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PLAY >New Updates Tuesday, April 17, 2001
New Split Updates   New Candidate Updates   New Momentum Updates
(We update our stop losses daily at the CURRENT PLAYS page.)

New Split Updates

BJS - BJ Services Company $76.35 -0.15 (+2.09)

The tight supply on petroleum continues to keep the prices of oil and gas strong and is also creating positive momentum in the oil drilling stocks. News of potentially higher petroleum prices helped BJS deliver another nice rally on Monday, as shares gained as much as 3.3% on the day. With this advance, the stock was able to reach the 50-dma, which positioned us for a potential breakout on Tuesday. Although this scenario didn't unfold exactly as planned, BJS shares did manage to break above this level on an intraday basis on Tuesday. With 1,238,700 shares crossing the tape, volume was held under the three-month average, as the stock gave back just 0.20% to close at $76.35. Additionally, we were pleased that BJS was able to hold ground above $76, which has plenty of historical support. Although the $76 mark resides just under current levels, it positions us for a sharp bounce as early as tomorrow. The short-term technicals look good, with both the MACD trending higher and the OBV holding strong. That said, should BJS make another attempt at higher levels later in the week, we'll look for initial resistance at the 50-dma of $76.76 mark and then at Tuesday's intraday high of $77.99. Look for entries when the stock breaks above either of these levels or bounces from support on good volume of 800,000 shares traded by noon. We'll raise stops to $75 to help lock in gains.


Picked on April 8th@ $71.75
Change since picked +4.60
Stop Loss @ $75.00
 
Interactive Chart Quote News First Call on BJS
 


PFGC - Performance Food Group $54.06 +0.59 (+0.15)

PFGC has been uncharacteristically calm for the past two weeks. That said, look for PFGC to possibly start moving higher as it approaches its 2:1 split distribution date of April 30th. PFGC owns one of the better looking charts on the NASDAQ (COMPX). The impressive performance of this index today in the face of potentially disastrous news from the technology front may create some encouragement from the momentum investing crowd. Some of this cash should flow into PFGC due to the pending split and the stock's strong technical picture. The trigger for a strong move is still a rally through the $54.50 resistance. Trading above this resistance may prove to be an excellent entry point, especially if it occurs with volume of more than 80,000 shares by midday. The MACD is still on the rise. OBV and Money Flow are both positive, but just like the stock, seem to be moving sideways.


Picked on March 25th @ $49.50
Change since picked +4.56
Stop Loss @ $52.50
 
Interactive Chart Quote News First Call on PFGC
 

New Candidate Updates

EQT - Equitable Resources, Inc. $75.63 2.53 (+3.18)

Equitable Resources continues to hit new highs. On Tuesday, A.G. Edwards & Sons lowered its rating on EQT to "maintain" from "accumulate" based on valuation. However, Prudential Securities raised its first-quarter earnings per share estimate on Equitable Resources Inc. to $1.90 from $1.70 and the price target on EQT to $95 from $93, citing stronger natural gas production and prices. The stock responded by closing at an all-time high of $77.50 on volume of 205,000 shares. EQT is breaking out on heavy volume so the stock may trade even higher in front of the earnings release, expected on Friday before the bell. Until then, EQT has support at Monday's intra-day high of $76.90 with stronger support at $75.79, the 5-dma. EQT closed at an all-time high on Tuesday so new resistance may show up at $79 or $80. Look for a bounce off of $76.90 or a breakout above $79 on midday volume greater than 100,000 shares before starting new plays. We have moved our stops up to $75.00, and we plan to exit no later than Thursday.


Picked on March 27th @ $67.20
Change since picked +10.30
Stop Loss @ $75.00
 
Interactive Chart Quote News First Call on EQT
 


MKC - McCormick & Company $41.40 -0.56 (-0.30)

McCormick has been struggling over the past five sessions. On Tuesday, shares of MKC traded to an intra-day low of $41.05 before bouncing back to a close of $41.30 on heavy volume of 249,000 shares. The stock closed below its 20-dma on heavy volume and MKC is starting to form a downward trend. However, MKC seems to find a bottom at $41 so the stock may be able to stay in its $41-$42 trading range as the market searches for direction. For now, support is Tuesday's intra-day low of $41.05 with additional support at $40.65, the March 29th intra-day low. Resistance is the 10-dma at $41.99 and then the April 10th intra-day high of $42.50. Traders may consider entry points on a bounce off of $41.05 or a move above $41.99 on volume of at least 75,000 shares by noon. We are keeping our stops at $38.75 to limit potential losses.


Picked on March 29th @ $41.43
Change since picked -0.03
Stop Loss @ $38.75
 
Interactive Chart Quote News First Call on MKC
 


OMC - Omnicom Group $88.30 +1.30 (+1.80)

Omnicom, a major player in the world of advertising, received a new high profile client yesterday that helped the stock get off to a good start this week. Goodyear Tire and Rubber (NYSE:GT) has awarded OMC with its $60 million North American advertising budget. Every positive move for OMC increases the likelihood that management will announce a split. The company's last split was announced in September of 1997 when the stock was trading at $70.50. OMC closed above the 50-DMA of $86.56 today and this event is a good sign that more gains are in the offering. Potentially profitable positions can probably be initiated as long as OMC stays above $$86.56. There is some resistance at $90.00. Therefore, one may want to be patient if there is a gap up to just below this resistance on tomorrow's open. That said, a close above $90.00 may provide a good buying opportunity in anticipation of a continued move on Thursday. The MACD is accelerating its ascent and the Money Flow is making new highs. These are two good technical signs that OMC will continue to move higher.


Picked on April 15th @ $86.50
Change since picked +1.80
Stop Loss @ $80.00
 
Interactive Chart Quote News First Call on OMC
 


SPW - SPX Corporation $95.17 +0.13 (-1.14)

To keep up with global demand for technical products, specifically in storage area networks (SAN's), SPW's recent billion-dollar investment in R&D should bode well for the company's future. It is technically significant that SPW bounced off its 5-DMA of $94.88, which has been providing good trendline support over the past couple of weeks. A sustained bounce off this level will be a good indication that the stock has found a short-term bottom and will likely trend higher. In addition, it appears as if SPW is finding further price support at $95. In the event of a deeper pullback, however, we feel there is plenty of additional support at $92, bolstered by the 20-dma of $92.46. We'll feel comfortable adding to positions if SPW can bounce sharply off either of these moving averages. A good entry point for momentum investors could present itself if SPW moves above its 50-DMA of $97.85. This trade becomes more enticing if it is accompanied by midday volume of at least 240,000 shares. We also like the fact that that the OBV is holding strong.


Picked on April 12th@ $96.31
Change since picked -1.14
Stop Loss @ $90.00
 
Interactive Chart Quote News First Call on SPW
 


TARO - Taro Pharmaceutical Industries $49.00 +0.50 (-1.65)

With a record $35 billion in sales of branded drugs going off patent over the next five years, the market for generic drugs is expected to rise sharply. This should be a major benefit for TARO, which derives nearly half of last year's revenues from its generic products. Turning to the chart, TARO shares gave a sharp bounce off the 10-dma of $48.37 in Tuesday's session and advanced as high as $50.50 before ending the day at $49. Volume fell significantly under the three-month average as 90,300 shares were traded. Light volume has been an underlying theme over the past several trading days, which is what we like to see during a consolidation. The technical indicators are also pointing to higher levels, as the MACD and Money Flow continue to remain strong. We want to note that resistance has started to form at the $50 mark and will hold our initial barrier. Any moves higher over the next few days will likely trigger a bullish crossover in the stochastic. New positions could be considered if the stock breaks through and closes above $50 on volume that puts the stock on track to meet or exceed the three-month ADV of 148,181 shares by days end. Our stops will remain at $44.00 to keep losses in check.


Picked on April 10th@ $49.45
Change since picked -0.45
Stop Loss @ $44.00
 
Interactive Chart Quote News First Call on TARO
 

New Momentum Updates

ACI - Arch Coal Incorporated $35.50 +1.72 (+3.25)

Shares of the second largest U.S. coal producer hit new highs on Tuesday, as Lehman Brothers released favorable earnings estimates and set new price targets for the coal producing giant. In its report, the brokerage firm lifted the 12-month price target on the stock to $42 from $30 and re-adjusted 2001 earnings per share estimates to 60 cents from 40 cents. Traders took the report positively and drove ACI higher by $1.72 or 5.09% in today's trading. More importantly, ACI shares were able to take out a tough barrier at the $35 mark and close at a new all time high of $35.50. The rally was backed by volume that came in greater than twice the stock's three-month average of 591,700 shares. This helped Money Flow turn sharply higher and positions us for more gains later in the week. To that end, we'll now be looking for new entries to be triggered when ACI breaks through today's intraday high of $36.30 or bounces swiftly off $35 on volume that puts the stock on track to reach the 3-month average by days end. We recommend raising stops to $33 to lock in profits.


Picked on April 5th@ $31.50
Change since picked +4.00
Stop Loss @ $33.00
 
Interactive Chart Quote News First Call on ACI
 


KMB - Kimberly-Clark $63.90 -1.50 (-1.63)

As we have stated before, the pullback in KMB is most likely due to some portfolio adjustment by traders who no longer feel they need the safety that KMB provides. One excuse for selling KMB today was the news that its Ballard Medical Products subsidiary received a warning from the FDA for failing to follow rules in collecting and reporting quality control data. Nevertheless, KMB did find support today at the critical 200-DMA of $63.00. If this support continues to hold it will likely signify the end of the short term stock price weakness. Nevertheless, new investment in KMB should probably be avoided until the stock can prove that the short term downtrend is over. The MACD is still negative and the OBV is starting to slip. If KMB can prove that it can stabilize with some consolidation trading over the next couple of days, the stock will become a more compelling buy.


Picked on April 1st @ $67.83
Change since picked -3.93
Stop Loss $62.50
 
Interactive Chart Quote News First Call on KMB
 


UNP - Union Pacific Corporation $57.35 +0.25 (+0.37)

Union Pacific is having trouble breaking through resistance at $57.63. On Monday, the stock traded to an intra-day high of $57.60 before pulling back to a close of $57.10. On Tuesday, the stock reached an intra-day high of $57.47 just before the closing bell. UNP has failed to take out resistance on five consecutive attempts, so the stock may be stuck in a tight trading range until we see the earnings report, expected on April 26th before the bell. The company pre-announced an earnings surprise last week and the news may be factored into the current stock price. However, the company announced a new boxcar "shuttle train" that offers one-call, door-to-door, multiple-stop service, inventory control, and direct store delivery to points between the Pacific Northwest and Southern California. The news came out after the bell on Tuesday, so the stock may be able to break out on the news. Going forward, support is the 5-dma at $57.07 with stronger support at $56.64, the 10-dma. Resistance is the 52-week high of $57.63 and then the 7/22/99 intra-day high of $58.31. A bounce off of $57.07 or a breakout above $57.63 on midday volume greater than 600,000 shares may be possible entry points. We are leaving our stops at $54.50 as downside protection.


Picked on April 3rd @ $57.35
Change since picked +0.00
Stop Loss @ $54.50
 
Interactive Chart Quote News First Call on UNP
 

Play Updates Index

 


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