New Split Updates
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New Candidate Updates
| ASD
- American Standard Companies, Inc. $66.63 +1.61 (+0.97)
|
American Standard Companies, Inc. gapped up Thursday morning on news
that Morgan Stanley (NYSE:MWD) increased its weighting of ASD from 1%
to 2% in Morgan's U.S. model portfolio. Shares of ASD traded to an all-
time high of $66.80 before pulling back to a close of $66.63 on volume
of 294,000 shares. The stock has been trending higher on average volume
so ASD may be able to continue to set new highs. From a technical
standpoint, ASD has support at Wednesday's intra-day high of $66 with
additional support at $65.56, the 10-dma. Resistance is Thursday's
intra-day high of $66.80 and then $68. A bounce off of $66 or a
breakout above $66.80 on midday volume greater than 250,000 shares may
be possible entry points. We have moved our stops up to $64.50 to lock
in additional gains.
| BJ
- BJ's Wholesale Club $48.75 +0.25 (+0.44)
|
This stock has behaved in a somewhat puzzling fashion this week. BJ
was able to fend off the bear attack earlier this week. Usually, this
type of relative strength attracts momentum investors. This was true
for a little while today. However, BJ was hit with some profit taking
after establishing a new high of $49.65 earlier in the session.
Today's action was almost a carbon copy of yesterday's trading.
Therefore, traders might want to try and get in early and anticipate
the establishment of another new high tomorrow, as opposed to buying
the stock at the time when it makes a new high. Obviously, another new
high is not a guarantee tomorrow. For the rest of you, we certainly
cannot complain about a stock that has established a new high three
days in a row. Some of BJ's technical indicators continue to be quite
strong and are suggesting the continuation of the rally. These
technical indicators include the MACD, Money Flow and OBV. In the
event of a pullback, BJ may find support at its 5-DMA, which closed
today at $47.19
| BKH
- Black Hills Corporation $54.90 -0.46 (-2.37)
|
Despite the drop below the important support provided by the 10-DMA of
$56.72, there is still a lot to like about this western US utility.
The company is expected to post record profits this year, due, in part,
to the energy crisis. Couple this fact with the possibility that the
company will announce a split soon and one can see why the stock is
trading just under its 52-week high of $58.50. BKH has split its
shares three times since 1986 and every previous split was announced
when the stock was trading at levels below today's closing price. That
said, traders will probably want to make sure that the stock can stay
above the next level of support, which is provided by the 20-DMA of
$54.69. The MACD did issue a sell signal yesterday, which is a bit of
a concern in the short term.
| CEFT
- Concord EFS Inc. $50.70 -0.02 (+0.10)
|
Concord EFS, Inc. has been consolidating over the last two days after
hitting an all-time high during Tuesday's session. On Thursday, shares
of CEFT traded to an intra-day low of $50.55 before bouncing back to a
close of $50.70 on volume of 3.35 million shares. The stock has broken
its sharp short-term upward trend so CEFT may spend some time
consolidating in the $49-$50 range. In the meantime, support is the 5-
dma at $50.35 with stronger support at $49.32, the 10-dma. Resistance
is holding at Tuesday's intra-day high of $51.40 and then $53. Look for
entry points on a bounce off of $50.35 or a breakout above $51.40 on
volume of at least 2 million by noon. We are keeping our stops at $46
as downside protection.
| CIMA
- Cima Labs Inc. $73.50 -3.20 (-1.30)
|
CIMA pulled back on lighter volume today. Due to the fact that the
stock traded only 200,000 shares on the sell off, we won't break out
the warning flag just yet. However, we will watch for CIMA to hold
above support at its 20-dma of $70.00 going forward into next week. In
addition, we need another good up day to avoid a definitive sell signal
out of the MACD. Resistance has come into CIMA at the $77.00 level and
again at the $78.00 level. More conservative traders may wish to wait
until CIMA can close above $78 on volume of at least 450,000 shares
before initiating positions. Otherwise, traders could look to enter on
a bounce off $70 on similar daily volume. Our stops remain at $67.95
to protect on the downside.
| HRB
- H&R Block $59.64 +0.27 (-0.08)
|
Even though HRB managed to forge ahead today, its MACD has turned
negative and volume is decelerating. These may be signs that HRB is
getting ready to roll over. For this reason, we have tightened our
stops up to $58.40 incase sellers regain the upper hand. Looking at
the chart, support should come in at $58.50 and resistance has showed
up at $60.44. Traders looking to get into HRB should wait until the
stock can close above $60.50 on volume of at least 600,000 for the day.
Otherwise, HRB looks vulnerable to a pullback.
| KRI
- Knight Ridder, Inc. $54.94 +0.10 (-0.69)
|
Knight Ridder, Inc. showed some signs of life on Thursday. The stock
hit an intra-day high of $55.36 before pulling back to close at $54.94
on volume of 399,000 shares. However, the stock has fallen below its
20-dma for the first time since May 16th and KRI has put in three
consecutive lower highs on below-average volume so the stock may
continue to drift lower until the volume returns. For now, support is
May 16th intra-day low of $54.56 with additional support at $54.08, the
200-dma. Resistance is the 20-dma at $55.44 and then the 100-dma,
currently at $56.21. Traders may consider starting new plays on a
bounce off of $54.56 or a move above $55.44 on volume of at least
250,000 shares by noon. We are leaving our stops at $54 to limit
potential losses.
New Momentum Updates
| BUCA
- Buca, Inc. $21.80 -3.35 (-2.99)
|
BUCA also succumbed to the downdraft in restaurant stocks. The stock
fell $3.35 on heavy volume of 725,000 shares. We avoided being stopped
out of this play by only $0.30. The good times for restaurant stocks
were bound to come to an end, but we never expected such an
overreaction to news of a slowdown in visitor traffic for May. BUCA
has recovered from big down days before, but since we are so close to
our stop, we don't hold out much hope for this casual dinning play.
Traders should hold off on entering BUCA until it can prove that it has
stabilized.
| GTK
- GTECH Holdings Corp $37.31 +0.69 (+0.09)
|
GTK showed some excellent resiliency yesterday during the broad stock
market decline. GTK did come within $0.08 of hitting our suggested
stop but then managed to rally from that level. Today's positive action
was likely influenced by not only the general bounce in the markets but
also a positive news item. GTECH beat out two competitors to win a
long term contract (through November 2011) to provide online lottery
and instant-ticket services for Warsaw, Poland based, government
controlled, Totalization Sportowy Sp. The contract is estimated to be
worth $110 million. Nevertheless, GTK has suffered some technical
damage this week. Over the past three days GTK has experienced lower
lows. GTK could either be on the verge of correcting or it might be
building a base here. This is why we use trailing stops. The MACD is
negative and is rolling over. However, one really strong technical
indicator is the OBV. This indicator jumped substantially today
because GTK enjoyed an increase in price accompanied by volume that was
4.28 times the average daily volume of 326,772. A good entry point
might present itself tomorrow if GTK can establish a new high above
$38.18 with midday volume exceeding 200,000 shares.
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