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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 Thursday: CHU; FALC; OTEX; QCOM; 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: 01/08/2004
CHINA (Chinadotcom--$10.83; +1.38; optionable): Chinese internet
http://biz.yahoo.com/p/c/china.html
STATUS: Flat. Chinese stocks that were early leaders in the 2003 run are, after a 4 to 6 month hiatus, are showing solid patterns and renewed buying. CHINA is moving off of the bottom of a 6 month base. Accumulation in the pattern is 8 to 4 (8 up price weeks on rising volume versus 4 down price weeks on rising volume), very solid given that it has not even really started the move up to form the right side of the base. Volume has started to surge the past week as it starts up, just what you want to see. It still has a long way to go to make it back to the precorrection high at 15, but it can make us some nice money along the way before it even starts to form a handle to the base.
Volume: 15.122M Avg Volume: 3.423M
BUY POINT: $10.96 Volume=5.1M Target=$13.15 Stop=$10.19
POSITION: UIH FB - June $10c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/china.html
Play Date: 01/08/2004
EONC (Eon Communications--$3.96; +0.27; no options): Internet service provider
http://biz.yahoo.com/p/e/eonc.html
STATUS: Test 18 day MVA. EONC broke out of a 12 week reverse head and shoulders in December, tested, and is now on the move back up. It has run into some resistance at 4, fading back this month from that level. It held the 18 day MVA (3.65) on the low in this test and then shot higher Thursday on the strongest volume in a month. Excellent 6 to 1 accumulation (6 up price weeks on rising volume to 1 down price week on rising volume) in the base, setting the foundation for a good breakout and rally. The 18 day test is a good place to pick up a breakout on the test. Money flow is leading the way, and we are looking to pick it up on a move over 4.
Volume: 380.779K Avg Volume: 159.772K
BUY POINT: $4.09 Volume=240K Target=$5.12 Stop=$3.73
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/eonc.html
Play Date: 01/08/2004
LLTC (Linear Technology--$44.36; +0.65; optionable): Semiconductors
http://biz.yahoo.com/p/l/lltc.html
STATUS: Cup. Volume has swelled the past week as LLTC moves toward the breakout form a 10 week base. Accumulation in the pattern is a solid 3 to 1 and money flow is strong. It has not formed a handle and it may do that now that it has reached the pre-correction high at 44. Sometimes they do and sometimes they don't. If LLTC continues its move on volume we will look at taking a partial position and then complete it when it makes the test or forms a handle and makes the breakout from there.
Volume: 5.466M Avg Volume: 4.245M
BUY POINT: $44.85 Volume=6.4M Target=$53 Stop=$42.58
POSITION: LLQ EV - May $42.50c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/lltc.html
Play Date: 01/08/2004
PHTN (Photon Dynamics--$42.46; +2.79; optionable): Chip equipment
http://biz.yahoo.com/p/p/phtn.html
STATUS: Reverse head and shoulders. PHTN is making the breakout move from a 9 week accumulation pattern. It formed the base over the 50 day MVA (38.02), a good support level for a base to form as it shows big money supporting it at that key level. Money flow is excellent and PHTN is making the move to follow it. We will take a half position on the move and then look to complete the buy on the test.
Volume: 749.848K Avg Volume: 291.863K
BUY POINT: $42.62 Volume=438K Target=$50 Stop=$49.94
POSITION: PDU DV - Apr. $42.50c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/phtn.html
Continuing Leader Plays:
Play Date: 01/04/2004
ASKJ (Ask Jeeves--$22.26; +0.21; optionable): Internet information provider
http://biz.yahoo.com/p/a/askj.html
STATUS: Cup w/handle. After surging up sharply last week and Monday on strong trade it is moving laterally, forming what looks to be a handle to the 15 week base. May take 2 or 3 more sessions to form the handle, but when it is through we will look to add positions on the next break higher.
Volume: 1.704M Avg Volume: 2.066M
BUY POINT: New: $23.12 (orig. $20.88) Volume=3.7M Target=$24.95 Stop=$20.94
POSITION: AUK CD - Mar. $20c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/askj.html
Play Date: 01/06/2004
DGX (Quest Diagnostics--$73.03; -0.6; optionable): Medical labs
http://biz.yahoo.com/p/d/dgx.html
STATUS: Cup w/handle. Continues to work laterally in its 5 week base, forming more of a handle the past two sessions. It looked ready on Wednesday, but volume was not there. It has formed this base over a 5 month base it broke from in November. Accumulation in the combined patterns is a solid 5 to 2. Again, volume has been lagging and it needs to surge when the stock breaks out. Could turn into a pre-announcement play; it is still well below its last announcement price.
Volume: 514.7K Avg Volume: 768.227K
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: 11/19/2003
PSSI (PSS World Medical--$12.66; +0.56; optionable): Medical equipment
http://biz.yahoo.com/p/p/pssi.html
STATUS: Test breakout. After the strong break higher in late December, PSSI has tested the move, coming back to the 18 day MVA (11.96) on lower, mostly below average volume. That is what you want to see as it shows just profit takers and no dumping. It held and started higher Thursday on rising, above average volume. That makes it look like a successful test and a good point to add new positions on a further move.
Volume: 723.373K Avg Volume: 535.636K
BUY POINT: New: $12.88 (orig. $10.26) Volume=779K Target=New positions: $15 (orig. positions $12.95) Stop=$12.09
POSITION: PYQ BB - Feb. $10c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/pssi.html
Play Date: 01/05/2004
TTMI (TTM Technologies--$17.75; +0.06; optionable): Printed circuit boards
http://biz.yahoo.com/p/t/ttmi.html
STATUS: Reverse head and shoulders. After blasting higher Monday and Tuesday, TTIM made a quick pullback Wednesday, testing back to the 10 day MVA (17.35). It has held there, showing a doji on the candlestick chart, an indication that the pullback may be over. A nice 9 week pattern with solid accumulation and money flow. Volume is good; want to see it continue its strong pace on the next solid rise.
Volume: 878.32K Avg Volume: 718.545K
BUY POINT: $18.75 Volume=725K Target=$22.72 Stop=$17.15
POSITION: UKD CW - Mar. $17.50c (61 delta) &/or Stock
http://www.investmenthouse.com/cs/ttmi.html
Play Date: 11/21/2003
WMS (Williams Industries--$27.44; -0.04; optionable): Gaming machines
http://biz.yahoo.com/p/w/wms.html
STATUS: Cup w/handle. After a neat little double bottom w/handle, WMS has formed the current short 5 week base on its heels. Base on base patterns are solid, shaking out all of the sellers. Good volume as WMS surged Tuesday, and now it has faded as WMS moves laterally in a very tight range, forming the handle. It may take a couple more sessions, but it is forming up well and we want to be ready. Accumulation is solid at 3 to 0 in this base. Very tight and neat. Looks ready to go again.
Volume: 117.6K Avg Volume: 267.09K
BUY POINT: New: 28.12 (orig. $25.83) Volume=650K Target=$31.22 Stop=$26.48
POSITION: WMS DE - Apr. $25c (67 delta) &/or Stock
http://www.investmenthouse.com/cs/wms.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.
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
GGG: Forecast 1-22-04.
LXK: Forecast 1-17-04.
MBG: Researching new date.
MBT: Researching date.
NSIT: Forecast 1-30-04.
OSI: Forecast 2-11-04. Back to the 50 day MVA.
RESP: Forecast 1-22-04 before the open.
SHFL: Forecast 2-19-04 with earnings.
SOV: Forecast 1-20-04 with earnings.
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.
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: 12/29/2003
SYK (Stryker--$84.3; +0.16; optionable): Medical instruments. Forecast to announce a split on 1-29-04 after the market closes in conjunction with earnings.
BACKGROUND: Last announced a 2 for 1 split on 4-19-00 at a stock price of $73.
The annual shareholder meeting was on 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 breakout. Back on the report as it has tested the 50 day MVA (81.77) and rebounded well. It is fading back to test the move, holding over the 10 day MVA (84.01) on the close the past two session as it tested. Volume jumped back above average as it held this level, moving in a tight range. That indicates buyers are stepping in. We are looking for a high volume move upside to enter positions.
Volume: 586.9K Avg Volume: 500.59K
BUY POINT: $84.55 Volume=745K Target=$97.35 Stop=$83.32
POSITION: SYK CQ - Mar. $85c (47 delta) &/or Stock
http://www.investmenthouse.com/cs/syk.html
Continuing Pre-Announcement Plays:
Play Date: 01/03/2004
MBT (Mobile Telesys--$88.39; +1.74; optionable): Russian wireless telecom
http://biz.yahoo.com/p/m/mbt.html
STATUS: Cup w/handle. Nice handle forming to a 13 week cup base as MBT moves laterally on lower below average volume the past three sessions. The base formed over the 50 day MVA (79.91), a good sign of institutional support as it moved laterally in the consolidation. Good volume as it surged higher last week and early this week, setting up the pattern nicely. Now we look for the next break higher on strong trade to move in with some new positions.
Volume: 209.6K Avg Volume: 255.909K
BUY POINT: New: 89.25 (orig. $88.39) Volume=412K Target=$99.95 Stop=$83.32
POSITION: MBT FQ - June $85c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/mbt.html
Play Date: 11/03/2003
UOPX (University of Phoenix Online--$75.74; -0.28; optionable): Online education. Forecast to announce a split on 2-27-04 with a board meeting or on 3-24-04 with earnings.
BACKGROUND: Last announced a 4 for 3 split on 4-5-02 at a stock price of $38.95. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/u/uopx.html
STATUS: Cup w/handle. Similar to MBT, UOPX is in the process of forming a handle to a short 5 week cup w/handle base that formed as UOPX sold off on the CECO news that was pretty specific to that stock. It has made a good comeback and now needs to work laterally for a few more sessions to complete the handle. Accumulation thus far is positive at 2 to 1. May take a few more days, but this stock can run well and we want to be ready.
Volume: 396.105K Avg Volume: 314.772K
BUY POINT: New: $76.94 (orig. $71.12) Volume=315K Target=$84 Stop=$72.28
POSITION: UBY CO - Mar. $75c (45 delta) &/or Stock
http://www.investmenthouse.com/cs/uopx.html
Play Date: 10/28/2003
VAR (Varian Medical Systems--$69.28; +0.58; optionable): Forecast to announce a split on 1-28-04 after the close with earnings or on 2-19 11-17-03 in conjunction with a board meeting. The company did not confirm this date, but based upon our research this is the date for the meeting.
BACKGROUND: Last announced a 2 for1 split on 11-19-01 at a stock price of $70.20. The annual shareholder meeting was on 2-13-03 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/var.html
STATUS: Testing the breakout. VAR continues to move laterally over the 50 day MVA (67.04) after the October breakout and run higher to just over 70. For the past 5 weeks it has tested that move, forming something of a new flat base. Volume has moved back up to average this week as it tests support at 68 on the intraday lows and rebounds to close. Volume was up to average Thursday as VAR moved ff this level. Looking for a very strong surge to take it over 70 for the next entry point.
Volume: 523.5K Avg Volume: 519.909K
BUY POINT: New: 70.12 (orig. $64.50) Volume=1.1M Target=New positions: $80 (orig. positions $74.25) Stop=$68.64
POSITION: VAR EN - May $70c (50 delta) &/or Stock
http://www.investmenthouse.com/cs/var.html
POST-SPLIT
Play Date: 12/29/2003
HAR (Harman Intl.--$73.14; -0.36; optionable): High end electronic equipment
http://biz.yahoo.com/p/h/har.html
STATUS: Testing the 18 day MVA. HAR continues to move laterally, holding in a fairly narrow range. Thursday it gapped lower to the 18 day MVA (72.06) on the open but fought back for a modest loss on lower, below average volume. This stock can move like the wind when it gets going, so we are keeping a close eye on it here as it works through its fourth week of the laterally move. Want to see volume surge again for the next positions.
Volume: 304.5K Avg Volume: 575.59K
BUY POINT: New: $73.88 (orig. $73.25) Volume=400K Target=$80 Stop=$72.38
POSITION: HAR DT - Apr. $72.50c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/har.html
Play Date: 07/30/2003
SBUX (Starbucks--$33.38; -0.3; optionable): High priced coffee
http://biz.yahoo.com/p/s/sbux.html
STATUS: Testing the breakout. When you are addicted to this coffee you have to have it. I have a friend who will do just about anything when the need for a Starbucks hits. It is almost scary, but it is kind of neat when you own the stock and also see that December sales were well above expectations. Of course, someone will eventually file suit against SBUX claiming they were addicted to the caffeine and squandered the family fortune on $5 mochaccinos. In any event, after that news of the same store sales gapped it higher, it has come back to test, holding the 10 day MVA (33.06) on the Thursday low and rebounding on a solid volume increase. That 33 level it bounced from is also the November high, the top of the current 8 week base. That is a great place for it to bounce from. Looking to pick up more positions on this rebound if we see volume continue to move in.
Volume: 3.286M Avg Volume: 2.462M
BUY POINT: New: $33.75 (orig. $30.35) Volume=6M Target=New positions: $40 (orig. positions: $36.75) Stop=$32.08
POSITION: SQX GZ - July $32.50c (62 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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