|
|
us stock market, trade stock
Begin part 2 of 3
SUBSCRIBER QUESTIONS:
Q: Had a look at the FAQs but didn't see it. In order to better understand what constitutes a below/above average day, what do you consider to be average volumes for the NASDAQ and S & P500/NYSE?
A: We look at volume based on the last 50 days of trading because we have found that this provides an accurate picture of what institutions are doing with a stock. To determine this average, you can go to a site like BigCharts.com, key in to the Nasdaq chart and set it to either daily or weekly volume and then run an average. Based on the current 50 day average for volume, average daily volume for the Nasdaq is roughly 2 billion, NYSE/S&P500 is roughly 1.5 billion. For daily volumes, go to http://quote.yahoo.com/m0?u .
Above average volume is anything that's over the 50 day moving average and is generally reflective of the movement of big money (institutions) into or out of an issue or in the case of the big averages, in and out of the market. This, of course accumulation or distribution is determined by the combination of price with the volume, whether it moves up or down with the higher volume levels.
It also can show us how strong a move is on a breakout from a pattern. Usually our target for volume on breakouts from most patterns like cup with handles, ascending triangles, double bottoms, etc. is 1.5 times the average daily volume, which is heavy. When we see that coupled with a sharp rise in price out of a solid pattern that shows accumulation, the chances are that it's a breakout that is going to launch the stock into a good run. Anything less than that 1.5 times average will make us less confident of that and requires closer watching to see if volume is actually 'on track' to meet our target for a breakout. We don't always look for that level of trade; rebounds, etc. after the initial breakout can give us solid entry points on maybe just average trade as the stock has already established the institutional interest with a high volume breakout.
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 Friday: AGN; BCR; DNA; FOS; IGT; LXK; MBT; NATI; OSI; VIP; WRLS
NEW PLAYS: This section includes plays from all sections other than pre-announcements. Those are contained in the pre-announcement section.
New Pre-Splits: These are momentum plays where we look to jump on when it makes the move, grab some gain, and when it starts to falter, take the money. We often use options in order to leverage the smaller price movements we look for on these plays.
Play Date: 02/28/2004
BR (Burlington Resources--$58.54; +0.58; optionable): Oil and gas. Splits 2:1 on 6-2-04
http://biz.yahoo.com/p/b/br.html
STATUS: Test 18 day MVA (56.54). BR is moving up off the 18 day after a weeklong lateral move at that level following a bounce off the 50 day MVA. Volume has not been great, but oil stocks are showing solid gains given the ever increasing prices. Friday BR gapped lower but rallied for a positive close. Would like to see more volume on the move thorugh the buy point to give is some strength at the January high at 60.
Volume: 913.3K Avg Volume: 1.43M
BUY POINT: $58.78 Volume=1.5M Target=$62.78 Stop=$56.76
POSITION: BR EK - May $55c (84 delta)
http://www.investmenthouse.com/cs/br.html
Play Date: 02/28/2004
DCOM (Dime Community Bancshares--$31.53; +0.79; no options): Savings & loan. Splits 3;2 on 3-17-04
http://biz.yahoo.com/p/d/dcom.html
STATUS: Flat base. Friday DCOM surged off the bottom of its 12 week flat base, rallying on very strong trade. A nice consolidation that formed over the 50 day MVA (30.62), showing it has some institutional support at that key level. Money flow is rallying, and DCOM is starting to follow it. Want to see it clear the range on continued good volume to move in.
Volume: 292.805K Avg Volume: 132.219K
BUY POINT: $32.17 Volume=200K Target=$37 Stop=$30.45
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/dcom.html
Play Date: 02/28/2004
EXC (Exelon--$67.14; +0.64; optionable): Utility holding company. Splits 2:1 on 3-11-04.
http://biz.yahoo.com/p/e/exc.html
STATUS: Flat base. Volume is jumping as EXC moves to break from its 8 week lateral move over the 50 day MVA (65.55). Accumulation is excellent at 3 to 0 (3 up price weeks on rising volume to 1 down price week on rising volume). That accumulation with the base holding over the 50 day shows there is some big money support. Money flow is strong as well, and we are looking for the volume to continue and EXC to break out from this base on another good surge. That is when we move in.
Volume: 1.656M Avg Volume: 1.118M
BUY POINT: $67.38 Volume=1.2M Target=$71.38 Stop=$65.88
POSITION: EXC GM - July $65c (77 delta)
http://www.investmenthouse.com/cs/exc.html
New Post-Splits:
Play Date: 02/28/2004
COH (Coach--$39.63; +0.63; optionable): High end handbags, accessories, etc.
http://biz.yahoo.com/p/c/coh.html
STATUS: Double bottom w/handle. After an outstanding run in 2003 from 15 to 40 (split adjusted), COH needed a rest. It has worked well the past 12 weeks, forming a double bottom with handle that has held roughly at the 50 day MVA (37.26) on the lows. Last week it raised its second half 2004 earnings forecast, but could not make the breakout on that news. It held the 18 day MVA (38.43) as it tested lower, and Friday was rebounding on a sharp surge in volume that took it back to just over average. Accumulation is an outstanding 5 to 1, showing that money was moving into the stock even as it based. That helps set up the next breakout and run.
Volume: 1.856M Avg Volume: 1.87M
BUY POINT: $40.44 Volume=2.5M Target=$46.55 Stop=$38.33
POSITION: COH HH - Aug. $40c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/coh.html
Continuing Leader Plays: May or may not turn into split candidates, but good patterns ready to move.
Play Date: 02/26/2004
CLKS (Click2learn--$2.46; -0.01; no options): Business software
http://biz.yahoo.com/p/c/clks.html
STATUS: Cup w/handle. Volume remains solid as CLKS presses right at the breakout point from its 16 week pattern that formed over the 50 day MVA (2.23). Accumulation in the base is excellent at 6 to 1, another indication of strong support. Money flow is surging higher as it masses for the breakout after drying up at the bottom of the pattern. That is what you want to see in this type of pattern. Want to see the strong volume continue as it moves out of the pattern and through the buy point.
Volume: 461.045K Avg Volume: 220.217K
BUY POINT: $2.54 Volume=301K Target=$3.18 Stop=$2.36
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/clks.html
Play Date: 02/14/2004
PRFT (Perficient--$4.29; +0.50; no options): Business software
http://biz.yahoo.com/p/p/prft.html
STATUS: Cup w/handle. Surging Friday on strong volume, PRFT is moving for the breakout from its 18 week base. It held the 50 day MVA (3.43) at the base of the handle, using that as a springboard for the breakout. Solid accumulation and surging money flow. Relative strength is ready for the breakout as well, an indication of a solid base for a stock that is outperforming the rest of the market. Just looking for a continuation of strong trade as it makes the move through the buy point.
Volume: 311.198K Avg Volume: 165.4K
BUY POINT: $4.38 Volume=229K Target=$5.48 Stop=$4.07
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/prft.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: Researching next date.
CHS: Forecast 3-3-04 after the close.
DNA: Forecast in 4-16-04 with shareholder meeting.
ELAB: Researching next date.
IDXX: Forecast 4-19-04.
IRM: Forecast 2-26-04. No split but great earnings and still moving higher.
LM: Researching next possible date.
LOW: Forecast in the May shareholder meeting.
LXK: Researching next date.
MBG: Forecast 3-4-04 before the open.
MBT: Researching date.
MIK: Forecast 3-3-04.
NMGA: Forecast 3-3-04 after the close.
OSI: Forecast 4-15-04.
SHFL: Forecast 2-26-04 with earnings. No split but still surging.
SONC: Forecast 3-15-04.
STJ: Forecast 4-12-04 in conjunction with earnings.
TOL: No split with earnings so looking to 3-2-04 with a board meeting. Still surging on the earnings.
UOPX: Forecast 3-24-03 with earnings.
VAR: Two Fridays back 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:
Play Date: 02/28/2004
BMET (Biomet--$38.98; -0.22; optionable): Medical appliances. Forecast to announce a split on 3-17-04 in conjunction with earnings.
BACKGROUND: Last announced a 3 for 2 split on 7-9-01 in conjunction with earnings. The stock price was $43. The annual shareholder meeting was on 9-27-03 at which time no additional shares were authorized. The company has sufficient shares for a 3 for 2 split.
http://biz.yahoo.com/p/b/bmet.html
STATUS: 50 day MVA test. BMET broke out of a 2 year flat base in September 2003 and rallied to 41 at the February high. It has edged back toward the 50 day MVA (38.17) on lower, below average volume, a typical support point to test a strong breakout and run. Friday BMET tapped toward the 50 day on the low and then rebounded on stronger, almost average trade to cuts its losses to 22 cents. That stronger volume bounce off the 50 day shows buyers ready to jump on the stock at that level. That is a very good sign for the stock to continue the breakout run. Strong money flow is helping lead the way higher. Looking for a strong break through the buy point on above average volume.
Volume: 1.566M Avg Volume: 1.634M
BUY POINT: $40.22 Volume=2M Target=$47 Stop=$38.88
POSITION: BIQ GH - July $40c (42 delta) &/or Stock
http://www.investmenthouse.com/cs/bmet.html
Play Date: 02/28/2004
CAKE (Cheesecake Factory--$47.23; +1.04; optionable): Restaurants. Forecast to announce a split on 4-19-04 in conjunction with earnings. The company has not confirmed the date at this time, but based upon our research this is the date for the release.
BACKGROUND: Last announced a 3 for 2 split on 5-24-01 in conjunction with its annual shareholder meeting. The stock price was $34.50. The annual shareholder meeting was on 5-13-03 at which time no additional shares were authorized. The company has sufficient shares for 3 for 2 split.
http://biz.yahoo.com/p/c/cake.html
STATUS: Breakout. Thursday and Friday CAKE surged out of an 11 week flat trading range from 41 to 45. Accumulation was a solid 4 to 2 as the base skipped along the 50 day MVA (43.75) as it formed. Both of those are signs of institutional support for the stock. Money flow is strong and the stock is showing good action on the breakout. We will look at picking up positions from the Friday close if it continues on some good trade, but we will also save some money for a test of 46 to hold and provide another entry point. Very solid action from a market leader.
Volume: 642.901K Avg Volume: 454.833K
BUY POINT: $47.48 Volume=650K Target=$56 Stop=$45.44
POSITION: CFQ GI - July $45c (69 delta) &/or Stock
http://www.investmenthouse.com/cs/cake.html
Continuing Pre-Announcement Plays:
Play Date: 01/13/2004
AGN (Allergan--$87.54; +1.3; 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. Making the move we are looking for a strong, above average volume move off of the 18 day MVA (86). Money flow is breaking higher ahead of the stock. A good buy on a further move from here on continued above average volume.
Volume: 1.212M Avg Volume: 865.691K
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: 12/30/2003
LXK (Lexmark Intl.--$82.29; +1.11; optionable): Printers. Forecast to announce a split In mid-April in conjunction with a board meeting or on 4-25-04 in conjunction with earnings. The company has not confirmed the board meeting date, but based upon our research this is the day for the meeting.
BACKGROUND: Last announce a 2 for 1 split on 4-29-99 at a stock price of $110.The annual shareholder meeting was on 4-30-03 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/l/lxk.html
STATUS: 50 day MVA test. LXK is using the NASDAQ consolidation to come back and fully test the late January breakout and hold the 50 day MVA (80.68) as well. Friday volume was back up near average as LXK jumped off the 50 day. It rallied to the 18 day MVA (82.50), but could not hold the move over that near term resistance. A good start, and a volume increase off of the 50 day is a good sign that investors are moving back into this strong, market leader stock. Looking for a strong move over the near resistance to open positions.
Volume: 957.5K Avg Volume: 887.545K
BUY POINT: $83.12 Volume=2M Target=$94 Stop=$80.55
POSITION: LXK DP - Apr. $80c (42 delta) &/or Stock
http://www.investmenthouse.com/cs/lxk.html
Play Date: 02/21/2004
MIK (Michaels--$48.04; +0.19; 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. Friday MIK was trying to make the breakout move, but volume again plagued the upside and the move failed by the close. Still a very solid 15 week base with solid 4 to 2 accumulation. Just need to see some volume on the move.
Volume: 260.2K Avg Volume: 577.65K
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--$83.74; +1.03; 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. The lateral move over the 18 day MVA (82.34) continues, but Friday VAR perked up showing a decent gain on rising though still below average volume. Money flow continues to move up ahead of the stock, and we are ready for VAR to follow it, but want to see an above average volume day when it does for us to take new positions.
Volume: 424.6K Avg Volume: 531.698K
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
PRE-SPLITS
Play Date: 02/24/2004
ATVI (Activision--$21.01; +0.12; optionable): Multimedia Graphics software. Splits 3:2 on 3-26-04
http://biz.yahoo.com/p/a/atvi.html
STATUS: Testing the breakout. Holding over the 10 day MVA (20.63) but unable to break 21. Volume is edging higher, trying to build some pressure to push ATVI over that near resistance. ATVI broke from a 7 week flat base 3 weeks back on a nice volume surge. Relative strength broke out on the move, a sign of the stock is out performing the rest of the market. Money flow remains strong, and we are looking for ATVI to make an above average volume break over 21.
Volume: 1.661M Avg Volume: 2.032M
BUY POINT: New: $21.06 (orig. $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: 02/17/2004
BRL (Barr Labs--$77.41; -0.29; optionable): Generic drugs. Splits 3:2 on 3-16.
http://biz.yahoo.com/p/b/brl.html
STATUS: Double bottom w/handle. Gapped over the buy point Friday (78.59 on the high) but then gave the move back as no volume came in to hold it up. It is back at the 18 day MVA (77.48), and we are looking for that level to hold and let it set up for the next try back up. Still in the handle of its 12 week base, just waiting for the volume to kick in for the break higher that we can buy into.
Volume: 366.1K Avg Volume: 745.75K
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: 02/26/2004
POG (Patina Oil & Gas--$51.06; +0.81; optionable): Oil and gas. Splits 2:1 on 3-4-04.
http://biz.yahoo.com/p/p/pog.html
STATUS: Reverse head and shoulders. Volume was a bit lower Friday but was still above average as POG rallied. It was a wild session, however, reaching down to the 50 day MVA before rebounding. That kept us from moving in, but on a continuing move from here we will start some positions. Volume has surged on this breakout move, and now we want to see it make the breakaway surge. Nice 8 week base sporting 3 to 2 accumulation. Money flow is surging with the volume.
Volume: 425.9K Avg Volume: 329.559K
BUY POINT: New: $51.22 (orig. $50.58) Volume=458K Target=$55.88 Stop=$48.38
POSITION: POG FJ - June $50c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/pog.html
Play Date: 02/24/2004
VAPH (Vaso Activ Pharma--$27.29; +0.01; no options): Splits 3:1 on 3-8-04. Drugs
http://biz.yahoo.com/p/v/vaph.html
STATUS: Test breakout. VAPH is working laterally on lower and lower volume, holding over the 10 day MVA (24.76) as it does. The range is narrowing and volume is falling as it holds onto its gains. It may take another session or two to complete the lateral move. Then we look for a higher volume move through the buy point to take new positions.
Volume: 412.966K Avg Volume: 275K
BUY POINT: $29.02 Volume=850K Target=$35 Stop=$26.99
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/vaph.html
POST-SPLIT
Play Date: 02/10/2004
TASR (Taser--$54.45; +0.85; no options): Stun guns
http://biz.yahoo.com/p/t/tasr.html
STATUS: Test 18 day MVA. Volume has backed off well below average as TASR continues its lateral move over the 10 day MVA (53.66) in a very narrow, tight range. An excellent test of the move. Still looks as if it is crouching for the next move higher.
Volume: 2.426M Avg Volume: 1.691M
BUY POINT: New: $54.88 (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
Play Date: 01/24/2004
TSCO (Tractor Supply--$42.82; +0.17; optionable): Farm and ranch depot.
http://biz.yahoo.com/p/t/tsco.html
STATUS: Reverse head and shoulders. This is the type of base that launched TSCO higher out of the 2003 consolidation; we saw this pattern forming in this leading stock, and it was an indication to us (along with other factors in the market such as solid price/volume action) that the consolidation was a good one for stocks in general. Perhaps TSCO is setting up to lead the market again with this 21 week base that has formed mostly over the 50 day MVA (41.49), a sign of institutional support. Accumulation is decent at 3 to 1; given the length of the base we would prefer to see more up weeks on rising volume. There is enough to generate the breakout; just need to see high volume on the move through the buy point.
Volume: 175.14K Avg Volume: 448.991K
BUY POINT: $44.55 Volume=719K Target=$55 Stop=$42.05
POSITION: QTF GI - July $45c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/tsco.html
End part 2 of 3
|
us stock market
trade stock
|
