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| PLAY >New Updates |
Sunday, March 18, 2001 |
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New Split Updates
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SBL
- Symbol Technologies $45.59 (-0.82)
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SBL's technology has revolutionized the inventory process. SBL's product line has become nearly indispensable for customers who wish to maintain a competitive edge. When SBL closes its books on fiscal 2001, the company is expected to realize profits of $1.32/share. If these estimates are realized, SBL will have increased their profits by $0.40, or 43%, over fiscal year 2000's profits. Needless to say, SBL is one of the few technology companies that has both a solid profit forecast and earnings visibility. SBL announced a 3:2 split on February 27th that becomes payable on April 16th. We believe that SBL will outperform the market and could enjoy a nice split run when the market stabilizes and begins its inevitable bounce higher. Last week's trading range established support for SBL at $45.50 and resistance at $50.25. Potentially profitable trades could be entered if SBL stays above support at $45.50. Momentum traders may want to pick up SBL if it trades above $50.25 accompanied by midday volume of more than 250,000 shares. One technical indicator that portends a positive move is the RSI. This indicator is telling us that there is plenty of upside potential before the stock would be considered overbought.
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UCBH
- UCBH Holdings Incorporated $53.13 (-2.63)
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The high probability of further cuts coming with Tuesday's FOMC announcement certainly bode well for our play for the week ahead. We're also anticipating an influx of buying to arise as shares approach the March 31st record date for the upcoming stock split. With these two events in mind, it's no surprise that the stock is already starting to gather momentum on the upside. What's more, UCBH has trended higher for the past three days, which confirms its short-term uptrend. Looking at the chart, UCBH shares rallied higher on Friday, adding $0.50 or 0.95% by the closing bell. The stock did flirt with higher levels on an intraday basis, but found a stiff barrier at the 30-dma of $53.77. A look at the technical indicators show the MACD is still negative, but could be in process of rounding out. On Balance Volume continues to make higher highs and indicates that there is solid buying of the stock on positive days. Traders considering an initial entry point should wait for a sharp break through the converging 10 and 20-dma's of $54.37 and $54.54, respectively. Support will come at the 50-dma of $50.46. We'll continue to hold stops at the $49 mark to protect on the downside.
New Candidate Updates
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CEC
- CEC Entertainment Inc. $40.40 (-1.60)
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CEC Entertainment started Friday's session in positive territory after Banc of America initiated coverage of the restaurant industry. CEC was assigned a "buy" rating with a $50 price target. Shares of CEC traded to an intra-day high of $40.81 early in the day. Unfortunately, the stock drifted lower as the market sold off. CEC closed at its intra-day low of $40.40 on volume of 149,900 shares. The stock has made three consecutive lower highs, creating a short-term downward trend. However, CEC still remains within its $40-$43 trading range, so it could bounce after a test of the $40 mark. The stock is currently trading around its previous split range. In addition, the company has 100 million shares authorized and 34.2 million shares issued; plenty for a 3:2. We are looking for a split announcement with the May earnings release or out of its next BoD meeting. Until then, support is holding at Thursday's intra-day low of $40.23 with additional support at $40, the February 21st intra-day high. Resistance remains at Thursday's intra-day high of $40.95 and then Wednesday's intra-day high of $41.60. Traders may consider starting new plays on a bounce off of $40.23 or a move above $40.95 on midday volume of at least 80,000 shares. We are leaving our stops at $39.50 as downside protection.
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UHS
- Universal Health Services $84.37 (+0.63)
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UHS, an owner and operator of 47 hospitals, attracted a fair amount of value investors last week. At first glance, a positive move of less than a point for the whole week may be unimpressive. However, when one considers the huge declines seen by a multitude of stocks over the last week, UHS' positive move tells us that the stock is developing some nice relative strength. It is technically significant that UHS bounced off its 200-DMA, which closed the week at $80.09. A sustained bounce off the 200-DMA is a good sign that a stock has found a bottom and will likely trend higher. Addition, it appears as if UHS is headed towards putting in a triple bottom formation. UHS is also tempting because it is a split candidate. The company's last split was made payable in May of 1996 when the stock was trading almost 30 points below Friday's close. In the event of a pullback on Monday, we are comfortable adding positions if UHS stays above our suggested stop at $80.00. A good entry point for momentum investors will present itself if UHS moves above its 50-DMA of $85.81. This trade becomes more enticing if the move above the 50-DMA is accompanied by midday volume of at least 150,000 shares. We are additionally encouraged by the fact that the OBV is getting stronger.
New Momentum Updates
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LMT
- Lockheed Martin Corp. $37.00 (-1.56) |
Lockheed Martin Corporation has lost ground in each of the last 4 sessions. On Friday, LMT sold off following news that Congressional auditors gave a negative report on the status of the $61.9 billion F-22 fighter program with Lockheed. Shares of LMT fell to an intra-day low of $36.32 before bouncing back to a close of $37 on volume of 2.28 million shares. The stock is starting to show signs of a bottom after hitting a higher low and a higher high on Friday. However, LMT has formed a short-term downward trend, so the stock may need to test support before it moves higher. For now, support is Friday's intra-day low of $36.32 with stronger support at $35.76, the 50-dma. Resistance has fallen to Friday's intra-day high of $37.60 and then Tuesday's intra-day high of $38.90. Look for entry points on a bounce off of $36.32 or a move above $37.60 on volume greater than 800,000 shares by noon. We are keeping our stops at $35 to limit potential losses.
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MAT
- Mattel, Inc. $17.70 (-0.76)
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On Friday global toy manufacturer Mattel Inc. closed below the 10-dma for the first time since March 5th. Shares of MAT traded to an intra-day low of $17.51 before making a small recovery to close at $17.70 on volume of 3.8 million shares. The stock continues to consolidate after hitting a 52-week high on March 9th. On the positive side, MAT's upward trend remains in tact so the stock should be able rebound if U.S. market conditions improve. In the meantime, MAT has support at Friday's intra-day low of $17.51 with additional support at $17.39, the 20-dma. Resistance has come in at Friday's intra-day high of $18.50 and then $18.84, the 52-week high. A bounce off of $17.51 or a move above $18.50 on midday volume of at least 1.3 million shares may be possible entry points. Our stops are holding steady at $17.
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