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us stock market, trade stock
Begin part 3 of 3
THE PLAYS:
New Plays:
New Post-Split Play:
Play Date: 10/28/2008
ECA (Encana Corp.--$43.71; +4.20; optionable): Independent oil and gas
http://biz.yahoo.com/p/e/eca.html
EARNINGS: Announced 10-23-08
STATUS: Trend reversal. ECA is making a higher low over the earlier October lows, showing some good upside volume the past week. Excellent set up to run higher from here and fill the tap near 55. May go past that closer to 60 but that is a good starting point for this run from a nice pattern.
Volume: 6.98M Avg Volume: 6.035M
BUY POINT: $43.91 Volume=9M Target=$54.00 Stop=$40.84
POSITION: ECA AH - Jan. $40c (62 delta) &/or stock
http://www.investmenthouse.com/ci/eca.html
Play Date: 10/28/2008
HBAN (Huntington Bancshares--$11.00; +1.83; optionable): Regional banks
http://biz.yahoo.com/p/h/hban.html
EARNINGS: Announced 10-16-08
STATUS: Trend reversal. Nice when the earnings are out of the way and a stock is ready to move higher. HBAN reversed a 12 month downtrend in September, surging nicely. It then got caught in the October selling, falling back and forming something of a 6 week reverse head and shoulders base. Good bounce this week with a strong move Tuesday, breaking over some interim highs. A bit more volume would be nice, but HBAN is showing excellent action.
Volume: 9.197M Avg Volume: 9.819M
BUY POINT: $11.21 Volume=12M Target=$13.94 Stop=$10.43
POSITION: HQB AB - Jan. $10c (68 delta) &/or Stock
http://www.investmenthouse.com/ci/hban.html
Play Date: 10/28/2008
MON (Monsanto--$83.15; +12.06; optionable): Agricultural chemicals, etc.
http://biz.yahoo.com/p/m/mon.html
EARNINGS: Announced early October
STATUS: Double bottom. Good shot of above average volume Tuesday as MON gapped higher off the second bottom in its 4 week pattern. Looking for this leader on the run through October to rally up to some resistance at 100 as an initial target on this move. Nice set up and starting its bounce.
Volume: 12.782M Avg Volume: 9.917M
BUY POINT: $83.41 Volume=12M Target=$98.00 Stop=$79.22
POSITION: MON AP - Jan. $80c (61 delta) &/or Stock
http://www.investmenthouse.com/ci/mon.html
Play Date: 10/28/2008
PPG (PPG Industries--$47.85; +3.97; optionable): Coatings, glass, an chemical products
http://biz.yahoo.com/p/p/ppg.html
EARNINGS: Announced 10-16-08
STATUS: Double bottom. Good shot of volume Tuesday as PPG jumped off the second bottom in a three week base formed after that late September to early October plunge. Looking for a rally up to the July low near 55. After that it may run into some trouble but we will ride it for what it gives us.
Volume: 1.951M Avg Volume: 1.759M
BUY POINT: $48.21 Volume=2.3M Target=$54.88 Stop=$44.84
POSITION: PPG AI - Jan. $45c (77 delta, low OI) &/or Stock
http://www.investmenthouse.com/cs/ppg.html
Downside: Just to be ready.
Play Date: 10/28/2008
DXD (ProShares DJ30 UltraShort ETF--$75.20; -21.47; optionable)
STATUS: We think there is quite a bit more mileage in the current upside move that just started even with this huge run higher. This is still a very volatile market, however, and given the rapid turns in the market we will be ready with a downside play on the DJ30 if this market move turns over.
Volume: 17.755M Avg Volume: 9.872M
BUY POINT: $73.88 Volume=1.5M Target=$85.00 Stop=$72.94
POSITION: DZS LW - Dec. $75c (54 delta, low OI) &/or Stock
http://www.investmenthouse.com/ci/dxd.html
CONTINUING PRE-ANNOUNCEMENT PLAYS
We consider many stocks for pre-announcement plays every week. We get information regarding upcoming announcements and other data that leads us to conclude a split announcement is coming. Even then, however, we have to be discriminating. We have to see a strong technical pattern as well, and thus we reject many potential candidates based on a weak technical position.
The key today is to find stocks in strong patterns or that are ready to rebound off support. A split announcement will amplify the move higher in these cases as we enjoy moves from strong leaders in position to run higher. We won't chase a stock in a poor technical position even if we know it is going to split; it simply won't do us any good, i.e. it typically won't make us any money to the upside. We could list all stocks we think are going to split, but again, that won't make us any money unless we are in an office pool as to what stocks will or won't announce a stock split.
Current Pre-Announcement Plays:
This is a list of stocks we are looking to announce splits. We are not in all of the potential splits plays but are letting them set up for the next move. In each report we look at the candidates that are in the best patterns ahead of their potential announcements. This focus on leaders in good patterns allows us to make good money even if companies do not announce the split. The key with splits is the pattern and of course the strong earnings growth that put it in the pattern in the first place.
AAPL: Nice action. Looks ready to make the break higher.
AFAM: Researching date.
AMED: Researching date
CELG: Forecast January 2009. Good earnings report
USNA: Nothing announced with earnings, but like this pattern it is showing.
CONTINUING LEADER PLAY:
Play Date: 10/25/2008
EBS (Emergent BioSolutions--$15.86; +1.46; optionable): Biotechnology
http://biz.yahoo.com/p/e/ebs.html
EARNINGS: 11-6-08
STATUS: Breakout test/50 day EMA test. Volume was up and above average as EBS moved off the 50 day EMA test. Looks solid and a buy on a continued upside move. To recap: A new issue in November 2006, EBS just this month broke out of a large 20 month base, the stock's only real base since coming public. Big surge starting two weeks back on some huge volume broke it out of the base. In last week's selling it sold as well, but on Fridays gap lower it held the 50 day EMA (14.04) and then reversed, holding the breakout over the late September high at 15. Like its snap at the key 50 day EMA and holding the breakout. Ready to move in as it continues higher after this breakout test, one of the best times to enter, particularly in a weak market.
Volume: 428.634K Avg Volume: 365.532K
BUY POINT: $15.95 Volume=550K Target=$19.45 Stop=$14.83
POSITION: EBS CC - Mar. $15c (57 delta, 116 OI) &/or Stock
http://www.investmenthouse.com/ci/ebs.html
Play Date: 10/27/2008
WPI (Watson Pharmaceuticals--$24.13; +1.68; optionable): Generic drugs
http://biz.yahoo.com/p/w/wpi.html
EARNINGS: 10-29-08 before the open.
STATUS: Double bottom. Gapped higher, posting a solid gain but volume faded back toward average. Still in good buy position as it continues the move higher. Would like to see some stronger volume as it moves. To recap: Some good action and upside volume during this 2.5 week pattern, setting up for a breakout move with earnings coming Wednesday morning. It is always aggressive in this kind of market to move in before an earnings report, but if WPI gives us a good upside start on solid trade we can move into some positions and then see how the earnings come out. We have seen that even with some good earnings results that we can get an entry point even if we wait for the earnings to come out so it is a matter of your risk tolerance. Like the pattern and the volume it is showing.
Volume: 1.485M Avg Volume: 1.34M
BUY POINT: $23.55 Volume=1.8M Target=$27.77 Stop=$21.94
POSITION: WPI AX - Jan. $22.50c (54 delta) &/or Stock
http://www.investmenthouse.com/ci/wpi.html
Trend Reversal/Leader Plays:
Play Date: 10/23/2008
DO (Diamond Offshore--$76.26; +7.35; optionable): Offshore drilling
http://biz.yahoo.com/p/d/do.html
EARNINGS: Announced 10-23-08 before the open
STATUS: Double bottom. Good shot of volume as DO broke higher, clearing the 10 day EMA. It was good enough to enter and it is still a buy as DO continues this move toward the gap down point at 92. To recap: Holding up well, coming back after a Friday gap lower, hanging in its pattern and still set to make the bounce. To recap: Strong volume Thursday as DO reported some solid earnings and gapped higher, running up to the 10 day EMA (74.77) on the close. It is threatening to reverse the downtrend that steepened in October, stifling DO at the 10 day EMA when it tried to bounce. Looking for a break over the 10 day EMA on some more solid trade to show us the buyers are still in the game and ready to send it higher.
Volume: 2.862M Avg Volume: 2.299M
BUY POINT: New: On a continued run higher (orig. $74.88) Volume=3.2M Target=$89.95 Stop=$71.68
POSITION: DO LO - Dec. $75c (55 delta, 62 OI) &/or Stock
http://www.investmenthouse.com/cs/do.html
CONTINUING INDEX PLAY:
Play Date: 10/23/2008
DIG (Oil & Gas Ultra ETF--$30.10; +5.35; optionable)
STATUS: Rolling. Great volume as DIG stepped up and rallied sharply. Likely should have gone ahead and moved in but it still has great potential ahead of it not just to 36 but likely on to 40. To recap: DIG is rolling up and down in a range from 25 to 37-38 on the closes at the top of the range. Reached lower and reversed Thursday on very strong volume. Looking to step in and play DIG on the roll to the top of the range. If it continues higher from there say on up to 40, great. We will be digging it even more in that case and will let some of the positions move higher for us.
Volume: 28.146M Avg Volume: 7.163M
BUY POINT: $30.32 Volume=15M Target=$36.00 Stop=$28.24
POSITION: DPB LD - Dec. $30c (51 delta, 101 OI) &/or Stock
http://www.investmenthouse.com/ci/dig.html
Good Investing!
Jon L. Johnson and the Stock Split Report Staff.
All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Online Investment Services, LP or its paid consultants and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on our related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolio of Partners of Online Investment Services, LP or its paid consultants may, in some instances, include securities mentioned herein and on our web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors.
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