us stock market, stock split

Begin Part 2 of 4

What does high or low volume accompanying a doji mean? Well, lets look at some scenarios. If a stock is running higher and shows a pattern of slowing down on the move and then shows us a doji on very high volume and where the stock closes the session well off of its high, that is a sign of reversal. The stock tried to continue its run, but sellers jumped in big time and drove it back to where it started the day on high volume. That is usually a sign that some stronger selling is coming the next few sessions. If the same occurs but the doji is on light volume, it still means that move may be over. If a stock hits a high on low volume, that means not many buyers are supporting the move to the high; selling is most likely. However, it may not be as severe as if there is that high volume reversal where the sellers just jump onto the stock. You have to be careful, and doji's are not automatic signals; they are flags saying 'take note of me.' Wait for confirmation, but be ready; the doji was your warning flare. Low volume doji's may mean less virulent selling. Indeed, we like to see those low volume pullbacks to near term support as that means no share dumping and most likely a good buy point or 'add to' point is coming at near term support.

On the downside the results are similar. A high-volume doji that occurs after a stock sells way down and then recovers is good. We call that a doji with a long tail; how poetic. Anyway, what that means is that the stock sold way down, but then buyers jumped in to push it back up to where it opened. Perhaps we are being told a reversal just occurred and buyers now outnumber sellers. If this occurs at support, we get really excited. As for the low volume variety, it is not as strong a signal as that doji with a long tail on high volume, but if the sell off down to the support or the doji has been on low volume, the low volume doji is just fine; it can indicate that the move to the upside is just around the corner (the next day or two). Again, the pattern is just a signal and not a 'buy' signal. Let there be confirmation of the move the next day (it actually starts up), and then make the move.

We cover doji's, candlesticks, and all of the technical analysis methods and techniques we use in the online seminars. Do your self a favor and take these courses to be ready for this next move up that will inevitably come.

THE PLAYS: Lots of breakouts this week, and Friday saw more solid moves from FITB, CBH, ASFC, LH and CAKE.

BONUS PLAYS:

ITMN (Intermune--$39.76; +1.71; optionable): Drug manufacturer.
http://biz.yahoo.com/p/i/itmn.html
STATUS: In a six-month cup with handle, the handle itself forming a 'v-shaped' cup over the last seven weeks. After testing 30 the stock rebounded back over its 50 and 200 day MVA's (35 & 36.93, respectively), Friday making a strong move up out of its recent lateral range. Volume was excellent on the move (1.15 million; average 386,000) as the stock moved closer to the handle high of 42.07. We will look for a continued move and ultimately a breakout. Relative strength has already broken out, which is a bullish indicator, and the stock shows excellent money flow and buying. Target on breakout: 48.
BUY POINT: Aggressive: Over 40.20 on continued strong volume. Stop: 37.39. Breakout: 42.20 on minimum volume of 578,000. Stop: 39.25.
POSITION: Aggressive: Stock and/or October $35 calls to buy (IQY JG). Breakout: Stock and/or October $40 calls to buy (IQY JH - low open interest).

PLA (Playboy--$17.85; -0.08): Publishing.
http://biz.yahoo.com/p/p/pla.html
STATUS: Has made a couple of massive breakouts, the first in May from a double bottom with handle, the second from a lateral consolidation formed after that move. The recent breakout hit 19.75, but has pulled back from there, show an orderly drop on generally decreasing volume (Friday down to 30,500; average 63,800). The stock is looking to hold support at its 10 day MVA (17.80), showing a tight doji there Friday, so we are looking for a bounce back up. The initial target is the recent high.
BUY POINT: A bounce over 18 on increased volume near the average. Stop: 16.74 (or just under the 18 day MVA (17.27).
POSITION: Stock and/or September $15 calls to buy (PLA IC).

PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: The coming week we look at FITB, DFXI, ADVS, ELN and THQI, and from our new Pre-Announcement plays FNM, and POOL!

NEW PRE-ANNOUNCEMENT PLAYS:

FNM (Fannie Mae--$86.04; +0.62; optionable): Mortgage Investment. Forecast to announce a split on Tuesday after the close with earnings.
http://biz.yahoo.com/p/f/fnm.html
BACKGROUND: Last announced a 4:1 split in 1996, splitting at $120.
STATUS: FNM is in its second handle to a rather jagged cup pattern that began forming at the end of December 2000. The stock formed a short handle in mid-June, followed by a failed breakout as the stock pulled back to its 50 day MVA (currently 82.76) before making a second breakout attempt later in June. Once again the stock pulled back to test the breakout, pulling into its current handle. It has been fighting resistance at 86.50 on generally below average volume. Friday the stock gapped slightly down, just above the 10 day (85.05), before moving up to close in the range of its recent highs on slightly decreased, below average volume (2.31 million, average is 3.13 million). Going into the forecast we are looking for a solid move up toward the handle high at 87.87 (high in left side of the cup at 89.44). Target on breakout: 100.
BUY POINT: Aggressive: 86.63 on increased volume near the average. Stop: 80.57. Breakout: 89.00 on breakout volume (4.69 million). Stop: 82.77. We will also look at positions before the close Tuesday on the stock showing continued pattern strength.
POSITION: Aggressive: Stock and/or September $80 calls to buy (FNM IP). Breakout: Stock and/or September $85 calls to buy (FNM IQ).

FII (Federated Investors--$31.56; -0.27; optionable): Financial Services. Forecast to announce a split on 7-24-01 after the close in conjunction with earnings.
http://biz.yahoo.com/p/f/fii.html
BACKGROUND: Last announced a 3:2 split on 6-22-00 with a board meeting. The stock price was $32. The company has sufficient shares for a 2:1 split.
STATUS: Since March the stock has formed an ascending wedge, made up of consecutive cup with handle patterns. The stock fell out of the handle to the second cup pattern last week, but caught itself at its 50 day MVA (30.67), making another higher low, and is trying to move back up on its highs (May high at 32.77 and recent handle high at 32.40). FII made a bounce back over its short-term MVA's (10 day at 31.38) Thursday, but volume was weak and the stock tested back below those levels Friday before pulling back up to close. Volume was up but remained below average on the move, at 141,300 (average 179,000). It is in a good sector, and heading into the forecast we are looking for a breakout. Target: 38.
BUY POINT: 32.90 on volume of 268,500. Stop: 30.60
POSITION: Stock and/or October $30 calls to buy (FII JF).

POOL (SCP Pool--$32.90; -1.54; no options): Wholesale basic materials. Forecast to announce a split on 7-17-01 before the market opens in conjunction with earnings or in conjunction with a board meeting scheduled for 7-26 and 7-27-01.
http://biz.yahoo.com/p/p/pool.html
BACKGROUND: Last announced a 3:2 split on 5-11-00 the day after its annual shareholder meeting. The stock price was $34. The annual shareholder meeting was on 5-9-01 at which time additional shares were authorized.
STATUS: Over the past 19 months POOL has made four lengthy runs up from its 200 day MVA (30.93), and in late June tested that level again, and again it bounced back up. After consolidating along its 50 day MVA (33.85), the stock took off the last two sessions, breaking out to a new high Friday as volume was huge (up to 512,700; average 133,000). The move took the stock over its March and June tops at 36-37, but it pulled back to close Friday after having hit as high as 39.15. With the close that far off of the high, we can expect some pullback. We will see if it can hold on the profit-taking at the 37 level, and holding on that level and move up could present a good opportunity to take positions going into Tuesday morning's forecast.
BUY POINT: A move up after holding 37 on a lower volume pullback.
POSITION: Stock only.

ACLNF (ACLN Ltd--$37.00; +4.01; no options): Shipping. Forecast to announce a split on 7-23-01 in conjunction with its annual shareholder meeting.
http://biz.yahoo.com/p/a/aclnf.html
BACKGROUND: Last announced a 5:4 split on 8-14-00 at a stock price of $39. The annual shareholder meeting is scheduled for 7-23-01 at 2:00 EDT. The company has sufficient shares for a 2:1 split.
STATUS: The stock broke from a large cup with handle (dating to August 2000) last month, but from the breakout high of 35.48 came back to test the handle (and 50 day MVA, at 30) twice. This week the stock again found support in the range of the former handle and then blasted up with a big gapping move Thursday, followed by an even stronger move Friday where it made a new high (intraday hit 37.40; prior high 35.48). Volume skyrocketed to 462,600 (average 107,000), as news that the stock would be listed on the NYSE prompted the move. It is still a buy up to 37.25, but we could see some profit-taking here. On a move down we will look for the stock to hold recent highs at 34.25-34.50 for a strong move back up going toward the forecast.
BUY POINT: Still a buy up to 37.30 on this breakout move. Pullback: After a lower volume pullback that holds the 34.50 range, a move back over 40 with continued strong volume.
POSITION: Stock only.

BRL (Barr Laboratories--$73.64; +0.89; optionable): Forecast to announce a split on 8-7-01 in conjunction with earnings. At this time the company cannot confirm this date.
http://biz.yahoo.com/p/b/brl.html
BACKGROUND: Last announce a 3:2 split on 5-31-00 with a board meeting. The stock price was $52. The annual shareholder meeting 10-26-00 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: BRL is making a strong move up in the handle to its six-month cup with handle pattern. It hit the handle high of 77.15 in early June when it cleared the left side of the cup, and has since gradually pulled back, testing its 200 day MVA (63.77) early this week before bouncing. The move up came on the new that the company was raising earnings estimates, and it responded with a very strong move up Thursday, continuing up Friday to hit 75 before pulling back to close. Volume was sharply down but remained strong at 1.07 million (average 564,400). It has some resistance from a mid-June spike in the handle at 75.50 before hitting the breakout. Good relative strength, and buying and money flow have responded with the good news. Target on breakout: 88.
BUY POINT: Breakout: 77.28 on continued strong volume (minimum breakout volume of 846,000). Stop: 71.87. Aggressive: Over 75.50 on continued strong volume. Stop: 72.08.
POSITION: Breakout: Stock and/or November $75 calls to buy (BRL KO). Aggressive: Stock and/or November $70 calls to buy (BRL KN).

BEST PLAYS: Besides the plays set forth below as best plays, there are some other stocks that also look good. These include Pre-Announcements FISV, FDC and RHB; Pre-Splits KG and our new Pre-Split play UOPX; Continuing Candidates ASFC, ACF, KRB and MIKE; and Post-Split GENZ.

PRE-ANNOUNCEMENT BEST PLAYS
1) FITB - Ready to break out and forecast for Monday
2) ACS - Looking to break out
3) DFXI - Forecast for Tuesday and also ripe for a breakout
4) THQI - Ascending wedge
5) ADVS - Forecast for Tuesday
6) MNC - Dojis on support
7) BRO - Holding on to the breakout

FITB (Fifth Third Bancorp--$62.84; +1.49; optionable): Looking for an announcement with earnings on Monday before the market open.
http://biz.yahoo.com/p/f/fitb.html
BACKGROUND: Last announced a 3:1 split on 6-20-00 at a stock price of $61. The annual shareholder meeting was on 3-20-01 at which time authorized shares were increased.
STATUS: Looking ready to break out. Earlier this week, FITB made a decent bounce up from its 50 day MVA (59.04), at the bottom of its handle, the second recent handle to its cup pattern dating back to the beginning of the year. Friday it made a nice move up on above average volume (1.87 million, average 1.60 million), hitting the pivot point (63.13; high Friday of 63.20) but pulling back to close. As the forecast is Monday before the open, we are looking for an announcement to be a catalyst for a strong breakout, looking for bigger volume. Relative strength and money flow have broken out. Target on breakout: 70.
BUY POINT: Breakout: 63.33 on volume of 2.40 million. Stop: 58.71.
POSITION: Stock and/or October $60 calls to buy (FTQ JK). Just after split announcements, options prices are typically inflated. An intraday pullback may provide a better entry point.

ACS (ACS Inc.--$76.31; +1.43; optionable): Forecast to announce a split on 7-31-01 before the market opens in conjunction with earnings.
http://biz.yahoo.com/p/a/acs.html
BACKGROUND: Last announced a 2:1 split in October 1996 at a stock price of $60. The annual shareholder meeting was on 10-26-00 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Primed for a break to a new high. ACS has been trending up solidly the past year, making its way along the 50 day MVA. From its June (and all-time) high of 77.68, the stock dipped back to its May consolidation range (just below its 50 day at 72.36) in early July, and has since made an impressive move up on steadily increasing volume. Friday ACS made another strong move up, nearly reaching the pivot point on increased, above average volume of 512,100 (average 450,000). Relative strength has broken out and money flow is excellent, and we are looking for a breakout. Target on breakout: 90.
BUY POINT: Breakout: 77.80 on increased volume. Stop: 72.54.
POSITION: Breakout: Stock and/or October $75 calls to buy (ACS GO).

DFXI (Direct Focus--$47.04; +1.41; optionable): Forecast to announce a split on Tuesday after the market close in conjunction with earnings.
http://biz.yahoo.com/p/d/dfxi.html
BACKGROUND: A frequent splitter, it last announced a 3:2 split on 12-12-00 in conjunction with a board meeting. The stock price was $44. Prior to that announced a 3:2 split on 6-28-00 in conjunction with a board meeting. The stock price was $44. See a pattern here? The annual shareholder meeting was on 6-4-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: A very solid stock that has performed well, and is proving to be a consistent splitter. It broke from a cup (and subsequent ascending wedge) recently and has made two solid surges, hitting 48 on its last move before pulling back. Wednesday it reached down intraday to test its 50 day MVA (39.22), and made a strong recovery on good volume, before making a nice move up the next two sessions. Friday's move was solid, opening just above the 10-day, and nearly hitting the recent (and all-time) high of 48, but once again, volume was lower than we would like to see (301,100, average is 325,800). The stock is ready to break out, and we are looking for another move up, on significantly increased volume heading into Tuesday's forecast. Target: 55.
BUY POINT: Breakout: Over 48 on above average volume. Stop: 44.64.
POSITION: Breakout: Stock and/or August and October $45 calls to buy (DQF HI and DQF JI).

THQI (THQ Inc.--$58.55; -1.17; optionable): Forecast to announce a split on 7-20-01 in conjunction with the shareholder meeting (earnings 7-26-01).
http://biz.yahoo.com/p/t/thqi.html
BACKGROUND: Last announced a 3:2 split on 10-26-99 in conjunction with earnings. The stock price was $44. Prior to that announced a 3:2 split on 7-23-98 in conjunction with earnings. The stock price was $33. The annual shareholder meeting is on 7-20-01 at which time authorized shares will be increased. The company has sufficient shares for a 2:1 split.
STATUS: Since breaking from a cup with handle way back in January, the stock has been on a steady run up along its short-term MVA's. Friday it pulled back a bit from the previous session's move up, on decreasing, below average volume (326,500, average is 579,100), once again finding support at the 10 day. This looks like an ascending wedge, with 60 continuing to provide resistance (stock hit an intraday high in June of 62). As the gap between support (10 & 18 day MVA's at 57.76 and 56.70, respectively) and 60 tightens, we are looking for the breakout move over 60, on significantly higher volume as we go into the forecast next week. Target: 69.
BUY POINT: A move over 60 on above average volume. Stop: 55.80. New high: Over 62 on above average volume. Stop: 57.66.
POSITION: Aggressive: Stock and/or September $55 calls to buy (QHI IK). New high: Stock and/or September $60 calls to buy (QHI IL).

ADVS (Advent Software--$55.51; +1.97; optionable): Forecast to announce a split on Tuesday after the close in conjunction with earnings.
http://biz.yahoo.com/p/a/advs.html
BACKGROUND: Last announced a 2:1 split on 2-17-00 in conjunction with a board meeting. The stock price was $80. Prior to that announced a 3:2 split on 7-13-99 in conjunction with earnings. The stock price was $75. The annual shareholder meeting was on 5-3-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Was moving nicely in the handle to nine-month cup with handle pattern, but took a severe drop, taking out the 200 day MVA (53.09). However, Friday the stock successively moved back over that level on above average volume (743,200, average 658,100) to close just under the 10 day (55.92). We will see if this momentum continues into the forecast next Tuesday. The 50 day (58.52), and near-by 18 day (58.10) may provide significant resistance; the handle high is way out at 69.
BUY POINT: Aggressive: On a move over the 50 day on continued strong volume. Stop: The 54.50 range. If the stock continues to show strength (not tanking back through the 200 day) on Tuesday, we can also look at positions going into the close.
POSITIONS: Stock and/or November $50 calls to buy (UIV KJ - low open interest).

MNC (Monaco--$28.06; -0.06; optionable): Automotive. Forecast to announce a split on 7-26-01 in conjunction with earnings. At this time the company has not confirmed a time for the release.
http://biz.yahoo.com/p/m/mnc.html
BACKGROUND: Last announced a 3:2 split on 6-7-99 in conjunction with a board meeting. The stock price was $34.75. The annual shareholder meeting was on 5-17-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: The stock has split several times in the 30's, and with a continuation of this move could be ready to announce again. It broke out of a large cup pattern at the end of June (prior high 30.94 in August 1999), surging up to 33.20 with a great move before pulling back. It is currently holding the 18 day MVA (27.75) and late-June high, showing tightening patterns with a third consecutive doji Friday. Volume was lower however, although still above average, (97,300, average 88,200). Poised for a move, and we are looking for this one to take off. Excellent buying.
BUY POINT: Aggressive: A bounce back over 29 on continued strong volume. Stop: 26.97.
POSITION: Stock and/or October $25 calls to buy (MNC JE - but very low open interest).

BRO (Brown & Brown--$47.00; +0.85; no options): Insurance Brokers. Forecast to announce a split on 7-25-01 in conjunction with a board meeting. At this time the company has not confirmed the date of the board meeting.
http://biz.yahoo.com/p/b/bro.html
BACKGROUND: Last announced a 2:1 split on 7-26-00 in conjunction with its regularly scheduled board meeting. The stock price was $48. The annual shareholder meeting was on 4-18-01 at which time authorized shares were increased.
STATUS: Continuing its breakout! This week, BRO made a solid move up, gapping up Thursday to break out of its saucer pattern to new highs. The loose doji pattern after the gap up signaled a possible pullback; however, Friday BRO held the high in the left side of the pattern (low of 46.25) and managed to push up again on continued very strong volume (down to 196,400; average 37,200). The stock is still a buy up to $48.11, although we still suspect there could be a slight pullback on lower volume, testing the breakout ($46.10) before we see another move up. Target: 49.
BUY POINT: From here: A move over 47.28 on continued strong volume. Stop: 43.97. Test: After a test of the 46 level, a strong move back over 46.50. Stop: 43.25.
POSITION: Stock only.

End Part 2 of 4

us stock market
stock split