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1) MARKET SUMMARY
Jobs report disappoints as anticipated, but market does not cave.
- Rally shows some wear, but holds up remarkably well given the employment report.
- Why the conventional wisdom is wrong and is missing the crucial and exciting dynamic emerging in the job market during this economic recovery. Structural job change? You bet and it is something fantastic.
- Market readies for a pullback as talk of valuation again emerges, but stocks are holding up well.
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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). We play pre-split plays as short-term plays. We get in when the technical indicators show us things look right, grab as much as we can, and get out, always being conscious of resistance and support. These stocks are highly volatile at this time, and can turn on you quickly. Don't let good profits disappear. Watch for turns, especially when a stock trades in a wide range and finishes off its high. That is a sign these stocks often give you that they are running out of steam. We usually get out and ask questions later. We can always get back in. We like to play in the money calls, preferably two strike prices in the money as this usually gives us a greater delta (the percent an option will mover versus the stock's movement). We prefer deltas of 75 or better. This means if the stock moves 1 point, the option should move three-fourths of that point. That means up or down. Remember, wait to see the stock start to move up. Don't just blindly make a play and don't try to guess tops and bottoms. We can look at indicators to give us a clue as to what will happen, but we need the stock to confirm it for us. Here's a pre-split play to watch and our current analysis.
SAFE (Invivo--$23.6; +1.29; no options): Medical appliances. Splits 3:2 on 9-29-03.
Company Profile
STATUS: 10 day MVA bounce. A bit more thinly traded than we usually look for, but it is showing excellent momentum and volume. After a surge off the 18 day MVA two weeks back it has tested the 10 day MVA (22.27) and shot up Friday on a volume surge. These are momentum plays and we are looking to get in on the move. It is a good sector as well as the techs take a breather. Strong money flow and a relative strength breakout. Remember, the object of these plays is to see the move occurring, get in, let it work for you until it shows a topping sign (e.g., a doji after a run higher), then take the gain.
Volume: 40.03K Avg Volume: 22.272K
BUY POINT: $23.75 Volume=40K Target=$26.75 Stop=$22.25
POSITION: - Stock (no option chain).
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