ITW is a multinational manufacturer of highly engineered products and specialty systems. The Company primarily serves the construction, food retail and service, automotive, and general industrial markets. For the nine months ended 9/30/00, revenues rose 9% to $7.45B. Net income rose 14% to $756.5M. Results reflect increased engineered products sales, acquisitions, and improved productivity in the food equipment and welding businesses.

January 7, 2001

Illinois Tool Works, Inc. manufactures and markets a variety of products and systems that provide specific, problem-solving solutions for a diverse customer base worldwide. The company produces plastic, metal and laminate components, fasteners and assemblies; industrial fluids and adhesives; tooling for specialty applications; welding products; packaging machinery and related consumables; food service equipment; and industrial spray coating equipment. We are adding ITW as one of our new momentum plays ahead of their next earnings release scheduled for January 30th. The stock has been making daily, consistent gains since December 20th and recently conquered short-term resistance at $61.00. In fact, the recent up surge has taken the stock above a seven-month basing pattern. On December 14th, ITW issued a statement warning of expected profit short falls in the 4th quarter as a result of the economic slowdown that had affected its customers. Investors took the stock lower on the news, but since then the stock has recovered on strong volume. On Friday, the stock made advances on volume of 1.3 million shares or roughly 30% higher than its average 3-month volume. We are looking for more upside leading into earnings from here. The technical picture looks like this; support can now be measured at the 5-dma at $61.10, then the 10-dma at $59.84 and finally the 20-dma at $58.95. Resistance is up at $64.00 for now. We will place our stop loss order at $58.00 on this new play.

Picked on January 7th @ $63.25
Change since picked 0.00
Stop Loss at $58.00

January 30, 2001

We dropped ITW from our play list as of the close of trading on Monday. The company announced earnings before the market opened today, and reported earnings growth of 12% for the year. We officially closed this play at the end of the day Monday with the stock at $64.56. We managed to exit this play with a small profit and will watch ITW for better trading opportunities in the near future.

Picked on January 7th at $63.25
Profit/Loss +1.31 (+2%) (Dropped Monday @ $64.56)
Best Profit +1.75 (+3%)

January 29, 2001

Dropped today ahead of earnings, write up to follow.

January 28, 2001

Illinois Tool Works posted a 4-percent gain this week ahead of their 4th quarter earnings announcement due out on Tuesday. This will be our last official play coverage of ITW, as we will drop this play at the close of trading on Monday. Our policy at SplitTrader is to never hold a position through an earnings announcement due to the increased risk. We have covered ITW for nearly a month now and if things continue on a bullish trend through Monday, we should close with a small profit. ITW manufactures and markets products for the industrial community ranging from chemicals to specialty tool and components. The stock has been on a nice run as of late, rising nearly 10% from the low on January 12th. Additionally the stock is now within $0.90 of hitting a new 52-week high. If your personal risk tolerance allows for short-term plays, possible last minute entry points might include a bounce off support at $64.00 or the 5-dma at $63.50 or a dynamic move to a new high on volume over 750,000 shares by midday. Be watchful of low volume at resistance, which is now marked at $65.00 and the current 52-week high of $65.62, as a sign of a possible retreat to lower ground. We will maintain our stop at $58.00 as we bid this play farewell to ITW for now.

Picked on January 7th @ $63.25
Change since picked +1.50
Stop loss @ $58.00