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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 Thursday: SYMC; AZO; HUM
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: 03/11/2004
ARO (Aeropostale--$33.30; +0.20; optionable): Apparel stores. Splits 3:2 on 4-27-04
http://biz.yahoo.com/p/a/aro.html
STATUS: Test 50 day MVA. Gapped down to the 50 day MVA (32.27) but rallied back for a modest gain on below average volume. After the close it announced its split and some solid earnings and was trading over 34. The move down to the 50 day MVA in the recent selling comes at the end of an 18 week cup base sporting excellent 7 to 2 accumulation (7 up price weeks on rising volume to 2 down price weeks on rising volume). This shows money moving into the stock as it took a breather, setting up a good breakout. Looking for a gap higher to test 34 and then start back up. That is when we will move in.
Volume: 628.9K Avg Volume: 659.363K
BUY POINT: $34.22 Volume=989K Target=$38.22 Stop=$33.21
POSITION: ARO GG - July $35c (44 delta) &/or Stock
http://www.investmenthouse.com/cs/aro.html
Play Date: 03/11/2004
HOV (Hovnanian Enterprises--$87.56; +0.56; optionable): Residential construction. Splits 3:2 on a date yet to be announced.
http://biz.yahoo.com/p/h/hov.html
STATUS: Cup w/handle. Forming a nice handle to a 14 week base showing positive 3 to 2 accumulation. The pullback in the handle, a low volume lateral and slightly lower move near the former high, is holding over the 10 day MVA (85.88), a logical support point. Volume has dropped below average on this move, and we are looking for a move up through the buy point on much stronger trade.
Volume: 737.3K Avg Volume: 918.09K
BUY POINT: $88.75 Volume=1.4M Target=$99 Stop=$85.22
POSITION: HOV ER - May $90c (45 delta)
http://www.investmenthouse.com/cs/hov.html
Play Date: 03/11/2004
XTO (XTO Energy--$30.80; -0.41; optionable): Independent oil and gas. Splits 5:4 on 3-18-04
http://biz.yahoo.com/p/x/xto.html
STATUS: Breakout test. XTO has already made us some good money on this pre-split run, and it has now come back to test the 10 day MVA (30.76). Money flow remains strong as it makes this modest pullback. Relative strength is holding very high as XTO is very resilient in a selling market.
Volume: 993.5K Avg Volume: 1.089M
BUY POINT: $31.25 Volume=1.2M Target=$33.28 Stop=$30.65
POSITION: XTO EF - May $30c (65 delta) &/or Stock
http://www.investmenthouse.com/cs/xto.html
New Leader Plays: May or may not turn into split candidates, but good patterns ready to move.
Play Date: 03/11/2004
PD (Phelps Dodge--$78.80; +0.02; optionable): Copper mining
http://biz.yahoo.com/p/p/pd.html
STATUS: 50 day MVA test. Strong run since the May breakout and may be getting weary in need of more rest. It has, however, come back to the 50 day MVA (78.69), showing a nice, tight doji at that level as volume surged Thursday. We are looking for a bounce to take it up toward the recent high at 90. It can run in a hurry when the momentum strikes. Will want to see continued solid trade as it starts the move back up.
Volume: 4.212M Avg Volume: 2.078M
BUY POINT: $80.22 Volume=3M Target=$90 Stop=$78.55
POSITION: PD GP - July $80c (49 delta) &/or Stock
http://www.investmenthouse.com/cs/pd.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.
BCR: Researching next date.
BMET: 3-17-04
CAKE: 4-19-04
CDWC: Researching the next date.
CHS: Forecast 3-3-04 after the close. No split announced. Nice pullback after the break higher.
ELAB: Researching next date.
HUG: Forecast 3-9-04. No announcement after hours with earnings but solid trade and a dividend jump.
IDXX: Forecast 4-19-04.
LM: Researching next possible date.
LOW: Forecast in the May shareholder meeting.
LXK: Researching next date.
MBG: No split on 3-4-04. Has come back to fully test the break higher.
MBT: Researching date.
NCEN: Working on the exact date.
NMGA: No 3-3-04 split announcement. 50 day MVA test.
OSI: Forecast 4-15-04.
SHFL: Researching next date.
SONC: Forecast 3-15-04.
STJ: Forecast 4-12-04 in conjunction with earnings.
TOL: No split with the board meeting on 3-2 but no complaints. Still testing the breakout.
UOPX: Forecast 3-24-03 with earnings.
VAR: 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.
VIP: Forecast 3-26-04.
WFMI: Researching next date.
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: 03/11/2004
STN (Station Casinos--$39.30; -0.18; optionable): Resorts and casinos. Forecast to announce a split on 4-20-04 before the market opens on in conjunction with earnings.
BACKGROUND: Last announced a 3 for 2 split in June 2000 at a stock price of approximately around $15. The annual shareholder meeting was on 5-21-03 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/s/stn.html
STATUS: Test breakout. STN broke out from a 14 week base in early February, made a quick test of the 50 day MVA (35.61) and then started the current nice run up to 41.55. During the market selling this market leader has eased back to the 10 day MVA (39.03) on mostly lower volume. Thursday that volume jumped as STN showed a tight doji right on top of that support level. A very orderly test in a market that is selling hard. Looking for it to bounce from here and continue the breakout on strong trade as the opportunity to move in.
Volume: 655.7K Avg Volume: 353.863K
BUY POINT: $39.66 Volume=550K Target=$45.75 Stop=$38.08
POSITION: STN GH - July $40c (47 delta) &/or Stock
http://www.investmenthouse.com/cs/stn.html
Continuing Pre-Announcement Plays:
Play Date: 02/24/2004
CHS (Chicos Fas--$45.23; -0.27; optionable): Apparel stores. No announcement on 3-3-04 after the market closes in conjunction with earnings, but looks solid and researching next date.
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: Breakout test. Great earnings and it surged higher on strong trade. Now that the market has pulled back, CHS is easing back as well, holding over the 18 day MVA (43.96) as it does. Thursday volume jumped as CHS tried to rally off the gap low. This market selling is giving us another chance on the stock.
Volume: 1.619M Avg Volume: 1.048M
BUY POINT: New: $46.12 (orig. $42.68) Volume=1.1M Target=$49 Stop=$45.94
POSITION: CHS EH - May $40c (64 delta) &/or Stock
http://www.investmenthouse.com/cs/chs.html
Play Date: 03/09/2004
EAT (Brinker Intl.--$37.91; -0.35; optionable): Restaurants. Forecast to announce a split on 4-20-04 before the market opens in conjunction with earnings. Next shareholder meeting is scheduled for 11-4-2004. Last shareholder meeting was on 11-13.03 at which time no additional shares were authorized.
BACGROUND: Last announced a 3:2 split in late 2000 at a price of $38.
http://biz.yahoo.com/p/e/eat.html
STATUS: Test 10 day MVA. Still testing the breakout from its 7.5 month base, slipping lower to the 18 day MVA (37.75) on very low, below average volume. Very nice action in a market selling on stronger trade. Again, stocks tend to make 4 to 5 bounces up off the 10 day after a breakout as part of the breakout run. Thus there is still plenty of upside on this breakout move. Nice doji at the 18 day, and looking for volume to jump as it makes the move back up.
Volume: 489.7K Avg Volume: 771.954K
BUY POINT: $39.06 Volume=950K Target=$46.88 Stop=$37.88
POSITION: EAT GG - July $35c (81 delta) &/or Stock
http://www.investmenthouse.com/cs/eat.html
Play Date: 03/06/2004
NCEN (New Century Financial--$49.43; +0.13; optionable): Mortgage investment. Pinpointing an announcement date.
BACKGROUND: Last announced a 3:2 split in May 2003 at a price of $42.
http://biz.yahoo.com/p/n/ncen.html
STATUS: Ascending triangle. Nice pullback in progress, holding over the 18 day MVA (48.87) and showing a very nice doji on slightly rising volume. Excellent relative strength as NCEN bides its time during the market selling, looking for a breakout. Nice 7 week triangle showing solid 3 to 1 accumulation in the base. Waiting for the strong volume break higher.
Volume: 1.108M Avg Volume: 893.318K
BUY POINT: $51.52 Volume=1.2M Target=$61 Stop=$48.24
POSITION: URE HJ - Aug. $50c (60 delta) &/or Stock
http://www.investmenthouse.com/cs/ncen.html
Play Date: 01/10/2004
SONC (Sonic Corp.--$35.01; -0.03; optionable): Burgers. Forecast to announce a split 3-15-04.
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: Breakout test. Another leader holding up well as the market sells. A nice breakout in early January, and then a 7 week lateral base that broke out in early March. Volume was very tame on that move, however, not the strong surge that tends to show big money piling in. It has made a nice, lower volume test to the 18 day MVA (34.98), holding that level on below average volume and showing a nice tight doji. That often indicates a pullback is over, particularly when it occurs over a support level. Nice money flow and relative strength moving up as the stock eases back; very bullish.
Volume: 148.892K Avg Volume: 250.363K
BUY POINT: New: $36.15 (orig. $33.68) Volume=562K Target=$41 Stop=$35.12
POSITION: ZSQ FF - June $30c (80 delta) &/or Stock
http://www.investmenthouse.com/cs/sonc.html
PRE-SPLITS
Play Date: 01/03/2004
DNA (Genentech--$106.03; -1.47; optionable): Biotechnology. Splits 2:1 on a date to be announced.
http://biz.yahoo.com/p/d/dna.html
STATUS: Breakout test. Another strong stock making a declining volume test of its surge higher. DNA continues to get good news and that shot it higher early in the month. It has come back to test that move, holding over support at 105. Excellent money flow and solid relative strength; a leader taking a breather as the market sells. Looking for a rebound on strong trade to move into new positions.
Volume: 3.321M Avg Volume: 2.483M
BUY POINT: New: $107.42 (orig. $95.44) Volume=3M Target=$102 Stop=$109.94
POSITION: DNA FD - June $110c (48 delta)
http://www.investmenthouse.com/cs/dna.html
Play Date: 02/28/2004
DCOM (Dime Community Bancshares--$31.17; +0.34; no options): Savings and loan. Splits 3:2 on 3-17-04
http://biz.yahoo.com/p/d/dcom.html
STATUS: Flat base. Still working through its 14 week flat base sporting solid accumulation and strong money flow. Holding over the 50 day MVA (30.78) in the base, a good indication of support. Volume shot higher Thursday as DCOM held the 50 day MVA and started higher. Looking for that volume to continue and DCOM to give us the breakout move.
Volume: 215.229K Avg Volume: 133.454K
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: 03/09/2004
IDSA (Industrial Services of America--$30.6; -1.6; no options): Waste management. Splits 2:1 on 3/31/04.
http://biz.yahoo.com/p/i/idsa.html
STATUS: Testing the breakout. Still holding at the 10 day MVA (31.10) on very low, below average volume after that massive breakout in early February. Money flow remained very strong and showing a doji Thursday. Looking for volume to surge on the next bounce.
Volume: 710.111K Avg Volume: 749.636K
BUY POINT: $34.48 Volume=2M Target=$44.55 Stop=$31.94
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/idsa.html
POST-SPLIT
Play Date: 02/28/2004
COH (Coach--$40.48; -0.56; optionable): Handbags, etc.
http://biz.yahoo.com/p/c/coh.html
STATUS: Breakout test. Another market leader testing the breakout, holding near the 18 day MVA (40.75) on below average volume. Money flow remains very strong and relative strength is ready for a breakout. Nice test of the 12 week double bottom with handle base, holding over the breakout point and showing a doji Thursday. Looks ready to resume the move and providing a good entry.
Volume: 1.593M Avg Volume: 1.679M
BUY POINT: $41.66 Volume=2.5M Target=$47.88 Stop=$40.96
POSITION: COH HH - Aug. $40c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/coh.html
Play Date: 09/16/2003
IGT (International Game Technology--$39.97; -0.58; optionable): Video poker
http://biz.yahoo.com/p/i/igt.html
STATUS: Breakout test. Another market leader making a test of the strong break higher. IGT blasted out of a flat base in late February, rallying to 43 on that move. It has come back to test the 18 day MVA (40.02), holding there on above average volume. Looks as if it is ready to resume the move higher and follow the money flow. Strong relative strength as the stock has held up well in the selling.
Volume: 2.437M Avg Volume: 1.982M
BUY POINT: New: $40.88 (orig. $29.05) Volume=4.7M Target=$47 (orig. $34.55) Stop=$40.38
POSITION: IGX GH - July $40c (64 delta) &/or Stock
http://www.investmenthouse.com/cs/igt.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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