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 24, 2001

HRB continued to churn around the $60 level on Thursday. The fact that it has not dipped below Monday's low of $58.40 is good news. It means that buyers are not worried about the last few days' retracement off the high of $61.75. We would have liked to see a little less volume as HRB slipped lower. However, due to the fact that the intraday swings were very narrow, we won't worry about the volume just yet. Turning to the chart, we see that support has first established itself at $59.35, and then lower at $58.00. Resistance shows up at $61.75. We will look for HRB to settle above its 5-dma going into the holiday weekend. Traders may want to initiate new positions if HRB can breach resistance at $61.75 on volume of at least 600,000 shares.

Picked on April 18th @ $52.85
Change since picked +6.05
Stop Loss @ $57.50

May 22, 2001

H & R Block finally took a breather after five straight up days in a row. You can't blame the stock for selling off after becoming extremely overbought, but it didn’t have to do so on 40% greater volume than its average 550,000 shares. The 770,000 shares traded on the downside today is a little much for our liking. Therefore, HRB deserves closer monitoring as we move into the holiday weekend. We will be watching to see that Monday's low of $58.40 holds up under selling pressure and for HRB's MACD to remain positive. Right now, it appears as if the MACD is starting to roll negative, but its nothing that a few up days can't cure. As far as new entries are concerned, it's not hard to see that the tax preparer is extended. We would wait for a pullback to the 5-dma, which now rests at $59.34 before committing capital to HRB. This move lower should ideally come on lighter volume of under 500,000 for the day. Our stops remain at $57.50 to help lock in gains.

Picked on April 18th @ $52.85
Change since picked +6.52
Stop Loss @ $57.50

May 20, 2001

H & R Block looks like its taking permanent residency on the Current Play list. On Friday, it added another quarter to its value to close at $58.46, marking another 52-week closing high. HRB was helped along on Friday by remarks made by Oakmark Fund manager Bill Nygren. In a nutshell, Nygren said that HRB will keep bumping along at a double-digit pace. At this point, though, we’d be leery of taking new positions, if only because volume is drying up. In fact, only 354,000 shares were exchanged on Thursday followed by 277,200 on Friday. With momentum waning, we’d be conservative about entering new positions and liberal about tightening stops, which, by the way, we adjusted again to $57.50. Technically, HRB still looks strong; both its MACD and On-Balance Volume are trending higher. However, HRB could run into serious resistance at its July 1999 high of $59.00. So, 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 $59.00 or a bounce off Wednesday’s intra-day high of $58.01 before placing their trades.

Picked on April 18th @ $52.85
Change since picked +5.61
Stop Loss @ $57.50