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SPW - SPX CorporationWeek Ended: 1/27/01
Price 112.94 P/E Ratio 26.05 52 Week High 186.00
Last Week + 4.25 Earnings Date 02/06/01 52 Week Low 74.00
Picked At 111.69 Date Picked 1/13/01 Sector Cap Goods
Current 112.94 Open 113.25 Change -1 1/16
Low 112.31 High 114.19 Volume 90,600

Company Description

SPX Corporation is a global provider of industrial products and services, technical products and systems, service solutions and vehicle components. For the nine months ended 9/30/00, net sales fell 1% to $1.97B. Net income before extra item rose 28% to $149M. Revenues reflect lower sales of technical products and systems. Net income reflects lower interest expenses and lower S/G/A as a percentage of revenues.

Play Description

January 14, 2001

SPX is a major global provider of a myriad of technical products. The company produces data networking equipment, broadcast antennas, power transformers, industrial valves, high-pressure hydraulics as well as transmission and steering components for the automobile and truck industries, among others. SPX should be a beneficiary of the recent change in FOMC policy to a lower interest rate environment and investors are re-discovering this company. Investors are also keying off of the recent surge in the transportation stocks, namely the trucking companies as a reason to buy SPW. The stock begun the process of developing a rounded bottom formation after the company announced that it was comfortable with 2000 earnings estimates of $5.90 a share. SPX will release their official earnings on February 6th. SPX closed the week just above the 50-DMA of $110.59. This is usually a bullish event and it may signal renewed buying support for the stock. The MACD is positive and rising. OBV is also confirming a reversal in trend. The RSI has plenty of upside potential before the stock will be considered overbought. Long term resistance will likely come in at the 200-DMA, which sits at $125.09. The 20-DMA should provide decent support at $103.53.

Picked on January 14th @ $111.69
Change since picked +0.00
Stop Loss @ $103.00


January 25, 2001

It was a decent day for many defensive stocks such as drugs and oils. Unfortunately, the rotation out of high technology stocks extended, albeit mildly, to SPW. This major producer of industrial and technical products has been enjoying a very nice recovery rally. Greenspan's comments today should keep the momentum going. SPW should be a notable beneficiary of a dovish Fed. Technically, SPW had been consolidating nicely above its 50-DMA of $109.13. We are a little bit concerned about today's decline because it broke a small up trend line. The selling was done on very low volume of only 94,700, so perhaps there was very little conviction behind today's decline. The MACD is still decidedly positive. According to the RSI, today's decline was not caused by an overbought condition. In fact, there is plenty of rally room before the stock would be considered overbought. SPW still needs to break above resistance of $118.75 before a more sustainable rally can ensue. Please remember that SPW will be reporting its earnings on February 6th.

Picked on January 14th @ $111.69
Change since picked +2.31
Stop Loss @ $109.00

January 23, 2001

SPX took a back seat to todayís technology, which should not come as a complete surprising considering itís manufacturer of industrial and technical products. SPW is fast approaching its earnings release, which is tentatively scheduled for February 6th. Current consensus estimates are looking for profits of a $1.65 a share. If the company should meet estimates, it will show an 18 percent increase in earnings over the same period last year, which saw profits of a $1.40. SPW is also a split candidate due to the stock's triple-digit price. SPW has been slowly climbing higher ever since it climbed above the 50-DMA, which currently provides excellent support at $109.56. Tomorrow's support should be $115.00. If there is renewed buying among cyclical issues ahead of next week's FOMC meeting, then look for SPW to really rally once it takes out resistance at $118.75. To that end, the MACD is rising and looks good. Whatís more, there is still plenty of room for the RSI to permit a rally.

Picked on January 14th @ $111.69
Change since picked +3.56
Stop Loss @ $109.00

January 21, 2001

SPX's widely diversified product mix that includes networking equipment, fire detection systems, automobile parts, power transformers and industrial furnaces, among numerous other products, is dependant upon a growing global economy for increasing profits. SPX's stock had been in a freefall throughout the last quarter of 2000, due to recession concerns and a Fed that was unwilling to cut interest rates. The recovery of SPX's share price began as soon as the Fed finally cut interest rates. The share price of SPW has been steadily rising since it found a bottom at $90.50. Last week, SPW climbed above the 50-DMA, which now provides solid support at $110.00. Last week's high of $118.75 should provide some modest resistance this week. The next resistance point is the most recent peak of $123.69. The MACD is confirming that this up trend could continue for a while. OBV is mirroring the stock's reversal. SPX is also a split candidate due to a share price that is in triple digits. SPX will report earnings on February 6th, which might be a good time for the company to announce a split. Please note that last week's rally enabled us to raise our stop on this play to $109.00.

Picked on January 12th @ $111.69
Change since picked +4.25
Stop Loss @ $109.00


Copyright 2001

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