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ITW - Illinois Tool WorksWeek Ended: 1/20/01
Price 61.88 P/E Ratio 20.21 52 Week High 69.00
Last Week - 3.00 Earnings Date 01/31/01 52 Week Low 49.50
Picked At 63.25 Date Picked 1/7/01 Sector Capital Good
Current 61.88 Open 62.06 Change -1/16
Low 60.94 High 62.25 Volume 873,300

Company Description

ITW is a multinational manufacturer of highly engineered products and specialty systems. The Company primarily serves the construction, food retail and service, automotive, and general industrial markets. For the nine months ended 9/30/00, revenues rose 9% to $7.45B. Net income rose 14% to $756.5M. Results reflect increased engineered products sales, acquisitions, and improved productivity in the food equipment and welding businesses.

Play Description

January 7, 2001

Illinois Tool Works, Inc. manufactures and markets a variety of products and systems that provide specific, problem-solving solutions for a diverse customer base worldwide. The company produces plastic, metal and laminate components, fasteners and assemblies; industrial fluids and adhesives; tooling for specialty applications; welding products; packaging machinery and related consumables; food service equipment; and industrial spray coating equipment. We are adding ITW as one of our new momentum plays ahead of their next earnings release scheduled for January 30th. The stock has been making daily, consistent gains since December 20th and recently conquered short-term resistance at $61.00. In fact, the recent up surge has taken the stock above a seven-month basing pattern. On December 14th, ITW issued a statement warning of expected profit short falls in the 4th quarter as a result of the economic slowdown that had affected its customers. Investors took the stock lower on the news, but since then the stock has recovered on strong volume. On Friday, the stock made advances on volume of 1.3 million shares or roughly 30% higher than its average 3-month volume. We are looking for more upside leading into earnings from here. The technical picture looks like this; support can now be measured at the 5-dma at $61.10, then the 10-dma at $59.84 and finally the 20-dma at $58.95. Resistance is up at $64.00 for now. We will place our stop loss order at $58.00 on this new play.

Picked on January 7th @ $63.25
Change since picked 0.00
Stop Loss at $58.00


January 18, 2001

Industrial products maker Illinois Tool Works finished down slightly on Thursday. Despite both the Dow Jones Industrial Average (INDU) and the NASDAQ Composite Index (COMPX) trading higher, ITW chose not to participate. The stock is due to report earnings on January 30th, so we are still anticipating some form of an earnings run leading into that date. Thursday volume was recorded at 1.14 million shares, pretty much in line with its three-month average of 1.0 million. The chart now reveals support at the 50-dma at $61.79, the 20-dma at $60.32 and the 50-dma at $58.63. Resistance is still at $63.00 and then $64.00. Traders may wish to consider opening a new position on a bounce off a support level or a move above resistance on volume of at least 1 million shares by midday. As a reminder to all, per our standing policy of not holding through earnings, we will exit this play by January 29th unless our stop at $58.00 is triggered sooner.

Picked on January 7th @ $63.25
Change since picked -1.31
Stop Loss at $58.00

January 16, 2000

Illinois Tool Works had a strong outing on Tuesday, rising 4% on 60% greater-than-average volume. ITW manufactures and markets a variety of products that range from plastic and metal components to industrial fluids and adhesives. The company is now two weeks away from reporting its fourth-quarter results on January 30th. The positive action on Tuesday may be the beginning of the stock's earnings run. The triple-digit gain in the Dow Jones Industrial Average (INDU) was probably a contributing factor in ITW's gains, too. In the time remaining until earnings, look for further advances on similar volume moves as a possible entry point for a new play. The stock presently has technical support at the 10-dma at $61.50, the 20-dma at $59.76 and the 50-dma at $58.33. Resistance is overhead at $63.00 and $64.00 where the stock has been stymied in the past. We are keeping our stop loss order at $58.00 for now. A reminder to all, we will not hold this position through earnings.

Picked on January 7th @ $63.25
Change since picked -0.75
Stop Loss at $58.00

January 14, 2001

Illinois Tool Works finished the week down by 5-percent. The negative pull on all the capital goods producers certainly played a part in ITW's weak performance this last week. Intraday, ITW traded as high as $60.94 and as low as $59.56 on volume of 1.36 million shares. Friday's volume was 36% higher than the 3-month average volume of 1.0 million shares. As the stock fell, it found support at the 20-dma at $59.56 and then made a mild recovery into the close. ITW, a multinational manufacturer of highly engineered products and specialty systems, will be reporting their Q4 earnings results on January 30th. Ahead of that announcement, provided we can get some cooperation from the broader markets, namely the S&P 500 (SPX.X) and the NASDAQ Composite Index (COMPX), we are looking for the stock to show strength going into their earnings. If you are considering opening a new play on ITW, possible entry points might be a bounce off a support level or if the stock can conquer resistance on volume exceeding 1 million shares. Support for ITW is now noted at the 20-dma at $59.43 and then the 50-dma, residing at $58.21. Resistance levels for the stock are at the 10-dma at $61.36, the 5-dma at $61.63 and then up at $63.00. We will keep our stop at $58.00 on this play to protect on the downside.

Picked on January 7th at $63.25
Change since picked -3.00
Stop Loss at $58.00


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