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Play of the Day (For Thursday)
Interactive Chart
Wednesday, May 23, 2001

ASD - American Standard $65.40 +0.25 (-0.05)

Tuesday's Comment:

American Standard Companies, Inc. has been consolidating after hitting an all-time high of $66.50 last week. On Tuesday, shares of ASD fell to an intra-day low of $64.80 before bouncing back to a close of $65.15 on volume of 468,000 shares. Despite the recent weakness, ASD was able to close above its 5-dma, keeping the long-term upward trend alive. Daily volume is picking up so ASD could be able to challenge its all-time high on a positive volume surge. In the meantime, support is the 5-dma at $64.92 with additional support at $63.84, the 10-dma. Resistance has fallen to Monday's intra-day high of $65.45 and then Friday's intra-day high of $66.50. A bounce off of $64.92 or a move above $64.92 on midday volume greater than 250,000 shares may be possible entry points. Our stops are holding steady at $63.50.

Wednesday's Update:

On Wednesday, ASD's CEO, Fred Poses, was a featured speaker at the Merrill Lynch Global Industries Conference in London. He was due to report on the importance of European markets on ASD's global strategies for its air conditioning and plumbing systems. Investors were obviously encouraged by ASD's goals to expand into Eastern Europe and to leverage their existing operations in Europe to strengthen their current position as market leaders. This was because on a decidedly down day in the broader market, ASD managed to eke out a small gain of $0.25. This advance came on volume of 480,000 shares, just over the three-month average of 400,000 shares. Turning to the chart, we see that ASD has been trading within a tight range between $64.50 and $65.50. This may indicate that ASD may be ready to break to the upside. However, traders are advised to wait until ASD clears near term resistance at $65.50 before initiating a position. This move above resistance should ideally come on daily volume of at least 450,000 shares. Since there is also overhead resistance at $66.50, traders may want to go in with half a position just above $65.50, then commit to the other half if ASD can later breach $66.50 on similar volume. Our stops remain at $63.50 to limit downside risk.

Picked on May 6th @ $62.50
Change since picked +2.90
Stop Loss @ $63.50

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