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PLAY >New Updates Sunday, March 11, 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 $92.90 (-0.43)

Simply put, Baxter's goal is to double its total annual revenues within ten years on the back of genetically engineered products. To attain this ambitious agenda, the company has hired scientists from established firms like Novaritis and Aventis. Baxter has already tripled its manufacturing capacity in Thousand Oaks, Calif. to help prepare for future production needs. Despite a pullback in the AMEX Biotechnology Index (BTK.X), which lost 2.49% on Friday, BAX managed to eke out a gain of $0.18 to close at $92.90. This contrary relationship to the index has been a re-occurring event during the course of our play, and could be a good indication of BAX's strength. The stock's one-month performance against the index is notable, with a 6% gain versus a 10% loss. So, should upward momentum in the stock continue we'll look for resistance to come in at $95, followed by a more notable barrier at the century mark. Support will come at the $90 mark (recent low), bolstered by the 30-dma of $89.70. Low risk entry points may present themselves with a bounce off support on volume of at least 900,000 shares by mid-day or a breach through resistance on similar mid-day volume. We'll continue to keep stops at $89.00 to guard against a pullback.


Picked on March 1st @ $92.61
Change since picked +0.29
Stop Loss @ $89.00

 
Interactive Chart Quote News First Call on BAX
 


GVA - Granite Construction Inc. $34.55 (-$0.65)

Granite Construction finished the week down after the market turned sour on Friday. The triple digit losses on both indices were too much for GVA to handle and the stock took the path of least resistance lower. The stock traded below its first level of support and came to rest at $34.50, a former level of resistance established back on February ninth. For now this will serve as the first level of support until a more solid footing can be established. Friday's volume surpassed the three-month average of 75,000 shares by 9%, with 82,000 shares swapping hands. As it turns out, the ill effects of the current market have outweighed what euphoria was out there for a split run. The split, a 3:2, is scheduled for April 13th and we'll continue to watch for another leg up prior to that date. For next week look for possible entry points for new plays if the stock bounces off support or move through resistance at $35.00 on volume exceeding 60K traded by midday. We are keeping our stop loss at $33.50 on this play.


Picked on February 25th at $33.07
Change since picked -1.48
Stop Loss at $33.50

 
Interactive Chart Quote News First Call on BAX
 


LTR - Loews Corporation $116.77 (+7.66)

Loews Corporation is a diversified holding company engaged in the sale of insurance, cigarettes, watches, clocks, and oil drilling services. On Friday, shares of LTR hit an all-time high of $117.10 before pulling back to a close of $116.77 on volume of 467,000 shares. The stock is gaining momentum despite weakness in the market. LTR has made 3 consecutive higher highs coupled with 3 higher lows and the stock is currently at an all-time high. Hopefully, LTR will continue to move higher as we are now just 7 trading days away from the 2:1 split, payable on March 20th. On the slightly negative side, LTR has gained 18% over the past two weeks so we may see some profit taking in the near future. Until then, support is Friday's intra-day low of $114.75 with stronger support at $113.21, the 5-dma. Resistance may show up at $118 or even $120. Traders may consider opening new positions on a bounce off of $114.75 or a breakout above $118 on volume greater than 225,000 shares by noon. We have moved our stops up to $113 to lock in additional gains.


Picked on February 27th @ $106.40
Change since picked +10.37
Stop Loss @ $113.00

 
Interactive Chart Quote News First Call on LTR
 

New Candidate Updates

AYE - Allegheny Energy Incorporated $47.52 (+0.52)

Aside from an established presence in energy production, Allegheny is seeking additional opportunities for growth in the lucrative telecommunications market. Through its Ventures division, AYE will leverage its existing fiber optic network by marketing telecom services to major carriers and retail customers. This doesn't sound like your average utility company, which is exactly what has attracted so much attention to the stock. Looking at the chart, shares continued to gain ground. On Friday the stock closed the session up $0.02 to $47.52. Volume improved over previous days to 562,900 shares, which we feel is a good sign that buyers may be re-entering the stock. The technical indicators also point to higher levels, with the MACD bottoming out after the recent decline, and the stochastic continuing a bullish crossover. So, to that end, we'll look for further gains in the upcoming week to face resistance at the all time high of $49 and then at the $50 mark. Support comes in at the converging 10 and 20-dma's of $47.41 and $47.18, respectively. Traders might want to consider initiating a position if the stock can bounce off support or move through resistance at $49 on volume of 300,000 shares traded by noon. To keep our downside risk in tact, we'll keep stops firm at $45.94.


Picked on February 22nd @ $48.22
Change since picked -0.70
Stop Loss @ $45.94

 
Interactive Chart Quote News First Call on AYE
 


IGT - International Game Technology $55.65 (+1.81)

IGT's steady ascent into new high territory was stymied on Friday by a stampede of nervous traders who desired to cut their stock positions before the weekend. That said, this major inventor and purveyor of casino games and electronic cash systems, has displayed excellent relative strength. After establishing a new high of $57.25 on Wednesday, IGT only pulled back less than two points. When the market inevitably oscillates back higher, IGT is likely to be one of the first stocks to go back up. If we see some early weakness on Monday, a bounce off the 10-DMA of $55.22 may prove to be an excellent entry point. Otherwise, we would like to see IGT trade above Friday's high print of $56.46, accompanied by midday volume over 300,000 shares, before adding to positions. The MACD is still in a nice ascending pattern. Although the OBV and Money Flow pulled back slightly, both indicators are still very strong and signal continued long term accumulation of IGT.


Picked on February 20th @ $53.52
Change since picked +2.13
Stop Loss @ $54.75

 
Interactive Chart Quote News First Call on IGT
 


OAT - Quaker Oats Company $98.80 (+1.72)

Quaker Oats is seeking to boost revenue growth by 9% for its current quarter. To accomplish this, the company has stepped up marketing efforts on its strongest product, Gatorade. Turning to Friday's action, shares of OAT gave back some ground from Thursday's sharp rally, closing at $98.80, down $0.53. What was encouraging was the weak of volume. The stock normally logs around 740,000 shares based on a three-month average, but Friday's decline came on volume of just 281,700 shares. This is an indication of a lack of sellers in the stock, which could be the result of investors holding onto shares ahead of the upcoming PepsiCo buyout. Bearing this in mind, we feel there's a good chance the stock will continue to show more momentum on the upside. So, to that end, look for initial resistance to come at the $99.33 mark (all time high). A potentially higher hurdle may follow at the century mark, which can often times mark the top of a rally. Support will come at the 20-dma of $97.83, with an additional base at the 3/2 intra-day low of $96.75, bolstered by the 30-dma of $97.11. Look to time your entries when OAT shares bounce off support or break above $99.33 on volume of at least 360,000 shares traded by noon. To limit our risk on the downside, we'll keep firm stops at $96.


Picked on March 8th @ $99.33
Change since picked -0.53
Stop Loss @ $96.00

 
Interactive Chart Quote News First Call on OAT
 


PFGC - Performance Food Group Company $48.88 (-4.81)

Performance Food Group Company held its ground on Friday after testing support at the 50-dma. Shares of the food product manufacturer ended Friday's session at $48.88 with 166,000 shares changing hands. The stock remains in a downward trend but the volume has been picking up so PFGC may be able to find a bottom. Unfortunately, PFGC may spend some time building a base in the $48-$51 range before it moves to new highs. Despite the recent weakness of PFGC, the stock is still trading above its previous split price and the company has enough shares for a split, with 50 million shares authorized and 17.3 million shares outstanding. We are looking for a split announcement with the May earnings release or out of the next BoD meeting. In the meantime, support is Thursday's intra-day low of $48.50 with additional support at $48.19, the 50-dma. Resistance has fallen to the 5-dma at $49.65 and then the 10-dma at $50.90. When initiating new positions, look for a bounce off of $48.19 or a move above $49.65 on midday volume of at least 100,000 shares by noon. We are keeping our stops at $47 as downside protection.


Picked on February 25th @ $50.13
Change since picked -1.25
Stop Loss @ $47.00

 
Interactive Chart Quote News First Call on PFGC
 


PII - Polaris Industries Inc. $50.14 (+2.94)

Polaris Industries finished the week up 6-percent and made a valiant effort at a new high on Friday. While both the major indices gapped down at the open of trading, Lone Ranger PII fought its way against the market and matched its recent 52-week high of $51.65. Once it hit that level, the stock gave in to the tremendous selling pressures and traded lower throughout he rest of the day. Next week we will look for this split candidate to conquer resistance at $51,65 and establish a new high. This type of move should occur on strong volume in order for the stock to follow through. We'd look for 100,000 shares traded by midday when considering a new play on PII. Support now exists at the half-century mark and then the 5-dma at $48.80. We are patiently awaiting a split announcement from PII, which currently has plenty of authorized shares to announce their first stock split. An announcement might come with earnings or with a more bullish environment in the market. We will post our stop loss below support at $48.00.


Picked on February 13th at $48.70
Change since picked +1.44
Stop Loss at $48.00

 
Interactive Chart Quote News First Call on PII
 


WFT - Weatherford International $58.01 (+4.01)

Weatherford International, a leading provider of oil and natural gas drilling equipment, set a new high in every session last week. On Friday, shares of WFT traded to an all-time of $58.95 early in the session. However, the stock ended the day at $58.01 on volume of 1.66 million shares, as general market malaise pulled the stock down. WFT has lost some of its momentum over the past two days so the stock may need to test support before it breaks out to new highs. The company is expected to report earnings in April and we are looking for a split announcement with the earnings release or out of the next BoD meeting. WFT already has enough shares for a split, with 250 million shares authorized and 110 million shares outstanding and the stock is currently trading within its historic split range. Going forward, support is the 5-dma at $57.39 with stronger support at $55.96, Monday's intra-day high. Resistance has moved up to Friday's intra-day high of $58.95 followed by $60. A bounce off of $57.39 or a breakout above $58.95 on midday volume greater than 750,000 shares may be possible entry points. We are leaving our stops at $55 to limit potential losses.


Picked on March 6th @ $56.80
Change since picked +1.21
Stop Loss @ $55.00
 
Interactive Chart Quote News First Call on WFT
 

New Momentum Updates

BDX - Becton, Dickinson and Co. $36.00 (+0.15)

A solid line of general use medical products has helped to keep BDX's share price stronger than most during the market collapse at the end of the week. Banc of America initiated coverage of BDX last week with a "Buy" rating. This news further helped BDX to withstand some of the general selling pressure that many stocks felt last week. BDX remains a compelling play for us because the stock was able to test its 50-DMA of $35.00 and bounce higher. We are also encouraged by the fact that BDX managed to close above its 10-DMA of $35.72 on Friday. A positive opening on Monday could signal the continuation of a move that should eventually test the 52-week high of $39.25. The MACD is still negative but is definitely showing signs of rebounding. The OBV is very strong and is indicating that there is some been some solid buying of BDX during positive days. New entries could be considered on a bounce of the 50-dma or a rise through resistance at $36.50 on volume of at least 400,000 shares by midday.


Picked on February 11th @ $37.03
Change since picked -1.03
Stop Loss @ $34.50

 
Interactive Chart Quote News First Call on BDX
 


ELY - Callaway Golf Corporation $26.51 (+1.51)

Callaway's late day rally, which lifted shares into positive territory on Friday, may have been spurred by an upbeat news release from the company. In the last hour of trading, ELY announced that after merely nine weeks since its introduction in Europe, the ERC II has been the #1 brand of driver in each of the last seven events on the PGA European Tour. "This extensive usage in Europe by such an impressive number of the very best players, especially so quickly after its introduction, is a great validation of our product," said Ely Callaway, Founder, Chairman and CEO of Callaway Golf. Despite a gap down at the open, ELY shares reached higher ground by Friday's closing bell, finishing up 7 cents to $26.51. Volume surpassed the 3-month average, as 867,200 shares crossed the tape. Much of this volume came as the stock recovered from its lows in the last 2 hours of trading, which sets us up for some follow through on Monday. In addition, we want to point out that the bigger picture remains in tact for our play, as the stock continues to ascend sharply higher, without breaking the upward trendline. The MACD and On-Balance Volume indicators also remain strong. So, should shares continue to reach higher levels in the upcoming week, we'll look for further resistance to occur at the $27.18 mark (52-week high), followed by a tougher challenge at $30. Support will come at the 5-dma of $26.26. Look to time entries when ELY shares bounce off of support or break above $27.18 on volume of at least 400,000 by midday.


Picked on February 25th @ $23.99
Change since picked +2.52
Stop Loss @ $25.50

 
Interactive Chart Quote News First Call on ELY
 


LMT - Lockheed Martin Corp. $38.56 (+0.26)

Lockheed Martin Corporation failed to reach its fifth straight 52-week high on Friday due to news that the Department of Defense is delaying a decision on whether to approve production of the F-22 until a US weapons review is completed. Shares of the aerospace contractor fell to an intra-day low of $38.01 before bouncing back to close at $38.56 on volume of 1.44 million shares. Momentum has cooled down after Wednesday's volume surge so LMT may spend some time consolidating in the $37-$39 range. From a technical standpoint, support is the 10-dma at $38.05 with additional support at Wednesday's intra-day low of $37.47. Resistance is holding steady at Thursday's intra-day high of $39.50 and then the 6/8/99 intra-day high of $41.56. Consider opening new positions on a bounce off of $38.05 or a breakout above $39.50 on volume of at least 800,000 shares by noon. Our stops remain at $35.


Picked on February 4th @ $36.40
Change since picked +2.16
Stop Loss @ $35.00

 
Interactive Chart Quote News First Call on LMT
 


PHCC - Priority Healthcare Corporation $39.63 (-2.87)

PHCC, the national distributor of specialty pharmaceuticals, shed 6-percent this week with much of that occurring on Friday. It should be of no surprise to anyone by now that Friday was an ugly day in the market, and that's being polite. There were few safe havens for traders to hide, as sell orders flooded the market in a fairly steady stream all day. Caught in the storm was PHCC, which shed $3.00 on Friday. The trading volume was 714,000 shares, which is 28% above the three-month average of 556,000. The stock crashed through two support levels and came within 32 cents of triggering our stop loss. Next week we'll need to see some life come back into this play ASAP or we'll have to say farewell. If you are considering a new play in PHCC, look for the stock to rise through resistance at the 20-dma at $40.71 on strong volume as a possible entry point. Strong volume would mean 400,000 shares traded by noon. Additionally, entries should be coordinated with a decent market rally, with emphasis in the NASDAQ Composite Index (COMPX) and the CBOE Health Care Index (HCX.X). We are keeping our stop loss just under foot at $39.00.


Picked on March 4th at $42.50
Change since picked -2.87
Stop Loss at $39.00

 
Interactive Chart Quote News First Call on PHCC
 


TX - Texaco, Inc. $69.94 (+3.10)

Texaco closed the week up 5-percent and recorded yet another new 52-week high. New highs are becoming as common for Texaco as golf trophies are for Tiger Woods. This company, known worldwide for petroleum and energy products, certainly has had its share of positive energy lately. We wish all of our momentum plays did this well in the face of such adverse market conditions. TX forged ahead on Friday despite both markets selling off into triple digit losses. If you are considering jumping into TX next week, possible entry points for new plays might include a bounce off support at $69.00 or a move higher on strong volume, 1.2 million shares traded by midday. On Friday, the advance was made on volume of 2.4 million shares, well above the three-month average of 1.7 million shares. This is the kind of volume we like to see for both breakouts and follow through. Though it has not mattered as of late for TX, we'd still like to confirm buy points with a bullish move in the Dow Jones Industrial Average (INDU) and the Oil Service Index (OSX.X) when initiating new plays. We have tightened our stop loss on this play to $68.00 to secure a profit.


Picked on February 18th at $64.90
Change since picked +5.04
Stop loss at $68.00

 
Interactive Chart Quote News First Call on TX
 

Play Updates Index

 


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