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Begin part 3 of 3
THE PLAYS
In each report we prepare full write-ups for those plays that look ready to move. Those that have made the move or are still setting up are discussed in the continuing play table. The purpose is to focus on those stocks that are set to move.
Good movers Tuesday: CEC; EVCI; SLAB
NEW PLAYS: This section includes plays from all sections other than pre-announcements. Those are contained in the pre-announcement section.
New Pre-Splits
Play Date: 02/24/2004
ATVI (Activision--$20.46; +0.31; optionable): Multimedia Graphics software. Splits 3:2 on 3-26-04
http://biz.yahoo.com/p/a/atvi.html
STATUS: Testing the breakout. ATVI broke from a 7 week flat base 3 weeks back on a nice volume surge. It rallied to 21.75 on the high then pulled back the past week to the 18 day MVA (19.99). Relative strength broke out on the move, a sign of the stock is out performing the rest of the market. As it has come back to make this test, money flow has stayed strong and well above the price. Monday it was up modestly off the 18 day. We are looking for volume to jump as it continues the move, and that is when we move in.
Volume: 1.679M Avg Volume: 1.927M
BUY POINT: $20.65 Volume=2.3M Target=$23.75 Stop=$19.88
POSITION: AQV ED - May $20c (60 delta) &/or Stock
http://www.investmenthouse.com/cs/atvi.html
Play Date: 02/24/2004
SSNC (SSS&C Technologies--$47.22; +1.94; no options): Application software. Splits 3:2 on 3-8-04
http://biz.yahoo.com/p/s/ssnc.html
STATUS: Test 18 day MVA. Nice breakout in early January, and running up the 10 and 18 day MVA (45.46, 43.68). In the Tuesday selling SSNC undercut the 18 day and rallied back on stronger, above average volume. This is the type of reversal you want to see in starting a pre-split play. Money flow is strong and relative strength is making the breakout. Looking to open positions on a further volume move from here.
Volume: 268.835K Avg Volume: 196.681K
BUY POINT: $47.38 Volume=250K Target=$53.45 Stop=$45.22
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/ssnc.html
Play Date: 02/24/2004
VAPH (Vaso Activ Pharma--$25.73; -2.62; no options): Drugs. Splits 3:1 on 3-8-94
http://biz.yahoo.com/p/v/vaph.html
STATUS: Breakout test. A new issue in December, VAPH moved laterally for 2 months and then exploded higher in February. It peaked on the run at 25 and has started pulling back the last two sessions to test that strong move. It showed a doji Tuesday at 25, the short term peak last week before the big surge Friday. It may still come back to the 10 day MVA (22.41) for a full test, but with money flow still very strong and the doji on the candlestick chart we want to be ready to move in when it starts back up.
Volume: 606.206K Avg Volume: 450K
BUY POINT: $26.38 Volume=850K Target=$32 Stop=$24.53
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/vaph.html
Continuing Leader Plays
Play Date: 02/23/2004
CHU (China Unicom--$12.17; -0.26; optionable): Chinese wireless telecom
http://biz.yahoo.com/p/c/chu.html
STATUS: Testing the breakout. Nice tight doji on the 18 day MVA (12.07) Tuesday as CHU continues to test the early January breakout from a 10 week cup with handle. Volume has peeled back as CHU makes the test, indicating little selling pressure. The doji suggests the pullback may be over. Great money flow leading higher, and we are looking for the price to follow. Relative strength breakout shows CHU is outperforming the rest of the market. Need to see volume turn higher on the rebound to take positions.
Volume: 549.9K Avg Volume: 754.318K
BUY POINT: $12.88 Volume=800K Target=$15.45 Stop=$11.98
POSITION: CHU GV - July $12.50c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/chu.html
Play Date: 01/21/2004
DVA (Davita--$44.89; +0.44; optionable): Health services
http://biz.yahoo.com/p/d/dva.html
STATUS: Breakout test. Very nice pullback to the 10 day MVA (44.25) on lower, below average volume. This move follows the excellent breakout from its 13 week ascending triangle. Picture perfect action, and the first test of the breakout is a great point to enter as stocks tend to make 4 to 5 runs up off of the 10 or 18 day MVA after a strong breakout. Money flow remains strong and out ahead of the stock. Relative strength is outstanding. Ready for the move back up as it started cheating higher Tuesday in the overall market selling.
Volume: 292.4K Avg Volume: 332.409K
BUY POINT: New: $45.12 (orig. $40.12) Volume=504K Target=New positions: $50; orig. positions: $46 Stop=$43.88
POSITION: DVA GI - July $45c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/dva.html
Play Date: 02/19/2004
INTL (Inter-Tel--$30.04; +0.03; optionable): Telecom systems
http://biz.yahoo.com/p/i/intl.html
STATUS: Breakout test. We started watching INTL 5 sessions back when it made its high volume breakout from a 22 week reverse head and shoulders base sporting solid 7 to 4 accumulation. Nice, tight doji that tapped the 10 day MVA (29.64) on the intraday low. Strong money flow is leading higher, and we are looking for the stock price to follow it after this breakout test.
Volume: 383.281K Avg Volume: 307.954K
BUY POINT: $31.12 Volume=458K Target=$35.88 Stop=$29.05
POSITION: TPQ GF - July $30c (65 delta) &/or Stock
http://www.investmenthouse.com/cs/intl.html
PRE-ANNOUNCEMENT PLAYS
Current Pre-Announcement Plays: In each report we look at the candidates that are in the best patterns ahead of their potential announcements. This focus on leaders in good patterns allows us to make good money even if companies do not announce the split, something that they are still gun-shy of as the market and economy recovers.
AGN: Forecast 4-26-04.
APOL: Forecast 3-24-04 or with the 2-27-04 board meeting.
BCR: Forecast 1-28-04. No split announced. Testing the 18 day MVA as it tries to hold the move.
DNA: Forecast in 4-16-04 with shareholder meeting. Want to see some volume on the rebound.
ELAB: Forecast 2-19-04. No split announcement. Still holding the 18 day MVA.
IDXX: Forecast 4-19-04.
IRM: Forecast 2-26-04. Held at the 50 day MVA in a tighter range.
LM: Researching next possible date.
LOW: Possible 2-23-04, but looking to May shareholder meeting. No split with earnings. Sold down to 50 day MVA, but holding at the 18 day. Looking for a volume bounce to start the positions.
LXK: No split announced 1-26-04. Test of the 50 day MVA.
MBG: Forecast 3-4-04 before the open. No complaints as it just keeps in moving higher on above average volume.
MBT: Researching date. Held the 18 day MVA and started higher as volume jumped.
MIK: Forecast 3-3-04.
NMGA: Forecast 3-3-04 after the close.
OSI: Forecast 4-15-04. No split announcement but solid earnings. Forming a handle over the 18 day MVA. Not bad.
SHFL: Forecast 2-26-04 with earnings. Whoa. Wild session as it announced a purchase of BET Technology.
SONC: Forecast 3-15-04. Still forming up well.
STJ: Forecast 4-12-04 in conjunction with earnings.
TOL: Forecast 2-24-04 in conjunction with earnings or on 3-2-04 with a board meeting. Nothing on the 24th, so looking at the board meeting in early March.
UOPX: Forecast 3-24-03 with earnings.
VAR: Friday it was announced VAR is calling a special shareholder meeting to increase authorized shares. Date has not been released yet and VAR will file a proxy statement to that effect. We expect that will be for the split and will be ready to move in on any chance the stock gives us.
VIP: Forecast 3-26-04.
WFMI: No announcement 2-11-04. Nice 18 day MVA and bounce on volume.
Full Write-ups: We do not cover all candidates in full in each report, but focus on those ready to make a move or are right at their forecast announcement date. This way we are focused on those stocks ready to make moves.
New Pre-Announcement Plays: Retail stocks have been forming up well.
Play Date: 02/24/2004
ORLY (Oreilly Automotive--$41.47; +0.65; optionable): Forecast to announce a split on 2-26-04 during the market in conjunction with earnings. The annual shareholder meeting was on 5-6-2003 at which time no additional shares were authorized. The company has sufficient shares for a 3 for 2 split.
BACKGROUND: Last announced a 2 for 1 split on 11-8-99 at a stock price of $45.00. Something of a wildcard here, but with the solid pattern it can make us money on the breakout.
http://biz.yahoo.com/p/o/orly.html
STATUS: Double bottom w/handle. After a strong move February through October ORLY needed a rest, and it is now taking one with the current 16 week base. Accumulation in the pattern is a solid 6 to 3 (6 up price weeks on rising volume on 3 down price weeks on rising volume). The base formed over the 200 day MVA (37.56), a level of institutional support. A very nice lateral handle is forming with volume dropping off to below average as it moves over the 10 day MVA (40.35). Want to see volume surge as it moves over the high in the handle. When we see that we can start positions.
Volume: 238.501K Avg Volume: 280.454K
BUY POINT: $41.81 Volume=421K Target=$48 Stop=$40.25
POSITION: OQR EH - May $40c (68 delta) &/or Stock
http://www.investmenthouse.com/cs/orly.html
Play Date: 02/24/2004
CHS (Chicos Fas--$41.64; +0.71; optionable): Forecast to announce a split on 3-3-04 after the market closes in conjunction with earnings.
BACKGROUND: Last announced a 2 for 1 split on 6-27-02 in conjunction with a board meeting. The stock price was $36.60. It also announced a 3 for 2 split on 12-19-01 in conjunction with a board meeting. The stock price was $38. Several prior splits before these.
http://biz.yahoo.com/p/c/chs.html
STATUS: Testing the breakout. CHS broke from a 12 week reverse head and shoulders base two weeks back though volume did not blast higher on the move. You always want to see volume as that indicates some institutional support behind the move. It has come back to test the 18 day MVA (40.41) on this test, holding the breakout. Want to see volume jump to well above average on the continued move off the 18 day.
Volume: 797.6K Avg Volume: 1.08M
BUY POINT: $42.68 Volume=1.1M Target=$49 Stop=$40.29
POSITION: CHS EH - May $40c (64 delta) &/or Stock
http://www.investmenthouse.com/cs/chs.html
Continuing Pre-Announcement Plays:
Play Date: 01/13/2004
AGN (Allergan--$86.71; +0.95; optionable): Drugs. Forecast to announce a split on 4-26-04 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: Test 18 day MVA. AGN ahs come back to the 18 day MVA (85.72) for another test, easing back to this level the past two weeks on lower, below average volume. Tuesday volume started higher as AGN started off this support level. Money flow is excellent and turned up ahead of the stock. Looking for some above average trade to add to positions.
Volume: 699.6K Avg Volume: 815.863K
BUY POINT: New: $87.65 (orig. $84.46) Volume=1.2M Target=$94 Stop=$85.94
POSITION: AGN GQ - July $85c (63 delta) &/or Stock
http://www.investmenthouse.com/cs/agn.html
Play Date: 02/07/2004
LM (Legg Mason--$91.88; -0.53; optionable): Investment brokerage. Looking to April for the announcement, but moving very well now.
BACKGROUND: LM last announced a 2:1 split in July 1998 at a price of $62.
http://biz.yahoo.com/p/l/lm.html
STATUS: Breakout test. LM exploded out of a nice 13 week cup with handle two weeks back and is making a very nice test of the breakout, holding over the 18 day MVA (90.87) as it does. Tuesday it tapped toward the 18 day on the low but managed to bounce as volume jumped back above average. Looks ready for the bounce off the first test, a great place to move in with additional or new positions.
Volume: 579.9K Avg Volume: 449.545K
BUY POINT: $92.24 Volume=550K Target=$102 Stop=$91.97
POSITION: LM QR - May $90c (50 delta) &/or Stock
http://www.investmenthouse.com/cs/lm.html
Play Date: 02/21/2004
MIK (Michaels--$46.39; -0.01; optionable): Crafts, hobby stores. Forecast to announce a split on 3-3-04 during the market in conjunction with earnings.
BACKGROUND: Last announced a 2 for 1 split on 10-31-01 in conjunction with a board meeting. The stock price was $52. The annual shareholder meeting was in June 03. The company has sufficient shares for q 2 for 1 split.
http://biz.yahoo.com/p/m/mik.html
STATUS: Cup w/handle. Extremely tight range as MIK tests the 18 day MVA (46.40) on very low, below average volume. Nice handle to its 15 week base showing solid 4 to 2 accumulation. Just being patient and letting it make the breakout if it will.
Volume: 285.5K Avg Volume: 539.136K
BUY POINT: $48.44 Volume=815K Target=$55.72 Stop=$46.22
POSITION: MIK FT - June $47.50c (49 delt) &/or Stock
http://www.investmenthouse.com/cs/mik.html
Play Date: 10/28/2003
VAR (Varian Medical Systems--$83.15; 0; optionable): Medical Equipment. Will be holding a special shareholder meeting to increase shares the time of which has yet to be announced.
BACKGROUND: Last announced a 2 for1 split on 11-19-01 at a stock price of $70.20.
http://biz.yahoo.com/p/v/var.html
STATUS: Testing the breakout. Again, no announcement, but it is clear one is coming. VAR continues an excellent lateral move over the 18 day MVA (82.14) on mostly below average volume. Very good action as it holds its gains after the strong January move. Stocks that can hold their gains as they rest are very solid. Looking for the next volume break higher to take it out of this range.
Volume: 516.2K Avg Volume: 505.681K
BUY POINT: New: $84.55; Clean break: 85.12 (orig. $64.50) Volume=1.1M Target=New positions: $100 (orig. $74.25) Stop=$80.92
POSITION: VAR EQ - May $85c (44 delta) &/or Stock
http://www.investmenthouse.com/cs/var.html
Play Date: 01/03/2004
VIP (Vimple Communication--$82.2; +1.15; optionable): Russian wireless. Forecast 3-26-04.
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 test. After gapping back up on strong volume last week, VIP has come back to test the move, holding the 10 day MVA (79.69) on low volume and then rebounding on sharply higher, average trade Tuesday. This is a solid move indicating that big money is coming back in after the test. We are ready for more positions on the next move on continued strong volume.
Volume: 494.1K Avg Volume: 435.136K
BUY POINT: New: 82.74 (orig. $73.34) Volume=615K Target=New positions: $93 (orig. $85) Stop=$79.97
POSITION: VIP GP - July $85c (44 delta) &/or Stock
http://www.investmenthouse.com/cs/vip.html
PRE-SPLITS
Play Date: 02/17/2004
BRL (Barr Labs--$76.25; -0.59; optionable): Generic drugs. Splits 3:2 on 3-16.
http://biz.yahoo.com/p/b/brl.html
STATUS: Double bottom w/handle. Has come all the way back to the simple 50 day MVA (76.02), showing a big doji with tail at that point with volume jumping back to average. That shows that money moved in to pick it up at that point, seeing it as a buying opportunity. Strong stocks rally from the 50 day, and if it can surge here on strong trade we are going to move in with it.
Volume: 766.5K Avg Volume: 721.045K
BUY POINT: New: $78.06 (orig. $80.72) Volume=975K Target=$85.75 Stop=$78.45
POSITION: BRL EP - May $80c (54 delta)
http://www.investmenthouse.com/cs/brl.html
Play Date: 02/21/2004
CLZR (Canela--$22.26; +0.62; optionable): Medical appliances. Splits 2:1 on 3-17-04
http://biz.yahoo.com/p/c/clzr.html
STATUS: Testing the breakout. After a full test of the 50 day MVA (21.15), volume jumped back above average Tuesday as CLZR came off that support. CLZR exploded out of a short 7 week base in mid-January and raced to 26.95 on that move. It has spent the past 4 weeks moving back to test that move on below average volume. Good accumulation in the prior bases set up the move, and after this test holds we anticipate it will start to move higher ahead of the split. Again, it can give us a move back up to the prior high and deliver a nice return.
Volume: 205.278K Avg Volume: 191.136K
BUY POINT: $22.65 Volume=235K Target=$26 Stop=$21.94
POSITION: UKZ EX - May $22.50c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/clzr.html
Play Date: 02/19/2004
XTO (XTO Energy--$27.83; +0.42; optionable): Oil and gas. Splits 5:4 on 3-18-04
http://biz.yahoo.com/p/x/xto.html
STATUS: 50 day MVA test. After testing the January high at 29, XTO came back to the 50 day MVA (27.17) on lower volume. Tuesday volume jumped as it moved up off the 50 day. That is what you want to see. Now we want to see above average volume as it moves through the buy point.
Volume: 991.8K Avg Volume: 1.067M
BUY POINT: $28.22 Volume=1.2M Target=$31.75 Stop=$27.48
POSITION: XTO EE - May $25c (93 delta) &/or Stock
http://www.investmenthouse.com/cs/xto.html
POST-SPLIT
Play Date: 02/10/2004
TASR (Taser--$53.53; -1.03; no options): Stun guns
http://biz.yahoo.com/p/t/tasr.html
STATUS: Test 18 day MVA. TASR jumped on the split as we anticipated, delivering a nice gain. It has held the 18 day MVA (50.29) on this test and after gapping lower Tuesday it rallied to cut much of the loss. Looking for a higher volume move from here to add some positions.
Volume: 5.233M Avg Volume: 3.55M
BUY POINT: New: $54.55 (orig. $45.88) Volume=1M Target=New: $68 (orig. $54.55) Stop=$56.75
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/tasr.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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