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Begin part 3 of 3
THE PLAYS
Good movers Tuesday: AMT; AVP; BR; BRCM; DGX; EBAY; ELAB; ERES; ESRX; GPRO; LXK; MOGN; NXTP; QCOM; RNT; UOPX; URBN; WFMI
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: 05/25/2004
SSP (E.W. Scripps--$103.29; +2.12; optionable): Newspapers. Splits 2:1 on a date to be announced.
http://biz.yahoo.com/p/s/ssp.html
STATUS: 50 day EMA test. Nice breakout in early April and a run up to 109. It has made an orderly pullback in the selling, undercutting the 50 day EMA (102.05) last week, but held support at 100 and jumped off that level Monday on strong trade. Looking to jump on and ride it back up to the prior high. Using options to leverage our gain.
Volume: 215.3K Avg Volume: 177.318K
BUY POINT: $103.72 Volume=245K Target=$109.45 Stop=$101.95
POSITION: SSP IT - Sept. $100c (71 delta) or SSP IA - Sept. $105c (43 delta)
http://www.investmenthouse.com/cs/ssp.html
Play Date: 05/25/2004
ANN (Ann Taylor--$42.4; +1.36; optionable): Apparel stores. Splits 3:2 on 5-27-04
http://biz.yahoo.com/p/a/ann.html
STATUS: 200 day SMA rebound. ANN broke down in early May, falling to the 200 day SMA (38.66). It found support, however, as the institutions supported it. Volume started jumping, running higher on rising days, a sign of accumulation. Tuesday it broke over the 50 day EMA (41.25) on rising though below average volume. It may come back to test this move before continuing, but there is still upside momentum on this break higher after a lateral move the past 4 days. Looking to move in on another above average volume upside session.
Volume: 796.6K Avg Volume: 943.727K
BUY POINT: $43.05 Volume=1M Target=$47 Stop=$40.68
POSITION: ANN IH - Sept. $40c (76 delta)
http://www.investmenthouse.com/cs/ann.html
New Leader Plays: May turn into a split, but a solid stock ready to move.
Play Date: 05/25/2004
MODI (Modine Mftrng.--$29.76; +0.9; no options): Auto parts
http://biz.yahoo.com/p/m/modi.html
STATUS: Reverse Head and shoulders breakout. MODI exploded out of a 17 week base that formed mostly over the 50 day EMA (27.80). That is a sign of very good bug money support. Excellent 7 to 2 accumulation in the base, setting the foundation and another sign of strong big money support. Looking to move in on a further volume break higher.
Volume: 245.224K Avg Volume: 100.59K
BUY POINT: $29.97 Volume=170K Target=$34.65 Stop=$28.12
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/modi.html
Play Date: 05/25/2004
MXIM (Maxim Integrated--$50.04; +2.55; optionable): Semiconductors
http://biz.yahoo.com/p/m/mxim.html
STATUS: Double bottom w/handle. Volume surged as MXIM moved toward the breakout from its 18 week base that made the left leg in March and the right in early May. It formed the handle the past two weeks, holding over the 200 day SMA as it did (47.77). Making the break over the April high, the 'hump' in the double bottom (50.01). Looking for a run up to the prior high for a nice gain; if it goes further we will let it.
Volume: 8.488M Avg Volume: 6.268M
BUY POINT: $50.25 Volume=7M Target=$56 Stop=$47.12
POSITION: XIQ HJ - Aug. $50c (53 delta) or XIQ KJ - Nov. $50c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/mxim.html
Continuing Leader Plays:
Play Date: 05/04/2004
OCLR (Ocular Sciences--$34; +0.11; optionable): Medical instruments
http://biz.yahoo.com/p/o/oclr.html
STATUS: Breakout test. Moving laterally in a very tight range the past week, banging its head at 34, making higher and higher intraday lows. This follows a big break from a 15 week cup base. Great consolidation with money flow moving higher ahead of price as it moves laterally. Volume has jumped the past two sessions and we are looking for OCLR to continue the move and follow that money flow.
Volume: 326.95K Avg Volume: 139.454K
BUY POINT: New: $34.42 (orig. $30.22) Volume=160K Target=New positions: $40 (orig. positions $34.65) Stop=$32.32
POSITION: QLO JG - Oct. $35c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/oclr.html
Play Date: 05/20/2004
PLT (Plantronics--$39.55; +1.05; optionable): Telecom products (headsets)
http://biz.yahoo.com/p/p/plt.html
STATUS: Double bottom w/handle. Nice price move Tuesday, but volume, though higher, was still below average. Everything looks solid, just want to see more explosive trade. Very nice 17 week base that is consolidating the strong 2003 run. Excellent 5 to 2 accumulation (5 up price weeks on rising volume to 2 down price weeks on rising volume) as money continues to move into the stock even as it consolidates. Solid 3 week handle forming over the 50 day EMA (37.20). Huge money flow.
Volume: 383.9K Avg Volume: 437.136K
BUY POINT: New: $39.88 (orig. $39.05) Volume=694K Target=$45 Stop=$36.88
POSITION: PLT HH - Aug. $40c (38 delta) or PLT HG - Aug. $35c (79 delta) &/or Stock
http://www.investmenthouse.com/cs/plt.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.
CHS: Forecast 5-27-04 after the close. Has held the 200 day SMA, now we see if it can continue the move.
CRL: No announcement 4-28-04. Still trying to hold the 50 day EMA.
CWTR: Forecast 5-26-04 or on 6-12-04 with its shareholder meeting. Surging higher.
DGX: Forecast 7-22-04 before the open.
ESRX: Forecast 5-26-04 with its shareholder meeting.
FLIR: Forecast 7-21-04
GD: Forecast 6-3-04
HUG: Forecast 5-25-04 after the close. No split announced after hours.
IDXX: Forecast 7-22-04.
ITW: Forecast 7-20-04
LXK: Forecast 7-22-04.
POOL: Forecast 7-22-04
QCOM: Forecast 7-22-04
RNT: Forecast 7-28-04.
RS: Forecast 5-19-04. No split announcement but good volume move back over the 50 day EMA.
UOPX: Forecast 6-24-04 before the open.
URBN: Forecast 6-1-04 at its shareholder meeting.
WFMI: Forecast 7-28-94.
XRAY: Researching the next date. Nice recovery over the 18 day EMA.
ZBRA: Forecast 6-3-04 at annual shareholder meeting.
ZMH: Forecast 7-21-04.
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: 05/25/2004
TRBS (Texas Regional Bancshares--$43.06; +0.56; no options): Regional bank. Forecast to announce a split 7-15-04.
BACKGROUND: Last announces a 3:2 split on 6-11-02.
http://biz.yahoo.com/p/t/trbs.html
STATUS: Ascending triangle. Working through a nice 8 week triangle that is using the 50 day EMA (41.70) as it makes higher and higher lows below a constant top at 43.50. These patterns build up pressure from below, and the breakouts can be explosive. This base follows a breakout in November and subsequent run up the 50 day. Volume surged Tuesday as it moved toward the top of the pattern. Looking for more volume as it makes the breakout move.
Volume: 194.953K Avg Volume: 101.636K
BUY POINT: $43.82 Volume=175K Target=$50.45 Stop=$47.55
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/trbs.html
Continuing Pre-Announcement Plays:
Play Date: 03/20/2004
DGX (Quest Diagnostics--$84.98; +1.85; optionable): Medical Laboratories. Forecast 7-22-04 before the market opens in conjunction with earnings.
BACKGROUND. Announced a 2:1 split on 2-22-01 at a price of $101.
http://biz.yahoo.com/p/d/dgx.html
STATUS: Cup w/handle. DGX continues to work on the 4 month handle to its 23 month base. The handle has formed over the 50 day EMA (82.90) on mostly below average volume. Volume has improved over the past 6 weeks, and Tuesday it jumped higher as DGX surged off the 50 day. Just looking for continued strong volume on a move through the buy point.
Volume: 939.4K Avg Volume: 578.818K
BUY POINT: $86.32 Volume=973K Target=$100 Stop=$81.92
POSITION: DGX HQ - Aug. $85c (42 delta) &/or Stock
http://www.investmenthouse.com/cs/dgx.html
Play Date: 05/17/2004
GD (General Dynamics--$94.80; +1.14; optionable): Aerospace/defense. Forecast to announce a split on 6-3-04 in conjunction with a board meeting or on 7-21-04 in conjunction with earnings.
BACKGROUND: Last announced a 2 for 1 split on 3-4-98 in conjunction with a board meeting at a stock price of $85. The annual shareholder meeting was on 5-5-04 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/g/gd.html
STATUS: Cup w/handle. After a lower dip to the simple 50 day MA (91.77) two weeks back, GD made a higher low over the 50 day EMA (92.59) the past week and is now moving higher. Often these higher lows at what looks to be the tail end of a pattern signal a breakout move to come. Excellent money flow continues to lead higher as it bangs its head against resistance at 95. Looking for volume to jump as it makes the move through that level.
Volume: 562.5K Avg Volume: 822.818K
BUY POINT: $95.74 Volume=1.2M Target=$108 Stop=$91.95
POSITION: GD KS - Nov. $95c (53 delta)
http://www.investmenthouse.com/cs/gd.html
Play Date: 02/02/2004
IDXX (Idexx Labs--$62.17; +2.55; optionable): Diagnostic substances. Forecast to announce a split 7-22-04 in conjunction with earnings.
BACKGROUND: Last split 2:1 back in 1995 at $45.
http://biz.yahoo.com/p/i/idxx.html
STATUS: Flat base. After an excellent surge up the short term MA (10 and 18 day EMA) following the mid-March breakout, IDXX has taken a much needed breather the past 5 weeks, moving down to test the 50 day EMA (59.12). Stocks often run up the 10 and 18 day EMA after making the breakout move (4 to 5 bounces), and then come back to test the 50 day EMA. If they are ready to continue, they bounce off that level on strong trade. Tuesday IDXX jumped off the 50 day EMA test on strong trade, indicating it is ready to make the move again. Looking to pick up more positions on a move out of the current base.
Volume: 387.446K Avg Volume: 270.636K
BUY POINT: New: $63.15 (orig. $50.22) Volume=500K Target=New positions: $74 (orig. $58) Stop=$60.38
POSITION: UID JL - Oct. $60c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/idxx.html
Play Date: 04/17/2004
QCOM (Qualcom--$66.9; +1.35; optionable): Telecom equipment. Forecast to announce a split July 22 in conjunction with earnings. Earnings date has not been confirmed by the company.
BACKGROUND: Last announced a 4 for 1 split on 11-22-99 at a stock price of $224.
Also announced a 2 for1 split on 4-14-99 at a stock price of $150. Prior to that announced a 2 for 1 split on 2-10-94 at a stock price of $47. The annual shareholder meeting was on 3-2-04 at which time no additional shares were authorized, but company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/q/qcom.html
STATUS: 50 day EMA test. Still a buy as it breaks higher off the 50 day EMA (64.16) on rising, above average volume. Nice rest after its good run to early April, and now it looks ready to continue the move.
Volume: 11.668M Avg Volume: 9.043M
BUY POINT: New: $67.22 (orig. $66.35) Volume=14M Target=$79 Stop=$64.05
POSITION: AAO GM - July $65c (52 delta) &/or Stock
http://www.investmenthouse.com/cs/qcom.html
Play Date: 05/08/2004
URBN (Urban Outfitters--$49.40; +1.62; optionable): Apparel stores. Forecast to announce a split on 6-01-04 at its annual shareholder meeting.
BACKGROUND: Last announced a 2 for 1 split on 8-14-03 in conjunction with a board meeting. The stock price was $46.50. The annual shareholder meeting is scheduled for 6-1-04 at 10:30 ET at which time additional shares will be authorized.
http://biz.yahoo.com/p/u/urbn.html
STATUS: Flat base. Volume was back to average as URBN started toward the breakout. Moved through the buy point, but volume was not there. Want to see more strength in the trade as it continues toward the prior April highs at 50.
Volume: 713.082K Avg Volume: 658.318K
BUY POINT: New: $49.88 (orig. $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
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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