stock split, stock research

Begin Part 2 of 3

THE PLAYS: Lots of announcements this week, with BER, SRCL, STJ and ESI!

BONUS PLAYS: RACN started the bounce on good volume. LEN made a weak move back through its 50 day and could still generate the put play. PG gapped up but closed with a doji so could come back first before continuing up.

Upside:

OEX (Standard & Poors--$553.30; +5.42; optionable):
STATUS: Break of resistance. Cleared the 50 day MVA (551.55) on rising volume Friday (1.26 million; avg. levels), after moving up to that resistance over the last several days. The index had hit a low at 518.22 before the recovery, which took it back over the February closing lows as well. We are looking to take advantage of further upside, a move up to the 200 day MVA at 570, watching 565 for possible resistance. Can test the support (at 551.55) before bouncing back up to launch the run.
BUY POINT: 554 on volume of 1.4 million or higher. Target=570. Stop=549
POSITION: July 540 or 550c to buy (OEB GH or GJ).

DJX (1/100 Dj Indu--$103.53; +0.64; optionable):
STATUS: Run to resistance. A recovery over the 50 day MVA on Tuesday led to another move up Friday; not a big gain but it was on rising volume (1.26 million; avg. levels). We are looking for the index to head for the March highs at the 106 range (actual high is at 106.35). Look for rising and above average volume on the move. The index just cleared Tuesday's high (103.49), but has more potential resistance (overhead supply) just over 104, nothing a rally on strong volume can't take care of.
BUY POINT: 103.65 on above average, rising volume. Target=106. Stop=101 (50 day MVA is currently at 101.47).
POSITION: September 100 or 102c to buy (DJV IV or IX).

DP (Diagnostic Products--$52.17; +0.71; optionable): Diagnostic substances
http://biz.yahoo.com/p/d/dp.html
STATUS: In an eight-month cup. DP made a huge move Wednesday on the heels of its earnings announcement. The stock had been building the right side of its base, but had dipped back last week rather abruptly to test its 50 day MVA (46). Wednesday's move blasted DP back over the recent high at 51, and it has held up nicely since, moving laterally on much lighter volume (way down to 122,700 Friday; avg. 124k). It is just under the all-time (and left-side) high of 53.25, and we will look for a continuation of this move over that point. Target: 62
BUY POINT: 53.35 on volume of 175k. Stop: 49.62 (7%)
POSITION: Stock and/or September $50 calls to buy (DP IJ - only 10 OI; plenty at $45, but much more pricey).

GLYN (Galyans Trading--$19.98; +1.03; optionable): Sporting Goods
http://biz.yahoo.com/p/g/glyn.html
STATUS: A new issue since August 2001. GLYN broke out of its range (highs 15) in late March, running hard to 20 before testing back to the 50 day (then 17). It took a nice bounce from there, forming something of an ascending wedge, and Friday off of earnings GLYN ran hard out of a consolidation formed over the 18 day MVA (18.85). Volume was super at 677k (avg. 101k), and GLYN pulled back from its intraday (and new all-time) high of 20.56. Looking good, and targeting 24.
BUY POINT: Over 20.56 on continued strong volume. Stop: 19.12 (7%)
POSITION: Stock only; no option chain yet.

Downside:

IGEN (Igen International--$39.34; -0.91; optionable): Scientific & Technical Instruments
http://biz.yahoo.com/p/i/igen.html
STATUS: IGEN was trying to form a cup with handle after having fallen off of double tops (January-February), but going into earnings it dropped and struggled with its 50 day MVA (40). With earnings IGEN's situation did not improve, as the stock dropped hard Friday through that support (volume sharply up to 461k; avg. 296k). We could get a test of the 50 day, but will look for a strong drop on a failure, giving us a put play down to a target of 36 (January and March-April consolidation lows; 200 day MVA at 35.18).
BUY POINT: After a failed test of 40, a drop back through 39.20 on continued strong selling volume. Stop: 41.25
POSITION: September $45 puts to buy (GQ UI).

LNY (Landry's--$25.05; +0.58; optionable): Restaurants
http://biz.yahoo.com/p/l/lny.html
STATUS: We were recently looking for LNY to break from an ascending wedge it had formed on the breakout from a double bottom. It never hit the buy point, instead retreating and giving up its 50 day MVA (25.82) Tuesday. It dropped to a low of 24.30 before rebounding Friday, reaching up toward the 50 day at its high of 25.55 but retreating to close. Looking weak, and a put on a drop back. Target: 21 (200 day MVA 21.84).
BUY POINT: 24.25 on increased volume (280k Friday; avg. 236k). Stop: 26.25
POSITION: July $30 puts to buy (LNY SF - only 1 OI as yet).

Quick updates prior bonus plays:

CCRN - Rested after the breakout move, still solid
AGN - Riding put positions as AGN rose on low volume to close below the 10 day MVA
WFMI - Has not been able to continue the bounce, holding for now
CPRT - Still fighting its down trendline and 50 day MVA, could get the put play
SERO - Still holding in its consolidation after pulling back Wednesday off of the buy point
GRMN - Good move!
DISH - Still held back by its 10 day MVA and could retreat again
ROIA - Holding the 50 day but not showing much else
CCRD - Holding in a precarious consolidation, and looking for a harder drop
ABT - Relief bounce Friday after the huge drop, but still targeting 44
WB - Riding after the strong Thursday move, but the 'star' doji Friday could signal a test of 39
WM - Weak bounce is not convincing, protecting positions
AMSG - Still holding the 18 day MVA and has formed a pennant
AVY - Moving well and holding support
XTO - Gave up the 18 day, but with the low volume breach we will look for a recovery
MTB - Good move up, but recent lessening gains point to a test back (18 day at 87)
TDY - Continues the solid action on its great breakout
MFC - Protecting positions, a bit erratic now
IRIC - Pulled back promptly from the bounce, and is very erratic
LEXR - Continued the bounce with a move on its high on huge volume
RF - Still proceeding up the short-term MVA's with weak volume
MCY - Still holding on the breakout test
PZB - On the uptrend and holding support
CF - Bounced nicely from the 50 day but losing momentum at resistance of prior highs

PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: Still looking at KSS for next Tuesday, KSWS Thursday and MEG next Friday.

NEW PRE-ANNOUNCEMENT PLAYS:

KSWS (K Swiss-- $44.53; +0.38; optionable): Footwear. Forecast to announce a split on 5-23-02 in conjunction with its annual shareholder meeting.
http://biz.yahoo.com/p/k/ksws.html
BACKGROUND: Last announced a 2:1 split on 2-8-99 at a stock price of $35. The annual shareholder meeting is scheduled for 5-23-02 at 10:00 PST at which time additional shares will be authorized, and the proxy indicates that the number of shares is being raised for a potential split.
STATUS: KSWS has made a nice run since breaking over former highs at 35, riding along its short-term MVA's since late February. After that solid run it has come back to test its 50 day MVA (43.49), as strong stocks will do periodically, holding that level Friday after getting a bit of volume on the selling back Thursday. Looking for the announcement Thursday with the shareholder meeting, and we will see if we can get a bounce going toward that event. The high (from earlier this month) is 48.12. On a break through that level, targeting 58.
BUY POINT: 46 on volume of 110k or better (58,500 Friday; avg. 97,500). Stop: 43.20
POSITION: Stock and/or July $40 calls to buy (SWU GH - 46 OI).

WEN (Wendy's--$37.74; -0.06; optionable): Restaurants. We are looking at a wildcard date on 5-23-02, the date of a WEN investor conference. orking on a new announcement date.
http://biz.yahoo.com/p/w/wen.html
BACKGROUND: Based upon our research it does not appear that WEN has ever split its stock. The annual shareholder meeting was 5-1-02 at which no additional shares were authorized. The company has sufficient shares for a 3:2 split
STATUS: WEN has made a solid run since testing its 50 day MVA in March (then 31, now 36), but has turned laterally the last three weeks. As it moves WEN continues to hold the 18 day MVA (37.58), which is acting as support in what has developed into an ascending wedge. Volume has tapered off in the pattern, and the price volume action has been positive. Friday WEN showed a doji over the 18 day as volume dropped to 296k (avg. 817k). Looking for a breakout (pattern high 38.50). Target: 44
BUY POINT: 38.60 on volume of 1.1m. Stop: 36.90
POSITION: Stock and/or September $35 calls to buy (WEN IG).

EDMC (Education Management--$42.92; +0.18; optionable): Education & Training services. Researching a date.
http://biz.yahoo.com/p/e/edmc.html
BACKGROUND: Last announced a 2 for 1 split on 12-2-98 in conjunction with a board meeting. The stock price was $ (Jay please fill in price). The annual shareholder meeting was on 11-8-01 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
STATUS: EDMC has been steadily building the right side of its base, steadily trending up along a trendline dating back to November (trendline at 42.50; 50 day MVA at 41.60). After a nice bounce in April that took it up to 44.60, EDMC has pulled into an ascending wedge. It has made several attempts to move over 44, but has pulled back off of intraday highs. It tried Wednesday, pulling back again and resting Friday above the trendline and 18 day MVA (42.70), showing a doji on low volume (107k; avg. 219k). Great money flow. Target: 52
BUY POINT: Aggressive: 44.25 on volume of 300k. Breakout: 44.70 on volume of 300k. Stop: 41.57 (7%)
POSITION: Stock and/or September $40 calls to buy (UKN IH - 25 OI).

DRS (Drs Technology--$46.20; +0.45; optionable): Aerospace/Defense. Researching a date.
http://biz.yahoo.com/p/d/drs.html
BACKGROUND: Based upon our research it does not appear that DRS has ever split its stock. The company has sufficient shares for a 3:2 split.
STATUS: After blasting up with defense issues after 9-11, DRS has had some trouble breaking over 42-43, setting up patterns but not quite able to break through. After finally pushing through in early April, DRS set up a lateral consolidation from which it broke to start this month, blasting up to a high of 48.66. The stock pulled back to test the prior high at 46, and has formed a consolidation at that point, over its 18 day MVA (46.13). Thursday DRS tapped down to 44 for the second time in a weak, but rebounded on strong volume to close. It could not follow up with a move Friday, closing with a doji on lighter volume (128k; avg. 194k). Looking for another bounce and run. Good money flow and relative strength. Target: 54
BUY POINT: Over 47 on volume of 250k. Stop: 43.80
POSITION: Stock and/or September $40 calls to buy (DRS II).

TFX (Teleflex--$58.25; +0.90; optionable): Conglomerate. Forecast to announce a split on 7-17-02 with earnings. The company has not confirmed a time for the release.
http://biz.yahoo.com/p/t/tfx.html
BACKGROUND: Last announced a 2:1 split in May 1997 at price $60. Before that TFX split its stock 3:2 in 1991 at a price of $40. The annual shareholder meeting was on 4-26-02 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: TFX broke out of a large reverse head & shoulders pattern in early March (breakout at 48), making a nice run up to an April high of 58. It set up an ascending wedge, pulling back to test its 50 day MVA (55) twice as it maintained a consistent high at 58. Friday TFX broke through, continuing what had been a light-volume move off of the 50 day with a break to a new high. Volume spiked up to 171,300 (avg. 121k), and we are looking for more. Target: 70
BUY POINT: A buy up to 59.50 on continued strong volume. Stop: 54.17-55.34
POSITION: Stock only.

PRE-ANNOUNCEMENT BEST PLAYS:
1) CTAS - Could bounce again
2) ABC - Started the move
3) KSS - Blowout move on earnings

CTAS (Cintas--$54.60; -0.57; optionable): Business services. Working on a date.
http://biz.yahoo.com/p/c/ctas.html
BACKGROUND: Last announced a 3:2 split on 1-18-00 in conjunction with a board meeting. The stock price was $54. The annual shareholder meeting was on 10-25-00 at which time additional shares were authorized.
STATUS: Made a solid breakout last week, and continued up this week before testing back the last three sessions. Volume continued to be strong on the selling, which is a concern, but Friday CTAS held the 10 day MVA (54.41) to close with a loose 'hammer' doji, with a long tail that dipped back through the pre-breakout high at 54, but CTAS recovered nicely to close. Volume was up at 1.54m (avg. 1.08m). On a bounce we can look to add positions, or take new ones. Target 65.
BUY POINT: Bounce: Over 55.50 on continued strong volume. Stop: 52.25
POSITION: Stock and/or August $50 calls to buy (NQQ HJ).

ABC (Amerisourcesbergen--$77.62; +1.58; optionable): Drugs wholesale. We are researching a forecast date.
http://biz.yahoo.com/p/a/abc.html
BACKGROUND: Last split in March 1999 in the $70 range. The annual shareholder meeting was on 2-27-02 at which time no additional shares were increased. The company has sufficient shares for a 2:1 split.
STATUS: Good move Friday in its nice handle-type consolidation. ABC formed the pattern after a breakout from a six-month cup with handle, and it has shown solid action with low volume on the move, holding over support of the 18 day MVA (53.52; former pattern highs at 72.50). Friday ABC bounced, taking out our bounce buy point, and although volume was down it was still strong at 1.16m (avg. 1.01m). A good start, and we are looking for a continued move, with the closing and intraday highs in the pattern ahead at 78.61 and 79.70. Good buying and relative strength is solid.
BUY POINT: Over the closing high: 78.71 on increased volume of 1.4m. Stop: 74
POSITION: Stock and/or August $75 calls to buy (ABC HO).

KSS (Kohl's Corp--$77.75; +4.20; optionable): Department Store.
http://biz.yahoo.com/p/k/kss.html
BACKGROUND: Last announced a 2:1 split on 3-16-00 at a stock price of $76. The company has sufficient shares for a 2:1 split.
STATUS: Quite a comeback by KSS. The stock made ahigh of 76.20 on a saucer pattern, but went into a one-month downtrend, rebounding with strong retail sales numbers earlier in the week. It slowed going into the forecast, and on earnings that blew out Friday KSS blasted up with a massive move. It gapped up and ran to a new high, running on huge volume of 4.63m (avg. 1.84m). After such a move we could see some lower-volume profit-taking, and we will look for that move to hold 76 and we can look at something more from there.
BUY POINT: After some profit-taking holds 76, a move back over 77 on continued strong, above average volume.
POSITION: Stock and/or July $75 calls to buy (KSS GO).

PRE-SPLITS BEST PLAYS: Remember, we try to grab Pre-Splits as they break out of good patterns or as they start a run right before the split. Not looking for home runs, but looking for those $3 to $4 moves running into the split, watching for topping signs and potential resistance. Not huge money, but it can be very steady. We set our initial stops at the 7-8% range below the purchase price (or just below obvious support), and move them up on a move to preserve our profits.
1) ATK - Could be ready again
2) IFIN - Double bottom with handle
3) CPS - Cup with handle
4) PNRA - Looking for a continued run
5) COCO - Looking for a move from the consolidation

ATK (Alliant Techsystems--$106.64; +0.64; optionable): Aerospace/defense. Splits 3:2 on or about June 11.
http://biz.yahoo.com/p/a/atk.html
STATUS: After the great move on the split announcement, ATK pulled back a more than we liked, dropping through the 18 day MVA (107.80), but it is showing that it is bottoming on this move as it closes on the 50 day MVA (103.47). It showed decreasing point losses on continued strong volume, which indicates that buying are stepping in to pick up the shares, and Friday ATK showed a loose doji in the range of its April consolidation, over the 50 day. Looking for the bounce, targeting 125, but this leg on the bounce will run into resistance at the high of 115.
PLAY: Over 109, with stock and/or August $100 calls (ATK HT). Stop: 103

IFIN (Investor's Financial--$76.86; -0.27; optionable): Splits 2:1 effective 6-17-02.
http://biz.yahoo.com/p/i/ifin.html
STATUS: Made a great bounce from the 50 day MVA (74.53) to start the week, breaking out of a double bottom with handle dating back to mid-March. After the abrupt jump IFIN dipped back and has formed another handle at the level of the pattern center, holding over its 10 day MVA (76.32). Looking solid, with the recent high at 78.70, and price resistance from 80-90. Target 90.
PLAY: Over 78 on above average (168k; Friday down to 124k). Breakout: 78.80 on volume of 186k. July $75 calls to buy (FLQ GO - 75 OI). Stop: 74

CPS (Choicepoint--$59.41; +0.20; optionable): Business services. Splits 4:3 effective June 7.
http://biz.yahoo.com/p/c/cps.html
STATUS: Forming up nicely in a six-week cup with handle. CPS made a strong move up in the right side of the cup, with steadily increasing volume. After reaching near the high (April, 61.80) this week, it has settled back into a good-looking handle, with volume dropping way back but CPS being stingy with its gains. Volume was down again on Friday's doji, coming in at 59.41. Looking for a breakout. Target: 69
PLAY: 60.50 on volume of 150k, with stock and/or July $55 calls to buy (CPS GK).

PNRA (Panera Bread--$69.75; +2.34; optionable): Splits 2:1 effective June 25.
http://biz.yahoo.com/p/p/pnra.html
STATUS: PNRA is a strong leader, but its fall back from the solid pre-split move it gave us to start the month was abrupt and caused some concern. It has held over the 50 day MVA (65.42) and the range of its 18 day (68.33), and Friday made a solid move, closing just over its April high. We still need to see more, and are looking for this move to continue and take PNRA back up and over its high of 73.60. Targeting 80.
PLAY: For new or additional positions, over 71 on increased volume (up today to 371k; avg. 392k), with stock and/or August $65 calls to buy (UPH HM).

COCO (Corinthian Colleges--$56.83; +0.09; optionable): Splits 2:1 effective 5-28-02.
http://biz.yahoo.com/p/c/coco.html
STATUS: Looking for another bounce. COCO made a great bounce in April, hitting a high of 59.25. It has pulled back into a nice handle-type consolidation, bouncing earlier this week from the support of the 18 day MVA (56.24). The move was not very strong, and after the initial move COCO dipped back slightly, still holding the 18 day with a low volume doji Friday. We will see if it can bounce.
PLAY: Over 58, with August $55 calls to buy (UCS HK).

End Part 2 of 3

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