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us stock market, trade stock
Begin part 2 of 3
THE PLAYS
Good moves Friday: ARO; POT; URBN; WCN; ZBRA
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 Post-Split Plays:
Play Date: 08/28/2004
ACV (Alberto-Culver--$48.16; +0.37; optionable): Consumer personal products (shampoo, etc.)
http://biz.yahoo.com/p/a/acv.html
STATUS: Cup w/handle. A rather abrupt pattern formed in the July and August selling, but ACV has bounced right back up and is currently working on a very nice, flat and tight handle to its 7 week base. A solid mover the past year, ACV is using this base to take a breather and set up for the next rally higher. Excellent 3 to 0 accumulation in the pattern shows buyers even in the dip toward the 200 day SMA (44.59); they used that to move into the stock and send it higher. This is a very tight pattern over the 50 day EMA (47.39) on very low, below average volume. Solid money flow in addition to the accumulation. ACV is getting close to the break higher.
Volume: 99.2K Avg Volume: 327.004K
BUY POINT: $48.41 Volume=491K Target=$52.38 Stop=$47.32
POSITION: ACV LI - Dec. $45c (85 delta)
http://www.investmenthouse.com/cs/acv.html
Play Date: 08/28/2004
KRON (Kronos--$43; +1.74; optionable): Human resources, payroll, scheduling, time and labor solutions
http://biz.yahoo.com/p/k/kron.html
STATUS: Reverse head and shoulders. Friday KRON started to break higher out of its 13 week base sporting positive 3 to 2 accumulation. Problem Friday was the lack of volume on the move. Indeed, all week KRON showed light volume. It enjoys surging money flow and relative strength ready for a breakout. This will take it to an all time high; KRON is a leader, and after this shakeout in July it is at a good buying point if it can show us some volume.
Volume: 147.047K Avg Volume: 241.488K
BUY POINT: $43.32 Volume=362K Target=$49 Stop=$41.88
POSITION: KUE AI - Jan. $45c (45 delta) &/or Stock
http://www.investmenthouse.com/cs/kron.html
Play Date: 08/28/2004
TRMB (Trimble Navigation--$26.40; -1; optionable): Scientific & technical instruments
http://biz.yahoo.com/p/t/trmb.html
STATUS: Cup w/handle. Volume started to move higher Friday, rising just above average as the stock moved off of the 18 day EMA (26.90). It is trying to move up off the 18 day toward the breakout from its 7.5 month base. Accumulation is a solid 9 to 6, setting the foundation for the breakout as it shows net buyers of the stock this year. Money flow has turned higher ahead of the stock the past two weeks. Relative strength is ready to make the breakout as well, a sign of overall strength. Looking for that Friday volume to get even stronger as TRMB moves through the buy point.
Volume: 357.106K Avg Volume: 352.272K
BUY POINT: $28.21 Volume=528K Target=$34 Stop=$27.48
POSITION: TUH KE - Nov. $25c (75 delta) &/or Stock
http://www.investmenthouse.com/cs/trmb.html
New Downside Plays:
Play Date: 08/28/2004
DSCO (Discovery Labs--$8.03; -0.67; optionable): Biotechnology
http://biz.yahoo.com/p/d/dsco.html
STATUS: Put. DSCO formed a broad top January to April and then broke down into the current downtrend. It sold below the 10 and 18 day EMA, coming up for air at the 50 day EMA (8.25). The past two weeks it rallied back up through the short term MA to the 50 day EMA, managing to break over that key level for a week. Friday, however, volume spiked above average as DSCO undercut the 50 day and closed just over the 18 day EMA (7.94). Stocks tend to move down the 10 and 18 day EMA in their downtrends and come up to test the 50 day EMA about every fourth bounce lower. Looks as if DSCO has made that test and the higher volume selling Friday indicates it is ready to turn back down.
Volume: 834.827K Avg Volume: 427.859K
BUY POINT: $7.92 Volume=500K Target=$6.54 Stop=$8.25
POSITION: AQW VU - Oct. $7.50p (-32 delta)
http://www.investmenthouse.com/cs/dsco.html
Continuing Leader Plays:
Play Date: 07/24/2004
OPTN (Option Care--$16.08; +0.28; optionable): Home health care
http://biz.yahoo.com/p/o/optn.html
STATUS: 50 day EMA test. OPTN continues to test the strong early July breakout from its saucer base. It has moved steadily lower on mostly light trade to test the 50 day EMA (15.73), holding that level on the lows the past two weeks. Volume ahs edged higher to end last week as the stock edged up off the 50 day. Money flow has remained strong during this pullback, and is starting to nudge higher as well. Being patient (have to be as long as this is taking) and looking for the volume to surge on the break higher. Looks as if it is ready to show its hand this week.
Volume: 101.532K Avg Volume: 138.998K
BUY POINT: $16.58 Volume=175K Target=$20 Stop=$16.24
POSITION: UOC AC - Jan. $15c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/optn.html
Continuing Downside Plays:
Play Date: 08/26/2004
SYK (Stryker--$46.06; +0.08; optionable): Medical instruments
http://biz.yahoo.com/p/s/syk.html
STATUS: Put. After breaking below the 200 day SMA (46.68) Thursday on strong volume, SYK stalled Friday. SYK peaked in early July and then cratered on high volume through the 50 day EMA (48.37). It found the 200 day SMA and has moved laterally along that level more or less until Thursday. Looking for that volume to kick back in as SYK continues the move lower toward the August low and give us a nice 55%ish gain.
Volume: 1.167M Avg Volume: 1.717M
BUY POINT: $45.85 Volume=1.6M Target=$42.82 Stop=$46.72
POSITION: SYK VI - Oct. $45p (-41 delta)
http://www.investmenthouse.com/cs/syk.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: Testing the break higher, holding the 10 day EMA.
BMET: Forecast 9-18-04.
BOL: Forecast 10-20-04
CME: Forecast 10-20-04
FAST: No split announced 8-24-04. Researching the next date. Still excellent as it holds over the 18 day EMA. Keeping an eye on it and ready to move in when it hits the buy point.
FDX: Forecast 9-22-04
KMRT: No split announced but continues its very nice handle.
MBT: Still researching to pinpoint the date.
MIK: No split announced 8-25-04 but still moving higher. Researching next possible date.
NCEN: Forecast to announce a split on 10-5-04
PENN: Researching to pinpoint a date.
SCSC: Forecast 10-12-04.
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: 08/28/2004
SCSC (Scansource--$61.51; +2.01; optionable): Wholesale computers. Tentatively forecast to announce a split 10-12-04 after the market closes in conjunction with earnings, but still researching.
BACKGROUND: Last split its stock 2:1 in January 2003 at a price of $60.
http://biz.yahoo.com/p/s/scsc.html
After Hours: $61.35
STATUS: Test 18 day EMA. SCSC showed excellent strength in August, overcoming some sharp selling around its earnings release, advancing back close to an all-time high. It has formed something of a short, 7 week reverse head and shoulders following the break higher from a 5.5 month cup with handle in June. Despite the selling three weeks back, accumulation in the base is a strong 4 to 0; that tells us that buyers have been moving in, taking advantage of the abrupt pullback to the 200 day SMA and sharp rebound. After that move it has eased back to test the 18 day EMA (59.34). Friday it held that level and then rebounded on stronger, above average volume. Looks ready to follow its strong money flow higher and provide us a nice entry point.
Volume: 195.018K Avg Volume: 157.595K
BUY POINT: $61.88 Volume=236K Target=$69 Stop=$59.22
POSITION: UHI LL - Dec. $60c (61 delta) &/or Stock
http://www.investmenthouse.com/cs/scsc.html
Continuing Pre-Announcement Plays:
Play Date: 08/24/2004
BMET (Biomet--$45.75; -0.29; 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: $45.85
STATUS: Double bottom w/handle. Volume was up Friday as BMET tested the 10 day EMA (44.61) on the low and rebounded, closing the session with a nice doji with tail on the candlestick pattern. Good action in the handle to its 7 week pattern sporting 3 to 0 accumulation. Like seeing that volume rise Friday, and we want even more as it continues higher; need to see a lot more on the breakout move. Solid price/volume action the past two weeks, up on upside sessions, down on the down days, and that is helping set the stage for the breakout.
Volume: 1.213M Avg Volume: 1.966M
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: 08/26/2004
BOL (Bausch & Lomb--$65.76; +0.63; optionable): Medical instruments (contact lenses, etc.). Forecast to announce a split on 10-20-04 before the market opens in conjunction with earnings.
BACKGROUD: Last announced a 2 for 1 split on 4-30-91 at a stock price of $80. Prior to that announced a 2 for 1 split on 10-5-83. The annual shareholder meeting was on 4-27-04 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/b/bol.html
STATUS: Double bottom w/handle. Still working laterally over the 10 day EMA (64.79) as it forms a very low volume handle to its 20 week base. Accumulation in the pattern is outstanding at 8 to 1, showing heavy buying during the base and setting the foundation for a good breakout. Money flow is also strong, rallying higher ahead of price. After this pullback toward the 10 day EMA (64.57) BOL will be ready to deliver the breakout move.
Volume: 139.8K Avg Volume: 392.561K
BUY POINT: $66.42 Volume=578K Target=$72 Stop=$64.44
POSITION: BOL AM - Jan. $65c (56 delta) &/or Stock
http://www.investmenthouse.com/ct/bol.html
Play Date: 08/18/2004
KMRT (Kmart Holding--$77.2; +0.82; optionable): Discount variety stores. Researching new split date, but an excellent pattern still.
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: $76.50
STATUS: Double bottom w/handle. Well, KMRT continues to work laterally over the 10 day EMA (75.64) in a very tight and narrow range. An excellent low volume, very quiet handle is putting the finishing touches on a short 8 week base. Still solid with money flow leading ahead of price. It is ready, and now all we need to see is volume surging on a breakout.
Volume: 701.298K Avg Volume: 2.683M
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--$44.64; +0.3; optionable): Basic materials. Splits 3:2 on 9-13-04
http://biz.yahoo.com/p/p/pool.html
STATUS: Cup w/handle. POOL spent last week trying to form a handle to its short 8 week base. It was cheating higher to end the week, rising above the 50 day SMA (43.14) as volume moved lower and lower; that is not the best handle action as you want to see it fade on the intraday lows so that it shakes out the weaker holders. It is a pre-split, however, and they tend to generate their own momentum. Want to see volume kick higher as it makes the move through the buy point.
Volume: 177.723K Avg Volume: 288.336K
BUY POINT: $44.94 Volume=300K Target=$48.92 Stop=$43.22
POSITION: QCL AI - Jan. $45c (42 delta)
http://www.investmenthouse.com/cs/pool.html
POST SPLIT PLAYS:
Play Date: 08/25/2004
SONC (Sonic Corp.--$22.54; -0.15; optionable): Burger joints
http://biz.yahoo.com/p/s/sonc.html
STATUS: Double bottom w/handle. SONC spent last week in an orderly, low volume pullback to the 50 day EMA (22.38), showing a nice, tight doji Friday on the candlestick chart. After the 6 month base, that can signal that SONC is ready to try a breakout move. Strong 7 to 3 accumulation in the base that formed using the 200 day SMA (22) at the low as support. Being patient and letting it finish off its handle and then show us a strong volume move higher through the buy point as our signal to move into positions. A perennial market leader.
Volume: 163.466K Avg Volume: 351.417K
BUY POINT: $23.28 Volume=450K Target=$26.35 Stop=$22.44
POSITION: ZSQ LX - Dec. $22.50c (60 delta) &/or Stock
http://www.investmenthouse.com/cs/sonc.html
Play Date: 08/21/2004
RIMM (Research in Motion--$62.93; +0.55; optionable): Blackberries
http://biz.yahoo.com/p/r/rimm.html
After Hours: $63
STATUS: Cup w/handle. Still working laterally in a very tight and flat handle to its 8 week base. It is holding over the 50 day SMA (59.43), calmly setting up for the next break higher. When it starts its moves it really can motor. The pattern is getting sweeter with each of these sessions. Looks super, and when it makes the breakout on volume we will be ready to add positions.
Volume: 2.978M Avg Volume: 8.403M
BUY POINT: $63.52 Volume=10M Target=$72 Stop=$61.04
POSITION: RUP LZ - Dec. $62.50c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/rimm.html
End part 2 of 3
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