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PLAY >New Updates Sunday, May 13, 2001
New Split Updates   New Candidate Updates   New Momentum Updates
(We update our stop losses daily at the CURRENT PLAYS page.)

New Split Updates

XTO - Cross Timbers Oil Co. $28.00 (+3.17)

What a difference a week can make. Two weeks ago, XTO was dropping to the bottom end of its range due to industry reports that indicated that there was a rise in oil and gasoline inventories. XTO dropped to $23.63 in reaction to this news, despite posting solid quarterly profits of $2.00 a share that same week. The recovery last week was probably due to the fact that mergers and acquisitions are heating up in the oil and gas world. Additionally, XTO may have rallied because it is scheduled to pay out a 3:2 split on June 5th. This week's trading direction depends upon whether or not XTO can keep moving higher and take out solid resistance at $28.75 or simply pull back within the current trading range. We have raised our stop to $27.00, just in case the second scenario comes to fruition. Otherwise, traders may be interested in adding to positions if XTO can trade above $28.75, accompanied by midday volume exceeding 350,000 shares. The MACD and Money Flow are both positive and it is encouraging for bulls that the RSI has plenty of upside room before issuing an overbought signal.

Picked May 6th @ $24.83
Change since picked +3.17
Stop Loss @ $27.00
Interactive Chart Quote News First Call on XTO

New Candidate Updates

ASD - American Standard Companies, Inc. $63.27 (+0.77)

American Standard Companies, Inc. traded to an all-time high of $63.80 on news of improving auto sales contained in the April Retail Sales report. However, the stock could not hold on to the gains due to general market weakness. Shares of ASD ended the session at $63.27 on light volume of 276,000 shares. The stock has put in three consecutive higher highs on top of higher lows, so ASD may have enough momentum to continue to hit new highs. However, the daily volume has been declining over the past two weeks and this could lead to trouble down the road. In the meantime, support is the 5-dma at $62.82 with additional support at the 10-dma, currently at $62.09. Resistance is now up to Friday's intra-day high of $63.80 and then $65. Look for a bounce off of $62.82 or a breakout above $63.80 on midday volume greater than 250,000 shares before starting new plays. Our stops are holding steady at $58.50.

Picked on May 6th @ $62.50
Change since picked +0.77
Stop Loss @ $58.50
Interactive Chart Quote News First Call on ASD

AYE - Allegheny Energy, Inc. $53.05 (+2.05)

Allegheny Energy, Inc. has posted gains in each of the last three sessions. On Friday, shares of AYE closed at an all-time high of $53.05 on volume of 447,000 shares. The stock has broken out of its $50-$52 trading range after eight sessions of consolidation and now appears to be embarking on a new up trend. The stock could continue to ride its 5-dma, now at $52.12, to new highs. The company just held its annual meeting, so we will keep our fingers crossed for a split announcement soon. Until then, support has moved up to Thursday's intra-day high of $52.40 with stronger support at $52.12, the 5-dma. All forms of resistance have been taken out so new resistance may show up at $54 or $55. Consider entry points on a bounce off of $52.40 or a breakout above $54 on volume of at least 300,000 shares by noon. We have moved our stops up to $52 to lock in a gain should AYE reverse course.

Picked on April 29th @ $50.60
Change since picked +2.45
Stop Loss @ $52.00
Interactive Chart Quote News First Call on AYE

BMET - Biomet Inc. $40.60 (-1.95)

Biomet, Inc. showed some signs of life on Friday following four straight days of losses. Shares of BMET traded to an intra-day high of $41.44 before pulling back to a close of $40.60 on volume of 1.36 million shares. The stock was able to stay above the $40 mark on Friday and it may have found a short-term bottom. Unfortunately, BMET remains in a downward trend so the stock could spend some time in the $40-$42 range before it moves higher. Going forward, support is Friday's intra-day low of $40 with additional support at $39.74, the 50-dma. Resistance is the 5-dma at $40.89 and then the 10-dma at $41.78. Traders should look for entry points on a bounce off of $40 or a move above $40.89 on volume greater than 900,000 shares by noon. We are keeping our stops at $39.50 as downside protection.

Picked on May 3rd @ $42.16
Change since picked -1.56
Stop Loss @ $39.50
Interactive Chart Quote News First Call on BMET

HRB - H&R Block $56.05 (+2.67)

On Friday evening, HRB announced that it would be paying out $21 million to settle a class-action lawsuit filed against Olde Discount brokers, which HRB bought back in 1999. HRB CEO Mark Ernst indicated that the settlement came about to avoid continued expensive litigation. Now whether this settlement has any effect on trading on Monday remains to be seen. It can be looked at as both positive and negative, but bottom line is that the sum of money paid out is not exorbitant. Other than the settlement, shares of HRB have been cooking along just fine. In fact, on Friday, HRB hit a new intraday high of $56.50 before falling back and closing at a new high of $56.05. The MACD has turned positive, OBV is healthy and volume is remaining on the high side. HRB is hitting on all cylinders. New entries could be considered on a breach of $56.50 on good volume of 300,000 traded by midday or a bounce of $55.00 on similar volume. Our stops remain at %54.50 to protect against a reversal.

Picked on April 18th @ $52.85
Change since picked +2.20
Stop Loss @ $54.50
Interactive Chart Quote News First Call on HRB

STU - The Student Loan Corporation $67.65 (-1.30)

The Student Loan Corporation held up relatively well on Friday considering that the stock is now reflecting the $0.70 dividend payment. Shares of STU hit an intra-day high of $68.77 before pulling back to close at $67.65 on volume of 12,200 shares. The stock has made three consecutive higher highs on top of higher lows and STU is starting to form a short-term upward trend as we approach the Annual Meeting on May 16th. We are looking for a split announcement out of the meeting. Until then, support is holding steady at Thursday's intra-day low of $67.15 with stronger support at $66.60, Tuesday's intra-day high. Resistance is the 10-dma at $68.97 and then the May 3rd intra-day high of $69.95. A bounce off of $67.15 or a move above $68.97 on midday volume of at least 15,000 shares may be possible entry points. Our stops remain at $65.

Picked on May 10th @ $68.20
Change since picked -0.55
Stop Loss @ $65.00
Interactive Chart Quote News First Call on STU

TTC - Toro Company $45.99 (-0.72)

TTC saw more of the range bound trading that has been typical of the last six sessions. TTC is stuck in a tight flag pattern between $45.88 and $47.00. The company does possess some positive fundamentals that may eventually bring the bulls back. TTC trades with a very low P/E of 13.58. The firm is expected to post very solid profits of $3.92 a share when its fiscal year ends in October. Clearly, TTC offers shareholders some decent value for their investment. A round of selling in the broader market, especially among stocks that are trading with substantially higher P/E's, may drive investors back to the relatively "safer" stocks like TTC. Volume was very light last week (Friday's volume was only 25,800 shares) and one gets the feeling that TTC may be ready to pop on some greater volume. The MACD and the Money Flow are both positive, which could lead one to believe that the breakout will be to the upside. Therefore, traders may want to go long if TTC can trade above $47.00 and accomplish this move with midday volume exceeding 50,000 shares.

Picked April 29th @ $46.25
Change since picked -0.26
Stop Loss @ $43.50
Interactive Chart Quote News First Call on TTC

New Momentum Updates

GTK - GTECH Holdings Corp $35.36 (+1.36)

Lottery equipment leader GTECH finished the week with a little profit taking. In our last report, we suggested that the stock might be due for a pullback because the Relative Strength Indicator was at a level that suggests an extremely overbought condition. The low volume of 70,800 shares traded during Friday's drop, however, indicates that the sellers had very little conviction in getting rid of shares. It appears that buyers were just taking a break. Looking ahead to this week, traders will probably want to make sure that the $35.00 support established last week holds before attempting to add to positions. A drop below this support could result in the execution of our $34.00 stop. Momentum traders may be interested in trying to capture some quick profits if GTK can establish a new high by trading over $37.00. This potential trade could be even more enticing if it occurs in the first hour of market action, accompanied by volume exceeding 100,000 shares.

Picked on April 20th @ $29.79
Change since picked +5.57
Stop Loss $34.00
Interactive Chart Quote News First Call on GTK

HD - Home Depot $49.88 (+0.29)

A couple of surprisingly strong economic reports helped Home Depot to fend off the sellers that took down other DJIA members during Friday's down draft. The University of Michigan Consumer Sentiment Index rose to 92.6 in mid-May from 88.4 at the end of April. Most economists had expected this index to actually decline. A report from the Commerce Department showed retail sales increased by 0.8 percent in April. Consensus estimates were looking for only a 0.1 percent increase. These numbers were good news for Home Depot, which is the nation's third largest retailer. The news also came just in time to build up a little excitement going into Home Depot's earnings report, which is due Tuesday morning before the market opens. According to Zack's, current consensus estimates are calling for profits of $0.25 a share. As always, we will exit this play no later than Monday's close in an attempt to avoid earnings related volatility. A possible day trade may present itself if HD can trade through $50.25 in the first hour of trading accompanied by volume exceeding 1.5 million shares. If HD gaps up $1.50 or more on the open, one might want to wait for a little pullback in an attempt to get a more advantageous entry price.

Picked on May 8th @ $50.01
Change since picked -0.13
Stop Loss $45.88
Interactive Chart Quote News First Call on HD

LEA - Lear Corporation $35.65 (-2.85)

Things are not looking great for LEA at this point. On Friday, Lear notched its fifth straight day of losses by falling $0.37 on volume of 270,000 shares. There are two separate forces at work that may serve to salvage LEA from the sell off blues. First, Friday's retail report showed unexpected strength in car sales. This may boost shares of LEA from a fundamental standpoint. Second, from a technical standpoint, the RSI and stochastic are both telegraphing a turnaround, based on the fact that LEA is oversold. Support should be showing up at $35. We would suggest waiting until LEA can show that selling pressure has subsided before initiating any new plays. A turnaround would be marked by a rally up through the 10-dma (now at $36.50) on daily volume of at least 450,000 shares. If LEA slips any further, we have stops set at $33.88 to limit our downside risk.

Picked on April 24th @ $36.20
Change since picked -0.55
Stop Loss @ $33.88
Interactive Chart Quote News First Call on LEA

WSM - Williams Sonoma $30.09 (-2.42)

Continued strength in the S&P Retail Index (RLX.X) has us thinking that WSM has room to run. The stock performed a slow meltdown towards the end of last week, but also managed to fill the gap created on 4/30. This is technically significant since WSM bounced right off the lower portion of the gap and closed in the upper portion of its daily range on Friday. It also did this gap filling move on strong volume of 965,000 shares. WSM's three-month average daily volume is only 570,000 shares. On Monday, we will look for a move above Thursday's closing price of $31.15 as a good entry point for new plays on what we hope is optimism going in to the Fed meeting on Tuesday. Look for volume to exceed 200,000 by midmorning. We are keeping our stop at $27.75 to protect against any post Fed announcement volatility.

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

Play Updates Index


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