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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: APOL; ASKJ; DTAS; GRMN; HBIO; OSIS; VTIV
NEW PLAYS: This section includes new plays from all sections other than pre-announcements.
Leadership stocks: Maybe not ready for a split, but setting up well for an upside move.
Play Date: 01/06/2004
ATYT (ATI Technologies--$16.54; +0.52; optionable): Semiconductors
http://biz.yahoo.com/p/a/atyt.html
STATUS: Flat base. ATYT is in the process of a breakout from its 17 week base, rallying Tuesday on a strong, above average volume surge. Positive accumulation in the pattern and relative strength ready for the breakout. Want to see another good volume session as it moves through the buy point to enter positions.
Volume: 4.309M Avg Volume: 2.609M
BUY POINT: $16.72 Volume=3.9M Target=$20 Stop=$15.55
POSITION: QFY EC - May $15c (70 delta) &/or Stock
http://www.investmenthouse.com/cs/atyt.html
Play Date: 01/06/2004
DGX (Quest Diagnostics--$73.01; +0.66; optionable): Medical labs
http://biz.yahoo.com/p/d/dgx.html
STATUS: Cup w/handle. DGX is in a short 5 week base that formed over the 50 day MVA (69.68). It rallied off that level to 73 and is now moving laterally over the 10 day MVA (71.94) on very low volume, forming the short handle. This base has formed over an earlier 18 week cup with handle base, holding over the breakout point from that base, a very good sign of strength. Accumulation in the patterns is a solid 5 to 2. These base on base patterns are nice because they really clean out the overhead supply. Volume has been lagging; want to see it really surge on the breakout move. This one could turn into a pre-announcement play; it is still well below its last announcement price.
Volume: 417.1K Avg Volume: 780.636K
BUY POINT: $73.88 Volume=1.2M Target=$84.85 Stop=$71.44
POSITION: DGX EN - May $70c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/dgx.html
Play Date: 01/06/2004
DRAX (Draxis Health--$3.42; +0.04; no options): Wholesale drugs
http://biz.yahoo.com/p/d/drax.html
STATUS: Cup w/handle. DRAX broke out from a 4 month flat base in October and rallied to 3.60. From there it formed the current 8 week base showing excellent 3 to 0 accumulation (3 up price weeks on rising volume to 0 down price weeks on rising volume). That accumulation sets the stage for another good breakout and run as it shows more buyers than sellers as it consolidated. Strong money flow to match. It has been tapping and then jumping off the 18 day MVA (3.18) as it forms the handle. Looks ready to make the breakout.
Volume: 158.067K Avg Volume: 242.954K
BUY POINT: $3.62 Volume=364K Target=$4.55 Stop=$3.27
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/drax.html
Continuing Leader Plays:
Play Date: 12/24/2003
AMZN (Amazon.com--$53.03; -0.24; optionable): Internet software
http://biz.yahoo.com/p/a/amzn.html
STATUS: Double bottom w/handle. AMZN formed a double bottom off of 47.50, broke over the 50 day MVA (51.74) in late December. It has come back the past week to test the 50 day. Monday it tapped that level on the low and jumped up on above average volume. Tuesday it stalled showing a tight doji on very low trade. Looks ready to make the next move. Want to see it take out the handle high (54.94) to break it out of this pattern.
Volume: 5.986M Avg Volume: 10.015M
BUY POINT: New: $55.06 (orig. $53.82) Volume=15M Target=$64 Stop=$51.12
POSITION: ZQN DJ - Apr. $50c (69 delta) &/or Stock
http://www.investmenthouse.com/cs/amzn.html
Play Date: 12/30/2003
AXYX (Axonyx--$4.9; +0.1; no options): Drugs
http://biz.yahoo.com/p/a/axyx.html
STATUS: Reverse head and shoulders. Still looking super in the right shoulder of its 14 week base. Excellent money flow to go along with the positive accumulation. Just being patient and waiting for the breakout. Very nice pattern, now it needs to show it.
Volume: 265.875K Avg Volume: 414.818K
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: 01/02/2004
CHU (China Unicom--$10.16; -0.15; optionable): Chinese wireless telecom
http://biz.yahoo.com/p/c/chu.html
STATUS: Double bottom w/handle. After surging Friday and Monday on strong volume, CHU is fading back on lower trade, starting the formation of a handle to its 9 week base. Outstanding money flow and solid accumulation have set the stage for a strong move. now we wait for the stock to test near 10 and rebound on strong trade over10.45 for the next buy point.
Volume: 980K Avg Volume: 910.045K
BUY POINT: New: $10.56 (orig. $10.02) Volume=880K Target=$12.25 Stop=$9.32
POSITION: CHU DB - Apr. $10c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/chu.html
Play Date: 12/30/2003
TMWD (Tumbleweed Communication--$8.27; -0.18; optionable): Internet software services
http://biz.yahoo.com/p/t/tmwd.html
STATUS: Double bottom w/handle. TMWD jumped sharply off the 50 day MVA (7.42) last week and has moved more or less laterally the past four sessions, tapping at the 10 day MVA (8.02) on the session lows. After a strong volume session Monday it was back to testing the 10 day MVA Tuesday on below average volume. Nice little handle forming to the 6 week base, much as we thought it would. Solid 2 to 0 accumulation and money flow still rallying up ahead of the price.
Volume: 346.802K Avg Volume: 526K
BUY POINT: New: $8.56 (orig. $8.42) Volume=880K Target=$10.15 Stop=$7.84
POSITION: MYQ CU - Mar. $7.50c (69 delta) &/or Stock
http://www.investmenthouse.com/cs/tmwd.html
Play Date: 01/03/2004
VTIV (Ventiv Health--$9.7; +0.31; no options): Sales & marketing solutions for pharmaceutical industry
http://biz.yahoo.com/p/v/vtiv.html
STATUS: Ascending triangle. Nice 8 week base and VTIV was moving higher Tuesday, posting a strong price move but not getting the volume it needed. The base formed over the 50 day MVA (8.56), making higher lows over that key support level. That is a sign that buyers were moving in to pick up the stock at that important level. Accumulation is an outstanding 4 to 0 in the pattern, and money flow is soaring. Needs more volume.
Volume: 130.393K Avg Volume: 158.863K
BUY POINT: $9.62 Volume=238K Target=$11.62 Stop=$8.95
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/vtiv.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: January 1-22-04 before the open. The annual shareholder meeting is on the same date. Interesting.
APPB: Forecast 2-13-04 after the close.
APOL: Forecast 3-24-04 or with the 2-27-04 board meeting. Neither confirmed yet.
BCR: Forecast 1-27-04.
DE: Forecast 2-14-04. Continues stuck on the 18 day MVA.
DCOM: 1-17-04.
DNA: Forecast 1-14-04. Nice pullback to test the breakout.
GGG: Forecast 1-22-04.
LXK: Forecast 1-17-04.
MBG: Nice pullback. Researching new date.
MBT: Researching date. Volume is surging as it rallies to finish its base.
NSIT: Forecast 1-30-04.
OSI: Forecast 2-11-04. Testing the 18 day MVA after a nice break off of the 50 day.
RESP: Forecast 1-22-04 before the open.
SHFL: Forecast 2-19-04 with earnings.
SOV: Forecast 1-20-04 with earnings. Still working laterally below 24.
UOPX: Forecast 3-24-03 with earnings.
VAR: Forecast 1-28-04 after the close or 2-19 in conjunction with its shareholder meeting.
VIP: Forecast 3-26-04.
VRTS: Forecast 1-20-03.
XTO: Forecast 2-18-04 in conjunction with earnings. Very nice test of the 18 day MVA.
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: 01/06/2004
RESP (Respironics--$47.33; +0.47; optionable): Forecast to announce a split on 1-22-04 before the market opens in conjunction with earnings
BACKGROUND: Last announced a split in 1995 at a stock price of $22.50. The annual shareholder meeting was on 11-18-03 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/r/resp.html
STATUS: Cup. After a breakout in April 2003 and a nice run to 48, RESP has spent the last 5 weeks consolidating the gains, forming a cup over the 50 day MVA (44.21). That is an important point because it is a level of institutional support. It rallied off the 50 day last week, tested it for two sessions, and then blasted higher Monday on strong volume. It was up again Tuesday, all the way to 48.75 on the high before giving back most of the gain. Very solid action with strong money flow. Looking for another strong volume move that holds.
Volume: 387.514K Avg Volume: 203.045K
BUY POINT: $47.68 Volume=305K Target=$55 Stop=$45.45
POSITION: RBQ DI - Apr. $45c (75 delta) &/or Stock
http://www.investmenthouse.com/cs/resp.html
Play Date: 01/06/2004
VRTS (Veritas--$38.96; +0.99; optionable): Application software. Forecast to announce a split on 1-20-03 in conjunction with earnings. The company has not confirmed this date.
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: Ascending triangle. VRTS is trying to make the breakout from an 8 week base that formed over the 50 day MVA (36.40). This week it has started higher on strong, above average volume. Tuesday VRTS surged to the top of the pattern; two strong sessions of moves may give us a day or two of rest. If we get it, we will look for it to break over the pattern highs on a resumption of strong trade. Excellent money flow.
Volume: 5.993M Avg Volume: 5.515M
BUY POINT: $39.22 Volume=8M Target=$47 Stop=$37.22
POSITION: VIV EH - May $40c (47 delta) &/or Stock
http://www.investmenthouse.com/cs/vrts.html
Continuing Pre-Announcement Plays:
Play Date: 01/03/2004
DNA (Genentech--$92.34; -0.21; optionable): Biotechnology. Forecast to announce a split on 1-14-04 after the market closes in conjunction with earnings.
BACKGROUND: Last announced a split on 10-5-00 in conjunction with a board meeting. The stock price was $172. Things were a bit wilder then, and now near $100 DNA is ready for another split. The annual shareholder meeting was on 4-23-03 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/dna.html
STATUS: Testing the 10 day MVA. DNA is still in the very nice 10 day MVA (92.81) test, showing a tight hammer doji Tuesday as volume surged to its best level in 3 weeks. DNA broke out of a 10 week cup w/handle base three weeks back and rallied to 95. It spent the past week edging back to the 10 day MVA on lower volume to test that strong breakout. As noted before, we are looking for DNA to hold this breakout test and then make a run toward 100. 100 acts as a magnet and then a barrier, but it usually can break that barrier after a bit of a pullback. Strong 4 to 1 accumulation in the prior base set up the foundation for this breakout and run. This is the first test of the breakout, and the fact it is holding much of the gain indicates it is going to be a nice run. Our initial target is $100, and we are using some options to make that play. We can also take some stock positions and then get some more after it tests the run to 100 and starts back up.
Volume: 3.064M Avg Volume: 2.172M
BUY POINT: Aggressive: $93.05 (orig. $94.55) Volume=3M Target=$100 Stop=$92.88
POSITION: DNA CS - Mar. $95c (52 delta)
http://www.investmenthouse.com/cs/dna.html
Play Date: 12/20/2003
GGG (Graco--$40.2; -0.01; 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. GGG has shown signs of life during this 3 week consolidation of the gap higher in mid-December. The pattern has turned into more of a double bottom with handle, the current consolidation being the handle. Looks good but we need to see the breakout. Accumulation remains solid at 4 to 2, and we are just being patient, wanting to see more volume on the breakout move.
Volume: 73.6K Avg Volume: 122.727K
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: 12/13/2003
SOV (Sovereign Bancorp--$24.35; +0.9; 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: Cup w/handle. The pattern built into a 9 week base with a short handle forming to end last week and Monday before a strong, above average volume breakout Tuesday. Solid 3 to 1 accumulation in the current base with surging money flow. This is the start of a good move. Still a buy.
Volume: 3.665M Avg Volume: 1.924M
BUY POINT: $24.37 Volume=2.7M Target=$29.12 Stop=$22.55
POSITION: SOV DX - Apr. $22.50c (71 delta) &/or Stock
http://www.investmenthouse.com/cs/sov.html
Play Date: 01/03/2004
VIP (Vimple Communication--$77.33; -1.67; optionable): More Russian wireless
BACKGROUND: No splits in its past, and a foreign stock as well. That does not mean it won't split, but it is harder to predict. What we do like is the pattern and its leadership status; it can make us nice gains without announcing a split, and when it comes, all the better.
http://biz.yahoo.com/p/v/vip.html
STATUS: Breakout. VIP did not come back to test the 10 day MVA (72.28) Monday, instead surging on solid, above average volume. We decided to wait for the stock to make that test as it has run $15 the past week. Tuesday it was down, posting a modest loss on stronger, above average volume. Still looking for a test toward the 10 day MVA (72.28). It may not, probably won't, hit that level, but we will watch for a pullback near 72.50, and when it turns up on some solid trade we move in. Outstanding 5 to 1 accumulation in the base with a relative strength breakout as well, an indication of the strength of the move.
Volume: 602.7K Avg Volume: 401.545K
BUY POINT: Test 72.50, then $72.88 on the way back up. Volume=615K Target=$85 Stop=$69.24
POSITION: VIP DN - Apr. $70c (72 delta) &/or Stock
http://www.investmenthouse.com/cs/vip.html
POST-SPLIT
Play Date: 12/17/2003
BSX (Boston Scientific--$35.86; -0.24; optionable): Medical instruments
http://biz.yahoo.com/p/b/bsx.html
STATUS: Testing the breakout. After a short double bottom the past 5 weeks, a pattern that formed over the 50 day MVA (34.72), a key support level, BSX shot higher last week and is now pulling back to test the 18 day MVA (35.55) on continued below average volume. Tuesday it showed a hammer doji right on top of the 10 day MVA (35.82). That is an indication that the stock may be ready to resume the move after this brief test. A market leader, and it looks ready to move again. We just need to see the volume.
Volume: 2.768M Avg Volume: 4.379M
BUY POINT: $36.62 Volume=8.2M Target=$42.12 Stop=$34.74
POSITION: BSX BG - Feb. $35c (60 delta) &/or Stock
http://www.investmenthouse.com/cs/bsx.html
Play Date: 12/29/2003
HAR (Harman Intl.--$72.76; -0.59; optionable): High end electronic equipment
http://biz.yahoo.com/p/h/har.html
STATUS: Testing the 10 day MVA. Still testing the 10 day MVA (72.66) as it comes back to test an explosive move higher last Monday. It stalled at 75 and eased back on very low volume. It spiked higher Monday. Still looking for it to hold here and set up the next bounce. Again, a strong stock that can run hard.
Volume: 494.6K Avg Volume: 579.909K
BUY POINT: New: $73.55 (orig. $73.25) Volume=400K Target=$80 Stop=$72.38
POSITION: HAR BN - Feb. $70c (64 delta) &/or Stock
http://www.investmenthouse.com/cs/har.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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