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PLAY >New Updates Tuesday, May 15, 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 $29.70 +0.76 (+1.70)

The AMEX Oil and Gas Index (XOI) has been one bright spot for the market this week. Today the XOI rallied 3.37 to 584.14. We suggested in our updates last week that XTO might be rallying because of takeover speculation. We were a little ahead of most on this supposition. Yesterday saw another major acquisition in the oil and gas industry, as Kerr-McGee (NYSE:KMG) agreed to purchase HS Resources (NYSE:HSE) for $1.7 billion. During coverage of the story of increasing acquisition activity in the oil and gas sector, CNBC specifically included XTO on a short list of potential acquisition targets. This story probably contributed to XTO's strong move so far this week. The rally has enabled us to raise our stop to $28.50. The next entry opportunity may present itself it XTO can trade through today's high of $29.90 and accomplish this move with first hour trading volume exceeding 200,000 shares. The longer term technical picture looks strong because the MACD, OBV and Money Flow are all breaking out and the RSI still has room before an overbought condition is indicated.The AMEX Oil and Gas Index (XOI) has been one bright spot for the market this week. Today the XOI rallied 3.37 to 584.14. We suggested in our updates last week that XTO might be rallying because of takeover speculation. We were a little ahead of most on this supposition. Yesterday saw another major acquisition in the oil and gas industry, as Kerr-McGee (NYSE:KMG) agreed to purchase HS Resources (NYSE:HSE) for $1.7 billion. During coverage of the story of increasing acquisition activity in the oil and gas sector, CNBC specifically included XTO on a short list of potential acquisition targets. This story probably contributed to XTO's strong move so far this week. The rally has enabled us to raise our stop to $28.50. The next entry opportunity may present itself it XTO can trade through today's high of $29.90 and accomplish this move with first hour trading volume exceeding 200,000 shares. The longer term technical picture looks strong because the MACD, OBV and Money Flow are all breaking out and the RSI still has room before an overbought condition is indicated.


Picked May 6th @ $24.83
Change since picked +4.87
Stop Loss @ $28.50
 
Interactive Chart Quote News First Call on XTO
 

New Candidate Updates

ASD - American Standard Companies $62.05 -0.41 (-1.22)

American Standard sold off after hitting an all-time high of $63.85 last week. On Tuesday, shares of ASD fell to an intra-day low of $61.17 before bouncing back to finish the day at $62.05 on light volume of 267,000 shares. The stock closed below the 10-dma for the first time since April 25th, breaking its upward trend. Daily volume has declined over the past week, so ASD may spend some time consolidating in the $61-$64 range until the volume picks up. Until then, support is the 20-dma at $61.05 with stronger support at the April 30th intra-day low of $60. Resistance is now at Monday's intra-day high of $62.95 and then $63.85, the all-time high. Traders may consider opening new positions on a bounce off of $61.05 or a move above $62.95 on volume of at least 250,000 shares by noon. We are leaving our stops at $58.50 to limit potential losses.


Picked on May 6th @ $62.50
Change since picked -0.45
Stop Loss @ $58.50
 
Interactive Chart Quote News First Call on ASD
 


AYE - Allegheny Energy, Inc. $53.35 +0.10 (+0.30)

Allegheny Energy is on a five-day winning streak. On Monday, AYE traded to an all-time high of $53.85. The stock was under pressure during most of Tuesday's session, hitting an intra-day low of $52.65 just after the opening bell. However, AYE was able to rally back into positive territory to a close of $54.35, ending the day with a $0.10 gain on volume of 386,000 shares. The stock continues to trend higher as the energy sector regains its momentum. On a cautionary note, AYE put in its first lower low since May 2nd, so we may get a round of profit taking in the near future. Going forward, support is the 5-dma at $52.73 with additional support at $52.16, Friday's intra-day high. Resistance has come in at Monday's intra-day high of $53.85 and possibly the $55 mark. Look for a bounce off of $52.73 or a breakout above $53.85 on midday volume greater than 300,000 shares before starting new plays. Our stops remain at $52 to protect gains.


Picked on April 29th @ $50.60
Change since picked +2.75
Stop Loss @ $52.00
 
Interactive Chart Quote News First Call on AYE
 


BMET - Biomet Inc. $42.85 +1.37 (+2.25)

Biomet has regained its momentum over the past three sessions. On Tuesday, shares of BMET hit an intra-day high of $43.30 before pulling back to a close of $42.85 on heavy volume of 2.97 million shares. BMET has made three consecutive higher lows after a test of major support at the 50-dma. Volume spiked on Tuesday and the stock was able to close above the 10-dma. The downward trend has been broken and the MACD is turning positive, so BMET could be ready to challenge its all-time high. In the meantime, support has moved up to the May 8th intra-day high of $42.49 with stronger support at the 10-dma $41.50. Resistance is the all-time of $43.68 and then $45. A bounce off of $42.49 or a breakout above $43.68 on midday volume of at least 900,000 shares may be possible entry points. Our stops are holding steady at $39.50.


Picked on May 3rd @ $42.16
Change since picked +0.69
Stop Loss @ $39.50
 
Interactive Chart Quote News First Call on BMET
 


HRB - H & R Block Inc. $56.08 +0.19 (+0.02)

H & R Block is turning out to be the little engine that could. Just when we thought that HRB was set to rollover, it ekes out another gain instead. In fact, HRB set another 52-week high today by closing at $56.08. At this point, though, we are concerned that HRB's engine could be running out of steam. Today's advance came on below average volume of 299,000 shares traded, which is 200,000 less than the three-month average daily volume. Moreover, On-Balance Volume is flattening, which could portend a lost of momentum. Still, if HRB rolls, we doubt that it will roll far. The stock has support at its 10-dma at $54.78 followed by the 40-dma at $52.09. As for resistance, we don't see any significant resistance until the July 1999 highs of $59.00. Traders considering a position in HRB should look for strong volume, 250,000 shares or more traded by noon EDT, on a move through today's intra-day high of $56.45 or a bounce off the 10-dma before placing their trades. To protect our gains, we've moved our stop up to $55.00.


Picked on April 18th @ $52.85
Change since picked +3.23
Stop Loss @ $55.00
 
Interactive Chart Quote News First Call on HRB
 


OMG - OM Group, Inc. $59.80 +1.20 (+1.84)

OM Group just keeps on keeping on. Today the company's stock rallied another $1.20 to close at an all-time high of $59.80. Much of the increase could be attributed to yesterday's report that the company's cobalt sales volume was up 18 percent in the first quarter and that recent increases in battery demand from the battery market have limited availability of material. OMG is breaking out after four months of consolidation, so it may continue to trend higher on average volume due to improving fundamentals. For now, OMG has support at Monday's intra-day high of $59.01 with additional support at the 5-dma at $58.04. Resistance was taken out on Tuesday, so new resistance may show up at $60 or $61. Look for entry points on a bounce off of $59 or a breakout above $60 on volume of at least 60,000 shares by noon. We have moved our stops up to $56.75, just under the 10-dma, to limit potential losses.


Picked on May 13th @ $57.96
Change since picked +1.84
Stop Loss @ $56.75
 
Interactive Chart Quote News First Call on OMG
 


STU - The Student Loan Corporation $69.15 +0.47 (+1.50)

The Student Loan Corporation broke its downward trend in anticipation of a rate cut from the Fed. On Tuesday, shares of STU hit an intra-day high of $69.48 before pulling back to close at $69.15 on volume of 8,800 shares. STU closed above the 10-dma for the first time since April 26th and the MACD is starting to turn around. The stock has now made five consecutive higher highs coupled with higher lows, so STU could continue to move higher as we approach the Annual Meeting on May 16th. From a technical standpoint, support is the 10-dma at $68.31 with stronger support at Monday's intra-day low of $67.75. Resistance is the May 3rd intra-day high of $69.95 and then the 20-dma at $71.43. Consider entry points on a bounce off of $68.31 or a move above $69.95 on volume greater than 15,000 shares by noon. We are keeping our stops at $65 to limit potential losses.


Picked on May 10th @ $68.20
Change since picked +0.95
Stop Loss @ $65.00
 
Interactive Chart Quote News First Call on STU
 


TTC - Toro Company $46.50 +0.12 (+0.51)

Last week saw some surprisingly strong retail numbers that suggest that consumer confidence is rising. This has to be good news for Toro, as the company enters it busiest season for selling lawn and gardening equipment. TTC's modest advance today was accompanied by volume that was a little better than last week's anemic 20,000 to 30,000 average. Perhaps TTC is on the verge of finally breaking out of its very narrow trading range between $45.88 and $47.00. A rally above $47.00, accompanied by midday volume exceeding 30,000 shares, may provide the next good entry signal. If this occurs, TTC might find resistance at its 52-week high of $47.65. Hopefully, the rally will come soon because the MACD is threatening to issue a sell signal. On the plus side is the RSI, which continues to indicate that there is plenty of rally room before the stock would be considered to be overbought.


Picked April 29th @ $46.25
Change since picked +0.25
Stop Loss @ $43.50
 
Interactive Chart Quote News First Call on TTC
 

New Momentum Updates

GTK - GTECH Holdings $35.50 +0.11 (+0.14)

GTECH never really got going today, even though it reported some good news concerning its ongoing operations. GTECH was awarded a five-year contract extension with the Rhode Island Lottery to continue providing the state with lottery equipment and online services. Nevertheless, GTK was able to add only $0.11 to its share value. Technically speaking, GTK has started to pullback in an attempt to consolidate its most recent rally. That said, GTK appears to have found some support at $35.00 and is still one of the strongest looking stocks in this market. Momentum traders looking for a buy are probably including GTK on their short list of candidates. GTK may be a compelling buy tomorrow if it can hold the $35.00 support and trade through its 52-week high of $36.80. New positions might be more enticing if the new high is accompanied by midday volume exceeding 150,000 shares. The longer-term technical picture still looks pretty good. The OBV is still advancing and the MACD is maintaining its rally. However, the RSI is indicating an extremely overbought condition that may have to be corrected before GTK can make its next advance.


Picked on April 22nd @ $29.79
Change since picked +5.71
Stop Loss $34.00
 
Interactive Chart Quote News First Call on GTK
 


LEA - Lear Corp. $36.00 +0.50 (-0.65)

Last week, we were concerned that Lear might rollover because it traded lower six-consecutive sessions. However, it's now starting to look like LEA may just be consolidating near its previous consolidation base at $35.00. We were encouraged that today's advance came on above-average volume of 560,800 shares traded, which was 120,000 shares greater than the three-month daily average of 440,000. Still, LEA could run into resistance at its 10-dma at $36.46. This is a level LEA has been unable to breach over the past five sessions. As for support, LEA has the aforementioned consolidation base of 35.00. Traders considering a position in LEA should look for strong volume, 250,000 shares or more traded by noon EDT, on a move through the 10-dma or a bounce off of $35.00 before placing their trades. But to be honest, given LEA's technical picture, we doubt it will offer much price action.


Picked on April 24th @ $36.20
Change since picked -0.20
Stop Loss @ $33.88
 
Interactive Chart Quote News First Call on LEA
 

Play Updates Index

 


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