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

HRB finally gave in to the sellers on Thursday morning. Our long-time play plummeted to its 20-dma in the first hour of trading, only to bounce higher into the close. However, due to the fact that we have been steadily ratcheting up our stop, we exit this play today with a nice gain.

Picked on April 18th @ $52.85
Profit/Loss = +8.15 (+15%) (Stopped out Thursday @ $62.00)
Best Profit = +10.75(+20%)

June 12, 2001

Over the last week, HRB has been acting "toppy." This financial services play has lost ground for the past three sessions in a row. In addition, HRB's MACD is about to roll over, which is generally a sign of an impending downtrend. Lastly, volume has been picking up as the stock moves lower, which is generally a blatant warning sign that sellers have taken over. Given the writing on the wall, we would advise against initiating new positions in HRB until the stock can close above resistance at $64 on volume of at least 600,000 shares. We are keeping our stops at $62.00 for now, but intend to boost them as soon as any sort of breathing room opens up.

Picked on April 18th @ $52.85
Change since picked +9.40
Stop Loss @ $62.00

June 10, 2001

It looks like the $64 level is setting itself up to become serious resistance for our tax service play. The stock has tried breaking through $64 four days in a row, but has been turned back on each occasion. However, we are still encouraged that HRB can continue higher due to the fact that the only above average volume days this week came as the stock was advancing. Traders wishing to open a new position in HRB should wait until HRB can close above $64 on volume of at least 600,000 shares for the day. We are moving our stop on this long time play up to $62 to protect our profits.

Picked on April 18th @ $52.85
Change since picked +10.05
Stop Loss @ $62.00