The Timberland Company designs, develops, engineers,markets and distributes premium-quality footwear, apparel and accessories for men, women and children. For the nine months ended 9/29/00, revenues rose 19% to $760.9M. Net income before extra. item rose 83% to $83.2M. Results reflect increased footwear, apparel and accessories unit sales and improved retail store sales. Earnings also reflect higher margins due to reduced manufacturing costs.

January 4, 2001

Retail stocks have enjoyed a stellar two-day rally following the reversal in the interest rate trend. Historically, it takes rate cuts a couple of quarters to inspire an increase in consumer confidence and cause more vigorous retail spending. It is important to remember that current stock prices typically reflect an opinion about the future prospects for a company. Timberland's explosion into new high territory has made the stock a viable split candidate. Timberland's last 2:1 split was announced in the middle of May last year when the stock was trading at $69.88. Today's move occurred on volume that was more than 30% greater than the average daily volume of 311,000. This is a good sign that momentum traders are jumping on this stock and the rally could continue. The new high of $74.00 should provide mild resistance tomorrow. The MACD reflects the current surge in the share price. Money Flow is also very strong while the OBV is poised to make a new high. There is always some risk trying to jump on a stock that is making new highs. The RSI is telling us that the stock is currently overbought. However, current market enthusiasm could keep the stock in "overbought" territory for a while. $70.00 should provide initial support.

Picked on January 4th @ $73.25
Change since picked +0.00
Stop Loss $68.00