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PLAY >New Updates Thursday, April 19, 2001
New Split Updates   New Candidate Updates   New Momentum Updates
(We update our stop losses daily at the CURRENT PLAYS page.)

New Split Updates

PFGC - Performance Food Group $53.46 -0.59 (-0.45)

If you used PFGC as your only window into the market, you would think we have entered a lackluster period reminiscent of late summer doldrums. In reality, all of the action following Greenspan's surprise rate cut has been in the technology and financial sectors. On the plus side, we have seen virtually no rotation out of PFGC into these "hot" sectors. This fact is encouraging and we still believe that PFGC has an excellent chance to stage a nice rally heading into their earnings report and 2:1 split at the end of the month. PFGC will probably offer traders a nice opportunity once it moves above the $54.50 resistance. This potential move will be even more enticing to traders if it occurs with midday volume of more than 80,000 shares tomorrow.


Picked on March 25th @ $49.50
Change since picked +3.96
Stop Loss @ $52.50
 
Interactive Chart Quote News First Call on PFGC
 

New Candidate Updates

HRB - H & R Block, Inc. $54.03 +1.19 (+3.26)

H & R Block keeps the momentum alive, as its shares advance to mark its fourth-consecutive winning session. It appears as if investors are putting their tax refunds right back into the company that helped them get those refunds in the first place. Although, as evidenced by the recent pick up in daily volume, it's not just the retail investor that has become enamored with HRB. The stock has broken through resistance at $53.30 on volume roughly 20% higher than the three-month daily average of 500,000, which means there is some conviction behind the recent advance. Looking at the chart, it appears as though HRB is making a parabolic move higher, which has us thinking that a pullback could be imminent. However, if HRB does settle back, we will watch for previous resistance at $53.30 to provide support, bolstered by the 5-dma at $52.20. As for resistance, we are looking at today's high of $54.20 and then the $55 level. New plays could be initiated on a successful retest of the $53.30 level or an advance through today's high on volume that would put HRB on track to trade 500,000 for the day.


Picked on April 18th@ $52.85
Change since picked $1.18
Stop Loss @ $49.25
 
Interactive Chart Quote News First Call on HRB
 


MKC - McCormick & Company $41.69 +0.91 (-0.01)

McCormick & Company made a nice recovery on Thursday. Shares of MKC hit an intra-day low of $40.06 early in the session. However, the stock bounced back to a close of $41.69 after trading through its 50-dma at $40.33. MKC has made four consecutive lower lows and it is now in a short-term downward trend. On the positive side, the 50-dma has provided a springboard for the stock over the past 6 months so MKC may be ready for a rally. Going forward, there is support at Wednesday's intra-day low of $40.70 with stronger support at $40.33, the 50-dma. Resistance is the 10-dma at $41.87 and then the April 10th intra-day high of $42.50. Look for a bounce off of $40.70 or a move above $41.87 on midday volume greater than 75,000 shares before opening new positions. We are leaving our stops at $38.75 as downside protection.


Picked on March 29th @ $41.43
Change since picked +0.26
Stop Loss @ $38.75
 
Interactive Chart Quote News First Call on MKC
 


OMC - Omnicom Group $92.50 +1.35 (+6.00)

Omnicom has proven to be enticing to traders because the rate cut should stabilize the economy and ensure a "soft" landing. Omnicom, a major player in the advertising industry, should benefit from a stabilized economy because their clients will be more willing to expand their advertising budgets in an attempt to capture more business as the economy improves. Analysts expect Omnicom to report solid earnings of $0.51 a share for the first quarter on April 24th, despite general weakness in the overall economy last quarter. Combine a solid first quarter with the prospects of an improving economy and one can see why Omnicom has been an excellent performer this week. That said, it looks like the stock has found some resistance at $92.50. A move above this resistance tomorrow, accompanied by first hour trading volume exceeding 200,000, may give traders their next good entry opportunity. Money Flow and the MACD are both still outstanding. Although the RSI is fast approaching an overbought indication, this rally may have enough steam to carry the stock higher into the April 24th report. Please note that we have raised our stop to $89.00 in an attempt to lock in this week's profits.


Picked on April 15th @ $86.50
Change since picked +6.00
Stop Loss @ $89.00
 
Interactive Chart Quote News First Call on OMC
 


SPW - SPX Corporation $99.90 +0.05 (+3.59)

SPW continued an ascent to higher levels on Wednesday, gaining 5% to close at a one month high of $99.85. More importantly, the stock was able to advance above last week's consolidation and could now be ready to overtake the century mark. In Thursday's trading session, however, SPW shares did take a breather, but still managed to close higher by 5 cents. Volume was held under the three-month average, as 362,500 shares were traded. In the last hour of trading, the stock saw some pretty impressive buying, which suggests that traders were fighting to get in before a potential follow through tomorrow. Bolstering the possibility of a further run are positive readings in both the MACD and On Balance Volume. So, what we'd like to see now is for momentum players to start hitting the offer and lift trading volume above its three-month ADV of 488,400 shares. This will add strength to the run and could potentially attract more attention to the stock as we near the May earnings report. Of course, this would be the best-case scenario, but we like what we see thus far. Keeping this in mind, we'll now look for an important psychological test to come at $100. An entry point could come when SPW shares move swiftly through this level on midday volume of at least 245,000 shares. A sharp bounce off support at $99 could also present a low-risk entry, when followed by similar midday volume. We're recommending that stops be lifted to $98, which will help to protect profits.


Picked on April 12th@ $96.31
Change since picked +3.59
Stop Loss @ $98.00
 
Interactive Chart Quote News First Call on SPW
 


TARO - Taro Pharmaceutical Industries $53.65 +2.66 (+3.00)

The ongoing growth in managed care organizations, which typically are heavy buyers of generic drugs, is another potential catalyst that is keeping TARO shares on the rise. As for the chart, after clearing resistance set back on 4/11/01, shares continued rallying today. At this point, TARO shares look free to run. We can, however, expect some resistance to come at $55, but after this test we don't see the next challenge coming until $60. Looking at the short-term technicals, the MACD is continuing a sharp uptrend, suggesting higher prices could be in the works. The stochastics are a bit rich at 95, but with TARO's extended uptrend, this is a normal occurrence. We want to point out that Wall Street is certainly staying bullish on the stock, as all three firms following the stock hold a Buy rating. As far as an entry point is concerned, conservative traders may want to wait for a close above $55 on volume above the three-month ADV of 146,800 shares. Given TARO's extended uptrend, we are now recommending that stops be raised to $51.


Picked on April 10th@ $49.45
Change since picked +4.20
Stop Loss @ $51.00
 
Interactive Chart Quote News First Call on TARO
 

New Momentum Updates

UNP - Union Pacific Corporation $59.50 +0.50 (+2.52)

Union Pacific has broken out to a new 52-week high after 14 sessions of sideways trading. On Wednesday, shares of UNP hit an intra-day high of $59.10 following a surprise rate cut from the Fed. On Thursday, the stock hit a 52-week high of $59.60 before pulling back to close at $59.50 on volume of 1.18 million shares. UNP is beginning to surge as we move closer to its earnings report scheduled on April 26th before the bell. The stock has cleared major resistance, so it may be able to keep its upward momentum alive for a few more days. In the meantime, support is now up to Thursday's intra-day low of $58.75 with additional support at $57.63, the April 2nd intra-day high. Resistance has moved up to the 7/19/99 intra-day high of $60.68 and then the 6/10/99 intra-day high of $62.25. Traders may consider starting new plays on a bounce off of $58.75 or a breakout above $60.68 on volume of at least 600,000 by noon. Our stops remain at $54.50.


Picked on April 3rd @ $57.35
Change since picked +2.15
Stop Loss @ $54.50
 
Interactive Chart Quote News First Call on UNP
 

Play Updates Index

 


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