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us stock market, stock watch
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SUBSCRIBER QUESTIONS
Q: Where do you find the 50 day MVA on a particular stock in your portfolio?
A: There are many good charting services. One that our subscribers have told us about many times is www.stockcharts.com. You can enter the ticker symbol and it will give you the chart and show you on the chart where the moving averages are and it will also tell you the actual price for the moving average that day.
TEAM TRADES
ARE, a TTR stock, broke out of a pennant today. A market alert was sent at 8:53CT when the stock hit our buy point of 40.08. Volume was looking good at 39,000 (average is 45,000) and if the stock continued to rally, volume should be above average pretty quickly (that's what we mean by volume "being on track" to get to our targeted volume for the play). At that point, though, ARE pulled back, which is to be expected on an initial strong move; it reached a high then at 40.30 and dropped back to test 40.20. At 8:58 it started back up, the cue for taking positions. The ask was at 40.25, then up to 40.30 (bid 40.15 to 40.20) by 9:04. A limit order was put in for shares at 40.30, and was filled just a cent under about 5 minutes later. ARE shot up from there, reaching a high of 40.77, then pulled back to remain flat for most the rest of the day between 40.60 and 40.70, except at the end of the day, when it slid back down to close at 40.38. Volume had stacked up to 102,000, great for the breakout, but the pull off the high wasn't very exciting. We will keep the stop loss (39, at the 50 day MVA) and the position for now, since ARE can really run if it gets the volume behind it.
THE PLAYS: Got the split announcement after hours from NVDA!! Also got some great moves today from DCOM, POOL, RMD and JNJ!
BONUS PLAYS:
SPP (Sappi Ltd--$9.39; +0.04; no options): Paper products
http://biz.yahoo.com/p/s/spp.html
STATUS: In a double bottom with handle pattern, the handle moving gradually lower (as we like) on below average volume (today at 141,500; avg. 293,000). The stock closed with a tight doji after bouncing off its low of 9.30 (testing the 18 day MVA). The 10 day MVA is at 9.34. Looking for a breakout over the handle high at 9.61. SPP is in a 19-month base (lows around 6), and shows huge money flow and good buying. Initial target: 12
BUY POINT: 9.74, on volume of 440,000 or better. Stop: 9.06 A buy on the breakout up to 10.23
POSITION: Stock.
MBI (Mbia--$56.98; +0.59; optionable): Insurance
http://biz.yahoo.com/p/m/mbi.html
STATUS: Ready to break out from an ascending wedge pattern, jumping up and closing just under the pattern's high at 57 on a strong surge in volume (696,100; avg. 422,181). The pattern formed after a cup with handle breakout, and has one aberrant low when the stock broke below the 50 day MVA for three days. Not a picture-perfect pattern, but looks ready to move; the insurance index is trying to push higher. Target: 65
BUY POINT: Breakout: 57.13, on continued strong volume (min. breakout volume is 570,000). Stop: 53.13 A buy on the breakout up to 60.
POSITION: Stock and/or November $50 calls to buy (MBI KJ).
PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: After the announcement from NVDA, we are looking ahead to DV, but it is looking rather weak.
BEST PLAYS: The pre-announcements continue to look very good. Besides the plays set forth below as best plays, there are some other stocks that also look good. These include our Pre-Announcements AZO and NDN; Pre-Split ATK; Continuing Candidate FNM and ASW; and Post-Splits JNJ and COBZ.
PRE-ANNOUNCEMENT BEST PLAYS
1) NVDA - Announced the split as forecast!
2) THC - Nice pattern
3) KRB - Solid move up to its down trendline
4) BJ - Trying to move out of the pennant
5) DV - Forecast for Thursday
NVDA (Nvidia--$85.85; -2.34; optionable): Semiconductor. Announced a 2:1 split as forecast, effective August 28!
http://biz.yahoo.com/p/n/nvda.html
STATUS: NVDA gapped down today but held onto support of its 10 day MVA (85.43), but it held on going into earnings and closed with a doji on big volume (9.34 million; average 4.4 million). After the close came the announcement, and after hours action was looking good. It has been a strong performer, dipping back in July to test near its 200 day MVA (66.59) but recovering this month to hold firm over the 50 day (83.42). It is a stock that shows us the benefits of stock splits in several ways: first, we build wealth by increasing the number of shares that we own, which shares typically increase faster than shares of non-splitting stocks, and which also allow us to use the stock to make money in other ways, like writing covered calls. Second, we can look for the short-term move that split announcers often make, and off of today's doji over support we will see if the stock can make a solid bounce. The recent high is at 90.72 and the all-time high is up at 100. Target: 100.
BUY POINT: From here: A bounce over 87 on continued strong volume. Stop: 80.91. Breakout over resistance: 90.85 on continued strong volume. Stop: 84.49.
POSITION: Stock and/or September $85 calls to buy (RVU IQ).
THC (Tenet Health Care--$55.52; +0.17; optionable): Researching a date.
http://biz.yahoo.com/p/t/thc.html
BACKGROUND: Last announced a stock split in September 1991 in the $45 range. The annual shareholder meeting was on 10-11-00 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Still moving within the flat consolidation. THC has been on a rather steady uptrend, rising from the 30 range over the past year. The stock broke from a trading range in June and then made a solid move in July out of a lateral consolidation. Since mid-July THC has formed another consolidation, hitting a high of 57 early on, then dipping back to hold nicely over its 18 day MVA (54.53). It closed last week with a pretty strong push up over the 10 day (54.88), and has held the move this week, showing a couple of dojis as volume falls (down today to 822,100, average 1.79 million). We are still looking for a breakout; the aggressive play remains a strong move over 56. Target: 68.
BUY POINT: Aggressive: Over 56 with above average volume. Stop: 52.08. Breakout: 57.12 on volume of 2.4 million. Stop: 53.12.
POSITION: Aggressive: Stock and/or November $50 calls to buy (THC KJ). Breakout: Stock and/or November $55 calls to buy (THC KK).
KRB (Mbna Corp--$37.35; +0.82; optionable): Banks. Working on a date.
http://biz.yahoo.com/p/k/krb.html
BACKGROUND: Last announced a 3:2 split was on 7-14-98 at a stock price of $40. The annual shareholder meeting was on 4-30-01 at which time no additional shares were authorized. The company has sufficient shares for a 3:2 split.
STATUS: Nice move today! KRB hit our buy point as it briefly pushed up through the down trendline (connecting the September, January and May closing highs), before pulling back just a bit to close. Volume was strong, up sharply to 2.75 million (average 2.51 million). KRB has been battling this trendline since last year, and after tapping through 28 in March, pulled up into a series of higher lows. This is the second recent challenge to the trendline, and comes after a bounce up from the 50 day MVA (35.37). We are looking for the momentum to continue, to carry KRB over May highs and back into the range of the late-September all time high (40.13). Relative strength has broken out. Target: 45.
BUY POINT: Over 37.75 on continued strong volume. Stop: 35.11.
POSITION: Stock and/or September $35 calls to buy (KRB IG).
BJ (BJ Wholesale--$56.20; +0.20; optionable): Forecast to announce a split on 8-21-01 in conjunction with earnings. At this time the company cannot confirm this date.
http://biz.yahoo.com/p/b/bj.html
BACKGROUND: Last announced a 2:1 split on 2-4-99 at a stock price of $44. The annual shareholder meeting was on 5-24-01 at which time no additional shares were authorized. The company has sufficient shares for 2:1 split.
STATUS: BJ tried to push out of the pennant today, but did not have the volume to sustain the move, and closed well of the intraday high on below average volume of 429,700 (average 645,900), making a slight gain on the day. Off today's move, we may see a test of the 10 day MVA (55.49) before we see another attempt to breakout. BJ is one of the retailers that is showing some strength; relative strength and money flow are very high, and the pattern is solid. We are looking for the volume necessary to carry the move. The recent highs in the pattern are at 56.90, with the overall pattern high at 57.24.
Breakout target: 66.
BUY POINT: 57.02 on above average volume. Stop: 53.03.
POSITION: Stock and/or September $55 calls to buy (BJ IK).
DV (Devry--$37.00; -0.92; optionable): Education services. Forecast to announce a split on 8-16-01 after the close in conjunction with earnings.
http://biz.yahoo.com/p/d/dv.html
BACKGROUND: Last announced a 2:1 split on 5-6-98 at a stock price of $39.76. The annual shareholder meeting was on 11-14-00 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: DV was moving in a steady handle consolidation to an eight-month cup, holding support over the 10 day MVA (38.58), but that changed Monday as the stock sold back through support on big volume and continued down today. The stock nearly hit the 50 day (36.68) on huge volume, and is currently in the range of the early July consolidation (36-37). After this strong selling, we will look for DV to hold the 50 day as we go into the forecast. Not looking good, but an announcement could give it the boost it needs to start a recovery. If we get a play on the announcement, it may be a quick one. Original breakout target: 48.
BUY POINT: Aggressive: After holding the 50 day, a move over the 10 day on continued strong volume. Stop: 35.90.
POSITION: Stock and/or September and November $35 calls to buy (DV IK and DV KK - but very low open interest).
PRE-SPLIT BEST PLAYS: Remember, we try to grab these as they break out of good patterns or as they start a run right before the split. Not looking for home runs, but looking for those $3 to $4 moves running into the split, watching for topping signs and potential resistance. Not huge money, but it can be very steady. We set our initial stops at the 7-8% range below the purchase price (or just below obvious support), and move them up on a move to preserve our profits.
1) POOL - Broke out!
2) FFIC - Looks ready
3) ALLY - A new play!
POOL (SCP Pool--$40.17; +0.57); no options): Wholesale basic materials. Splits 3:2 effective September 7.
http://biz.yahoo.com/p/p/pool.html
STATUS: Got the move! After moving in a low volume consolidation, POOL opened the week with a high volume doji, and broke out today, hitting a new all-time high on decreased, above average volume of 204,800 (average 129,700). The stock is still a buy up to 42.02, we are looking for momentum to continue from here. Target: 48.
PLAY: A buy up to 42.02 on continued strong volume, with stock only. Stop: 37.67.
FFIC (Flushing Financial--$24.99; -0.11; no options): Banking. Splits 3:2 effective 8-31.
http://biz.yahoo.com/p/f/ffic.html
STATUS: FFIC is still continuing in the current consolidation, tightening up as it holds steady over the 10 day MVA (25). Volume has picked up three out of the last four sessions, up today to 53,500 (average 29,900), signaling that we may be getting the breakout move soon (all time high: 25.33). We have time. Target: 30.
PLAY: 25.50 on continued strong volume, with stock. Stop: 23.72.
ALLY (Alliance Gaming--$33.80; +2.11; no options): Splits 2:1 effective 8-21-01.
http://biz.yahoo.com/p/a/ally.html
STATUS: After tanking in mid 2000 (low of 1.15), ALLY pulled up a June high of 41 before falling back through the 50 day MVA (then 32.50) and pulling back to the 27.50 range in late-July. ALLY broke from a consolidation at that level Monday, taking out the short-term and 50 day MVAs (50 at 31.45) on increasing, below average volume (today up to 363,200, average 376,600). The pattern is showing classic pre-split momentum, and we are looking for it to continue from here.
PLAY: 34.10 on increasing volume, with stock only. Stop: 31.85.
CONTINUING CANDIDATE BEST PLAYS:
1) RMD - Solid move
2) FRX - Trying to break out
3) ACF - Strong bounce
RMD (Resmed--$57.43; +1.58; optionable): Health services.
http://biz.yahoo.com/p/r/rmd.html
BACKGROUND: Last announced a 2:1 split on 2-25-00 with a board meeting. The stock price was $68. The annual shareholder meeting was on 11-6-00 at which time authorized shares were increased.
STATUS: A strong move today for RMD, which is steadily climbing up in the right side of a saucer pattern. Today it broke out over its recent highs in the 56-56.50 range, moving on sharply stronger volume of 409,700 (average 267,400). The highs in the left side are just ahead in the 58 range, with the high at an intraday spike at 58.96. Relative strength has broken out, and it is showing strong money flow and buying. Target on a breakout: 70.
BUY POINT: 58.33 on continued strong volume. Stop: 54.25.
POSITION: Stock and/or October $55 calls to buy (RMD JK).
FRX (Forest Labs--$81.16; +108; optionable): Drugs.
http://biz.yahoo.com/p/f/frx.html
BACKGROUND: Last announced a 2:1 split on 12-18-00 with a board meeting. The stock price was $135. Prior to that announced a 2:1 split on 2-23-98 in conjunction with a board meeting. The stock price of $62. The annual shareholder meeting was 8-13-01 at which time no additional shares were be authorized. The company has sufficient shares for a 2:1 split.
STATUS: FRX has stormed back after falling from its tight lateral consolidation last week. On that move it caught its 50 day MVA (74.84), showing strength from institutional support, and has continued up. Today it reached 81.98 (high is 82.33), with volume taking off at 1.81 million (average 1.35 million). We will watch to see what it does after pulling back a bit to close, but are looking for a breakout. Target: 100.
BUY POINT: Breakout: 82.46, on volume of 1.8 million. Stop: 76.69.
POSITION: Stock and/or November $80 calls to buy (FRX KP).
ACF (Americredit--$63.00; +2.35; optionable): Credit Services.
http://biz.yahoo.com/p/a/acf.html
BACKGROUND: Last announced a 2:1 split on 8-18-98 at a stock price of $35. The annual shareholder meeting was on 11-7-00 at which time no authorized shares were increased. The company does not have sufficient shares for a 2:1 split, but does have sufficient shares for a 3:2 split.
STATUS: ACF bounced up today, rising out of the recent, tight consolidation it had formed over its 18 day MVA (60.31). Volume spiked up on the bounce, coming in at 1.23 million (average 1.04 million). The consolidation formed after the stock dipped back from its high of 64.90, and its holding the 18 day and its July highs at 60 showed strength. Looking for a new breakout for this stock, which has shown a great amount of strength over the last year. Target on a new breakout: 70.
BUY POINT: Aggressive: A move from here over the intraday high of 63.60. Stop: 59.15. Breakout: 65.02 on increased volume. Stop: 60.47.
POSITION: Stock and/or November $55 calls to buy (ACF KL).
POST-SPLIT BEST PLAYS:
1) WFMI - Trying to move back up
WFMI (Whole Foods--$33.63; +0.63; optionable): Grocery Stores. Split 2:1 June 5.
http://biz.yahoo.com/p/w/wfmi.html
STATUS: After its pullback from the recent breakout high of 35.13, WFMI found support at the 10 day MVA (32.52) and made a bounce Friday. After that strong move, it has slowed, and today the stock made a small move up on low volume (371,300; average 603,600). We could get another test of the 10 day MVA, but we will look for the stock to make a stronger move from here with an infusion of volume. New target: 40.
PLAY: A move to 34 on average or better volume, with stock and/or October $30 calls to buy (FMQ HE). Stop: 31.50.
* * *
PRE-ANNOUNCEMENTS REMAINING PLAYS
* * *
TTC (Toro--$47.80; -0.86; no options): Manufacturing. Forecast to announce a spit on 8-22-01 before the market opens in conjunction with earnings.
http://biz.yahoo.com/p/t/ttc.html
BACKGROUND: Based upon our research it does not appear that TTC has ever split its stock. The annual shareholder meeting was on 3-13-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Broke out of the cup with handle, hitting a high of 48.99, but pulled back the last couple of days. Volume has not been that great on the selling, and it is back in the range where we were looking for it to hold; it is just below its handle high at 48.25 and May high at 48, but still holding the 10 day MVA (47.47), and we will see if that support continues to be strong going into the forecast next week, looking for a move back up. Buying is solid. Target: 58.
BUY POINT: After holding the 10 day MVA, a move back over 48.50 on stronger than average volume. Stop: 45.11 for that position.
POSITION: Stock only.
TECD (Tech Data--$37.90; +0.58; optionable): Computers wholesale. Forecast to announce a split on 8-29-01 after the market closes in conjunction with earnings.
http://biz.yahoo.com/p/t/tecd.html
BACKGROUND: Last announced a 2:1 split in March 1994. The annual shareholder meeting was on 6-19-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: TECD is moving in the right side of a 12 month cup base (September highs at 55.88), and trying to make its way out of a smaller base within that pattern, which started with the high of 39.50. The stock tried a move last week, hitting 38.82 but volume was weak and it dropped back to recent support at the 18 day MVA (36.55). It has tried a move the last two days, today making a move up to 39 but pulling back for a 'tombstone' doji, with volume up at 505,800 (average 580,800). Off of this pattern we will see if it can hold the 18 day again, and still look for a run back up. Strong money flow, and relative strength is at its highs. Target on a breakout: 48.
BUY POINT: Aggressive: A move over 38.82 on stronger than average volume. Stop: 36.10. Breakout: 39.62 on better than average volume. Stop: 36.85.
POSITION: Both buy points: Stock and/or September $35 calls to buy (TDQ IG).
CPRT (Copart--$24.75; +0.56; optionable): Auto parts. Forecast to announce a split in August in conjunction with earnings. At this time the company cannot confirm a date.
http://biz.yahoo.com/p/c/cprt.html
BACKGROUND: Last announced a 2:1 split on 12-28-99 at a stock price of $41. The annual shareholder meeting was on 12-5-00 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: CPRT had been moving in a pennant begun in late June, but has fallen out. We looked at a put play recently, and the stock found the first level of support at 24. It took a small bounce today, but volume was weak. For existing put positions we will see if it falls back again, looking at the 24 level and its lows the last couple of days (23.57) on a possible continuation down to the 22 range (200 day MVA at 21.49). No new positions.
AZO (Autozone--$45.80; +0.09; optionable): Auto Parts. Forecast to announce a split on 9-25-01 in conjunction with earnings. At this time the company has not confirmed a time for the release.
http://biz.yahoo.com/p/a/azo.html
BACKGROUND: Last announced a 2:1 split in March of 1994 at a price of $58. The annual shareholder meeting was on 12-14-00 at which time no additional shares were authorized.
STATUS: AZO broke out from a long cup with handle in June, and then after another consolidation made a solid breakout move in July. The stock has since pulled back into a nice, gradually descending consolidation. It has caught support at its 18 day MVA (45.73), showing four consecutive dojis. After a couple of 'hammer' dojis the stock made a bit of a move up to 46.51 today, with volume remaining below average at 753,900 (average 805,800). Looking for a rebound off of these tight patterns. Solid relative strength and money flow, and the sector has been strong. Target on breakout: 60.
BUY POINT: Breakout: 49.33 on volume of 1 million. Stop: 45.88. Aggressive: 47.50 on above average volume. Stop: 44.18.
POSITION: Both buy points: Stock and/or September $45 calls to buy (AZO II).
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