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Begin part 2 of 3
Support and Resistance
NASDAQ: Closed at 1838.02
Resistance:
1850 (July lows) and the May 2004 lows (1876 closing, 1865 intraday) may prove to be some resistance.
The March 2004 lows (1897 - 1989)
The 50 day EMA at 1880 is key resistance.
The 2004 down trendline at 1935
The 200 day SMA at 1974
Support:
The October 2002/March 2003 up trendline at 1829
The 18 day EMA at 1824
July 2003 highs at 1755
Late July 2003 top at 1735.
June 2003 intraday highs at 1686 to closing range at 1644 to 1677 (mid-July low here as well).
1600.
S&P 500: Closed at 1098.35
Resistance:
1096 to 1100 represent price support.
The 50 day EMA at 1099
The 200 day SMA at 1110
The March/April down trendline at 1122
1125 was key price support.
1142-1146 are the June highs.
The April and January highs (1150 to 1155).
1159 (February highs) and 1160 to 1175 the highs in that double top that spanned late 2001, early 2002.
Support:
The 18 day EMA at 1087
May low at 1084 (closing) to 1076 (intraday).
1080 (May and July lows).
1062 - 1058 from November 2003
1048-1040 from September 2003
1010 - 1015 from June/July 2003
Dow: Closed at 10,110
Resistance:
The 50 day EMA at 10,105 is not completely broken.
The February/April down trendline at 10,127
The 200 day SMA at 10,245
Late April, June peaks at 10,478 to 10,512
10,570 is the early April high
Price consolidation at 10,600 level
10,747 is the February high
Support:
The 18 day EMA at 10,013
9783 to 9793, the August lows.
9625 - 9660 from September 2003.
9500 from various price points in late summer to fall 2003.
9250. More solid support from the June through August 2003 consolidation.
Economic Calendar
These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.
August 24
Existing Home Sales, July (10:00): 6.80M expected and 6.95M prior
Durable Orders, July (8:30): 1.0% expected and 0.9% prior
August 25
New Home Sales, July (10:00): 1292K expected and 1326K prior
August 26
Initial Claims, 08/21 (8:30): 331K prior
Help-Wanted Index, July (10:00): 38 expected and 38 prior
August 27
GDP-Preliminary, Q2 (8:30): 2.8% expected and 3.0%
Chain Deflator-Preliminary, Q2 08:30): 3.2% expected and 3.2% prior
Michigan Sentiment-Rev., Aug (9:45): 94.0 expected and 94.0 prior
THE PLAYS
Good moves Friday: BAC; CCBI; EBAY; HAR; JOYG; QCOM; TZOO
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 make us money.
NEW PLAYS:
New Pre-Split Plays:
Play Date: 08/21/2004
IVX (Ivax--$24.72; +0.69; optionable): Generic drugs. Splits 5:4 on 8-25-04.
http://biz.yahoo.com/p/i/ivx.html
After Hours: $24.75
STATUS: Flat. Volume has jumped to end the week as IVX heads toward a breakout over 25, starting to move as its split approaches. The base formed over the 50 day EMA (23.42) with the 200 day SMA (23.33) rising up to meet it this month. Accumulation is a positive 6 to 5, showing net buyers during the base. Money flow is off the chart, surging ahead of price. Relative strength is showing a positive divergence as well. Volume is jumping to end the week. Ready to surge.
Volume: 2.108M Avg Volume: 1.287M
BUY POINT: $25.08 Volume=1.9M Target=$30 Stop=$24.62
POSITION: IVX LE - Dec. $25c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/ivx.html
New Post-Split Plays:
Play Date: 08/21/2004
RIMM (Research in Motion--$61.77; +2.65; optionable): Handheld PDA's
http://biz.yahoo.com/p/r/rimm.html
After Hours: $62.29
STATUS: Double bottom. Taking another look as it makes a comeback. RIMM formed a small double bottom the past 7 weeks, tapping twice at 52.50 earlier this month. It rallied back and recovered the 50 day EMA (58.69), jumping off that level Friday on some solid, average volume. Excellent money flow is rallying well ahead of price. Looks very good and can fly when it gets started. Looks ready to do just that.
Volume: 8.595M Avg Volume: 8.637M
BUY POINT: $63.12 Volume=10M Target=$72 Stop=$62.22
POSITION: RUP LZ - Dec. $62.50c (55 delta) &/or Stock
http://www.investmenthouse.com/cd/rimm.html
Continuing Leader Plays:
Play Date: 08/17/2004
ISCA (Intl. Speedway--$51.82; +0.84; optionable): Raceways
http://biz.yahoo.com/p/i/isca.html
STATUS: Flying plateau. Still working through the 6 week lateral move over the 50 day EMA (50.50). This follows an explosive breakout from a 16 week reverse head and shoulders base, surging over 52 on strong trade. Several good volume spikes in the move indicate accumulation continues as the stock works laterally. Solid money flow and positive accumulation in this last part of the base.
Volume: 49.427K Avg Volume: 130.322K
BUY POINT: $53.46 Volume=200K Target=$58.48 Stop=$52.12
POSITION: QWY LJ - Dec. $50c (77 delta) &/or Stock
http://www.investmenthouse.com/cs/isca.html
Continuing Downside Plays:
Play Date: 08/19/2004
EL (Estee Lauder--$42.75; +0.25; optionable): Make-up
http://biz.yahoo.com/p/e/el.html
STATUS: Put. Eased up to the 10 day EMA (42.82) Friday on even lower volume. Thudded through the 200 day SMA (42.63) and has made this lower volume rebound. Looks ready to roll over from here. Again, looking for it to turn back down and give us a nice quick move for a 45%ish gain.
Volume: 1.547M Avg Volume: 1.121M
BUY POINT: $42.25 Volume=1.7M Target=$40.15 Stop=$42.68
POSITION: EL VI - Oct. $45p (-80 delta)
http://www.investmenthouse.com/cs/el.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. The key with splits is the pattern. Still gat positive moves on the announcement, but stocks in this market need to have a good pattern of accumulation to really benefit from a split announcement.
AET: Took a breather but volume crept a bit higher. Still a solid move.
FAST: Forecast 8-24-04.
FDX: Forecast 9-22-04. Still trying to retake the 50 day EMA.
HUG: Forecast 8-24-04 after the close.
KMRT: Forecast 8-26-04.
MBT: Still researching to pinpoint the date. Harder as it is foreign.
MIK: Forecast 8-25-04 during the market.
NCEN: Forecast to announce a split on 10-5-04
PDCO: Forecast 8-26-04 before the open.
PENN: Researching to pinpoint a date.
RAVN: Came through with the split announcement Friday. Rebounded on strong volume from the Thursday selling. If it can clear 40 on continued solid trade it is a buy.
SBUX: Coming back to the 50 day EMA on lower volume.
UTX: Forecast 10-20-04.
VIP: Researching an exact 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: 08/21/2004
FAST (Fastenal Company--$61.89; +1.93; optionable): Fasteners. Forecast to announce a split on 8-24-04 in conjunction with a board meeting or on 10-8-04 in conjunction with earnings. The company could not confirm these dates, but based upon our research these are the dates for the events.
BACKGROUND: Last announced a 2 for 1 split on 4-15-02 at a stock price of $80. Also announced 2 for 1 splits in 1995, 1992 and 1990. The annual shareholder meeting was on 4-20-04 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/f/fast.html
After Hours: $61.83
STATUS: Ascending triangle. FAST broke sharply higher in early July from a 14 week base, surging on very strong volume. It has since formed the current 6 week triangle/flying plateau as it consolidates that move and sets up the next. Last week volume started to surge, jumping back above average every session. Friday the stock looked solid. Excellent money flow and outstanding 4 to 0 accumulation in the lateral move. Looks ready to make the next move in the breakout.
Volume: 736.383K Avg Volume: 624.866K
BUY POINT: $62.75 Volume=937K Target=$70.72 Stop=$60.45
POSITION: FQA BM - Feb. $65c (41 delta) &/or Stock
http://www.investmenthouse.com/ci/fast.html
Play Date: 08/21/2004
MIK (Michaels--$55.67; +1.07; optionable): Forecast to announce a split on 8-25-04 during the market in conjunction with earnings or on 9-16-04 in conjunction with a board meeting.
BACKGROUND: Last announced a 2 for 1 split on 10-31-01 in conjunction with a board meeting. The stock price was $52. The annual shareholder meeting was on 6-17-04 at which time additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/m/mik.html
STATUS: Double bottom. Looking solid as it has come off the bottom of its short 8 week base that formed mostly over the 50 day EMA (53.17). Volume has not been surging, so we may see MIK form a handle near 56, a lateral move for a few sessions that sets up the next breakout as the last sellers get frustrated and sell out. Money flow is really solid, leading the way higher, and relative strength is already making the breakout, a very bullish sign. It is due for a split and a breakout here is a good entry point to move into the stock.
Volume: 232.7K Avg Volume: 400.346K
BUY POINT: $56.15 Volume=601K Target=$62 Stop=$55.68
POSITION: MIK AK - Jan. $55c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/mik.html
Play Date: 08/21/2004
NCEN (New Century Financial--$50.97; +2.11; optionable): Wildcard. Forecast to announce a split on 10-5-04 in conjunction with a board meeting or on 10-20-04 in conjunction with earnings. The company cannot confirm these dates at this time.
BACKGROUND: Last announce a 3 for 2 on 5-22-03 in conjunction with a board meeting. The stock price was $44.90. The last annual shareholder meeting was on 5-21-03 and then a special meeting on 9-10-03 to increase authorized shares. No annual shareholder meeting is scheduled for this year because NCEN is converting to a REIT. An annual shareholder meeting will be held once this conversion is complete.
http://biz.yahoo.com/p/n/ncen.html
After Hours: $50.83
STATUS: Reverse head and shoulders. NCEN may not announce a split this go round given its conversion into a REIT upcoming, but that is no reason to stop it and the pattern is very nice. A 7 month base that bottomed over the 200 day SMA (44.29) at the midpoint of the pattern. Accumulation is a solid 8 to 6. Volume was surging Friday back above average as relative strength started the breakout. Just want to see more volume as NCEN continues the move.
Volume: 869.113K Avg Volume: 706.181K
BUY POINT: $51.22 Volume=1.1M Target=$59 Stop=$49.34
POSITION: URE AJ - Jan. $50c (60 delta) &/or Stock
http://www.investmenthouse.com/cs/ncen.html
Continuing Pre-Announcement Plays:
Play Date: 08/19/2004
HUG (Hughes Supply--$62.7; +2.9; optionable): Plumbing supplies. Forecast to announce a split 8-24-04.
BACKGROUND: Last split 3:2 on 7-17-97 at a price of $39.50
http://biz.yahoo.com/p/h/hug.html
STATUS: Ascending base. Volume was up Friday to average levels as HUG tried the breakout from its 17 week base. Relative strength broke out on the move, following money flow higher. Nice 4 to 1 accumulation in the base. Still a buy on this move with more volume.
Volume: 300K Avg Volume: 281.329K
BUY POINT: New: $62.95 (orig. $60.92) Volume=427K Target=$67 Stop=$59.15
POSITION: HUG AL - Jan. $60c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/hug.html
Play Date: 08/18/2004
KMRT (Kmart Holding--$76.55; -0.34; optionable): Discount variety stores. Forecast 8-26-04.
BACKGROUND: This is the new K-Mart. There are no prior splits, but it is at that $75 level that is the new 'in' level to announce splits.
http://biz.yahoo.com/p/k/kmrt.html
After Hours: $76.65
STATUS: Double bottom w/handle. KMRT continues to work on the new handle to its 7 week base. Volume exploded higher to start the week as KMRT moved off of the 50 day EMA (69.05) as it formed the second leg of the base. It is now sliding back on low volume, holding its gains. Excellent money flow is leading higher, and after this rest in the handle we think KMRT will continue its move higher.
Volume: 2.307M Avg Volume: 2.718M
BUY POINT: $79.42 Volume=3.6M Target=$88.88 Stop=$77.85
POSITION: KTQ LP - Dec. $80c (53 delta)
http://www.investmenthouse.com/cs/kmrt.html
Play Date: 08/07/2004
MBT (Mobile Telesys--$124.15; +0.85; optionable): Russian wireless services. Announced earnings in June. Researching next date, but wanted it on as it is getting ready to run.
BACKGROUND: A new issue in 2001, MBT has yet to announce its first split. It made us money last year on its run and now it is setting up again.
http://biz.yahoo.com/p/m/mbt.html
STATUS: Cup. Still pulling back and forming a handle to its 19 week base after that solid surge early last week on strong volume. Money flow continues to improve, moving ahead of the stock. May take 2 to 3 more sessions to finish setting up for the breakout.
Volume: 142.1K Avg Volume: 283.531K
BUY POINT: $125.65 (orig. $121.65) Volume=500K Target=$135 Stop=$116.95
POSITION: MBT LE - Dec. $125c (48 delta)
http://www.investmenthouse.com/cs/mbt.html
Play Date: 08/12/2004
PDCO (Patterson Dental--$76.29; +0.80; optionable): Medical equipment. Forecast August 26 before the market opens.
BACKGROUND: Last announced a 2 for 1 split on 6-13-00 in conjunction with a board meeting. The stock price was $53. The annual shareholder meeting was on 9-8-803 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/p/pdco.html
After Hours: $76.34
STATUS: Double bottom w/handle. Volume was up solidly last week as PDCO showed some good volume spikes in its 3 week handle that is trying to finish off its 18 week base. Very nice pattern has formed, setting the stage for the breakout that will take it to a new all-time high.
Volume: 350.03K Avg Volume: 472.101K
BUY POINT: $77.02 Volume=698K Target=$83 Stop=$76.34
POSITION: DOU AO - Jan. $75c (58 delta)
http://www.investmenthouse.com/cs/pdco.html
Play Date: 08/17/2004
VIP (Vimple Communication--$95.65; +1.04; optionable): Russian telecom. Researching to pinpoint the date.
BACKGROUND: No past splits.
http://biz.yahoo.com/p/v/vip.html
STATUS: Cup. Big volume surge Tuesday sent VIP gapping over the 50 day EMA (89.44) on tremendous trade. It tried to move higher Thursday and Friday, but volume was not there. It needs another day or two moving laterally near 95 on this low volume. That will better set up the move and with money flow surging higher, that move will be strong when it starts back up.
Volume: 216.1K Avg Volume: 421.407K
BUY POINT: New: $95.88 (orig. $94.55) Volume=581K Target=$104.55 Stop=$92.66
POSITION: VIP JS - Oct. $95c (47 delta)
http://www.investmenthouse.com/cs/vip.html
PRE-SPLIT PLAYS:
Play Date: 08/19/2004
ZBRA (Zebra Technologies--$83; +0.38; optionable): Computer peripherals. Splits 3:2 on 8-26-04
After Hours: $82.87
http://biz.yahoo.com/p/z/zbra.html
STATUS: Double bottom. Finished the week moving laterally on below average volume as it starts a handle to its 7 week base. Solid 3 to 1 accumulation in the base shows net buyers as the stock consolidates a strong move the past year. With the split coming up this week we are looking for ZBRA to make the breakout move. Looks nice.
Volume: 343.034K Avg Volume: 417.533K
BUY POINT: $83.58 Volume=425K Target=$89.88 Stop=$82.22
POSITION: ZBQ KP - Nov. $80c (67 delta)
http://www.investmenthouse.com/cs/zbra.html
End part 2 of 3
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