GTK is a world wide supplier of computerized on-linelottery products and services. As of 2/99, the Company has contracts to supply and/or operate lottery systems for 29 U.S. customers and 52 customers outside the U.S. For the 39weeks ended 11/25/00, total revenues fell 7% to $690.6M. Net income fell 73% to $17.3M. Revenues reflect a decrease in the sales of lottery terminals. Earnings also suffered from a $40M special charge and lower gross margins.

April 22, 2001

Although there are very few players that win the lottery, the ones that always win in this game of chance are those companies that supply the machinery to run these highly regulated sweepstakes. In addition, more and more states are now jumping on board the lucrative gravy train of starting and running a state lottery. GTECH has been enjoying this trend by providing the necessary equipment for governments in the U.S. and around the world to set up their own "numbers" games. GTK has been in a steady up trend despite posting earnings on April 6th that showed a decrease in profits of 6 pennies to $0.79 from the same quarter a year ago. That said, analysts believe that GTK will increase their profits for the whole year by 33%. Ever since November, GTK has been moving steadily higher and has been finding excellent support along its 40-DMA, which is now located at $27.56. Three of our favorite technical indicators, the MACD, Money Flow and OBV are all steadily rising and point towards a continuation of the positive momentum. GTK may prove to be an excellent buy if it can establish a new high above $29.95 on Monday with first hour trading volume exceeding 50,000 shares. If GTK gaps up to $32.00 or higher on the open, traders may want to wait for a little pullback to around $29.50 before initiating positions.

Picked on April 22nd @ $29.79
Change since picked +0.00
Stop Loss $26.75

May 10, 2001

GTK has been able to make new highs over the past two days. Granted, the increase in share price has been modest; nevertheless, it’s encouraging to see GTK move higher while the broader markets appear to be in a consolidation mode. The technical picture is reflecting something of a push/pull scenario. Momentum investors want to drive the stock higher, as it crosses into new high ground due to the lack of overhead resistance. Profit takers, on the other hand, keep driving the stock back down because the RSI is indicating an extremely overbought condition. Still, the trend is our friend, and we will enjoy the ride as long as it lasts and continue to raise our stop to protect our profits. Day traders may be able to make a quick profit if GTK trades above $36.80 tomorrow with first hour trading volume exceeding 100,000 shares. That said, a gap up to $38.00 or higher on tomorrow's open could result in another quick pullback.

Picked on April 22nd @ $29.79
Change since picked +6.16
Stop Loss $34.00

May 8, 2001

There was a decided interest in driving up the shares of GTK today. This lottery equipment concern managed to make a new high yesterday of $35.70 before pulling back into the close. Today's attempt to establish yet another new high fell a little bit short. Please note that we have raised our trailing stop to $34.00, just in case the momentum is starting to wane. The RSI is indicating an extremely overbought condition. This fact does not preclude the possibility that momentum traders may continue to drive up the price of GTK. However, we placed our stop at today's low print because a drop below this price could result in a bit of profit taking. Traders may be able to squeeze out some more profits by entering a trade once GTK crosses $35.70 with first hour trading volume exceeding 100,000 shares. Traders should probably be cautious about entering a new position if GTK gaps up to $37.00 or higher on the open, in case the stock experiences quick profit taking the way it did on Monday.

Picked on April 22nd @ $29.79
Change since picked +5.46
Stop Loss $32.00

May 6, 2001

Governments around the world are catching onto the fact that state sanctioned lotteries can fill coffers without raising taxes. GTECH is the leader in providing the services and equipment necessary to successfully run these lotteries and has thereby benefited from the strong demand for its products. Analysts expect GTECH to increase it profits by $0.67 a share, or 32% this fiscal year. GTECH currently has a reasonable P/E of 27.20, which compares favorably to its growth potential going forward into next year. GTECH finished last week hovering just below resistance established at the all-time high of $34.30. Momentum traders may want to jump on board if GTK can breach $34.40, accompanied by midday volume of at least 150,000 shares. If GTK gaps up to $36.00 or higher on the open, a subsequent pullback may provide a better entry price. One note of caution, the RSI is currently indicating a very overbought condition. This fact does not mean that GTK cannot climb higher, but it does suggest that the stock may be poised for a pullback soon. Our stops remain at $32.00.

Picked on April 20th @ $29.79
Change since picked +4.21
Stop Loss $32.00