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Begin part 2 of 3
Support and Resistance
Nasdaq: Closed at 1932.21
Resistance: The near top of the channel (1966). October high (1967). The second, higher channel hit in September is at 1980. Then 2000 to 2050, the early January 2002 double top.
Support: The September high (1913). The 18 day MVA (1909). 1860 to 1865. The 50 day MVA (1861). The March/August up trendline (1858).
S&P 500: Closed at 1050.71
Resistance: 1054 (October highs). 1059, the December to June upper channel line. 1050 and 1080 from February 2002 lows. 1100 represents some early 2001 lows. 1150 to 1175, the early 2002 double top.
Support: 1040, the September highs. The 10 day MVA (1042) and the 18 day MVA (1039). 1030 to 1032 (early September highs). The exponential 50 day MVA (1025). The top of the summer range at 1015. 1010 the early September highs. 975 (December 1997 peak).
Dow: Closed at 9801.12
Resistance: 9800 (April and May 2002 lows) and the October high (9850). 10,000 is the candle that attracts the moth.
Support: The 18 day MVA (9691). 9686 (September high). 9588 the early September highs. The exponential 50 day MVA (9558). 9500 (June 2002 lows) is the top of the summer range.
Economic Calendar
11-03-03
ISM Index, October (10:00): 55.8 expected, 53.7 September.
Construction spending, September (10:00): 0.2% expected, 0.2% August.
11-05-03
ISM Services, October (10:00): 62.0 expected, 63.3 September.
Factory Orders, September (10:00): 0.6% expected -0.8% August.
11-06-03
Initial jobless claims (8:30): 380K expected, 386K prior.
11-07-03
Non-farm payrolls, October (8:30): 50K expected, 57K September.
Unemployment rate, October (8:30): 6.1% expected, 6.1% September.
Hourly earnings, October: 0.2% expected, -0.1% September.
Average workweek: 33.8 expected, 33.7 September
Wholesale inventories, September (10:00): 0.2% expected, -0.2% August.
Consumer credit, September (3:00): $5.5B expected, $8.2B 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:
NEW PLAYS: This section includes new plays from all sections other than pre-announcements.
Upside Leader Plays: These are stocks that have formed up well and can make us money. Not necessarily split stocks, but some can turn into split plays.
Play Date: 11/01/2003
CLKS (Click2learn--$2.22; +0.05; no options): Business software
http://biz.yahoo.com/p/c/clks.html
STATUS: Cup w/handle. CLKS is forming the handle to a 15 week base showing strong 5 to 2 accumulation (5 up price weeks on rising volume to 2 down price weeks on rising volume). That shows net buying of the stock during the base and sets a solid foundation for a breakout. Last week the stock pulled back to test the 10 day MVA (2.12) after rallying to the July high where the base started. This handle acts to shake out the last sellers who rode it back up only to see the stock stall out and head down; fearing another collapse they sell out. Once they are gone, however, the stock can start to move given the sellers are gone. Strong money flow that continues to rise even as the stock pulls back on very low volume. Looking for CLKS to turn back up and power higher on strong trade through the buy point.
Volume: 69.202K Avg Volume: 197.363K
BUY POINT: $2.44 Volume=296K Target=$3.18 Stop=$2.27
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/clks.html
Play Date: 11/01/2003
MIPS (Mips Technologies--$4.99; +0.14; no options): Semiconductor memory chips
http://biz.yahoo.com/p/m/mips.html
STATUS: Ascending triangle. MIPS is working on a 6 week base showing strong 3 to 0 accumulation. This base follows the breakout from a 9 month cup with handle. This combination of bases is a particularly strong one. The cup with handle shakes out the sellers then the triangle builds up buying pressure with a series of higher lows until there is a big breakout. MIPS has been using the 50 day MVA (4.36) as the bottom of the pattern with constant tops at 5.25. The higher and higher lows build pressure for the breakout. Friday volume jumped up to average as MIPS edged toward the breakout point. Looks solid, and we are just waiting for the next breakout move.
Volume: 211.611K Avg Volume: 193.863K
BUY POINT: $5.22 Volume=291K Target=$6.55 Stop=$4.85
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/mips.html
Play Date: 11/01/2003
XLNX (Xilinx--$31.77; +0.41; optionable): Semiconductors
http://biz.yahoo.com/p/x/xlnx.html
STATUS: Double bottom w/handle. XLNX is just starting to form what looks to be the handle to a 7 week base sporting strong 3 to 1 accumulation. XLNX has tapped down to 28 twice in October, bouncing smartly after those tests. The last move rallied it from 28 to near 32; a lateral move the next 2 to 3 sessions to form a handle would be an excellent resting point to give it a better base to break higher from. Volume was much stronger and back to average Friday. Would like to see it move laterally on some lower volume early in the week to set up the breakout move, but if it shows the volume break before then we will move in.
Volume: 7.861M Avg Volume: 7.598M
BUY POINT: $32.05 Volume=11M Target=$38.48 Stop=$30.88
POSITION: XLQ CZ - Mar. $32.50c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/xlnx.html
CONTINUING LEADER PLAYS
Play Date: 10/30/2003
AVO (Advanced Medical Optics--$20.17; +0.79; optionable): Medical instruments
http://biz.yahoo.com/p/a/avo.html
STATUS: Cup w/handle. Friday AVO was making another good move, but after running up to 20.67 on the high it backed off and gve back a portion of the move. Volume was above average and still solid. The close off the high indicates it may come back a bit further and then resume the move. AVO broke out in November and ran steady up to the July high at 19. After that stellar run it had to take a breather, and it fell into the current 4 month base. Accumulation in the base is strong at 5 to 2 (5 up price weeks on rising volume to 2 down price weeks on rising volume), strong money flow, and a relative strength breakout on the Thursday move. After a test of 19.50 to 20 it will be a buy on the rebound on strong trade.
Volume: 340K Avg Volume: 245.772K
BUY POINT: Test toward 19.55, then $19.72 on the way back up. Volume=359K Target=$23.68 Stop=$18.34
POSITION: AVO DD - Apr. $20c (44 delta) &/or Stock
http://www.investmenthouse.com/cs/avo.html
Play Date: 10/27/2003
CATS (Catalyst Semiconductor--$7.23; -0.07; no options): Chips for microcontrollers
http://biz.yahoo.com/p/c/cats.html
STATUS: Testing the breakout. Still trying to make the move off the 18 day MVA (6.81) after testing the breakout, but not picking up any volume. CATS made a big volume move out of an 11 week cup with handle base showing positive 2 to 1 accumulation (2 up weeks on rising volume to 1 down week on rising volume). Excellent money flow. Needs a breakout over 7.50 on above average volume.
Volume: 41.1K Avg Volume: 133.545K
BUY POINT: New: $7.55 (orig. $6.88) Volume=145K Target=$8.38 Stop=$6.52
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/cats.html
Play Date: 10/30/2003
CLEC (US Lec Corp.--$5.28; -0.05; no options): Telecom services
http://biz.yahoo.com/p/c/clec.html
STATUS: Cup w/handle. Still working on the handle, though it is getting a bit elongated here. Still solid, holding over the 50 day MVA (4.99) on the lows. Thursday it showed a big volume spike as it came up off of that level. Took a low volume breather Friday, but looks ready to make the breakout after putting the finishing touches on a nice 6 month base. Accumulation in the base is an excellent 7 to 1 and money flow is surging above the price. Looks solid and ready for positions on a break over 5.50 on further strong trade.
Volume: 32.5K Avg Volume: 67.409K
BUY POINT: $5.54 Volume=96K Target=$6.94 Stop=$5.15
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/clec.html
Play Date: 10/29/2003
KOSP (KOS Pharmaceuticals--$39.96; +0.37; optionable): Drugs
http://biz.yahoo.com/p/k/kosp.html
STATUS: Cup w/handle. After a nice surge off the 50 day MVA (35.95) near the bottom of the pattern, KOSP starteed moving laterally Wednesday. This is the preferred action as it works to form a handle to the base and get rid of the remaining sellers before the next strong advance. KOSP broke out from a 6 month cup with handle base in May and rallied to 42. It is taking a breather in the current 6 week base showing strong 3 to 1 accumulation and strong money flow. Very nice handle forming and we want to see a strong breakout from this market leader.
Volume: 258.797K Avg Volume: 492.818K
BUY POINT: $40.25 Volume=727K Target=$48.32 Stop=$37.28
POSITION: KQW BH - Feb. $40c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/kosp.html
Play Date: 10/14/2003
NEXM (Nexmed--$5.4; +0.42; no options): Drugs
http://biz.yahoo.com/p/n/nexm.html
STATUS: Cup w/handle. Nice move Friday on strong volume as NEXM successfully tested the breakout, holding over the 18 day MVA (4.87). Friday was a good day for more defensive stocks, and NEXM looks to be starting the next leg higher. A solid 15 week base with strong volume and a relative strength breakout. Nice action and ready for the next move higher.
Volume: 1.117M Avg Volume: 278.318K
BUY POINT: New: $5.54 (orig. $5.03) Volume=292K Target=$6.28 Stop=$4.78
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/nexm.html
PRE-ANNOUNCEMENT PLAYS
Current Pre-Announcement Plays: Many stocks making moves without announcing splits as companies are still a bit gun-shy. Still getting strong moves from these leaders, and that is why we love split-caliber stocks. They also tend to announce after earnings as JAH did this evening. At this juncture many have rallied higher out of buy position, but there are still some that look ready to move. We will continue to look at the stocks in the best patterns for entry points moving into the potential split announcements. We are researching the next date on those that did not announce but are still very strong.
ACV: No split on 10-23 with earnings or a board meeting 11-3. Still running higher.
APPB: No split on 10-29-03 but moving well with the tremendous earnings report.
AVP: No split on 10-28 before the open with earnings.
BCR: No split on 10-15-03 after the close but moving very well.
CEDC: Forecast 11-11-03.
CHS: Forecast 12-2-03 after the market closes.
COCO: Forecast 11-20 at a board meeting.
COLM: No split announced on 10-23-03.
COO: Forecast 11-4-03.
CPWM: Forecast 11-20 before the open.
DG: Forecast 12-4.
DLTR: Forecast 11-25-03 after the close.
FOSL: Forecast 11-11-03.
FRED: Forecast 11-20-03.
LM: No split on 10-22 with earnings. Still in a strong uptrend.
ORLY: No split announced10-28-03 after the close.
PDCO: Forecast on 11-20-03.
RI: Forecast 12-4 in conjunction with a board meeting.
ROST: Forecast 11-18-03 before the market with earnings.
SYK: No split announced on 10-16-03. A leader setting up for the next move.
VRTS: No split announced on 10-22-03.
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: 11/01/2003
COO (Cooper Companies--$43.45; +0.05; optionable): Medical Instruments. Forecast to announce a split on 11-4-03 in conjunction with a board meeting or on 12-11-03 in conjunction with earnings. The company will not confirm the date for the board meeting, but based upon our research this is the date for the meeting.
BACKGROUND: Last announced a 2 for 1 split on 11-5-02 in conjunction with a board meeting at a stock price of $52.94. The annual shareholder meeting was on 3-25-03 at which time additional shares were authorized.
http://biz.yahoo.com/p/c/coo.html
STATUS: Double bottom. COO is trying to form a handle to its 7 week base, moving just over 43 where the 'hump' in the 'w' is. That is where the handle typically forms. Accumulation in the base is an excellent 4 to 0. Super buying and solid money flow. It may take another 2 to 3 days to form the handle and then make the breakout move.
Volume: 150.4K Avg Volume: 394.545K
BUY POINT: $44.06 Volume=550K Target=$50.88 Stop=$41.95
POSITION: COO BI - Feb. $45c (44 delta) &/or Stock
http://www.investmenthouse.com/cs/coo.html
Play Date: 11/01/2003
FOSL (Fossil--$26.87; -0.06; optionable): Watches, shoes, fashion accessories. Forecast to announce a split on 11-11-03 in conjunction with earnings.
BACKGROUND: Last announced a 3 for 2 split on 5-14-02 in conjunction with a board meeting at a stock price of $27.70. the annual shareholder meeting was on 5-21-03 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/f/fosl.html
STATUS: Double bottom w/handle. FOSL is forming the handle to its 9 week base, working laterally and slightly lower, coming back to test the 50 day MVA (26.15) on low volume. It is forming this handle just below the hump in the W pattern (roughly 27.17), must where it should. Money flow is running higher ahead of the stock even as it moves lower. Very nice base forming and looks ready to make a breakout this week.
Volume: 102.041K Avg Volume: 246K
BUY POINT: $27.32 Volume=369K Target=$32.75 Stop=$26.25
POSITION: QFS LE - Dec. $25c (81 delta) &/or Stock
http://www.investmenthouse.com/cs/fosl.html
Continuing Pre-Announcement Plays:
Play Date: 08/14/2003
AVP (Avon Products--$67.96; +0.8; optionable): Makeup. Looking for the next announcement date as it did not announce on 10-28-03 with earnings.
BACKGROUND: Last announced a 2 for 1 split on 7-22-98 in conjunction with earnings. The stock price was $43. The annual shareholder meeting is scheduled for 5-1-03 at 10:00 ET at which time no additional shares will be authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/a/avp.html
STATUS: Testing the breakout. After testing the 50 day MVA (65.89) Tuesday on the intraday low after earnings, AVP bounded right back and continued its lateral move over the 18 day MVA (67.17) but below 68. This is not bad action, consolidating for the next break higher. AVP is a proven market leader, and we still want to be in it for when the split announcement does come. A good recovery Friday on continued above average volume. Looks to be getting close for the next break higher.
Volume: 1.101M Avg Volume: 910.863K
BUY POINT: New: $68.38 (orig. $66.68) Volume=1.7M Target=$76.32 Stop=$67.12
POSITION: AVP AM - Jan. $65c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/avp.html
Play Date: 10/04/2003
CHS (Chicos Fas--$37.54; -0.05; 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: Testing the breakout. A solid Wednesday move took CHS back to the early October high (37.57), but it could not totally hold the move, edging back Thursday and Friday. Not much, however, as it tapped at the 10 day MVA (36.63) on the low and rebounded. May come back to test the 10 day MVA more earlier in the week, but in good position to make the further break higher.
Volume: 737.6K Avg Volume: 1.148M
BUY POINT: New: $37.75 (orig. $34.62) Volume=1.8M Target=$41.53 Stop=$34.92
POSITION: CHS BG - Feb. $35c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/chs.html
Play Date: 10/23/2003
DLTR (Dollar Tree--$38.29; +0.35; optionable): Discount variety stores. Forecast to announce a split on 11-25-03 after the market closes in conjunction with earnings.
BACKGROUND: Last announced a 3 for 2 split on 5-25-00 at a stock price of $56.69.
The annual shareholder meeting was on 6-19-03 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/d/dltr.html
STATUS: Cup. Appears to be forming a lateral handle to its nice 7 week cup base. It is holding over the 10 day MVA (37.53) on the lows as it moves laterally on very low, below average volume. Solid 3 to 1 accumulation in the base that is acting as the handle to a much larger 17 month double bottom pattern. Very nice action, and now just need to see a new breakout on volume.
Volume: 906.336K Avg Volume: 1.465M
BUY POINT: New: 38.65 (orig. $37.92) Volume=2.3M Target=$45.55 Stop=$35.94
POSITION: DQO BU - Feb. $37.50c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/dltr.html
Play Date: 10/30/2003
FRED (Freds Inc.--$37.68; -0.12; optionable): Another discount variety store. Forecast to announce a split on 11-20-03 in conjunction with earnings.
BACKGROUND: Split in July 2003, February 2002, June 2001, the last two around $35.
http://biz.yahoo.com/p/f/fred.html
STATUS: Testing the breakout. Moving this one up to the pre-announcement section. FRED jumped up out of its 7 week base Thursday, surging on very strong trade. Friday it gapped higher to continue the move but then faded with the rest of the market. Not bad action given the market move for the session, and it held the break higher. Very solid base and already back up to the split price. Might wait until Q1 to announce the split, but with it breaking higher here from its base, a good time to move into a position.
Volume: 448.245K Avg Volume: 368.045K
BUY POINT: $37.94 Volume=526K Target=$45.55 Stop=$35.32
POSITION: FMU BG - Feb. $35c (75 delta) &/or Stock
http://www.investmenthouse.com/cs/fred.html
Play Date: 10/25/2003
PDCO (Patterson Dental--$64; +0.32; optionable): Wholesale medical equipment. Forecast to announce a split on 11-20-03 in conjunction with earnings. The company has not confirmed this date, but based upon our research this is the date for the release.
BACKGROUND: Last announced a 2 for 1 split on 6-13-00 in conjunction with a board meeting. The stock price was $53. The annual shareholder meeting was on 9-8-803 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/p/pdco.html
STATUS: Breakout test. Still working laterally in a very narrow range over the 10 day MVA (62.95) on low, below average volume. Like these lateral consolidations after breaks higher, and just waiting for volume to rally as it does.
Volume: 347.516K Avg Volume: 539K
BUY POINT: New: $64.12 (orig. $62.72) Volume=755K Target=$75 Stop=$60.88
POSITION: DOU AL - Jan. $60c (67 delta) &/or Stock
http://www.investmenthouse.com/cs/pdco.html
Play Date: 09/20/2003
SYK (Stryker--$81.11; -0.05; optionable): Medical instruments. No split announced on 10-15-03 in conjunction with earnings. Researching the next date but SYK remains solid.
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: Testing the breakout. This market leader is still working laterally over the 10 day MVA (80.66), moving in a very tight range on low volume. Showing dojis the past two sessions, accentuating the tight trade. Very nice action that often leads to a big move higher.
Volume: 518.4K Avg Volume: 664.772K
BUY POINT: $82.12 (orig. $78.97) Volume=1.1M Target=$90.25 Stop=$78.55
POSITION: SYK AO - Jan. $75c (61 delta) &/or Stock
http://www.investmenthouse.com/cs/syk.html
End part 2 of 3
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