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The SplitTrader.com Sunday 12/17/2000 2 of 2
Copyright 2000, All rights reserved.
Redistribution in any form is strictly prohibited.
- Your World Leader for Trading Stock Splits on the Internet -
Posted online for members at: http://www.SplitTrader.com
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In This Candidate Newsletter:
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Watch List
Plays - New - Updates - Drops
Monday's Candidate Play-of-the-Day -AT
=============================
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Watch List
==========
The following stocks are on our radar screen. We are watching
them for further developments before we add them to our In Play
List.
- SPLIT RUN CANDIDATES TO WATCH-
IDPH - IDEC Pharmaceuticals $209.31 +1.13
WHY WE LIKE IT: While the AMEX Biotech Index (BTK.X) has been
faltering since early November, IDPH has held up nicely. We like
this show of relative strength and look for IDPH to lead once the
BTK.X turns around. IDEC Pharmaceutical is paying a 2:1 split on
01/17/01, so there is still time to see a split run materialize.
POTENTIAL TRIGGER EVENT: A breakout and close above the stock's
previous closing high of $220.25 on volume of greater than 1.5
million shares could prompt us to add IDPH to our Current Play
list.
SUNDAY'S UPDATE: IDPH pulled off a midday U-turn after being down
over $13 before reversing course to close up $1.13. IDPH still
looks strong, although it appears as if the 5-dma is now acting
as resistance. The MACD is still positive and the stock is
coming down from over bought levels according to the stochastic.
A few more strong days and IDPH will be added to our Christmas
shopping basket.
Chart = 
===
EAT - Brinker International $41.00 +0.31
WHY WE LIKE IT: Whether the economy comes in for a hard landing
or not, folks still will chow down at Brinker's reasonably priced
family of restaurants. The stock's 50-dma has offered good
support since October. The company is splitting its stock 3:2 on
01/16/01.
POTENTIAL TRIGGER EVENT: A close above the stock's previous high
of $42.75 on volume of at least 600,000 shares would ring the
dinner bell for us.
SUNDAY'S UPDATE: On Friday, EAT bounced off its 10-dma to finish
fractionally higher on a decidedly down day in the broader
markets. Volume has been light on the recent pull back in the
stock so we will look for volume to pick up next week in order to
carry Brinker to higher ground. Look for $40.50 (Friday's low)
to offer near term support.
Chart = 
- SPLIT CANDIDATES -TO WATCH-
SWY - Safeway, Inc. $59.00 +0.88
WHY WE LIKE IT: Safeway has pulled back from its highs as
expected, but has bounced nicely off its 50-dma, proving that
there may still be some strength to the stock.
POTENTIAL TRIGGER EVENT: A breakout above its old high of $61 on
strong volume of at least 2.5 million shares would merit a closer
look at the stock.
SUNDAY'S UPDATE: Safeway bucked the market trend again on Friday
by finishing in the green. Another move to the upside will
produce a buy signal in the MACD. However, we will wait for
conformation of the stock's strength to come with a close above
its previous high of $61 before heading to the checkout line.
Chart = 
===
JNJ - Johnson & Johnson $98.56 -0.69
WHY WE LIKE IT: With the AMEX Pharmaceutical Index (DRG.X)
looking like it ready to make another run at its highs, we like
the sector. Most drug stocks took a hit in early December
because of a sweeping downgrade to the whole sector based on
valuation. It looks like most investors have now shrugged this
off and are again buying the drug stocks.
POTENTIAL TRIGGER EVENT: Johnson & Johnson has been trading
within a 10-point range since July. A breakout through the
upside of this range at $102 would certainly be bullish for JNJ.
SUNDAY'S UPDATE: JNJ started the day strong, bumping against
$100 twice in the morning session. However, the afternoon
session saw more volatility to the downside (possibly expiration
related) and JNJ could not hold up under the selling pressure.
The stock continues to look strong and the MACD still looks
poised to issue a buy signal.
Chart = 
- MOMENTUM STOCKS TO WATCH-
GM - General Motors $53.81 -0.13
WHY WE LIKE IT: The designer and manufacturer of trucks and
autos is bouncing off long-term support at $48. Although it has
been mired in a downtrend since May, it is now telegraphing signs
of a turnaround. If the Fed moves towards cutting rates,
automakers could stage a nice turnaround as credit worries will
ease and consumers will be willing to make more big-ticket
purchases.
POTENTIAL TRIGGER EVENT: We like to stay away from calling an
absolute bottom, so we will let the stock tell us it is strong by
waiting to see if it can break overhead resistance at $55 (the
last gap in the chart). A break of this level on volume of
greater than 6 million shares would entice us to nibble.
SUNDAY'S UPDATE: GM headed down as low as $51.38 before it
downshifted and put the pedal to the metal, finishing off just
$0.13. GM is showing some real signs of accumulation as much of
the recent moves higher have come on good volume. Look for
volume to remain strong as GM looks to challenge its 50-dma next
week.
Chart = 
===
UST - UST, Inc. $25.63 +0.19
WHY WE LIKE IT: There have been a total of zero earnings
warnings out of the tobacco group in the last month. UST is
included in this defensive sector but has distanced itself from
most of the lawsuits, due to the fact that it is a leading
provider of smokeless tobacco.
POTENTIAL TRIGGER EVENT: We would like to see UST conquer and
close above its previous high of $25.94 on volume of at least
600,000 shares before adding this stock to our Current Play list.
SUNDAY'S UPDATE: UST rallied as high as $26.25 on Friday before
settling back into its current two-month base. Looking at a
weekly chart, it can be seen that UST has just broken out of a
cup and handle formation. This is usually very bullish, so we
will watch for UST to conquer resistance sooner than later. The
stock's MACD just recently issued a buy signal. In addition, the
recent up turn in volume has confirmed the fact that the stock is
attracting the attention of investors frustrated with the lack of
leadership in the market.
Chart = 
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SplitTrader.com Plays
=====================
The PLAY LEGEND:
SplitTrader.com Candidate Play Recommendations.
Candidate Play-of-the-Day is our number one candidate
recommendation for the following trading day.
Updates are just that - updates on continuing plays
New plays are brand new for the newsletter.
Drops are closing plays that we feel have lost the advantage.
You will see:
Stock Symbol, Company Name, Closing Price, (change for the week)
Picked at date and Change since picked
Terms:
BoD = Board of Directors meeting
ADV = Average Daily Volume
dma = daily moving average
At the SplitTrader.com website, we have comprehensive profiles
for each stock that we are playing or have played in the past, as
well as hundreds of others. Please take the time to visit the site
to view the profile of the stock(s) you wish to learn more about.
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=========
NEW PLAYS
=========
NEW SPLIT RUN PLAYS 12/17/00
============================
TALX - TALX Corporation $38.00 (+7.88)
The TALX Corporation (TALX) is an application service provider
(ASP) that designs and implements interactive communications
solutions for human resources, payroll, and employee benefits.
All of the company's services are delivered through the TALX ASP
Center and use leading edge technologies such as interactive web
and interactive voice response systems. Such technologies have
kept the company ahead of the competition and has kept their
stock price soaring. On November 11th, shareholders authorized
the company's first stock split. The 3:2 split will be authorized
for shareholders of record on December 8th, with a payable date
of January 19, 2001. Even more exciting, shares may have just
signaled that they're ready for additional gains by breaking out
to new highs on Friday. This week's advance, which broke above a
two-week consolidation range, came on strong volume (110 thousand
shares traded) and made a new closing high at $38. We'll look for
$38.25 (intraday high) to present our initial opposition. As far
as support for the stock goes, the previous high of $33.81 should
help to bolster support at $34. We are placing our stop just
below support at $33.25, to protect against a meltdown. Look for
buying opportunities if good volume (100 thousand shares or more)
follows a sharp bounce from support or an advance through
resistance.
Picked on December 17th @ $38.00
Change since picked 0.00
Stop Loss @ $33.25
Chart = 
NEW SPLIT CANDIDATE PLAYS 12/17/00
==================================
PFGC - Performance Food Group $49.75 (+3.19)
People may not be buying personal computers nearly as much these
days but hard landing or not; they are still eating just as much.
PFGC is a processor and supplier of a variety of food products to
multiple institutions including restaurants, hospitals and
schools. PFGC's share price is plowing into new highs, which
makes the stock a split candidate. A relatively low P/E of
28.11, combined with expected earnings growth in the low 20% area
for the past year and for next year has attracted investors.
PFGC established a new all time high of $49.88 on Friday. This
price should provide mild resistance on Monday. PFGC completed a
secondary offering last week at $41.00. This price should
provide major long-term support. Friday's opening price was
$46.75, which rests upon the short-term trend line and should
provide support. The MACD recently turned positive and is
rising. Money Flow is on fire, with investors fleeing from tech
stocks and putting money into reliable, fundamentally sound
stocks. The RSI may be indicating the start of an overbought
condition. However, the last time the RSI was at current levels,
it hung at overbought levels for a while before the stock started
to pull back.
Picked on December 17th @ $49.75
Change since picked +0.00
Stop Loss @ $43.00
Chart = 
NEW MOMENTUM PLAYS 12/17/00
============================
None
=======
UPDATES
=======
SPLIT RUN PLAY UPDATES 12/17/00
===============================
CRY - Cryolife Incorporated $49.69 (+2.06)
Cryolife is currently performing over 75% of all cardiovascular
tissue grafts in the U.S. In October, the company was given a
boost when its SynerGraft pulmonary heart valve received product
approval for distribution in Europe. Since this announcement, CRY
has put together a strong uptrend, which now may be gearing up
for another run after pausing briefly in late November. The stock
is currently oscillating in the $50 range. We believe that
lighter volume and a tight consolidation over the last two
trading days may have positioned the stock for a near-term
advance into the payable date of 12/27. In order to do this, the
stock will first have to retake resistance at $50. Look for good
volume (100 thousand shares or more) to accompany a break through
and close above this level prior to opening new positions.
However, aggressive buyers may want to consider accumulating
shares at their present levels. We'll expect Friday's low of
$48.13 to help bolster good support at the $48 mark. If prices
retrace to this level and reverse sharply on good volume, this
may mark a good, lower risk entry point. Set stops just below
this level at $47.88 to prevent additional losses. Consider
reconfirming entries with strength in the AMEX Biotechnology
Index (BTK.X). Support and resistance will be used for
determining our entries and exits ahead of the December 27th
payable date. Buyer beware, however, as Cryolife trades on very
low volume, which can have the effect of increased volatility.
Picked on December 12th @ $53.00
Change since picked -3.31
Stop Loss @ $47.88
Chart = 
SPLIT CANDIDATE PLAY UPDATES 12/17/00
=====================================
AXF - AXA Financial Inc. $54.63 (-1.00)
AXA Financial, the diversified financial service organization,
has once again managed to regain its upward trend. This past week
the stock tested major support at the 50-dma located at $53.50.
This is the same level that in October proved to be solid support
as well. The stock has been gently climbing higher on decent
volume. Considering the fact that the Dow Jones Industrial
Average (INDU) lost over 400 points this week, we are impressed
that AXF is off only a buck. As of the closing bell on Friday,
AXF now sits just above support at the 50-dma at $54.09.
Resistance is immediately overhead at the 10-dma at $54.65
followed by the 20-dma at $55.25. We would like to see any moves
higher accompanied with volume of at least 1.8 million shares.
This would confirm continued buying support for the stock. We
will keep our stop loss at $53.00.
Picked on November 30th @ $56.31
Change since picked -1.68
Stop Loss @ $53.00
Chart = 
===
D - Dominion Resources $61.50 (+1.31)
Dominion Resources is a utility holding company with a daily
energy production capacity of 2.7 trillion BTUs. On Friday,
shares of D traded to an intra-day high of $61.81 after testing
support at the 5-dma. Volume has been picking up, with 1.2
million shares trading during Friday's session. The stock appears
to be creating a firm base as the energy sector regains momentum.
As far as a split announcement, D is currently trading above its
previous split range so we could get a split announcement
following their next BoD meeting or earnings release. Their last
split announcement came out of a BoD meeting when the stock was
trading in the $45-55 range. In the meantime, support is the 5-
dma at $60.88 with additional support at the December 12th intra-
day low of $60. Resistance is holding steady at Wednesday's
intra-day high of $61.88 and then $62.69, the November 17th
intra-day high. A bounce off of $60.88 or a move above $61.88 on
midday volume of at least 450,00 shares may be possible entry
points. Our stops remain at $57.50 to limit losses.
Picked on November 19th @ $62.69
Change since picked -1.19
Stop Loss @ $57.50
Chart = 
===
DGX - Quest Diagnostics $127.00 (+4.00)
Medical testing service provider Quest Diagnostics has been
consolidating in the $120-$130 range for the past two weeks. SG
Cowen initiated coverage of DGX with a "Strong Buy" rating on
Friday morning. However, the new coverage was not enough to move
the stock out of its trading range. Shares of DGX hit an intra-
day high of $127.94 on volume of 496,000 shares. We have been
impressed with the movement in DGX, as the stock continues to
trend higher in a generally weak market. DGX is currently in
split territory. The shares are trading above the century mark
and the company has enough shares for a split, so an announcement
could come out of their next BoD or with the quarterly earnings
report in January. Going forward, support is the 5-dma at $125.61
with stronger support at $123, just below the 10-dma. Resistance
remains at the December 12th intra-day high of $128.63 and then
$130. Traders may consider starting new plays on a bounce off of
$125.61 or a move above $128.63 on volume greater than 300,000
shares by midday. We are keeping our stops at $118 to protect
profits.
Picked on November 24th @ $104.38
Change since picked +23.13
Stop Loss @ $118.00
Chart = 
===
MRK - Merck & Company $90.38 (+0.82)
Despite an ugly market on Friday, Merck finished the week down
less than a dollar. Merck lost only 62 cents on the day but
recorded huge volume. The stock traded 10.6 million shares, well
above its 3-month average of 6.2 million shares. This could have
been due to triple witching, but bottom line is that the stock is
holding up well. Expect the trading volume to subside across the
board going into the holiday weekend. On Thursday, after Gore
conceded, the market expected the drug stocks to rally. A "Bush
rally" was so widely anticipated by the market, however, that
when the Texas Governor finally won, the market sold the news.
Looking at the chart, we note that the trading range for MRK has
grown much smaller. In fact, MRK appears to have formed a "wedge"
pattern, which began in late November. We will watch to see how
the stock moves when it reaches the pinnacle of this wedge. The
stock has support at the consolidation area at $90.00 and then
back at the 50-dma at $87.22. Resistance has been pervasive at
$92.00. Wait for market confirmation before entering a new play.
Look for support from the Dow Jones Industrial Average (INDU) and
the AMEX Pharmaceutical Index (DRG.X) before considering a new
position. We will post our stop loss at $87.00.
Picked on November 28th @ $92.62
Change since picked -2.24
Stop Loss @ $87.00
Chart = 
===
RKY - Adolph Coors Company $79.00 (+4.00)
The domestic beer industry continues to benefit from a favorable
pricing environment, as witnessed by RKY's successful
implementation of price hikes and a reduction in discounting over
this last year. Coors employed these price hikes over 75% of the
country, which has helped to keep the stock on a steady upward
climb ever since early March. On Friday, the stock gained $3.50,
or 4.64%, on great volume of 839 thousand shares. Coors bucked
the trend of the broader markets on Friday, exemplifying the
reasons behind owning defensive plays in this turbulent market
environment. As for our next resistance point, we'll be
expecting an intraday challenge at the all time high of $79.50.
Tougher opposition should follow just higher at $80 and then $85.
Without any previous support or resistance levels in new
territory, we'll use increments of $5 to approximate future
resistance. Support should come in at the previous all time high
of $77.06, where many traders may be looking to pick up shares.
Further down, we'll look to the $75 mark, bolstered by the 20-dma
of $74.99, to provide a firmer foothold. Look for potential
entries should the stock bounce sharply off either of these
levels on good volume of 400 thousand shares or more. We'll keep
stops at $72 to protect against further declines.
Picked on December 7th @ $76.56
Change since picked +2.44
Stop Loss @ $72.00
Chart = 
===
XL - XL Capital Limited $80.69 (-5.50)
Bermuda based insurance and financial services company XL Capital
finished the week down by 8-percent. The axiom, "the market
giveth and the market taketh away" was proven true once again
this week. The stock has now given back all the gains that it had
posted the first week of December. The across-the-board selling
hasn't helped matters at all. We will need a broad market rally
to instill some serious interest back into this stock. Earnings
accompanied by a possible split are still forth coming in the
month of January. Should the company announce a split, it will be
the first in its history. The company has almost a billion shares
authorized and only 127 million shares outstanding, so available
shares is not the issue here. On Friday, the stock fell on volume
of 461,000 shares, slightly below the 3-month average of 540K.
The technical perspective shows support at the 20-dma at $80.17
and the 50-dma at $76.62. The 20-dma has held the stock for the
past three trading sessions. Resistance is at the 10-dma at
$82.12. Watch the broad markets for confirmation before engaging
in a new play. Continue to monitor the PHLX Banking Index (BKX.X)
and the S&P Insurance Index (IUX.X) when considering new plays.
We will post our stop loss below support at $75.38.
Picked on December 3rd @ $80.25
Change since picked +0.44
Stop Loss @ $75.38
Chart = 
MOMENTUM PLAY UPDATES 12/17/00
===============================
AT - Alltel Corporation $64.44 (+2.56)
This major wireless communications and information services
provider could be on the verge of breaking through major
consolidation. Although the quarter that ends this month is
expected to show a small decrease of 5.27% in earnings over the
same quarter a year ago, 2001 is expected to show an increase in
earnings of just over 14%. This expected growth compares
favorably to a P/E of only 10.53. In this market, that type of
valuation constitutes low risk. If the market had not been weak
on Friday, we think that the move above the $65.00 resistance
would have resulted in more follow through. One good up day on
solid volume, and the stock will break from a very bullish cup
and handle formation. The MACD is positive and slowly rising.
OBV and Money Flow are not terribly exciting, but they are
heading in the right direction. The $65.63 level should provide
some light resistance followed by $70.00. Short term support can
be found at $63.50.
Picked on December 14th @ $64.75
Change since picked -0.31
Stop Loss @ $61.00
Chart = 
===
MO - Philip Morris Cos. $40.19 (+0.56)
Philip Morris is a leading supplier of tobacco and consumer
products. On Friday, shares of MO traded to a 52-week high of
$41.81 before reversing directions later in the day. The stock
was hit with a round of profit taking and an earnings warning
from Clorox (CLX) didn't help the sector much. MO closed on its
intra-day low of $40.06 on heavy volume of 16.1 million shares,
twice the average daily volume. However, this may be related to
triple witching and the large open interest in the December $40
calls and puts, pinning the stock at $40. If this indeed was the
case, MO may resume its upward trend on Monday. For now, support
is now the 10-dma at $39.44 with additional support at $39.19,
the December 13th intra-day low. Resistance has come down to
Friday's intra-day high of $41.81 and then the 6/10/99 intra-day
high of $42.50. Traders should be looking for entry points on a
bounce off of $39.44 or a move above $41.81 on midday volume of
at least 3.5 million shares. We are leaving our stops at $39 to
lock in a gain.
Picked on October 26th @ $36.00
Change since picked +4.19
Stop Loss @ $39.00
Chart = 
=====
DROPS
=====
SPLIT RUN PLAY DROPS 12/17/00
=============================
SYY - Sysco Corporation $55.00 (-0.63)
Sysco Corporation was stuck in a tight trading range on Friday.
Shares of SYY traded to an intra-day high of $55.25 before
pulling back to close at $55 on heavy volume of 1.9 million
shares. We exited SYY at the closing bell on Friday because the
shares are due to split Monday.
Picked on November 9th @ $53.94
Profit/Loss = +0.86 (+2%)(Friday's Close)
Best Profit = +4.75 (+9%)
Chart = 
SPLIT CANDIDATE PLAY DROPS 12/17/00
===================================
CEFT - Concord EFS $42.13 (-4.12)
With all the downgrades and earnings warnings from large
institutions like J.P. Morgan (JPM) and Bank of America (BAAC),
CEFT just couldn't stand up against the selling pressure.
Friday's volume of 4.72 million shares was just more than two
times the ADV. Our stop was executed during this recent
downdraft. We still believe that CEFT is a solid split
candidate. If history repeats itself, CEFT's stock will bounce
off the 50-DMA and establish a new high. We will continue to
monitor this stock and hopefully we can catch a more advantageous
move next time.
Picked on December 10th @ $46.25
Profit/Loss -4.25 (9%) (Stopped on Friday @ $42.00)
Best Profit +0.19 (1%)
Chart = 
MOMENTUM PLAY DROPS 12/17/00
=============================
None
PLAY-OF-THE-DAY
===============
Sunday, December 17, 2000
=============================
AT - Alltel Corporation $64.44 (+2.56)
Sunday's Comment:
This major wireless communications and information services
provider could be on the verge of breaking through major
consolidation. Although the quarter that ends this month is
expected to show a small decrease of 5.27% in earnings over the
same quarter a year ago, 2001 is expected to show an increase in
earnings of just over 14%. This expected growth compares
favorably to a P/E of only 10.53. In this market, that type of
valuation constitutes low risk. If the market had not been weak
on Friday, we think that the move above the $65.00 resistance
would have resulted in more follow through. One good up day on
solid volume, and the stock will break from a very bullish cup
and handle formation. The MACD is positive and slowly rising.
OBV and Money Flow are not terribly exciting, but they are
heading in the right direction. The $65.63 level should provide
some light resistance followed by $70.00. Short-term support can
be found at $63.50.
Picked on December 14th @ $64.75
Change since picked -0.31
Stop Loss @ $61.00
Chart =
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DISCLAIMER
==========
This newsletter is a publication dedicated to the education
of online stock traders. The newsletter is an information
service only. The information provided herein is not to be
construed as an offer to buy or sell securities of any kind.
The newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding how to trade stock
splits. It is possible at this or some subsequent date, the
editors and staff of SplitTrader.com may own, buy or sell
securities presented. All investors should consult a qualified
professional before trading in any security. The information
provided has been obtained from sources deemed reliable but is
not guaranteed as to accuracy or completeness. SplitTrader.com
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due
to factors beyond our control.
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