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stock watch, stock split
Begin Part 3 of 4
BEST PLAYS: Besides the plays set forth below best plays, there are some other stocks that also look good. These include Pre-Announcements FISV, our new Pre-Split plays, and Continuing Candidate CECO. Some of the techs are showing life, with Post-Splits BRCD, EMLX and SEBL, and Continuing Candidate MERQ looking like they can move in a good market, perhaps after a brief pullback to support.
PRE-ANNOUNCEMENT BEST PLAYS (in addition to PDII and ACS above)
1) BMET - Loose star doji over support
2) KRB - Still looking like a put
3) NVDA - Consolidating nicely and ready for a run to $100
BMET (Biomet--$48.06; -0.39; optionable): Medical equipment. No announcement with the board meeting, but we are looking at 7-9-01 before the open with earnings.
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: The stock has been quite strong, making steady if not spectacular moves up. It has broken from a couple of solid patterns along the way (a large and then a smaller ascending wedge), but has been trending up along its short-term MVA's for the last month and a half (10 & 18 day at 47.50 and 46.81, respectively). The stock hit a new high at 49.18 Thursday, but closed well off its high, a topping sign, and predictably gapped down to support, showing a loose star doji. From this support level we are looking for the stock to hold and make a move up to a new high. This has been its pattern. Still shows good relative strength, money flow and buying. Target: 54.
BUY POINT: A move over 49.18 on above average volume (up to 1.39 million Friday; average 1.68 million). Stop: 45.74 (50 day MVA at 44.48).
POSITION: Stock and/or August and October $45 calls to buy (BIQ HI and BIQ JI). With earnings plays, we buy short-term options to sell before the announcement when the earnings run loses steam, and longer-term options to hold through the announcement.
KRB (MBNA Corp--$33.00; -0.75; optionable): Forecast to announce a split on 7-10-01 in conjunction with earnings. At this time the company cannot confirm an earnings date.
http://biz.yahoo.com/p/k/krb.html
BACKGROUND: Last announced a 3:2 split on 7-14-98 in conjunction with earnings. The stock price was $40. KRB is a holding company and does not hold annual shareholder meetings.
STATUS: Has taken a strong fall the past month from the 38 range, going the opposite direction of most banks. After a relief bounce the stock dropped back again Friday from its 18 day MVA (34.29), moving on strong volume (up to 3.9 million; average 2.44 million). This is the strong selling we were looking for after a bounce, and we will look for the stock to continue down from here for a continued put play. The recent low was 32.45. Target: 29-30. Not what we want from a split candidate, but we will take the downside action and then see if it can recover.
BUY POINT: A move back below 32.45 on continued strong selling volume.
POSITION: August $37.50 puts to buy (KRB TU).
NVDA (Nvidia--$92.75; +0.83; optionable): Semiconductor. Forecast to announce a split on 8-15-01 in conjunction with its annual shareholder meeting or on 8-13-01 during the market in conjunction with earnings.
http://biz.yahoo.com/p/n/nvda.html
BACKGROUND: 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 made at least four trend runs up its trendline connecting March and May closing lows, but after the last run (which hit up to 100) the stock pulled back to visit the 50 day MVA (86.42). It bounced up from that level and has now tightened up along its short-term MVA's (10 day at 91.97). It showed a second consecutive doji Friday, with volume holding at below average levels (3.09 million; average 5.24 million). We really like the lower volume as the pattern tightens. This one could spring in a decent market and easily make that run to $100 as with PDII.
BUY POINT: Aggressive: After holding the 10 day, a strong move up with a good market, looking for volume near the average.
POSITION: Stock and/or September $90 calls to buy (RVU IR).
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, watching for topping signs and potential resistance. Not huge money, but it can be very steady. We set our initial stops at the 7-8% range below the purchase price (or just below obvious support), and move them up on a move to preserve our profits.
1) KG - Has found support
2) ING - Small, but gaining momentum and can move very well.
KG (King Pharmaceuticals--$53.75; +0.63; optionable): Splits 4:3 on or about July 19.
http://biz.yahoo.com/p/k/kg.html
STATUS: Has pulled back from its break from a cup with handle (high of 57.88), but has been holding support at 52.50 (its handle range, with the 18 day MVA at 53.32). Friday saw the stock dipping back to 51.50 at its low, but it recovered strong, moving on excellent volume (1.95 million; average 1.13 million). We will see if the momentum can continue. If it can hold support we could get a solid pre-split run, as the stock initially pulled back after announcing the split, which can happen when a stock makes a strong pre-announcement run. Target on a breakout: 64-65.
PLAY: On a move over 55 on continued strong volume, stock and/or August $50 calls to buy (KG HJ).
ING (Ing Groep--$65.87; +1.59; optioinable): Life Insurance. Splits 2:1 effective July 13.
http://biz.yahoo.com/p/i/ing.html
STATUS: ING has been in a downtrend since the beginning of the year, when it was up near 85. The move down slowed the last few months and it is starting to make a move up. After a nice move up followed by a low-volume pullback to support (18 day MVA, at 64.42) this week, Friday saw the stock make a solid move back over the 50 day, moving on good volume (120,600; average 117,000). It is just below the high made on the last move, at 66.06, and we will see if the momentum can continue. The 200 day MVA, which turned back the stock three times in April, is at 68.81. Getting the momentum.
PLAY: A move up from here, with stock and/or August $65 calls to buy (but very low open interest).
CONTINUING CANDIDATE BEST PLAYS: Some puts in here.
1) MIKE - Broke out!
2) FDC - Strong selling
3) MMM - Still a put
MIKE (Michaels Stores--$41.00; +2.40; optionable):
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: It was a shakeout after all! MIKE broke out, running up after a shakeout that drove the price down and below recent levels of its handle consolidation (to a cup dating back to early February). The stock hit up to 42.06 at its high, moving on good breakout volume (357,300; average 219,000), but pulled back to close. We will see if the pullback to close portends a test back or if the stock can jump again from here. Target: 47.
BUY POINT: From here: A continued move up from here on continued good volume. Stop: 38.13. Pullback: A move up after a lower volume test of the 40 level, although we will be wary of a drop below that level. Stop: 37.20.
POSITION: Both buy points: Stock and/or September $35 calls to buy (IKQ IF).
FDC (First Data--$64.35; -2.15; optionable): Working on a forecast date. Earnings were announced on 4-12-01.
http://biz.yahoo.com/p/f/fdc.html
BACKGROUND: Last split was a 2 for 1 on 11-18-96 at a stock price of $80. The annual shareholder meeting was on 1-11-01 at which time authorized shares were increased. The company has sufficient shares for a 2:1 split.
STATUS: This was a surprise. FDC had tightened into a pennant pattern, but took a hard fall Friday, tanking through its 50 day MVA (65.36) as volume took off (up to 2.77 million; average 1.52 million). We will see if it can jump right back over the 50 day MVA Monday. If not and it just tests that level, we will take what it gives, meaning puts o the breach of this important support level. It is currently at support from May lows, so it may make the bounce back. But, on a drop we will target the 58-60 range.
BUY POINT: After a test of the 50 day that fails, a move back below 64 on continued strong selling volume.
POSITION: August $70 puts to buy (FDC TN).
MMM (Minnesota Mining--$114.10; -1.76):
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: Not helping the Dow out much. Dropped back recently from a lateral consolidation it had formed early this month, and has now tested its 50 day MVA (117.26) three times to the upside before falling back each time. Friday's test was followed by selling back on above average volume (up to 2.04 million; average 1.99 million), closing at its intraday low and just above the low on the previous drop (114). Looking to play a further drop, with the initial target the 200 day MVA, at 107.74.
BUY POINT: A move below 114 on increased volume.
POSITION: August $125 puts to buy (MMM TE).
POST-SPLIT BEST PLAYS:
1) CAKE - What a move!
2) GENZ - Broke out!
3) MTON - A possible put post-split
4) DGX - Looking for a test of the breakout
CAKE (Cheesecake Factory--$28.30; +1.35; optionable): Restaurant. Splits 3:2 effective 6-19-01.
http://biz.yahoo.com/p/c/cake.html
STATUS: The stock made a big move coming off the split, but after abruptly pulling back the stock has flown back up, breaking from a double bottom. Two similar moves on Thursday and Friday have equaled a move of about 13 percent from its 10 day MVA (currently 25.90), and over the center of the pattern, at 26.80. Friday's move took the stock over a late February consolidation range, and we are now looking at the next major resistance at the January-February highs near 30. We could get some profit taking here, but the moves have been on very strong volume (up to 1.27 million Friday; average 415,700). Protecting positions carefully with stops on a move from here to protect gains, but we will also be ready to look at new positions on a move up after some lower-volume profit-taking. A bit beyond where we normally chase a breakout here.
PLAY: After a lower-volume test of the 27 range, a strong move back up, with stock and/or October $25 calls to buy (CFQ JE). Stop: Just under the 18 day MVA (currently 25.25).
GENZ (Genzyme--$61.00; +3.43; optionable): Split 2:1 effective 6-4-01.
http://biz.yahoo.com/p/g/genz.html
STATUS: Biotechnology. Broke out Friday, making a strong move up to a new high. The stock had been moving somewhat laterally in an expanding consolidation, recently making a small double bottom. Friday's move was on lower, but still solid volume (4 million; average 3.13 million), but the thing of concern is that GENZ closed well off of the intraday high of 64, but that move could be anomalous as the abrupt up and down move occurred at the very end of the extended Friday session. At any rate, it has been a strong performer and we will see if it pulls back or forges on from here; it is still a buy up to 61.38. Target on a breakout: 65.
PLAY: A buy up to 61.38, looking for continued strong volume, with with stock and/or October $55 calls to buy. Stop: 57.08 (10 day MVA at 56.12). Pullback: After a test of the 60 range with lower volume, a strong move back up, with stock and/or October $55 calls to buy. Stop: 55.80.
MTON (Metro One--$64.87; +1.42; optionable): Telecom. Splits 3:2 effective July 2.
http://biz.yahoo.com/p/m/mton.html
STATUS: Has been made a solid, steady move up along its short-term MVA's (10 and 18 day at 60.10 and 57.41, respectively), and on Friday it gapped up for the second consecutive day to show a tight doji. Volume spiked up Friday (638,100; average 436,400), indicating that the stock could be in for a fall post-split. We will look for it to drop back from here, with the aggressive looking at a move back to the 18 day, and on a drop through that level, perhaps a test of the 18 day MVA (57.50). Not a bad put play and then out for the bounce back higher.
PLAY: On a drop back from here, August $75 puts to buy (KQM TO; check broker for deltas, etc. on post-split options).
DGX (Quest Diagnostics--$74.85; +0.70; optionable): Health services. Split 2:1 June 1.
http://biz.yahoo.com/p/d/dgx.html
STATUS: Made a solid breakout move Thursday, but Friday gapped up to a tight doji on sharply higher volume (1.02 million; average 447,000). That typically points to a drop back, but DGX has been strong and we will look for the stock to hold support at its breakout point (73) or its up trendline (connecting March-May closing lows), which is at 71. DGX has been very strong, on its fourth move now along its up trendline established from the March low near 40, breaking out in stair-step fashion from consecutive handles to a cup. We will see how much more it has in it after a test back, but will carefully protect positions with stops. Target: 80.
PLAY: On a test of the breakout at 73, a strong move back up, with stock and/or August $70 calls to buy (DGX HN). Stop: 67.89.
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PRE-ANNOUNCEMENTS REMAINING PLAYS
* * *
FITB (Fifth Third Bancorp--$60.05; -1.56; optionable): Looking for an announcement with earnings on 7-16-01 before the market open.
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: Was looking good in a consolidation over its 10 day MVA (60.93) and its prior breakout point (from a cup with handle, at 61.11), but Friday succumbed to selling. The stock pulled back, taking out its 10 day as well as the 18 day MVA (60.44), with volume really picking up on the selling (2.97 million; average 1.73 million). It is still just above a consolidation range from the lower part of its former handle (50 day MVA at 58.28), but the volume is a concern. We will see if it can hold, looking for a recovery back up toward the breakout high of 63. Still in split range and the forecast is drawing near.
BUY POINT: Breakout: A move over 63 on continued strong volume. Stop: 58.59.
POSITION: Breakout: Stock and/or August and October $60 calls to buy (FTQ HL and OKC JL).
THQI (THQ Inc.--$59.63; +0.17; optionable): Forecast to announce a split on 7-20-01 in conjunction with the shareholder meeting (earnings 7-26-01).
http://biz.yahoo.com/p/t/thqi.html
BACKGROUND: Last announced a 3:2 split on 10-26-99 in conjunction with earnings. The stock price was $44. Prior to that announced a 3:2 split on 7-23-98 in conjunction with earnings. The stock price was $33. The annual shareholder meeting is on 7-20-01 at which time authorized shares will be increased. The company has sufficient shares for a 2:1 split.
STATUS: Made a nice run the last few days, but it would appear to be over. The stock hit up to 62 at its high Friday, but closed with a doji on sharply higher volume than we saw on the recent rise (up to 943,000; average 608,400). The stock had been dipped back to the 10 day MVA (56.29) intraday, and perhaps due to the strange technical issues along with the quarter ending Friday, the stock ranged wildly at the end of the extended regular session, testing as low as the 50 day MVA at its low of 49.25 before recovering right back up. We will look for a test back and see where it holds, with 18 day at 54.63. It has been a strong performer, breaking from a cup with handle in January and making several trend runs since then, going steadily upward. We have been looking for a pullback and possible test of the 50 day, but not in the fashion we saw Friday.
BUY POINT: Nothing specific for now; we will look for a strong move up after a pullback and perhaps a consolidation in the 54-55 range.
POSITION: Aggressive: Stock and/or September $55 calls to buy (QHI IK).
CHV (Chevron--$90.50; +1.76; optionable): Forecast to announce a split on 7-24-01 before the open 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: CHV has taken a hard fall with its sector, giving a solid put play. It made the relief bounce expected Friday, hitting up to 90.88 as volume, though lower, remained pretty strong (2.96 million; average 2.35 million). We will see if it tries the 91 level again, but there is not much room back down to the 200 day MVA (87.38) to make a put play worthwhile. This is a rough move in the sector for a split candidate, but we will see if it can hold on and try to start a recovery going toward the forecast. Nothing for now.
CEFT (Concord EFS--$52.01; -4.07; optionable): 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: Made a breakout move last week, but after bouncing around a bit this week the stock took a big fall back Friday. Maybe Lehman's uncommon values list is not so good after all. CEFT took out its 10 & 18 day MVA's (53.52 and 52.67, respectively), actually tapping its 50 day MVA at its intraday low of 49.95. A big drop, but volume was much lower than we have seen recently, coming in at 2.46 million (average 4.38 million). We will see if it can hold and consolidate here, in the range of its former handle to a cup pattern. It has been a steady performer, but strong trending stocks will periodically test their 50 day MVA's.
BUY POINT: After holding support over the 50 day, we will look for a strong move back up toward the high near 57 as we go toward the forecast. No positions for now.
ATK (Alliant Techsystems--$89.90; +2.40; optionable): Forecast to announce a split on 8-7-01 in conjunction with its annual shareholder meeting.
http://biz.yahoo.com/p/a/atk.html
BACKGROUND: Last announced a 2:1 split on 11-2-00 in conjunction with earnings. The stock price was $89. The annual shareholder meeting is scheduled for 8-7-01 at 2:00 pm CT at which time additional shares will be authorized.
STATUS: After a big drop (recent high at 101.24, 50 day MVA at 92.57), the stock found support in the 85 range, and has started to make its way back up. Friday it closed just above its 10 day MVA (89.67) as it moved on higher volume (179,600; average 189,000), but lower than we saw on the recent selling. We are not looking upside, but will see if the move stalls and gives way to strong selling. On a drop we will watch the recent low at 84.10, and on a drop below that we are targeting 78-80.
BUY POINT: After a failure of this move, perhaps in the 92 range, selling back below the 10 day MVA on above average volume.
POSITION: August $100 puts to buy (ATK TT).
FISV (Fiserv--$63.98; +0.87; 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 has made a strong move on its breakout from a base-over-base pattern (ascending wedge formed after a cup with handle), continuing to steadily rise all this week. Friday was no different, with the stock testing back near its 10 day MVA (61.46), but pushing up to an all-time high. A good move, with volume down but still strong at 1.27 million (average 1.56 million). Generally a bit extended for us, but now that it has broken to a new high we can carefully look at positions, protecting them carefully along the way. A better entry point could be on a test back to the 62 range. Our target is 68.
BUY POINT: From here: A move up on increased volume. Stop: 59.50 (18 day MVA at 59.93). Pullback: After holding a lower-volume pullback at the 10 day, a strong move back up. Stop: 57.16.
POSITION: From here: Stock and/or September $60 calls to buy (FTQ IL). Pullback: Stock and/or September $55 calls to buy (FTQ IK).
End Part 3 of 4
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stock watch
stock split
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