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PLAY >New Updates Tuesday, April 03, 2001
New Split Updates   New Candidate Updates   New Momentum Updates
(We update our stop losses daily at the CURRENT PLAYS page.)

New Split Updates

MBI - MBIA Incorporated $79.61 -2.09 (-1.07)

The interest rate environment for mortgage-backed securities remains strong and continues to keep shares of MBI positioned for more gains. On Monday, MBI shares delivered a nice rally, hitting an all-time high of $83.80. More importantly, the stock was able to close above its old high, which positioned us for a nice rally on Tuesday. Although this scenario didn't unfold to our expectations, MBI shares did pullback on light volume during today's trading session. With 541,900 shares crossing the tape, volume was held under the three-month daily average, as the stock gave back 2.55% to close at $79.61. The good news is that MBI was able to hold at its 5-dma ($79.62). Although, the 5-dma resides right next to current levels, it positions us for a sharp bounce as early as tomorrow. The short-term technicals also look bright, with both the MACD holding positive and the OBV at year highs. So, we'll now look for an upside move to encounter initial resistance at the $80 mark and then at the all time high ($83.80). Support will come in at the 5-dma and just lower at the 10-dma of $77.85. Consider entries when the stock breaks above resistance or bounces from support on good volume of 275,000 shares traded by noon. Continue to hold a firm stop at the $76.50 mark.


Picked on April 2nd@ $81.70
Change since picked -2.09
Stop Loss @ $76.50
 
Interactive Chart Quote News First Call on MBI
 

SBUX - Starbucks $41.75 -1.25 (-0.69)

SBUX did a good job yesterday of maintaining its value while so many stocks collapsed. Today, a bit of a chink was evident in the armor, but the stock is, nevertheless, showing some nice relative strength. SBUX appears to have already gone through its major correction and, having found some good support at $38.56, appears to be headed in the right direction and should eventually test its 50-DMA of $46.41. That said, we are a little bit concerned that SBUX closed today below its 200-DMA of $42.69. New positions should probably be avoided until SBUX can cross back over this important moving average. We would also be concerned if SBUX drops below today's low of $41.63, which is sitting right on a short term uptrend line. Longer term, we like the fact that the MACD has just turned positive. We are also encouraged that SBUX is scheduled to pay out a 2:1 split on April 26th. Therefore, we expect a split run to occur once the overall market can stabilize and begin to bounce.


Picked on March 29th @ $41.94
Change since picked -0.19
Stop Loss $38.50
 
Interactive Chart Quote News First Call on SBUX
 
New Candidate Updates

EQT - Equitable Resources, Inc. $70.59 +1.33 (+1.59)

Equitable Resources has posted gains in each of the past three sessions as the energy sector heats up. On Tuesday, shares of EQT hit an all-time high of $70.80 before settling back to close at $70.59 on volume of 406,000 shares. The stock continues to move higher on strong volume thanks to two positive earnings pre-announcements from Dynegy (DYN) and Williams Cos. (WMB). The energy sector has solid momentum build on improving fundamentals, so EQT could be ready to make a string of new highs as we approach its earnings announcement scheduled for April 20th. In the meantime, support is Tuesday's intra-day low of $68.65 with additional support at $67.23, the 10-dma. Resistance has moved up to Tuesday's intra-day high of $70.80 and then possibly $73 or $75. Traders should be looking for entry points on a bounce off of $68.65 or a breakout above $70.80 on volume of at least 100,000 shares by noon. We are keeping our stops at $63.40 to limit potential losses.


Picked on March 27th @ $67.20
Change since picked +3.39
Stop Loss @ $63.40
 
Interactive Chart Quote News First Call on EQT
 


MKC - McCormick & Company $41.65 -0.37 (-0.34)

McCormick hit an all-time high of $42.25 on Monday. However, the stock sold off slightly on Tuesday while the rest of the market tanked. Shares of MKC traded to an intra-day low of $41.45 before bouncing back to close at $41.65 on volume of 138,000 shares. MKC is slowly working its way higher, although the daily volume has been trending lower. The stock may spend some time consolidating in the $41-$42 range until the volume picks up. For now, support is Tuesday's intra-day low of $41.45 with stronger support at $40.95, the 10-dma. Resistance is Tuesday's intra-day high of $41.85 and then the all-time high of $42.25. A bounce off of $41.45 or a breakout above $41.85 on midday volume greater than 80,000 shares may be possible entry points. Our stops remain at $38.75 as downside protection.


Picked on March 29th @ $41.43
Change since picked +0.22
Stop Loss @ $38.75
 
Interactive Chart Quote News First Call on MKC
 


PFGC - Performance Food Group $52.56 +0.75 (+0.06)

The plummeting NASDAQ had very negative breadth today. Decliners smashed advancers by a ratio of 30 to 8. Considering this fact, we were quite pleased that PFGC, a major food supplier, was able to muster a solid advance of almost a point today. PFGC's action was even more impressive when one considers that the stock closed on its high print of the day while the NASDAQ showed a lot of weakness into the close. Traders will definitely consider these facts when they start looking for stocks to buy when the market enjoys its next inevitable bounce. The 10-DMA provided pretty good support today just under $51.00. Therefore, traders could consider adding to their positions if PFGC can stay above $50.50 in the event of more market weakness in the early going tomorrow. We don't expect that to be a problem, though, as the MACD and the Money Flow are still trending higher.


Picked on March 25th @ $49.50
Change since picked +3.06
Stop Loss @ $46.00
 
Interactive Chart Quote News First Call on PFGC
 


RDN - Radian Group Incorporated $66.15 -1.95 (-1.60)

If you are bullish and think the economy is headed for a rebound later this year, now could be a good time to shop for financial stocks. We certainly think so and continue to like the prospects for RDN going forward. On the day, RDN shares were pressured by sector related weakness, which caused the NYSE Financial Index (NF) to fall 16.28 points, or 2.77%, to close at $570.53. The broad industry decline pressured RDN to finish lower by $1.95 and close at $66.15. We do want to point out, however, that today's decline was accompanied by volume of 368,300 shares, which came in 22% less than the three-month average daily volume. This indicates that there is light selling at present levels and could result in a quick turnaround if buyers come in. The technical picture also boosts our confidence for an extended rally and tells us that a run to $70 could still be in store. So, with that said, should shares trend higher later in the week, we'll look for resistance to emerge at the recent high of $68.98, followed by a harder challenge at the $70 mark. Support will come at the 100-dma of $64.32. Look for entry points when shares bounce off support or break above the last high on volume of at least 225,000 shares traded by midday.


Picked on March 18th @ $61.00
Change since picked +5.15
Stop Loss @ $62.50
 
Interactive Chart Quote News First Call on RDN
 


UHS - Universal Health Services $85.55 -0.77 (-2.75)

This market is making investors try and hold on to something solid and so far shares of this major hospital owner and operator have proven to be somewhat resilient. There are probably a few reasons why UHS is hanging in there. First of all, UHS has already pulled back significantly from its high of $112.93. Secondly, UHS is currently trading at a reasonable P/E of 28.42. This fact is especially important considering UHS should be able to maintain its steady earnings growth despite the economic slowdown. UHS is also a viable split candidate because the stock is trading at levels substantially higher than where it was trading when the last split was announced. We like the fact that UHS was able to close above its 50-DMA of $84.94 today. Momentum traders will probably want to wait for UHS to move above Friday's high of $90.25 before going long. To that add, the MACD and the RSI point towards longer-term price increases. We do advise caution, though, should UHS close below $84.94.


Picked on March 15th @ $83.50
Change since picked +2.05
Stop Loss @ $80.00
 
Interactive Chart Quote News First Call on UHS
 

New Momentum Updates

KMB - Kimberly-Clark $65.85 -1.09 (-1.98)

KMB may not be the most exciting company in the universe; nevertheless, its stock continues to attract investment due to its stability. Although this play has pulled back so far this week due to general market uneasiness, KMB could make a move tomorrow following some potentially positive developments after the close. KMB's Executive Vice President, Kathi Seifert, is speaking at the Banc of America Securities Consumer Products Conference Tuesday afternoon. She will be outlining KMB's strategic initiatives and provide an overview of the company. These types of presentations are usually pretty positive because they are designed to encourage investment in the company by the conference attendees. Technically speaking, KMB saw its third mild down spike of the past two weeks today. The previous two spikes were one day events and the stock quickly recovered and moved right back to its 50-DMA. This moving average closed today at $67.97. We would be cautious about adding positions if this pattern does not repeat itself and KMB drops below $65.28. Otherwise, traders could consider adding to positions if KMB opens flat to a little higher (no more than two points).


Picked on April 1st @ $67.83
Change since picked -1.98
Stop Loss $62.50
 
Interactive Chart Quote News First Call on KMB
 


WM - Washington Mutual Incorporated $52.95 -1.38 (-1.80)

The month-old Fed loosening cycle on interest rates is a double-edged sword for most thrifts, but that's not stopping investors from buying Washington Mutual. One reason for this could be that the company also stands to benefit from higher fees for its originations and from the sale of fixed rate mortgages. Whatever the case may be, traders probably won't argue over the chart. WM's long uptrend is hard to overlook and continues to keep the stock poised for more gains. Moving to the stock, WM shares, after reaching an intraday high of $55.63 on Monday, gave up 2.54% in today's trading to close at $52.95. Volume on the day came in just below the three-month daily average, as 3,120,200 shares crossed the tape. Although this was higher than we would have liked, the intraday chart reveals that the majority of trades changed hands in the first hour of the day, as shares gapped higher at the open. This does provide us with some indication that momentum players are still eager to buy. So, as for entries, we'll look for a move above $55 to be a possible entry point. A bounce off support offered by the 10-dma of $52.19 might also be a good low-risk entry level.


Picked on April 1st @ $54.75
Change since picked -1.80
Stop Loss @ $50.75
 
Interactive Chart Quote News First Call on WM
 

Play Updates Index

 


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