H&R Block is a holding company whose subsidiaries provide tax-related services, investment services through broker dealers, mortgage services, personal productivity software, accounting, and consulting services to business clients. For the nine months ended 1/31/01, revenues rose 54% to $1.30B. Net loss increased 8% to $95.8M. Results reflect the 12/99 acquisition of OLDE Financial Corp., offset by higher personnel expenses.

April 18, 2001

Shares of tax and investment services provider H & R Block seem to be enjoying a post-tax filing season rally thanks to a reported 10 percent increase in tax preparation revenues. For the day, HRB surged ahead $1.00, hitting our Watch List trigger price of $52.39 on strong volume of 700,000 shares traded. HRB has added over two dollars to its value this week since gapping up Monday from a bullish hammer position formed last week. HRB may also be moving higher in anticipation of a possible split announcement. To that end, HRB has 400 million shares authorized and only 91 million shares outstanding, meaning it has more than enough shares to authorize a 2-for-1 stock split. The last time HRB announced a split it was trading near $60. But even if a split is not in short order, we still like the stock based on its technical indicators. HRB’s MACD has recently turned positive and its On-Balance Volume is trending towards new highs. As it now stands, the stock has strong support at its 40-dma at $49.25 and no immediate resistance until the July 1999 high of $59.50. Traders considering a position in HRB should look for strong volume, 250,000 shares or more traded by noon EST, on a move through Wednesday’s intra-day of $53.49 or a bounce off the 5-dma at $51.70 before placing their trades.

Picked on April 18th@ $52.85
Change since picked 0.00
Stop Loss @ $49.25

April 19, 2001

H & R Block keeps the momentum alive, as its shares advance to mark its fourth-consecutive winning session. It appears as if investors are putting their tax refunds right back into the company that helped them get those refunds in the first place. Although, as evidenced by the recent pick up in daily volume, it's not just the retail investor that has become enamored with HRB. The stock has broken through resistance at $53.30 on volume roughly 20% higher than the three-month daily average of 500,000, which means there is some conviction behind the recent advance. Looking at the chart, it appears as though HRB is making a parabolic move higher, which has us thinking that a pullback could be imminent. However, if HRB does settle back, we will watch for previous resistance at $53.30 to provide support, bolstered by the 5-dma at $52.20. As for resistance, we are looking at today's high of $54.20 and then the $55 level. New plays could be initiated on a successful retest of the $53.30 level or an advance through today's high on volume that would put HRB on track to trade 500,000 for the day.

Picked on April 18th@ $52.85
Change since picked $1.18
Stop Loss @ $49.25