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| PLAY > New Plays |
Sunday, April 01, 2001 |
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New Split Plays
None
New Candidate Plays
None
New Momentum Plays
| KMB - Kimberly-Clark $67.83 (+0.72)
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KMB, a global leader in the production and marketing of numerous household and industrial products, has been a very strong market performer for the better part of a year. By supplying the world with products that people will always need, KMB has been able to maintain stable earnings. KMB is expected to post profits of $3.65 for fiscal 2001. The company has a very modest forward P/E of 18.6, which offers jittery investors a little bit of cushion in this nervous market. This fact partly explains why KMB has been able to hold its stock value while so many other stocks have floundered. KMB has spent the past several trading sessions consolidating its gains from earlier this year. This process may be nearing its completion, enabling the stock to resume its up trend. New positions can be added as KMB crosses over its 50-DMA of $67.88. Some of you may want to wait until it becomes clear that KMB will close above the 50-DMA on volume that put the stock on track to do 2 million shares by day's end. Money Flow has been outstanding and the OBV is improving. Although the MACD is still negative, it appears to have stopped its decent and could be poised to trigger a buy signal soon. We are placing stops at $62.50 in case KMB brakes support at $65.50.
| WM - Washington Mutual Incorporated $54.75 (+4.31) |
Revenues in the financial service industry remain closely tied to the direction of interest rates, which is one reason why Washington Mutual (WM) has caught the attention of momentum traders over the past few months. The picture was quite different just last year, however, as earnings growth for the company slowed because of a series of rate hikes by the Fed. This year is a completely different story. Currently, WM is poised to deliver solid profit growth in upcoming quarters and with the possibility of further monetary easing, the company should be able to reduce its funding costs even more. We also like the fact that WM is a giant within its industry and currently has over 2000 offices and $190 billion in assets. Turning to WM's chart, we can't help but notice the excellent set-up for a momentum breakout. Bullish crossovers in both the MACD and Stochastic provide strength to the current uptrend and further our confidence of a potential rally. Volume, we need to point out, has come in under the 3-month average over the past several days and will need to improve to at least 3,500,000 shares/day to fuel the stock higher. We'll look for resistance to come in at the all time high of $55.93, and above that, we can expect a tougher barrier at $60. Support should come in at the 5-dma of $53.28 and then at the 50-dma of $50.92. Low risk entry points may present themselves with a bounce off support on volume of at least 1,750,000 shares by mid-day or a breach through resistance on similar mid-day volume. We'll employ stops at $50.75 to guard against lower levels.
New Plays Index
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