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Email Version, Section 2, Thursday 05/31/2001
The SplitTrader.com Newsletter          Thursday 06/07/01  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 -

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

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http://www.splittrader.com/htmlemail/3541_1.asp
==================================================================

In This Newsletter:
===================
Market Commentary  Chips Don't Dip
Definition of the Day
Thursday's Split Announcements - None
Friday's Expirations
Stock Plays - New - Updates - Drops
Friday's Play-of-the-Day - WMI
==================================================================

Market Commentary
=================
Chips Don't Dip

Intel (NASDAQ:INTC +1.34) gave its first-ever mid-quarter update
just after the bell, reaffirming second quarter guidance and
suggesting stronger earnings in the second half.  The company said
that second quarter sales will be at the lower end of the
expectations, but within expectations at least, as the world's
largest semiconductor maker struggles with a slowdown in PC sales.
Shares of semis were moving up in response during after-hours
trading.

The company has been pummeled by weak demand for microprocessors
in the current economic downturn.  When it reported first-quarter
earnings, however, Intel had said it saw "encouraging" signs for a
stronger second half. This was despite first-quarter net income
plunging 82 percent on a 16 percent decline in sales.  Shares of
Intel have fallen 59 percent since its record high of 74.88 in
August, compared to the Nasdaq Composite index (COMPX) fall of 47
percent during that time period.  Intel gained 4.49 percent to
31.16 today during regular trading.

During the day, positive expectations about the Intel report
helped spark a rush to buy semiconductor shares.  In addition,
despite a weak earnings forecast from National Semiconductor
(NYSE:NSM +3.10) for the next quarter, the company commented in
its conference call that an improvement in its turns business has
been driven by cell phone companies.  As a result, the rally
spread to stocks such as Qualcomm (NASDAQ:QCOM +2.42), Nokia
(NYSE:NOK +1.24), and Motorola (NYSE:MOT +0.74).  Applied Micro
(NASDAQ:AMCC1.93) led the communication IC stocks higher.  C.E.
Unterberg Towbin analysts left a meeting with the company with the
notion that near-term order cancellations, push-outs, and de-
bookings had nearly evaporated.  That news also lit a fire under
PMC Sierra (NASDAQ:PMCS +4.65).

Also, last night the Semiconductor Industry Association projected
20.5 percent growth in 2002, which was revised upward from 10
percent, and 25 percent for 2003.  The revision may indicate that
a bottom is near in the sector.  Corroborating that view was Banc
of America Securities, which said that "motherboard checks"
(sounds like fun) at Computex in Taiwan showed positive
indications for the third quarter.  They also noted that
conversations with four large Taiwanese manufacturers showed an
increase in OEM activity.  The Semiconductor Index (SOXX), has
jumped 19 percent since last Wednesday's low of 578.40.  It's now
at 697.04  a 7.7 percent gain today  just beyond its pivotal
200-day moving average, which last month acted as strong
resistance that turned back the index nearly 20 percent.  Can it
move through it this time?

All of the action today was on moderate volume, which showed some
caution ahead of the Intel comments.  But when the dust settled,
the tech-bound Nasdaq Composite index (COMPX) picked up 46.27
points, or 2.09 percent, to reach 2,264.  The S&P 500 (SPX)
bigcaps were up 6.93, or 0.55 percent, to 1,276.96.  And the Dow
Jones Industrials (DJI), after being underwater this morning,
closed up 20.50 points, or 0.19 percent, to 11,090.74.

In other tech news, chipmaker Broadcom (NASDAQ:BRCM +4.67) warned
of a steeper-than-expected sales decrease in its second quarter
and announced cost cutting plans.  The company slashed second-
quarter revenue expectations late yesterday, citing continued
weakness in the technology sector.  Nonetheless, Broadcom said in
its conference call that it saw signs of increasing new orders
that may well lead to renewed growth by year's end.

Discouraging news from the retail sector came in today.
Unseasonable weather in the Midwest and Northeast lowered clothing
purchases in May, and high fuel prices and consumer concerns about
the economy reduced mall traffic, resulting in slow monthly retail
sales.  Large retailers including Gap (NYSE:GPS +0.61) and
Federated Department Stores (NYSE:FD 1.90) warned of additional
weakness in sales and/or earnings.  Also, Pacific Sunwear
(NASDAQ:PSUN 0.78) was downgraded.  All in all, it seems the
overall same-store retail sales pickup in April may not have been
the precursor to recovery that was thought.  Nonetheless,
electronic retailers were up today, partially due to good news out
of Best Buy (NYSE:BBY +2.38), which posted a 25 percent increase
in Q1 sales and said that quarterly earnings would be in line with
estimates. This news also sparked Circuit City (NYSE:CC +0.44), up
2.81 percent, and Radio Shack (NYSE:RSH +0.81), up 2.89 percent.

Shares of Philip Morris (NYSE:MO 1.48) and other tobacco stocks
started to plunge in after hours trading yesterday after an L.A.
jury ordered a record $3 billion payout to a smoker with incurable
lung and brain cancer.  Nonetheless, analysts -- and even
antismoking activists -- said the verdict likely would be reduced
by the judge or overturned on appeal.  Philip Morris closed off
its lows for the day to lose 2.96 percent at 48.52.  R.J. Reynolds
(NYSE:RJR 3.19) was down further, though, at 5.42 percent, to
55.69.

In other news, banking regulators said U.S. commercial banks
earned a record $19.9 billion during the first quarter.  This
number was "padded" by $1.2 billion worth of securities sales
however, which masked more fundamental concerns about the sector.
The Federal Deposit Insurance Corp. added that troubled commercial
and industrial loans continued to increase, especially at larger
banks, and interest rate margins continued to decline.  Banks
charged off $7 billion in bad loans in the first quarter, a 38
percent rise from the same period last year.

New state jobless claims rose to the highest level since November
1992, last week, revealing a still weakening job market, which may
not have bottomed yet.  New claims soared above the key 400,000
level for the third straight week  the longest string since
September, 1992.  Economists had expected a modest drop in claims
from the prior week.  Here comes the Fed?

Treasury prices gained early as a result of the aforementioned
jobless claims report that raised expectations of further interest
rate cuts by the Federal Reserve.  Then they weakened, as the 30-
year long bond'  the most vulnerable to a potential inflation-
igniting recovery  shed 31/32 at 95 5/32, with a yield of 5.72
percent, for a gain of 7 basis points.  The 10-year Treasury lost
11/32 at 97 24/32, to yield 5.30 percent, a pickup of 5 basis
points.  The 5-year note dropped 4/32 at 99 1/32 to yield 4.85
percent for a gain of 3 basis points.  And the Fed-sensitive 2-
year note was flat at 100 9/32, for a yield of 4.10 percent.

For Tomorrow:

There is a gap between what Intel is saying about the future and
what its box-maker customers are saying.  Who's right?  We'll be
watching to see how this plays out tomorrow.  See Intel run.  See
market react.

Staff Analyst



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

Buying Power

Buying power has many forms but the most basic definition refers
to institutional sized accumulation or distribution over a long
period. BOP tells you whether the underlying activity in a stock
is characterized by systematic buying or selling.

For the complete definition, please go to:
http://www.splittrader.com/glossary/viewglossary.asp?glossaryid=51



===================
Split Announcements
===================

None


====================================
Friday'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.
Updates are just that - updates on continuing plays.
New plays are brand new for the newsletter.
Drops are closing 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 06/07/01
============================

LOW  Lowes Companies $74.00 +1.92 (+4.70)

Lowes is the countries second largest home improvement retailer
behind the guys in the orange bibs.  Although, if CEO Robert
Tillman has anything to do with it, Lowes won't be second to the
orange folks for long.  The retailer just announced a 2:1 split
that will be payable on 6/29/01.  We are therefore entering this
play in hopes of a split run into the payable date two weeks from
tomorrow.  Looking at the chart, LOW just broke out of a two-week
base and set a new closing high.  The only drawback we can see is
that volume came in light on the breakout.  Only 2.3 million
shares were traded as opposed to the three-month average of 3.3
million.  Support should be coming in around $70 and resistance
is today's high (and close) of $74.  Traders thinking about
getting into LOW should look to do so on a strong open and break
above $74.  Volume will naturally be lighter since tomorrow is
Friday, so more conservative traders may wish to wait until next
week to get a true read on the stock.

Picked on June 7 th @ $74.00
Change Since Picked 0.00
Stop Loss @ $68.00

 



NEW SPLIT CANDIDATE PLAYS 06/07/01
==================================

None


NEW MOMENTUM PLAYS 06/07/01
============================

None


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


SPLIT RUN PLAY UPDATES 06/07/01
===============================

None


SPLIT CANDIDATE PLAY UPDATES 06/07/01
=====================================

BJ - BJ's Wholesale Club $51.03 0.97 (+2.72)

In our last update, we spoke of profit taking in BJ.  Well, that
profit taking arrived on the scene on Thursday, however, it was
mild in nature and doesn't have us worried yet.  The stock might
be heading back towards support at $50 so don't be surprised if
we see a few more down days on light volume before things pick
back up again.  That said, we suggest traders wait for a bounce
off $50 before initiating new positions in retail play.  Lastly,
BJ reported Thursday that same store sales rose 4% for May, with
double-digit sales growth within its southeast region stores.

Picked on May 27th @ $48.31
Change Since Picked +2.72
Stop Loss @ $48.75

 


===
CEFT - Concord EFS $52.33 +1.58 (+1.73)

Those of you who were waiting for a definitive close over $51.50
should have gotten into CEFT today.  The stock had a strong
session that was marked by some large block trades hitting around
1 p.m. eastern time.  These trades served to boost the stock
higher into the close, finally giving us a good close over
$51.50.  Volume was also strong on the breakout, with 3.4 million
shares trading on Thursday.  Traders looking to initiate a
position within CEFT could do so on a retest of the $51.50 level,
or a break above today's high of $52.70.

Picked on May 27th @ $50.60
Change Since Picked +1.73
Stop Loss @ $46.00

 


===
CIMA - Cima Labs Inc. $85.75 +2.15 (+10.95)

You know a stock has institutional support when it rockets close
to 10% in one day and never settles back the next day.  We were
anticipating that CIMA would retrace back to the $81 level but
instead, the stock made a new high today.  Support should be
coming into CIMA around $82.50 and the MACD is signaling a new up
trend.  Traders that are considering opening a position in CIMA
could look to do so on a bounce off of $82.50, or on a strong
advance through resistance at today's high of $85.75 (also the
closing price).

Picked on May 29th @ $76.95
Change Since Picked +8.80
Stop Loss @ $80.00

 


===
HRB - H&R Block $63.90 +1.04 (+4.18)

Our tax service provider managed to notch another new high today.
HRB took out resistance at $63.75 and advanced closer to
psychological resistance at $65. However, we won't put too much
significance into Thursday's performance due to the fact that if
it weren't for a few block trades at the end of the session, HRB
would have closed below $63.75.  Momentum traders looking for a
few points in HRB could use a breakout above today's high of $64
as an entry point.  This is provided that HRB can muster up at
least 600,000 shares traded for the day.

Picked on April 18th @ $52.85
Change since picked +10.05
Stop Loss @ $61.00

 


===
MTG - MGIC Investment $71.77 0.63 (+4.93)

MTG had a stellar $2.30 up day on Wednesday, so we weren't too
surprised by the slight pullback Thursday.  MTG shares actually
traded as high as $74 on Wednesday before pulling back into the
close.  Lighter volume and low volatility marked Thursday's trade
in MTG, so we might see a pickup going into the weekend.  That
being said, traders should be aware that resistance has come in
at $73 and $74, so we would wait until resistance at $74 is
conquered before adding new positions.  More aggressive traders
might consider adding positions on a break above $73, with a
corresponding tight stop at $71.  Our stops on this play remain
at $66.75 to protect on the downside.

Picked on May 31st @ $70.37
Change Since Picked +1.40
Stop Loss @ $66.75

 


===
SRDX - SurModics, Inc. $56.30 +0.30 (+3.30)

SRDX made up some lost ground on Thursday, but the stock failed
to close above its 5-dma at $56.41.  Therefore, we will keep the
yellow caution flag raised until SRDX can conquer resistance at
$58.96.  The stock did find support today around $55.30, which
also corresponds with the top of the base from which it just
broke out three days ago.  That the stock didn't fall back into
its base is a good sign.  However, we won't breathe easy until
SRDX can close above $58.96 on volume of at least 150,000 shares.
That being said, traders should hold off until SRDX can turn it
around by completing the aforementioned scenario.

Picked on June 5th @ $58.00
Change Since Picked 1.70
Stop Loss @ $54.00

 



MOMENTUM PLAY UPDATES 06/07/01
===============================

WMI - Waste Management $28.59 +0.08 (+0.79)

WMI eked out a small gain on Thursday and remains on its breakout
track.  Shares of WMI continued on their recently revived uptrend
and found good support along the way at the 5-dma at $28.22.
With today's advance, WMI's MACD was just able to issue a buy
signal.  Volume was light on Thursday, with just 1.5 million
shares changing hands.  WMI's three-month average daily volume is
2.1 million shares.  We will be watching to see whether the stock
can take out mild resistance at $29 in the near future.
Meanwhile, traders might consider initiating new positions in WMI
if the stock can break above Wednesday's opening price of $28.80
on volume that puts WMI on pace to do 2.5 million shares for the
day.  Our stops remain just under the previous base at $26.90.

Picked on June 6th @ $28.51
Change since picked +0.08
Stop Loss @ $26.90

 



=====
DROPS
=====

SPLIT RUN PLAY DROPS 06/07/01
=============================

None


SPLIT CANDIDATE PLAY DROPS 06/07/01
===================================

ASD - American Standard $66.09 0.71 (+0.43)

ASD finally fell victim to the profit taking that we knew was
bound to surface soon.  Its MACD is rolling over and volume is
starting to build on down days.  Due to the fact that we had
recently raised our stop, we exit ASD today with a profit.

Picked on May 6th @ $62.50
Profit/Loss = +3.50 (+6%) (Stopped out Thursday @ $66.00)
Best Profit = 4.85 (+8%)

 


===
BKH - Black Hills Corporation $48.05 3.92 (-9.22)

As it turned out, our energy play ran out of the stuff it
produces.  The energy sector has come back to earth this week,
and unfortunately BKH was no exception.  We were stopped out of
BKH on Wednesday for a loss.

Picked on May 20th @ $55.94
Profit/Loss = -3.69 (-7%) (Stopped out Wednesday @ $52.25)
Best Profit = 2.56 (+5%)

 



MOMENTUM PLAY DROPS 06/07/01
=============================

BUCA - Buca, Inc.  $20.03 0.92 (-4.76)

After all the damage that had been done to restaurant stocks last
week, it was inevitable that sellers would come back into BUCA to
take it lower.  It now appears as if the stock is heading back to
test resistance at $18.75.  We were stopped out of BUCA on
Wednesday at $21.30.

Picked on May 24th @ $25.15
Profit/Loss = -3.85 (-15%) (Stopped out Wednesday @ $21.30)
Best Profit = 0.00 (0%)

 

===
GTK - GTECH Holdings Corp. $37.40 0.84 (+0.00)

It's going to be hard saying good-bye to this gaming play.
Although, it's safe to say that traders who got in on the early
stages of this momentum play are happy with their nearly 25%
gains.  Also keep in mind that these gains came in just over one
month's time.  So we bid farewell to GTK.  Today we were stopped
out of the stock at $37.40 and are dropping the GTK from our
Current Play list.

Picked on April 20th @ $29.79
Profit/Loss = +7.61 (+26%) (Stopped out Thursday @ $37.40)
Best Profit = +9.11 (+31%)

 


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=============================
Play of the Day (For Friday)
Thursday, June 7, 2001
=============================

WMI - Waste Management $28.59 +0.08 (+0.79)

Thursday's Comment:

WMI eked out a small gain on Thursday and remains on its breakout
track.  Shares of WMI continued on their recently revived uptrend
and found good support along the way at the 5-dma at $28.22.
With today's advance, WMI's MACD was just able to issue a buy
signal.  Volume was light on Thursday, with just 1.5 million
shares changing hands.  WMI's three-month average daily volume is
2.1 million shares.  We will be watching to see whether the stock
can take out mild resistance at $29 in the near future.
Meanwhile, traders might consider initiating new positions in WMI
if the stock can break above Wednesday's opening price of $28.80
on volume that puts WMI on pace to do 2.5 million shares for the
day.  Our stops remain just under the previous base at $26.90.

Picked on June 6th @ $28.51
Change since picked +0.08
Stop Loss @ $26.90

 
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