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us stock market, stock watch
Begin Part 2 of 4
THE PLAYS: Many stocks continuing to show good action this week, and some great plays up on the scorecard today.
PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: Looking at LOW on Monday, with NVDA, OMC and CEC on Tuesday.
NEW PRE-ANNOUNCEMENT PLAYS:
CEFT (Concord EFS--$46.60; +1.60; optionable): Forecast to announce a split on 5-24-01 in conjunction with its annual shareholder meeting.
http://biz.yahoo.com/p/b/bmet.html
BACKGROUND: Last announced a 3:2 split on 8-26-99 at a stock price of $37. Prior to that announced a 3:2 split on 5-14-98 in conjunction with its annual shareholder meeting. The annual shareholder meeting is scheduled for 5-24-01 at 9:30 am CST at which time additional shares will be authorized.
STATUS: Is well within split range and the stock made a new high in March at 49.94, and has been moving in a rather wild pattern since. It dipped back to its 200 day MVA (40.14) in April but rallied back, this week pulling back over its 50 day MVA (44.37) after having dropped back through that level in early May. The recent move has been on below average volume (2.8 million Friday; average 3.66 million), and it is right at recent highs in the 47.50 range. It could pull back a bit here, but we could look at such a move as an opportunity to take positions going into the forecast.
BUY POINT: A move up on increased volume after a pullback that holds the 10 day MVA (45.26).
POSITION: Stock and/or August $40 calls to buy (SQL HH).
MIKE (Michaels Stores--$36.45; -0.78; optionable): Wildcard Forecast to announce a split on 5-30-01 after the market opens in conjunction with earnings.
http://biz.yahoo.com/p/b/bmet.html
BACKGROUND: Based upon our research it does not appear that MIKE has ever split its stock. The annual shareholder meeting was on 9-13-00 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Broke from a cup with handle pattern this week, hitting a breakout high of 37.83 Thursday before pulling back a bit Friday (high in the left side of the cup, from February, at 41.90). Volume on the breakout was not good breakout volume, but the pullback Friday was on very light action (45,500; average 240,500). We will look for a test of the breakout at 35 (10 day MVA at 35.24), watching to catch a strong move up after the test.
BUY POINT: A move up on increased volume near the average after a continued low volume pullback that holds the 35 range.
POSITION: Stock and/or June and September $30 calls to buy (IKQ FF - low open interest, and IKQ IF).
ESRX (Express Scripts--$90.10; +0.19; optionable): Forecast to announce a split on 5-23-01 in conjunction with its annual shareholder meeting.
http://biz.yahoo.com/p/b/bmet.html
BACKGROUND: Last announced a 2:1 split on 10-12-98 in conjunction with a board meeting. The stock price was $80. Prior to that announced a split on 5-25-94 in conjunction with its annual shareholder meeting. The stock price was $80. The annual shareholder meeting is scheduled for 5-23-01 at 9:30 CT at which time no additional shares will be authorized. The company has sufficient shares for a 2:1 split.
STATUS: Returns to the report as a pre-announcement, well in its range. The stock was moving in a cup (with a small double bottom configuration) in March and April, but the handle to that pattern has extended almost as long as the cup. This week it has made a move back up over its 50 day MVA (86.25), but it is catching resistance from its recent high at the current level. Volume was not strong on the recent move, coming below average each day, and down to 363,600 on Friday's doji (average 772,000). Looks primed for a pullback, but we will see if it can make a higher low by holding support at its 10 day MVA (87.21). A move up from there would be an entry point going toward the split.
BUY POINT: A move up after holding a pullback (on continued low volume) at the 10 day MVA. Look for the move up on strong volume near the average.
POSITION: Stock and/or August $85 calls to buy (XTQ HQ - low open interest).
BEST PLAYS: Besides the plays set forth below best plays, there are some other stocks that also look good. These include Pre-Split PKI; Continuing Candidates ASFC, GNTX, ITG, and KMI; and Post-Split CAH.
PRE-ANNOUNCEMENT BEST PLAYS:
1) OMC - Good move this week and forecast for Monday
2) CEC - At a new high, forecast for Tuesday
3) NVDA - Forecast for Tuesday
4) LOW - Another Tuesday forecast at a new high
5) BMET - Resting
OMC (Omnicom--$93.85; -0.42; optionable) Wildcard Forecast to announce a split on 5-22-01 in conjunction with its shareholder meeting.
http://biz.yahoo.com/p/o/omc.html
BACKGROUND: Last announced a split on 12-16-97 at stock price of $70. The annual shareholder meeting is scheduled for 5-22-01 at 10:00 ET at which time no additional shares will be authorized. The company has sufficient shares for a 2:1 split.
STATUS: Broke out from its cup with handle (with a double-bottom configuration) on Thursday, but did so on below average volume. That cast doubt on the strength of the move, as we generally look for volume of 50% higher than the average on breakouts of this sort of pattern. Friday saw the stock pull back, but at its low of 93.15 it held above the breakout point of 92.70, and volume on the selling was even lower (785,200; average 1 million). Going into Tuesday's forecast, we are looking for the stock to hold and make a move back up with more volume, perhaps taking positions before the close Monday.
BUY POINT: A move back up on stronger volume after holding support at the breakout level.
POSITION: Stock and/or July $90 calls to buy (OMC GR).
CEC (CEC Entertainment--$53.38; +0.30; optionable): Forecast to announce a split on 5-22-01 in conjunction with earnings.
http://biz.yahoo.com/p/c/cec.html
BACKGROUND: Last announced a 3 for 2 split on 6-24-99 at a stock price of $40.
STATUS: Reached up to a new high of 54.50 intraday on Thursday, pulling back to close at a new closing high. Despite the steep drop back to close, the stock held on Friday to close slightly up with a loose doji, volume dropping back nearer the average at 246,000 (average 221,200). Not a bad day, and it could be resting for a further move up at the level of its April high. On a continued move from here we can look at positions going into the forecast. This is the second surge back up after a test of the stock's strong gap-up breakout in mid-April.
BUY POINT: A move up from here on increased volume.
POSITION: Earnings play. Stock and/or June and September $50 calls to buy (CEC FJ and CEC IJ low open interest for both options, however).
NVDA (Nvidia--$86.30; -0.70; optionable): Semiconductor. Forecast to announce a split May 22 after the close with earnings.
http://biz.yahoo.com/p/n/nvda.html
BACKGROUND: The company last announced 5-16-00 after the close with earnings. Price was at $94, but the stock rose $8.74 that day in anticipation.
STATUS: NVDA has battled back over its 10 day MVA (84.19), pulling back slightly for a doji Friday. It reached a new high on breaking from a large cup in early May, but fell back hard before catching support in the 76 range. Volume dipped back significantly, coming in at 2.4 million (average 5.2 million). It has been somewhat tentative on this move back up. If it can hold here it is in a position where it could give us a move with an announcement back up toward the high of 95.28.
BUY POINT: Aggressive After holding the 10 day MVA, a move back up on stronger volume.
POSITION: Earnings play. Stock and/or June and September $80 calls to buy (RVU FP and RVU HP).
LOW (Lowe's--$68.40; +0.70): Forecast to announce a split on 5-21-01 before the open in conjunction with earnings, or more probably on 5-25-01 at its annual shareholder meeting.
http://biz.yahoo.com/p/l/low.html
BACKGROUND: Last announced a split on 5-29-98 in conjunction with its annual shareholder meeting. The stock price was $75. Prior to that announced a split on 3-4-94 at a stock price for $64. The annual shareholder meeting is scheduled for 5-25-01 at 10:00 ET at which time no additional shares will be increased. The company has sufficient shares for a 3:2 split.
STATUS: LOW has given us a good ride up thus far. It broke out on good volume Tuesday, but after a more suspect, below average surge up to another new high Thursday, the stock showed a doji to end the week. The doji, especially after the preceding weak move, indicates a potential pullback, but we know what the news of an announcement can do. If we get an announcement before the open Monday (also looking at next Friday), we will look for a solid move up, although we will carefully protect profits on the ride. On a good move that has more volume we are looking at a possible move to the 74 range. Now we wait and see if we rewarded further.
BUY POINT: On an announcement, a strong move up from here, but remember: on an announcement, option priced tend to spike higher because of volatility. We are not real eager to rush in on them and LOW has made a good run thus far.
POSITION: Stock and/or July $65 calls to buy (LOW GM).
BMET (Biomet--$44.27; +0.08; optionable): Medical equipment. Working on a date for this one.
http://biz.yahoo.com/p/b/bmet.html
BACKGROUND: Last announced a 3:2 split on 7-6-00 at a stock price of $29. The annual shareholder meeting was on 9-16-00 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: BMET has really charged back after a disappointing drop from its breakout from an ascending wedge. After two very strong moves, the stock has shown consecutive dojis, holding strong above the former breakout point of its ascending wedge pattern. Volume dipped back Friday to 1.2 million (average 1.8 million), demonstrating pretty good action. Looking for it to hold over the former high of 43.68, (tapped 43.47 at the low Friday), moving back up from there on continued strong volume.
BUY POINT: A move up on continued strong volume after holding support over its prior high.
POSITION: Stock and/or July $40 calls to buy (BIQ GH).
PRE-SPLIT BEST PLAYS: Remember, we try to grab these 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. Not huge money, but it can be very steady.
1) BAX - Low volume pullback after the breakout
2) FIC - Nice consolidation in a flying plateau
BAX (Baxter International--$96.28; -0.94; optionable): Health Services. Splits 2:1 effective 5-31-01.
http://biz.yahoo.com/p/b/bax.html
STATUS: Broke from its ascending wedge pattern Thursday, making its third consecutive strong move up. It hit a high of 97.98 Friday before pulling back, but volume was tame (899,000; average 1.52 million), and it held at its low of 95.80 over its breakout point of 95.70. Looking for it to hold at this point for another move back up.
PLAY: After holding support here, a strong move back up, with stock and/or July $90 calls to buy (BAX FR).
FIC (Fair Isaac--$73.00; +0.24; no options): Splits 3:2 effective June 4.
http://biz.yahoo.com/p/f/fic.html
BACKGROUND: On 6-25-95, FIC issued a 100% stock dividend equivalent to a 2 for 1 split. The price at the time of the dividend was $56. The annual shareholder meeting was held 2-6-01 at 9:30 PST. Authorized shares were not increased, but the company has sufficient shares for a 2 for 1 split.
STATUS: Business services. Has recovered from a brief dip back to its 18 day MVA (70.82), climbing back into the recent range of its flying plateau. It has shown consecutive dojis over its 10 day MVA (72.56) now, and if could give us another run going into the split if it can hold here. However, we will diligently exercise discipline in protecting profits, as it has made quite a run.
PLAY: Aggressive A strong move up from here. Safer A move over 75 on above average volume. Stock only.
CONTINUING CANDIDATE BEST PLAYS:
1) KMP - Broke out!
2) IGT - Another breakout!
3) MMM - Testing the breakout!
4) RJR - Consolidating
KMP (Kinder Morgan--$73.16; +1.05):
http://biz.yahoo.com/p/k/kmp.html
BACKGROUND: Based upon our research it does not appear that KMP has ever split its stock. KMP is a master limited partnership and therefore does not have annual shareholder meetings.
STATUS: Broke out again Friday, jumping out of the lateral consolidation it had formed after having tested the breakout from its saucer pattern. Volume was slightly down on the move but was still strong at 181,000 (average 127,000). Looking for a continued move, and we are targeting initially the 77-78 range; again protect profits as the breakout from the saucer was back at 65. On a pullback there is support from its recent closing highs at 72. Solid relative strength, money flow and buying.
BUY POINT: A move up from here on continued strong volume.
POSITION: Stock and/or September $70 calls (KMP FN).
IGT (International Game Technology--$59.85; +2.86; optionable):
http://biz.yahoo.com/p/i/igt.html
BACKGROUND: Based upon our research, it does not appear that IGT has ever announced a split. The annual shareholder meeting was on 3-5-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: What a fine move IGT has made the last few days, breaking out from its long handle (to a cup pattern) Friday. Volume was the strong breakout volume we look for, coming in at 2.23 million (average 712,000). Still a buy up to 60.80 on this move. The breakout point was 57.88.
BUY POINT: A move up on continued strong volume.
POSITION: Stock and/or July $55 calls to buy (IGT GJ).
MMM (Minnesota Mining--$123.05; -0.66):
http://biz.yahoo.com/p/m/mmm.html
BACKGROUND: Last announced a 2:1 split on 3-15-94 in conjunction with a board meeting. The stock price was $102. The annual shareholder meeting is scheduled for 5-8-01 at 10:00 am CT at which time no additional shares will be authorized.
STATUS: A big breakout move Wednesday out of its cup with handle pattern, but after hitting up to 127 the stock has drawn back. The action is good, however, with the stock tapping the breakout point at its low of 122 Friday, recovering a bit to close. Volume was as we indicated it should be in Thursday's report, coming in sharply lower at 1.97 million (average 2.36 million). A bit of profit-taking, so we will watch for the stock to hold this level and make a move back up.
BUY POINT: A move back up on increased volume after holding support at 122.
POSITION: Stock and/or July $120 calls to buy (MMM GD).
RJR (RJ Reynolds--$59.96; +0.46; optionable): Tobacco.
http://biz.yahoo.com/p/r/rjr.html
BACKGROUND: Based upon our research it does not appear that RJR has ever split its stock. The annual shareholder meeting is scheduled for 4-25-01 at 9:00 ET at which time no additional shares will be authorized. The company has sufficient shares for a 2:1 split.
STATUS: Is consolidating now along its short-term MVA's (10 day and 18 day at 59.63 and 59.19, respectively), Friday making a very weak push back up from the 18 day (volume 166,000; average 434,300). The stock had broken out from a saucer with handle pattern, but after hitting up to 62.70 it peeled back quickly, but is holding strong support at the MVA's, which are in the range of former saucer levels. The action is not bad here, so we will look for it to hold and try to make another strong move up.
BUY POINT: Aggressive A move back over 61 on above average volume.
POSITION: Stock and/or August $55 calls to buy (RJR HK).
POST-SPLIT BEST PLAYS:
1) BRCD - Low volume rest Friday.
2) EMLX - Could move in a good market
3) STZ - Testing the breakout
BRCD (Brocade--$45.91; +0.55; optionable (UBF): Telecom
http://biz.yahoo.com/p/b/brcd.html
STATUS: BRCD is holding up nicely after its strong move up in Wednesday's rally. The stock has dipped back slightly since, showing tightening candlesticks. Friday's action resulted in a doji, with an intraday spike up to 48. Volume was low at 9 million (average 15.5 million), and it is comfortably over its 10 day MVA (43.70). It had made a nice move up to 50.75 before pulling back in a handle (although low in the pattern to BRCD's forming base). Looking for the stock to continue up in a good market after holding here. On a strong move in a good market, we are looking at a target of $50, then $56.
BUY POINT: A move up from her on increased volume with a strong market, with stock and/or July $40 calls to buy (UBF GH).
EMLX (Emulex--$43.53; -0.21; optionable (UMQ): Computer Hardware: Peripherals
http://biz.yahoo.com/p/e/emlx.html
STATUS: EMLX used the rally Wednesday to move back up in its handle, and has followed up with consecutive tight dojis. Looking good as volume dipped down to a low 4.3 million (average 6.45 million), holding above its 10 day MVA (41.12). The handle high is ahead at 47.85, but we can look at positions on a strong move up from here. On a breakout, the 200 day MVA is resistance ahead at 54.49.
PLAY: Pullback A move up in a rally after holding support here, looking for higher volume, with stock and/or July $40 calls to buy (UMQ GH).
STZ (Constellation Brands--$37.07; -0.84; optionable): Wineries. Split 2:1 May 15.
http://biz.yahoo.com/p/s/stz.html
STATUS: What a move STZ has made since the split, blasting up with a breakout move this week. It topped Thursday at 38.31, but after such a run (started at 33.50, the breakout point from its small, six-week cup at 37), it was due for a rest. It gapped down to open, but sold on very light volume (95,200; average 179,000), holding the breakout point at its intraday low of 36.65. This is the level to which we were looking for possible support, and now that it is there we will see if it holds for a move back up.
PLAY: After holding the 37 level, a move back up on increased volume, with stock and/or July $35 calls to buy (STZ GG).
End Part 2 of 4
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us stock market
stock watch
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