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Begin part 3 of 3
THE PLAYS
Good movers Thursday: AVO; FLIR; LXK; SFCC; XRAY
APPB: Finally announced the split today, a stock we had looked at earlier in the year. It peaked in April, rolled over and has been struggling over the 200 day SMA the past three weeks. It was in no position to enter so we did not pick it back up. In this market the pattern is the key. APPB might set up for a pre-split run, and of course we will keep an eye on its technical position.
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.
NEW PLAYS: This section includes plays from all sections other than pre-announcements. Those are contained in the pre-announcement section.
New Pre-Split Plays:
Play Date: 05/13/2004
ELAB (Eon Labs--$66.65; +1.52; optionable): Drugs. Splits 2:1 on 6-2-04
http://biz.yahoo.com/p/e/elab.html
STATUS: Test 50 day EMA. Finally announced the split and enjoyed a nice rally starting in late March, jumping off the 50 day EMA (now at 65.95) and running easily over 74. In the market selling it has tested the move, falling back to the 50 day EMA. It has tried to move up off that level, starting the bounce in early May but then falling again Monday back to the 50 day. It undercut that level, but then caught fire Wednesday on strong volume. It continued higher Thursday on continued above average volume. Looking for a volume move over the short term MA (10 and 18 day EMA) to enter.
Volume: 394.525K Avg Volume: 322.181K
BUY POINT: $67.12 Volume=475K Target=$73 Stop=$65.42
POSITION: ESQ GM - July $65c (61 delta)
http://www.investmenthouse.com/cs/elab.html
Downside Plays: Even with the reversal Wednesday, there are several stocks under pressure.
Play Date: 05/13/2004
DHR (Danaher--$89.97; -1.45; optionable): General building materials
http://biz.yahoo.com/p/d/dhr.html
STATUS: Put. This is a pre-split, but it and its sector are under a lot of pressure. Crashed through the 50 day EMA (92.41) 5 sessions back on rising, above average volume. It continued lower to 88 on strong trade and then started a low volume rebound to test the breakdown. Got up to the 10 day EMA (91.59) and then rolled over Thursday as volume shot back above average. Looks ready to continue the move lower. May try to hold at 88, but we anticipate it will fall on through toward the 200 day SMA (85.56) and give us a nice 50+% gain.
Volume: 1.273M Avg Volume: 834.5K
BUY POINT: $89.75 Volume=950K Target=$86.25 Stop=$91.65
POSITION: DHR RR - June $90p (-49 delta)
http://www.investmenthouse.com/cs/dhr.html
Play Date: 05/13/2004
ETN (Eaton Corp.--$57.6; +0.13; optionable): Auto parts
http://biz.yahoo.com/p/e/etn.html
STATUS: Put. ETN split in late February and has had a rocky time since. It tried to form a base, rallying back up to the high at 62 in late April. That move failed, however, and it crashed through the 50 day EMA (58.22) Monday on a big volume surge. It fought back up to the simple 50 day (57.79) Thursday but volume backed off well below average. Looking for it to roll back over and test toward the 200 day SMA (52.92) once again to give us a nice 50% gain.
Volume: 824K Avg Volume: 1.074M
BUY POINT: $57.38 Volume=1.1M Target=$54.38 Stop=$58.02
POSITION: ETN SY - Aug. $65p (-64 delta)
http://www.investmenthouse.com/cs/etn.html
New Leader Plays: May turn into a split, but a solid stock ready to move.
Play Date: 05/13/2004
WITS (Witness Systems--$13.87; +0.63; no options): Optimization software re customer data and workforce performance
http://biz.yahoo.com/p/w/wits.html
STATUS: Ascending triangle. A nice 10 week ascending triangle sporting excellent 4 to 0 accumulation and outstanding money flow. The pattern has formed making higher lows on the 50 day EMA (12.88) under a constant top at 14ish. That builds pressure from below as it weeds out the sellers. These breakouts can be explosive. Really like the pattern.
Volume: 285.999K Avg Volume: 379.227K
BUY POINT: $14.32 Volume=510K Target=$17.25 Stop=$13.48
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/wits.html
Continuing Leader Plays:
Play Date: 05/11/2004
ACLS (Axcelis Technologies--$10.92; -0.08; optionable): Chip equipment
http://biz.yahoo.com/p/a/acls.html
STATUS: Double bottom/reverse head and shoulders. The chips may have a better session Friday given the ADI results that sparked chips after hours Thursday. A good 14 week base sporting solid 4 to 2 accumulation (4 up price weeks on rising volume to 2 down price weeks on rising volume). That shows us money has been moving into the stock as it corrected, and money flow is rallying ahead of price.
Volume: 1.108M Avg Volume: 1.257M
BUY POINT: $11.82 Volume=1.9M Target=$14 Stop=$10.99
POSITION: ULS JB - Oct. $10c (75 delta) &/or Stock
http://www.investmenthouse.com/cd/acls.html
Play Date: 05/06/2004
AMI (Alaris Medical--$20.02; 0.00; no options): Medical appliances
http://biz.yahoo.com/p/a/ami.html
STATUS: Cup w/handle. A nice doji on the simple 50 day MA Thursday as volume rose back above average. This sector has been good with the move toward defensive positions. A nice, low volume pullback and now volume rising. Ready for it to follow that strong money flow higher.
Volume: 229.4K Avg Volume: 177.181K
BUY POINT: $21.42 Volume=262K Target=$25.68 Stop=$19.92
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/ami.html
Play Date: 05/10/2004
ARTI (Artisan Components--$24.19; +0.12; optionable): Semiconductors
http://biz.yahoo.com/p/a/arti.html
STATUS: Double bottom w/handle. Still working on that breakout to a new high in its 4 month cup with handle. It tried the move Tuesday, gapping higher, but it gave it back. Still looks very good with solid accumulation at 4 to 2 (4 up price weeks on rising volume to 2 down price volume weeks on rising volume). Just waiting for the volume breakout to hold.
Volume: 265.174K Avg Volume: 390.5K
BUY POINT: $25.35 Volume=592K Target=$29.15 Stop=$23.58
POSITION: UAR IE - Sept. $25c (50 delta) &/or Stock
http://www.investmenthouse.com/cs/arti.html
Play Date: 05/05/2004
IDSY (I.D. Systems--$9.79; +0.09; no options): Telecom equipment
http://biz.yahoo.com/p/i/idsy.html
STATUS: Breakout test. Big breakout to start the month and has tested back to the 18 day EMA (9.32) on continued low, below average volume. Excellent money flow still shooting higher ahead of price. Just being patient and waiting for the move through the buy point.
Volume: 52.139K Avg Volume: 85.409K
BUY POINT: $10.22 Volume=123K Target=$12.32 Stop=$9.48
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/idsy.html
Play Date: 05/12/2004
MXIM (Maxim Integrated--$48.04; -0.37; optionable): Semiconductors
http://biz.yahoo.com/p/m/mxim.html
STATUS: Double bottom w/handle. Still easing back on very low volume to form the handle to its 12 week base. Thursday it showed a nice, tight doji right over the 50 day EMA (47.80). That often signals it is ready to make the move. Again, chips were doing well after hours on the ADI earnings and guidance. Want to see that volume jump back up as it makes the move through the buy point.
Volume: 6.337M Avg Volume: 6.101M
BUY POINT: $50.12 Volume=9M Target=$55.95 Stop=$48.55
POSITION: XIQ HJ - Aug. $50c (44 delta)
http://www.investmenthouse.com/cs/mxim.html
Play Date: 05/12/2004
NXTP (Nextel Partners--$14.95; +0.37; optionable): Wireless communications
http://biz.yahoo.com/p/n/nxtp.html
STATUS: Cup w/handle. Nice price move Thursday toward the buy point but volume fell below average. That is okay but we need to see that volume jump back up on the breakout to show us that the big money is moving back in and is buying in quantity. A very nice 16 week base that looks ready for the next breakout and run. Has held up very well in the market selling.
Volume: 1.95M Avg Volume: 2.217M
BUY POINT: $15.28 Volume=3M Target=$18.12 Stop=$14.32
POSITION: KTU HC - Aug. $15c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/nxtp.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 even after the market has made a good recovery as well as the economy. The key with splits now is in the pattern; yes there is a positive move on the announcement, but stocks in this market need to have a good pattern of accumulation to really benefit from a split announcement.
APOL: Forecast 6-12-04 before the open.
BMET: Researching next date.
CHS: Forecast 5-27-04 after the close. Has not improved into a buy position.
CRL: No announcement 4-28-04. Trying to bounce off the 50 day EMA.
CWTR: Forecast 5-26-04.
DGX: Researching next date and waiting for the breakout.
ESRX: Forecast 5-26-04 with its shareholder meeting. Needs to set back up with a move back over the 50 day EMA.
FLIR: Nice volume break higher Thursday. Still researching date.
GTK: Forecast 6-18-04. Nope. Has imploded the last two sessions without giving us an entry point.
HUG: Forecast 5-25-04 after the close.
IDXX: Researching next date.
LXK: Researching the next split date. Nice move off the 50 day EMA giving us the next entry point.
MATK: Nice move Wednesday. Still researching the date.
PDCO: Mid-May, 2004.
POOL: No split announced at the shareholder meeting Thursday. Still holding up well.
QCOM: No split announcement on 5-3. Still trying to make the move to retake the 50 day.
RS: Forecast 5-19-04. Still struggling below the 50 day EMA and has not given us an entry point yet.
STJ: Dumped big Monday so we cut. Trying to move back over the 50 day EMA. Will see if it develops more.
UOPX: Forecast 6-24-04 before the open.
URBN: No announcement on 5-13-04 with earnings so looking at 6-1-04 at its shareholder meeting.
WFMI: No split announced 5-5-04 but holding up well at the 50 day EMA.
XRAY: Nice break higher on volume Thursday. Still researching the next date.
ZBRA: Looking for a new date. Finally getting some volume and breaking over 77.
ZMH: No split announced 4-26-04. Holding the 50 day EMA
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.
Continuing Pre-Announcement Plays:
Play Date: 01/24/2004
APOL (Apollo Group--$90.78; +1.18; optionable): Education and training. Forecast to announce a split 6-12-04 before the open
BACKGROUND: Last announced a 3 for 2 split on 4-5-02 at a stock price of $34.50. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/a/apol.html
STATUS: 50 day EMA test. Still holding the 50 day EMA (88.12), a point where a strong stock on a continuing run should hold. It has done so, but has been unable to make the breakaway from that level. It has done well in the selling to hold that support, not undercutting it, a sign of strength. Looking for it to clear that near resistance on strong trade to enter new positions in this leader.
Volume: 1.707M Avg Volume: 1.706M
BUY POINT: $91.72 Volume=3M Target=$105 Stop=$87.95
POSITION: OAQ HR - Aug. $90c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/apol.html
Play Date: 05/08/2004
URBN (Urban Outfitters--$46.04; +0.05; optionable): Apparel stores. Forecast to announce a split on 6-1-04 with its shareholder meeting where it is set to increase authorized shares.
BACKGROUND: Last announced a 2 for 1 split on 8-14-03 in conjunction with a board meeting. The stock price was $46.50.
http://biz.yahoo.com/p/u/urbn.html
STATUS: Pennant. Still working laterally and holding the 50 day EMA (45.95) as it does so. Volume has really started jumping the past week given the solid earnings and good sales results. Being patient and waiting for that volume to carry it in a breakaway move.
Volume: 1.189M Avg Volume: 626.59K
BUY POINT: $48.72 Volume=972K Target=$56 Stop=$45.55
POSITION: URQ IJ - Sept. $50c (52 delta) &/or Stock
http://www.investmenthouse.com/cs/urbn.html
PRE-SPLITS
Play Date: 04/29/2004
HSY (Hershey Foods--$89.10; +0.46; optionable): Chocolate, etc. Splits 2:1 on 6-16-04
http://biz.yahoo.com/p/h/hsy.html
STATUS: Breakout test. A nice surge in late April to 90. HSY started higher to start May, but the market selling pushed it back to the 18 day EMA (88.25) this month. Volume jumped Wednesday as it tested the 50 day and bounced Thursday. Looks ready to continue the breakout move.
Volume: 493.6K Avg Volume: 460.772K
BUY POINT: $89.58 Volume=708K Target=$98.75 Stop=$88.72
POSITION: HSY HR - Aug. $90c (45 delta)
http://www.investmenthouse.com/cs/hsy.html
Play Date: 05/08/2004
SSP (E.W. Scripps--$103.59; +1.09; optionable): Newspapers. Splits 2:1 on a date yet to be announced.
http://biz.yahoo.com/p/s/ssp.html
STATUS: 50 day EMA test. Volume was up again Thursday as SSP moved off the 50 day EMA (102.43), but it tapped the 18 day EMA on the high (104.12) and faded. It needs more trade to push it through that near term resistance, but the pullback to test the breakout has been orderly and on lower volume, so it looks as if it will be able to make the break higher. Solid money flow has turned up ahead of price.
Volume: 135.7K Avg Volume: 171.681K
BUY POINT: $104.78 Volume=225K Target=$112 Stop=$103.72
POSITION: SSP IA - Sept. $105c (43 delta)
http://www.investmenthouse.com/cs/ssp.html
POST-SPLIT PLAYS:
Play Date: 05/08/2004
BLUD (Immucor--$26.09; +0.89; optionable): Diagnostic substances
http://biz.yahoo.com/p/b/blud.html
STATUS: Breakout test. Solid volume and a good move Thursday as BLUD looks ready to break to a new all-time high. It closed 60 cents off of its high, but with the strong money flow and relative strength breakout, looks as if it will continue on. We are ready to jump on it early if it continues moving higher.
Volume: 522.389K Avg Volume: 289.727K
BUY POINT: New: $26.38 (orig. $25.62) Volume=500K Target=$30 Stop=$23.92
POSITION: QMQ IE - Sept. $25c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/blud.html
Play Date: 05/08/2004
GPRO (Gen Probe--$38.13; +0.12; optionable): Diagnostic equipment
http://biz.yahoo.com/p/g/gpro.html
STATUS: Cup. Shot higher Thursday to 40.10 on rising, above average volume, but gave most of the move back. It is still very solid in its 15 week cup base with money flow moving higher ahead of price. Looking for another strong volume break higher.
Volume: 944.882K Avg Volume: 593.863K
BUY POINT: New: $38.62 (orig. $38.25) Volume=900K Target=$44 Stop=$36.25
POSITION: PSU HG - Aug. $35c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/gpro.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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