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stock split, stock research
Begin Part 2 of 3
THE PLAYS: KSWS announced the split as forecast after hours!
BONUS PLAYS: MAN, FNF and MOLX started moves, but on light volume. DNR is still poised to move. EME, SKX and CBE are testing resistance, and we are still looking at them as possible puts. WY made a strong move!
AM (American Greetings--$22.02; +0.22; optionable): Business management services
http://biz.yahoo.com/p/a/am.html
STATUS: AM made a big breakout move in March, and after consolidating in a flag pattern, blasted up again this month. The last couple of weeks it has pulled into another consolidation, steadily pulling back on light volume to intersect its 10 day MVA (21.70). Looking good on this rest, and we are looking for AM to hold here to set up another strong move. The closing high on the breakout was 22.97, with an intraday spike up to 23.80. Excellent money flow and buying. Target: 27.
BUY POINT: Bounce: Over 22.50 on above average volume (950k; today down to 535k). Stop: 21. Over the high: 23.05 on above average volume. Stop: 21.50.
POSITION: Stock and/or October $20c to buy (AM JD).
THQI (Thq Inc--$32.68; +1.99; optionable): Multimedia & graphics software
http://biz.yahoo.com/p/t/thqi.html
STATUS: Put. One that we have followed from time to time, including on its recent split. After a choppy consolidation over its 200 day MVA (33, just below its 50 day), THQI fell hard through that support Tuesday. After hitting down to 30, THQI rebounded today, but volume was much lower on the move up, and THQI closed just below resistance. Looking for a failure here and a drop back for a put play. Targeting 25.
BUY POINT: Below 32 on volume of 1.2 million or better (1.04m; avg. 1.08m). Stop: 34
POSITION: September $36.625p to buy (IHX UV - 22 OI).
KMI (Kinder Morgan--$45.14; -0.65; optionable): Gas utilities
http://biz.yahoo.com/p/k/kmi.html
STATUS: A steady downtrend, turning steeper the last month after failing to move back over its 200 day MVA (then 52). It is trending down in typical fashion, moving down and then testing back up to the down trendline. KMI tapped 43.25 last Friday, and has risen back up to the trendline, moving on the light volume we expect on the tests of the line (which is at the 10 day MVA, 45.63). Today KMI turned back from that line, dropping on continued light volume of 422,500 (avg. 942k). Looking for volume to pick up on selling. The move on this leg we are targeting 42, with a longer term target at 40.
BUY POINT: A move below 44.50 on average or better volume. Stop: 47
POSITION: August $50p to buy (KMI TJ).
Quick updates prior bonus plays:
ATVI - Big move!
IGEN - A relief bounce with some more strength today; now facing the 50 day MVA again. With remaining positions we will see how it handles.
LNY - Trying to hold at 24 but looking for more of a drop
RACN - Wary of a strong drop as it tries to hold on
LEN - Testing the 50 day MVA on light volume, holding for the test
CCRN - Dropped right back after the breakout, but is holding for now
AGN - Still riding puts as AGN made a weak relief bounce today
WFMI - Has not been able to continue the bounce, holding for now
GRMN - Holding up after the move
DISH - Made a move up today, clearing the 18 day although on weak volume. Wary of more strength on a move up and protecting positions.
CCRD - Has not been able to take out the 10 day, and looking for a drop back on the pu play
WM - Could be setting up an ascending wedge
AVY - Strong move back up today!
TDY - Bounced back nicely from the 18 day
CF - Resting now after the nice 50 day bounce; looking for a hold and continued move
PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: KSWS joins THC with a split! Nothing from the wildcard WEN. Still looking at MEG Friday.
PRE-ANNOUNCEMENT BEST PLAYS:
1) KSWS - Split announcement!
2) PDCO - Great move!
3) CTAS - Set up for another bounce
4) MEG - Forecast for Thursday
KSWS (K Swiss--$45.49; +0.40; optionable): Footwear. Announced the split today with the shareholder meeting, as forecast! Splits 2:1 effective June 22.
http://biz.yahoo.com/p/k/ksws.html
STATUS: Got the announcement! 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 (43.58), as strong stocks will do periodically. It has tried to bounce, but has been held back by the short-term MVA's (45.39). Today it closed back over that resistance, but volume was weak. However, with the announcement we could see the added strength to push it on another move. The high (from earlier this month) is 48.12. Targeting 58.
BUY POINT: Over 46 on volume of 110k or better. Stop: 43.20
POSITION: Stock and/or July $40c to buy (SWU GH - 46 OI).
PDCO (Patterson Dent--$47.35; +1.85; optionable): Medical equipment wholesale. Researching a date.
http://biz.yahoo.com/p/p/pdco.html
BACKGROUND: Announced a 2:1 split on 6-14-00 at a price of $53, and announced a 3:2 split on 1-12-98 at $45.
STATUS: Breakout! PDCO has been moving laterally since its big move in March off of its 50 day MVA (then 40, now 45), ranging between 45 and 47. Today it got some strength behind it, blasting up to a new closing high with strong, sharply higher volume behind it (438k; avg. 264k). It is now just below the all-time high of 47.48, and we are looking for a more of a move here, targeting 57.
BUY POINT: Over 47.75 on continued strong volume. Stop: 44.70
POSITION: Stock and/or or October $45c to buy (DOU JI - 74 OI).
CTAS (Cintas--$54.33; +0.63; 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: Still testing the breakout. CTAS has shown some significant intraday volatility, tapping down near 52 (and hitting the trailing stop for some positions), but recovering to close over its 18 day MVA (53.68; in the range of former highs). Volume has remained strong as the stock holds and makes these intraday dips and recoveries, today up to 1.52m (avg. 1.04m) after climbing back up from a low of 52.71. Looking for a strong bounce to continue up over the high of 56.62 and toward the 65 target.
BUY POINT: Bounce: Over 55.50 on continued strong volume. Stop: 52.25
POSITION: Stock and/or August $50 calls to buy (NQQ HJ).
MEG (Media General--$65.75; -0.22; no options): Newspapers. Forecast to announce a split on 5-24-02 in conjunction with its annual shareholder meeting.
http://biz.yahoo.com/p/a/abc.html
BACKGROUND: Based upon our research it does not appear that MEG has ever split its stock. The annual shareholder meeting is scheduled for 5-24-02 at 11:00 ET at which time no additional shares will be authorized. The company has sufficient shares for a 2:1 split.
STATUS: Flirting with its 50 day MVA (64.66) again, but the volume remains low as MEG has gradually made its way along in its lateral range. Today it showed a tighter doji as volume remained steady at 71,700 (avg. 79,500). Not much happening, but an announcement with the shareholder meeting could be the catalyst to send it back up and on a run up along the short-term MVA's. We can look for a move at any time.
BUY POINT: Aggressive: Over 67 with above average volume. Stop: 64.
POSITION: Stock only
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) FOSL - Still could spring on the test
2) RYAN - Good start
3) BER - Looks ready
FOSL (Fossil--$31.03; -0.30; optionable): Recreational goods. Splits 3:2 effective 6-10-02.
http://biz.yahoo.com/p/f/fosl.html
STATUS: Made a huge move on the announcement, blasting up from its 50 day MVA (then 27, now 28.58). After hitting a new high at 33.61, FOSL has dropped back, holding the 10 day MVA (31.12) with a couple of dojis. Today FOSL tapped the 18 day at its low of 30.45 (prior pattern highs at 30), recovering to close. It could test lower again, but we are looking for a hold and bounce back up for a pre-split run. Target: 36
PLAY: Over 32, with September $30c to buy (QFS IF - 60 OI). Stop: 30
RYAN (Ryan's Family Steak House--$27.92; +0.83; optionable): Splits 3:2 effective 5-30-02.
http://biz.yahoo.com/p/r/ryan.html
STATUS: Good bounce today. RYAN has been very strong, steadily trending upward along its short-term MVA's with an occasional visit to the 50 day. It formed an ascending wedge the last few weeks over its 18 day MVA (26.96), and today RYAN bounced up from that support. A good start to a pre-split run, making a new closing high, and we are looking for a continued move, breaking out and targeting 32.
BUY POINT: 28.10, with August $25c to buy (UYY HE).
BER (W.R. Berkley--$59.75; -0.10; optionable): Splits 3:2 on or about July 3.
http://biz.yahoo.com/p/b/ber.html
STATUS: BER formed an ascending wedge with its bounces from the 50 day MVA (58.24) in late April and last week, making highs near 61. After reversing after a gap up Monday, BER has very gradually nestled back to the 10 day MVA (69.63), showing three consecutive dojis. Volume was low on the first couple of dojis, but it spiked up today to 211k (avg. 119k), so BER could be ready to make a jump. Target 72.
PLAY: Over 61.20 on volume of 160k, with October $55c to buy (BER JK - 62 OI). Stop: 57.50
CONTINUING CANDIDATES BEST PLAYS: JCI is setting up a nice pattern.
1) FITB - Still a put
2) MHK - Poised to keep moving
3) STI - Looking to breakout
4) AZO - Great move!
FITB (Fifth Third Bancorp--$66.03; -0.13; optionable): Regional bank
http://biz.yahoo.com/p/f/fitb.html
STATUS: Dropped hard Monday, gapping through the 50 day MVA (66.98) and continuing to sell on the day with strong volume. It has since drifted back up, making small moves up, but failing to reach back to the 50 day, instead retreating to close from the 10 day today (66.67). Each session it has tested toward the recent low at 65.15, but recovered. We are looking for a strong breach of the low for put positions. Initially targeting 62.50 (200 day MVA is at 62.35, with October and December highs), adjusting the target for existing positions as well, but we could get a more serious drop than that.
BUY POINT: A drop through 65.15 on above average volume (1.76m; today 1.7m). Stop: 68
POSITION: August $70p to buy (FTQ TN).
MHK (Mohawk Industries--$68.94; -0.71; optionable): Textile manufacturing.
http://biz.yahoo.com/p/m/mhk.html
BACKGROUND: Based upon our research it does not appear that MHK has ever split its stock. The company has sufficient shares for a 2:1 split.
STATUS: A strong breakout move last week, and after an additional surge Monday, MHK has acted well in a consolidation. It has pulled laterally and slightly down, moving on lower volume, today dipping back again on continued below average volume (630k; avg. 639k). MHK is holding over its prior pattern highs and 10 day MVA (67.76), and we look for a continued hold and strong continuation of the move. Still targeting 79.
BUY POINT: Riding existing positions. For new or additional positions, a move over 70 on volume of 900k. Stop: 66
POSITION: Stock and/or August $65c to buy (MHK HM).
STI (Suntrusts Banks--$68.97; +1.22; optionable): Money center bank
http://biz.yahoo.com/p/s/sti.html
BACKGOUND: Last announced a 2:1 split on 2-1-96 at a stock price of $75. The company has sufficient shares for a 2 for 1 split.
STATUS: STI formed a large double bottom dating back to August, but the promising handle turned into a two-month saucer pattern. STI made an unconvincing breakout attempt, pulling back to test former pattern highs (and the 10 day MVA, at 68.93) this week, but held on a pair of dojis and today bounced back up. The move was on increased volume (773k; avg. 632k), and on this move up on the breakout test we will see if STI can generate more volume and run. Good relative strength and buying. Target: 81.
BUY POINT: 70.40 on increased volume of 900k. Stop: 68
POSITION: Stock and/or October $65c to buy (STI JM).
AZO (Autozone--$81.30; +4.63; optionable): Auto Parts
http://biz.yahoo.com/p/a/azo.html
BACKGROUND: Last announced a 2:1 split in March of 1994 at a price of $58. There are sufficient shares for a 2:1 split.
STATUS: AZO dipped back Tuesday going into earnings, but an announcement that was solid and beat the street propelled AZO back up on a gap and run. Today it gapped and ran again through our buy point, as volume continued to be strong (down to 3.04m; avg. 1m), and the stock broke to a new high and out of its cup with handle. A great move, and even though it is within 5% of a breakout, it has still made a long run without rest, so we will ride existing positions and see if we get a bit of profit taking. If it can hold 80 with some lower volume selling, we can look for a move back up on big volume.
BUY POINT: After holding 80 on some lower-volume profit taking, a move back over 81 on strong volume. Target: 94.
POSITION: Stock and/or September $75c to buy (AZO IO).
POST-SPLITS BEST PLAYS:
1) ICUI - Ascending wedge
ICUI (Icu Medical--$39.61; +0.48; optionable): Medical instruments
http://biz.yahoo.com/p/i/icui.html
STATUS: ICUI made two short-lived bounces up in April and May. Although the retreats were immediate, the stock held fast at the support of its 50 day MVA (37.50), and has now formed an ascending wedge over the last few weeks. ICUI has been banging up against a consistent high at 40 while holding the 18 day MVA (39.03) to close, tapping below that mark on intraday lows as volume has been rather low (48,900; avg. 70k). A bit aggressive given its recent performance, but we will see if it can hold on this time. Target: 45.
PLAY: 40.35 on volume of 100k, with stock and/or August $35c to buy (QPD HG - no open interest as yet).
End Part 2 of 3
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stock split
stock research
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