trade stock, stock split

Part 4 of 4

PRE-SPLITS REMAINING PLAYS: With these stocks we keep an eye out, waiting for the start of a pre-split run.

RAVN (Raven Ind--$27.00; 0.00; no options): Textile Manufacturing. Splits 3:2 effective July 16. Thinly traded, but we had good success with these this year.
http://biz.yahoo.com/p/r/ravn.html
STATUS: A true perfect doji Friday, with the stock only getting one trade for 100 shares the entire session. We talk about thinly-traded pre-splits, but that is hardly what we have in mind (average volume for RAVN 5680). It has got to generate some more volume to be of interest, but the stock is holding in a fine lateral consolidation over its 10 day MVA (26.90) after having made an outstanding move in May and early June, rising from 19 up to a high of 28. We will see what it can do. Relative strength and buying are still strong.
PLAY: On a move over 27.25 on average or better volume, stock.

TARO (Taro Pharmaceutical--$81.65; -2.44; optionable: Drugs. Splits 2:1 July 27.
http://biz.yahoo.com/p/t/taro.html
STATUS: Broke out from a cup with handle last October and has increased more than fourfold since. It reached a high of 90.50 on its most recent move, but pulled back this week and is now just over its 18 day MVA (79.80). Not a bad pullback, coming on overall light volume (301,000 Friday; average 418,500), and we will see if it can hold this support for another strong move going into the split. It might need a bit of rest here before making such a move.
PLAY: Aggressive: Back over 84 on increased volume near the average, with stock and/or August $80 calls to buy (QTT HP).

CONTINUING CANDIDATES REMAINING PLAYS: When splits are not announced, we will keep the best split prospects on the report rather than continue to carry all of them in case there is a an unexpected announcement. We will continue to monitor the stocks that are trimmed and add them again when we ascertain a revised split announcement date.

ASFC (Astoria Financial--$57.91; -0.09; optionable): Savings and Loan.
http://biz.yahoo.com/p/a/asfc.html
BACKGROUND: Last split its stock in 1996 with the split at a price of $56. The annual shareholder meeting was on 5-16-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: This stock has been wildly erratic of late. It was in something of a rolling range, but after making a strong move up toward the highs ASFC made a huge drop last Friday (last day of the quarter), recovering quickly back near the top of the range. It is holding up, but volume has been low, and after Friday's doji it looks like it will pull back to test support again. We will see if it can hold the 10 day MVA (57.31) rather than again dipping to the pattern lows at 55-56. If it can settle down a bit, this is looking like another saucer pattern, but it might be a while before it can make a strong breakout move.
BUY POINT: Breakout: Over 58.55 on volume in the 750,000 range (down to 254,000 Friday; average 361,500).
POSITION: October $55 calls to buy (AQR JK - under 100 open interest).

CECO (Career Education--$58.45; +0.70; no options):
http://biz.yahoo.com/p/c/ceco.html
BACKGROUND: Last announced a 2 for 1 split on 8-1-00 in conjunction with earnings. The stock price was $57. The annual shareholder meeting is scheduled for 5-11-01 at 1:00 pm CDT at which time additional shares will be authorized. The company has sufficient shares for a 2 for 1 split without increasing authorized shares.
STATUS: The stock had been moving steadily moving up along its 50 day MVA (53.75), but in recent weeks has steepened its trend, using the 18 day (57) for support as it moves in surges, making sharp jumps from that level. After the last jump reached 61.35 the stock has pulled back again, holding the 18 day and trying a move Friday, but volume was low (173,800; average 216,200) and the stock pulled back off of its high of 59.93 to close. The action suggests another test of the 18 day, or perhaps even the 50 day.
BUY POINT: After a test of the 18 day, a run back over 59 on above average volume. Stop: 54.87. We will also look for a 50 day bounce if we get an orderly pullback that can hold that level.
POSITION: Stock only.

CHBS (Christopher & Banks--$26.15; -2.71; optionable): No announcement this week.
http://biz.yahoo.com/p/c/chbs.html
BACKGROUND: Last announced a 3:2 stock split on 1-17-01 at a price of $34. Before that CHBS also had 3:2 splits in July of 2000 at $35 and in December 1999 at $26.
STATUS: The stock has been in a serious downtrend from its late May high at 47.50, and the last two sessions has continued the strong drop. Thursday saw CHBS drop back from its 10 day MVA (30.30), which had been steady resistance, and Friday the stock gapped through the 200 day (28.66) and continued down on lesser, but still strong volume (659,400; 555,000). Pretty nasty, but has been a decent put play. From here there is support in the 25 range from February-April lows. We can potentially look at new positions if it shows a bounce back up to test the 200 day, but fails.
BUY POINT: After a test back up to the range of the 200 day, selling back down on continued strong volume, watching the 24-25 range for the next level of support.
POSITION: August $40 puts to buy (URH TH).

IGT (International Game Technology--$59.20; -4.25; 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 had an ugly day Friday, gapping down and then continuing to sell on big volume (1.62 million; average 776,200), taking out its 50 day MVA (60.25). IGT has made a very strong run over the last couple of years, and was looking pretty good here after a typical test of the 50 day a couple of weeks ago. However, this sharp drop signals a possible change in character, so we will see if it is able to recover back over the 50 day; if it cannot, we will look at a put play. The stock tapped support from its April high at its low of 58.25, and below that our initial target would be 54.
BUY POINT: After a bounce back up toward the 50 day that fails, selling back down below 58 on continued strong volume.
POSITION: August $70 puts to buy (IGT TM).

KMP (Kinder Morgan--$71.87; +0.37):
http://biz.yahoo.com/p/k/kmp.html
BACKGROUND: Based upon our research it does not appear that KMP has ever split its stock. KMP is a master limited partnership and therefore does not have annual shareholder meetings.
STATUS: Trying to make a move, but it is not easy in the oil and gas sector these days. It broke from its recent consolidation over the 50 day MVA (68.95) Tuesday, and has continued up since, but Friday the stock showed a much smaller gain on weak volume (down to 48,300; average 126,000) as it tapped up to 72 for the second consecutive session. Looks like a pullback, and we will see if it can hold the highs in the recent pattern, near the 10 day MVA at 70.18. Relative strength has broken out.
BUY POINT: After a test of the 10 day, a move back over 72 on above average volume.
POSITION: Stock and/or September $70 calls (KMP FN).

MIKE (Michaels Stores--$37.99; -2.21; 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: A disappointing day Friday for MIKE, which had broken out the previous Friday but could not sustain the move (hitting 42.06). It was holding support and looked like it was ready for another move, but the stock took out its short-term MVA's (10 day at 39.43) on strong volume (232,800; average 210,700), holding the 50 day to close (37.42). We will see if it can hold, but it has some work to do to get back up toward the breakout. The nice handle pattern is no more. No positions for now.

MMM (Minnesota Mining--$114.60; -1.84):
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 was on 5-8-01 at which time no additional shares were authorized.
STATUS: MMM continues to struggle below its 50 day MVA (at 117.11, with several other MVA's), Friday dropping back again on increased volume. It is still a potential put play down to the 200 day MVA (108.38), but the caveat is that MMM, after a negative report Monday, gapped down to 109.25 but shot back up like a rocket with lots of volume behind it. That violent upside reaction makes us wary of a put play here, and we are exercising caution with any plays.
BUY POINT: Aggressive: We could see a bit of a bounce back up toward the 10 day at 116.26, but on a move down below 115 on increased volume (up to 1.67 million Friday; average 1.89 million), puts.
POSITION: August $125 puts to buy (MMM TE).

POST SPLITS REMAINING PLAYS:

ESRX (Express Scripts--$50.70; -0.17; optionable): Split 2:1 June 25.
http://biz.yahoo.com/p/e/esrx.html
STATUS: ESRX is moving in a handle to large cup pattern (dating back to the beginning of 2001), and is testing its 50 day MVA (49.74). It was very strong going into the split, and post-split weakness is certainly not uncommon. With the doji ESRX showed Friday, the stock could be ready to hold and make a run back up. The handle high is an intraday spike at 58, but we are looking at a break over the prior intraday high of 55.82 for a breakout. It might take a while, but we will see if it can start a strong move.
PLAY: Aggressive: A move over the 10 day MVA (52.38) on above average volume (465,200 Friday; average 623,000), with stock and/or August $50 calls to buy (XTQ HJ - November is the next expiration out, and has no open interest).

FIC (Fair Isaac--$63.50; -1.00; optionable): Split 3:2 effective June 5.
http://biz.yahoo.com/p/f/fic.html
STATUS: Business services. FIC has been an amazing performer. It broke out yet again Thursday, hitting a new high at 65 with solid volume behind it. Friday it tested all the way back to 61.60 but rallied to close, moving on sharply lower, but still strong volume of 196,600 (average 104,000). Still too extended for us to chase, but we will carefully monitor existing positions and keep stops in place, perhaps just below the 10 day MVA (60.19), under the recent consolidation range. Still shows strong money flow and buying, with relative strength breaking out.
PLAY: Aggressive: A move up after a test back toward 60, with stock and/or October $55 calls to buy (FIC JK - very low open interest as FIC just became optionable).

JNJ (Johnson&Johnson--$50.41; -0.50; optionable): Drugs. Split 2:1 June 12.
http://biz.yahoo.com/p/j/jnj.html
STATUS: After pulling back from its fine post-split run, JNJ is bouncing about on its 50 day MVA (50.08). Not a lot going on here, and not much of a pattern, but we will see if it can hold the 50 day and try a move back up, with the recent high at 54.20. Last Friday it sold down hard, so holding the 50 day will be a key signal of whether we can expect a move back up any time soon.
PLAY: Aggressive momentum: A move back over 52.60 on above average volume (5.3 million; Friday up to 5.78 million), with stock and/or October $50 calls to buy (JNJ JJ). It might take some time. Stop: 48.92.

MTON (Metro One--$38.10; -4.69; optionable): Telecom. Splits 3:2 effective July 2.
http://biz.yahoo.com/p/m/mton.html
STATUS: MTON made the move down in the weak tech market, abruptly dropping back through its 10 and 18 day MVA's (40.98 and 39.60) and tapping its 50 day at the low of 34.77 before recovering to close. Volume was huge at 1.48 million (average is 420,500). We could get another opportunity at a put play, but this stock held at the 50 day MVA on its low Friday and bounced up. We are going to look for an upside play possibly after another test of the 50 day (34.77).
PLAY: After another test of the 50 day MVA (34.77), a move over 37 with stock and/or September $33.38 calls to buy (OIN IY).

WFMI (Whole Foods--$27.46; -0.82; optionable): Grocery Stores. Split 2:1 June 5.
http://biz.yahoo.com/p/w/wfmi.html
STATUS: Was struggling with the 28.40 level, and after failing (on weak volume) four times at that level the stock fell back Friday. It has been moving in a long handle to a cup pattern, and was trying work its way back up to the handle high of 29.42 after testing the 50 day MVA (26.66). It is now resting on its 18 day (27.46) after the drop, which was on higher, above average volume (465,000; average 456,700). We will see if it can hold and finally try a move on the breakout.
PLAY: Aggressive: Over the recent consolidation high of 28.50 on continued strong volume. Stop: 26.50. Breakout: 29.55 on minimum volume of 720,000, with stock and/or August $27.50 calls to buy (FMQ HY). Stop: 27.50.

Good Investing!
Jon L. Johnson and the Stock Split Report Staff.

All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Online Investment Services, LP or its paid consultants and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on our related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolio of Partners of Online Investment Services, LP or its paid consultants may, in some instances, include securities mentioned herein and on our web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors.

trade stock
stock split