Waste Management Inc. provides integrated waste management services consisting of collection, transfer, disposal, recycling and resource recovery services as well as other hazardous waste services to commercial, industrial, municipal & residential customers. For the FY ended 12/00, sales fell 5% to $12.49B. Net loss before extra. item fell 75% to $97M. Revenues reflect the divestiture of WM International. Lower loss reflects overall price increases.

June 6, 2001

This waste service provider has been on a rocky ride since it fell out of bed in July of 1999. Less than two years ago WMI was a $60 stock, but due to accounting irregularities, it lost half its value in less than a month. Since 1999, Waste Management has cleaned up its act and has reasserted itself as the leader in U.S. disposal and recycling services. In addition, it just recently announced the formation of the first pulp and paper trading service within its industry. This service will allow WMI and its customers to manage their commodity price exposure and will further differentiate WMI from its competitors. Turning to the chart, we can see that WMI has just broken out of a large cup and handle formation. The good news is that the stock has very little in the way of upside resistance to hold it back at this point. In fact, judging by the depth of the cup, our near term price target on WMI is $34.50. In addition, WMI's MACD is set to issue a buy signal with one more up day like Wednesday's. Traders wishing to get into WMI could look to do so as long as WMI opens strong and doesn't dip below $28.50. Conversely, if WMI gaps higher, don't chase it much over $29. Look for volume to continue to come in strong (over 3 million shares for the day) when making your entry. Our initial stop is placed just under support at $26.90.

Picked on June 6th @ $28.51
Change since picked 0.00
Stop Loss @ $26.90

June 14, 2001

WMI looks to be in the throws of a breakaway run. On Thursday, the stock gapped higher at the open and never looked back. Volume was again outstanding, with almost 5 million shares changing hands. WMI's MACD is now decidedly positive and OBV is shooting skyward. Our trash play may be the beneficiary of investors looking for a place to hide from further tech weakness. Going forward, we will look for volume to ease on any pullbacks. The $30-level will be the next hurdle for our play, and momentum traders might look to jump into WMI on a close above this level on continued strong volume. Otherwise, a pullback to support at $29 could also present a lower risk entry point.

Picked on June 6th @ $28.51
Change since picked -0.01
Stop Loss @ $26.90

June 12, 2001

WMI did a tremendous about face on Tuesday, as shares plummeted in the early going only to turn on a dime and close higher for the day. WMI dipped as low as $27.38 before reversing course at about midday. We were encouraged by the fact that the big block trades occurred as the stock was heading higher in the afternoon instead of when the stock was selling off in the morning. Tuesday's action in WMI might have been the "cleansing" before the next leg higher for the stock. Any weak shareholders probably pulled the ripcord today, leaving only strong holders that will probably not turn into sellers until much higher prices present themselves. Those who might be thinking about adding WMI to their portfolios could look to do so on a break through resistance at $29 on volume of at least 2.5 million shares for the session.

Picked on June 6th @ $28.51
Change since picked -0.01
Stop Loss @ $26.90

June 10, 2001

WMI had a lazy day on Friday. The stock traded only 999,000 shares and was stuck in a tight intraday range of just over $1.00. The good news is that buyers showed up at the $28.25 level three times during the session to drive the stock higher. Conversely, intraday resistance came in at $28.45. We won't take too much from Friday's trade, however, due to the NYSE outage and the light volume. But we will note that WMI has yet to sink back into its base. This tells us that buyers are still supporting the stock. Going forward, traders might want to consider opening a position in WMI if the stock can break up through resistance at $29 on volume of at least 2.5 million shares.

Picked on June 6th @ $28.51
Change since picked -0.07
Stop Loss @ $26.90