SunGard Data Systems, Inc. provides integrated IT solutions and "eProcessing" for financial services. SunGard also provides high availability infrastructure for business continuity. For the 3 months ended 3/31/01, total revenues rose 15% to $440.8M. Net income rose 30% to $54M. Revenues reflect higher demand from the financial service industry and acquisitions. Earnings also reflect the absence of a $1.6M merger charge, and higher operating margins.

May 16, 2001

SunGard specializes in offering information technology solutions to the financial community. They have products that make it easier for companies to web-enable clients, process transactions electronically and outsource business-critical operations. Fundamentally speaking, the company has topped analysts' earnings expectations for the last four quarters in a row. With the Fed cutting rates for the fifth time this year, SDS is hoping that this leads to a ramp up in trading that keeps SunGard's string of double digit profit growth alive. Looking at the chart, SDS has just broken out of a cup and handle formation on strong volume of 1.4 million shares. This represents an increase of 300,000 shares over SDS's three-month daily average volume. This is precisely what you want to see following a period of sideways action on lower volume. Today's strong move also higher helped to avoid a sell signal out of SDS's MACD. Going forward, new entries could be timed on a bounce off support at $60, or more aggressive traders could pick up the stock as long as it doesn't trade above today's high of $62.75. Look for daily volume to remain in the 1 million-share neighborhood on either of these moves. We are placing our stops at support of $58.40 to protect against a reversal.

Picked on May 16th @ $62.00
Change since picked +0.00
Stop Loss @ $58.40

May 17, 2001

We added this former Watch List stock on Wednesday, and as luck would have it, it lost ground today. Even more discouraging, though, was that SDS lost ground on 2.05 million shares traded, which was more than double the three-month average daily volume of 917,000. Nevertheless, we think SDS could make a strong run into its split-payable date on June 18th. To that end, its MACD remains in a strong up trend while its Stochastic isn’t showing its stock to be overbought. At this point, though, SDS may be ripe for some profit taking, particularly after yesterday’s $3.05 advance, so don’t be surprised if this stock consolidates around $60 for the next session or two. With that said, traders considering a position in SDS should look for a move through Thursday’s intra-day high of $64.50 or a bounce off $60 on 400,000 shares traded by midday.

Picked on May 16th @ $62.00
Change since picked -1.00
Stop Loss @ $58.40