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1) MARKET SUMMARY
Investors leave stocks status quo into the weekend.
- Stocks remain mired in the mud after falling back into the range midweek.
- OPEC promises production cut, oil price falls.
- Producer prices still climbing but consumer sentiment higher.
- Layoffs continue in large corporate America.
- Resting for the next move higher versus running out of gas.
- Christmas run part two or epilogue?
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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). We play pre-split plays as short-term plays. We get in when the technical indicators show us things look right, grab as much as we can, and get out, always being conscious of resistance and support. These stocks are highly volatile at this time, and can turn on you quickly. Don't let good profits disappear. Watch for turns, especially when a stock trades in a wide range and finishes off its high. That is a sign these stocks often give you that they are running out of steam. We usually get out and ask questions later. We can always get back in. We like to play in the money calls, preferably two strike prices in the money as this usually gives us a greater delta (the percent an option will mover versus the stock's movement). We prefer deltas of 75 or better. This means if the stock moves 1 point, the option should move three-fourths of that point. That means up or down. Remember, wait to see the stock start to move up. Don't just blindly make a play and don't try to guess tops and bottoms. We can look at indicators to give us a clue as to what will happen, but we need the stock to confirm it for us. Here's a pre-split play to watch and our current analysis.
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Company Profile
STATUS: Breakout test. Taking another run at LCAV as it has set up well for its run into the split. It is making the first test of the breakout from its 24 week reverse head and shoulders base. A nice lateral move above the 18 day EMA (33.29) is narrowing as LCAV moves higher up that support below a constant top the past week at 34.95. It splits next week, and the pattern looks good to get some upside momentum to break it out moving in to the split.
Volume: 163.605K Avg Volume: 276.103K
BUY POINT: $35.11 Volume=350K Target=$41 Stop=$33.82
POSITION: JVQ CG - Mar. $35c (54 delta) &/or Stock.
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