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trade stock, stock split
Begin part 3 of 3
THE PLAYS
Good movers Friday: BAX; HSIC; OMC; PTEN; XTO
NEW PLAYS: New pre-announcement plays are contained in the pre-announcement section.
New Pre-Split Plays:
Play Date: 02/19/2005
VMSI (Ventana Medical Sys.--$69.93; +0.07; optionable): Medical instruments. Splits 2:1 on 3-15-05
http://biz.yahoo.com/p/v/vmsi.html
After Hours: $69.86
STATUS: Flying plateau. VMSI broke out from a 5 month flat base in late October and rallied to 65 before it needed a rest. It sold back to the 50 day EMA (65.42) to take the rest and then rebounded back for another move up the short term MA (10 and 18 day EMA); strong stocks show this kind of action when they make their breakouts. This is VMSI's second test of the 18 day EMA (68.99) since testing the 50 day. Volume has been very low, indicating no selling in the shares as it consolidates at this near support. Looking for volume to jump as it makes a move out of this nice lateral consolidation.
Volume: 99.263K Avg Volume: 138.454K
BUY POINT: $71.12 Volume=150K Target=$77.45 Stop=$69.78
POSITION: UMI FN - June $70c (55 delta)
http://www.investmenthouse.com/cs/vmsi.html
New Post-Split Plays:
Play Date: 02/19/2005
SCHN (Schnitzer Steel--$37.60; +0.89; optionable): Metal recycling
http://biz.yahoo.com/p/s/schn.html
After Hours: $37.61
STATUS: Double bottom w/handle. A short 11 week base has formed above the 200 day SMA (30.81) as the finishing touch on a larger 14 month base. The big base shows solid 15 to 9 accumulation (15 up price weeks on rising volume to 9 down price weeks on rising volume), showing net buyers as the stock consolidated and set up the next move. Volume has improved this month, rallying above average on several occasions. SCHN has rallied up to the 38 level where it has stalled on two prior occasions in the base. A break above this level on strong volume this time indicates it is ready to make a more serious upside move. We will look at a partial position (half of what we are going to put into the play) on a breakout, and then look for a test and then move in with the rest of the buy when that test back holds and starts to rebound on some solid trade.
Volume: 536.119K Avg Volume: 673.045K
BUY POINT: $38.75 Volume=1M Target=$44 Stop=$37.68
POSITION: SQQ HH - Aug. $40c (52 delta) &/or Stock
http://www.investmenthouse.com/cs/schn.html
Play Date: 02/19/2005
SONC (Sonic Corp.--$32.54; +1.85; optionable): Burger joints
http://biz.yahoo.com/p/s/sonc.html
After Hours: $32.65
STATUS: Flat base. SONC received an upgrade Friday and that was enough to break it higher out of a 7 week flat base. A nice, tight base that moved laterally above the 50 day EMA (30.78). Volume has faded the past three weeks as it put investors to sleep with its light trade and narrow $1 range. Friday it leapt higher on that strong volume, clearing the base. It did not get too extended, so we are going to look for some positions as it continues the move on some decent volume (Friday was high; it does not have to be that high, just another good push). Relative strength broke out with the stock Friday, a good indication of the stock's overall strength and ability to hold the breakout move. Excellent money flow is right in the mix, leading higher.
Volume: 983.827K Avg Volume: 333.545K
BUY POINT: $32.75 Volume=500K Target=$73 Stop=$31.37
POSITION: ZAQ FF - June $30c (70 delta) &/or Stock
http://www.investmenthouse.com/cs/sonc.html
Continuing Leader Plays:
Play Date: 02/15/2005
COGN (Cognos--$43.92; -0.09; optionable): Application software
http://biz.yahoo.com/p/c/cogn.html
After Hours: $43.92
STATUS: Cup w/handle. Another tight doji Friday on very low volume as it held just below the breakout point. Still looks very good and ready to make the breakout move. To recap: Currently in a short 7 week base that formed over the 50 day EMA (42.04). This breakout will take it to a new all-time high, something we like because there is no overhead resistance to push it back down. Accumulation is excellent at 3 to 0 (3 up price weeks on rising volume to 0 down price weeks on rising volume), showing all buyers as it sets up for the next breakout move. A perennial leader.
Volume: 416.547K Avg Volume: 801.318K
BUY POINT: New: $44.28 (orig. $44.11) Volume=1M Target=$50 Stop=$42.65
POSITION: CRQ EV - May $42.50c (68 delta) &/or Stock
http://www.investmenthouse.com/cs/cogn.html
PRE-ANNOUNCEMENT PLAYS
Current Pre-Announcement Plays: This is a list of stocks we are looking to announce splits. We are not in all positions but are letting them set up for the next move. 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.
APPX: No split 2-16-05 but some solid moves on a strong earnings report.
CMTL: Forecast early March.
EASI: Forecast 2-22-05 before the open.
FDX: Forecast mid-March.
GPC: Forecast 2-22-05 before the open.
GPN: Tentatively forecast 3-21-05
LEH: Tentatively forecast 3-24-05.
OMC: Forecast 2-22-05 before the open
ORLY: Forecast 2-23-05
SPLS: Forecast 2-24-05.
TBL: Researching next date as no announcement 1-20. Still testing the great move.
TTC: Forecast 2-22-05 during the market.
YELL: No announcement 1-27-05 after the close
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: 02/19/2005
CVH (Coventry Health Care--$58.81; -0.94; optionable): Health care plans. Forecast to announce a split 2-22-05 before the open.
BACKGROUND: Last announced a 3:2 split 12-23-03 at $63.30.
http://biz.yahoo.com/p/c/cvh.html
After Hours: $59.40
STATUS: Test breakout. This one will be out before we can get in, but given the price pattern we wanted to see it make a volume move higher before we entered. CVH broke higher to end January on some decent but not blowout trade. It has moved higher to just over 60 before this test. It was rough going in October when it was sold hard. It has been on the mend since, easily retaking the pre-October highs. It is ripe for a split and we have heard talk of an announcement but nothing firm. That is why we want to see the move and then enter. Excellent relative strength shows the stock is outperforming the broad market. Just needs to give us a strong break higher on volume for some positions to let it work for us longer term.
Volume: 832.8K Avg Volume: 926.818K
BUY POINT: $60.48 Volume=1.4M Target=$67.55 Stop=$58.55
POSITION: CVH GL - July $60c (53 delta)
http://www.investmenthouse.com/cs/cvh.html
Play Date: 02/19/2005
NBL (Noble Energy--$64.86; +1.36; optionable): Independent oil and gas. Forecast to announce a split 2-22-05. No time has been provided by the company. It has purchased Patina for $2.9B and the deal has not closed. This may put the expected split announcement off, but we are hearing the company wants to have more stock outstanding. Good pattern in any event.
http://biz.yahoo.com/p/n/nbl.html
STATUS: Cup w/handle. NBL is making the breakout move from a 12 week base. The base formed along the 50 day EMA (60.19), a sign of good institutional support. NBL is moving to another all-time high, but we want to see volume pick up on the upside move to give this move some authority.
Volume: 711.7K Avg Volume: 818.772K
BUY POINT: $65.05 Volume=1.2M Target=$72 Stop=$63.89
POSITION: NBL EM - May $65c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/nbl.html
Play Date: 02/19/2005
TOL (Toll Brothers--$84.41; -0.50; optionable): Residential construction. Forecast to announce a split 2-22-05 or 3-7-05 before the open.
BACKGROUND: Last announced a 2:1 split 3-4-02 at $50.
http://biz.yahoo.com/p/t/tol.html
After Hours: $84.41
STATUS: Flying plateau. TOL is moving laterally above the 10 day EMA (83.19) the past two weeks, holding a narrow range and on lower, below average volume the past week. This follows a strong breakout in early December and a rally up the 10 day EMA. It needed a breather, and this plateau gives a rest. The fact that it holds its gains shows it has strength, i.e. not many want to sell it. We are looking for a move out of the pattern on decent trade to enter positions. Earnings are out 2-22, but TOL has tended to announce a week to 2 weeks after its earnings release. A split has been on the board agenda and other homebuilders have been announcing as well. TOL is ripe.
Volume: 2.001M Avg Volume: 1.694M
BUY POINT: $85.25 Volume=2.2M Target=$99 Stop=$82.68
POSITION: TOL FQ - June $85c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/tol.html
Continuing Pre-Announcement Plays:
New Buy Points:
Play Date: 02/19/2005
EASI (Engineered Support--$60.48; +0.55; optionable): Aerospace and defense. Forecast 2-22-05.
BACKGROUND: Last announced a 3 for 2 split on 9-18-03 in conjunction with a board meeting at a stock price of $61.15.
http://biz.yahoo.com/p/e/easi.html
After Hours: $60.29
STATUS: Test 18 day EMA. EASI started to undercut the 18 day EMA (59.86) last week, but held the line by the end of the week. It broke higher early in the month from a 7 month cup with handle of sorts, but it did not have much behind the move. It faded back and struggled to hold the 18 day EMA. As noted, it managed to do that and volume was up Friday as it peaked back above 60. An announcement could be the catalyst that finally gives it the kick in the pants to breakout and hold the move. Looking for the move to tell us the entry point. It will either happen or it won't so no pressure.
Volume: 406.084K Avg Volume: 282K
BUY POINT: $61.25 Volume=423K Target=$68.45 Stop=$59.66
POSITION: UFE HL - Aug. $60c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/easi.html
Play Date: 02/19/2005
TTC (Toro--$83.35; -0.19; optionable): Tool, mowers, etc. Forecast 2-22-05 with earnings but has been known to announce a week after. Hearing a split is on the board's agenda but cannot confirm the exact date it will pick.
BACKGROUND: Last announce a 2 for 1 split on 3-20-03 in conjunction with a board meeting at a stock price of $70. The annual shareholder meeting was on 3-12-04 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/t/ttc.html
STATUS: 18 day EMA test. Toro broke out from a 6 month ascending base in December and rallied up to 85, the recent peaks hit this month. Yes there are two modest peaks this month as the stock moved on relatively low volume; that is not typically a great sign, but it showed similar action in January and it broke through those as well. Just need to see some strong volume as it breaks higher to the buy point; indeed, we need to see that volume or we wait until it clears 85.75 on solid trade, the peak of the twin peaks this month.
Volume: 136.8K Avg Volume: 205.136K
BUY POINT: $84.45 Volume=308K Target=$95 Stop=$83.21
POSITION: TTC FQ - June $85c (48 delta)
http://www.investmenthouse.com/cs/ttc.html
Buy not yet hit:
Play Date: 02/15/2005
FDX (Federal Express--$97.35; -0.4; optionable): Shipping. Forecast mid-March. Still pinpointing the date.
BACKGROUND: Two splits in the past, one 1996 at $75. The more recent was announced 3-18-99 at $92. It is right there.
http://biz.yahoo.com/p/f/fdx.html
After Hours: $97.59
STATUS: Cup. FDX continues its low volume handle formation, working laterally now over the 18 day EMA (96.46). This is better action as it shakes out the last sellers (they get frustrated and sell out) and sets up a good launch pad for the breakout. To recap: FDX is working on a 10 week cup base that is for the most part using the 50 day EMA (95.57) as support. There was a sharp dip to 90 in mid-January, but it made a knifepoint turn at that point and rebounded to continue about its business in forming the pattern. This base has formed after an August breakout and run to 100. It needed the breather and it is getting it here. It is taking its time to form up the last of the base, but that is a positive. It has 3 to 2 accumulation in the base and the lateral move will let it form up better. Looking for a high volume surge through the buy point to start our play.
Volume: 1.018M Avg Volume: 1.85M
BUY POINT: $98.15 Volume=2.8M Target=$108 Stop=$95.78
POSITION: FDX GS - July $95c (72 delta)
http://www.investmenthouse.com/cs/fdx.html
Play Date: 02/14/2005
IR (Ingersoll-Rand--$80.80; -0.20; optionable): Machinery. Researching to pinpoint a date but a great pattern.
BACKGROUND: Last split in 1997 at $65.
http://biz.yahoo.com/p/i/ir.html
STATUS: Double bottom w/handle. Volume has ticked up the past two sessions as IR works in its tight range over the 10 day EMA (80.44), getting set for the breakout move from its nice base. To recap: Nice 9 week base is setting up for the breakout move. It has spent the past week moving laterally over the 10 day EMA on lower and lower below average volume. That is the action that shakes out the last sellers and sets the stock for the breakout move. The base roughly used the 50 day EMA (77.56) as support, another good sign that big buyers were stepping in to support the stock. Excellent pattern with money flow moving higher ahead of price and relative strength is ready to breakout with the stock.
Volume: 916.7K Avg Volume: 1.143M
BUY POINT: $81.92 Volume=1.7M Target=$90 Stop=$79.57
POSITION: IR FP - June $80c (62 delta)
http://www.investmenthouse.com/cs/ir.html
Play Date: 02/05/2005
TDS (Telephone & Data Sys.--$85.96; +1.16; optionable): Wireless communications. Did not announce a split back on 2-9-05, but it just looks very good here.
BACKGROUND: Last split way back in early 1989 at roughly $35. Something of a wild card, but moving well in a nice pattern.
http://biz.yahoo.com/p/t/tds.html
STATUS: Double bottom w/handle. Volume was up well above average Friday as TDS started off the 18 day EMA test (84.38) in the handle of its 4.5 month base. It really formed the handle in January and broke higher early this month, but there was not a lot of volume on that move. This is more of a second handle, but it is forming the same function, i.e. weeding out the last sellers. Solid money flow and excellent 6 to 2 accumulation in the pattern (6 up price weeks on rising volume to 2 down price weeks on rising volume) shows money has been moving into the stock, setting up the breakout.
Volume: 250.3K Avg Volume: 174.136K
BUY POINT: $86.22 Volume=300K Target=$100 Stop=$84.32
POSITION: TDS CQ - May $85c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/tds.html
PRE-SPLIT PLAYS:
Play Date: 02/17/2005
DHI (D.R. Horton--$42.3; -0.32; optionable): Residential construction. Splits 4:3 on 3-17-05
http://biz.yahoo.com/p/d/dhi.html
STATUS: Test breakout. Held tight over the 18 day EMA (41.94) Friday, but that was on the close. Intraday it bounced down toward the 50 day EMA (39.92; 41.18 on session low) but rebounded sharply to close down fractionally. That kind of rebound can trigger the next move as it works to flush out the sellers. To recap: DHI surged higher 2 weeks back, breaking out from an 8 week reverse head and shoulders pattern. It rallied to 45 and has come back to test that move fully the past week. It has bounded up from that test, but volume has faded as it did. Want it to test 42 and then rebound on stronger trade. That is when we step in.
Volume: 1.601M Avg Volume: 1.88M
BUY POINT: $42.88 Volume=2.8M Target=$48 Stop=$42.21
POSITION: DHI EH - May $40c (75 delta) &/or Stock
http://www.investmenthouse.com/cs/dhi.html
POST SPLIT PLAYS:
Play Date: 02/14/2005
JCOM (J2 Global Communications--$37.95; +0.40; optionable): Global outsourced messaging and communications
http://biz.yahoo.com/p/j/jcom.html
After Hours: $37.94
STATUS: Breakout test. JCOM broke higher to start the month, gapping up and rallying over the high in its short 6 week double bottom pattern. It has worked higher up the 10 day EMA (37.08), and our first buy was the first bounce off the 10 day. We missed it; didn't even take a cut at it, just watched it make the move. Got a great Polaroid of it as it went by. As is the usual case, however, there is more than one entry point for a play. Right now JCOM is making a lower volume test of the, you guessed it, 10 day EMA. Friday it held that level and nudged higher on a slight volume rise. Looking to move in as it makes its next volume move off this near support level.
Volume: 457.963K Avg Volume: 487.636K
BUY POINT: $38.35 Volume=800K Target=$45 Stop=$37.72
POSITION: JQF FG - June $35c (73 delta) &/or Stock
http://www.investmenthouse.com/cs/jcom.html
Play Date: 02/15/2005
SSNC (SSS&C Technologies--$23.63; +0.37; optionable): Application software
http://biz.yahoo.com/p/s/ssnc.html
STATUS: Saucer w/handle. SSNC is toying with us, flirting with a strong breakout move but just edging higher as volume trailed off to end the week. Still looks very nice, and a good shot of volume as it moves higher gives us an entry point. To recap: 14 week base has formed as SSNC builds its second move off the bottom of a long base that started in March. Volume has spiked up on several occasions the past few weeks. An excellent consolidation to end the pattern in a tight range with volume starting to jump higher. Great money flow leading the way higher. Positive 3 to 2 accumulation in the base shows net buying.
Volume: 170.945K Avg Volume: 153.776K
BUY POINT: New: $23.78 (orig. $23.42) Volume=214K Target=$28 Stop=$22.08
POSITION: QUN GX - July $22.50c (61 delta) &/or Stock
http://www.investmenthouse.com/cs/ssnc.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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