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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.
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: 06/03/2004
MRVL (Marvell Technology--$45.67; +0.20; optionable): Semiconductor integrated circuits. Splits 2:1 on 6-29-04
http://biz.yahoo.com/p/m/mrvl.html
STATUS: Double bottom w/handle. MRVL is forming a handle to its 9 week base, coming back to test the 10 day EMA (45.11) on below average volume after a big move from 38 to 47 in May. Strong money flow is still holding up very well during the pullback, and we anticipate that after this nice test MRVL is going to turn back up and deliver another strong move.
Volume: 2.762M Avg Volume: 3.163M
BUY POINT: $46.55 Volume=4.5M Target=$51.45 Stop=$44.88
POSITION: UVM HI - Aug. $45c (59 delta)
http://www.investmenthouse.com/cs/mrvl.html
New Leader Plays: These are solid stocks in good patterns that may develop into a split play, but they also are just good stocks ready to make good moves.
Play Date: 06/03/2004
POSS (Possis Medical--$28.00; -0.75; optionable): Medical appliances
http://biz.yahoo.com/p/p/poss.html
STATUS: Cup w/handle. Forming the handle the past two weeks to its 9 week base sporting solid 3 to 1 accumulation (3 up price weeks on rising volume to 1 down price week on rising volume). Like the base and like where it is forming as a breakout will send POSS to an all time high with no overhead resistance. Volume really jumped as it rallied in mid-May and has now backed off to miniscule levels. Poss-ibly a very good play.
Volume: 76.693K Avg Volume: 191.909K
BUY POINT: $29.58 Volume=288K Target=$34 Stop=$27.51
POSITION: UPQ JF - Oct. $30c (40 delta) &/or Stock
http://www.investmenthouse.com/cs/poss.html
Continuing Leader Plays: May turn into a split, but a solid stock ready to move.
Play Date: 05/22/2004
BRCM (Broadcom--$41.12; -0.71; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/b/brcm.html
STATUS: Flat base. After a strong move to end May, BRCM has sold back this week but is holding up much better than the semiconductor sector overall. Indeed, it looks like a nice, low volume shakeout in the 20 week base. It is trading just over the 18 day EMA (40.71) on low volume, and if it makes a higher low here without returning toward the bottom of the range near 38, that is typically a sign a bigger breakout is coming. When stocks trade in a defined range and then make that higher low within the range, that is the signal we look for. The stocks was trading higher after hours on the INTC news regarding strong communications chip sales. Looking for a break over the recent highs (42.88) to take new positions.
Volume: 6.259M Avg Volume: 8.311M
BUY POINT: New: $42.98 (orig. $41.44) Volume=13M Target=$47.42 Stop=$40.44
POSITION: RCQ HH - Aug. $40c (59 delta) or RCQ KS - Nov. $42.50c &/or Stock
http://www.investmenthouse.com/cs/brcm.html
Play Date: 05/23/2004
NMSS (Natural Microsystems--$8.48; -0.16; optionable): Telecom processing systems
http://biz.yahoo.com/p/n/nmss.html
STATUS: Cup w/handle. A very nice test of the 18 day EMA (8.36) as NMSS looks as if it is completing the 19 week base that formed over the 50 day EMA (8.00). Very low volume as it makes this test, and with money flow still moving higher ahead of price, we anticipate a strong breakout soon.
Volume: 186.015K Avg Volume: 439.363K
BUY POINT: $8.95 Volume=624K Target=$10.68 Stop=$8.32
POSITION: QNM IU - Sept. $7.50c (68 delta) &/or Stock
http://www.investmenthouse.com/cs/nmss.html
Play Date: 05/20/2004
PLT (Plantronics--$39.27; -0.72; optionable): Telecom products (headsets)
http://biz.yahoo.com/p/p/plt.html
STATUS: Double bottom w/handle. Tried the breakout move Monday, but has peeled back the past two sessions to tap the 18 day EMA (38.83) on lower, below average volume. A very nice 19 week base sporting excellent 5 to 2 accumulation (5 up price weeks on rising volume to 2 down price weeks on rising volume). Money flow is very strong and well ahead of price. This may be the final shakeout before it makes the breakout.
Volume: 350.1K Avg Volume: 435.136K
BUY POINT: New: $40.88 (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.
CECO: Forecast 7-20-04.
CHS: Looking for an announcement in mid-June in conjunction with a board meeting.
CRL: No announcement 4-28-04. Just when it starts to move it starts to struggle.
CWTR: Forecast 6-12-04 with its shareholder meeting.
DGX: Forecast 7-22-04 before the open.
ESRX: No split announced 5-26-04 with its shareholder meeting. Continues to hold solidly over the 10 day EMA.
FLIR: Forecast 7-21-04
GD: Forecast 6-3-04. No split announcement yet.
HUG: Researching next date.
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.
STJ: Forecast 7-22-04 before the open.
TRBS: Forecast 7-15-04
UOPX: Forecast 6-24-04 before the open.
WFMI: Forecast 7-28-94.
XRAY: Researching the next date. Blasting higher off the 18 day EMA.
ZBRA: Forecast 6-3-04 at annual shareholder meeting. No split announcement and ZBRA cut through the 18 day EMA.
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: 06/03/2004
CWTR (Coldwater Creek--$26.34; +0.93; no options): Catalog and Mail order. Researching next date.
BACKGROUND: A frequent splitter of late. 3:2 in August 2003 at $20. 3:2 in December 2002 at $18. Like these as they build up shares for holding onto a good stock.
http://biz.yahoo.com/p/c/cwtr.html
STATUS: Breakout test. Retail is still hot though that is only recently being rediscovered by analysts that gave it up for dead three months back. CWTR blasted out of a short 7 week base in late May and rallied up near 27. It took a breather after the breakout, moving laterally and then down toward the 10 day EMA (24.97) to test the move. It gaped lower Thursday on the same store sales results and then rebounded for a nice gain on an excellent volume surge. Money flow is screaming higher and relative strength is getting ready to breakout again, a further corroboration of any move. Looking to move in on a further run higher on continued solid trade.
Volume: 502.804K Avg Volume: 164.227K
BUY POINT: $26.75 Volume=300K Target=$32 Stop=$24.88
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/cwtr.html
Play Date: 06/03/2004
NMGA (Neiman Marcus Group--$52.28; +0.80; optionable): High end department stores. Released earnings 6-3-04 and they were solid. We are looking at this stock as a potential split announcer sometime next week, but even without, it is in a good position to profit from.
BACKGROUND: Based on our research NMGA has never announced a split. It is trading at an all-time high, however, and in a range where retailers frequently announce splits.
http://biz.yahoo.com/p/n/nmga.html
STATUS: Test 50 day EMA. High end retail continues to perform. NMGA peaked in March and slid into the current 13 week base. It bottomed at 48 and bounced back over the 50 day EMA (51.22). After a weeklong lateral move over the 50 day it looks ready to start a run to form the right side of its cup. We are interested in starting a position on a further volume move (volume exploded Thursday as NMGA started up off the 50 day). Surging money flow, and we are looking to move in as it resumes its move higher. Good risk/reward position here.
Volume: 486K Avg Volume: 219.454K
BUY POINT: $53.06 Volume=330K Target=$59.55 Stop=$50.35
POSITION: NMG JJ - Oct. $50c (73 delta) &/or Stock
http://www.investmenthouse.com/cs/nmga.html
Continuing Pre-Announcement Plays:
Play Date: 04/17/2004
QCOM (Qualcom--$67.64; -0.34; 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. QCOM continues to work laterally, now forming a handle to its short 9 week cup base. Solid 2 to 0 accumulation in the new pattern. We are looking closer at this one because of Intel's comments regarding communication chip sales being so strong.
Volume: 6.702M Avg Volume: 9.011M
BUY POINT: New: $68.22 (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: 05/29/2004
STJ (St. Jude Medical--$76.35; +0.57; optionable): Medical appliances. Forecast to announce 7-22-04 before the open.
BACKGROUND: Last announced a 2:1 split in April 2002 at a price of $75.
http://biz.yahoo.com/p/s/stj.html
STATUS: Ascending triangle. Still easing back to the 10 day EMA (75.44), bouncing up off of that level Thursday on rising, average trade. A very nice 15 week base showing 3 to 1 accumulation. It has made a higher low over the 10 and 18 day EMA, and as the pattern is narrowing, we are really starting to look for the breakout move over the next few sessions.
Volume: 1.296M Avg Volume: 1.444M
BUY POINT: $77.32 Volume=2.2M Target=$89 Stop=$74.08
POSITION: STJ JP - Oct. $75c (61 delta) &/or Stock
http://www.investmenthouse.com/cs/stj.html
POST SPLIT PLAYS:
Play Date: 06/01/2004
EASI (Engineered Support--$53.22; +0.46; optionable): Aerospace/defense
http://biz.yahoo.com/p/e/easi.html
STATUS: Cup w/handle. Has turned a bit volatile this week, trying to make the break higher Monday but then reversing field Tuesday. It held over the 10 day EMA (51.99) during all the excitement, however, and that keeps it set up for a break higher. Again, it has formed a 6 month shallow cup/flat base. Great gap higher to end May, and a nice lateral move to test the move. Just waiting for the break higher.
Volume: 542.981K Avg Volume: 283.136K
BUY POINT: $55.12 Volume=420K Target=$61.48 Stop=$51.26
POSITION: UFE HK - Aug. $55c (52 delta)
http://www.investmenthouse.com/cs/easi.html
Play Date: 06/02/2004
PLMD (Polymedica--$29.80; -0.28; optionable): Drugs
http://biz.yahoo.com/p/p/plmd.html
STATUS: Cup. Took a breather Wednesday after a strong break higher Tuesday on excellent volume. PLMD split in September, rallied up to 30, and then fell into the current 28 week base that formed along the 50 day EMA (27.90). Excellent 8 to 2 accumulation in the pattern and excellent money flow as well. May try to form a handle here, but we want to be ready for a break higher.
Volume: 310.824K Avg Volume: 219.045K
BUY POINT: $30.38 Volume=316K Target=$34.95 Stop=$28.38
POSITION: PM IF - Sept. $30c (56 delta) &/or Stock
http://www.investmenthouse.com/cs/plmd.html
Play Date: 05/15/2004
SHFL (Shuffle Master--$34.90; -0.32; optionable): Card shuffling machines
http://biz.yahoo.com/p/s/shfl.html
STATUS: Cup. Surged on the split but after hitting 36 it fell back into the current 7 week cup base. Holding over the 50 day EMA (32.05) on the lows of the cup. Good move Tuesday but no volume. Wednesday it stalled out but held up well with the market. May edge back toward 34, but looks ready to move higher if it can get that volume back in.
Volume: 673.583K Avg Volume: 681.727K
BUY POINT: New: $35.12 (orig. $34.62) Volume=800K Target=$39.85 Stop=$32.21
POSITION: SVF HG - Aug. $35c (69 delta) &/or Stock
http://www.investmenthouse.com/cs/shfl.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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