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us stock market, trade stock
Begin Part 2 of 3
THE PLAYS:
Good moves: CHS; AZO
NEW BONUS PLAYS: Splitting stocks are often market leaders and thus we do not just focus on them at points where they are expected to announce or before they actually split. They provide many opportunities to invest in them and this section is where we can look at some former split stocks and other stocks that are in good position to make us money.
Upside:
BRO (Brown & Brown--$32.45; +0.22; optionable): Insurance brokers
http://biz.yahoo.com/p/b/bro.html
STATUS: Cup w/handle. BRO is a former split stock. It is working through a 5.5 month base, attempting to form a handle to its cup after moving over the 200 day MVA (31.50) a week back. The stock is part of the insurance group that is doing better in anticipation of and following the House's approval of an anti-terrorism insurance bill. It attempted the breakout Tuesday but had not formed a solid enough consolidation in the handle and it fell right back. We expect it to move laterally a few more sessions to shake out the remaining sellers and then make a breakout move. BRO sports some of the best fundamentals in the market.
Volume: 184.5K Avg Volume: 284.195K
BUY POINT: $33.05 Volume=475K Target=$38 Stop=$30.74
POSITION: BRO CF - Mar. $30c (66 delta) and/or Stock
http://www.investmenthouse.com/cs/bro.html
ESRX (Express Scripts--$55.64; +0.92; optionable): Mail order prescriptions
http://biz.yahoo.com/p/e/esrx.html
STATUS: Cup w/handle. ESRX split back in 2001 and though it is not ready to announce again it is in good position to make us some money after this last pullback. ESRX is working through a 6-month base, clearing some resistance at 55 the past week. It has moved back to test 55, and if that support holds ESRX can provide a nice trade toward the pre-correction high at 65. A break over 57.50 clears some interim peaks from April and June, but we are interested in taking some partial position if it shows some upside volume before that level.
Volume: 1.894M Avg Volume: 1.948M
BUY POINT: $56.05 Breakout over resistance: 57.55. Volume=2.5M Target=$62 Stop=$52.13
POSITION: XTQ BK - Feb. $55c (60 delta)
http://www.investmenthouse.com/cs/esrx.html
LNCR (Lincare Holdings--$35; +0.77; optionable): Health services
http://biz.yahoo.com/p/l/lncr.html
STATUS: Cup. Another stock that split in 2001 that has formed up another base. LNCR is moving in 2 month cup base on the heels of a late August breakout attempt that did not succeed. Instead of collapsing LNCR formed the current base. This is good action as it shows buyers still in the stock and the weeding out process continues. Friday LNCR showed a good price move though volume was lacking. It has excellent accumulation in the base, however, at 3 accumulation weeks to 1 distribution week. A breakout pushes the stock to a new high and that is what we like as there are no owners that bought at a higher price ready to try and get out 'even' when the stock gets close to where the bought it.
Volume: 795.97K Avg Volume: 1.478M
BUY POINT: $35.32 Volume=1.1M Target=$40.55 Stop=$32.85
POSITION: LQN BZ - Feb. $32.50c (70 delta, low OI) or LQN BF - Feb. $30c (81 delta) and/or Stock
http://www.investmenthouse.com/cs/lncr.html
MARY (Saint Mary Land & Exploration--$25.4; -0.88; optionable): Independent oil and gas
http://biz.yahoo.com/p/m/mary.html
STATUS: Testing breakout. We were watching MARY for over a week, and we watched it form up and then breakout Thursday. Sometimes it is like that; you see it but just wait. Well the good accumulation at 8 accumulation weeks to 3 distribution weeks no doubt is helping the stock along with continued concerns about war prospects. After a big volume breakout Thursday, MARY is now pulling back toward the breakout point at 25, tapping close to that on the Friday low. It may snug up closer to that point this week before it starts to move back up. We like successful breakout tests as that takes some of the uncertainty out of the picture re failed breakouts. Want to see another session or two of lower volume testing and then a stronger volume move back up.
Volume: 295.973K Avg Volume: 126.544K
BUY POINT: $25.55 Volume=300K Target=$30 Stop=$23.76
POSITION: JQM BX - Feb. $22.50c (70 delta, no OI) and/or Stock
http://www.investmenthouse.com/cs/mary.html
MOVI (Movie Gallery--$17.62; -0.02; optionable): Videos
http://biz.yahoo.com/p/m/movi.html
STATUS: Forming a handle on top of the 10 day MVA at 17 the past week after a breakout over and test of the 200 day MVA (16). MOVI appears to be stepping up the right side of a cup base, using lateral consolidations to take a breather before the next move higher. At this juncture we are not viewing this as a long term play but more a trade up to the July high at 22 where the pattern started. That still provides an excellent return. Several of the movie and video chains are performing quite nicely now, and MOVI looks ready for a move of its own after a nice, lower volume consolidation here.
Volume: 529.923K Avg Volume: 654.819K
BUY POINT: $18.22 Volume=975K Target=$22 Stop=$16.85
POSITION: QLV CC - Mar. $15c (75 delta) and/or Stock
http://www.investmenthouse.com/cs/movi.html
CONTINUING PLAYS
Upside:
Play Date: 09/12/2002
BSX (Boston Scientific--$36.1; -0.3; optionable): Medical instruments
http://biz.yahoo.com/p/b/bsx.html
STATUS: Still working laterally along the 10 day MVA (35.50) after the strong breakout in early October from its 3-month base. The consolidation has been on lower volume, making higher lows. Like those as they build pressure from the bottom for another big breakout move.
Volume: 1.864M Avg Volume: 2.383M
BUY POINT: $36.55 Volume=3.3M Target=$43.75 Stop=$33.99
POSITION: BSX AY - Jan. $27.50c (70 delta) and/or Stock
http://www.investmenthouse.com/cs/bsx.html
Play Date: 10/14/2002
CRL (Charles River Labs--$39.77; -0.18; optionable): White rats
http://biz.yahoo.com/p/c/crl.html
STATUS: Ascending wedge. Little changed from Thursday, CRL is sitting right at the breakout point on lower, below average volume. Pressure is building in the ascending wedge on top of the cup, one of our favorite combination patterns as these can lead to excellent longer term moves.
Volume: 379.7K Avg Volume: 575.158K
BUY POINT: $40.22 Volume=700K Target=$46.45 Stop=$37.55
POSITION: CRL BG - Feb. $35c (74 delta) and/or Stock
http://www.investmenthouse.com/cs/crl.html
Play Date: 10/17/2002
HNR (Harvest Natural Resources--$6.14; -0.05; no options): Independent oil and gas
http://biz.yahoo.com/p/h/hnr.html
STATUS: Testing breakout. HNR continues to move along the 10 day MVA (5.97) after the big breakout from the cup pattern in late September and early October. Similar to CRL though shorter in duration, HNR is forming a wedge after the breakout, consolidating the gains without giving much back. Looks to be setting up for another breakout ahead. Accumulation is solid at 6 up weeks on rising volume to 3 down weeks on rising volume. It looks to be preparing for its next move up on this breakout.
Volume: 103.3K Avg Volume: 166.662K
BUY POINT: $6.38 Volume=288K Target=$7.75 Stop=$5.78
POSITION: Stock (no option chain)
http://www.investmenthouse.com/cs/hnr.html
Play Date: 10/03/2002
INGR (Intergraph--$18.75; -0.54; optionable): System software
http://biz.yahoo.com/p/i/ingr.html
STATUS: Cup w/handle. Forming the handle to a 5-month cup w/handle pattern, INGR has started to edge lower the past week on much lower volume, feeling for the 10 day MVA at 18.35. This is the perfect spot for a handle, just below the lip of the cup. INGR would be best to consolidate a few more sessions and then give the next breakout move. Really like the action.
Volume: 376.77K Avg Volume: 345.437K
BUY POINT: Breakout: 19.85 (orig. $19). Volume=525K Target=$22.25 Stop=$17.84
POSITION: IGQ AC - Jan. $15c (74 delta, low OI) and/or Stock
http://www.investmenthouse.com/cs/ingr.html
Play Date: 10/08/2002
NBIX (Neurocrine Biosciences--$42.35; +0.75; optionable): Biotechnology
http://biz.yahoo.com/p/n/nbix.html
STATUS: Cup/Ascending wedge. Another combination pattern that is getting very ready, NBIX was up Friday but just did not have the breakout volume. Pressure is building for the breakout, and we will look for that strong breakout volume this week. Excellent accumulation.
Volume: 618.803K Avg Volume: 718.569K
BUY POINT: $42.35 Volume=1.1M Target=$50.75 Stop=$39.39
POSITION: UOT BH - Feb. $40c (60 delta) and/or Stock
http://www.investmenthouse.com/cs/nbix.html
PRE-ANNOUNCEMENT PLAYS
Play Date: 09/07/2002
EDMC (Education Management--$44.67; +0.1; optionable): Education and training. Forecast to announce a split on 10-24-02 in conjunction with earnings.
http://biz.yahoo.com/p/e/edmc.html
BACGROUND: Last announced a 2 for 1 split on 12-2-98 at a stock price of $46. 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 continues to struggle near its high at 46, two times failing to make the move over that level last. It has thus shown a bit of a double top and has not been able to convincingly show it has what it takes here to hold a new high. This is common in many of the education stocks right now. Friday it showed another doji, holding above the 10 day MVA on the close. At this point it needs a convincing, high volume breakout to get us into new positions. Earnings are this week and there may be some trepidation after DV, a laggard in the group, failed to produce good results. At this point we are inclined to let it show the breakout before we enter whether it occurs before or after the earnings on 10-24.
Volume: 305.272K Avg Volume: 371.5K
BUY POINT: Aggressive: from here on volume. Breakout: 46.10. Volume=520K Target=$49.45 Stop=$40.95
POSITION: UKN LH - Dec. $40c (65 delta, low OI) and/or Stock
http://www.investmenthouse.com/cs/edmc.html
Play Date: 10/05/2002
IGT (International Game Technology--$70.3; +0.28; optionable): Gaming electronics. Forecast to announce a split 10-23-02 in conjunction with earnings (company has not confirmed this date).
http://biz.yahoo.com/p/i/igt.html
BACKGROUND: IGT has never announced a stock split, but the gaming sector is performing well and the stock is near an all-time high, a leader in the market.
STATUS: Cup w/handle. Still trying to get by 70, IGT spent all week there but was unable to make headway after Tuesday. It is well-poised to make a move as it sits over the last top at 70. If it gets some volume we will look at positions moving into the forecast announcement. Accumulation in the pattern is positive at 9 up weeks on rising volume to 8 down weeks on rising volume.
Volume: 821.9K Avg Volume: 1.007M
BUY POINT: Breakout: $70.95 Volume=1.2M Target=$80 Stop=$66.45
POSITION: IGT DN - April $70c (51 delta) or IGT AM - Jan $65c (61 delta) and/or Stock
http://www.investmenthouse.com/cs/igt.html
Play Date: 10/02/2002
MME (Mid-Atlantic Medical--$41.5; +0.44; optionable): Health care plans. Forecast to announce a split 11-6-02 after the close.
http://biz.yahoo.com/p/m/mme.html
BACKGROUND: MME has announced two prior splits in 1993 and 1994. For the first time since that time the stock is back at those levels.
STATUS: Testing breakout. MME is coming under fire with the valuation downgrade and now stating that it will not hit its earnings forecast for the first time in 10 quarters. Friday it was able to hold at the recent lows and above the 10 day MVA at 40, but the outlook for the stock has changed with the earnins admission. One of the reasons MME has been a leader is its growing earnings and sales. Unless MME resolves this question to the upside we are not too wild about looking at new plays for now. There is time before the proposed announcement with the board meeting and we will see if it can regroup and continue its move. Keping a tight rein on it, however, should it start to sell on increased volume.
Volume: 664.2K Avg Volume: 548.692K
BUY POINT: $40.75 Volume=650K Target=$46 Stop=$37.85
POSITION: MME CF - Mar. $30 c (77 delta, low OI) OR MME CG - Mar. $35c (64 delta) and/or Stock
http://www.investmenthouse.com/cs/mme.html
Play Date: 10/17/2002
TTC (Toro--$61.5; -0.17; no options): Mowers and the like. Forecast to announce a split on 12-4-02 in conjunction with earnings. The company has not confirmed this information, but based upon our research this is the date for the release.
http://biz.yahoo.com/p/t/ttc.html
Based upon our research it does not appear that TTC has ever split its stock. The annual shareholder meeting was on 3-14-02
STATUS: Reverse head & shoulders. Friday TTC took a breather after the solid move over resistance Thursday. The candlestick pattern was a tombstone doji, and after a move up that indicates some pullback. That is fine as it will give a better point to enter the stock after the breakout. Looking for a teste of 60 on lower volume and then a bounce on rising volume. Accumulation is very good at 10 up weeks on rising volume to 6 down weeks on rising volume.
Volume: 84.7K Avg Volume: 75.902
BUY POINT: Test of 60: 60.55 on rising volume. Breakout: $62.08 Volume=120K Target=$72 Stop=$57.73
POSITION: Stock (no option chain)
http://www.investmenthouse.com/cs/ttc.html
UNH (Unitedhealth Group--$99.73; +2.03; optionable): No split announced with earnings. More likely will be on 10-23-02 in conjunction with a board meeting (last split announced). The company would not confirm the board meeting date, but based upon our research this is the date for the next board meeting
http://biz.yahoo.com/p/u/unh.html
BACKGROUND: Last announced a 2 for 1 split on 10-25-00 at a stock price of $106. The annual shareholder meeting was on 5-15-02 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
STATUS: Cup. Gapped sharply Thursday and then sharply sold off on heavy volume. Friday it was on the buy list again for investors as it rallied on lower though continues solid, above average volume. We were looking for a handle but Friday it showed no such intention. Needs the pullback to get into positions at this point. The 10 day MVA is at 95, and that would be a good point to test and enter.
Volume: 2.825M Avg Volume: 2.447M
BUY POINT: After a pullback to test 95, $95.35. Volume=3M Target=$106.88 Stop=$92.25
POSITION: UHB AS - Jan. $95c (74 delta) and/or Stock
http://www.investmenthouse.com/cs/unh.html
CONTINUING CANDIDATES
Play Date: 10/03/2002
HSIC (Henry Schein--$54.49; -0.53; optionable): Wholesale medical equipment
http://biz.yahoo.com/p/h/hsic.html
STATUS: Testing the 10 day MVA. Big move Monday and an attempt to follow through Tuesday failed. HSIC then moved down toward the 10 day MVA (54.05) on lower volume the rest of the week. This is a very nice test of the move to a new high and a perfect place for the stock to hold and start a new rally. This is just what we were looking for.
Volume: 355.134K Avg Volume: 434.38K
BUY POINT: New positions: after a test of 54, 55.25 Volume=550K Target=$59.85 Stop=$52.05
POSITION: HQE AI - Jan. $45c (74 delta) and/or Stock
http://www.investmenthouse.com/cs/hsic.html
POST-SPLIT
Play Date: 10/19/2002
BYS (Bay State Bancorp--$19.39; +0.54; no options): Savings and loans
http://biz.yahoo.com/p/b/bys.html
STATUS: Recent splitting stock moving through a 9-week cup base. Friday BYS showed some real life as it jumped up on some very strong volume. The stock can be quite volatile but it is also moving in a solid pattern with very good price/volume action. A solid move in a solid pattern, we are looking at additional positions on a further move up. It may form a handle near 20, but if it continues to move on volume we will not hesitate to take positions. In this type of recovering market you often see stocks race up and breakout without forming handles as investors push back into get into leading stocks with good fundamentals.
Volume: 187.8K Avg Volume: 43.649K
BUY POINT: $19.54 Volume=185K Target=$23.45 Stop=$18.17
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/bys.html
Play Date: 10/19/2002
HCBK (Hudson City Bancorp--$18.44; +0.12; optionable): Savings and loans
http://biz.yahoo.com/p/h/hcbk.html
STATUS: See a pattern here? HCBK split in June and then corrected into a base. It has come off a short double bottom in September and October and is now forming a handle at prior resistance in the range of 18 to 19. Friday it showed a doji after testing 18 on the low as volume spiked sharply. A breakout over 19 is a buy point and the stock can basically give us our gain by rallying up to and slightly over the prior highs. That is something we like a lot in a play.
Volume: 657.4K Avg Volume: 250K
BUY POINT: $19.05 Volume=475K Target=$22.85 Stop=$17.55
POSITION: KHQ DC - April $15c (no OI) and/or Stock
http://www.investmenthouse.com/cs/hcbk.html
Play Date: 10/12/2002
PFGC (Performance Food Group--$36.52; -0.11; optionable): Wholesale food
http://biz.yahoo.com/p/p/pfgc.html
STATUS: Testing the 10 day MVA. PFGC continues to test the Monday and Tuesday s move, tapping near the 10 day MVA on the Friday low (35.84) and recovering to show a tight doji on the close. Volume jumped to average on the session, indicating that there was some buy side activity on the test. Very good consolidation action and we look for more upside this week given the good accumulation, good fundamentals (a top ranked stock re earnings and sales growth), and ready to break to a new high.
Volume: 416.174K Avg Volume: 441.059K
BUY POINT: $36.55 Volume=500K Target=$39.5 Stop=$34.25
POSITION: PGU LF - Dec. $30c (82 delta, 73 OI)
http://www.investmenthouse.com/cs/pfgc.html
Play Date: 10/12/2002
SHFL (Shuffle Master--$21.9; 0; optionable): Card shufflers
http://biz.yahoo.com/p/s/shfl.html
STATUS: Breakout ascending wedge. SHFL tried to clear 22, but it was not ready, showing a doji after the run higher. That can often signal the stock needs to take a breather after a good move, and as the last three sessions have been on lower volume, SHFL is trying to take a breather and may need to test toward 21 to set up the next move higher. What we are doing is letting it test the 10 day MVA (20.75) if it wants, and then use that as an entry point for additional or new positions as it tests the short term MVA after its dramatic move out of the range on strong volume last week. Accumulation in the pattern was positive at 6 up weeks on rising volume to 5 down weeks on rising volume. This wedge is part of a larger 6-month cup base.
Volume: 236.67K Avg Volume: 286.269K
BUY POINT: New positions: 22.05 (orig. $20.38). Volume=375K Target=$24 Stop=$18.75
POSITION: SFQ BW - Feb. $17.50c (74 delta) and/or Stock
http://www.investmenthouse.com/cs/shfl.html
Play Date: 10/16/2002
WHI (W. Holding Company--$17.89; -0.36; no options): Savings and Loan
http://biz.yahoo.com/p/w/whi.html
STATUS: Double bottom. Now forming the handle to its 7 week pattern that found support at 15. WHI gapped higher but then close at a new handle low on continued well below average volume. That is the volume action you want to see in the handle, and 2 to 3 more sessions of low volume lateral movement will set WHI up for the breakout.
Volume: 103.2K Avg Volume: 260.825K
BUY POINT: New buy point: $18.60 Volume=356K Target=$22.25 Stop=$17.16
POSITION: Stock (no option chain)
http://www.investmenthouse.com/cs/whi.html
End Part 2 of 3
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