before starting
new plays. We plan to place stops at $58.50 to limit potential

Monday's Update:

Since reporting its strong quarterly results three-weeks ago,
American Standard's stock has inched gradually higher.  In fact,
it inched to a new all-time high of $63.30 on Monday before
finally closing flat at $62.50.   More importantly, though, we
think American Standard could continue its ascending ways.  To
that end, the company's stock is looking very healthy technically.
Both the MACD and On-Balance Volume are trending higher on the
back of a strong intermediate upward-sloping trendline started
back in late March. At current levels, American Standard has
support at its 20-day moving average at $60.15, with additional
support provided by the 50-day moving average at $58.94.  Since
American Standard is trading at all-time high levels, there is no
obvious resistance overhead, though the stock could run into some
resistance at the psychologically-significant $65 level. Traders
considering a position in American Standard should look for strong
volume, 200,000 shares or more traded by noon EDT, on a move
through Monday's intra-day high of $63.30 or a bounce off the 10-
day moving average at $60.69 before placing their trades.

Picked on May 6th @ $62.50
Change since picked 0.00
Stop Loss @ $58.50


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