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PLAY >New Updates Sunday, May 06, 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 $46.31 (-2.29)

SouthTrust Corporation spent the entire week consolidating after hitting an all-time during Monday's session. On Friday, the company announced that it agreed to buy CENIT Bancorp Inc. (CNIT) for approximately $117 million in stock. Shares of SOTR pulled back from an intra-day high of $46.84 to close at $46.31 following the news. Volume was on the light side with just 688,000 shares changing hands. Volume has been trending lower over the past three days and the acquisition could put a drag on the stock. SOTR may continue to trade in the $44-$47 until the volume returns. However, the 2:1 split, payable on May 11th, may be the catalyst to push the stock higher. In the meantime, support is the 20-dma at $46.06 with additional support at $45.45, the April 23rd intra-day low. Resistance is Friday's intra-day high of $46.95 and then the April 26th intra-day high of $48. Look for entry points on a bounce off of $46.06 or a move above $46.95 on volume greater than 500,000 shares by noon. We are keeping our stops at $44 to limit potential losses.


Picked on April 19th @ $46.96
Change since picked -0.65
Stop Loss @ $44.00
 
Interactive Chart Quote News First Call on SOTR
 

New Candidate Updates

AYE - Allegheny Energy, Inc. $51.00 (+0.40)

Allegheny Energy, Inc. regained some of its momentum on Friday, following a round of profit taking in the energy sector. Shares of AYE closed the session at an intra-day high of $51.00 on volume of 411,000 shares. The stock has been able to hold its 10-dma over the last three sessions on declining volume, so AYE may have found a short-term bottom just below the $50 mark. The company has scheduled its Annual Meeting for May 10th and we are looking for a split announcement out of the meeting. The company currently has enough shares for a 3:2 split, with 260 million shares outstanding and 123 million shares issued. From a technical standpoint, support has moved up to Thursday's intra-day high of $50.25 with stronger support at $49.68, the 10-dma. Resistance is now at Wednesday's intra-day high of $51.20 and then the all-time high of $51.75. A bounce off $50.25 or a move above $51.20 on midday volume of at least 300,000 shares may be possible entry points. We are leaving our stops at $47 as downside protection.


Picked on April 29th @ $50.60
Change since picked +0.40
Stop Loss @ $47.00
 
Interactive Chart Quote News First Call on AYE
 


BMET - Biomet Inc. $42.55 (+0.86)

Biomet, Inc opened in negative territory on Friday, thanks to a weak employment report. However, the stock moved quickly off its lows along with the AMEX Biotech Index (BTK.X). Shares of BMET ended the session at $42.55 on volume of 1.93 million shares. The stock is giving a mixed signal, with three consecutive lower lows within a long-term upward trend. Therefore, BMET may spend some time consolidating in the $41-$44 range. The company is expected to announce earnings on June 17th and we are looking for a split announcement with the release or with the next BoD meeting, expected on June 29th. BMET has enough shares for a split, with 500 million shares authorized and 179 million shares out standing, and the stock is within historic split range. The Board set a 3:2 split last June when the stock was trading in the $30-$40 range. For now, support is the 10-dma at $41.42 with additional support at $40.35, the April 27th intra-day low. Resistance has fallen to Friday's intra-day high of $43 and then the all-time high of $43.68. Traders may consider starting new plays on a bounce off of $41.42 or a move above $43 on volume greater than 900,000 shares by noon. Our stops remain at $39.50.


Picked on May 3rd @ $42.16
Change since picked +0.39
Stop Loss @ $39.50
 
Interactive Chart Quote News First Call on BMET
 


HRB - H&R Block $53.88 (-1.22)

On Thursday, H&R Block said it expected 2001 earnings to exceed expectations on the strength of its U.S. tax and mortgage businesses, even as it cut jobs. The firm said H&R Block Financial Advisors eliminated about five percent of its total work force, which will result in a ``modest'' fourth-quarter charge. On Friday, traders obviously woke up to the fact that this Kansas City based financial service company is going to do well this year, even if the economy is slowing. Shares reversed their three-day down trend and rose $0.38 on strong volume of 940,000 shares. We will be watching for volume to continue on the high side as the stock attempts to regain momentum to the upside. Strong volume means daily volume of over 700,000 shares. Looking at the chart, we can see that the MACD has gone negative. However, we also notice that on Thursday, HRB bounced off the top of its previous base at $52.50. This is a good sign that buyers are stepping up and ready to take HRB higher. Possible entry points could present themselves on a bounce off Thursday's closing price of $53.00, or a break through the 5-dma at $53.82 on volume of at least 300,000 by noon.


Picked on April 18th @ $52.85
Change since picked +0.53
Stop Loss @ $49.25
 
Interactive Chart Quote News First Call on HRB
 


TTC - Toro Company $46.71 (+0.46)

TTC made some progress last week and could be on the verge of a nice breakout. There are a couple of compelling reasons why investors have been buying shares of this lawn and gardening equipment leader. TTC is obviously a seasonal play as we head into the warmer months. In addition, the stock is trading at a P/E of only 13.35, even though the company is expected to post year-end profits of $3.92/share in October. Technically speaking, TTC has been consolidating its February breakout by trading between the all-time high of $47.65 and the support offered by a rising 50-DMA, which is now located at $44.38. One possible entry point may present itself if TTC can move above Friday's high of $46.95. If TTC gaps up and finds resistance at the all-time high of $47.65 on Monday's open, it may pullback a bit in the early going, resulting in a better entry price. TTC could have a strong week if it can close in new high ground on volume exceeding 100,000 shares. The MACD and the Money Flow are two technical indicators that are suggesting that TTC may move higher over the next few days. We additionally are encouraged by the fact that the RSI is at a level that implies that TTC has room to mow before issuing an overbought signal.


Picked April 29th @ $46.25
Change since picked +0.46
Stop Loss @ $43.50
 
Interactive Chart Quote News First Call on TTC
 

New Momentum Updates

GTK - GTECH Holdings Corp $34.00 (+1.76)

Governments around the world are catching onto the fact that state sanctioned lotteries can fill coffers without raising taxes. GTECH is the leader in providing the services and equipment necessary to successfully run these lotteries and has thereby benefited from the strong demand for its products. Analysts expect GTECH to increase it profits by $0.67 a share, or 32% this fiscal year. GTECH currently has a reasonable P/E of 27.20, which compares favorably to its growth potential going forward into next year. GTECH finished last week hovering just below resistance established at the all-time high of $34.30. Momentum traders may want to jump on board if GTK can breach $34.40, accompanied by midday volume of at least 150,000 shares. If GTK gaps up to $36.00 or higher on the open, a subsequent pullback may provide a better entry price. One note of caution, the RSI is currently indicating a very overbought condition. This fact does not mean that GTK cannot climb higher, but it does suggest that the stock may be poised for a pullback soon. Our stops remain at $32.00.


Picked on April 20th @ $29.79
Change since picked +4.21
Stop Loss $32.00
 
Interactive Chart Quote News First Call on GTK
 


LEA - Lear Corporation $38.50 (+2.52)

Lear added $2.10 on strong volume of 575,000 shares during Friday's session and more importantly, managed to breakout of its pennant formation. Early in the week Lear was named supplier of the year by General Motors (NYSE:GM) and on Thursday, was highlighted on the front page of Investors Business Daily. The IBD article pointed out that LEA is a great growth story in a narrow industry with few competitors. The article also points out that even though the U.S. auto industry may be slowing, the demand for interior auto parts (Lear's specialty) is still cooking along. This is due to the auto industry trend towards adding more bells and whistles as well as safety features to the interior spaces of American cars and trucks. No wonder buying interest has picked up again. Looking at the chart, no real resistance comes in until the psychological $40-level and then the $50-level. Since Lear closed at the highs of Friday's session, traders might want to wait for a pullback to the $37.75-$38.00 range before initiating new positions. Chasing the stock much beyond $39.50 would expose a trader to the risk of an 8% retracement back to Lear's base at around $36.60 so be patient if the stock decides to gap higher.


Picked on April 24th @ $36.20
Change since picked +2.30
Stop Loss @ $33.88
 
Interactive Chart Quote News First Call on LEA
 


WSM - Williams Sonoma $32.51 (+3.21)

After erasing three days of gains in the first 30 minutes of trading on Friday, WSM moved steadily higher for the rest of the session, to close up $0.65 on good volume of 690,000 shares. This is a good sign that buyers are coming in on the dips. In addition, the 50-dma is just about to cross up through the 200-dma, which is usually a very bullish sign. We also like the fact that WSM's technical indicators are firing on all cylinders. The OBV is almost at yearly highs and the MACD is still decidedly positive. The RSI and stochastic, however, are both issuing an overbought condition, but then again, they have been saying this for a few weeks and WSM keeps on adding to its gains. A slight pullback might be in the cards early on next week, but this might give traders a chance to add to positions. We are looking for additional entry points on a pullback to the 5-dma at $31.44. Our stops remain at $27.75, but may be raised soon if WSM keeps on its northerly course.


Picked on May 1st @ $31.10
Change since picked +1.41
Stop Loss @ $27.75
 
Interactive Chart Quote News First Call on WSM
 

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