Merrill Lynch & Co. provides investment, financing, advisory, insurance, and related products and services on a global basis to individual investors, small businesses, corporations, governments, and financial institutions. For the 39 weeks ended 9/29/00, total revenues rose 28% to $33.21B. Net income applicable to Common rose 54% to $2.88B. Results reflect increased asset management fees and commissions earned and improved operating margins.

January 17, 2001

One could assume that now would be a tough time for a company whose logo is a Bull. However, the share price of Merrill Lynch charged to a new high today. The AMEX Broker/Dealer Index (XBD.X) has been surging ever since the FOMC electrified the financial stocks with a surprise rate cut. Lower rates should benefit Merrill Lynch by providing a better investment climate that will likely increase trading profits and commission income. Momentum investors have had limited trading candidates these days and MER has been of their prime candidates. Merrill Lynch could be experiencing the early stages of an earnings and perhaps a split anticipation run. Earnings will be released on January 23rd. Merrill Lynch's last two splits were announced in conjunction with their earnings reports. The newly established high of $75.88 will probably constitute light resistance in tomorrow's trading. Today's intraday low of $73.63 successfully tested Merrill's up trend line. Since this trend line has now been tested five times, we feel that it should provide good support going forward. Otherwise, support should be found at the 20-DMA of $69.00, which is where we have placed our initial stop. The MACD is solidly positive and indicates that this rally could continue. Current Money Flow is also very good. The RSI is telling us that there is enough room to allow an earnings/split anticipation rally to occur.

Picked on January 17th @ $74.56
Change since picked +0.00
Stop Loss @ $69.00

January 18, 2001

Merril1 Lynch took a little break from its foray into all-time high territory for two reasons: First, J.P. Morgan Chase & Co (JPM) disappointed the Street this morning with lower-than-expected earnings. One of the causes for this earnings miss was trading losses. This does not necessarily mean that MER had similar problems, but the news does create a cautionary tone for the stock. MER reports its earnings January 23rd before the market opens. Secondly, MER probably under performed the market today because the bullish focus was on technology stocks. Nevertheless, MER looks technically strong and could be poised for a nice earnings and split anticipation rally. MER has a history of announcing splits in conjunction with its earnings reports. Technically speaking, the MACD is still quite positive and Money Flow is strong. The 10-DMA provided some support tomorrow. Look for this moving average to continue to provide support tomorrow at $72.84. The all time high of $75.88 is important resistance. A move above that price could trigger a nice charge for the Merrill Lynch Bull.

Picked on January 17th @ $74.56
Change since picked -1.00
Stop Loss @ $69.00