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Begin part 3 of 3
THE PLAYS
Good moves Tuesday: ARO; EBAY; JOSB; NCEN; TZOO; GRP
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: 08/24/2004
CFC (Countrywide Financial--$68.78; +0.03; optionable): Mortgage investment. Splits 2:1 on 8-31-04
http://biz.yahoo.com/p/c/cfc.html
After Hours: $68.78
STATUS: 50 day EMA test. CFC is moving laterally along the 50 day EMA (68.57) the past week in a very narrow range on low volume. The stock broke below the 50 day early in the month but in a show of strength it managed to regain that level and start the current lateral move. Volume was moving up Tuesday as the stock showed a nice doji with tail over the 50 day. Looking for a surge higher on rising trade to move in and catch the pre-split move.
Volume: 1.883M Avg Volume: 2.596M
BUY POINT: $69.35 Volume=2.7M Target=$74.38 Stop=$68.22
POSITION: CFU JX - Oct. $66.62c (66 delta) or CFU JN - Oct. $70c (45 delta)
http://www.investmenthouse.com/cs/cfc.html
New Post-Split Plays:
Play Date: 08/24/2004
URBN (Urban Outfitters--$29.18; +0.09; optionable): Specialty apparel stores
http://biz.yahoo.com/p/u/urbn.html
After Hours: $29.29
STATUS: Double bottom w/handle. A nice, short 8 week pattern that has formed at the 50 day EMA (28.28), an indication of institutional support. This move is consolidating a strong move 2003 through June. Volume has backed down the past week as URBN moves laterally over the 18 day EMA (28.82), forming the handle in a narrow range. It is setting up for the next move just as is the market, but the pattern is a lot better.
Volume: 589.707K Avg Volume: 1.562M
BUY POINT: $30.28 Volume=2.2M Target=$35 Stop=$28.98
POSITION: URQ LF - Dec. $30c (47 delta) &/or Stock
http://www.investmenthouse.com/cs/urbn.html
New buy point on a continuing play:
Play Date: 08/24/2004
AEOS (American Eagle Outfitters--$33.86; +0.28; optionable): Specialty apparel
http://biz.yahoo.com/p/a/aeos.html
After Hours: $33.90
STATUS: Breakout test. AEOS surged out of a flat base in late July on some solid trade. Came back to test the 50 day EMA (30.85) and then bounce right back up for another nice move. Stocks tend to bounce higher up the 10 or 18 day EMA after breakouts. The past week AEOS has made a nice, easy, low volume pullback to test the 10 day EMA (33.23) on the intraday lows. Showed a doji Tuesday over that level as volume moved back up though still below average. A strong market leader, and looking for another surge of volume to add additional positions.
Volume: 1.194M Avg Volume: 1.685M
BUY POINT: $34.32 Volume=2.5M Target=$39 Stop=$33.12
POSITION: AQU KG - Nov. $35c (45 delta) &/or Stock
http://www.investmenthouse.com/cs/aeos.html
Continuing Leader Plays:
Play Date: 08/17/2004
ISCA (Intl. Speedway--$52.13; +1.25; optionable): Raceways
http://biz.yahoo.com/p/i/isca.html
STATUS: Flying plateau. Volume was up Tuesday as ISCA tested toward the 50 day EMA (50.58) on the intraday low and rebounded for a nice gain. Still in that 6 week lateral move over that support. Strong money flow and some good 'get ready' spikes as it has worked sideways.
Volume: 92.935K Avg Volume: 124.318K
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
PH (Parker Hannifin--$54.63; +0.24; optionable): Industrial equipment
http://biz.yahoo.com/p/p/ph.html
STATUS: Put. Stalling below the 18 day EMA (55.07), tapping at that level on the Tuesday intraday high. It managed to post a gain on the session, but this is a comeback move from heavy selling last week as PH started a fall from the 18 day. Money flow is weak, and we are looking for PH to fall from here and on some rising volume.
Volume: 396.4K Avg Volume: 730.272K
BUY POINT: $53.48 Volume=800K Target=$51.25 Stop=$54.85
POSITION: PH UK - Sept. $55p (-70 delta)
http://www.investmenthouse.com/cs/ph.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.
BMET: Forecast 9-18-04.
CME: Forecast 10-20-04
FAST: Forecast 8-24-04.
FDX: Forecast 9-22-04
HUG: Forecast 8-24-04 after the close. Announced the split. Now we see if it can make a serious breakout.
KMRT: Forecast 8-26-04.
MBT: Still researching to pinpoint the date. Setting up for the next move.
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.
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: 08/24/2004
BMET (Biomet--$45.83; +0.20; optionable): Medical appliances. Forecast to announce a split on 9-18-04 in conjunction with its annual shareholder meeting.
BACKGROUND: Last announced a 3 for 2 split on 7-9-01 in conjunction with earnings at $43. Prior to that announced a 3 for 2 split on 7-18-00 at $43. The annual shareholder meeting is scheduled on 9-18-04 at 1:30, Warsaw, IN. The company has sufficient shares for a 3 for 2 split.
http://biz.yahoo.com/p/b/bmet.html
After Hours: $46.92
STATUS: Double bottom w/handle. Volume was up Tuesday as BMET continued its short lateral move of the past three sessions, forming the handle to its 7 week base formed along the 50 day EMA (43.47). Solid 3 to 0 accumulation in the base shows money continuing to move in with net buyers. Showing good price/volume action the past two weeks, up on upside sessions, down on the down days. Looks ready for the breakout move.
Volume: 1.978M Avg Volume: 1.906M
BUY POINT: $46.36 Volume=2.9M Target=$56.38 Stop=$45.12
POSITION: BIQ AI - Jan. $45c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/bmet.html
Play Date: 08/24/2004
CME (Chicago Merchantile Exchange--$136.41; -0.98; optionable): Commodities, securities, currency, etc. trading. Forecast to announce a split on 10-20-04 in conjunction with earnings. The company has not confirmed this date.
BACKGROUND: It does not appear that CME has ever split its stock. The annual shareholder meeting was on 4-21-04 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/c/cme.html
STATUS: Double bottom w/handle. After a nice surge in 2003 CME needed a breather, and the current 7 week base is a good consolidation to set up the next move higher. Solid 2 to 0 accumulation in the pattern shows net buyers still. Good move laterally over the 50 day EMA (129.73) on lower volume is setting up the handle and the next breakout. Money flow is moving higher ahead of price, and we look for CME to follow the money higher. Nice 'get ready' spike Monday. It can run like the wind when it gets going. Using options to leverage our position.
Volume: 431.6K Avg Volume: 618.454K
BUY POINT: $138.88 Volume=928K Target=$154 Stop=$136.38
POSITION: CME LH - Dec. $140c (46 delta)
http://www.investmenthouse.com/cs/cme.html
Continuing Pre-Announcement Plays:
Play Date: 08/21/2004
FAST (Fastenal Company--$62.1; +0.58; 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. Volume was up Tuesday as FAST tapped at the breakout level from its 6 week flat/ascending triangle sporting strong 4 to 0 accumulation. FAST broke sharply higher in early July from a 14 week base, surging on very strong volume. Excellent money flow is still moving higher. Looks very good.
Volume: 627.292K Avg Volume: 604.181K
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--$55.65; +0.25; 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. Volume surged Tuesday as MIK moved toward the breakout, tapping at 56.48 on the high but was unable to hold the move. Nice 8 week base has formed at the 50 day EMA (53.35). Could not hold the move Tuesday, but we like the volume moving into the stock.
Volume: 848.8K Avg Volume: 391.363K
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: 08/18/2004
KMRT (Kmart Holding--$77.17; +0.72; 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. Volume continues to ease as KMRT forms a nice handle to its 8 week base. Very tight range forming over the 10 day EMA (74.53). The quiet action in the handle is setting up the next breakout, and we are just waiting for it to show a solid volume breakout move.
Volume: 1.781M Avg Volume: 2.646M
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
PRE-SPLIT PLAYS:
Play Date: 08/23/2004
POOL (SCP Pool--$43.86; +0.43; optionable): Basic materials. Splits 3:2 on 9-13-04
http://biz.yahoo.com/p/p/pool.html
After Hours: $43.81
STATUS: Pre-split cup. Still working over the simple 50 day MA on low volume after jumping back over that level last Friday. Nice, short 6 week base that followed a nice breakout and run in April. Money flow continues to run higher as the stock steps sideways the past two sessions. Positive 2 to 1 accumulation in the current pattern. Ready to follow that money higher now that it has taken a couple of days rest following the big Friday move.
Volume: 249.179K Avg Volume: 279.363K
BUY POINT: $44.12 Volume=300K Target=$48.45 Stop=$42.89
POSITION: QCL AI - Jan. $45c (42 delta)
http://www.investmenthouse.com/cs/pool.html
Play Date: 08/19/2004
ZBRA (Zebra Technologies--$83.2; +0.59; 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. Well, ZBRA looks super, moving laterally over the 18 day EMA (81.34) as it continues to work on its weeklong handle to the 7 week base. Solid 3 to 1 accumulation in the base shows net buyers as the stock consolidates a strong move the past year. The split is imminent; looking to see if the move is as well.
Volume: 329.011K Avg Volume: 402.818K
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
POST SPLIT PLAYS:
Play Date: 08/23/2004
WCN (Waste Connections--$28.86; +0.12; optionable): Waste management
http://biz.yahoo.com/p/w/wcn.html
STATUS: Cup w/handle. Still forming a very nice, flat handle to its short 7 week base, moving laterally on low, below average volume. Money flow is moving higher even as it does, a nice bullish touch. Solid 2 to 0 accumulation in the pattern is setting up the next move from this strong leader. Held up well during the selling, and now we are looking for the payoff.
Volume: 228.9K Avg Volume: 320.818K
BUY POINT: $29.06 Volume=400K Target=$32.15 Stop=$28.35
POSITION: GWC JY - Oct. $26.62c (95 delta) or WCN AF - Jan. $30c (35 delta) &/or Stock
http://www.investmenthouse.com/cs/wcn.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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