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PLAY >New Updates Sunday, April 29, 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 $48.60 (+2.79)

SouthTrust Corporation has posted gains in each of the last three sessions as the banking sector gains momentum. On Friday, shares of SOTR traded to an intra-day low of $47.03 before reversing direction late in the session. The stock finished the day at an all-time high of $48.60 on volume of 1.26 million shares. SOTR is heating up as we approach the 2:1 split, payable on May 11th. The stock has made four higher highs coupled with higher lows. The volume is also picking up, so SOTR may just continue to move higher into the payable date. Until then, support is Thursday's intra-day high of $48 with stronger support at $47, the 5-dma. Resistance was taken out on Friday, so new resistance may show up at $49 or $50. Look for a bounce off of $48 or a breakout above $49 on midday volume of at least 500,000 shares may be possible entry points. We are keeping our stops at $44 as downside protection.

Picked on April 19th @ $46.96
Change since picked +1.64
Stop Loss @ $44.00
Interactive Chart Quote News First Call on SOTR

New Candidate Updates

ACS - Affiliated Computer Services $71.39 (+6.54)

ACS is living proof that not every technology-based business is circling the drain. Perhaps ACS is benefiting from the seemingly unlimited resources of the Federal Government, which is an extremely important client of ACS's information technology services. Additionally, traders may be attracted to ACS because of the possibility that the company will announce a split soon. The company's last split occurred in November of 1996 when the stock was trading nearly $14.00 lower than Friday's closing price. ACS established a new intraday high of $72.48 on Friday. This is an encouraging sign that momentum traders are buying the stock in earnest. That said, we would have liked to see volume exceed 600,000 shares (volume came in at 542,000). A good entry point may present itself if ACS can trade above $72.50 on Monday and make this move with first hour volume exceeding 175,000 shares. In the event of a gap up of over $2.50, it might be wise to wait for a potential pullback before getting on board. Please make a note of the fact that we have raised our stop to $64.50 in an attempt to lock in profits.

Picked on April 26th @ $69.13
Change since picked +2.26
Stop Loss $64.50
Interactive Chart Quote News First Call on ACS

HRB - H&R Block $54.60 (+0.89)

H & R Block made a nice technical move higher on Friday. The stock had been basing around the $54.00 level but with Friday's burst higher, HRB cleared its base pattern and looks poised to challenge its all-time high of $59.50 established back in August of 1999. The stock has been setting up perfectly, having first gapped higher in February and then subsequently forming a base on base pattern on lower volume. Momentum traders love this kind of price action since it allows for stronger moves once the stock finally breaks to new highs. The only thing lacking on Friday's breakout move was volume. HRB traded 444,000 shares on Friday compared with its three-month average of 530,000. We shall soon see if this is going to hold the stock back, because the stock will sink right back into its base on Monday if traders don't think the breakout had enough conviction. In addition, the OBV needs to turn up, as it diverged lower last week as HRB continued sideways. This is not a great sign, but can be remedied with a few solid up days on heavy volume. If you are in the stock with a profit, you might think about raising your stop just in case. As far as initiating new plays is concerned, volume is the key. Lower risk entries will present themselves on a break above Friday's high on increased daily volume of at least 600,000 shares traded. Our stops remain at $49.25, but if volume continues to dry up, we will be raising them soon.

Picked on April 18th @ $52.85
Change since picked +0.75
Stop Loss @ $49.25
Interactive Chart Quote News First Call on HRB

JEC - Jacob's Engineering $66.27 (+6.77)

JEC, which offers a multitude of commercial construction and maintenance services, was one of the best performing stocks last week. It makes sense that sidelined cash is flowing into this stock. The company already reported solid earnings earlier this month and it has a huge backlog (just under $6 billion) going forward. JEC may be offering investors the best of both worlds, that being solid earnings and excellent growth at a reasonable price. Its P/E as of Friday was 22.18, which compares favorably with other companies in the construction service sector. Profit takers tried to take the stock down on Friday, but it recovered nicely and could be poised for further gains this week. A move above $67.00, which would establish a new high, may prove to be the next excellent entry point for momentum traders, especially if we see first hour trading volume exceed 100,000 shares. However, the RSI is now indicating an overbought condition; therefore traders should probably be cautious if JEC gaps up two or more points at the open. JEC's longer-term prospects look very promising because the MACD, OBV and Money Flow are all soaring.

Picked on April 24th @ $62.00
Change since picked +4.27
Stop Loss @ $64.00
Interactive Chart Quote News First Call on JEC

MKC - McCormick & Company $41.04 (-0.16)

McCormick & Company is gaining upward momentum following two weeks of selling pressure. On Friday, shares of MKC hit an intra-day high of $41.40 before pulling back to a close of $41.04 on light volume of 91,800 shares. The stock is starting to build a short-term upward trend after testing the low end of its trading range at $40. However, the volume remains light so MKC may continue to trade in the $40-$43 range until the volume picks up. From a technical standpoint, MKC has support at Friday's intra-day low of $40.80 with additional support at $40.25, Wednesday's intra-day low. Resistance is the 20-dma at $41.56 and then the April 18th intra-day high of $42. Traders may consider starting new plays on a bounce off of $40.80 or a move above $41.56 on volume greater than 75,000 shares by noon. Our stops are holding steady at $38.75.

Picked on March 29th @ $41.43
Change since picked -0.39
Stop Loss @ $38.75
Interactive Chart Quote News First Call on MKC

New Momentum Updates

GTK - GTECH Holdings Corp $32.24 (+2.45)

Market sentiment has been shifting over the last week, which may explain why we saw solid buying across the board. Over the past couple of months we have seen profit taking at the end of the week from nervous traders. On Friday, however, we saw solid buying into the close, which helped GTK to finish right at its high print for the week. This fact bodes well for GTK's prospects for this coming week because momentum traders, who appear to be coming out of hibernation, will likely notice the excellent relative strength that GTK is exhibiting. These types of traders might be strong buyers of GTK on Monday especially if the stock opens to the upside. However, one should probably be cautious about buying GTK if the stock gaps up more than two points at the open. If GTK gaps up by this amount or more, it will likely pull back in the first hour of trading and offer stock pickers a more advantageous entry price later in the session. The current rally has seen GTK find good support at its 5-DMA, which closed at $30.41 on Friday. If GTK drops below this support on Monday, traders may want to hold off on adding to positions. Two technical indicators, the MACD and OBV, are implying that there are potentially more gains to be had down the road in GTK. We are raising our stop to $31.00 to lock in gains should GTK reverse course.

Picked on April 20th @ $29.79
Change since picked +2.45
Stop Loss $31.00
Interactive Chart Quote News First Call on GTK

HSIC - Henry Schein, Inc. $38.04 (+0.04)

Henry Schein, Inc. made a nice recovery on Friday thanks to a solid earnings report from UnitedHealth Group (UNP). Shares of HSIC traded to an intra-day high of $38.14 following the news. Volume was on the heavy side, with 560,000 shares changing hands. Unfortunately, volume has been trending lower over the past week and the stock has made three consecutive lower highs on top of lower lows. On the positive side, HSIC was able to close above the 10-dma, keeping the long-term upward trend alive and a positive volume surge could drive the stock to a new 52-week high. For now, support is the 10-dma at $37.60 with stronger support at the April 19th intra-day low of $36. Resistance is the 5-dma at $38.21 and then $39.02, Wednesday's intra-day high. A bounce off of $37.60 or a move above $38.21 on midday volume of at least 250,000 shares may be possible entry points. We are leaving our stops at $35 to limit potential losses.

Picked on April 22nd @ $38.00
Change since picked +0.04
Stop Loss @ $35.00
Interactive Chart Quote News First Call on HSIC

LEA - Lear Corporation $35.98 (+0.86)

Lear was bitten by yet another analyst downgrade on Friday after just being downgraded by two other brokerage firms on Thursday. This time around it was Goldman Sachs that lowered its rating on the big automotive parts supplier. Goldman removed LEA from its recommended list and tacked a new rating of market perform upon our play. The good news throughout all this pessimism is that the stock has held its own. In fact, after being down almost $1.00 on Friday, LEA rallied to close up by $0.06. This is a great sign that buyers are supporting the stock. It seems as if most buyers are stepping up at the 5-dma, now at $35.79, since LEA has bounced off this level twice over the last week. The technical picture on Lear is still looking very good. The recent churning in the stock has resulted in Lear tracing a handle to accompany its cup formation. These chart patterns can result in powerful moves to the upside if a breakout occurs on strong volume. Therefore, we will watch for LEA to breach the $36.20 level on volume of at least 600,000 shares by the end of the day. If it looks like the stock is going to close above this level, this is your lower risk entry signal. Our stops remain at $33.88 to protect against a reversal.

Picked on April 24th @ $36.20
Change since picked -0.22
Stop Loss @ $33.88
Interactive Chart Quote News First Call on LEA

Play Updates Index


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