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us stock market, stock split
Begin Part 2 of 4
Weekly Economic Calendar (All times Eastern). The figures are the consensus expectations, not ours.
6-04-01
Auto sales for May: 6.2M expected versus 6.4M priorl
Truck sales for May: 6.9M versus 7.0M.
6-05-01
Productivity, Q1, revised (8:30): -0.7% expected versus -0.1% prior.
Factory orders for April (10:00): -2.7% expected versus +1.4% prior.
NAPM Services for May (10:00): 48% expected versus 47.1% prior.
6-07-01
Initial jobless claims (8:30): 430,000 expected versus 419,000 prior.
Wholesale inventories for April (10:00): -0.1% versus +0.1% prior.
Consumer Credit for April (3:00): $8.6 billion versus $6.1 billion prior.
TEAM TRADES
Friday we saw some action in some of our plays from Thursday, and we were getting in when the presented the opportunity.
AMGN: We were in the middle of the Friday Stock Splits seminar when the eSignal alert for AMGN went off. We were heading to a break, so we pulled up the volume, a bit light, but we like the pattern the biotechs were forming. We made a decision to take a partial position as volume was not huge and then see if we got more volume this week to complete the position. That is one method we use when buying into breakouts. We can always add to a position if it continues to perform as we want it to do. The stock hit the breakout over 67.62, and we picked up some shares right at that price. The stock ran up on two apparent market orders (68.80) and then came back to test the move; that is when we took the positions. It closed the session at 68.58 on below average volume. We are looking for more positions if the stock continues to move.
SCMR: A rolling covered call play we were looking at, SCMR jumped out of the gates and ran to 10.95 in the first half hour, but then came back to test the move, dropping back to 10.60. It started back up and we moved in with stock positions at that point. Our goal was to pick up the stock and let it strengthen up to the 12 to 12.50 level and then sell the June $10 calls on it. The stock closed close to its high, but right below the 50 day MVA at 12.31. Monday we are going to see if it can reach the 50 day MVA, and if it starts to fall, we will sell the June $10 calls. We expect them to be right at 2.44 at that point.
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THE PLAYS: Some great plays and great moves! MIKE broke out Friday, as did BAX, with IGT on the verge. We also saw some solid moves by ESRX, SDS and DGX.
PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: No announcements scheduled for this week following our recent activity with FCEL, ESRX, LOW and FHCC, but we have some solid new candidates on the report this weekend!
NEW PRE-ANNOUNCEMENT PLAYS:
FITB (Fifth Third Bancorp--$59.46; +0.59; optionable): Forecast to announce a split on 6-21-01 in conjunction with earnings. At this time the company cannot confirm the date.
http://biz.yahoo.com/p/f/fitb.html
BACKGROUND: Last announced a 3:1 split on 6-20-00 at a stock price of $61. The annual shareholder meeting was on 3-20-01 at which time authorized shares were increased.
STATUS: FITB has formed a cup since mid-February, and the last couple of weeks has pulled into a lateral handle. Friday the stock broke out, moving over the former handle high of 59.23. Volume was up and above the average at 2.1 million (average 1.74 million), decent but not great (we generally look for 1.5 times the average). A solid pattern, and we will look for the stock to continue up with increased volume. Relative strength has broken out, and money flow is excellent.
BUY POINT: A continued move up on increased volume in the 2.3 million range.
POSITION: Earnings play. Stock and/or July and August $55 calls to buy (FTQ GK and FTQ HK).
CHV (Chevron--$96.38; +0.33; optionable): Forecast to announce a split on 7-24-01 in conjunction with earnings. At this time the company cannot confirm the date.
http://biz.yahoo.com/p/c/chv.html
BACKGROUND: The annual shareholder meeting was on 4-25-01 at which time authorized shares were increased.
STATUS: With Exxon Mobil announcing, we are looking at some other of the big oils to follow suit, and CHV looks prime. The stock has made a move up from the 78 level since December, breaking from a cup pattern in the process. It has made recent double tops at 98, but also higher lows as it forms an ascending wedge. We love ascending wedges after breakouts from cups with handles. Friday the stock moved up slightly, but closed with a tight doji after testing the 10 day MVA (95.55) at its low. We will see if it can hold the 10 day MVA and show us a breakout. Relative strength has moved over the level made on its most recent high, and money flow is outstanding.
BUY POINT: A move over 98.59 on volume of 3.3 million (average 2.45 million; Friday 1.76 million).
POSITION: Stock and/or September $95 calls to buy (CHV IS).
FISV (Fiserv--$56.04; +0.93; optionable): We are working on a date.
http://biz.yahoo.com/p/f/fisv.html
BACKGROUND: Last announced a 3:2 split on 3-25-99 in conjunction with its annual shareholder meeting. The stock price was $52. FISV's last two splits were announced in conjunction with its annual shareholder meeting. The company currently has sufficient shares for a 2:1 split.
STATUS: FISV had been in a large descending wedge since September, forming a cup with handle in the last part of the pattern since March. The handle formed as the stock, rather than dropping back to its recent lows in the mid-40's after falling back from its down trendline (currently at 53.25), caught support at the 200 day MVA (52.02) on its last trip down. From that point the stock ran back up, breaking out to a high of 57.49 before testing the trendline. This week the stock made a move back up from that resistance-turned-support, and Friday continued its move up, hitting 54 at its low (10 day MVA at 54.92) and 56.60 at its high. Volume has not been that impressive on this week's rise, coming in low Friday (generally a low volume day in the market) at 701,400 (average 1.5 million). We will see if the stock pulls back to support or if it can move up and break out over the breakout high.
BUY POINT: Over 57.49 on above average volume.
POSITION: Stock and/or September $55 calls to buy (FTQ IK).
BEST PLAYS: Besides the plays set forth below best plays, there are some other stocks that also look good. These include our new Pre-Split plays, Continuing Candidates GNTX, KMP and NVDA, and Post-Splits BRCD and EMLX.
PRE-ANNOUNCEMENT BEST PLAYS:
1) BMET - Looking solid
2) CEFT - Lateral consolidation
BMET (Biomet--$45.36; +0.69; optionable): Medical equipment. Forecast to announce a split with a board meeting 6-29-01.
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: After bouncing a bit on the 18 day MVA (43.71), the stock made a big move off of that level Wednesday, and has since tapped down to support at its 10 day MVA (44.44). After a light volume pullback Thursday, the stock tapped the 10 day at its low before showing a tight doji to close on Friday. BMET has been looking good; it broke from an ascending wedge in April, and after a visit to its 50 day MVA (41.63) it has made a move back up to a new high at 46. Volume Friday remained light 1.06 million (average 1.84 million), and the hold of higher support at the 10 day is encouraging, as the stock could be in a smaller little ascending wedge here. Relative strength has broken out.
BUY POINT: Breakout A move over 46 on above average volume.
POSITION: Stock and/or July $40 calls to buy (BIQ GH).
CEFT (Concord EFS--$50.50; -0.20; optionable): NEW INFORMATION Forecast to announce a split on 7-25-01 in conjunction with earnings. At this time the company cannot confirm this date, but based upon our research this is the date for the release.
http://biz.yahoo.com/p/c/ceft.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: Has pulled laterally since breaking from its cup last Friday. The breakout move was on below average volume, but it is hanging on, and Friday tapped down to its 10 day MVA (49.46) at its low before recovering for its second consecutive doji. We will continue to look for the stock to hold support in the 50 range (breakout level was 50), watching for a move up with volume behind the move. It has been a steady, solid move up from the 42 level, so perhaps it will rest and from a consolidation.
BUY POINT: A move over 51.40 on above average volume (3.8 million; Friday down to 3.23 million).
POSITION: Stock and/or September $45 calls to buy (EQF II).
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) WFMI - Good pattern and splitting Tuesday
2) ESRX - Good move after the pullback
3) SDS - Strong move in its handle
4) LOW - Looking for a solid move off the doji
5) FIC - Pulled back to the 10 day MVA going into the split
WFMI (Whole Foods Market--$57.16; -0.11; optionable): Grocery Stores. Splits 2:1 effective June 5.
http://biz.yahoo.com/p/w/wfmi.html
STATUS: Has formed a cup since early February, and as it approached the high in the left side it has pulled back to form a handle. It showed a tight doji Friday after a slight move up from its 10 day MVA (56.22). With one session to go before the split, we will see if the stock can continue the move toward the breakout of its cup with handle. At this point the breakout is our main play so close to the actual split. The handle high is 58.83.
PLAY: From here A move up, with stock and/or August $55 calls to buy (FMQ HK (no open interest for July). Breakout 58.96 on volume of 765,000 (average 537,000, Friday 494,900), with stock and/or August $55 calls to buy (FMQ HK).
ESRX (Express Scripts--$100.17; +3.63; optionable): Announced a 2:1 stock split as forecast! Splits 2:1 effective on or about June 22.
http://biz.yahoo.com/p/e/esrx.html
STATUS: Has made a very strong move off of its split announcement, and after a light volume pullback the last couple of sessions the stock made a solid move back up Friday. The stock held support above the former handle high of 96.34 (the 10 day MVA is 95.69) for the move, which came on higher, but below average volume (446,700; average 788,800). The breakout high was 100.84, with the recent high at 101 (the left side of its recent cup-with-handle pattern; the late-December high is 107). We will see if the stock can continue the move with a bit more volume behind it.
BUY POINT: A move over 101 on above average volume.
POSITION: Stock and/or August $95 calls to buy (XTQ HS low open interest).
SDS (Sungard Data--$61.98; +2.50; optionable): Announced a 2:1 split, effective June 18.
http://biz.yahoo.com/p/s/sds.html
STATUS: After consolidating a bit over its 18 day MVA (59.36) in its handle (to a cup pattern), the stock made a strong bounce up Friday. It closed up near the high on its move (63), and the handle high is 64.50 (an intraday spike). Volume was sharply up at 735,500 (average 893,000), and relative strength broke out.
BUY POINT: A continued move up from here on continued strong volume, with stock and/or July $55 calls to buy (SDS GK). Breakout 63.13 on volume of 1.3 million, with stock and/or July $60 calls to buy (SDS GL).
LOW (Lowe's--$69.30; -0.23): Splits 2:1 on or about June 29.
http://biz.yahoo.com/p/l/low.html
STATUS: LOW has leveled out a bit since announcing its split, which came after the stock made a break from a cup with handle. The stock has pulled back to its 10 day MVA (69.41), showing consecutive tight dojis and tapping down intraday to its 18 day MVA (67.94). Volume has pulled back with the stock, coming in at 2.26 million Friday (average 3.4 million). There is resistance from the high at 73.70, but that is a decent move in and of itself, and with some volume we can see if it will break out to a new high.
BUY POINT: A strong move over 70.50 with increased volume near the average.
POSITION: Stock and/or July $65 calls to buy (LOW GM).
FIC (Fair Isaac--$75.65; +0.65; no options): Splits 3:2 effective June 5.
http://biz.yahoo.com/p/f/fic.html
STATUS: Business services. Made a nice little move out of its flying plateau last week, but pulled back this week. It caught support at its 10 day MVA (75.16), moving up slightly from that level Friday. We will see if it can make a last move Monday before the split, looking at the high ahead at 77.54.
PLAY: A move up from here. Stock only.
CONTINUING CANDIDATE BEST PLAYS: Some puts in here.
1) ACF - Nice pullback to support
2) IFIN - Dropping like a brick
3) IGT - Good move and ready to break out
4) KMI - Strong drop, and looking for more to the downside
5) MIKE - Breakout!
ACF (Americredit--$51.84; -0.36; optionable): Credit Services.
http://biz.yahoo.com/p/a/acf.html
BACKGROUND: Last announced a 2 for 1 split on 8-18-98 at a stock price of $35. The annual shareholder meeting was on 11-7-00 at which time no authorized shares were increased. The company does not have sufficient shares for a 2 for 1 split, but does have sufficient shares for a 3 for 2 split.
STATUS: ACF is one of the stocks that have made a very strong run for us on the report, making a great move mid-month. From the high established at 55 the stock has gradually pulled back, and Friday showed another in a string of dojis at the 10 day MVA (51.85). It looked good Thursday with a shooting star doji on strong volume, but after settling back slightly Friday still appears poised for a move. We will be careful in using stops as the stock makes its move, protecting profits, and watching the action as it approaches the resistance at 55.
BUY POINT: A move over 52.50 on increased volume near the average (972,000; Friday 683,300).
POSITION: Stock and/or August $50 calls to buy (ACF HJ).
IFIN (Investors Fin Services--$63.54; -1.59; optionable):
http://biz.yahoo.com/p/i/ifin.html
BACKGROUND: Last announced a 2:1 split on 5-15-00 in conjunction with a board meeting. The stock price was $82. Prior to that announced a 2:1 split on 2-18-99 in conjunction with a board meeting. The stock price was $40.76. The company does not have sufficient shares for a 2:1 split.
STATUS: After testing back up to its 10 day MVA (66.92) at its intraday high Thursday, the stock dropped back on increased volume Friday (497,800; average 365,500). It has been in a very long handle to a double bottom, but gave up support of the 200 day MVA (68.73) earlier this week, and has not been able to launch a recovery. On continued selling down, we will continue to focus on a put play down to the April gap up point (and center of the former double bottom pattern at 61.50), with a soft target of 60 (with more volume on the selling it could crash through that level).
BUY POINT: A continued move down through 63 on continued strong selling volume.
POSITION: July $70 puts to buy (FLQ SN).
IGT (International Game Technology--$63.36; +1.91; 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: IGT has been on a tear. The stock made a solid breakout from its cup with (long) handle in mid-May, and after pulling back to test the move (breakout point was 59, and the 18 day MVA at 59.19) the stock has shot back up the last two sessions. Friday saw volume spike up high to 1.18 million (average 780,400), and it closed just below the breakout high of 63.50 (high Friday was 63.70). It could give us some more, but we will be diligent with stops as it has made a strong run.
BUY POINT: A move over 63.70 on continued strong volume.
POSITION: Stock and/or July $60 calls to buy (IGT GL).
KMI (Kinder Morgan--$54.69; -0.56; optionable): Gas Utility.
http://biz.yahoo.com/p/k/kmi.html
BACKGROUND: Last announced a 3:2 split in October 1998 at a stock price of $50. It also split 3:2 in the $40 range in 1993. The annual shareholder meeting was on 5-9-00. We are currently unable to determine if any additional shares were increased.
STATUS: Fell last week out of what was shaping up as an ascending wedge, and dropped Tuesday though its 50 day MVA (56.40). The stock did not retest the 50 day but bled back more, and Friday saw it gap up slightly but then drop on volume that skyrocketed (2.12 million; average 658,000). We have mentioned potential support from some January-February levels in the 54 range, so for new or additional positions we will want to see a drop through that level, with our target initially will be 50-52 (200 day MVA and March lows at 48).
BUY POINT: A drop below 54 on continued strong volume.
POSITION: Both buy points July $60 puts to buy (KMI SL).
MIKE (Michaels Stores--$39.55; +2.35; optionable): No announcement this week, but broke out.
http://biz.yahoo.com/p/m/mike.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: Made the breakout Friday from its nice cup with handle pattern, moving over the handle high (38.22) on solid breakout volume of 506,500 (average 246,000; we look for 1.5 times the average on these moves). Still a buy up to 40.13 (5% over the breakout), and the high in the left side of the cup is at 41.19.
BUY POINT: A continued move on strong volume.
POSITION: Stock and/or September $35 calls to buy (IKQ IF).
End Part 2 of 4
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us stock market
stock split
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