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Begin part 2 of 3
Economic Calendar
10-7-03
Consumer credit, August (3:00): $6.0B expected, $6.0B July.
10-8-03
Wholesale inventories, August (10:00): 0.1% expected, 0.0% July.
10-9-03
Initial jobless claims (8:30): 390K expected, 399K prior.
10-10-03
Trade balance, August (8:30): -$41.0B expected, -$40.3B July.
PPI, September (8:30): 0.1% expected, 0.4% August.
Core PPI (8:30): 0.2% expected, 0.1% August.
SEMINARS ON CD
http://www.stockseminarsonline.com
This is Jon Johnson's own site devoted exclusively to seminars designed to teach you what you need to know about the stock market and stock movement and how to take advantage of those moves without incurring the usual high costs of travel and related expenses usually associated with seminars.
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 pre-announcement plays are found in that section.
Good movers Friday: SOX (flipped it to upside); COLM; CPTV; EBAY; JCOM; JBLU; KFX; NSM; NTPA; ORLY; PTEK; UOPX; URBN
NEW PLAYS: This section includes new plays from all sections other than pre-announcements.
Post-Split:
Play Date: 10/04/2003
HOTT (Hot Topic--$24.91; +1.36; optionable): Young fashions
http://biz.yahoo.com/p/h/hott.html
STATUS: Double bottom. HOTT split to start September, and after a strong run immediately fell into the current 5 week base that used the 50 day MVA (22.26) as the bottom of the base. Solid 2 to 0 accumulation in the pattern (2 up price weeks on rising volume versus 0 down price weeks on rising volume), and Friday HOTT was surging on stronger, average volume as it continued the run off the 50 day. Solid money flow and a relative strength breakout. HOTT may form a handle here after running 3 points off the 50 day; these patterns often but don't always form a handle where the stock moves laterally on lower volume and then makes the next strong breakout move. We are willing to take a partial position on a further move from here if there is solid volume, and then again as it tests the move by forming a handle and then breaking out over the handle high, most likely near 25.
Volume: 795.816K Avg Volume: 498.574K
BUY POINT: $25.24 Volume=748K Target=$30.25 Stop=$23.47
POSITION: UHO BE - Feb. $25c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/hott.html
Pre-Split:
Play Date: 10/04/2003
PSC (Philadelphia Suburban--$24.73; +0.24; optionable): Water utility. Splits 5:4 on 12-2-03
http://biz.yahoo.com/p/p/psc.html
STATUS: Cup w/handle. Not really sexy, but utilities of all types have been setting up good patterns. PSC is in the process of breaking out of a 3.5 month base sporting excellent 5 to 1 accumulation. Friday it was moving well but there was not breakout caliber volume. On pre-splits we don't worry too much about that, but as this is a pattern that proves itself with a volume breakout, we want to see the volume spike up on a further move.
Volume: 141.7K Avg Volume: 210.3K
BUY POINT: $24.94 Volume=210K Target=$28.75 Stop=$24.26
POSITION: PSC LX - Dec. $22.50c (99 delta) &/or Stock
http://www.investmenthouse.com/cs/psc.html
Upside:
Play Date: 10/04/2003
ADIC (Advanced Digital Info--$15.54; +1.39; optionable): PC Data storage devices
http://biz.yahoo.com/p/a/adic.html
STATUS: Cup w/handle. ADIC blasted higher on volume Friday, starting the breakout move from a 21 month base sporting solid 20 to 16 accumulation. Outstanding money flow racing ahead of price and a solid relative strength breakout. In a market that is currently wanting for good bases, ADIC has a solid one, and it is delivering the breakout move. We want to go ahead and jump on this one as it continues the breakout.
Volume: 1.889M Avg Volume: 767.204K
BUY POINT: $15.85 Volume=1.2M Target=$19 Stop=$14.74
POSITION: QXG LC - Dec. $15c (61 delta) &/or Stock
http://www.investmenthouse.com/cs/adic.html
Play Date: 10/04/2003
ADPT (Adaptec--$8.4; +0.51; optionable): PC networking and communication
http://biz.yahoo.com/p/a/adpt.html
STATUS: Reverse head and shoulders. ADPT surged off the 50 day MVA (7.57) to end the week, rallying toward a breakout on a huge Friday volume surge. Accumulation in the 4 month pattern is positive at 4 to 3; all it takes is positive accumulation to tip the scales in favor of a sustainable breakout. ADPT has run hard to end the week, and it may need a bit of rest before it continues its move, moving slightly lower to test 8.35 to start the week.
Volume: 1.943M Avg Volume: 1.082M
BUY POINT: $8.62 Volume=1.6M Target=$10.35 Stop=$8.24
POSITION: APQ AU - Jan. $7.50c (74 delta) &/or Stock
http://www.investmenthouse.com/cs/adpt.html
CONTINUING LEADER PLAYS
Play Date: 10/02/2003
CAND (Candies, Inc.--$2.12; -0.08; no options): Footwear
http://biz.yahoo.com/p/c/cand.html
STATUS: Testing the breakout. CAND broke higher in late September on strong trade and has spent the last week testing that move. It did not participate in the Friday rally, instead completing its pullback as it rallied early, ahead of the market. Accumulation in the 4 month cup base is a solid 4 to 2. Great money flow and a relative strength breakout with the stock price. Now we just wait for the stock to start back up on volume. Friday the volume was there, but CAND was testing the move still, undercutting the 10 day MVA (2.10) intraday and then rallying back to hold that level on the close.
Volume: 322.65K Avg Volume: 160.219K
BUY POINT: $2.34 Volume=240K Target=$3.05 Stop=$2.08
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/cand.html
Play Date: 10/02/2003
ECIL (ECI Telecom--$4.02; +0.08; no options): Telecom processing systems
http://biz.yahoo.com/p/e/ecil.html
STATUS: Testing the breakout. Pretty quiet Friday, gapping higher but going nowhere on low volume. ECIL broke from a 4 month flat base in September on explosive trade. The pattern sports strong 5 to 2 accumulation (5 up weeks on rising volume to 2 down weeks on rising volume) along with excellent moneh flow and a relative strength breakout. A good breakout test and now looks ready to go.
Volume: 62.65K Avg Volume: 257.891K
BUY POINT: $4.08 Volume=300K Target=$5.12 Stop=$3.82
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/ecil.html
Play Date: 09/24/2003
CLEC (US Lec Corp.--$5.02; -0.08; no options): Domestic telecom services
http://biz.yahoo.com/p/c/clec.html
STATUS: Testing the breakout. Volume shot higher Friday as CLEC jumped off the 50 day MVA (4.77), and it looked as if CLECL was ready to continue the breakout move. It was stalled in the mud on Friday, however, failing to participate in the rally. Still very solid with money flow moving up even as the stock moves laterally and lower. Solid 6 to 3 accumulation in the base. Just waiting for a strong rebound on volume.
Volume: 32.1K Avg Volume: 66.633K
BUY POINT: $5.88 Volume=93K Target=$7.35 Stop=$5.29
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/clec.html
Play Date: 09/27/2003
QMM (Q Comm Intl.--$7.7; +0.1; no options): Telecom: purchase and resale of prepaid products
http://biz.yahoo.com/p/q/qmm.html
STATUS: Testing the breakout. Still working laterally over the 10 day MVA (7.51) on below average volume, QMM continues to test the breakout from its 3 month reverse head and shoulders base. QMM was a new issue in June, and we really like to pick up new issues as they make the breakout from their first bases. Friday QMM was edging higher on rising though still below average volume. Want to see it make the next burst higher on an above average volume surge. Accumulation in the base is a solid 5 to 2 accompanied by strong money flow and a relative strength breakout with the stock.
Volume: 20.3K Avg Volume: 31.162K
BUY POINT: $7.78 Volume=50K Target=$9.78 Stop=$7.26
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/qmm.html
Downside:
Play Date: 10/02/2003
AVY (Avery Dennison--$52.55; +0.15; optionable): Paper & paper products
http://biz.yahoo.com/p/a/avy.html
STATUS: Put. AVY has completed the test of the 50 day MVA (52.82) after tanking through that support two weeks back. The past two sessions it has showed a doi at the 50 day, Friday on much lower, below average volume as it tested higher and failed yet again. We want to see the volume pikcup as it makes the move back down, something that was missing Friday. Ready to continue the downtrend that started a year ago, but want to see the volume rise on the turn back down.
Volume: 478.5K Avg Volume: 653.943K
BUY POINT: $52.04 Volume=1M Target=$49 Stop=$52.88
POSITION: AVY WK - Nov. $55p (-69 delta)
http://www.investmenthouse.com/cs/avy.html
Play Date: 09/25/2003
UVN (Univision Communications--$32.35; -0.1; optionable): Broadcast TV
http://biz.yahoo.com/p/u/uvn.html
STATUS: Put. UVN has now made the test of the 50 day MVA (33.68) that we were looking for, gapping higher Friday but then rolling over to give all the gain back. Still would have liked to see a bit more upside before it turned down, but it looks to have run out of gas. Looking at positions on a break below 32.
Volume: 2.689M Avg Volume: 2.12M
BUY POINT: New: $32.96 (orig. $33) Volume=3M Target=$29.35 Stop=$34.05
POSITION: UVN WG - Nov. $35p (-71 delta)
http://www.investmenthouse.com/cs/uvn.html
PRE-ANNOUNCEMENT PLAYS
Current Pre-Announcement Plays:
ACV: Forecast 10-23 with earnings or a board meeting 11-3.
APOL: Forecast to announce a split with earnings before the market opens on 10-07-03. Gapped higher Friday but gave the move back on rising but below average volume. This was right at the prior September high. APOL will have to make the break through that resistance to be ready for the next buy point. Next buy at 69.55.
AVP: Forecast 10-28 before the open with earnings.
BCR: Forecast 10-15-03 after the close.
CFC: Forecast 10-23-03.
CHS: New. Forecast 12-2-03.
COCO: Forecast 10-29 or on 11-20 at a board meeting.
COLM: Forecast to announce a split on 10-23-03 after the market closes.
CPWM: No announcement with the 9-30 board meeting.
DG: No split with earnings on 8-28-03. Looking to pinpoint another day.
DHR: No announcement with the 9-17-03 board meeting. Researching the next date.
ERES: Forecast 10-22-03.
ETN: Forecast 10-13 with earnings or 10-22 with a board meeting.
GDW: Forecast 10-15-03 in conjunction with earnings.
HAR: Announced its split Wednesday, ahead of schedule (forecast 10-29 with earnings). Moving well.
JAH: Forecast 10-27-03.
JBLU: Forecast 10-23 with a board meeting.
LM: Forecast 10-22 with earnings.
MERQ: Forecast to announce a split on 10-16-03 in conjunction with earnings.
NATI: Forecast 10-20-03.
ORLY: Forecast 10-21-03.
PDCO: Forecast on 11-20-03.
ROST: Forecast 11-18-03 before the market with earnings.=
SYK: Forecast 10-16-03 after the market closes.
UOPX: Forecast to announce a split on 10-7 before the market opens with earnings.
VRTS: Back on. Forecast 10-20-03.
XRAY: Forecast to announce 10-21-03.
We are putting full write-ups of those pre-announcement stocks that are ready to make moves. As the other pre-announcement candidates reach new buy points we will put them on as well. We want to keep the report focused on those stocks ready to make moves. The following is a summary table of current pre-announcement plays.
New Pre-Announcement Plays:
Play Date: 10/04/2003
BCR (C.R. Bard--$71.91; +0.37; optionable): Medical instruments and supplies. Forecast to announce a split on 10-15-03 after the market closes in conjunction with earnings.
BACKGROUND: Last announced a 2 for 1 split around 1-22-00 at a stock price of $48. The annual shareholder meeting was on 4-16-03 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/b/bcr.html
STATUS: Cup w/handle. BCR is working toward the breakout from a nice 4 month base. It rallied up to the June high at 72 and then faded back to the 18 day MVA (70.79) to form the handle the past two weeks. This is the point where the last sellers are frustrated out of the stock. Friday BCR was trying the breakout move, gapping higher, but it had no volume backing the move. Will let it reload and just be patient until it makes the breakout on strong volume.
Volume: 172.2K Avg Volume: 375.502K
BUY POINT: $72.63 Volume=563K Target=$83.55 Stop=$70.62
POSITION: BCR AN - Jan. $70c (70 delta) &/or Stock
http://www.investmenthouse.com/cs/bcr.html
Play Date: 10/04/2003
CHS (Chicos Fas--$32.87; +0.57; optionable): Apparel stores. Forecast to announce a split on 12-2-03 after the market closes in conjunction with earnings.
BACKGROUND: Last announced a 2 for 1 split on 6-27-02 at a stock price of $37.74. Prior to this split CHS has announced other splits in December: 12-01 and 12-99, so December is a favored month. The annual shareholder meeting was on 6-24-03 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/c/chs.html
STATUS: Double bottom. CHS is one of our favorite apparel stores as far as a stock is concerned as it continues to grow its sales and earnings. After a 7 month lateral move up to June, CHS broke out and rallied to 34 in early September. It has since worked laterally over 30 and the 50 day MVA (29.58), forming the current 5 week double bottom base showing solid 2 to 0 accumulation. Friday it gapped higher on rising though still below average volume, giving back some of the move on the close. We would like to see it form a handle here, a lateral and below average volume move this week and then provide a strong breakout. Double bottoms do not always form handles, so we will look at taking a partial position on a further move on strong volume. Then if it comes back to test or form a handle and then breaks higher again on volume, we will complete the position.
Volume: 1.036M Avg Volume: 1.213M
BUY POINT: $33.62 Volume=1.8M Target=$40.53 Stop=$31.42
POSITION: CHS BF - Feb. $30c (75 delta) &/or Stock
http://www.investmenthouse.com/cs/chs.html
Play Date: 10/04/2003
VRTS (Veritas--$33.93; +1.93; optionable): Application software. Forecast to announce a split on 10-20-03 in conjunction with earnings. The company has not confirmed this date, but based upon our research this is the date for the release.
BACKGROUND: VRTS has announced a split every year from 1995 to 2000. Announced a 3 for 2 split on 9-4-97 at a stock price of $47. The annual shareholder meeting was on 5-6-03 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/v/vrts.html
STATUS: Test the 50 day MVA (32.53). We are putting VRTS back on the report as it tumbled down to the 50 day MVA, but did so on mostly lower volume. After a week at that level it came to life Friday on a strong volume surge. That shows a solid change in character, and we are ready to move into the stock on a further move. Aggressive from the Friday close, a bit safer to let it break the recent high (35.64).
Volume: 9.363M Avg Volume: 6.794M
BUY POINT: $35.74 Volume=1M Target=$42.88 Stop=$33.24
POSITION: VIV AG - Jan. $35c (49 delta) &/or Stock
http://www.investmenthouse.com/cs/vrts.html
Continuing Pre-Announcement Plays:
Play Date: 09/20/2003
COCO (Corinthian Colleges--$59.18; +0.3; optionable): Education and training. Forecast to announce a split on 10-29-03 in conjunction with earnings or 11-20-03 at its shareholder meeting.
BACKGROUND: Last announced a 2 for 1 split on 4-25-02 in conjunction with earnings. The stock price was $53.25.
http://biz.yahoo.com/p/c/coco.html
STATUS: Double bottom w/handle. Started to surge Wednesday, but then could not make anything more of it the rest of the week. Still in very good shape, however, holding over the 10 day MVA (58.48) in a nice, tight range, showing another doji on below average volume. Very good action in its 7 week base, and we are looking for a break higher this week on again surging volume.
Volume: 530.971K Avg Volume: 720.672K
BUY POINT: $59.42 Volume=1.1M Target=$69 Stop=$56.85
POSITION: UCS BL - Feb. $60c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/coco.html
Play Date: 09/06/2003
JAH (Jarden--$37.35; 0; no options): Rubber & Plastics. Forecast to announce a split on 10-27-03 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 split 2 for1 split on 5-6-03 in conjunction with a board meeting. The stock price was $37.10. The annual shareholder meeting was on 4-24-03 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/j/jah.html
STATUS: Testing the breakout. JAH continues to test, holding the 10 day MVA (37.32) in a very tight range on very low volume. It is just about as good a pullback as you could ask for. Just waiting for it to make the break on volume. Excellent 4 to 1 accumulation in the prior base.
Volume: 230.8K Avg Volume: 198.177K
BUY POINT: $38.05 (orig. $33.72) Volume=270K Target=$44.45 Stop=$36.42
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/jah.html
Play Date: 09/30/2003
RI (Ruby Tuesday--$24.58; +0.15; optionable): Restaurants, casual dining. Forecast to announce a split on 10-7-03 after the market closes in conjunction with earnings and with annual shareholder meeting.
BACKGROUND: Last announced a 2 for 1 split on 4-11-00 in conjunction with earnings. The stock price was $19.10. The annual shareholder meeting is scheduled for 10-7-03 at 11:00 am CT at which time no additional shares are authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/r/ri.html
STATUS: Cup w/handle. RI is still working on the handle to its 13 week base, holding over the 18 day MVA (24.26) as it works laterally on low volume. A very nice pattern and restaurants are forming up well as an improving economy means more eating out. Accumulation in the base is a strong 5 to 2 (5 up weeks on rising volume to 2 down weeks on rising volume). A very solid pattern and we are just waiting for the breakout on volume. Give that we are looking for an announcement on Tuesday after the close, it may not make the move before then, but the news could provide the breakout. That is what we like about split plays in solid patterns: the news often provides the impetus for the breakout and subsequent run.
Volume: 351.6K Avg Volume: 537.486K
BUY POINT: $25.28 Volume=750K Target=$30.35 Stop=$24.06
POSITION: RI AX - Jan. $22.50c (68 delta) &/or Stock
http://www.investmenthouse.com/cs/ri.html
Play Date: 09/18/2003
ROST (Ross Stores--$50.07; +1.37; optionable): Discount apparel. Forecast to announce a split on 11-18-03 before the market opens in conjunction with earnings.
BACKGROUND: Last announced a 2 for 1 split on 8-26-99 at a stock price of $42.32.
http://biz.yahoo.com/p/r/rost.html
STATUS: Double bottom. A classic double bottom formed the past 5 weeks as ROST dropped below the 50 day MVA (47.39) last week, undercutting the early September low that acted as the first leg of the double bottom pattern. After the undercut ROST has rallied up to the 'hump' in the pattern (50.40) though on lower, below average volume. Given that lower volume we anticipate ROST will form a handle, i.e., a lateral move along 50 that shakes out the remaining sellers that were not scared out on the deeper dip at the end of September. It can do two things at this point that will get us into the play: break higher from here on strong volume or form that handle this week and then break higher on volume.
Volume: 548.153K Avg Volume: 775.068K
BUY POINT: $50.58 Volume=850K Target=$60 Stop=$48.62
POSITION: REQ BJ - Feb. $50c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/rost.html
Play Date: 09/20/2003
SYK (Stryker--$77.31; +0.82; optionable): Medical instruments. Forecast to announce a split on 10-16-03 after the market closes in conjunction with earnings.
BACKGROUND: Last announced a 2 for 1 split on 4-19-00 at a stock price of $73.
The annual shareholder meeting was 4-22-03 no additional shares will be authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/s/syk.html
STATUS: Flat base. Friday SYK was making the move, zooming to 78.73 on the high before backing off for a modest gain. Volume was up, but we waited to move in given the poor finish. Accumulation remains at 2 to 0 in the 9 week pattern. It still looks good, but we never like it when a stock tries to make the breakout and then reverses. Again, it still looks good, and we will let it reload and make the move again.
Volume: 902.5K Avg Volume: 749.367K
BUY POINT: New: $77.65 (orig. $77.12) Volume=1.1M Target=$88.65 Stop=$75.05
POSITION: SYK AO - Jan. $75c (61 delta) &/or Stock
http://www.investmenthouse.com/cs/syk.html
Play Date: 10/01/2003
UOPX (University of Phoenix Online--$71.74; +1.96; optionable): Forecast to announce a split on 10-7-03 before the market opens in conjunction with earnings.
BACKGROUND: Last announced a 4 for 3 split on 4-5-02 at a stock price of $39.62. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/u/uopx.html
STATUS: Breakout. A good week for UOPX, rallying off of support at 65 on a nice shot of above average volume all week. UOPX is a runner, and it is off and running again. Forecast before the open on Tuesday, and we anticipate another strong quarter. Thus we are looking to pick up shares on a further move here and right before the close as well as we anticipate some weakness as it moves to close before the pre-market earnings announcement on Tuesday.
Volume: 262.529K Avg Volume: 223.51K
BUY POINT: $69.42 Volume=328K Target=$79.88 Stop=$67.96
POSITION: UBL LN - Dec. $70c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/uopx.html
End part 2 of 3
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