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ITW - Illinois Tool WorksWeek Ended: 1/27/01
Price 64.75 P/E Ratio 20.58 52 Week High 65.63
Last Week - 1.63 Earnings Date 01/31/01 52 Week Low 49.50
Picked At 63.25 Date Picked 1/7/01 Sector Capital Good
Current 64.75 Open 64.31 Change 0.44
Low 63.31 High 65.00 Volume 799,100

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 25, 2001

Illinois Tool Works gained more ground on Thursday and came within a dollar of hitting a new 52-week high. The company, which is primarily engaged in the manufacture of industrial chemicals and products, is scheduled to release its fourth-quarter earnings next Tuesday, January 30th. We will terminate coverage of this play effective Monday, since our policy is to never hold a position through earnings. Since January 12th the stock has been in an earnings run. On Thursday, ITW added $1.56 on trading volume of 862,000 shares, off from its three-month average volume of 1.0 million. ITW closed above former resistance at $64.00, so that level will now become the first level of support. Below that, look for more stable support at the 5-dma at $62.95 and then the 20-dma at $61.75. The new resistance level will be the current 52-week high at $65.62. Possible last minute plays might include a bounce off a support level with follow through volume exceeding 1 million shares by early afternoon. Earnings announcements can be very volatile and at times very costly, so use caution. We will keep our stop at $58.00.

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

January 23, 2001

Illinois Tools Works is starting to climb ahead of next week's earnings release. In fact, the stock has been on something of a mini-run of late. On Monday, ITW bounced off support at the 20-dma and posted a modest gain for the day. Today, ITW grabbed some more profit on trading volume of 916,000 shares, which is just shy of the three-month average of 1 million shares. Next up is resistance of $64.00. In order for this level to be conquered, ITW will likely need an advance on 500,000 shares traded by midday. Should that level be defeated, the next opponent will be the 52-week high of 65.56. On the downside, support now exists at the 5-dma at $62.58, the 10-dma at $62.00 and finally the 20-dma at $61.20. We'd look for a bounce off a support level as a possible entry point. We will exit this play win lose or draw by the close of trading next Monday per our policy to not hold a play through earnings. In the meantime, our stop remains at $58.00.

Picked on January 7th @ $63.25
Change since picked +0.38
Stop Loss $58.00

January 21, 2001

Worldwide industrial tool and chemical supplier Illinois Tool Works finished the week up by two-percent. This week the stock traded as high at $63.88 and as low as $61.88. Friday's trading volume was low, with only 871,000 shares traded, well off its 3-month average of 1.0 million. This week the stock has drifted between support and resistance at the 20-dma and the $64.00 level. Twice this week ITW tested support at the 20-dma at the $60.00 level, which proved sufficient to hold the stock. Overhead resistance kept the stock from trading higher than $63.88. On January 30th the company will report earnings, therefore, if there is going to be an earnings run, it will have to occur next week. Traders may wish to use a bounce off support at $60.58 as a possible entry point. If the stock moves through the first level of resistance at $63.00 on volume exceeding 1.0 million shares by midday, this too might make a lower risk entry place for a new play. We will drop this play by January 30th ahead of earnings or sooner if our stop is hit at $58.00.

Picked on January 7th @ $63.25
Change since picked -1.37
Stop Loss at $58.00


Copyright 2001

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