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 23, 2001

We excited Merrill at yesterday's close to avoid this morning’s earnings release. For the record, Merrill Lynch reported stellar results of $0.93 in profits. This number was $0.05 above the consensus estimates. Longer-term investors who held the stock through the report saw a very nice rally to a new all time high.

Picked on January 17th @ $74.56
Profit/Loss +0.57 (1%) (Stopped Monday $75.13)
Best Profit +2.25 (3%)

January 21, 2001

Merrill Lynch has been recently surging on the prospects of an improved investing climate following the FOMC's decision to cut interest rates earlier this month. Merrill Lynch will report their earnings on Tuesday, just before the market opens. In accordance with our trading rules we will exit this play no later that Monday's close, in order to avoid any earnings related volatility and added risk. A rally on Monday, fueled by traders anticipating a good earnings report may be enough to get us out of the hole before we have to close out this play. The all time high of $75.88 is the only resistance that MER should encounter on Monday. A move above this price could spark a decent rally into the close. However, be cautious if MER drops below Friday's low of $73.00.

Picked on January 17th @ $74.56
Change since picked -0.68
Stop Loss @ $69.00