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- Nasdaq stalls at 200 day MVA as Thanksgiving move runs out of steam.
- A bit of a breather ahead before the holiday rally resumes.
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2) Stock Splits

Playing stock splits can be very profitable, but it takes know-how. Our stock split service focuses on three main types of plays:

1) pre-announcement (where we forecast an upcoming split prior to the company making the announcement); 2) pre-split (these plays are made in the days leading up to the actual split day); and 3) post-split plays (plays made after the actual stock split where the stock is showing continued or renewed strength).

For post-splits, we can play them as we would pre-splits (very short term), but we prefer to stretch our horizons, playing the trend. When playing options, we look further out, 2 or more months at least. We let the trend carry us along if there is one, but we will also take profits if the technical pattern degenerates, e.g., breaks a trendline. The main difference between post-splits and pre-splits plays is that we really have to like the pattern. Pre-splits can run right before their splits even with poor technical indicators. For post-splits, we are looking at the stocks from more of a longer term "would I buy this stock at this juncture?" position. Now there are times when a hot stock splits and investors pile in to get in while the stock is 'cheaper.' We play those, but with more of a short-term, pre-splits mentality in that we will be ready to get out fast if the momentum fades.

Remember, everything we do has to pass muster with the market that day ... don't fight the market on these plays. Here's a post-split play to watch and our current analysis.

Chart by StockCharts.com

WERN (Werner Enterprises--$22.07; -0.49; no options): Trucking.
Company Profile
STATUS: Cup w/handle. WERN has been working hard on a 10-month cup w/handle base, trying its first breakout in June and then continuing to work on the pattern. It ran to an intraday high in October and then slipped into the month-long handle. Thursday it started a breakout move, jumping up on the good economic news. Friday it just sat around with nothing to drive it, but it did not sell off. Accumulation in the base excellent at 12 accumulation weeks to 7 distribution weeks. Seems that WERN has been trying to price in an economic recovery this year and it looks as if it is finally ready to get serious about it.
Volume: 92.893K Avg Volume: 365K
BUY POINT: $22.75 Volume=550K Target=$27.35 Stop=$21.16
POSITION: QEH ED - May $20c (74 delta, low OI) and/or Stock.

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Infinity Property & Casualty Corp., which is planning an initial public offering of as much as $350 million, said on Wednesday it filed to sell $180 million in senior notes.

It said in a Securities and Exchange Commission filing it plans to use the proceeds from the offering to repay a promissory note to its parent company, insurance provider American Financial Group Inc. (AFG.N), and working capital.

(This IPO story is continued on our website in the IPO Forum.)