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Email Version, Section 2, Thursday 06/14/01
The SplitTrader.com Newsletter          Thursday 06/14/01  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

To view this email newsletter in HTML format with imbedded
charts and graphs, click here:

http://www.splittrader.com/htmlemail/279_1.asp
==================================================================

In This Newsletter:
===================
Market Commentary - Thursday Thumping
Definition of the Day
Thursday's Split Announcements - None
Friday's Expirations
Stock Plays - New - Updates - Drops
Friday's Play-of-the-Day - EPIQ

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

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

Thursday Thumping

Tech company earnings warnings, EU commission warnings on the GE-
Honeywell deal, ECB growth warnings, warnings from Charles Schwab
(NYSE:SCH -1.32), even tropical storm warnings on the Gulf Coast
that caused energy concerns.  After all was done today, investors
wouldn't have been surprised to see a warning that the sky was
falling, too.  And speaking of falling, the Nasdaq Composite
(COMPX) broke below its pivotal short-term floor of 2,060, with a
decline of 77.59 points, or 3.66 percent, to 2,044.07.
Semiconductors, semiconductor equipment stocks, telecom equipment,
and software stocks led today's tech decline.

The Dow (DJI) fell 181.49 points, or 1.67 percent, to 10,690.13.
Honeywell (NYSE:HON -5.16) was the Dow's weakest link, followed by
United Technologies (NYSE:UTX -3.16), Microsoft (NASDAQ:MSFT -
1.79), and American Express (NYSE:AXP -1.75).  The S&P 500 (SPX)
shed 21.73 points, or 1.75 percent, to 1,219.87.  The only good
news today for bulls was the PPI report that showed that
inflation, if not falling like everything else, was at least not
rising.

In late afternoon trading, the banks and brokerages looked like
they were set for a bounce but it failed to materialize.  Overall,
selling was broad based.  The largest declines were in the
utility, natural gas, financial, cyclical and biotech groups.  The
defensive drug, drugstores, gold, alcohol, and waste management
groups recorded slight gains.

Internet shares were slammed on concerns that the companies would
fail to meet their Q2 goals.  Shares of Ariba (NASDAQ: -0.64)
dropped to lows not seen since early April.  Merrill Lynch
Business-to-Business Internet Holders (AMEX:BHH -0.37), a basket
of e-business software or services companies, dropped 5.96
percent, to $5.84.  Merrill also downgraded fiber-optics leader
Corning (NYSE:GLW -1.35).  Also falling sharply on fairly heavy
volume was Commerce One (NASDAQ:CMRC -0,86), down 15.44 percent to
$4.71.  Software security firm VeriSign (NASDAQ:VRSN -3.91)
dropped 7.24 percent to $50.10.  And I2 Technologies (NASDAQ:ITWO
-1.89) fell 9.84 percent to $17.32.  The overall Internet group
fell four of the last five sessions on increased concerns of the
longer than anticipated slowdown in demand.

The aforementioned General Electric (NYSE:GE +1.01) / Honeywell
(NYSE:HON -5.16) merger may fall apart in Europe, after once being
considered as a 95 percent lock.  Intense negotiations have not
bridged the gap between the two companies and the EU over anti-
trust concerns, despite a reported $2.2 billion in concessions
offered just before the midnight deadline.  GE Chairman Jack
Welch, a heck of a poker player, issued a strong statement of
dismay yesterday, saying that the EU regulators' position exceeded
anything imagined and differed sharply from their counterparts in
the U.S. and Canada.  That took the EU by surprise after it had
assessed the talks in a more neutral manner.  Is all this linked
somehow to EU opposition to Bush administration policies, and with
Bush currently in Europe the target of demonstrations and a
hostile press?  Once a merger like this becomes politicized,
anything can happen.  Stay tuned.

In the energy sector today, crude oil and gasoline prices moved
slightly higher, but oil shares moved lower.  The discrepancy
arose due to crude supplies falling while refined gasoline
inventories were rising.  Mounting pressure resulting from Iraq's
halting of exports and also Tropical Storm Allison in the Gulf
Coast may influence prices going forward.  The CBOE Oil Index
(OIX) declined 1.10 percent to 337.69, and the Oil Service Index
(OSX) shed 2.30 percent to 118.28.  Oilfield services giant
Schlumberger (NYSE:SLB -3.32) sank by 5.51 percent to $56.90 after
the company warned of lower-than-expected revenue resulting from
its purchase of Sema Plc.  The Amex Natural Gas Index, (XNG) fell
by 2.39 percent to 226.61, due to the fall of 5.50 percent in
Questar (STR -1.56) to $26.81.

In the government data released today, inflation at the wholesale
level was fairly benign in May, according to the Labor
Department's Producer Price Index report.  This should reassure
the Fed, but the Street still expects another 25 basis point rate
cut anyway later this month, for cut No. 6 in an effort to
jumpstart the economy.

The Labor Department's jobless claim report for the week to June 9
was consistent with Street expectations.  But the four-week moving
average increased to the highest level in nearly nine years.  This
indicates further weakening in the job market as we try to turn
the corner on this slowdown.

Business inventories in general held firm in April as sales
declined for the second straight month, according to the Commerce
Department.  Retail inventories dropped but wholesale and
manufacturing inventories rose.  The stock-to-sales ratio that
measures how long it will take to sell off current inventories
rose to 1.44 months from 1.43 months in March.  It was last at
this level back in January 1999.

For those on Fed watch, Fed Vice Chairman Roger Ferguson
reiterated his view today that productivity gains will likely not
decline even as the economy slows.  He said that most of the gains
have been structural rather than trend-based or cyclical.
Productivity gains can increase supply and stimulate faster
economic growth without inflationary pressure.  But in Q1,
productivity hit its sharpest decline in eight years.

Among the bonds, the Fed-sensitive 2-year Treasury note yield
dropped below the 4 percent mark today for the first time since
October 1998 as traders predicted an increased chance for a deep
Fed rate cut.  The price was up 3/32 at 100 15/32.  The 5-year
note picked up 7/32 in price at 99 17/32, for a yield of 4.73
percent, a decline of 5 basis points.  The 10-year note gained
8/32 at 98 9/32, for a yield of 5.23 percent, a loss of 3 basis
points.  Finally, the 30-year long bond picked up 12/32 at 96 9/32
and a yield of 5.63 percent, a shedding of 3 basis points.

For Tomorrow:

The Consumer Price Index, Capacity Utilization, and Michigan
Sentiment reports should make for an interesting day.  If that's
not enough, it's triple witching Friday, as options and futures
contracts expire, which sometimes causes a wild ride for short-
term traders.  Let that be - yes - a warning to us all.

Bruce Feldman
Research Analyst
www.splittrader.com


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

Derivative

A derivative is an investment vehicle that has been derived from
something else.

For the complete definition, please go to:
http://www.splittrader.com/glossary/viewglossary.asp?glossaryid=96



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

None



====================================
Friday's Expirations by Payable Date
====================================

Trading Split-Adjusted June 18

Genesee & Wyoming (GNWR) splits 3:2
International Bancshares (IBOC) splits 5:4
Eagle Bancorp (EGBN) splits 7:5


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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 06/14/01
============================

None



NEW SPLIT CANDIDATE PLAYS 06/14/01
==================================

EPIQ - EPIQ Systems $35.10 -0.97 (+2.80)

With the economy (supposedly) circling the drain and more
companies going out of business, EPIQ has been in the catbird
seat.  This is because their software products help facilitate
bankruptcies.  Needless to say, business has been booming lately.
Turning to the chart, EPIQ has been making new highs all year in
a step-like fashion.  On Wednesday, shares of EPIQ broke out of a
month long base on higher than average volume.  Although the
stock pulled back today, we feel that it is still poised to go
higher.  Resistance has come in at $36.94 and support should show
up at the $33.50-level (the top of the previous base).  Traders
interested in getting a piece of the bankruptcy pie could look to
get into EPIQ on a break above $36.94 on volume of at least
130,000 shares traded for the session.  Our initial stop has been
set at $31.00 to limit downside risk.

Picked On June 14th @ $35.10
Change Since Picked 0.00
Stop Loss @ $31.00

 



NEW MOMENTUM PLAYS 06/14/01
============================

None


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


SPLIT RUN PLAY UPDATES 06/14/01
===============================

LOW - Lowes Companies $72.93 -0.97 (-0.64)

Lowes fell victim to overall weakness within the market on
Thursday.  The stock lost $0.97 on low volume of 1.7 million
shares.  The stock did find good support at its 10-dma at $72.17
and managed to close in the upper half of its intraday range.
Resistance is still present at $74, so traders shouldn't look to
initiate new positions until this resistance is conquered on
volume of at least 3.2 million shares.  Our stops remain at $68
to limit downside risk.

Picked on June 7th @ $74.00
Change Since Picked -1.07
Stop Loss @ $68.00

 



SPLIT CANDIDATE PLAY UPDATES 06/14/01
=====================================

BJ - BJ's Wholesale Club $53.05 +1.03 (+1.81)

BJ bucked the market and headed higher on Thursday.  Not only did
it break up through $53, it managed to close above the
psychologically important $53-level on good volume of 730,000
shares.  Earlier in the day, BJ successfully tested support at
$51.70 and bounced higher.  At this point, traders who want to
hop aboard the wholesaler's train should wait to see if BJ can
close above $53 again on Friday.  However, don't chase the stock
much over $54, should it start to pick up steam, since it is
starting to get slightly overbought at current levels.  We are
giving BJ one more day before we tighten up our stop, so for now
our stop remains at $50.00.

Picked on May 27th @ $48.31
Change Since Picked +4.74
Stop Loss @ $50.00

 

===

ESI - ITT Education $42.80 -1.30 (-0.64)

Unfortunately for our newer play, we weren't able to capture any
breathing room today.  Sellers ruled the session, as the stock
lost $1.30 to $42.80.  However, volume on the pullback was so
weak (only 79,000 shares were traded) that we won't start
worrying just yet.  ESI also found good support at its 10-dma at
$42.81.  With today's dip, ESI's MACD has started to roll over,
but there is plenty of time to avoid a sell signal as long as ESI
holds support around $42.  Going forward, it has become more
important for ESI to prove that it still has buying support.  To
do this, we need ESI to close over resistance at $44.50 on volume
of at least 250,000 shares for the day.

Picked On June 12th @ $43.70
Change Since Picked -0.90
Stop Loss @ $40.00

 

===

MTG - MGIC Investment $72.21 -1.58 (+0.81)

MTG gave back all of Wednesday's gains on Thursday, as the stock
retreated by $1.58 on the session.  The bad news is that volume
picked up today as the stock headed lower.  The good news is that
the current up trend is still in tact, as today's low was a
higher low.  Going forward, we will look for MTG to find support
at its 10-dma at $71.38.  Resistance has come in at $74.  MTG's
MACD also looks to be rolling over, so hopefully the stock will
find support soon.  Traders looking to get into MTG should wait
until the stock can close over $73.79 (previous closing high) on
volume of at least 750,000 shares for the day.

Picked on May 31st @ $70.37
Change Since Picked +1.84
Stop Loss @ $66.75

 



MOMENTUM PLAY UPDATES 06/14/01
===============================

BEBE - BEBE Stores, Inc. $30.10 -1.34 (-0.70)

BEBE followed the S&P Retail Index (RLX.X) lower on Thursday,
losing $1.34 to $30.10.  We had a feeling that a sell off was
coming and the good news is that the overbought condition in BEBE
has been largely removed now.  In addition, the stock found good
support at its 10-dma at $29.80.  However, going forward we will
keep an eye on the MACD since it is about to issue a sell signal.
Traders looking to get into BEBE should probably wait for either
a bounce off support at $29.40 or a break above $32.25.  In
either case volume should be close to 300,000 shares for the day.

Picked On June 10th @ $30.80
Change Since Picked -0.70
Stop Loss @ $ $27.00

 

===

WMI - Waste Management $29.73 +0.61 (+1.29)

WMI looks to be in the throws of a breakaway run.  On Thursday,
the stock gapped higher at the open and never looked back.
Volume was again outstanding, with almost 5 million shares
changing hands.  WMI's MACD is now decidedly positive and OBV is
shooting skyward.  Our trash play may be the beneficiary of
investors looking for a place to hide from further tech weakness.
Going forward, we will look for volume to ease on any pullbacks.
The $30-level will be the next hurdle for our play, and momentum
traders might look to jump into WMI on a close above this level
on continued strong volume.  Otherwise, a pullback to support at
$29 could also present a lower risk entry point.

Picked on June 6th @ $28.51
Change since picked -0.01
Stop Loss @ $26.90

 



=====
DROPS
=====


SPLIT RUN PLAY DROPS 06/14/01
=============================

None


SPLIT CANDIDATE PLAY DROPS 06/14/01
===================================

CEFT - Concord EFS $50.81 -2.12 (-1.80)

CEFT threw in the towel on Thursday, succumbing to early selling
pressure.  There was no CEFT specific news to spark this sell
off, but weakness in the overall market and bad news out of
General Electric probably had a hand in the stock's decline.
Good thing that we just raised the stop on CEFT, as we exit this
play with a small gain.  As we have been saying, hitting singles
in this market isn't so bad.

Picked on May 27th @ $50.60
Profit/Loss = +0.90 (+2%) (Stopped out Thursday @ $51.50)
Best Profit = +3.90 (+8%)

 

===

HRB - H&R Block $63.01 -0.01 (-0.69)

HRB finally gave in to the sellers on Thursday morning.  Our
long-time play plummeted to its 20-dma in the first hour of
trading, only to bounce higher into the close.  However, due to
the fact that we have been steadily ratcheting up our stop, we
exit this play today with a nice gain.

Picked on April 18th @ $52.85
Profit/Loss = +8.15 (+15%) (Stopped out Thursday @ $62.00)
Best Profit = +10.75(+20%)

 



MOMENTUM PLAY DROPS 06/14/01
=============================

None


=============================
Play of the Day (For Friday)
Thursday, June 14, 2001
=============================

EPIQ - EPIQ Systems $35.10 -0.97 (+2.80)

Thursday's Comment:

With the economy (supposedly) circling the drain and more
companies going out of business, EPIQ has been in the catbird
seat.  This is because their software products help facilitate
bankruptcies.  Needless to say, business has been booming lately.
Turning to the chart, EPIQ has been making new highs all year in
a step-like fashion.  On Wednesday, shares of EPIQ broke out of a
month long base on higher than average volume.  Although the
stock pulled back today, we feel that it is still poised to go
higher.  Resistance has come in at $36.94 and support should show
up at the $33.50-level (the top of the previous base).  Traders
interested in getting a piece of the bankruptcy pie could look to
get into EPIQ on a break above $36.94 on volume of at least
130,000 shares traded for the session.  Our initial stop has been
set at $31.00 to limit downside risk.

Picked On June 14th @ $35.10
Change Since Picked 0.00
Stop Loss @ $31.00

 


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