|
|
us stock market, stock split
Begin Part 2 of 3
Economic Calendar
12-17-02
CPI, November (8:30): 0.2% expected, 0.3% prior.
Core CPI: 0.2% expected, 0.2% prior.
Housing starts, November (8:30): 1.690M expected, 1.603 Prior.
Building permits, November (8:30): 1.700M expected, 1.722M prior.
Industrial Production, November (9:15): 0.2% expected, -0.8% prior.
Capacity Utilization, November (9:15): 75.4% expected, 75.2% prior.
12-18-02
Trade balance, October (8:30): -$37.0B expected, -$38.0B prior.
12-19-02
Initial jobless claims (8:30): 441K prior.
Leading Economic Indicators, November (10:00): 0.3% expected, 0.0% prior.
Philly Fed, December (12:00): 5.3 expected, 6.1 prior.
Treasury budget, November (2:00): -$50B expected, -$54B prior.
12-20-02
Q3 GDP, final (8:30): 4.0% expected, 4.0% prior.
Chain deflator (8:30): 1.0% expected, 1.0% prior.
ONLINE SEMINARS LIVE OR NOW ON CD!!
There is an incredible wealth of knowledge, years of experience, and 'how to' plans of action in these seminars. As one graduate put it, "I had no idea how little I knew about market direction and the reasons behind it until I took your course." Our graduates over the past year and one-half have made the bear market in stocks their own private second bull market because they learned how to and when to enter the downside and make dramatic profit from what most investors dread. Have the knowledge to take advantage of any kind of market as well as the confidence to act when you see the action unfold. We cover it all from trends, to accumulation/distribution, patterns, stocks, buying and selling options naked, covered, or creating spreads. Go to
http://www.stockseminarsonline.com
and look for the link to the CD seminars or the next live series dates where you can learn and ask questions from the comfort of your home without having to incurr costly travel expenses and time away from work, costs and time that very few can deduct from their taxes. This is Jon Johnson's internet site for online seminars and they get you up to speed on how to deal with up or down markets. Hope you check it out.
SUBSCRIBER QUESTIONS
Q: With gold prices breaking $ 330.00 an ounce yesterday and the dollar losing its value where do you see the equities going? I do see the economy picking up some and I know we need to let the market tell us what its doing but it sure looks like the market is a long ways from recovering. Just wanted to get your feedback on this. Thank You.
A: Gold has been depressed for a long time and it is finally making another run. It made a run a year ago but that was a move based on actions of gold suppliers and producers and it faded. This move has the 'traditional' substance behind it, e.g., global tensions including Iraq war possibilities, Al Qaeda bio weapon threats, Iran's nuclear sites, North Korea reactiviating its nuclear program, and now Venezuelan unrest. Uncertainty about war causes gold to rise in anticipation of events. It spiked in 1991 on the Kuwait invasion as well. It did not take it long to fall back, however, once the parameters of the war became clear.
The market has also seen better days, but compared to the prior 30 months, it has seen much worse days. Since the October bottom up to a week ago it was looking fine. One thing that is hard to do is to try and wipe away what has happened before much like a professional athlete has to forget a mistake and go on with the game and try to make something good happen. Sure you have to know where past support and resistance points are, where the trendlines are in order to project how the market will react in the furutre, but you have to take the current market action for what it is without the overhang from the past. You are right when looking at the economic situation improving; the market has been taking that into consideration even as most thought the economy was weakening further. That is the trap that many analysts and brokerages have fallen into with valuation calls; fear of the past is making them fear the future without looking at what the market is actually doing. They are so tied up in where the market has been that they don't act when the market is looking healthier. That is why many missed out on the move up. If you wipe away that prior downtrend, the market the past three months looks pretty solid and there has been some big money made just in that move.
The same analysis keeps you always looking ahead. The action up to thie latter part of this week was still solid, a normal part of the pullback. While the economic picture remains improving and we think the market will continue to follow after this pullback, we cannot let individual positions get out of hand to the downside for a number of reasons. With options you have time against you and riding a position down can be okay if it is a normal pullback to near term support and the trend is still easily in place. If the action worsens such as falling below the near term trend we are playing with options, we have to decide to ride the position and take our chances or close it out and preserve what we can. Unlike stock, if the position breaks down, we don't have the luxury of time to potentially correct the decision.
Another reason related to this that most planners do not get into is opportunity cost. Even with stock in a long term account (say an IRA) we prefer to exit a position that is not performing if it breaks key support. Why? Because there are other fish that can make us money, regaining any loss and then adding positive gains while the other works through its woes. I have a friend that bought one telecom stock years ago because it was going to be a barn burner. It came onto the U.S. market and sold from the opening minute. I owned some on an overseas market on the move up, but when it went to the U.S. market and started to sell I was out fast. He held on for several years because it was a 'long term investment.' It was actually a long term loss. It went from 40 to 5. That is why we are watching this recent action with a keen eye and sticking with positions that are holding up well while weeding out those that are breaking key support levels. Let the better stocks work for you and cut the ones that are not acting well early so they don't hurt you and take away good gains.
THE PLAYS:
In each report we prepare full write-ups for those that look ready to move. If the move has been made already we discuss the play in the summary table. The purpose is to focus on the next good movers.
NEW 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. In addition, there are emerging trends in the recent move off of the double bottom, and we want to capture those stocks emerging from the obscurity as well.
Upside:
Play Date: 12/14/2002
BEIQ (BEI Technologies--$14.25; -0.05; no options): Scientific & Technical Instruments
http://biz.yahoo.com/p/b/beiq.html
STATUS: Testing the breakout. BEIQ is in a sector performing well of late. The stock moved over the 200 day MVA (14) in late November and has worked laterally above that level on lower volume. Accumulation since May when the stock peaked before starting this base is positive at 9 accumulation weeks to 6 distribution weeks. Again this sector has had some of the better movers in the market. Looking for a strong volume move up from here after the volume has dried up the past week.
Volume: 5.1K Avg Volume: 41K
BUY POINT: $15.06 Volume=55K Target=$18 Stop=$13.94
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/beiq.html
NEW POST-SPLIT
Play Date: 12/14/2002
FAST (Fastenal Company--$37.83; -0.03; optionable): Fasteners.
http://biz.yahoo.com/p/f/fast.html
STATUS: Cup w/handle. Forming the handle to its 7.5 month base, FAST is moving laterally over the 200 day MVA (36.59) in a lateral, slightly lower handle. Accumulation is positive at 9 accumulation weeks to 7 distribution weeks. Friday it showed rising volume, jumping back above average. Indeed, FAST has been showing very good volume for the past week. Very good action and just waiting for the breakout.
Volume: 1.002M Avg Volume: 660K
BUY POINT: $38.55 Volume=995K Target=$43 Stop=$35.85
POSITION: FQA EG - may $35c (68 delta) and/or Stock
http://www.investmenthouse.com/cs/fast.html
Downside:
Play Date: 12/14/2002
HSIC (Henry Schein--$46.18; +1.08; optionable): Medical equipment
http://biz.yahoo.com/p/h/hsic.html
STATUS: Put. HSIC is in a continuing downtrend that started in october when the stock rolled over. It sold down then bounced up in November, then sold again. It spent the last two weeks rallying back up to the down trendline on lower, below average volume. It reversed Thursday at the trendlien and then fell Friday on sharply rising, above average volume. It managed to hold the short term MVA on the close, but we don't think that is going to stop the move in the continuing downtrend. Looking for that trend to assert itself again for a nice move lower.
Volume: 629.315K Avg Volume: 591.5K
BUY POINT: $44.15 Volume=667K Target=$40 Stop=$41.06
POSITION: HQE MI - Jan. $45p (-47 delta, low OI)
http://www.investmenthouse.com/cs/hsic.html
PENN (Penn National Gaming--$16.68; -0.96; optionable): Gaming
http://biz.yahoo.com/p/p/penn.html
STATUS: Put. Times are a changing for PENN. It was a leading stock and tried to breakout of its last base in late October. It reversed, tried gain in early November, but failied. It tried to hold the 200 day MVA just below 18, but it gave that up last week and really started lower Friday as volume edged higher. These breakdowns after failed breakout attempts can be the start of some really hefty selling, and we are looking to get in on the early move lower.
Volume: 196.338K Avg Volume: 425K
BUY POINT: $16.55 Volume=300K Target=$14 Stop=$17.65
POSITION: UQN PD - April $20c (-59 delta)
http://www.investmenthouse.com/cs/penn.html
CONTINUING LEADER PLAYS
Upside:
Play Date: 12/12/2002
AMLN (Amylin Pharmaceuticals--$17.85; -0.2; optionable): Drugs
http://biz.yahoo.com/p/a/amln.html
STATUS: Ascending wedge. Still working laterally in the base that shows excellent accumulation at 11 accumulation weeks to 3 distribution weeks since March. A good second base after its longer cup base breakout in September.
Volume: 410.449K Avg Volume: 954.681K
BUY POINT: $18.75 Volume=750K Target=$22.75 Stop=$17.25
POSITION: AQM DC - April. $15c (72 delta) and/or Stock
http://www.investmenthouse.com/cs/amln.html
Play Date: 12/07/2002
ALN (Allen Telecom--$9.9; +0.31; optionable): Scientific & Technical Instruments
http://biz.yahoo.com/p/a/aln.html
STATUS: Testing the 18 day MVA. ALN has made good on the test of the 18 day MVA near 9 earlier in the week and then made the stronger breakout move we were looking for Friday as volume jumped solidly above average as it made the price move. A leader in this market (and a very good sector as well), ALN is still a buy at this point.
Volume: 419K Avg Volume: 280K
BUY POINT: New positions: 10.03 (orig. $9.86). Volume=412K Target=$11.85 Stop=$9.17
POSITION: ALN FU - June $7.50c (75 delta, low OI) and/or Stock
http://www.investmenthouse.com/cs/aln.html
Play Date: 11/23/2002
ATRS (Altiris--$13; -0.06; no options): Altiris
http://biz.yahoo.com/p/a/atrs.html
STATUS: Ascending wedge. Very tight range Friday as volume spiked back up to average levels. Outstanding accumulation (9 accumulation weeks to 2 distribution weeks), and the jump in volume indicates it is ready to make its move. Very nice pattern.
Volume: 167.4K Avg Volume: 139.818K
BUY POINT: $14.05 Volume=200K Target=$18 Stop=$19.96
POSITION: Stock (no option chain)
http://www.investmenthouse.com/cs/atrs.html
Play Date: 11/21/2002
BMRN (Biomarin Pharmaceuticals--$7.74; -0.14; optionable): Drugs
http://biz.yahoo.com/p/b/bmrn.html
STATUS: Testing the breakout. Still holding the 18 day MVA at 7.75 on some very low, below average volume. It keeps testing 7.50 intraday and bouncing back. Looks ready to make its move.Nice test of the 18 day MVA, moving laterally along that level on this pullback on below average volume.
Volume: 118.765K Avg Volume: 358.909K
BUY POINT: $7.95 Volume=750K Target=$11 Stop=$7.29
POSITION: NUR DA - April $5c (low OI) and/or Stock
http://www.investmenthouse.com/cs/bmrn.html
Play Date: 12/11/2002
BSTE (Biosite--$31.41; -0.49; optionable): Diagnostic substances
http://biz.yahoo.com/p/b/bste.html
STATUS: Ascending wedge. A bit wilder Friday, testing down to 30 on the low but rebounding on some volume. It is at the end of its base, pinching off as it should. It is time for the breakout this week if it is coming.
Volume: 284.056K Avg Volume: 643.954K
BUY POINT: $32.07 Volume=900K Target=$39.25 Stop=$29.83
POSITION: BQS DF - April $30c (70 delta, low OI) and/or Stock
http://www.investmenthouse.com/cs/bste.html
Play Date: 12/10/2002
CREE (Cree, Inc.--$19.14; -0.51; optionable): Chip equipment
http://biz.yahoo.com/p/c/cree.html
STATUS: Testing the 50 day MVA (18.71). CREE is holding up very well in the chip selling, managing to hold the 50 day MVA on lower, below average volume as the rest of the market sells off. Friday it tested the 50 day MVA on the low and recovered a lot of the loss. Looking for the bounce up on stronger volume.
Volume: 1.825M Avg Volume: 3M
BUY POINT: $19.65 Volume=4.1M Target=$24.25 Stop=$18.27
POSITION: CVO FW - June $17.50c (69 delta, low OI) and/or Stock
http://www.investmenthouse.com/cs/cree.html
Play Date: 11/20/2002
PIXR (Pixar--$60.18; +0.68; optionable): Toy Story; Monsters, Inc.
http://biz.yahoo.com/p/p/pixr.html
STATUS: Breakout. PIXR jumped to a new high Friday on very strong volume after a lower volume lateral consolidation the past two weeks. Solid volume and a good add-to point.
Volume: 800.153K Avg Volume: 500K
BUY POINT: New: $60.25 (orig. $57.85) Volume=775K Target=$66 Stop=$57.65
POSITION: PQJ KD - April $55c (61 delta, low OI) and/or Stock
http://www.investmenthouse.com/cs/pixr.html
Play Date: 12/03/2002
SCIO (Scios--$32.74; -0.32; optionable): Wholesale drugs
http://biz.yahoo.com/p/s/scio.html
STATUS: Testing the breakout. SCIO has pulled back to the 10 day MVA (32.60), holding that level on lower, below average volume. This follows the stronger volume move a week earlier; the pullback in the overall market selling was very mild and SCIO held up well. Looking for the next move on volume.
Volume: 496.415K Avg Volume: 980K
BUY POINT: $33.05 Volume=1.6M Target=$39.65 Stop=$30.74
POSITION: UIO EF - May $30c (67 delta) and/or Stock
http://www.investmenthouse.com/cs/scio.html
Play Date: 12/11/2002
SCSS (Select Comfort--$9.78; +0.02; no options): Air beds
http://biz.yahoo.com/p/s/scss.html
STATUS: Ascending wedge. SCSS continues to move in the ascending wedge pattern that follows on the heels of an October cup w/handle breakout. Very nice consolidation pattern on the heels of the breakout. We like to see ascending wedges in continuing upside trends as it is a bullish pattern that shows continued upside bias. Looking for the strong, above average volume breakout.
Volume: 267.934K Avg Volume: 475K
BUY POINT: $9.85 Volume=545K Target=$12 Stop=$8.97
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/scss.html
Downside:
Play Date: 12/11/2002
ANT (Anteon Intl.--$22.6; +0.57; optionable): ITS software
http://biz.yahoo.com/p/a/ant.html
STATUS: Put. We did not enter into ANT last week, letting it rise up to complete the test of the break of the 50 day MVA up near 23.75. We wanted to see if it would return to that level, but it did not, holding below the 18 day MVA near 23. Friday it made one more attempt, but it could not clear even the 10 day MVA, rallying on much lower volume than on the selling sessions. Looks like a last gasp attempt and is now ready to fall
Volume: 94.4K Avg Volume: 300K
BUY POINT: $22.45 Volume=200K Target=$20 Stop=$23.55
POSITION: ANT ME - Jan. $25p (-64 delta, low OI) or ANT PX - April $22.50p (-40 delta, low OI)
http://www.investmenthouse.com/cs/ant.html
PRE-ANNOUNCEMENT PLAYS
Play Date: 12/12/2002
ROST (Ross Stores--$44.52; -0.07; optionable): Apparel stores. Forecast to announce a split on 3-19-03 in conjunction with earnings. At this time the company cannot confirm a time for the release.
http://biz.yahoo.com/p/r/rost.html
BACKGROUND: Last announced a 2 for 1 split on 8-26-99 in conjunction with a board meeting. The stock price was $43.30. The annual shareholder meeting was on 5-23-02 at which time authorized shares were increased. The company has sufficient shares for a 2 for 1 split.
STATUS: Testing the breakout. Holding at the 18 day MVA with another doji as volume moved higher to slightly average levels. This comes after a test of the 50 day MVA earlier last week, and the higher volume as it held the 18 day MVA suggests that it could be ready to continue the move higher. Accumulation is positive during the base at 7 up weeks on rising volume to 6 down weeks on rising volume. Money flow has turned back up ahead of the stock as it has worked laterally the past two weeks.
Volume: 1.188M Avg Volume: 1.06M
BUY POINT: $45.85 Volume=1.6M Target=$52.75 Stop=$42.64
POSITION: REQ EV - May $42.50c (66 delta, low OI) and/or Stock
http://www.investmenthouse.com/cs/rost.html
Play Date: 10/28/2002
WFMI (Whole Foods Market--$53.22; +0.41; optionable): Health food grocery. Forecast to announce a split on 2-12-03 in conjunction with earnings. The company has not confirmed this date, but based upon our research this is the date for the announcement.
BACKGROUND: Last announced a 2 for 1 split on 5-10-01 in conjunction with a board meeting. The stock price was $50.40. The annual shareholder meeting was on 3-25-02 at which time authorized shares were increased. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/w/wfmi.html
STATUS: Testing the breakout. Looking really good in its lateral consolidation above the 18 day MVA (52) as volume rose to above average levels on WFMI's move higher Friday. The stock looks very good and ready for the breakout. We wanted to see higher volume on the move, and it looks as if that is going to happen.
Volume: 748.231K Avg Volume: 654.09K
BUY POINT: New: 53.95 (orig. $50.11) Volume=975K Target=Initial $57.51 Stop=$49.94
POSITION: FMQ BI - Feb. $45c (64 delta) and/or Stock
http://www.investmenthouse.com/cs/wfmi.html
End Part 2 of 3
|
us stock market
stock split
|
