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

May 10, 2001

H & R Block has a new winning streak going. In fact, over the past week, it’s strung together five consecutive winning sessions, breaking through resistance at $55.00 to a 52-week closing high of $55.78. This rally has been fueled in part by the company’s announcement last Thursday that it expects to exceed the First Call consensus EPS of $2.91 for 2001. As for the technical picture, HRB has again claimed support at its 10-dma at $54.37. As for resistance, we don’t see any until July 1999 highs of $59.00, which we think HRB could challenge soon given that its MACD has turned positive. Traders considering a position in HRB should look for strong volume, 250,000 shares or more traded by noon EDT, on a move through today’s intra-day high of $55.96 or a bounce off the 20-dma at $53.21 before placing their trades. To protect our gains, we’ve moved our stop up to $54.50.

Picked on April 18th @ $52.85
Change since picked +2.93
Stop Loss @ $54.50

May 8, 2001

H & R Block righted a ship that had been listing late last week. Over the past two days, this omnipresent tax preparer added over a dollar to its value to regain support above its 10-dma at $54.00. This mini rally has been fueled in part by the company’s announcement late last Thursday that it expects to exceed the First Call consensus EPS of $2.91 for 2001. As for the current technical picture, HRB has support at its 20-dma at $53.20 and immediate resistance at $55.00. The MACD remains negative (but just barely) and On-Balance Volume is beginning to show an upside trend. Traders considering a position in HRB should look for strong volume, 250,000 shares or more traded by noon EDT, on a move through resistance at $55.00 or a bounce off the 20-dma at $53.21 before placing their trades.

Picked on April 18th @ $52.85
Change since picked +1.61
Stop Loss @ $49.25

May 6, 2001

On Thursday, H&R Block said it expected 2001 earnings to exceed expectations on the strength of its U.S. tax and mortgage businesses, even as it cut jobs. The firm said H&R Block Financial Advisors eliminated about five percent of its total work force, which will result in a ``modest'' fourth-quarter charge. On Friday, traders obviously woke up to the fact that this Kansas City based financial service company is going to do well this year, even if the economy is slowing. Shares reversed their three-day down trend and rose $0.38 on strong volume of 940,000 shares. We will be watching for volume to continue on the high side as the stock attempts to regain momentum to the upside. Strong volume means daily volume of over 700,000 shares. Looking at the chart, we can see that the MACD has gone negative. However, we also notice that on Thursday, HRB bounced off the top of its previous base at $52.50. This is a good sign that buyers are stepping up and ready to take HRB higher. Possible entry points could present themselves on a bounce off Thursday’s closing price of $53.00, or a break through the 5-dma at $53.82 on volume of at least 300,000 by noon.

Picked on April 18th @ $52.85
Change since picked +0.53
Stop Loss @ $49.25