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Begin part 3 of 3
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 moves Tuesday: CKSW; FALC; MALL; PMTI
NEW PLAYS: This section includes new plays from all sections other than pre-announcements.
New Post-Splits:
Play Date: 12/30/2003
EASI (Engineered Support--$55.25; 0; optionable): Aerospace/defense
http://biz.yahoo.com/p/e/easi.html
STATUS: Test 18 day MVA (55.38). EASI gave is an excellent gain on its pre-split and then post-split run, and had now come back to take a rest, dropping back to the 18 day MVA. The past two weeks it has traded in a flat, narrow range right on top of that support level. You like to see nice, quiet trade on a pullback, and that is what EASI is showing. We may be a bit early on this one, but with that calm action we want to be ready when it makes the next big break higher.
Volume: 298.7K Avg Volume: 261.261K
BUY POINT: $55.65 Volume=400K Target=$61 Stop=$54.88
POSITION: UFE EK - May $55c (56 delta) or UFE BK - Feb. $55c (54 delta)
http://www.investmenthouse.com/cs/easi.html
Leadership stocks: Maybe not ready for a split, but setting up well for an upside move.
Play Date: 12/30/2003
AXYX (Axonyx--$4.79; +0.19; no options): Drugs
http://biz.yahoo.com/p/a/axyx.html
STATUS: Reverse head and shoulders. AXYX is coming off of the 50 day MVA (4.41) where it held on the low of this pullback to form the right shoulder to its 13 week base. Accumulation is an outstanding 5 to 1 (5 up price weeks on rising volume to 1 down price week on rising volume). Excellent money flow is moving up ahead of the stock even as it made this pullback to form the shoulder. Volume was up Tuesday as AXYX moved up off of the 50 day. Looking for a strong volume breakout over the recent highs to move into positions.
Volume: 385.5K Avg Volume: 468.7K
BUY POINT: $5.04 Volume=703K Target=$6.32 Stop=$4.62
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/axyx.html
Play Date: 12/30/2003
TMWD (Tumbleweed Communication--$8.2; +0.68; optionable): Internet software services
http://biz.yahoo.com/p/t/tmwd.html
STATUS: Test 50 day MVA (7.28). A great surge from August to late November, and TMWD has used the past month to pull back and take a rest. It held the 50 day MVA twice and rebounded well. During this small double bottom accumulation was a solid 2 to 0. Money flow is jumping up ahead of price and Tuesday TMWD followed the money, jumping off the 50 day on a very strong volume surge. Moving in on a continued solid volume move.
Volume: 1.451M Avg Volume: 586.773K
BUY POINT: $8.42 Volume=880K Target=$10.15 Stop=$7.69
POSITION: MYQ CU - Mar. $7.50c (69 delta) &/or Stock
http://www.investmenthouse.com/cs/tmwd.html
Continuing Leader Plays:
Play Date: 12/18/2003
FALC (Falconstar Software--$8.91; +0.29; optionable): PC data storage devices
http://biz.yahoo.com/p/f/falc.html
STATUS: Cup w/handle. FALC formed a short 7 week base showing solid 3 to 1 accumulation. After edging up the 10 day MVA (8.48) for the past week it started moving Friday. Tuesday it put together volume and price gain as it made a cleaner break. Excellent money flow and relative strength is ready to breakout as well.
Volume: 305.61K Avg Volume: 219.795K
BUY POINT: New: $9.02 (orig. $8.58) Volume=300K Target=$10.35 Stop=$8.24
POSITION: XMQ EU - May $7.50c (73 delta) &/or Stock
http://www.investmenthouse.com/cs/falc.html
Play Date: 12/29/2003
TUTS (Tut Systems--$6.48; -0.01; no options): Telecom equipment
http://biz.yahoo.com/p/t/tuts.html
STATUS: Testing the breakout. Still working laterally in a breakout test, tapping at the 18 day MVA (6.21) on the lows and then bouncing back on the close. TUTS worked laterally September to November, broke higher three weeks back, and has since moved sideways on lower volume over the 18 day. Solid 3 to 0 accumulation on the move, and the light volume the past 3 weeks shows very few sellers as it consolidates for the next move. Excellent money flow and accumulation.
Volume: 68.753K Avg Volume: 129.781K
BUY POINT: $6.78 Volume=175K Target=$8.48 Stop=$6.28
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/tuts.html
PRE-ANNOUNCEMENT PLAYS
Current Pre-Announcement Plays: We will 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. Some companies are still gun-shy about announcing splits, but one of the things we love about split plays is that they involve market leaders that make us good money even if they do not announce.
ACV: Early January. Up to the simple 50 day MVA but volume was backing off.
APPB: 12-15-03. No announcement but looking solid in its range. Needs a breakout over 40.
APOL: 12-18-03 before the market opens. No announcement. Still holding over the 50 day MVA.
BCR: Forecast 1-27-04.
DE: Forecast 2-14-04. Still holding the 18 day MVA after dropping to that level last week.
DCOM: 1-17-04.
LXK: Forecast 1-17-04.
MBG: Nice pullback. Researching new date.
NSIT: Forecast 1-30-04. Finally making a breakout on some better volume.
OSI: Forecast 2-11-04. Held the 50 day MVA and now trying to make a bounce.
SHFL: No split on 12-11-03. Nice pullback after strong surge.
SOV: Forecast 1-20-04 with earnings.
UOPX: No split on 12-18-03. Back over the 50 day MVA, but really working hard for anything it gets.
VAR: Forecast 12-01-03. No split announced but working laterally in a nice, low volume consolidation over the 18 day MVA.
XTO: Forecast 2-18-04 in conjunction with earnings.
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.
New Pre-Announcement Plays:
Play Date: 12/30/2003
TOL (Toll Brothers--$40.15; -0.75; optionable): Home builder. Forecast to announce a split on 2-24-04 in conjunction with earnings or on 3-2-04 in conjunction with a board meeting. The company has not confirmed theses dates, but based upon our research these are the dates for the events.
BACKGROUND: Last announced a 2 for 1 split on 3-4-02 at a stock price of $25.60. The annual shareholder meeting was on 3-20-03 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/t/tol.html
STATUS: Testing the 50 day MVA. TOL is one of the last homebuilders to not have announced a split. It is coming off a 50 day MVA (38.61) test in early December and is currently holding the 18 day MVA (40.33) after a jump off the 50 day. The existing home sales put some pressure on the homebuilders, but it did not sink them. Now they will eventually run out of steam, but the pattern has been for them to look as if they were going to fold and then recover. We are going to be patient and let TOL break higher over the recent interim highs on some good volume and then we take some positions.
Volume: 670.8K Avg Volume: 1.04M
BUY POINT: $41.44 Volume=1.2M Target=$49.75 Stop=$40.22
POSITION: TOL FH - June $40c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/tol.html
Continuing Pre-Announcement Plays:
Play Date: 12/17/2003
BCR (C.R. Bard--$80.92; -0.01; optionable):Medical instruments. Forecast to announce a split on 1-27-04 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 2 for 1 split on 7-13-88 at t stock price of $40. 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: Reverse head and shoulders. BCR had an aborted breakout form the 8 week base last week, but it held up and then started back up. Tuesday it gapped higher but gave it all back on some rising, average trade. Still a very solid pattern, and after a test of the 10 day MVA (80.13) it looks ready to move back up. We want to pick it up off of there.
Volume: 357.9K Avg Volume: 344.602K
BUY POINT: New: Test 80.12, then 80.75 on the way back up (orig. $80.12) Volume=500K Target=$92.25 Stop=$78.72
POSITION: BCR DP - Apr. $80c (49 delta) &/or Stock
http://www.investmenthouse.com/cs/bcr.html
Play Date: 12/20/2003
GGG (Graco--$40.26; -0.2; optionable): Fluid management for industrial applications. Forecast to announce split on 1-22-04 in conjunction with earnings.
BACKGROUND: Last announced a 3 for 2 split on 5/6/02 at a stock price of $43.20. A regular splitter, Has announced 5 splits in the last 9 years.
http://biz.yahoo.com/p/g/ggg.html
STATUS: Testing the breakout. Still working laterally over the 10 day MVA (40.04) on low, below average volume. Looked as if it might try the move Monday but did not have the volume. Still solid accumulation, and just waiting for it to make the breakout move form this 4 month base.
Volume: 67.1K Avg Volume: 130.056K
BUY POINT: $40.55 Volume=200K Target=$48.75 Stop=$39.42
POSITION: GGG EH - May $40c (56 delta) &/or Stock
http://www.investmenthouse.com/cs/ggg.html
Play Date: 12/20/2003
KBH (KB Home--$73; -0.88; optionable): Residential construction. No split announcement with earnings, but a great move and still looking for an announcement.
BACKGROUND: KBH has never announced a split. Splits are running rampant in this sector right now.
http://biz.yahoo.com/p/k/kbh.html
STATUS: Cup w/handle. After a nice breakout, KBH is coming back to test the move. It fell on a bit higher though still below average volume Tuesday on the existing home sales report, though KBH does not sell existing homes. In any event we are looking for KBH to come back and test the 10 day MVA (71.80) and price support at that level. From there it should hold and then start back up. That is a great place for new positions. Accumulation in the 6 month base was a solid 6 to 4. Nice pattern.
Volume: 835K Avg Volume: 970.971K
BUY POINT: Test 72, then 72.55 on the rebound (orig. $70.62) Volume=1.5M Target=$81.25 Stop=$71.44
POSITION: KBH DN - Apr. $70c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/kbh.html
Play Date: 12/30/2003
LXK (Lexmark Intl.--$78.46; -0.12; optionable): Computer printers, etc. Forecast to announce a split on 1-17-04 in conjunction with a board meeting or on 1-26-04 in conjunction with earnings. The company has not confirmed the board meeting date, but based upon our research this is the day for the meeting.
BACKGROUND: Last announce a 2 for 1 split on 4-29-99 at a stock price of $110.The annual shareholder meeting was on 4-30-03 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/l/lxk.html
STATUS: Cup w/handle. LXK is working on a 6 month base with the handle using the 50 day MVA (74.56) as support. It has rebounded the past two weeks and is now at the breakout point. We want to see it come back to test the 10 or 18 day MVA (77.24, 76.59), however, so it can take some of the fluff out and prepare for a breakout move. Need to see volume jack way up on a breakout.
Volume: 439.5K Avg Volume: 1.301M
BUY POINT: $79.12 Volume=2M Target=$89 Stop=$77.12
POSITION: LXK DP - Apr. $80c (42 delta) &/or Stock
http://www.investmenthouse.com/cs/lxk.html
Play Date: 11/18/2003
MBG (Mandalay Resort Group--$44.95; -0.35; optionable): Resorts & Casinos
http://biz.yahoo.com/p/m/mbg.html
STATUS: Testing the breakout. After a nice surge out of the 11 week base two weeks back, MBG is making a nice test of that move, tapping the 18 day MVA (44.68) on the Tuesday low. We love these breakout tests as they show the breakout is for real.
Volume: 694.6K Avg Volume: 1.036M
BUY POINT: $44.3 Volume=1.8M Target=$53 Stop=$44.54
POSITION: MBG CH - Mar. $40c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/mbg.html
Play Date: 11/22/2003
SHFL (Shuffle Master--$35.19; -0.02; optionable): No split in mid-December, but still moving very well and want to stay in it for a possible January announcement.
http://biz.yahoo.com/p/s/shfl.html
STATUS: Testing the breakout. After a big surge to start the month SHFL is coming back to test the move, easing back to the 10 day MVA (34.69) on lower, below average volume. The past week it has moved laterally in a tight range as the 10 day has risen to meet the stock. That typically triggers the next move, and we are looking for that again here.
Volume: 175.631K Avg Volume: 251.602K
BUY POINT: New: 35.88 (orig. $31.47) Volume=425K Target=$37.55 Stop=$34.44
POSITION: SFQ BF - Feb. $30c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/shfl.html
Play Date: 12/13/2003
SOV (Sovereign Bancorp--$23.67; +0.03; optionable): Savings & Loan. Forecast to announce a split on 1-20-04 with earnings.
BACGROUND: SOV was a frequent splitter back in the late 1990's, announcing three 6:5 splits in 97 and 98 before it sank into a deep correction in 1999 that lasted until 2002. It is now back up to those old prices.
http://biz.yahoo.com/p/s/sov.html
STATUS: Testing the breakout. SOV still looks good, but it still has not made the move either. It is skipping along the 10 day MVA (23.34) on lower volume but still below the breakout point at 24. Money flow continues to surge ahead of the price, however, and we are anticipating SOV making the move soon.
Volume: 716.5K Avg Volume: 2.001M
BUY POINT: $24.12 Volume=2.7M Target=$28.95 Stop=$22.38
POSITION: SOV DX - Apr. $22.50c (71 delta) &/or Stock
http://www.investmenthouse.com/cs/sov.html
POST-SPLIT
Play Date: 12/17/2003
BSX (Boston Scientific--$36.54; +0.46; optionable): Medical instruments
http://biz.yahoo.com/p/b/bsx.html
STATUS: Test 50 day MVA. Making the breakout move over 36 but not getting the volume it needs on the move. It may come back to test 36 after that lower volume move this week. We want to see that hold and then see the volume turn up as the stock turns back up. Solid 3 to 1 accumulation in the short 7 week pattern.
Volume: 3.327M Avg Volume: 2.806M
BUY POINT: Test 36, then $36.62 Volume=8.2M Target=$42.12 Stop=$34.74
POSITION: BSX EG - May. $35c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/bsx.html
Play Date: 07/30/2003
SBUX (Starbucks--$32.71; +0.41; optionable): Fancy coffee
http://biz.yahoo.com/p/s/sbux.html
STATUS: Triangle. Working toward the breakout from an 8 week pattern that formed over the 50 day MVA (31.44). Volume has started to tick higher this week as SBUX reached up to the breakout point (33) on the Tuesday high and backed off. Volume was up but still below average. Accumulation in the pattern is 2 to 1. Want to see a volume surgeon the breakout.
Volume: 2.21M Avg Volume: 2.773M
BUY POINT: New: $33.12 (orig. $30.35) Volume=6M Target=New positions: $40 (orig. positions: $36.75) Stop=$31.32
POSITION: SQX DZ - Apr. $32.50c (56 delta) &/or Stock
http://www.investmenthouse.com/cs/sbux.html
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.
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