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PLAY >New Updates Tuesday, March 06, 2001
New Split Updates   New Candidate Updates   New Momentum Updates
(We update our stop losses daily at the CURRENT PLAYS page.)

New Split Updates

BAX - Baxter International Incorporated $94.43 -0.77 (+1.10)

Baxter's big gamble in biosciences is giving investors more bang for the buck. The firm recently reported fourth quarter earnings per share growth of 15%, in-line with expectations. In addition, sales growth was strong across all divisions and is accelerating. The company has now recorded eight straight quarters of good results and the outlook continues to be positive. What's more, it looks like momentum players are starting to jump back on the bandwagon. Looking at the chart, we're pleased with the early week success of BAX shares, which broke sharply through resistance on Monday with a strong advance of 4.09 points! The stock normally trades around 1,949,590 shares based on a three-month average, but Monday's breakout came on volume of only 1,511,000 shares. This is of some concern to us, so what we'd like to see now is for volume to build as the stock attempts to make further highs later in the week. With that said, we'll look for initial resistance to come at the $95 mark, bolstered by the all time high of $95.20. Look for a much swifter barrier to follow at the century mark, which may be a good level to lock in gains. Support will come at the February 21st intra-day high of $93.16, with additional support at the 20-dma of $90.04. Look to time entries when BAX shares bounce off of support or break above $95 on volume of at least 900,000 shares by noon. We plan to place stops at $98.50 to limit potential losses.


Picked on March 1st @ $92.61
Change since picked +1.82
Stop Loss @ $89.00

 
Interactive Chart Quote News First Call on BAX
 


LTR - Loews Corporation $111.53 +1.02 (+2.42)

Loews Corporation, a holding company with majority stakes in the insurance, cigarette, hotel, oil, and clock industries, is hitting some resistance after reaching a new 52-week high of $111.76 last week. On Tuesday, shares of LTR fell to an intra-day low $109.90 before recovering later in session. The stock closed at $111.53 on volume of 416,000 shares. LTR continues trend higher as we approach the 2:1 split, payable on March 20th. However, the stock is up 13% in just seven sessions so it may need to consolidate before it moves higher. For now, LTR has support at Monday's intra-day low of $110.10 with stronger support at $109.43, the 5-dma. Resistance is holding steady at Friday's intra-day high of $111.76 and then the 11/5/97 intra-day high of $113.87. Traders may consider entry points on a bounce off of $110.10 or a breakout above $111.76 on volume greater than 225,000 shares by noon. We have moved our stops up to $109 to lock in profits.


Picked on February 27th @ $106.40
Change since picked +5.13
Stop Loss @ $109.00

 
Interactive Chart Quote News First Call on LTR
 


GVA - Granite Construction $35.08 -$0.02 (-$0.18)

This week Granite has hardly moved after finishing last week on such a strong note. On Monday the stock traded on better than twice its normal volume but only moved $0.75 for the day. Tuesday saw 83,000 shares change hands, slightly higher than the three-month average of 73,000. On a technical note, GVA may be in the early stages of forming a flag or pennant formation. If this is confirmed, we'll be watching for a breakout, as this split run play moves closer to its ex-date in April. For now, we will be watching for another break higher coupled with good volume. Those traders considering a new play on GVA might look for volume to exceed 60,000 by midday and the stock to climb through resistance on a volume surge. A bounce off support might also trigger a possible entry point. Since the follow through from last week's new high has been weak, we are going to tighten our stop on this play to $33.50 to lock in a profit should the stock turn south.


Picked on February 25th at $33.07
Change since picked +2.01
Stop Loss at $33.50

 
Interactive Chart Quote News First Call on GVA
 

New Candidate Updates

AYE - Allegheny Energy Incorporated $47.00 -0.01 (0.00)

As deregulation spreads across the country, Allegheny has a three-pronged strategy to gain more share of the energy market and increase its total plant production to 9,600 MW's by 2003. The whole idea is to boost AYE's profitability by enlarging its already sizeable generating business, offering bundled energy services, and venturing into distributed power generation. Shares of the Maryland-based company continued to form a long consolidation base near the $47 mark today, and lost just one cent during the trading session. During today's trading activity, the stock gave a sharp intraday bounce off the 30-dma ($46.30) and formed a bullish hammer candlestick formation. A hammer formation frequently marks the bottom of a move and gives us hope of a near-term turn around. Still, what has really captured our attention has been the lightness in volume over the past three trading days. The stock's three-month average volume is 682,363 shares per day. However, over the past three sessions, AYE has logged an average of just 215,000 shares. We feel this is an excellent sign of a lack of sellers in the stock. With this in mind, we'll look for an upside move to encounter resistance at the 10-dma of $47.50 and then at the $49 mark. Support comes in at the 30-dma of $46.30, bolstered by intraday lows. Look for entries to come when the stock breaks above resistance or bounces swiftly from support on strong volume of 350,000 shares traded by noon. We'll continue to hold a firm stop at $45.94.


Picked on February 22nd @ $48.22
Change since picked -1.22
Stop Loss @ $45.94

 
Interactive Chart Quote News First Call on AYE
 


IGT - International Game Technology $56.59 +0.81 (+2.90)

Value investing in the technology sector was the dominant theme of the day. However, this did not stop momentum traders from continuing to express interest in IGT. The stock of this leader in the casino gaming equipment business was bolstered by some bullish comments from Robertson Stephens, which has raised its earnings forecast for fiscal 2001 to $2.60 and to $3.00 for 2002. Previous estimates were calling for profits of $2.55 and $2.85, respectfully. The research firm added that the stock could drive past $70.00 over the next 24 months. Earnings estimate increases are exceedingly rare these days and IGT has been partially rewarded for its ability to grow during these difficult economic times. IGT ignored the late day profit taking and closed right at its newly established all-time high of $56.59. This fact means that there is an absence of overhead resistance, and a positive open tomorrow could easily result in an extension of the stock's gains. The MACD survived a test and is now pointing towards higher prices. The OBV and Money Flow are noticeably strong and also point towards an extension of the rally. Please note that we have been able to raise our stop to $54.75. Momentum traders may want to continue adding positions as long as IGT can stay above the support offered by the 5-DMA of $54.88.


Picked on February 20th @ $53.52
Change since picked +3.07
Stop Loss @ $54.75

 
Interactive Chart Quote News First Call on IGT
 


PFGC - Performance Food Group Company $53.69 (+3.56)

Performance Food Group Company has been under pressure over the last two sessions thanks to a negative earnings announcement from H.J. Heinz Co. (HNZ). On Tuesday, shares of PFGC fell to an intra-day low of $48.50 on light volume of 46,000 shares. The stock broke its upward trend on weak volume, so it may be able to snap back if the volume returns. Hopefully, PFGC will not close below the 20-dma as it attempts to put in a bottom. From a technical standpoint, support is the 20-dma at $48.54 with additional support at $47.13, the February 21st intra-day low. Resistance has fallen to the 10-dma at $50.86 and then the 5-dma at $52.10. A bounce off of $48.54 or a move above $50.86 on midday volume of at least 100,000 shares may be possible entry points. We are keeping our stops at $47 to limit potential losses.


Picked on February 25th @ $50.13
Change since picked -1.07
Stop Loss @ $47.00

 
Interactive Chart Quote News First Call on PFGC
 


KRI - Knight-Ridder, Inc. $60.40 +0.95 (-0.35)

Knight-Ridder is a major player in the newspaper publishing and news gathering business. A relatively low P/E of 17.11 has recently encouraged investing in this stock, which offers a relative value and subsequent peace of mind for nervous investors. One of KRI's high profile properties, The San Jose Mercury News, long known as the premier observer of the Silicon Valley, announced plans to layoff an undetermined number of employees and to restructure operations today. This news release, coupled with a market that has focused on technology value investing, has caused KRI to trade flat so far this week. That said, this market has long been characterized by sector rotations. Therefore, KRI could have a good opportunity to rally once there is some inevitable profit taking in the technology sector. KRI has excellent support provided by the 50-DMA of $58.00. The 52-week high of $61.25 is within striking distance. A move above this resistance, accompanied by midday volume over 250,000 shares, may prove to be fortuitous entry point. OBV and the Money Flow remain solid. What's more, any positive move over the next couple of days will likely result in a buy signal being triggered by the MACD.


Picked on March 4th @ $60.75
Change since picked -0.35
Stop Loss @ $57.00

 
Interactive Chart Quote News First Call on KRI
 


PII - Polaris Industries Inc. $47.70 +$0.44 (+$0.50)

Polaris Industries seems to be stuck in a rut. For the second day in a row the stock channeled between $47 - $48, much like it has done twice before in February. The trading volume has shrunk from the three-month average of 93,000 to less than 54,000 both days this week. Thus, with such low volume the stock has been unable to conquer its immediate resistance level the 20-dma at $48.00. The bullish engulfing pattern that we noted in Sunday's report has yet to provide the favorable response we were looking to achieve. Perhaps last month's downgrade from USB Piper Jaffray along with the bearishness of the market has investors in a watch and see mode. Regardless, we are looking for some solid news or momentum to resurrect this split candidate play. From where PII sits now possible new play opportunities might exist if the stock were to bounce off support at $47.00 or move through the 20-dma on volume exceeding 100,000 traded by 1:00 EST. If support cannot hold then look for the stock to possibly test the 50-dma at $44.88. If this were to occur then we'd be out of this play as we are maintaining our stop loss on this play at $44.88.


Picked on February 13th at $48.70 
Change since picked -1.00
Stop Loss at $44.88

 
Interactive Chart Quote News First Call on PII
 

New Momentum Updates

BDX - Becton, Dickinson and Co. $34.87 -0.60 (-0.33)

Most of the stocks on the NYSE that are not technology related were victims of some accelerating profit taking into the close. BDX, a major medical supply company, was unable to buck this trend, pushing the stock perilously close to our $34.50 stop. Nevertheless, BDX looks very tempting on a technical basis. Today's pullback, accompanied by relatively light volume of just over 700,000 shares, has brought BDX down to a test of very strong support provided by the 50-DMA, which closed today at $34.78. If we see some rotation out of the technology sector into the medical stocks tomorrow, BDX may be offering us an excellent buying opportunity at current prices. The very light downside volume has allowed the Money Flow and OBV to maintain their bullish readings. A resumption of the up trend could easily occur if BDX can trade above the resistance offered by the 10-DMA, which closed today at $35.94. Although we are close to our stop, traders may want to enter new positions if BDX can open flat to higher tomorrow. If BDX trades above $36.00 with first hour trading volume over 300,000 shares, the stock could possibly be on its way towards a retest of the 52-week high of $39.25.


Picked on February 11th @ $37.03
Change since picked -2.16
Stop Loss @ $34.50

 
Interactive Chart Quote News First Call on BDX
 


ELY - Callaway Golf Corporation $26.09 +0.82 (+1.09)

Callaway has made much headway in reining in costs over the past two years. But, even more impressive, the company has grown stronger due to steady sales growth from its new product introductions and a recent venture into the premium golf ball market. Despite the skepticism of some investors, ELY is continuing with its ramp-up efforts to gain more share of the golf ball market, which it hopes to attain through Callaway's established brand name. As for our play, ELY shares kept climbing on Tuesday, setting yet another new 52-week high of $93.48. The run up came on excellent volume of 937,800 shares and leads us to believe that the stock is still able to attract plenty of buying at higher levels. Looking at the short-term technical indicators, the MACD remains positive and the OBV continues its push to higher highs. So, to that end, we'll expect to see the stock face its next level of resistance at the $27 mark, followed by a more difficult barrier at $30. Keep in mind that a sharp bounce from either of these levels could provide a good exit signal. Support is at the 5-dma of $25.14 and then the $25 mark. We'll look for potential entry points to occur when ELY rallies through resistance or reverses from support on good volume by midday of at least 250,000 shares. Our raised stop of $24.75 will limit our risk on the downside and help to lock in gains.


Picked on February 25th @ $23.99
Change since picked +2.10
Stop Loss @ $24.75

 
Interactive Chart Quote News First Call on ELY
 


LMT - Lockheed Martin Corp. $37.38 -1.06 (-0.92)

Aerospace contractor Lockheed Martin has hit two consecutive 52-week highs this week on news of a $43 million contract win with the US Navy and a move by the FAA to skip the bidding process for its long-distance air traffic control system and award the deal to Lockheed. Unfortunately, shares of LMT sold off during Tuesday's session on profit taking, with 1.73 million shares changing hands. Despite the pullback, the stock remains in a strong upward trend, although the MACD looks a bit stretched. In the meantime, support is the 20-dma at $36.89 with stronger support at $36.23, Friday's intra-day low. Resistance remains at the 8/23/99 intra-day high of $39.44 and then the 6/8/99 intra-day high of $41.56. Consider starting new plays on a bounce off of $36.89 or a breakout above $39.44 on volume greater than 800,000 shares by noon. We are keeping our stops at $35 as downside protection.


Picked on February 4th @ $36.40
Change since picked +0.98
Stop Loss @ $35.00

 
Interactive Chart Quote News First Call on LMT
 


PHCC - Priority Healthcare Corp. $43.38 -$0.43 (+$0.88)

Priority Healthcare, which specializes in pharmaceutical services for patients with chronic diseases or genetic disorders, opened the week with a new high. On Monday PHCC traded up to $44.25 intra-day on volume of 742,000 shares, which is 36% higher than the three-month average of 545,000. PHCC is one of our newest momentum plays; we began coverage on this play on Sunday. The stock has been performing well over the past few months and Monday's activity proved to us that there is more profit potential in PHCC. Traders might want to considered a position if the stock can bounce off support at the 5-dma at $42.50 or move through resistance at $44.25 on 400,000 shares traded by noon. Look for additional support from the NASDAQ Composite Index (COMPX) and the CBOE Health Care Index (HCX.X) when considering starting a new play. We will post a stop loss at $39.00 on this play.


Picked on March 4th at $42.50
Change since picked +$0.88
Stop Loss at $39.00

 
Interactive Chart Quote News First Call on PHCC
 


TX - Texaco Inc. $67.90 +1.10 (1.06)

Like a geyser of oil, Texaco exploded to a new 52-week high on Tuesday. Texaco began the week on a strong note gapping open and posting a new high. Tuesday the stock again posted another high and confirmed its move with impressive volume. TX normally trades on volume of 1.7 million shares, but Tuesday made the third day in a row that TX traded on volume over 2.5 million shares. The increased volume coupled with ongoing new highs is a sight we like to see. Texaco has been a momentum play for a few weeks now and has been a good performer considering the recent market conditions. The company is moving ahead with its planned merger with Chevron (CHV) and there is no reason to believe that further gains aren't possible. Going forward, if you are considering a new play on TX, the maker of outdoor all-terrain recreational vehicles possible entry points might include a bounce off support at the 5-dma at $66.37 or a move through resistance at today's high of $68.36. Look for good volume over 1.2 million traded by midday when considering new plays. Added support from the Dow Jones Industrial Average (INDU) and the Oil Service Index (OSX.X) would be helpful as well when thinking about a new position on TX. We are going to tighten our stop on this play to $66.00 and thus ensure ourselves a profit from this play.


Picked on February 18th at $64.90
Change since picked +3.00
Stop Loss at $66.00

 
Interactive Chart Quote News First Call on TX
 

Play Updates Index

 


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