Granite Construction Inc. is a civil contractor whichconstructs dams, highways, airports, tunnels, bridges and other infrastructure-related projects in the west, southwestand southeast. For the FY ended 12/31/00, revenues increased 1% to $1.35B. Net income increased 5% to $55.8M. Revenues reflect growth in the market for residential and commercial site development. Net income also reflects an improved gross profit margin and increased interest income.

February 25, 2001

Granite Construction Incorporated is one of the largest heavy civil construction contractors in the United States and operates nationwide. The company operates in both the public and private sectors providing such services as construction of roads, highways, bridges, dams, as well as performing site preparation services for buildings, plants, subdivisions and other facilities. GVA announced a 3:2 split with their earnings report this past Wednesday the 21st. This will be GSA's third stock split since the company started trading publicly in 1997. The stock split will occur on April 13th. Good news seems to breed good news at GVA because the day after the split announcement, GVA was awarded a $21.9 million contract by the California Department of Transportation for the asphalt concrete resurfacing of Interstate-880 in Oakland, California. Switching our focus from the news to the chart, we note that on February 9th GVA hit a new 52-week high of $34.40. That new high was achieved on volume of 132,000 shares. GVA normally trades about 62,000 shares based on a 3-month average, so the new high was achieved on the kind of volume we like to see. We mention this because on Friday while the market was bleeding red with selling, GVA actually posted a gain of +1.74 for the day on 130,000 shares of positive volume. Looking to next week, if you are considering opening a new play on GVA, look for a move through resistance at $33.50 and then up at the present high of $34.40 on continued good volume. A bounce off a support level could also be considered for an entry point. Use the 10-dma at $32.17, the 20-dma at $31.50 or the 50-dma at $30.85 as support levels. We'd like to see volume of 45,000 or better traded by midday accompany the stock higher when considering a new play. For our protection we will post our stop loss at $30.50 just below the last level of support.

Picked on February 25th at $33.07
Change since picked 0.00
Stop Loss at $30.50

March 1, 2001

Granite Construction closed in the green thanks to a broad market rally Thursday afternoon. Like synchronized swimmers, the Dow Jones Industrial Average (INDU) and the NASDAQ Composite Index (COMPX) stopped their downward spiral and headed higher at 2:15 EST. Like many other stocks, GVA jumped on the bandwagon and headed north too. Recovering from an intra-day low of $32.41, GVA climbed about a $0.30 to close at $33.40. Thursday's volume was recorded at 82,000 shares, slightly higher than its three-month average of 65,000. GVA is currently sitting at resistance at $33.50. The next challenge will come when the stock attempts to conquer the 52-week high of $34.40. Support is underfoot at the 10-dma at $32.44 and then the 50-dma at $31.00. So, possible entry points for a play might include a bounce off support or a move through resistance on good volume, meaning better than 60,000 traded by midday. We have raised the volume limit because the stock is now so close to a new high we'd like to see strong volume when going to a new level. We will hold our stop loss in place at $30.50 just below support.

Picked on February 25th at $33.07
Change since picked +$0.33
Stop Loss at $30.50

February 27, 2001

Civil construction contractor Granite Construction is once again facing a challenge that dates back to 1998. That was the first time the stock attempted to move above $34.00 and now we find the stock faced with the same nemesis. On Monday, we were elated to see the volume in GVA soar to 139,000, more than twice its normal trading volume of 65,000. Unfortunately, on Tuesday, the follow through never came and volume shrank to 87,000 shares. On Wednesday, we'll be watching for a change of direction and a move higher on good volume. GVA is due to split its stock 3:2 on April 13th, the company's third stock split. Ahead of that date, with the cooperation of the broad market, we are anticipating a split run from GVA. Expect resistance February 9 high of $34.40. Support exists at the 5-dma at $32.57 and then at the 20-dma at $31.87. Consider opening a new position if GVA bounces off its support level or continues higher on strong volume, meaning 45,000 traded by midday. We will continue to hold our stop loss position at $30.50 until further notice.

Picked on February 25th at $33.07
Change since picked -0.07
Stop Loss at $30.50