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1) MARKET SUMMARY
Expiration session gives its usual impossible read. At least nothing changed.
- Stocks end the week steady, holding over support, below resistance.
- Preliminary Michigan sentiment appears way off, again.
- Fed on stage this week as it faces a slowly expanding economy.
- Subscriber Question: Weekly jobless claims versus monthly non-farm payrolls.
- Stocks hanging tough over support, showing bullish bias. Still time to be wary.
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2) Stock Splits Playing stock splits can be very profitable, but it takes know-how. Our stock split service focuses on three main types of plays: 1) pre-announcement (where we forecast an upcoming split prior to the company making the announcement); 2) pre-split (these plays are made in the days leading up to the actual split day); and 3) post-split plays (plays made after the actual stock split where the stock is showing continued or renewed strength). For post-splits, we can play them as we would pre-splits (very short term), but we prefer to stretch our horizons, playing the trend. When playing options, we look further out, 2 or more months at least. We let the trend carry us along if there is one, but we will also take profits if the technical pattern degenerates, e.g., breaks a trendline. The main difference between post-splits and pre-splits plays is that we really have to like the pattern. Pre-splits can run right before their splits even with poor technical indicators. For post-splits, we are looking at the stocks from more of a longer term "would I buy this stock at this juncture?" position. Now there are times when a hot stock splits and investors pile in to get in while the stock is 'cheaper.' We play those, but with more of a short-term, pre-splits mentality in that we will be ready to get out fast if the momentum fades. Remember, everything we do has to pass muster with the market that day ... don't fight the market on these plays. Here's a post-split play to watch and our current analysis.
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Company Profile
After Hours: $25.63
STATUS: Breakout test. Exploded higher to start the month, making the breakout from a 9 week cup base. Surged to 27 and spent last week easing back, testing the move on lower, below average volume. Holding near 26 on the lows, setting up for the next move higher as money flow surges ahead of price. Solid 3 to 1 accumulation in the pattern. After a couple more days of rest it will be ready to resume the move.
Volume: 4.468M Avg Volume: 4.735M
BUY POINT: $26.85 Volume=7.1M Target=$31 Stop=$25.55
POSITION: UVM BE - Feb. $25c (68 delta) &/or Stock.
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