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1) MARKET SUMMARY
Uninspired but doing what it should until a late, pre-weekend sell off.
- A modest continuation rally collapses late.
- Jobs report is the focus in a big week for data even as reports improve after a breather.
- Continuation rally falters at an important point, needs to continue bounce next week.
- Pessimism showing a nice rise.
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2) Stock Splits Playing stock splits can be very profitable, but it takes know-how. Our stock split service focuses on three main types of plays: 1) pre-announcement (where we forecast an upcoming split prior to the company making the announcement); 2) pre-split (these plays are made in the days leading up to the actual split day); and 3) post-split plays (plays made after the actual stock split where the stock is showing continued or renewed strength). We play pre-split plays as short-term plays. We get in when the technical indicators show us things look right, grab as much as we can, and get out, always being conscious of resistance and support. These stocks are highly volatile at this time, and can turn on you quickly. Don't let good profits disappear. Watch for turns, especially when a stock trades in a wide range and finishes off its high. That is a sign these stocks often give you that they are running out of steam. We usually get out and ask questions later. We can always get back in. We like to play in the money calls, preferably two strike prices in the money as this usually gives us a greater delta (the percent an option will mover versus the stock's movement). We prefer deltas of 75 or better. This means if the stock moves 1 point, the option should move three-fourths of that point. That means up or down. Remember, wait to see the stock start to move up. Don't just blindly make a play and don't try to guess tops and bottoms. We can look at indicators to give us a clue as to what will happen, but we need the stock to confirm it for us. Here's a pre-split play to watch and our current analysis.
UNFI (United Natural Foods--$47.63; -0.22; no options): Wholesale natural foods. Splits 2:1 on 4-20-04.
Company Profile
STATUS: Flying plateau. UNFI broke out from a 13 week cup with handle base in early February and then rallied up the short term MVA (10 and 18 day MVA) to early March, hitting 50 on the high. In the market selling it has come back to test the move; indeed, it needed a rest after a nice breakout and run. As the market sold it came back to the 18 day MVA (46.90) and then bounced on good volume and now moving laterally over the 10 day MVA (47.40) on lower trade. It is taking a breather and setting up the next run. It may take several more sessions to completely set up, but with money flow surging ahead of price we want to be ready to move in when it makes its breakout move.
Volume: 116.869K Avg Volume: 173.59K
BUY POINT: $48.88 Volume=260K Target=$56.22 Stop=$46.78
POSITION: - Stock (no option chain).
Learn more about our Stock Split Report - Issued 5 Times Per Week | 
