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PLAY >New Updates Tuesday, May 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

APPB - Applebee's $45.05 -0.28 (+0.95)

Applebee's pulled back a little on Tuesday, but not before notching a new intraday high at $45.44. This pullback is certainly not enough to get us worried, but we will keep a close eye on APPB's volume. As the restaurateur has been marching higher, volume has been tailing off. We would like to see any further moves above $46 accompanied by volume of at least 400,000 shares. If APPB can get above $46, its MACD will issue a buy signal and the next resistance level becomes $50.00. While shares of APPB may look extended, the stock still only trades at a P/E of 17.52, which turns out to be a discount to the restaurant sector's 29 P/E. While we think that APPB has room to run, traders should probably wait for a pullback to support at $44.20 before initiating new positions.


Picked on May 15th @ $43.20
Change since picked +1.85
Stop Loss @ $40.50
 
Interactive Chart Quote News First Call on APPB
 


PKI - PerkinElmer $75.11 +0.94 (+2.29)

PKI is moving right in step with this week's technology stock rally. The company's pending stock split, which has a scheduled payable date of June 1st, is probably contributing to the stock's solid move. If PKI experiences a pullback, it will most likely find support at $68.00 (the top of the old base). On the other hand, a continuation of this powerful move could eventually find major resistance at the 200-DMA of $85.19. If technology stocks can extend their rally for a seventh day tomorrow, look for PKI to offer momentum traders a potentially profitable opportunity to go long if the stock can trade through today's high print of $76.25. This potential trade would be more enticing if the move above $76.25 is accompanied by midday volume exceeding 260,000 shares. The Money Flow has been very good during this rally and the MACD is positive. As long as these technical indicators continue to go in the right direction, it would be reasonable to assume that PKI will continue to move higher. That said, a drop below the $72.00 support should raise one's caution flag.


Picked on May 17th @ $70.12
Change since picked +4.99
Stop Loss @ $67.0
 
Interactive Chart Quote News First Call on PKI
 


SDS - SunGard Data Systems $62.65 +0.61 (+1.74)

SunGard tacked on $0.61 during Tuesday's session after a Deutsche Bank Alex Brown analyst initiated coverage of the computer service provider with a "buy" rating. Mark D'Annolfo of Duetsche Bank believes that SunGard combines the predictability of a computer services stock with the higher margins of a software company. He also likes the fact that SDS almost dominates its core businesses. We couldn't agree more. Given the ringing endorsement, we would have thought that shares of SDS would have responded more positively. However, the stock only traded 440,000 shares, well shy of its three-month average of 940,000 shares. Going into the later part of this week, we will be watching for volume to move back towards 900,000 shares as SDS tests resistance at $63. Traders interested in initiating new positions in SDS could consider doing so on a break through $63 on volume that puts SDS on pace to do 950,000 shares for the day.


Picked on May 16th @ $62.00
Change since picked +0.65
Stop Loss @ $58.40
 
Interactive Chart Quote News First Call on SDS
 

New Candidate Updates

ASD - American Standard Companies, Inc. $65.15 -0.10 (-0.30)

American Standard Companies, Inc. has been consolidating after hitting an all-time high of $66.50 last week. On Tuesday, shares of ASD fell to an intra-day low of $64.80 before bouncing back to a close of $65.15 on volume of 468,000 shares. Despite the recent weakness, ASD was able to close above its 5-dma, keeping the long-term upward trend alive. Daily volume is picking up so ASD could be able to challenge its all-time high on a positive volume surge. In the meantime, support is the 5-dma at $64.92 with additional support at $63.84, the 10-dma. Resistance has fallen to Monday's intra-day high of $65.45 and then Friday's intra-day high of $66.50. A bounce off of $64.92 or a move above $64.92 on midday volume greater than 250,000 shares may be possible entry points. Our stops are holding steady at $63.50.


Picked on May 6th @ $62.50
Change since picked +2.65
Stop Loss @ $63.50
 
Interactive Chart Quote News First Call on ASD
 


AYE - Allegheny Energy, Inc. $54.40 -0.20 (+0.60)

Allegheny Energy, Inc. traded to an all-time high of $54.62 just before Monday's closing bell. Unfortunately, the stock spent all of Tuesday in negative territory. Shares of AYE hit an intra-day low of $54.15 before closing at $54.40 on volume of 307,000 shares. The stock continues to trend higher with frequent tests of the lower end of the channel. However, daily volume has been on the light side so AYE may run into some selling pressure in the near future. From a technical standpoint, support has moved up to the 5-dma at $54.02 with stronger support at $53.38, the 10-dma. Resistance is now at the all-time high of $54.62 and then possibly $55 or $56. Look for entry points on a bounce off of $54.02 or a breakout above $54.62 on volume of at least 225,000 shares by noon. We are leaving our stops at $53 to protect gains.


Picked on April 29th @ $50.60
Change since picked +3.80
Stop Loss @ $53.00
 
Interactive Chart Quote News First Call on AYE
 


BKH - Black Hills Corporation $57.85 -0.15 (+1.91)

The potential for a split announcement grows every day that this western US utility increases its stock price. Granted, the stock slipped a bit today, but BKH started the week solidly by establishing a new high of $58.00 yesterday and extending those gains to $58.50 in today's trading before pulling back modestly. Traders are driving up BKH not only because of the split possibility (it has a BoD meeting next Wednesday), but also because of the increasing demand for energy that is well publicized by the California energy shortage. Momentum traders might jump on board again tomorrow if BKH can trade through $58.50 with midday volume exceeding 100,000 shares. If the stock happens to take a breather, look for it to possibly find support on its 5-DMA of $56.09. The technical indicators are a bit mixed. The MACD is positive and just recently issued a buy signal but the RSI is indicating an overbought condition. That said, traders might continue to drive the stock higher if the pattern of new highs is extended.


Picked on May 20th @ $55.94
Change since picked +1.91
Stop Loss @ $52.25
 
Interactive Chart Quote News First Call on BKH
 


BMET - Biomet Inc. $44.93 -0.66 (+0.66)

Biomet, Inc. sold off on Tuesday after hitting an all-time high of $45.64 early in the session. The stock dipped below the 5-dma to an intra-day low of $44.20 on light volume of 979,000 shares. The stock remains in a firm short-term upward trend but the daily volume has been trending lower over the past 3 sessions. BMET may need to consolidate its recent gains before it moves to new highs. For now, support is the 5-dma at $44.60 with additional support at $43.47, Friday's intra-day low. Resistance has moved up to Tuesday's intra-day high of $45.64 and then $46. Traders should look for a bounce off of $44.60 or a breakout above $45.64 on midday volume greater then 900,000 shares before opening new positions. We are keeping our stops at $43 to lock in gains.


Picked on May 3rd @ $42.16
Change since picked +2.77
Stop Loss @ $43.00
 
Interactive Chart Quote News First Call on BMET
 


HRB - H&R Block $60.37 -1.34 (+1.91)

H & R Block finally took a breather after five straight up days in a row. You can't blame the stock for selling off after becoming extremely overbought, but it didn't have to do so on 40% greater volume than its average 550,000 shares. The 770,000 shares traded on the downside today is a little much for our liking. Therefore, HRB deserves closer monitoring as we move into the holiday weekend. We will be watching to see that Monday's low of $58.40 holds up under selling pressure and for HRB's MACD to remain positive. Right now, it appears as if the MACD is starting to roll negative, but its nothing that a few up days can't cure. As far as new entries are concerned, it's not hard to see that the tax preparer is extended. We would wait for a pullback to the 5-dma, which now rests at $59.34 before committing capital to HRB. This move lower should ideally come on lighter volume of under 500,000 for the day. Our stops remain at $57.50 to help lock in gains.


Picked on April 18th @ $52.85
Change since picked +6.52
Stop Loss @ $57.50
 
Interactive Chart Quote News First Call on HRB
 


ITG - Investment Technology Group $54.50 -0.30 (+0.61)

We have one word for today's action in ITG, disappointing. The stock started the day well above pesky resistance at $55, but could not hold onto its gains. The early rise and subsequent drift lower into the close left a bearish hammer formation on ITG's chart. This usually doesn't bode well for a stock in the short term, so we will watch for support at $54 to hold up amid more selling pressure. We will also watch for volume to dry up on any further moves lower. An actual close above $55 is what ITG desperately needs to keep its upward momentum going. It has been turned back by this resistance level five times in a row, so short sellers may be starting to circle. However, given the fact that the AMEX Broker/Dealer Index held up today, we remain optimistic that ITG will persevere. Traders should wait for a close over $55 on volume of at least 300,000 shares traded before initiating new positions.


Picked on May 16th @ $54.52
Change since picked -0.02
Stop Loss @ $51.40
 
Interactive Chart Quote News First Call on ITG
 


KRI - Knight Ridder, Inc. $57.78 +1.08 (+1.77)

Knight Ridder, Inc. released its business revenue data for April on Tuesday. Total advertising revenue was down 8.6% for the month and down 4.2% for the year to date. However, the news had a mild affect on the stock. Shares of KRI traded to an intra-day high of $58.65 before pulling back to a close of $57.78 on heavy volume of 792,000 shares. The stock is breaking out after two months of sideways trading so KRI may continue to move higher. Going forward, KRI has support Monday's intra-day high of $56.75 with stronger support at $56.33, the 5-dma. Resistance has moved up to Tuesday's intra-day high of $58.65 and then the March 6th intra-day low of $60.50. Consider entry points on a bounce off of $55.75 or a move above $58.65 on volume of at least 250,000 shares by noon. We are leaving our stops at $54 to limit potential losses.


Picked on May 20th @ $56.01
Change since picked +1.77
Stop Loss @ $54.00
 
Interactive Chart Quote News First Call on KRI
 

New Momentum Updates

GTK - GTECH Holdings Corp $37.47 -0.07 (+0.86)

The momentum continues to the upside for this lottery equipment and services leader. GTK has exhibited some excellent relative strength and continued its winning ways again today. The stock pulled back only $0.07 even though there was some profit taking pressure seen across many sectors. Additionally, GTK has been able to establish new 52-week highs during both Monday's and today's trading sessions. Today's high print was $38.10. It was not terribly surprising that GTK was unable to close in positive territory today. We have pointed out in the last several updates that GTK is extremely overbought according to its RSI. Nevertheless, momentum traders may still be able to make a profit if they go long tomorrow on the condition that GTK can trade through $38.10, accompanied by first hour trading volume exceeding 75,000 shares. Just be wary if GTK starts to pull back following the establishment of a new high. A repeat of today's action tomorrow is very possible due to the overbought condition. If GTK starts to sell off in the early going, one should probably pay attention to the 10-DMA of $36.10. If this support is violated, our stop at $35.50 could be quickly executed.


Picked on April 22nd @ $29.79
Change since picked +7.68
Stop Loss $35.50
 
Interactive Chart Quote News First Call on GTK
 


LEA - Lear Corporation $37.00 -1.00 (-0.60)

Lear might face some turmoil in the near term since the Ford (NYSE:F) recall might have traders turning sour on the auto stocks. That being said, LEA still looks technically strong despite today's $1.00 sell off. LEA's MACD almost issued a buy signal on Monday and the gap formed on 5/17 is offering good support at the $36.50 level. We will note, however, that resistance at $38 once again stymied LEA. In fact, shares of LEA hit $38 right at the open, never to return. Traders interested in opening new positions in the automotive parts supplier could either wait for a pullback to support at $36.56 or more aggressive momentum traders could wait to see if LEA can conquer the $38 level on volume of over 450,000 shares before pulling the trigger. Our stops remain at $35.00 to protect against a reversal.


Picked on April 24th @ $36.20
Change since picked +0.80
Stop Loss @ $35.00
 
Interactive Chart Quote News First Call on LEA
 

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