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PLAY >New Updates Sunday, April 22, 2001
New Split Updates   New Candidate Updates   New Momentum Updates
(We update our stop losses daily at the CURRENT PLAYS page.)

New Split Updates

SOTR - SouthTrust Corporation $45.81 (+0.70)

SouthTrust Corporation opened in negative territory on Friday and stayed there for most of the day. Shares of SOTR ended the session at $45.81, just one penny above its intra-day low. Volume was on the light side, with 801,000 shares crossing the tape. The stock was due for a round of profit taking after hitting an all-time high on Thursday. However, as mentioned, the move came on light volume so SOTR should be able to recover as we get closer to the 2:1 stock split on May 11th. Until then, support has come in at the 10-dma at $45.35 with stronger support at the 20-dma, currently at $44.93. Resistance is holding steady at Thursday's intra-day high of $47.20 and then possibly $48 or $50. Traders may consider starting new plays on a bounce off of $45.35 or a breakout above $47.20 on volume greater than 500,000 shares by noon. Our stops remain at $44.

Picked on April 19th @ $46.96
Change since picked -1.15
Stop Loss @ $44.00
Interactive Chart Quote News First Call on SOTR

New Candidate Updates

HRB - H&R Block $53.71 (+2.36)

HRB, as expected, sold off on Friday. Whether this was due to the general market sell off, or due to the relief of a heavily overbought condition in HRB we will never know. What we do know, however, is that the minor sell off did not put even put a scratch in the recent up trend. We say this since the stock failed to even come back far enough to test support at $52.85 and also because the sell off came on volume of 500,000, which barely equals the three month volume average. In addition, the stock made a higher high at $54.25 and also put in a higher low at $53.70 to keep the up trend solidly in tact. Looking at the chart, we can see that resistance has asserted itself again at the $54.25 level. In addition, support still remains at the 5-dma at $52.85, bolstered by HRB's short-term up trend line. Should this support level fail, however, HRB will likely retrace back to support at $52.30, the peak formed in early March. New entries could be considered on a bounce off of the 5-dma or a on break through resistance at $54.25 on midday volume of at least 250,000 shares. We are keeping our stops at $49.25 to limit downside risk.

Picked on April 18th @ 53.25
Change since picked +0.46
Stop Loss @ $49.25
Interactive Chart Quote News First Call on HRB

MKC - McCormick & Company $42.47 +0.36 (+0.48)

McCormick & Company hit an all-time high on Thursday after filling in the gap created on March 30th. Shares of MKC traded as high as $42.50 just before Thursday's closing bell. Volume has been trending lower over the past two weeks and this could put a drag on the short-term upward trend. However, the volume remains relatively normal on a 6-month basis so the long-term upward trend should be able to hold. In the meantime, support is Monday's intra-day high of $42.25 with additional support at $41.57, the 5-dma. Resistance was taken out on Thursday so new resistance may show up at $43 or $44. Look for a bounce off of $42.25 or a breakout above $43.75 on midday volume of at least 90,000 shares before starting new plays. We are keeping our stops at $38.75 to limit potential losses.

Picked on March 29th @ $41.43
Change since picked +1.04
Stop Loss @ $38.75
Interactive Chart Quote News First Call on MKC

OMC - Omnicom Group $90.69 (+4.19)

Some of last week's biggest winners were subjected to some light profit taking during Friday's option expiration action. OMC joined this group of stocks. Nevertheless, there is a strong possibility that OMC will continue its upward direction during this week's trading. OMC, a major player in the world of advertising, will likely be a strong beneficiary of last week's rate cut. An improving economy makes corporate America more willing to allocate increasing resources to their advertising budgets. To help fuel their long-term growth, Omnicom announced on Friday that it has joined a group of the largest advertising firms that will form an electronic market place that will enable their clients to better conduct their media business dealings. The new exchange should become operational during the current quarter. Moving to the technical picture, Omnicom found some resistance at $92.69 last week. Additional resistance will likely be found at the 52-week high of $97.50. Friday's pullback took the stock near our trailing stop of $89.00. Traders may want to add to positions if this support holds on Monday. A move above $92.69, with midday volume exceeding 600,000, might be a good trigger event for momentum traders to try and pick up a couple of points. The MACD and Money Flow are both outstanding. The RSI did start to turn down on Friday after approaching a level that suggested an overbought condition.

Picked on April 15th @ $86.50
Change since picked +4.19
Stop Loss @ $89.00  
Interactive Chart Quote News First Call on OMC

TARO - Taro Pharmaceutical $54.90 (+4.25)

On Friday, Taro received some welcome news from the U.S. Food and Drug Administration. The FDA tentatively approved Taro's Abbreviated New Drug Approval for Enalapril Maleate and Hydrochlorothiazide Tablets USP. Enalpril is Taro's number one drug candidate for the treatment of hypertension. Shares of TARO traded up on the news and ended the week at yet another all time high. The stock is distancing itself from its 50-dma and is in overbought territory according to its stochastic and RSI. However, it should be noted that these indicators have remained at high levels in the past without the stock succumbing to selling pressures. Therefore, we remain encouraged by the stock's price action but are anticipating a mild sell off soon. When and if this sell off occurs, we will expect the 10-dma, now at $49.95 to continue providing support. Resistance may come in at $56.00, Friday's high, and then again at $57.00. The MACD remains positive and OBV keeps chugging higher as the stock continues on its northerly track. New entries could be considered on a successful test of Thursday's low of $50.75 or a break through Friday's high of $56.00 on volume of at least 100,000 shares by midday. We have moved our stop up to $53.00 to lock in gains should TARO decide to change course.

Picked on April 10th@ $49.45
Change since picked +5.45
Stop Loss @ $53.00
Interactive Chart Quote News First Call on TARO

New Momentum Updates

UNP - Union Pacific Corporation $58.85 (+1.87)

Union Pacific Corporation sold off on Friday after trading to a 52-week high on Thursday. Shares of UNP hit an intra-day low of $58.80 on volume of 971,000 shares. The stock was ripe for profit taking following four days of gains. However, we are concerned about the declining volume because it does not support Wednesday's breakout. UNP has already pre-announced an earnings surprise so the stock may be at the end of its run. The company is expected to announce earnings on April 26th before the bell and we plan exit this play no later than April 25th. For now, support is the 5-dma at $58.36 with additional support at $57.37, the 10-dma. Resistance is now at Thursday's intra-day high of $59.60 and then the 7/19/99 intra-day high of $60.68. Look for a bounce off of $58.36 or a breakout above $59.60 on midday volume greater than 600,000 shares as possible entry points. We are leaving our stops at $54.50 as downside protection.

Picked on April 3rd @ $57.35
Change since picked +1.50
Stop Loss @ $54.50
Interactive Chart Quote News First Call on UNP

Play Updates Index


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