ACS provides a full range of information technology services including business process outsourcing, technology outsourcing, and professional services to the commercial sector and federal government. For the 6 months ended 12/31/00, revenues rose 6% to $979.5M. Net income rose 22% to $62.5M. Revenues benefitted from acquisitions and growth in technology outsourcing services. Earnings also reflect a gain on the sale of a minority interest.

January 28, 2001

After building a base for the past three months, Affiliated Computer Services just broke out of an inverse head and shoulders formation, notching a new 52-week high on strong volume. The company provides business process outsourcing, systems integration services and technology outsourcing services to commercial and government clients. The stock has had a great run over the last year, having risen from a 52-week low of $31 on March 8th to an all-time high of $63.13 on Friday. The company announced solid earnings on Thursday morning and we are now looking for a split announcement out of the next BoD meeting, expected on February 1st. The company already has enough shares for a split, with 500 million shares authorized and 50 million shares outstanding and the stock price is currently trading at historic split-levels. Going forward, support is the January 11th intra-day high of $62, with additional support at $60.40, the 5-dma. Resistance may come in at $63.50 or $65. Traders may consider entry pints on a bounce off of $62 or a move above $63.50 on volume greater than 700,000 shares by midday. We are setting our stop at $58 to guard against a reversal.

Picked on January 28th @ $62.94
Change since picked +0.00
Stop Loss @ $58.00

February 1, 2001

Business process and systems integrator Affiliated Computer Services resumed its upward trend on Thursday after round of profit taking in the previous session. Shares of ACS traded to an intra-day high of $65.15 before pulling back to $65 on volume of 535,000 shares. The stock currently has strong momentum, trading near its all-time high on above-average volume. However, the company held its BoD meeting on Thursday and investors may be hoping for a split. Therefore, we could get a pullback if we do not get a split announcement by Monday. For now, support is the 5-dma at $64.16 with additional support at Wednesday’s intra-day low of $63.14. Resistance has come in at the all-time high of $65.30 and then possibly $68. Consider opening new positions on a bounce off of $64.16 or a breakout above $65.30 on volume of at least 200,000 shares by noon. Our stops remain at $58.

Picked on January 28th @ $62.94
Change since picked +2.06
Stop Loss @ $58.00

January 30, 2001

Affiliated Computer Services, a business process and systems integration services firm, continues to move higher following its earnings announcement last week. On Tuesday, shares of ACS hit an all-time high of $65.30 on volume of 383,000 shares. The stock has now made six consecutive higher highs and it has strong momentum as we approach the BoD meeting on February 1st. Hopefully, will get a split announcement out of the meeting. Until then, support is Monday’s intra-day low of $63.50 with stronger support at $62.47, the 5-dma. Resistance may show up as low $67 or as high as $70. Traders should be looking for a bounce off of $63.50 or a move above $67 on midday volume greater than 175,000 shares before starting new plays. We are keeping our stops at $58 as downside protection.

Picked on January 28th @ $62.94
Change since picked +2.08
Stop Loss @ $58.00