DCI manufactures air cleaners, filters and exhaust products for heavy-duty mobile equipment; in-plant air cleaning systems; air intake systems for gas turbines; filters for disk drives, & personal respirators. For the 6 months ended 1/31/01, revenues rose 13% to $569.5M. Net income rose 1% to $34.9M. Revenues reflect increased sales of industrial products and acquisitions. Earnings were partially offset by increased costs related to acquisitions.

May 17, 2001

Of DCI's many businesses, the potential demand for the company's air intake systems for gas turbines may be what is really driving the stock these days due to the energy crisis and the need to build more power plants. This will be a very quick play for us because DCI is scheduled to announce its earnings next Tuesday after the close. Obviously, we are looking for the continuation of a nice earnings anticipation run. Technically, DCI looks very strong. The MACD is rising and the OBV and Money Flow are both making new highs. The RSI is indicating an overbought condition but the stock could easily become more "overbought", as momentum traders drive the stock higher ahead of the earnings release. The stock closed today right on its high. Therefore, any uptick on tomorrow's open may be an enticing entry point for traders. That said, a gap up of more than a point on the open may result in a bit of a pullback in the first half hour of trading. Therefore, a little patience following a sizable gap up may afford traders a better entry price. We see some pretty good support at the 10-DMA of $28.81 and we have set our initial stop just below this moving average.

Picked on May 17th @ $30.04
Change since picked +0.00
Stop Loss @ $28.50

May 22, 2001

We saw only a modest advance during the short duration of this play. Obviously, this result is better than the alternative. Our exit from this play was precipitated by the company's earnings announcement after today's close. For the record, DCI reported profits of $0.39 a share, which was a penny better than last year's results for the same quarter. The company also said that it is instituting a hiring freeze in order to combat rising costs during these challenging times in the global economy.

Picked on May 17th @ $30.04
Profit/Loss +1.59 (5%) (Stopped Tuesday @ $31.63, earnings)
Best Profit +1.76 (6%)

May 20, 2001

DCI is starting to make a nice little move ahead of its earnings release Tuesday afternoon. With only one day left before we exit this position (Monday at the close), this play is a bit aggressive and may not be for everyone. That said, DCI did manage to establish a new high on Friday at $30.85. Therefore, there is very little overhead resistance and DCI could continue its advance if it can trade above $30.85. A good trade opportunity may present itself if DCI trades above $30.85 in the first hour of trading accompanied by volume exceeding 25,000 shares. A gap up to $32.00 or higher may result in a quick pullback that may offer patient traders a better entry price. The OBV, Money Flow and MACD are all positive and suggest that the DCI rally could continue. We would be cautious about entering any new positions if DCI drops below the support offered by Friday's low of $29.72.

Picked on May 17th @ $30.04
Change since picked +0.73
Stop Loss @ $28.50