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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: AMZN; DTAS; EBAY; VAR
NEW PLAYS: This section includes new plays from all sections other than pre-announcements.
New Post-Split:
Play Date: 01/13/2004
STJ (St. Jude Medical--$63; -0.43; optionable): Medical appliances
http://biz.yahoo.com/p/s/stj.html
STATUS: Cup w/handle. Okay, it has been a long time since STJ split (July 2002), but it is in between splits and it has formed up a good pattern so we wanted to get it on the report. It is currently in the handle of a 6 week cup with handle that is acting as the handle to a larger 7 month cup with handle base. Accumulation in the larger base is a solid 7 to 4 (7 up price weeks on rising volume to 4 down price weeks on rising volume) and 3 to 0 in the smaller base. All in all solid accumulation that shows institutions have been buying the stock even as it consolidates. That sets the stage for a breakout and rally. The last base formed over the 50 day MVA (60.38), another indication that there is strong support for the stock. Excellent money flow to go along with the accumulation. Just being patient and letting STJ complete the base and show us a strong volume breakout.
Volume: 1.485M Avg Volume: 1.476M
BUY POINT: $64.45 Volume=2.2M Target=$75 Stop=$62.12
POSITION: STJ DM - Apr. $65c (41 delta) &/or Stock
http://www.investmenthouse.com/cs/stj.html
Leadership stocks: Maybe not ready for a split, but setting up well for an upside move.
Play Date: 01/13/2004
SNUS (Sonus Pharmaceutical--$6.20; -0.10; no options): Diagnostic substances
http://biz.yahoo.com/p/s/snus.html
STATUS: Testing the breakout. SNUX exploded out of a 10 week base to start the month, surging to 6.50 on strong volume. It has spent the past two sessions testing that move, tapping the 10 day MVA (5.80) on the Tuesday low befor ea furious rebound recovered most of the losses. Volume rallied as it cut the losses, a good sign that buyers came in to support it. We expect SNUS to test back toward the 10 day MVA again before making the continued breakout run. Accumulation in the base is an outstanding 5 to 1.
Volume: 199.651K Avg Volume: 112.695K
BUY POINT: Test 5.80ish, then 6.22; Breakout: $6.55 Volume=175K Target=$7.95 Stop=$6.09
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/snus.html
Play Date: 01/13/2004
IDEV (Interneuron Pharma--$6.95; +0.67; no options): Drugs
http://biz.yahoo.com/p/i/idev.html
STATUS: Flat. Making the breakout move from a nice 7 month flat base sporting excellent 11 to 2 accumulation, IDEV was roaring higher on strong volume Monday. The pattern was very tight and quiet, setting up a good breakout. The last time this stock came out of a multi-month base it doubled. We will take that if it gets there, but our initial target is much more modest.
Volume: 2.312M Avg Volume: 314.54K
BUY POINT: $7.12 Volume=500K Target=$8.55 Stop=$6.48
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/idev.html
Play Date: 01/13/2004
VOCL (Vocaltec Communications--$6.48; +1.24; no options): Internet software and services
http://biz.yahoo.com/p/v/vocl.html
STATUS: Double bottom w/handle. Making the breakout from a 6 month base in a down market, a sign of strength. Accumulation is an outstanding 8 to 2, one reason for it to show strength in a selling market. Money flow is surging ahead of the stock and relative strength is making a breakout as well, another indication of the power of the move. The market might be struggling but this stock is not. Looking for positions on a further move on some solid trade.
Volume: 1.917M Avg Volume: 387.622K
BUY POINT: $6.62 Volume=581K Target=$8.28 Stop=$6.16
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/vocl.html
Continuing Leader Plays:
Play Date: 01/08/2004
CHINA (Chinadotcom--$10.88; -0.19; optionable): Chinese internet
http://biz.yahoo.com/p/c/china.html
STATUS: Flat. After surging higher through Friday, CHINA is easing back to test the move, falling back on much lower volume. That is an indication that there is just modest profit taking, no dumping. CHINA is moving off of the bottom of a 6 month base with 8 to 4 accumulation. It is forming this handle a bit early, but this stock can run well. When it surges back up on volume we will look at moving into positions. Given the pullback we are adjusting the buy point to get to clear the resistance when it starts back.
Volume: 5.668M Avg Volume: 3.82M
BUY POINT: New: $11.77 (orig. $10.96) Volume=5.1M Target=$14.15 Stop=$10.19
POSITION: UIH FB - June $10c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/china.html
Play Date: 01/06/2004
DGX (Quest Diagnostics--$73.51; -0.09; optionable): Medical labs
http://biz.yahoo.com/p/d/dgx.html
STATUS: Cup w/handle. Continues the nice lateral move over the 10 day MVA (72.86), biding its time in the current 6 week base that formed after a 4.5 month cup w/handle base from July to October. After volume drifted lower and lower it jumped back to average Tuesday as DGX tapped the 10 day MVA and rebounded. That volume jump often precedes a breakout move. We will be patient as well and let it make the breakout and move in as it does. Accumulation remains strong at 5 to 2.
Volume: 633K Avg Volume: 777.525K
BUY POINT: New: $74.06; aggressive: $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: 11/24/2003
GRMN (Garmin Ltd.--$56.92; -0.48; optionable): GPS devices
http://biz.yahoo.com/p/g/grmn.html
STATUS: Testing the breakout. Still testing the breakout, coming back to tap the 10 day MVA (56.47) on the Tuesday low. Volume remains low and well below average on this pullback, an indication there is no heavy selling. Just being patient and letting it makes its pullback. We move in when it jumps up through the buy point on strong, above average volume.
Volume: 423.58K Avg Volume: 620.042K
BUY POINT: New: $58.12 (orig. $54.38) Volume=690K Target=New positions: $68 (orig. positions $62) Stop=$55.35
POSITION: GQR DK - Apr. $55c (50 delta) &/or Stock
http://www.investmenthouse.com/cs/grmn.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.
DCOM: 1-17-04. Double topped at 32 and falling to the 50 day. Has to hold that level and give a strong bounce, but not looking solid moving toward earnings.
DNA: Forecast 1-14-04
GGG: Forecast 1-22-04.
LEA: Forecast 1-26-04
LXK: Forecast 1-17-04.
MBG: Researching new date.
MBT: Researching date.
MGAM: Forecast 1-28-04 before the open.
NSIT: Forecast 1-30-04.
OSI: Forecast 2-11-04. Trying to hold the 50 day MVA.
RESP: Forecast 1-22-04 before the open.
SHFL: Forecast 2-19-04 with earnings.
SONC: Forecast 1-24-04 in conjunction with its shareholder meeting.
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.
WFMI: Forecast 2-11-04.
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: 01/13/2004
AGN (Allergan--$80; -0.3; optionable): Drugs. Forecast to announce a split on 1-28-04 before the market opens in conjunction with earnings or on 2-2-04 in conjunction with the annual shareholder meeting.
BACKGROUND: Last announced a 3 for 2 split on 1-14-02 in conjunction with a board meeting. The stock price was $36.5. The annual shareholder meeting is scheduled for 2-2-04 at 9:30 am. Additional shares will be authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/a/agn.html
STATUS: Cup w/handle. AGN is starting to form a handle to a 4.5 month base sporting excellent 6 to 2 accumulation and surging, surging money flow. Volume has surged the past week as AGN formed the right side of its base just as it should. Now it needs to settle back on some lower trade and then blast higher on renewed buying.
Volume: 1.995M Avg Volume: 783.817K
BUY POINT: $81.78 Volume=1.2M Target=$94 Stop=$77.98
POSITION: AGN DP - Apr. $80c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/agn.html
Continuing Pre-Announcement Plays:
Play Date: 01/03/2004
DNA (Genentech--$90.25; -0.4; 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. 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 breakout. After a nice surge to 95 on the December breakout from its 11 week base DNA is testing the move. It has come back to 90 which is trying to act as support to send it back up. Volume jumped a bit on the selling, something we don't like to see. Earnings are out after the market closes, and this pullback has taken some air out of the move. If DNA can clear the 10 day MVA (91.48) we will open a partial position, and then look to the earnings and a split to continue the bounce where we will take more positions.
Volume: 1.796M Avg Volume: 2.303M
BUY POINT: Aggressive: $91.62; Breakout: $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: 01/06/2004
RESP (Respironics--$49.8; -1.15; optionable): Medical appliances. 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: Testing the breakout. RESP exploded higher Monday on strong volume, moving out of a short 5 week base that formed over the 50 day MVA. That is a sign of strength in the stock. This pullback could provide another opportunity to enter the stock on a move back to the 10 day MVA (47.99).
Volume: 362.423K Avg Volume: 213.554K
BUY POINT:New: test 48ish, then 49.25 on rising volume. Breakout: $50.45 Volume=305K Target=$58 Stop=$47.48
POSITION: RBQ DI - Apr. $45c (75 delta) &/or Stock
http://www.investmenthouse.com/cs/resp.html
Play Date: 01/10/2004
SONC (Sonic Corp.--$33.71; -0.16; optionable): Forecast to announce a split January 24 in conjunction with its annual shareholder meeting at 1:30 p.m. CT.
BACKGROUND: SONC last announced a 3:2 split 1-17-02 at its annual shareholder meeting with a stock price of $36.30. A frequent splitter announce roughly every 2 years.
http://biz.yahoo.com/p/s/sonc.html
STATUS: Testing the breakout. SONC continues to pullback on lower volume following the storng breakout early last week. That rally pushed it out of a 7 month cup with handle. After a mad cow scare SONC announced solid earnings and that shot the stock higher in the next breakout. It is coming back to test that move and is setting up well. Just being patient and letting it make the next move higher on strong volume.
Volume: 342.043K Avg Volume: 347.275K
BUY POINT: Test toward 32.50, then $32.62 on the way back up. It may not make it that far. From here: 34.22. Volume=562K Target=$39.15 Stop=$31.55
POSITION: ZSQ FF - June $30c (80 delta) &/or Stock
http://www.investmenthouse.com/cs/sonc.html
Play Date: 01/03/2004
VIP (Vimple Communication--$75.95; -2.26; optionable): Russian wireless communications. Forecast to announced a split on 3-26-04 in conjunction with earnings. This date is not confirmed, but based upon our research this is the date for the release.
BACKGROUND: It does not appear that VIP has ever split its stock. The annual shareholder meeting was on 6-27-03 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/vip.html
STATUS: Testing the breakout. VIP never came back, instead moving laterally over the 10 day MVA (75.58) on mostly lower volume. It got a bit out of hand Tuesday as VIP tanked to the 10 day on rising volume. It is where we want to see it hold and then resume the breakout move.
Volume: 482.9K Avg Volume: 388.181K
BUY POINT: New: $76.62 (orig. $75.55) Volume=615K Target=$85 Stop=$70.88
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--$36.43; +0.03; optionable): Medical instruments
http://biz.yahoo.com/p/b/bsx.html
STATUS: Double bottom w/handle. Coming off the 50 day MVA (34.99), BSX tried the breakout move Tuesday on rising, above average volume. It reached 37.45 on the high but then gave it all back. Still holding solid over the 10 day MVA (36.11) after the reversal. Medical stocks are looking better as the techs prepare to give some back. Looking for BSX to try another break higher from here.
Volume: 4.631M Avg Volume: 2.965M
BUY POINT: New: $37.06 (orig. $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: 07/30/2003
SBUX (Starbucks--$33.11; -0.25; optionable): High priced coffee
http://biz.yahoo.com/p/s/sbux.html
STATUS: Testing the breakout. Still testing last week's break higher, holding over the 18 day MVA (32.84) on below average volume. This also keeps it right over the November high, exactly where you want to see it hold a breakout move. The breakout earlier last week came on news of strong December same store sales. Just being patient and waiting for the bounce back up.
Volume: 2.447M Avg Volume: 2.479M
BUY POINT: New: $33.75 (orig. $30.35) Volume=6M Target=New positions: $40 (orig. positions: $36.75) Stop=$32.55
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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